Adel Clay Products Co.

National Labor Relations Board - Board Decisions

Sep 24, 1942

44 N.L.R.B. 386 (N.L.R.B. 1942)

In the Matter of ADEL CLAY PRODUCTS COMPANY, A CORPORATION, M. T.
STRAIGHT, LEE STRAIGHT, DOROTHY STRAIGHT AND BETTY STRAIGHT
OGG, A COPARTNERSHIP, D/B/A ADEL CLAY PRODUCTS COMPANY, AND
H. R. STRAIGHT, AN INDIVIDUAL and INTERNATIONAL UNION OF MINE,
MILL AND SMELTER WORKERS
Case No. C-2224.Decided September 24, 1942
Jurisdiction : brick and building tile manufacturing industry.
Unfair Labor Practices
Interference, Restraint, and Coerdion: participating in formation of a labor or-
ganization and executing contract therewith although after execution of con-
tract organization ceased to function as a labor organization ; practice of requir-
ing individual contracts as a condition of employment to deter self organization
and collective bargaining.
Discrimination: refusal to reemploy union leader because of his refusal to sign
individual contract of employment when this requirement was intended to and
did interfere with rights of employees and as such constituted an illegal condi-
tion of employment. -
Remedial Orders : reinstatement and back pay awarded; individual contracts
of employment abrogated.
Definitions : corporation, successor-partnership, and individual who dominated
labor policies of both corporation and partnership, held employers within the
meaning of the Act.
Mr. Russell Packard, for the Board.
Mr. Robert J. Bannister_ and Mr. E. B. Carpenter, of Des Moines,
Iowa, for the respondents.
Mr. Thomas B. Hadden, of Des Moines, Iowa, for the Union.
Mr. Bliss Daffan, of counsel to the Board.
DECISION
AND
ORDER
STATEMENT OF THE CASE
Upon an amended charge duly filed by International Union of Mine,
Mill and Smelter Workers, herein called the Union, the National,
Labor Relations Board, herein called the Board, by the Regional Di-
rector for the Eighteenth Region (Minneapolis, Minnesota), issued its
complaint dated May 6, 1942, against Adel Clay Products Company,
a corporation, M. T. Straight, Lee Straight, Dorothy Straight and
Betty Straight Ogg, a copartnership, doing_ business as Adel Clay
Products Company, and M. T. Straight, an individual, all of Adel,
44 N L R B, No. 74
386 c. - -
ADEL 'CLAY PRODUCTS COMPANY 387
-Iowa, herein called the respondents, alleging that the respondents had
engaged in and were engaging in unfair labor practices affecting com-
merce, within the meaning of Section 8 (1) and (3) and Section 2
(6) and (7) of the National Labor Relations Act, 49 Stat. 449, herein
called the Act. - Copies of the complaint accompanied by notice of
hearing were duly served upon the respondents and the Union.
With'respect to the unfair labor practices, the complaint, as amended
at the hearing, alleged, in substance, that the respondents (1) on or
about May 1, 1941, and at all times thereafter, failed and refused to
-reinstate Glen Smith to the position from which he had been tempo-
rarily laid off, and on or about August 1, 1941, transferred Clifford
Cotton from his employment on the day shift to employment on the
night shift, because they and each of, them had joined and assisted the
'Union and engaged in concerted activities with other employees for
the purposes of collective bargaining and other mutual aid and pro-
tection; (2) from about March 1937 to the date of the complaint
required their employees to execute annually individual contracts of
employment for the purpose of preventing self-organization and col-
lective activity ; held meetings of their employees for the purpose of
executing said contracts and;to discourage self-organization and col-
lective activity; interrogated employees concerning their union mem-
bership and activity; made derogatory 'remarks to employees concern-
ing the Union; advised, urged, threatened, and warned their employ-
ees to refrain from joining or assisting the Union or any other labor
organization; required their employees to sign waivers of rights under
the Fair Labor Standards Act of 1998, after said employees had'col-
iectively sought to exercise such rights; advised, urged, and suggested
to their employees that they set up a company union; and otherwise
indicated to their employees disapproval of and opposition to self-
'organization; and (3) by all of the aforesaid acts interfered with,
restrained, and coerced their employees in the exercise of the rights
guaranteed in Section 7 of the Act. On May 12, 1942, the respondents
filed their answer, admittincertain allegations of the complaint per-in
to their business and denying others, and denying that they
had engaged in the unfair labor practices alleged.
Pursuant to notice, a hearing was held on May 18 and 19, 1942, at
Adel, Iowa, before Horace A. Ruckel, the Trial Examiner duly desig-
nated by the Chief Trial Examiner. The Board and the respondents
were represented by counsel, and the Union by a representative. All
parties participated in the hearing and were afforded full opportunity
to be heard, to examine and cross-examine witnesses, and to introduce
evidence bearing upon the issues. ,
At , the, beginning of the hearing,. motions by counsel for the Board
'and the respondents to amend the complaint and the answer, respec-
388 DECISIONS.'OF NATIONAL LABOR RELATIONS BOARD
tively, in minor -particulars, were granted by, the Trial Examiner
without objection. During the course of the hearing counsel for the
Board moved to.amend the complaint to include additional allegations
relative to the commission of unfair labor practices,' and counsel for
the respondents moved to amend the respondents' answer to deny such
additional allegations. Both motions were granted by the Trial Ex-
aminer without objection. At the conclusion of the hearing the Trial
Examiner granted motions by counsel for the Board and the respond-
ents to amend the complaint and the answer to conform to the proof
adduced with respect to. formal matters, and denied a motion by the
respondents' counsel to strike certain evidence from the record. Dur-
ing the course of the hearing the Trial Examiner made rulings on a
number of other motions and,on objections to the admission of evi-
dence. The Board has reviewed the rulings- of the Trial Examiner
and finds that no prejudicial errors were committed. The rulings are
hereby affirmed.
