American Rolling Mill Co.

National Labor Relations Board - Board Decisions

Sep 24, 1940

27 N.L.R.B. 441 (N.L.R.B. 1940)

In the Matter of AMERICAN -ROLLING MILL COMPANY and STEEL
WORKERS ORGANIZING COMMITTEE, AFFILIATED WITH THE CONGRESS
OF INDUSTRIAL ORGANIZATIONS
Case No. C-1507.-Decided September 24, 1940
Jurisdiction : steel product manufacturing industry.
Unfair Labor Practices.
Interference, Restraint, and Coercion: separate allegation of, dismissed.
Company-Dominated Union: employee representation plan : suggesting formation
of, and presenting plan of organization to employees prior to effective date
of Act ; lack of opportunity afforded employees to select officers and rep-
resentatives; permitting amendments only upon consent of management-
Plan continued unchanged and manner of its administration including re-
spondent's participation, aid, and, support, in administration of, remained
unvaried after effective date of Act.
Remedial Orders: ordered-.to withdraw all recognition from and, completely dis-
establish the Plan.
Definitions
Employee representation plan is a labor organization by express defini-
tion, despite respondent's contention that it is no such entity but -a mere
collective agreement made with employees acting through representatives.
Mr. Max W. Johnstone, for the Board.
Frost d Jacobs, of Cincinnati, Ohio, and Meyer, Johnson c1 Kin-
caid, of Zanesville, Ohio, for the respondent.
Mr. Clarence J. Crossland, of Zanesville Ohio, for the Plan.
Mr. E. A. Luster, of Zanesville, Ohio, for the S. W. O. C.
Mr. Sidney Sugerman, of counsel to the Board. -
DECISION
AND
ORDER
STATEMENT OF THE CASE
Upon a charge 1 duly filed by Steep Workers Organizing Com-
mittee, herein called the S. W. O. C., the National Labor Relations
1 Among other things, the charge alleged an act of discrimination on the part of the
respondent constituting an unfair labor practice within the meaning of Section 8 (3) of i
the Act. The complaint contained no allegation on that particular charge At the open-
ing of the hearing, on motion of the Board's attorney, the Trial Examiner ordered that
allegation stricken from the charge.
27 N L. R B., No. 96.
441
442 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Board, herein called the Board, by the Regional Director for the
Eighth Region (Cleveland, Ohio), issued its complaint dated Febru-
ary 15, 1940, against American Rolling Mill Company, Zanesville,
Ohio, herein called the respondent and sometimes Armco, alleging
that' the respondent had engaged in and was engaging in unfair
labor, practices affecting commerce, within the meaning of Section
8 (1) and (2) and Section 2 (6) and (7) of the National Labor Re-
lations Act, 49 Stat. 449, herein called the Act. The complaint, with
a copy of the charge annexed, and a notice of hearing were duly
served upon the respondent, upon the S. W. O. C., and upon Zanes-
ville Armco Plan of Employee Representation, herein called the
Plan.
As to the unfair labor practices, the complaint alleges that, by
certain specified acts and "by various other acts-and by various other
methods and means," the ^ respondent about May" 1933 established and
has since dominated and interfered with the formation and admin-
istration of the Plan as a labor organization,. and has contributed
financial and other support to it. The complaint further alleges that
by reason of such domination and interference with respect to the
Plan; by certain specified anti-union threats and statements, and the'
distribution of certain anti-union literature and petitions; and "by
.various, other ilcts., and various other, methods and, means," the re-
spondent has interfered with, restrained, and coerced its employees
in the exercise of the rights guaranteed in Section 7 of the Act.
On Februaxy 20, 1940, the respondent' filed with the Regional Di-
rector a motion to make more definite and certain the-above-men-
tioned general allegations as to "various other acts and various other-
,methods and means" constituting unfair labor practices; or in the
alternative that the same be stricken from the complaint. The Re-
gional Director held the motion for disposition by the Trial Ex-
aminer at the hearing.
