American Hair and Felt Co.

National Labor Relations Board - Board Decisions

Jan 8, 1940

19 N.L.R.B. 202 (N.L.R.B. 1940)

In the Matter of AMERICAN HAIR AND FELT COMPANY and TEXTILE
WORKERS UNION OF AMERICA, LOCAL 99, AFFILIATED WITII THE
CONGRESS OF INDUSTRIAL ORGANIZATIONS
Case No. C-1142-Decided January 8, 1940
Felt Manufacturing Industry-Interference, Restraint, and Coercion: question-
ing of employees by plant manager of respondent regarding their union affilia-
tion ; raising wages of employees individually to head off organization ;
disparaging union leaders ; attempting to induce union president to forego
union activity-Discrimination: denial of reinstatement following unfair labor
practice strike ; retention of strikebreakers ; discriminatory reductions in pay :
charges of, dismissed-Reinstatement Ordered: displacement of employees hired
after commencement of strike ; preferential list, to be followed in further rein-
statement-Back Pay: to striking employees, from date of refusal to reinstate
to date of offer of reinstatement; in case of one striker, reinstated, from date of
refusal to reinstate until reinstatement-Unit Appropriate for Collective Bar-
gaining: production and maintenance employees, excluding engineers, mechanics,
watchmen, office, clerical and supervisory ; not contested-Representatives:
proof of choice : application cards-Collective Bargaining: refusal to recognize
representative as exclusive bargaining agency; refusal to enter mutually bind-
ing agreement; absence of bona fide intent to reach agreement; breaking off
negotiations during strike and reopening plant with strikebreakers ; remedial
order : enter into a signed agreement, if understanding is reached.
Mr. Frank A. Mouritser, for the Board.
Mr. Elmer H. Howlett and Mr. Towson T. MacLaren, of Los
Angeles, Calif., for the respondent.
Mr. Carey McWilliams, of Los Angeles, Calif., and Mr. Alfred
Udoff, of New York City, for the Union.
Mr. Stanley D. Metzger, of counsel to the Board.
DECISION
AND
ORDER
STATEMENT OF THE CASE
Upon charges and amended charges duly filed by Textile Workers
Organizing Committee, Local 99, herein called the Union, the National
Labor Relations Board, herein called the Board, by the Regional Di-
rector for the Twenty-first Region (Los Angeles, California), issued
its complaint dated October 28, 1938, against American Hair and Felt
19 N. L. R. B., No. 25.
202
AMERICAN HAIR AND FELT COMPANY 203
Company, Los Angeles, California, here called the respondent, alleg-
ing that the respondent had engaged in and was engaging in unfair
labor practices affecting commerce within the meaning of Section 8
(1), (3), and (5) and Section 2 (6) and (7) of the National Labor
Relations Act, 49 Stat. 449, herein called the Act. Copies of the com-
plaint and notice of hearing thereon were duly served on the
respondent and the Union.
. The complaint alleged in substance that on or about October 25,
1937, and at all times thereafter, the Union represented a majority of
the respondent's employees in an appropriate unit; that the respond-
ent had on or about October 25, 1937, and thereafter, refused to bar-
gain collectively with the Union ; that the respondent had sought to
discourage membership in the Union by questioning its employees
about union affiliation and by making derogatory statements about the
Union and its leaders; that the respondent had discriminatorily re-
duced the pay of Richard B. Gatewood, Louise Geiger, Charles Geiger,
H. W. Anderson, and Pernilla Yri because they joined or assisted the
Union; that as a result of the foregoing, the Union, on or about July
11, 1938, instituted a strike against the respondent; that during the
strike the respondent continued to refuse to bargain collectively with
the Union; that on termination of the strike the respondent refused
to reinstate 20 union members because of their union activity ; and that
by these and other acts the respondent had interfered with, restrained,
and coerced its employees in the exercise of the rights guaranteed
them by the Act.
Pursuant to notice, a hearing was held in Los Angeles, California,
on November 7, 8, 9, 14, and 15, 1938, before Thomas H. Kennedy,
the Trial Examiner duly designated by the Board. The Board, the
respondent, and the Union were represented by counsel and partici-
pated in the hearing. Full opportunity to be heard, to examine and
cross-examine witnesses, and to introduce evidence bearing on the
issues was afforded all parties.. During the course of the hearing the
Trial Examiner made various rulings on motions and on objections
to the admission of evidence. He reserved ruling on the admissibility
of union application cards. In his Intermediate Report he admitted
them to.evidence. The Board has reviewed the rulings of the Trial
Examiner and finds that no prejudicial errors were committed. The
rulings are hereby affirmed.
On January 23, 1.939, the Trial Examiner filed his Intermediate
Report in which he found that the respondent had engaged in
unfair labor practices substantially as alleged in the complaint. He
recommended that the respondent cease and desist from engaging in
such unfair labor practices and that it should, upon request, bargain
collectively with the Union, offer reinstatement with back pay to the
strikers who had been denied reinstatement, and make whole Richard
204 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Gatewood, Charles Geiger, Louise Geiger, H. W. Anderson, and Per-
nilla Yri for loss of pay suffered by reason of a discriminatory
reduction in their pay. On February 20, 1939, the respondent filed
exceptions to the Intermediate Report. Oral argument before the
Board was waived by all parties. We have considered the exceptions
of the respondent, and except as followed herein, find them to be
without merit.
The Union filed a motion, dated July 17, 1939, supported by
affidavit, requesting that thereafter in these proceedings it should be
designated as "Textile Workers Union of America, Local 99" instead
of as "Textile Workers Organizing Committee, Local 99." The
motion was pursuant to formal action at a convention of the Textile
Workers Organizing Committee on or about May 15, 1939. On
October 16, 1939, the Board notified the parties that, unless sufficient
cause to the contrary appeared by October 27, 1939, it would grant
the motion. Cause not having been shown, on October 30, 1939, the
Board granted the motion.