. On June 10, 1942, the Trial Examiner filed his Intermediate Report,
copies of which were duly served upon all the parties, in which he
found that the respondents had engaged in and were 'engaging in un-
fair labor practices affecting commerce, within the meaning of Section
8 (1), and (3) and Section 2 (6y and (7) of the Act. He recommended
that the respondents cease and desist from their unfair labor practices
and reinstate Glen Smith with back pay. He further found that the
respondents had not discriminated against Clifford Cotton and had
not engaged in certain,other unfair labor practices, and recommended
that the complaint be dismissed in these respects. Thereafter the
respondents filed exceptions to the Intermediate Report. None of the
parties filed briefs or requested oral argument. The Board has con-
sidered the respondents' exceptions and, insofar as they are inconsist-
ent with the findings, conclusions, and order set forth below, finds no
merit in.them.
Upon the entire record in the case, the Board makes the following:
FINDINGS OF FAST
I. THE BUSINESS OF THE RESPONDENTS
Adel Clay Products, Company, an Iowa corporation, herein called
the corporation, was incorporated in 1916. Until July 1941 the
corporation was engaged in the manufacture of brick and building
tile .at a plant in Redfield, Iowa. The principal raw materials ' used
in the operation of the Redfield plant were clay and coal. All the
, The complaint was amended to allege that the respondents required their employees to
sign waivers of their rights under the Fair-Labor Standards Act of 1938'after they had
collectively sought to exercise such rights; and advised, urged , and suggested to their
employees that they set up a company union
ADEL CLAY PRODUCTS COMPANY 389
clay was obtained within the State of Iowa. During 1940 the cor-
poration bought coal of the approximate value of $14,000, all of
which was transported to the plant in Redfield from,the State of
Indiana. During the same year the value of the corporation's
finished products amounted to approximately $181,000, of which one-
third in volume was shipped to points outside the State of Iowa.
Prior to 1935 or 1936 all the stock in the corporation was owned
by i'ts officers, H. R. Straight, president, Ethel Straight, wife of
H. R. Straight, vice president, and M. T. Straight, brother of H. R.
Straight, secretary and treasurer. At that time H. R. and Ethel
Straight 'transferred all their stock to their children, Lee Straight,
Dorothy Straight, and Betty Straight Ogg.2
In July 1941, the stockholders of the corporation, i. e;, M. T.
Straight, Lee Straight; Dorothy Straight, and Betty Straight Ogg
formed a partnership known as Adel Clay Products Company, here-
in called the partnership, the interest of each partner in the partner-
ship being in proportion to the stock which he owned in the corpora-
tion.3 At the time of its formation, substantially all the assets of
the corporation, including the plant at Redfield, were transferred
by the corporation to-the partnership.' No change was made in the
name of the business, and the plant at Redfield was continued in
uninterrupted operation by the partnership without any change -in
management, policy, or personnel. The partnership admits that it
is engaged in commerce within the meaning of the Act.'
H. R. Straight is now and has been president of the corporation
since its incorporation in 1916. Upon formation of the partnership
in July 1941. H. R. Straight became "president" of the partnership.
He has also acted in the capacity of general manager in complete,
charge of production at the Redfield plant, both during the time of
its operation in, the name of the corporation and since it has been
operated in the name of the partnership. His three. children, who
along with M. T. Straight compose the partnership, have nothing
whatever to do with the management of the business or the formula-
tion of its- policies. M. T. Straight, the remaining partner, resides
in Des Moines, Iowa, and is in charge of sales operations of the
business at that point. All decisions relative to matters of produc-
tion or labor policy affecting the business are made either by H. R.
Straight alone or, on occasion, in conjunction with M. T. Straight.
2 There was no consideration for this transfer . By virtue thereof, the three children
of H. R. and Ethel Straight became the holders of 50 percent of the stock of said corpo-
ration, while M. T. Straight continued to own the remaining 50 percent.
The stock ownership in the corporation had remained the same since the transfer'in
1935 or 1936, hereinbefore referred to.
4 As of the time of the hearing, the corporation had not been dissolved and continued
in existence as titleholder of certain farm lands.
390 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Thus the change in structure from the corporation to the partner-
ship resulted in no change in the employer-employee relationship.
Under these circumstances, we find that, for the purposes of effectu-
ating the policies of the Act, the corporation and the partnership are
so interrelated as to be jointly and severally liable for the unfair
labor practices of both.5 We further find that H. R. Straight, in his
capacity' as an officer and general manager in charge of production,
dominated and controlled the labor policies of both the corporation and
the partnership. We find that the corporation, the partnership, and H.