On March 5, 1940, the Regional Director issued an order granting
the motion of the Plan,' filed that day with its proposed answer, for
leave to intervene in the proceedings. On March 7, 1940, the re-
spondent filed its answer. -
Among various respective denials, admissions, and affirmative mat-
ters, both answers contend that the Plan is not a labor organization
at all, within the meaning of the Act, but is merely the product, in the
nature of an agreement', resulting from the collective bargaining ef-
forts of the respondent, on the one hand, and its employees acting
upon their own initiative through representatives of their own choos-
7 Tile motion was made in the name of the Employee Representatives to the Zanesville
Armco Plan of Employee Representation . We do not differentiate , except as may appear
textually , between the Plan and its Employee Representatives
AMERICAN ROLLING MILL COMPANY 443-
mg, on the other. Denying that the respondent has -dominated or
interfered with the formation or administration of the Plan, the
answers admit the respondent's participation in the administration
of the Plan, in the sense that it thereby fulfilled its contractual
obligations to'the employees. To the extent that the respondent con=
tributed certain support to the Plan, as both answers admit, the
respondent alleges that such practice was in conformity with pro-
cedure expressly approved by the Board on June 16, 1937, after
consideration of a charge involving similar circumstances at another
of the respondent's plants.
Pursuant to a corrected notice duly served upon all the parties,
a hearing was held at Zanesville, Ohio, from March 7 to 14, 1940,
before James C. Batten, the Trial Examiner duly designated by the
Board. The Board, the respondent, and the Plan were represented
at the hearing by counsel, and the S. W. O. C. by its local repre-
sentative; all participated in' the hearing. Full opportunity. to be
heard, to'examine and cross-examine witnesses, and to introduce evi-
dence bearing upon the issues was afforded all parties. At the out-
set of the hearing the Trial Examiner ordered the Board's attorney
by the next day to particularize the general allegations of the com-
plaint to which the respondent's motion, above referred to, was ad-
dressed. Thereafter, for failure of the Board's attorney to par-
ticularize those allegations, the Trial Examiner ordered them stricken
from the complaint. During the course of the hearing the Trial
Examiner made several rulings on other motions and on objections
to-the admission of evidence. The Board has reviewed all the rulings
of the Trial Examiner and finds that no prejudicial errors were com-
mitted. The rulings are hereby affirmed.
At the close of the hearing, the Trial Examiner reserved rulings
upon two motions : one, made by the Board's attorney, to strike
the testimony of the respondent's witness, Ruth Sebaugh, on the
ground that it was not proper matter of surrebuttal; the other made
by the. respondent, to strike certain allegations from the complaint
for failure of proof. The former motion i§ hereby denied. The
grounds urged in support of the latter motion go to the weight of
the evidence considered in making the findings of fact and conclu-
sions of law below. The motion is denied in so far as the relief
requested is inconsistent with such findings and conclusions.
On March 15, 1940, the Board, acting pursuant to National Labor
Relations Board Rules and Regulations-Series 2,* as amended,3 or-
dered that the case be transferred to and continued before the Board,
that no Intermediate Report should be,issued' by the Trial Examiner;
5 Article - Ii, Sections 36 and 37.
444 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
that Proposed Findings of Fact,,Proposed Conclusions of Law, and
a Proposed Order should be issued by the Board; and,-further, that
the parties should have the right, within.twenty (20) days from the
date of said Proposed Findings of Fact, Proposed Conclusions of
Law, and Proposed Order, to file exceptions and to request oral
argument before the Board; and, within thirty (30) days from said
date, to file a brief with the Board. On April 15, 1940, the Plan
filed a brief with the Board.
On July 6, 1940, the Board issued and duly served upon the parties
copies of its Proposed Findings of Fact, Proposed Conclusions of
Law, and Proposed Order.
,' 'On August 16, 1940, the respondent duly filed exceptions, in which
the Plan joined,'to the-Proposed Findings of Fact, Proposed Con-
clusions of Law, and Proposed Order, and both parties requested oral
-argument before the Board in support of the exceptions. On the
same day, the respondent duly filed a brief in support of its exceptions.
Pursuant to notice duly served upon all the parties, a hearing was
held before the Board in'Washington, D. C., on September 12, 1940,
for the purpose of oral argument. The respondent and the Plan
were represented at and participated in the hearing.