Upon the entire record in the case, the Board makes the following :
FINDINGS or FACT
1. TI-IF: BUSINI?SS OF THE RESPONDENT
American Hair and Felt Company, a Delaware corporation, has
its principal office in Chicago, Illinois, and maintains manufacturing
establishments and sales offices in many cities throughout the country.
Its factory involved in this proceeding, located at Los Angeles, Cali-
fornia, processes animal hair and jute fiber and manufactures carpet
cushion and insulating felt. About 60 per cent of all hair received
by the Los Angeles plant is procured from sources outside the State
of California. About 20 per cent of all shipments made by the
Los Angeles plant are to destinations outside the State of California.
In 1937 over 5,000,000 pounds of hair were used in production, over
2,000,00 pounds of which was imported from foreign countries. In
its answer, the respondent admits that it is engaged in interstate
commerce.
About 30 production workers are regularly employed at the Los
Angeles plant.
II. THE ORGANIZATION INVOLVED
Textile Workers Union of America, Local 99, affiliated with the
Congress of Industrial Organizations, is a labor organization admit-
ting to membership all production and maintenance employees of
respondent at its Los Angeles plant, with the exception of engineers,
Incchanics, watchmen, office, clerical, and supervisory employees.
From January 1938 until May 1939, it was known as Textile Workers
AMERICAN HAIR AND FELT COMPANY 205
Organizing Committee, Local 99. Prior thereto and at the time of
its formation during the summer of 1937, the Union was known as
"Warehouse Union, Local 38-134, International Longshoremen's
Association." During the summer of 1937 International Longshore-
men's Association in the Los Angeles area transferred its affiliation
from the American Federation of Labor to the Committee for Indus-
trial Organization,' and became known as International Longshore-
men's and Warehousemen's Union. The I. L. W. U. then began organi-
zation of textile workers in the Los Angeles vicinity in a union called
"Textile Lodge of the International Longshoremen's and Warehouse-
men's Union, Local 1-26," which absorbed the respondent's employees
who had signed applications in "Warehouse Union, Local 38-134, In-
ternational Longshoremen's Association." This Textile Lodge was a
semi-autonomous group, which, it was understood by the I. L. W. U.,
would obtain a charter of its own when it reached sufficient strength.
In January 1938 the Union obtained a charter as "Textile Workers
Organizing Committee, Local 99," and continued to be known as
such until on or about May 15, 1939. Although the name of the
Union has changed several times, its identity has remained constant
throughout.
III. THE UNFAIR LABOR PRACTICES
A. Interference, restraint, and coercion
In July 1937 a number of employees at the Los Angeles plant
became interested in joining a labor organization. Early in August
several employees were instructed by Lyle Ehrhard, plant superin-
tendent, to report to the office of Dwight E. Baum, the plant manager,
for a meeting. Here the employees told Baum of their desire to
organize, whereupon Baum stated that they either could form a
committee of their own, without outside affiliation, or could join
the A. F. L. or C. I. O. Baum offered them stenographic services
and use of the respondent's premises for the purpose of holding an
election. As it result, an election was held in which the majority
of the employees voted to affiliate with the C. I. O.
Thereafter, about August 1, 1937, leaflets were distributed outside
the plant announcing a union meeting on August 14. The meeting
subsequently was attended by 15 or 20 employees who there joined the
Union. Shortly thereafter, Baum approached Richard B. Gatewood,
a union member, and inquired why he had joined the Union. Gate-
wood replied that he was not satisfied with his pay, and expected to
get more money by joining the Union. A few days later, Baum
approached each employee in the plant and asked him what he
I Now Congress of Industrial Organizations.
206 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
thought his services were worth . The following day he called the
employees into his office individually and there gave them wage
increases . Baum took occasion to remind John C. Bates, a union
member, that the raise did not result from any action by the Union,
but was given on Baum's own initiative.
About August 16 , Baum asked Fred Francis, a union member, if
he was going to join a union , and the latter replied that he believed
in "sticking together" with the other employees. Baum then stated
that Francis "didn't have to belong to a union" to work in the plant.
Baum had previously made the same observation to all of the
employees at a "Safety Meeting." Baum inquired ' if Francis wanted
this made "any plainer ," but Francis did not reply . During this
period Baum interrogated other employees about their union affilia-
tion. In December 1937 Baum approached William W. Johnke in
the plant and inquired if Jolinke had derived any benefits from the
Union. Baum stated at the time that the respondent had been get-
ting along well "up to now" without a union and that there would
have been no union in the plant had it not been for "a couple of
fellows who were communistic ." Baum admitted at the hearing that
this last remark referred to Gatewood and Anderson, leaders in the
Union.
During working hours on or about June 22, 1938, Baum approached
Anderson , the president of the Union. According to Anderson,
Baum remarked that Anderson could not serve "two bosses" and of-
fered to refrain from applying a proposed general wage cut to
Anderson if the latter would " forget" the Union . Baum's version
of the conversation was that he offered to maintain Anderson's wage
scale if he would get his production up. This offer Baum explained
on the ground that Anderson actually had , admitted that he had been
keeping production down for 3 years. Ehrhard, the plant super-
intendent , testified that he had never received any complaints about
Anderson 's work, thus casting great doubt on Baum's version of the
conversation . Under the circumstances , we find Baum in fact
requested Anderson to "forget" the Union.
From the foregoing it is clear that during the period of time cov-
ered by the activities recited, Baum's conduct was designed to inter-
fere with the employees' exercise of the rights guaranteed them by
the Act. Baum's concern in offering the men stenographic services,
and use of . the respondent 's property , at the outset of their interest
in self-organization provides the first indication of his desire to in-
fluence the men. After his suggestion that the men might form an
independent union had gone unheeded , Baum set out to attack the
Union directly through the grant of individual wage increases, with
the remark that the Union had no part in getting them for the men.