R. Straight, and each of them, are employers of the employees herein
involved, within the meaning of the Act.6 We use the term, the re-
spondents, herein as referring either to the corporation or to the-
partnership depending upon the dates of the activities- hereinbelow
described.
II. THE ORGANIZATION INVOLVED
International Union of Mine, Mill and Smelter Works is a labor
organization, affiliated with the Congress of Industrial Organizations,
admitting to membership employees of the respondent.
III. THE UNFAIR LABOR PRACTICES
A. Interference, restraint, and coercion
1. The respondents' attempts to. form a company, union:
' .In' July 1937, within a short time after the plant at Redfield had
begun operation for the production season of 1937,' H. R. Straight'
called a meeting' of the employees in the mill room of the plant. On-
this occasion''Straight stated that he was afraid thtit the C. I. O.
would attempt organization of the employees and suggested that,
they form a;`company unioii" and that they secure the services of
Robert Frush, an 'Adel attorney, to assist them in this connection.e
While the evidence in the record relative to the sequence of events
°.Matter of Weinberger Banana Co ., Inc and United Dock and Fruit Workers' Union,
18 N. L. R; B 786. Cf N L. R. B v. Arthur L Colten,'105 F. (2d) 179 (C. C. A 6)
°'Matter of National Lumbcr Mills,, Inc., Colonial Products Company, and Charles
Pechenik and York Federation of Trade Unions, affiliated with the American Federation
of Lalior, 37'N L. R. B 700 , and cases cited
' The production season as a rule extended from April or May of one year until January
of the follow mg year _
rre This,findmg is, based upon, the testimony of Joe Stout and Glen Smith , witnesses for
the Board . Although Straight admitted during his testimony that he recommended the
employment of Fiush to the employees , he testified that he did so on the solicitation of an
employee named Huff , who came to. him and stated that the employees desired to form
"a local union," and denied that he had suggested the formation of a company union.
Because the testimony of Stout and- Smith - is consistent with other activities engaged in
by Straight, as will be shown hereinafter , we do_not credit Straight 's. testimony but find
that he suggested to the employees that they form a company union and also recommended
the employment of Frush to assist them in the matter.
ADEL CLAY PRODUCTS 'COMPANY 391
following Straight's suggestion is not entirely clear, some of the
employees consulted with Frush shortly thereafter with the result
that Frush' appeared at a meeting. of the employees held in the mill
room of the plant. during July 1937. At this meeting, Frush
brought with him a "set of articles or constitution," modeled after a
similar document which he had prepared for the employees of United
Brick and Tile Company, a neighboring Adel enterprise. After
explaining to the employees that the purpose of the document was
to enable them to "have a little company union," Frush requested
the employees present at the -meeting to sign the document, which
many of them did. Either at the same time or shortly thereafter,
the employees, utilizing the document prepared b^ Frush, held a
meeting and formed the Employees Association of the Adel Clay
Products Company, herein called the Association. Thereafter' on
July 29, 1937, a meeting of the Association was held and a bargain-.
ing committee of five employees was elected to engage in negotia-,
tions with the respondents relative to a collective bargaining
agreement. On the same day the newly elected bargaining com-
mittee of the Association met with. H. R. Straight, presented him
with the document prepared by Frush which contained' the signa-
tures of 46 employees, and negotiated a contract covering wages,
hours, and working condition's of the employees for the 1937 pro-
duction season.9 Although Frush was not present during'the course
of the negotiations, the terms agreed upon between' the respondents
and the Association were submitted to him and he prepared the final
draft of the agreement executed by the parties. This. document,
e The above findings relative to the formation of the Association and the contract of
July 30, 1937, are predicated upon the testimony 'of Stout, Straight,' and recitals in the
contract of July 30, 1937. In his first testimony on the subject, Stout'did not identify
directly the laws er who assisted in the formation of, the Association In subsequent tes-
timony, however Stout detailed the circumstances surrounding Frush's appearance at the
_,.uieeting of the employees, his talk' to the employees concerning the formation' of a company
union on that occasion, and his obtaining the signatures of employees to a "paper." Frush
corroborated Stout's testimony to the extent of stating that he prepared a "set of articles
or constitution at the instance of the employees who secured his attendance at the meeting,
although in effect,' he denied that he secured the signatures of employees thereto. It is
reasonable to infer, however, and we find, that the document which Frush prepared is the
one that Stout testified the employees signed at the meeting in question. Straight's testi-
mony on the subject was that the employees engaged. an attorney "and had what they called
an Association paper drawn up " This paper, according to Straight, was signed by 46
employees and named a bargaining committee, and was presented to, him as the basis for
the negotiations which culminated in the execution of the contract,of July 30. The con-
tract of July 30, which is in evidence, refers to "written articles of agreement"'of the Asso-
ciation, made a part of such agreement, and although this document was not introduced
in, evidence, it is apparent that Straight's testimony, regarding "an Association paper",
signed by 46 employees, is' with reference thereto 'cinder' these circumstances it is reason-
able to infer, and we find, that Stout's reference to "a paper" to which Frush secured
the signatures of employees at the meeting in, question, and Frush's testimony regarding a
"set of articles or constitution" which lie prepared for such meeting, had reference to the
document referred to as the "'written articles of agreement," in the contract of July' 30,
1937. We do not credit Frush's denial that he secured employees' signatures to this
document . -'
392 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
dated July 30, 1937, was,signed by H. R. and M. T. Straight, on
behalf of the respondents, and although purporting on its face to
be an-agreement between the respondent corporation and the Associ-
ation, bears, in addition to those of the bargaining committee of the
Association, as such, the signatures of 41 employees as "individual
members of the Employees Association of the Adel Clay Products
Company." Subsequent to July 30, 1937, Frush prepared a state-
ment for the legal services which he had rendered in connection
with the formation of the Association and the preparation of the
contract of July 30, 1937, and sent the statement to H. R. Straight
with the request that he collect Frush's fee from the employees.