The Board has considered all the exceptions to the Proposed Find-
ings of Fact, Proposed Conclusions of Law, and Proposed Order, and
the brief filed-by the respondent and the Plan, and in so far as the
exceptions are inconsistent-with the findings; conclusions, and order
set forth below, finds them to be without merit.
Upon the entire record in the case, the Board makes the following:
FINDINGS OF FACT
i
1. THE BUSINESS OF THE RESPONDENT
The respondent, an Ohio corporation having its principal place
cf business at'Middletown, Ohio, is engaged in, the manufacture, sale,
and distribution of steel products: It operates plants in Ohio, Ken-
tucky, and Pennsylvania. We are solely coiicerned, in this proceed-
ing, with the respondent's plant at Zanesville, Ohio.
The principal products manufactured by the respondent at its
Zanesville plant are electrical steel sheets. The. principal materials
used there` in such production are bars and plates, of a total cost to
the respondent for the year 1939 of $3,000,000. Fifty per cent of
said materials so purchased and used in 1939 were obtained from
the State`of Kentucky 'and States other than Ohio, and were trans-
ported into the State of Ohio.
A1\'IEIIICAN ROLLING MILL COMPANY 445,
The value of the respondent's products at its Zanesville plant-for
1939 was about $4,500,000, 'approximately 60 per cent of which prod-
ilcts were transported to purchasers in States other than Ohio.
The respondent employs at that plant an average of more than
800 persons. The average annual pay roll there is approximately
$1,250,000. •
II. THE ORGANIZATIONS INVOLVED
Steel ' Workers Organizing Committee, affiliated with the Congress
of Industrial Organizations, herein called the C. I. 0., is a labor:or-
ganization . Although the record, does not define its precise juris-
diction, that organization admits to membership employees of the
respondent.
Zanesville Armco Plan of Employee Representation is a labor or-
ganization, admitting .to membership 4 all employees at the respond-
ent's Zanesville Division except officials, persons having the right to
employ or discharge or regularly -holding purely • supervisory
positions.
III. THE UNFAIR LABOR PRACTICES
A. Origin of the Plan
I i August '1923 the respondent established at its Zanesville plant
a project of "cooperative management " through the medium of The
Armco Advisory ,Committees. These committees, to be elected by the
employees in each department, had "no administrative, executive, or
legislative functions." Their function, as stated by- Charles R. Hook,,
the respondent's president, was - -
First, to advise with and learn the policies of the General Man-
agement. Second, to convey to their fellow employees an under-
standing of these policies and to reflect the sentiment of the
members of their departments on such matters as may be of help,
to the management.
In exercising this function, the separate Departmental Advisory
Committees, acting through their respective "responsible executives,"'
and the supreme Works Advisory Committee, under the chairmanship
of the respondent's Works Manager, were to " take up . . . any
matter that in their opinion is not being handled properly." They
might be called upon for advice, to make constructive suggestions,
4 Although the.Plan 'makes no provision in haec verba for admission to membership Sr
such, the status of employees within the defined structure and functions of the Plan is such
ae to fit the ' common meaning of "membership
e The facts found here are substantially as stipulated by the parties in Board Exhibit 3_
446 DECISIONS OF NATIONAL LABOR RELATIONS - BOARD
or " to consider any general problems concerning working conditions,
personal matters, equipment, and production." As Hook summed it
up, " the advisory committee . . . is -a vehicle by which Armco men
can express their views, ask questions, and make suggestions without
feeling or prejudice and by which management can freely give to the
whole organization confidential and helpful information on any sub-
ject, and simple explanations of intricate business problems."
The Advisory Committees continued to function in the Zanesville
Division for almost 10 years. With the passage of the National
Industrial Recovery Acts in June 1933, and simultaneously with the
initiation of an organizing campaign at the plant by Amalgamated
Association of Iron, Steel and Tin Workers of North America, herein
called the Amalgamated, a labor organization then affiliated with the
American Federation of Labor, A. F. Murphy, works manager .of
the Division, called a meeting of the Advisory Committee Chairmen
to arrange a vote among all employees as to whether or not "The
Armco Advisory Committee Plan " was satisfactory to them as the
method of exercising their rights under the new law. On June 29
and 30, 1933, a vote was taken by secret ballot on the respondent's
premises. The results of the balloting showed 484 against continu-
ance of the-Advisory Committees for that purpose and 182 in favor.