AMERICAN HAIR AND FELT COMPANY 207
Contemporaneously, and thereafter, he inquired as to the union
activity of a number of employees, and disparaged the Union and its
leaders. ' His anti-union activity culminated in his attempt to induce
Anderson to "forget" the Union by offering to maintain Anderson's
wage scale in the face of a general wage cut. We find that by the
foregoing acts and conduct the respondent has interfered with, re-
strained, and coerced its employees in the exercise of their rights
guaranteed in Section 7 of the Act.
B. The refusal to bargain collectively
1. The appropriate unit
The complaint alleges, and the Union contends, that all produc-
tion and maintenance employees at the Los Angeles plant, excluding
engineers, mechanics, watchmen, office, clerical, and supervisory em-
ployees constitute a unit appropriate for the purposes of collective
bargaining. The respondent does not contest the propriety of such
unit and the Union is the only labor organization involved. Ac-
cordingly, we find that the production and maintenance employees of
the respondent at its Los Angeles plant, excluding engineers, me-
chanics, watchmen, office, clerical, and supervisory employees con-
stitute a. unit appropriate for the purposes of collective bargaining,
and that such a unit insures to employees of the respondent the full
benefit of their right to collective bargaining and otherwise effectu-
ates the policies of the Act.
2. Representation by the Union of the majority in the
appropriate unit
On October 25, 1937, the respondent employed approximately 31
employees at its Los Angeles plant, while on July 11, 1938, there were
27 employees. There was introduced in evidence a number of appli-
cations for membership in the Union. No question as to the au-
thenticity of the cards has been raised. On the basis of these cards
it appears that on October 25, 1937, the Union represented 27 of the
31 employees in the unit, while, on July 11, 1938, it represented 23 of
the 27 employees in the unit. At no time from October 25, 1937,
until the hearing herein, did the respondent contest the Union's claim
to represent a majority of the employees.
We find that on October 25, 1937, and at all times thereafter,. the
Union was the duly designated representative of the majority of the
employees in the appropriate unit for the purposes of collective bar-
gaining and that pursuant to Section 9 (a) of the Act it was the
exclusive representative of the employees in such unit for the purposes
of collective bargaining with respect to rates of pay, wages, hours
of employment, and other conditions of work.
208 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
3. The refusal to bargain
The Union first met with Baum on September 20, 1937, and pre-
sented to him a draft contract providing for recognition of the Union
as the bargaining representative of its members. Baum questioned
whether the Union represented a majority of the employees. When
the Union offered to obtain certification by the Board, however,
Baum said this would not be necessary. On his request, negotiations
thereupon were suspended while he visited Chicago for several weeks.
While in Chicago, Baum received from the Union a notarized list of
its members, who constituted a majority of the employees. At a, second
conference on October 21 Baum accepted this list as adequate proof
of the Union's majority and never thereafter questioned the Union's
status as representative of a majority of the employees.
Negotiations between the parties took place'a.t a series of meetings
on October 21, 25, 28, and November 1, 1937. At the outset of the
negotiations, on October 21, the Union requested both a written con-
tract and exclusive bargaining rights. Baum refused both requests.
Baum asserts that he told the union representatives that the respond-
ent "preferred not to sign a contract" and would prefer to embody
any agreement with the Union only in a policy statement to be posted
in the plant. According to Gatewood, a union representative, Baum
made a flat statement that the respondent would not sign any contract
with a union, and that the Union "might as well get that straight."
Irrespective of the exact content of Baum's statement, it is clear that
it resulted in the temporary withdrawal of the Union's request for
a contract, and after October 25 negotiations proceeded on the basis
of a "statement of policy" covering matters agreed to by the parties,
which statement was to be posted in the plant.
After October 25 the Union submitted two proposed policy state-
ments. The first provided for recognition of the Union by the re-
spondent "as, the collective bargaining agency for its employees."
This was discussed at a meeting on October 28, during which Baum by
interlineation changed the proposed statement so as to provide. for
recognition of the Union as bargaining agent for its members only.
Baum claims that he' did this only after discussion with the Union,
and that the Union was not actually seeking exclusive recognition.
Gatewood's testimony, supported by the terms of the proposed state-
ment of policy, was that the Union specifically requested union recog-
nition as bargaining agent for all employees. In view of the circum-
stances, we are convinced that Gatewood's testimony on this matter
is reliable. Gatewood further testified, and we find, that Baum re-
fused to recognize the Union is exclusive bargaining agent for all
the employees. Thereafter, the Union accepted "members only"
recognition, as "satisfactory for the time being" and was accorded
AMERICAN HAIR AND FELT COMPANY 209
such recognition in the policy statement finally agreed upon and
posted in the plant on November 1, 1937.
The statement of policy did not purport to be a contract but was
merely a unilateral declaration by the respondent. It announced a
seniority principle in lay-offs and a grievance committee of two em-
ployee and two employer representatives.. It also provided that a
week's notice of any lay-off should be given the employees affected,
and that a union bulletin board should be maintained in the plant.
The policy statement contained no provision regarding wages. Baum
orally promised, however, not to change the wages then being paid.
The grievance committee thus set up met but twice, in December.
1937 and January 1938, since the union representatives felt the
respondent to be wanting in sincerity in the grievance negotiations.
Despite his oral promise not to reduce wages, Baum, during Janu-
ary, February, and March of 1938, reduced the wages of five
individual union members. The reductions were made without con-
sultation with the Union. Again in April 1938 a notice was posted
in the plant, stating that the Company was losing money and that
an adjustment of wages might be necessary if conditions failed to
improve. On June 23, Baum posted a statement in the plant announc-
ing a 10-per cent wage cut effective June 27, 1938. Without any
notice being given pursuant to the policy statement, the plant then
was shut down on June 25.
In conjunction with the adoption of the wage cut, Baum approached
Anderson, the union president, about June 22 and remarked that the
latter could not "work for two bosses." Baum then offered to main-
tain Anderson's wage rate without any reduction if Anderson would
"forget" the Union. At about the same time Baum also inquired
of Johnke, a prominent union member, as to how many union mem-
bers there were. Johnke informed him there were "quite a few."