Thereafter, Straight held a meeting of the employees at which he
requested that they pay Frush's fee. When the employees refused
to do so Straight stated that he would pay the fee himself. How-
ever, Frush testified at the hearing that his fee had not been paid.
In any event, Frush's connection with the Association apparently
ceased with the execution of the contract of July 30, 1937, and there
is no evidence that he ' thereafter participated in the affairs of either
the employees or the respondents.
Although the terms of the contract of July 30, 1937, governed the
working conditions of the employees for the 1937 season, there is
no evidence in the record, that the Association or its bargaining
committee held any further meetings or functioned in any manner as
a bargaining representative of the employees after the execution of
the 1937 contract.
The complaint alleges that the respondents interfered with the
exercise by the employees of their rights under the Act by partici-
pating in the formation of the Association. . The- Trial Examiner
found that the allegations in this respect were not sustained by the
evidence. As indicated by the findings heretofore, made, we disagree
with the Trial Examiner's findings in this regard. The evidence
establishes that H. R. Straight was responsible for the formation of
the Association, and that he was motivated in this action by the desire
of the respondents to prevent organization of the employees by an.
affiliated labor organization. As will be shown below, the respond-
ents' hostility toward the Union after it began organization for the
employees in the fall of 1939 greatly • strengthens this conclusion.
Nor is it material that the Association did not function as a bargain-
ing representative after execution of the contract of 'July 30, 1937.
The fact remains that it was conceived and designed by, the respond-
ents as an obstacle to self-organization of the employees and, as such;
constituted an interference with the exercise of their rights under the
Act. Since the respondents' participation in the organization of the'
Association constituted interference with the rights of the employees,
ADEL CLAY PRODUCTS COMPANY - 393
the contract of July 30, 1937, between the Association and'the respond
ents, likewise, constituted interference with the rights of the em-
ployees under the Act. , . ',
We find that by participatingein the formation of the Association
and entering into the contract of July 30, 1937,-with the organization
,after its formation, the respondents interfered with, restrained, and
coerced their employees in the exercise of the rights guaranteed in
,Section 7 of the Act.
2. The individual contracts of employment and other acts of
interference
On or about April 1, 1938, the respondents called a meeting of
the employees for the purpose of entering into an agreement govern-
ing the working conditions of the employees for the 1938 production
season. - As a result of this meeting, a written contract was entered
into between the respondents and 42 individual employees whose
signatures appeared thereon. This 'contract, dated April 2, 1938,
omitted any reference to the Association and purports on its face to
be an agreement' between the respondents and the individual em-
ployees, whose signatures are affixed thereto. In this connection,
`H. R. Straight explained that it was agreed that all the employees
would sign the agreement "as members of the bargaining committee"
because many of them had expressed themselves as being dissatisfied
with the terms of the agreement negotiated by the committee of the
Association for the 1937 production' season. At the beginning of
each production season following 1938, the respondents required their
employees, 'as a condition of employment, to sign individual contracts
,of employment similar to the one entered into for the year of 1938.10
These contracts were discussed and signed at meetings in the plant,
called by the respondents for this purpose, just prior to `the resump-
'tion of operations for a particular season . Although the contracts.
in effect during the years from 1938 to 1942, inclusive, are in evidence,
there is very little testimony in'the record regarding the circlim-
stances surrounding the execution of any of them with the exception
of the one for the 1941 season.
During' this period, however, an attempt to organize the employees
by an affiliated union met with immediate opposition by the respond-
ents. In October or November 1939, an organizer for the Union
1O Although particular provisions of the contracts varied from year to year, all of them
established the base wages to be paid for the various classes of work for a particular
season In some years the contract provided for a sharing of the season's profits with
the employees' but in other years no' such provision was made. The contracts custom-
arily reserved•,.to the respondents the right to shut down the plant during the life of
the contract, as well as a right to discharge employees for any cause found to be "suffi-
cient" and permitted any employee to quit his employment if he could thereby "improve
his earnings."
394 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
arrived in' }Redfield and visited Glen Smith. Arrangements were
made to hold a meeting at a local hall in Redfield. On the after-
noon of the day on which the meeting was scheduled to be held,
H. R. Straight called a meeting of the employees in the plant. Ac-
cording to the testimony of several witnesses for the Board, Straight
stated on this occasion that he understood that there was to
be a union meeting that evening, advised the employees not to attend,
stating that he would not operate the plant under a union; that he
"would go on the road selling pub-mill knives" before he would do
so; and that any employee who joined the Union "just didn't need
to come back" to work. Although H. R. Straight admitted that he
called a meeting of the, employees on the, afternoon prior to the union
meeting, he specifically denied that he threatened the employees with
discharge if they joined the Union.' Upon all the evidence, we find,
as did the Trial Examiner, that Straight made the statements at-
tributed to him by the Board's witnesses.