Arrangements were made by the Advisory Committee for a mass
meeting of employees at the local high school auditorium on July 14,
1933. Shortly before then Miles Fryar, a committeeman, invited
Murphy to attend the meeting and discuss the National Industrial,
Recovery Act with the men, who, he said, were being told by Walter
Payne, the organizer of the Amalgamated, that they were compelled
under that law to join the Amalgamated in order to enjoy their
rights. Murphy accepted the invitation.
The plant shut down its operations for the, evening of July 14.
Murphy went to the meeting and addressed the men assembled. He
told them that the law did not require them to join any organization
whatever not of their choice. Feeling that Payne had been making
misrepresentations to the men as to the necessity of their joining the
Amalgamated, Murphy told them there was no such compulsion, but
that they had a free choice of organization under the law, the com-
pany policy, and his own attitude. He admits having "told them
that since they had voted out the old advisory committee . . . (he)
hoped that they were . . . working out some kind of a plan or agree-
ment that (the respondent) could do business with."
E. A. Luster and Robert F. Denman, employees and members of
the Amalgamated who attended the July 14 meeting, testified with-
49 Stat. 195.
AMERICAN ROLLING MILL COMPANY 447
out direct contradiction that Murphy said, with some excitement,
that the respondent would not be allowed to-operate without some
form of representation for its employees, adding, "Give me your old
advisory board, any group of men. Give me something to work
with." Likewise uncontradicted was Denman's testimony that he had
been notified by Reed Caldwell, his foreman, that attendance at the
meeting was required of all men not at work, by Murphy's order.
When Murphy finished his speech he withdrew from the meeting,
which in the general discussion following became disorderly. Murphy
was recalled and, in the words of the stipulation, Board Exhibit No.
3, "he then informed those assembled that some plan, organization, or
agreement should be worked out."
. From July 17 to, 20, 1933, on the respondent's premises, primary
and final elections of temporary departmental representatives were
conducted to replace the advisory committeemen, pursuant to a notice
to all employees posted by the respondent. In the, meantime, the re-
spondent canvassed employees for "suggestions regarding (an)
Armco Plan of Employee Representation" which would be mutually
satisfactory to all concerned. On July 18 the respondent published
the suggestions in printed form.
As a result of the elections a committee of eight employees, in-
cluding E. A. Luster, was formed to "help draw up a plan of em-
ployee representation in accordance with the National Industrial
Recovery Act." On July 21 the-committee convened in Murphy's
office for its first deliberations. Murphy furnished each member
with a printed copy of the respondent's "Proposed Armco Plan of
Employee Representation," dated that day, which stated that it com-
bined the various suggestions received from employees, as well as
those contained in a number of plans in effect in other companies,
and that this proposed plan "gives the fullest representation to the
entire organization." Murphy read the entire Plan to the commit-
tee and said that he was confident that it would be acceptable to the
respondent as proposed by it. The meeting then adjourned to
July 25.
On the latter date the committee met alone on the respondent's
premises. The chairman, Sam Atkinson, suggested the adoption of
the respondent's proposed plan. Luster presented the constitution
and bylaws of the Amalgamated for consideration with a motion that
that organization be accepted to represent the employees for the pur-
poses of collective bargaining. A vote was taken and the motion
carried 4 to 3, the chairman not voting. The latter thereupon ruled
himself qualified to vote on the proposition, and cast his ballot with
the result that the vote was tied at 4 to 4.