On July 8, 1938, during the shut-down, the Union held a meeting
to consider action with respect to the wage cut and to discuss once
more the possibility of obtaining a collective bargaining contract with
the respondent. , At the meeting dissatisfaction was expressed over
the Union's past bargaining relations with the respondent since it
was felt that Baum had been "stalling" throughout the negotiations,
as evidenced by the refusal to grant exclusive recognition to the
Union, and refusal to enter into a contract. A draft contract finally
was approved by the meeting for presentation to Baum, and it was
decided that a strike should be called if Baum continued "stalling."
In order to discuss the wage cut and negotiate a contract, Gatewoocl
thereafter arranged a conference between Baum and union repre-
sentatives on the morning of July 11, the day the plant reopened.
At the conference the union representatives initially requested a
signed contract. Their proposed contract contained provisions for a
210 DECISIONS OF NATIONAL LABOR RELATIONS BOARD -
closed shop, for an increase in wages over the scale existing prior
to April 1, 1938, for continuance of the grievance procedure outlined
in the November 1, 1937, policy statement, for notice-of lay-offs, and
for a union bulletin board in the plant. Baum, however, stated
that he would not enter into such a contract because parts of it
affected "company policies," and necessitated his consulting the Chi-
cago office.2 He expressed opposition to the grievance procedure on
the ground that he wanted to handle grievances with the specific indi-
viduals involved and not with the Union; refused to agree to give
notice of lay-offs because it would "disrupt business," and refused to
permit a union bulletin board in the plant. All three of these con-
cessions had been granted to the Union in the November 1, 1937,
policy statement. According to Gatewood, Baum also announced a
determination never to recognize the Union as sole collective bargain-
ing agency. Baum denied this. As noted above, he had in fact
refused such recognition to the Union on October 25, 1937. In view
of the circumstances, we are convinced that Gatewood's testimony is
entitled to credence and that on July 11 Baum again refused to grant
the Union recognition as exclusive representative of all the employees.
At the close of the meeting Gatewood pointed out that the union
members had decided to strike unless Baum "was willing to definitely
bargain and work out some solution." Although Baum replied that
he did not "give a damn" if they did strike, the union representatives
decided to hold another union meeting to consider the advisability of
striking.
During the noon hour this -meeting was held and the men again
voted to strike. The union representatives returned to Baum's office
that afternoon, informed him of the vote, and again stated that unless
Baum "was willing to bargain and arrive at some solution" the strike
would take place immediately. Baum thereupon asked the union lead-
ers to do him a personal favor and continue working for another day
so that a particular order could be completed. When this was re-
fused, Baum said that he would notify the Chicago office that the
plant was closed due to the strike. That afternoon the strike actually
commenced, and a picket line was established outside the plant.
On the same evening Baum and Tannons, the respondent's office
manager, called on Johiike and Francis, union members, at their
homes and urged them to return to work the next day. Baum asked
each man to give an "individual answer" and told Johnke that it
would be assumed that he did not want to work for the respondent
Gatewood testified that Baum claimed to lack authority to sign the contract. On
July 14, Baum presented a letter to union representatives from the Chicago office author-
izing him to bargain and sign any contracts subject to approval of the respondent's board
of directors.
AMERICAN HAIR AND FELT COMPANY 211
any longer if he failed to report to work. Both Johnke and Francis
refused Baum's offer.
On July 14, 1938, union representatives again met with Baum. The
latter pointed out that it had been previously claimed by' the men
that the respondent was not bargaining in good ,faith, and then pre-
sented for consideration a contract dated July 12, 1938, which had
been drafted at the respondent's Chicago office. This contract, while
in terms granting the Union's request for exclusive representation of
the employees and recognizing a seniority principle as a factor in
lay-offs and rehiring, actually provided for individual settlement of
grievances, and made no mention of the posting of -lay-off notices or
of the maintenance of a union bulletin board in the plant. It also
called for Maintenance of the wage reduction given in June. The
union representatives, although pointing out that, apart from recogni-
tioii of the Union, the proposed contract was considerably less favor-
able to the Union than the policy statement, agreed to present it to the
union members for consideration. In the discussion Bauln refused to
enter into a closed-shop contract, but offered to make a small modifica-
tion of the wage cut.3
At a meeting on July 16, 1938, the union members discussed the
respondent's proposed contract and decided that it was unacceptable.
As a result, a committee was instructed to press once more, for accept-
ance by Baum, the contract submitted by the Union on July 11. On
July 18, 1938, the committee met with Baum, who once more refused
to consent to the system of presenting grievances which the Union had
suggested, and which had been outlined in the policy statement. He
again refused to post lay-off notices, on the ground that they would
disrupt business, rejected an offer by the Union to accept the wage
scale prevailing prior to the cut, reiterated his July 14 proposal of a
partial reduction in the wage cut, and refused the request for a closed
shop., Baum stated that the proposed company contract of July 1 t
was the only contract he would sign.
At the same meeting, according to Gatewood, one Thiers, whom
Baum introduced as a former vice president of the respondent, spoke
on the respondent's behalf and told the union representatives that
he had been through eight strikes, that unions "always lose and al-
ways will lose strikes," and that the Union had better accept Baum's
proposal. Baum testified that Thiers was a stockholder who hap-
pened to drop in on his way "up north," whereupon Baum asked him
to sit in at the meeting. Baum did not deny Gatewood's version of
3 The wage cut announced June 23 provided for 6 cents an hour cut for employees
receiving from 60-69 cents an hour, and 5 cents an hour cut for employees receiving
50-59 cents an hour . The offered modification reduced the cut to 5 cents an hour for
employees receiving 60-69 cents an hour , and 3 cents an hour for employees receiving
50-59 cents an hour.