Notwithstanding H. R. Straight's efforts to discourage their at-
tendance, some four or five of the respondents' employees, including
Glen Smith, attended the meeting of the Union that evening, which
was also attended by some 20 or 25 employees from another concern
in Redfield. Membership applications were distributed and signed
by the employees present.' Following the meeting 10 or 12 of the
respondents' employees, largely through the efforts of Smith, signed
,membership cards in the Union. No local, however,, was ever formed,
although within, the next year and a half after the first meeting,
another, meeting was held in the hall and two at Smith's home. The
last meeting was, held at Smith's home in March 1941, shortly'before
the meeting 'of the employees, discussed below, called, by the, re-
spondents for the purpose of discussing and executing the individual
contract of employment for the, production season of 1941.
The 1940, production season ended in January 1941 and the plant
closed down. On March 20, ,1 941, H. R. Straight sent letters to all
the employees who had 'Worked the previous season , advising them
that certain repairs to machinery would be necessary before the plant
could commence operations for the season, that the "details of the
company contract" with the employees must be discussed before costly
machinery parts, which it was necessary to replace could be ordered,
and requesting that they attend a meeting in the mill room on March
22, 1941. In response to these letters the employees met with Straight
on March 22. At this meeting; Straight discussed, the broken down
machinery, `showed the, employee's. an auditor's statement revealing
.the financial condition of the respondents, and then brought up the
subject of , the- individual contracts. In this connection, Straight dis;
tributed several copies of a proposed agreement among the employees
for examination . During the course of "the discussion relative to
ADEL, CLAY PRODUCTS COMPANY '395
the proposed contract, the subject of union- organization arose.
Straight advised the employees that the respondents would not toler-
ate union organization and could not operate the plant "under
a union scale" ; that "he would be damned if he wouldn't sell pug mill
knives before he would run the plant under the Union"; that "if it
was found out who was agitating the Union, why, he would fire
them"; and that "we could either sign them [the proposed contract]
or take our dinner buckets and go home." 11 Straight's interpreta-
tion of the remarks attributed to him by' the various witnesses at the
meeting in question was that he advised the employees that: 12
This was a free country,, they had a right to belong to any
union if they 'wanted to; but it was my opinion that if a union
was formed that the friction would probably eliminate the little
profit that there had been and I would be damned if I would
operate the plant if we could not make a profit, but as far as the
operations of the plant was concerned, I couldn't speak for my
brother * * * if I didn't work for the Company I would
go out and sell pug mill knives, at'which I could make several
times more than working for the Company; but the reason I
was sticking by the Company was that I was not going to ,walk
out on the employees who had been so loyal at times and when
we were so practically broke.
In View of H. R. Straight's partial corroboration of the testimony
.of the other witnesses, set forth above, and upon the record as a
whole, we believe 'that' their versions of Straight's remarks are more
in accord with the facts than his. We, find, as did the Trial
'Examiner, that' Straight made the remarks' as found above.
'Following Straight's remarks some 30 odd' employees at-the meet-
ing signed the contract. , Smith, however, did not do so.' Within a
week or two after the meeting practically all the employees who had
not signed the contract at the' meeting of Match 122, with. the excep-
tion of Smith, affixed their signatures thereto. During' the- month 'of
April 1941-Straight -was- advised by ^ the Wage' andi Hour Division' of
the Department of Labor that certain provisions of the' contract of
March 22'were of questionable validity. Thereupon the. respondents
prepared a• new draft, meeting the objections made to the original
,document, and 'thereafter submitted it to the employees for their
signatures itt a meeting held on May 3, 194113 It appears that all
u These findings are predicated upon the testimony of Smith, Raymond Merical, the
respondents' mill 'foreman and a Board witness, and Lonnie Stapes, an employee \Nho
appeared as a witness for the respondents. . k '
'a Straight fixed the date of his remarks as at a later meeting on May 3, 1941. _However,
he was obviously mistaken in the date smce.Smith, who testined regarding the statements,
.did not attend'any meeting after March 22.
"The Trial Examiner found that the evidence did not support the allegations in, the
complaint that the respondents had interfered with the employees' rights by requiring
396' DECISIONS OF, NATIONAL LABOR 'RELATIONS BOARD
I
the employees, with the exception of Smith who did not attend the
meeting, also signed this contract. As is discussed more fully here-
inafter, the respondents refused to reinstate Smith because of his
refusal to sign the 1941 contract.
The, complaint alleges that the respondents' requirement that the
employees execute the above-described contracts as a condition of
employment for each production season constituted interference with
the employees' right to organize for the purposes of collective bar-
gaining and other mutual aid and protection. Upon substantially
the same findings relative to the respondents' determination to pre-
vent organization of the employees by the Union, the Trial Examiner
concluded that the respondents had not thereby interfered with the
rights guaranteed employees by Section 7 of the Act by the device
of the individual contracts. We are unable to agree with that
conclusion.
As previously found, in 1937 the respondents executed a contract
governing wages and working conditions with an organization formed
by the respondents for the purpose of preventing organization by
an offiliated organization. When in 1938 the employees repudiated
the company-dominated 'organization, the respondents sponsored the
use*of individual contracts of employment to fix wages and working
conditions. Upon the advent of the Union in 1939, the respondents'
opposition-to union representation was again made clear to the em-
ployees by Straight's admonition that the respondents would not
tolerate organization nor operate the, plant under union conditions.
That the respondents'_, purpose was to minimize the value of organ-
ization and collective bargaining by the device of setting wages
and working conditions first through a company-union contract and
then by the individual contracts cannot be doubted in view of, the
respondents' established-determination to prevent organization. This
purpose became -strikingly clear in 1941, when at a meeting called to
discuss -the' individual . contracts Straight required the 'employees to
sign the individual contracts or "go home," subsequently discharging
Smith for refusing, to sign such a contract, and threatened • to shut
down. the plant rather than operate "under the union" or ",under a
union scale." It is. clear, and we find that the respondents thus offered
theiroemployees individual contracts as an alternative to self-organ-
ization and collective bargaining. The refusal of Smith, the leader
of the union movement, to sign the individual contract in 1941 like-
wise establishes that he viewed the individual contract as being in
derogation of the employees' rights to collective bargaining. That
the respondents utilized the contracts as a means to prevent organiza-
them to sign waivers of rights under the Fair Labor Standards Act. Although no excep-
tions were filed to this conclusion we have examined the evidence and concur in the finding
' '"of the Trial Examiner. '
ADEL CLAY PRODUCTS COMPANY 397
Lion is further established by provisions in the contracts allowing the
respondents to discharge the employee during the term of the con-
tract .for any cause deemed "sufficient" by the respondents. The
utilization of individual contracts as a means of preventing organiza-
tion and collective bargaining is a clear interference with the rights
of employees guaranteed by the Act 14
We find that by their course of conduct in requiring, their em-
ployees to execute individual contracts of employment at the begin-
ning of each production season and in the statements • of H. R.
Straight, as set forth above, the respondents ' have interfered with,
restrained, and coerced their employees in the exercise of the rights
guaranteed in Section 7 of the Act.
B. The discharge and the alleged,discriminatory transfer
Glen Smith began his employment with the respondents in, 193 6 .
During the last several years prior to 1941 he worked as a burner
on the night shift, along with Joe Stout, who was head burner. As
shown above, Smith was the most active of the respondents' employees
on behalf of the Union. In addition to the union activities which
have been detailed above, Smith also solicited the membership of
Raymond Merical, mill room foreman, and James Baker, foreman
in charge of,the car loaders, each of whom Straight acknowledged to
be a supervisory employee.
As shown above, Smith attended the meeting of employees on
March 22, 1941, but did not sign the individual contract of em-
ployment presented by Straight for the employees' signatures on that
occasion. On March 27, the respondents addressed' the following
letter to Smith :
We have made a new agreement with our men for the operating
year of 1941 and until the next operating year starts. All
but a few of our men have signed this agreement and we are
anxious,to know whether or not you will sign it.
We will understand that if you do not sign it within 30 days
from this date, you cannot expect to work for us this year and
we will be governed accordingly in hiring new men.
If you do expect to work for us, it would be greatly appreciated
if you are not in town, if ydu would write us a letter telling
us what we can depend upon so that we can havd your reply
within ten days. •
SIN. L. R. B. v. Superior Tanning Co., 117 F. (2d) 881 (C. C. A. 7)'; .N. L. R B. v.
Stone et al .,. 125 F. (2d) 752 (C. C. A. 7) ; N. L. R. B. v. Jahn & •Ollier'Engravt hg Co.,
123 F. (2d) 589 (C. C. A. 7).
395, DECISIONS OF :NATIONAL,; LABOR RELATIONS BOARD
Smith did not reply to this letter and -did not attend the meeting
of employees, on May 3 at which the revised contract for the 1941
season was submitted-by the respondents to the employees for their
signatures.. -
On May, 4, 1941, the burning operations in the, respondents' plant
began and all the burners with the exception of Smith were on hand
and began work.',' Smith did not appear and his place as a burner
was filled by Adam Finley, a common laborer, who had previously
had experience with the respondents as a burner.
On May 9, Howard Hunt, the respondents' superintendent, called
at Smith's home and inquired as to whether or not he was going to
return to work, and advised him that it would be necessary for him
to execute the contract of May 3, 1941, if he did so.16 Smith advised
Hunt that he "hadn't decided to sign the contract yet." The fol-
lowing day Hunt returned to Smith's home in company with H. R.
Straight. Straight asked Smith if he was ready to return to work
and Smith replied that he was. Straight stated that he had the
contract with him 'and requested that Smith sign it. Smith again
refused, reiterating his previous statement that'he had not decided
to sign the contract. He was then advised by Straight to let Straight
know that afternoon as to whether or not he would sign the contract
and return to work. That afternoon Smith went to the plant, met
with Straight, and again stated that he had not decided to sign the
contract. Straight thereupon informed Smith that, in any event,
he could not return to work in his old position a's a burner, but would
have 'to return as a common laborer. According to the testimony of
Smith, when he asked Straight why he could not have his old posi-
tion as a burner, Straight stated that it was because "you talk too
much about the Union." While Straight's testimony regarding this
incident is in other respects in substantial accord with that of Smith,
he denied telling Smith that he could not return to his position as a
burner because he "talked too much about the Union." He testified
instead that the reason which he assigned to Smith for not offering
him his position as a burner was that Smith's position had already
been filled due to his failure to report for work when the plant began
operations. Upon the record as a whole, we find, as did the Trial
Examiner, that Smith's testimony is substantially true. Smith next
asked Straight if it would be necessary to sign the contract if he
accepted employment as a common laborer and Straight replied that
11 The plant began operations for the season on May 3, the date of the execution of the
revised contract for the 1941 season.