212 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Thiers' statements. The respondent, in its exceptions, denies that
Thiers had authority to speak for it. We are unable to believe that
Thiers' appearance at the important negotiations on July 18 was not
premeditated. Baum, who introduced Thiers and was present
throughout, by his conduct led the union representatives to believe
reasonably that Thiers spoke with authority. Thus the respondent
assumed responsibility for Thiers' statements. Following Thiers'
statement, Baum announced that if the Union would accept his pro-
posal the men mould return to work immediately, but that if they
refused to accept it, he would no longer "fool" with them, and would
reopen the plant. Baum added that it was time for his lunch, and
that the union representatives had better leave. As a result the meet-
ing broke up, with the understanding that the Union would recon•
cider the proposals that Baum submitted.4
Without further negotiations being had, Baum on July 20, 1938,
wired all strikers individually to return to work on July 21 at the
reduced wages announced on June 23. When they failed to. return,
Baum hired 28 strikebreakers through the Merchants' and Manufac-
turers' Association in Los Angeles, and with the aid of armed guards
hired for the purpose, he reopened the plant on July 22, 1938.
Baum's reluctance in testifying to the circumstances surrounding
the reopening of the plant on July 22, and his evasive replies to
questions and faulty memory regarding said occurrences, greatly
impair his credibility.
About July 26, 1938, union representatives sought to resume nego•
tiations but were told by Baum that he had little time to "fool" with
them and had nothing further to say since the strikers' jobs had
been filled. On August 2, union representatives offered to have the
strikers return to work at the wage scale prevailing prior to June
27, but this suggestion was rejected by Baum on the ground that
the respondent was then paying all it could afford. On August 5,
1938, the strike was terminated and the strikers sought reinstatement,
which was denied.
In considering whether the foregoing facts establish that the re-
spondent has refused to bargain collectively with the Union, within
the meaning of Section 8 (5) of the Act, it is noteworthy that very
early in the negotiations the respondent refused to recognize the
Union as exclusive bargaining representative for all the employees.
As we have previously had occasion to state : "To meet and negotiate
with a committee of employees while deliberately withholding union
recognition does not satisfy the requirements of the Act. The para-
mount importance of the effect of union recognition alone in securing
* The modification of the wage cut and the July 14 company contract.
AMERICAN HAIR AND FELT COMPANY 213
collective bargaining has been asserted repeatedly in our decisions." 5
At all times during the negotiations after October 25, 1937, the Union
was the duly designated bargaining agency of the respondent's em-
ployees, and it was incumbent upon the respondent's officials to recog-
nize, and negotiate with, the Union as such exclusive agency. The re-
spondent not only refused to recognize the Union as the exclusive
bargaining agency of its employees, but, in addition, refused at the
very outset of negotiations to enter into any agreement with the Union,
preferring a unilateral policy statement which was revocable at any
time. A refusal at the outset of negotiations to enter into an agree-
ment mutually binding upon the parties is a refusal to bargain within
the meaning of Section 8 (5) of the Act. Such a refusal, by denying
a labor organization the normal fruits of its. endeavors, has a clear
tendency to render the organization impotent and destroy it. Once
having pressed the Union into renouncing temporarily its demand
for a contract, moreover, the respondent ignored its own policy state-
ment by closing down its plant and laying off its employees without
giving them the required notice. Further, the respondent ignored
its oral promise not to reduce wages by cutting the wage rates of five
employees. These events, in addition to the factors above mentioned,
indicate the respondent's intention not to accord the Union the stature
usually accorded a bargaining agency in bona fide collective bargain-
ing. We find that the respondent, by refusing on October 25, 1937,
and thereafter until July 14, 1938, to recognize and bargain with the
Union as the exclusive bargaining agency of its employees, refused
to bargain collectively with the Union as required by the Act.
Following the initial refusal to bargain with the Union, Baum
made derogatory statements about union leaders, reduced the pay
of five union members despite his promise not to do so, and attempted
to influence the president of the Union to cease his union activity.
Following these events he repeated his refusal to grant the Union
exclusive recognition, on July 11, 1938. On the same day, after his
refusal of exclusive recognition, among other things, had precipi-
tated a strike, he solicited two union members to return to work as
individuals and thus abandon the Union. At conferences on July
11 and two subsequent occasions, he flatly refused to continue any
form of grievance procedure although, as noted above, the policy
statement had established such a procedure. In connection with this
refusal, Baum remarked that "he wasn't going to have any one take
up their grievances with the Union and then bring them to him."
He also refused to continue the policy of posting lay-off notices and
permitting a union bulletin board in the plant.
g Matter of The Griswold Manufacturing Company and Amalgamated Association of
Iron, Steel and Tin Workers of North America, Lodge No. 1197, 8 N. L. R. B. 298, enf'd
N. L. R. B. V. Griswold Manufacturing Co., 106 F . ( 2d) 713 (C. C. A. 3).
283030-41-vol. 19-15
214 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
The foregoing incidents make it clear that Baum 's entire course of
conduct from the inception of the Union's effort to bargain collec-
tively was marked by hostility toward the Union. It is apparent
that at no time on or before July 11, 1938, did Baum intend to
bargain collectively with the Union with the intention of reaching
some agreement with it. On July 14 Baum presented a proposed
contract which at last granted the Union exclusive recognition, but
which in other respects was so unfavorable to the Union that Baum
could not reasonably have expected the Union to agree to it without
further negotiations. On July 18 the Union in fact rejected the
proposed contract, whereupon Baum stated that unless his proposed
contract was accepted he would no longer "fool" with the Union.
Baum then dismissed the union representatives so that he could eat
lunch. Two days later, without any further effort to negotiate, he
proceeded to solicit the strikers to return to work individually and
thus abandon the Union's position. This took place only 9 days
after the Union instituted its efforts to obtain an agreement with
the respondent and after but three conferences between the parties
had been held. At this stage in the negotiations, Baum could not
reasonably have believed that such an impasse had been reached
that further consultation with the Union would be fruitless. Never-
theless he proceeded to reopen the plant with strikebreakers, and
thereafter refused to deal with the Union.
In thus breaking off the negotiations, the respondent, through
Baum , failed and refused to bargain collectively with the Union.,'
Indeed from all the evidence it appears that although Baum in some
ways attempted to preserve the forms of collective bargaining, he
did not observe its substance. We have no doubt that at no time did
Baum , as representative of the respondent, seriously intend to make
all reasonable efforts to reach an agreement with the Union.
We find that respondent, on October 25, 1937, and at all times
thereafter, refused to bargain collectively with the Union, as the
representative of its employees, in respect to rates of pay, wages,
hours of employment, and other conditions of employment, and that
it thereby interfered with, restrained, and coerced its employees in
the exercise of the rights guaranteed by Section 7 of the Act.
We further find that the respondent, by refusing to bargain with
the Union, and by its other acts, caused the strike on July 11, 1938,
and its prolongation thereafter.
6 Cf. Jeffery-DetiVitt Insulator Company v . National Labor Relations Board, 91 F. (2d)
134 (C. C. A. 4), cert. den. 302 U. S. 731. In that case the Circuit Court said: ".. .
If an employer in the presence of a strike could rid himself of the obligation to negotiate
by declaring further negotiations to be useless and refusing to recognize as employees
those failing to return to work on his own terms, the statute enjoining collective bar-
gaining would largely fail of its purpose . We do not think it can be brushed aside so,
easily. " 91 F. (2d ) at p. 140.
AMERICAN HAIR AND ,FELT COMPANY 215
C. The alleged discriminations with regard to hire and tenure
of employment
1. The refusal to reinstate striking employees
The complaint alleges, and the Trial Examiner found that the re-
spondent discriminated with regard to the hire and tenure of employ-
ment of Lawrence Foster, William Johnke, Pernilla Yri, William
Russell, Hugh Anderson, Robert Dedrick, M. A. Mitchell, Eugene
Wells, William Sherrard, Arlis Reynolds, Carl Molin, Jace Rich-
ardson, Evelyn Richardson, . Richard Gatewood, Charles Geiger,
Louise Geiger, Don McGee, Fred Francis, Cecil Bates and Hans
Reiper, by refusing to reinstate them on application following the
strike. All of these employees were among those who went on strike.
The strike, substantially caused by the respondent's unfair labor
practices, occurred on July 11, 1938. On July 20 the respondent
wired all the strikers individually to return to work on July 21 at
the wage scale prevailing on July 11. When they did not return,
the respondent hired 28 strikebreakers and, with their aid, reopened
the plant on July 22. About July 26, when union representatives
requested bargaining in order to arrive at some solution, Baum re-
plied that the strikers' jobs were filled and that he had nothing
further to say. On August 5 union representatives informed Baum
that they were terminating the strike, and requested Baum to rein-
state the strikers. Baum at that time inquired if the men would sign
new applications for employment and on being told they would do
so, and that they desired to be treated "collectively," distributed the
applications. At the same time, Baum informed the union repre-
sentatives that the jobs had already been filled, "and that he cer-
tainly wasn't going to fire any of the men that he had in the plant
and replace any of those fellows that were on the picket line." The
applications for employment nonetheless were filled out by the men
and returned to Baum. From August 5, 1938, until the hearing
herein, only one striker, Eugene Wells, was reinstated. Of the 28
strikebreakers hired by the respondent for the July 22 reopening,
24 were still employed on August 5, 1938, the date the 20 strikers
applied for reinstatement. It is apparent from the foregoing that
at the time the strikers applied for reinstatement on August 5 the
plant was operating at a capacity at least as great as when the strike
was called, and that the respondent would have been able, by dis-
placing persons hired after the strike began, to have restored all strik-
ing employees to their former positions at the time of their
application for reinstatement.
Under Section 2 (3) of the Act the strikers remained employees;
of the respondent. We have frequently held that where a strike has
216 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
been caused or prolonged, in whole or in substantial part, by the re-
spondent's unfair labor practices, the striking employees are entitled
to reinstatement in their former positions upon making application
therefor.7 The failure of the respondent in this case to reinstate the
striking employees to the positions to which they were entitled on
August 5, 1938, by displacing persons hired after the commencement
of the strike, constituted discrimination in regard to the hire and
tenure of employment of the strikers seeking reinstatement. We
find that by the foregoing refusal to reinstate the striking employees
on August 5, 1938, the respondent has discriminated in regard to the
hire and tenure of employment of its employees, thereby discouraging
membership in the Union, within the meaning of Section 8 (3) of
the Act, and has interfered with, restrained, and coerced its em-
ployees in the exercise of the rights guaranteed in Section 7 of
the Act.
2. Alleged discriminatory reductions in pay
The complaint alleges, and the Trial Examiner found, that on or
about March 1, 1938, the respondent reduced the hourly wage rate
of Richard Gatewood, Louise Geiger, Charles Geiger, Hugh Ander-
son, and Pernilla Yri because they joined and assisted the Union,
and thereby discriminated in regard to hire and tenure of employ-
ment of its employees within the meaning of Section 8 (3) of the Act.
The reductions in the hourly wage rates of the named individuals
occurred in January, February, and March, 1938, after the respond-
ent had promised orally, on or about November 1, 1937, not to reduce
wages. With regard to three of the individuals, Louise Geiger,
Pernilla Yri, and Charles Geiger, it does not appear that they were
active in the Union, and the record indicates that they were only
slightly reduced in pay at a time when business conditions were bad.
The respondent had, a few months prior, reduced in a similar manner
the wage rates of two non-union employees. In these circumstances,
we do not feel that the reductions in the pay of Louise Geiger, Per-
nilla Yri, and Charles Geiger, were designed to discriminate against
them because of their union activity. Regarding Gatewood and An-
derson, there is more doubt respecting the motives of the respondent
in reducing their wage rates. Both men were leaders in the Union,
and had been described by Baum as "communistic" shortly before
the reductions in their pay. In view of all of the evidence, however,
7 Matter of Jeffery-DeWitt Insulator Company and Local No. 455, United Brick and
Clay Workers of America, 1 N.. L. R. B. 618, enf'd, Jeffery-DeWitt Insulator Company v.