16 These findings are predicated upon Smith ' s testimony which is in conflict in some
respects with that of Hunt. However , the Trial Examiner found Hunt to be an unreliable
witness, as do we. Under these circumstances we credit Smith's testimony regarding the
incident.
ADEL CLAY -PRODUCTS COMPANY , 399.
it would.. Smith then advised Straight that he had "decided not to
sign" the contract. Upon being informed by Straight that he could
not obtain, employment unless he did so, Smith still refused to sign
the contract and this terminated the,incident. Smith made no fur-
ther efforts to secure reinstatement nor did the respondents thereafter
solicit his return to work.
While a portion of Smith's testimony indicates that he would have
accepted employment on May 10 if he had been offered his old posi-
tion as a burner, even though by doing so he would have been re-
quired to sign the contract, it is unnecessary, for the purposes of this
decision, to determine this question. There is nothing in the record
to indicate that Smith would not have obtained his former position
if he had signed the contract prior to the resumption of operations
on May 3 and had reported for work at that time. The undisputed
evidence shows that Smith did not sign the individual contract at
the meeting on March 22, and thereafter refused to sign it at the
'insistence of Hunt and Straight, because he believed that such a re-
quirement contravened his rights. This conclusion on his part was
unquestionably engendered by Straight's remarks at said meeting
of March 22. , Smith was the ' leader ' of the attempted organization
of the respondent's employees 'and he had held a union meeting at
his home just prior to March 22 in an effort to promote organization
among the employees. Straight's remarks, in connection with the
discussion concerning the individual contract of employment, were
construed by Smith, as the leader of the Union, to hewn that by
execution of the individual contract of employment he would re-
pudiate his membership in the Union and thereby relinquish his
right to engage in collective bargaining relative to the wages, hours,,
and working conditions which were the subject matter of the contract.
We have found above that this requirement on the part of the
respondents was intended to and did interfere with the rights of the
employees under the Act. This being true, it constituted an illegal
condition of employment which Smith was not required to accede to
in order to obtain work. The respondents refusal to reemploy
Smith unless he complied with this illegal condition of employment
was tantamount to a refusal to reinstate him because he would not
disavow his membership in, and right to bargain collectively through,
the Union and, as such, constituted discrimination within the meaning
of the Act.
We find that by refusing to reinstate Smith on May 3, 1941, and at
all times thereafter, the respondents discriminated with regard to his
hire and tenure of employment, thereby discouraging membership in
the Unioii^and interfering with, restraining, and coercing their em-
ployees in the exercise of the rights guaranteed in Section 7 of the Act.
400 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Clifford Cotton. , The Trial Examiner found that the evidence' did
not support the allegations of the complaint that the respondents had
discriminated against Cotton by transferring him from the day shift
to the night shift. No exceptions were filed to this conclusion. We
have reviewed the evidence and likewise find that the evidence does
not sustain these allegations. We will, accordingly, dismiss the
complaint in this respect.
IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE
We find that the activities of the.respolidents set forth in Section
III, above,' occurring in connection with the operations' of the re-'
spondents described in Section I, above, have a close, intimate, and
'substantial relation to trade,' traffic, and commerce among the
several States and tend to lead to labor disputes burdening and
obstructing commerce and the free flow of commerce.
V. THE REMEDY
Having found that the respondents have engaged in certain unfair
labor practices, we shall order them to cease and desist therefrom and
to take certain affirmative action designed to effectuate the policies of
the Act and to restore as nearly as possible the conditions which
existed prior to the commission of. the unfair labor practices.
We have, found that the- respondents, by refusing to reinstate Glen
Smith, have discriminated in regard to his hire and tenure of em-
ployment, thereby discouraging membership in the Union. We shall,
therefore, order the respondents to offer him immediate reinstatement
to his former or substantially equivalent position without prejudice
to his seniority and other rights and, privileges, and to make him
whole for any loss of pay he has suffered by reason of the respond=
ents' discrimination against him by payment to him of a sum of
money equal to the amount he would normally have earned as wages
from the date of the respondents' refusal to reinstate him to the date
of such reinstatement, less his net earnings 17 during such,period.
We, have further found that, by reason of the circumstances sur-
rounding the execution of the individual contracts of employment
at the beginning of each production season, as a condition of em-
ployment, the respondents interfered with, restrained, and coerced;
17 By "net earnings " is meant earnings less expenses , such as for transportation, room,
and board , incurred by an employee in connection with obtaining woik and corking else-
where than for the respondents , e hich would not have been incurred but for his unlawful,
discharge and the consequent necessity of 'his seeking employment elsewhere See Matter
of Crossett Lumbei Company and United Brotherhood of Carpenters and Joiners of
America, Lumber and Sawmill Workers Union, Local 2590, 8 N L R B 440 . Monies
receiNed for work perfoimed upon Federal, State , county, municipal , or other work-relief
projdcts shall be considered as; earnings . See Republic 'Steel Corporation v. N L 'R B ,
811U S 7.