National Labor Relations Board, 91 F. (2d) 134 (C. C. A. 4), cert. den. 302 U. S. 731 ;
National Labor Relations Board v. Remington Rand, Inc., 94 F. (2d) 862 (C. C. A. 2),
cert. den. 304 U. S. 576; Matter of Western Felt Works, a corporation and TcWtile
Workers Organizing Committee, Western Felt Local. In N. L. R. B. 407.
AMERICAN HAIR AND FELT COMPANY 217
we are unable to conclude that Gatewood and Anderson were sub-
jected to discrimination because of their union activity.
We shall therefore order that the complaint be dismissed in so far
as it alleges that the respondent discriminated against Richard
Gatewood, Louise Geiger, Hugh Anderson, Charles Geiger, and Per-
nilla Yri by reducing their hourly wage rates.
IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE
We find that the activities of the respondent set forth in Section
III above, occurring in connection with the operations of the respond-
ent 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 com-
merce and the free flow of commerce.
V. THE REMEDY
Having found that the respondent has engaged in unfair labor
practices, we will order it 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 striking employees were discriminatorily
denied reinstatement, on and after August 5, 1938. We shall, there-
fore, order the respondent to offer to its employees who went on
strike on July 11, 1938, reinstatement to their former positions, with-
out prejudice to their seniority and other rights and privileges. Such
reinstatement shall be effected in the following manner :
All persons hired after July 11, 1938, shall be dismissed, if neces-
sary to provide employment for those to be offered reinstatement.
If, after this is done, the respondent determines that the services of
any of its staff as then constituted, including all employees to be
offered reinstatement as provided herein, are not required, it may
reduce its staff, provided that it does so without discrimination against
any employees because of their union affiliation or activities, follow-
ing a system of seniority to such extent as has heretofore been applied
in the conduct of the respondent's business, subject to any modifica-
tion introduced by agreement with the Union. Those employees
remaining after such distribution, for whom no employment is imme-
diately available, shall be placed upon a preferential list prepared
in accordance with the principles set forth above, and shall, there-
after, in accordance with such list, be reemployed in their former or
substantially equivalent positions as such employment becomes avail-
able and before other persons are hired for such work.
218 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
We shall order the respondent to make whole for any loss suffered
as a result of the discrimination each of the employees ordered to be
offered reinstatement by payment to each of an amount equal to that
which each would have earned as wages from August 5, 1938, to the
date of the offer of reinstatement, or placement on the preferential
list, less his or her net earnings 8 during that period. With regard to
Eugene Wells, a striker who has been reinstated, the respondent shall
give him such compensatory back pay for the period from August 5,
1938, until August 23, 1938, the date he was offered reinstatement.
We have found that a majority of the respondent's employees
within the appropriate unit have designated the Union as their repre-
sentative for the purposes of collective bargaining. The respondent's
unfair labor practices in refusing to bargain with the Union and
denying employment to its members cannot operate to change or
nullify the bargaining representatives previously selected by the un-
trammeled will of the majority. The striking employees remain em
-ployees of the respondent, and will be reinstated. In order to effec-
tuate the policies of the Act, we must restore, as nearly as possible,
the status quo before the unfair labor practices were committed and
secure to the employees their right to bargain through the represent-.
atives they have selected with full freedom of choice. We will,
therefore, base our order upon the majority obtaining upon the
date of the refusal to bargain and require the respondent to bargain
with the Union upon request." Since we have found that the re-
spondent has refused to enter into a contract with the Union, we
shall order the respondent, if an understanding is reached on the
matters bargained about by the Union and the respondent, to embody
such understanding in a signed agreement upon request by the Union.
We have found that the respondent has not discriminated against
Richard Gatewood, Louise Geiger, Hugh Anderson, Charles Geiger,
and Pernilla Yri within the meaning of Section 8 (3) of the Act by
reducing their hourly wage rates. We shall, therefore, dismiss that
8 By "net earnings" is meant earnings less expenses , such as for transportation, room,
and board , incurred by an employee in connection with obtaining work and working else-
where than for the respondent , which would not have been incurred but for the respond-
ent's unlawful refusal to reinstate him, and the consequent necessity of his seeking
employment elsewhere . See Matter of Crossett Lumber Company and United Brother-
hood o f Carpenters and Joiners of America, Lumber and Sawmill Workers Union, Local
3590, 8 N. L. R. B. 440. Monies received for work performed upon Federal, State, county,
municipal , or other work-relief projects are not considered as earnings , but as provided
below in the Order, shall be deducted from the sum due the employee , and the amount
thereof shall be paid over to the appropriate fiscal agency of the Federal , State, county,
municipal , or other government or governments which supplied the funds for said work-
relief projects.
eMatter of Inland Steel Company and Steel Workers Organizing Committee and Amal-
gamated Association of Iron, Steel and Tin Workers of North America , Lodge Nos. 64,
1010, and 1101, 9 N. L. R . B. 783, and cases cited therein.
AMERICAN HAIR AND FELT COMPANY 219
portion of the complaint which alleges that the respondent has dis-
criminated against them by reducing their hourly wage rates.
Upon the basis of the foregoing findings of fact and upon the en-
tire record in the proceeding, the Board makes the following :
CONCLUSIONS OF LAW
1. Textile Workers Union of America, Local 99, is a labor organi-
zation within the meaning of Section 2 (5) of the Act.
2. All of the respondent's production and maintenance employees
at its Los Angeles, California, plant, excluding engineers, mechanics,
watchmen, office, clerical, and supervisory employees constitute a unit
appropriate for the purposes of collective. bargaining within the
meaning of Section 9 (b) of the Act.
3. Textile Workers Union of America, Local 99, was, on October
25, 1937, and at all times thereafter has been, the exclusive represent-
ative of all employees in such unit for the purposes of collective
bargaining within the meaning of Section 9 (a) of the Act.
4. By refusing to bargain collectively with Textile Workers Union
of America, Local 99, as the exclusive representative of its employees
in the appropriate unit, the respondent has engaged in and is engag-
ing in unfair labor practices within the meaning of Section 8 (5) of
the Act.
5. By discriminating against Lawrence Foster, William Johnke,
Pernilla Yri, William Russell, Hugh Anderson, Robert Dedrick,
M. A. Mitchell, William Sherrard, Arlis Reynolds, Carl Molin, Jace
Richardson, Evelyn Richardson, Richard Gatewood, Charles Geiger,
Louise Geiger, Don McGee, Fred Francis, Cecil Bates, Eugene Wells,
and Hans Reiper, in regard to their hire and tenure of employment
and thereby discouraging membership in Textile Workers Union of
America, Local 99, the respondent has engaged in and is engaging
in unfair labor practices within the meaning of Section 8 (3) of the
Act.
6. By interfering with, restraining, and coercing its employees in
the exercise of the rights guaranteed in Section 7 of the Act, the
respondent has engaged in and is engaging in unfair labor practices
within the meaning of Section 8 (1) of the Act.
7. The aforesaid unfair labor practices are unfair labor practices
affecting commerce within the meaning of Section 2 (6) and (7) of
the Act.
8. The respondent, by reducing the hourly wage rates of Richard
Gatewood, Louise Geiger, Hugh W. Anderson, Charles Geiger, and
Pernilla Yri, has not engaged in unfair labor practices within the
meaning of Section 8 (3) of the Act.
220 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
ORDER
Upon the basis of the above findings of fact and conclusions of law,
and pursuant to Section 10 (c) of thl National Labor Relations Act,
the National Labor Relations Board hereby orders that the respond-
ent, American Hair and Felt Company, and its officers, agents,
successors, and assigns shall :
1. Cease and desist from :
(a) Discouraging membership in Textile Workers Union of Amer-
ica, Local 99, or any other labor organization of its employees, by
discharging, laying off, or refusing to reinstate any of its employees,
or in any other manner discriminating in regard to their hire or
tenure of employment or any terms or conditions of their employment;
(b) Refusing to bargain collectively with Textile Workers Union
of America, Local 99, as the exclusive representative of all produc-
tion and maintenance employees at its Los Angeles, California, plant,
excluding engineers, mechanics, watchmen, office, clerical, and
supervisory employees;
(c) In any other manner interfering with, restraining, or coercing
its employees in the exercise of their rights to self-organization, to
form, join, or assist labor organizations, to bargain collectively
through representatives of their own choosing and to engage in con-
certed activities for the purpose 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) Upon request, bargain collectively with Textile Workers Union
of America, Local 99, as the exclusive representative of all production
and maintenance employees at the Los Angeles, California, plant,
excluding engineers, mechanics, watchmen, office, clerical, and super-
visory employees, in respect to rates of pay, wages, hours of employ-
ment, and other conditions of employment; and, if an understanding
is reached on such matters, upon request, embody said understanding
in a signed agreement;.
(b) Offer to Lawrence Foster, William Johnke, Pernilla Yri,
William Russell, Hugh Anderson, Robert Dedrick, M. A. Mitchell,
William Sherrard, Arlis Reynolds, Carl Molin, Jace Richardson,
Evelyn Richardson, Richard Gatewood, Charles Geiger, Louise
Geiger, Don McGee, Fred Francis, Cecil Bates, and Hans Reiper, im-
mediate and full reinstatement to their -former positions, without
prejudice to their seniority and other rights and privileges, in the
manner set forth in the section entitled "Remedy" above, placing
those employees for whom employment is not immediately available
upon a preferential list in the manner set forth in said section, and
AMERICAN HAIR AND FELT COMPANY 221
thereafter, in said manner, offer them employment as it becomes
available;
(c) Make whole the employees named in the preceding paragraph,
and Eugene Wells, for any loss of pay they may have suffered by
reason of the respondent's refusal to reinstate them on August 5, 1938,
and thereafter, by payment to each of them respectively of a sum of
money equal to that which each would have earned as wages during
the period from August 5, 1938, to the date of the-offer of reinstate-
ment, or placement on the preferential list, less net earnings , if any,
during said period, had the respondent reinstated each of them on
August 5, 1938, in the manner provided in the preceding paragraph,
deducting, however, from the amount otherwise due to each of them
monies received by each of them. during said period for work per-
formed upon Federal, State, county, municipal, and other work-relief
projects, and pay over the amount so deducted to the appropriate
fiscal agency of the Federal, State, county, municipal, or other gov-
ernment or governments which supplied the funds for such work-
relief projects;
(d) Post immediately in conspicuous places in each department
of the respondent's plant at Los Angeles, California, notices stating :
(1) that the respondent will cease and desist as provided in para-
graphs 1 (a), (b), and (c) of this Order; (2) that it will take the
affirmative action set forth in 2 (a), (b), and (c) of this Order; and
(3) that employees are free to become or remain members of Textile
Workers Union of America, Local 99, and that the respondent will
not discriminate against any employee because of membership or
activity in that organization;
(e) Maintain such notices for a period of at least sixty (60) con-
secutive days from the date of posting;
(f) Notify the Regional Director for the Twenty-first Region in
writing, within ten (10) days from the date of this Order what steps
the respondent has taken to comply herewith.
AND IT IS FURTHER ORDERED that the allegations of the complaint
that the respondent has engaged in an unfair labor practice within
the meaning of Section 8 (3) of the Act by reducing the hourly wage
rates of Richard Gatewood, Louise Geiger, Hugh Anderson, Charles
Geiger, and Pernilla Yri be, and they hereby are, dismissed.