ADEL CLAY PRODUCTS COMPANY 401
their employees in the exercise of the rights guaranteed by the Act.
Accordingly , we will order - that the respondents cease giving effect
to any of such contracts of employment which are now in existence
and to discontinue such practice in the future , but nothing in our
order shall be construed as requiring the respondents to vary these
wage, hour, and other substantive features of their relationship with
the employees which the respondents may have established in per-
formance of these ' contracts as extended, renewed, modified,
supplemented , or superseded.
Having, found that the respondents did not engage in unfair labor
practices by discriminating with regard to the hire and tenure of
employment of Clifford Cotton , we will dismiss the allegations of
the complaint in this respect.
Upon the basis of the foregoing findings of fact and upon the
entire record in the case , the Board makes the following :
CONCLUSIONS OF LAW
1. International Union of Mine, Mill and Smelter Workers, is
a labor organization , within the meaning of Section 2 ( 5) of the
Act.
2. By discriminating in regard to the hire and tenure of employ-
ment of Glen Smith , thereby discouraging membership in Inter-
national Union of Mine, Mill and Smelter Workers, the respondents
have engaged in and are engaging in unfair labor practices ; within
the meaning of Section 8 (3) of the Act.
3. By interfering with, restraining , and coercing their employees
in the exercise of the rights guaranteed in Section , 7 of the Act, the
respondents have engaged in and are engaging in unfair labor
practices , within the meaning of Section 8 ( 1) of the Act.
4. The aforesaid unfair labor practices are unfair labor practices
affecting commerce, . within the meaning of Section 2 (6) and (7) of
the Act. -
. 5. The respondents , by transferring Clifford Cotton from the day
shift to the night shift, have not engaged in unfair labor practices,
within the meaning of Section 8 (3) of the Act.,
ORDER
Upon the basis of the above findings of fact and conclusions of
law, and pursuant to Section 10 (c) of the National Labor Relations
Act, the `National Labor Relations Board hereby orders that, the
respondents -Adel Clay Products Company, a corporation, M. T.
Straight , Lee• Straight, Dorothy Straight , and Betty Straight Ogg,
487498-42-vol. 44-26
402- DECISIONS OF NATIONAL LABOR RELATIONS BOARD
a partnership, doing.business'as Adel Clay Products Company, and
H. R. Straight, an individual, all- of Adel, Iowa, and, their officers,
agents, successors, and assigns shall -
1. Cease and desist from:
(a) Discouraging membership in International `Union -of Mine,,
Mill and Smelter Workers or any other labor organization of -their-
employees by refusing to reinstate any of their employees or in any
other manner discriminating in regard to their hire 'or tenure -of
employment, 'or any terms or conditions of employment, because of
their membership in or activity in behalf of any such labor
organization ;
(b) Giving effect to any contract of employment now in existence
between-the respondents and their individual employees, or requiring,
as a condition of employment, execution of-any such contracts by the
individual employees;
(c) In any other manner interfering with, restraining, or coercing
their employees in the exercise of the-right to self-organization, to
form, join,-or assist labor organizations, to bargain collectively through
representatives of their own choosing, or to engage in concerted activi-
ties for the purposes of collective bargaining or other mutual' aid or
protection as guaranteed in Section 7 of the National Labor Relations
Act:
2. Take the following affirmative action which the Board finds will
effectuate the policies of the Act :
(a) Offer to Glen Smith immediate and full reinstatement to his
former or a substantially equivalent position without prejudice to his
seniority and other rights and privileges;
(b) Make whole Glen Smith for any loss of pay he inay have suf-
fered by reason of the respondents' discrimination 'against-him by
payment to him of a sum of money equal to that which he normally
would have earned as wages during the period from May 3, 1941, to
the date of the respondents"offer of reinstatement, less his net earnings
during said period;
(c) Post immediately in conspicuous places in their plant at Red-
field, Iowa, and maintain for a period of at least sixty (60) consecutive
days from the date of posting, notices to their employees stating : (1)
that the respondents will not engage in the conduct from which they
are ordered to cease and desist in paragraphs 1 (a), (b), and (c) of
this Order; (2) that they will take the affirmative action set forth in
paragraphs-2 (a), (b), and (c) of this Order; and (3) that the em-
ployees are free to become or remain members of International Union
of Mine, Mill and Smelter Workers, and that the respondents will not
discriminate against any employee because of membership or activity
in that organization;
ADEL CLAY PRODUCTS COMPANY 403
(d) Notify the Regional Director for the Eighteenth Region in
writing within ten (10 ) days from the date of this Order what steps
the respondents have taken to comply herewith.
AND IT IS FURTHER ORDERED that the complaint be, and it hereby is,
dismissed , insofar as it alleges that the respondents have discriminated
in regard to the hire and tenure of employment of Clifford Cotton.
CHAIRMAN MILLIS took no part in the consideration of the above
Decision and Order.