448 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
A
Two days later, on July 27, the committee reconvened alone on
the respondent's premises. One of the representatives moved the
adoption of the proposed plan. This carried by a vote of 5 to 1,
Luster and Lou C. Highfield, who was also a member of the Amal-
gamated, abstaining. Murphy was called into the meeting with one
Rectanus, of the, respondent's main office. On being informed of
the action taken by the committee, Murphy and Rectanus said they
were glad the men had reached a decision. Although Murphy denies
that he and Rectanus participated further in the committee, con-
ference, the minutes drawn by its secretary , Russell Morrison, a
clerical employee, state that both of them "gave suggestions and
answered questions as to the future business of the Committee."
,.Thereafter, still on the respondent' s premises , between July .28
and'-"August 3, 1933, secret balloting was conducted for the nomina=
t ori.'and election of the 27 Employee Representatives to serve tem-
porarily `under - the Plan as adopted by the committee. The ballots
were' provided by the respondent.
On November 11, 1933, the Employee Representatives submitted to
all employees copies of the Plan, which the respondent,published in
adequate quantity, in form and substance as the respondent had
proposed it. Over their facsimile signatures was their recommenda-
tion that the Plan be adopted in a yes-no vote. Below their signa-
tures was the.following : . " -
To All Employees, Zanesville Division :
The Management, after consulting fully with your elected rep-
resentatives, is in accord with their recommendations regarding
the foregoing Zanesville ARMCO Plan 'of Employee Repre-
sentation.
A. F. Murphy (signature)
Works Manager.
On December 7, 8, and 9, using ballots furnished by the respondent,
the employees voted 348 to 172 that they "approve" the Plan. On
the same ballots was provision for the nomination of departmental
Employee Representatives for the coming calendar year, from lists of
eligibles lodged with those temporarily serving as representatives,
and also posted on the respondent's bulletin boards.
On December 14 and 15, again on the respondent's premises and
by' ballots provided by it, the employees elected a slate of Employee
Representatives, from among the nominees, to serve under the Plan
for the year 1934. Such representatives, by departments, were listed
in -an 18-page printed and covered pamphlet containing the Plan,
issued and distributed to all employees by the respondent. The Plan
AMER'IC'AN ROLL\G MILL COMPANY 449
has continued since then in full force and effect without modification,
revision, or amendment.
B. The Plan
The preamble of the document which sets forth the Plan recites :
"The management and the employees . . agree to this . . . Plan
... in -order to provide an effective communication and means of
contact between the employees and the management on all questions
regarding the conditions and provisions of their employment." (Em-
phasis supplied.) In form and content, however, the document is
not an agreement at all, either in the narrow legal sense of a contract
or in the traditional.' sense of a trade agreement.'
- The document goes on to set forth in full Section 7 (a) and (b)
of the National Industrial Recovery Act, dedicating the Plan to
compliance, with that law. In 10 enumerated sections the document
provides in turn for electoral representation and districting within
the plant; for the qualifications of representatives and voters, while
guaranteeing against abridgment of the right of employees "to be-
long or not to belong to any lawful ... union, or other organiza-
tion." It provides the procedure of nominating and electing rep-
resentatives, "with such assistance from the Management as the
employees may request"; their term of office and the 'manner of
filling Vacancies which may occur, among other ways, as by the dis-
continuance of the representatives' employment. Next is provided
the set-up of various employees' committees, management represen-
tatives, and joint committees of the two groups. Management repre-
sentatives, unlike employee representatives; are appointive. The
former, to facilitate close relationships between the Management and
employee representatives, are required to "respond promptly to any
request from representatives, and shall interview all of them, from
time to time, collectively or separately, with reference to matters of
concern to the employees." The number of representatives from
each side to their joint committees may be equal, but management's
may not exceed employees': Power to employ, suspend, discharge
for cause. transfer, and ]ay off employees is reserved exclusively to
the respondent. Provision is made for separate meetings of em-
ployee representatives and for their joint monthly meetings with
management. Joint committee meetings shall be presided over by
a management representative, who shall supply minutes of the meet-,
ings to each member. Such meetings are provided to be held during
' See N. L R B v Highland Park Mfq Co, March 11, 1940 (C C A 4), 6 L R R.
101, enforcing Matter of Highland Park Manufacturing Co and Textile Workers Organizing
Committee , 12 N L R B 1238
323428-42-vol. 27-30
450 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
regular business hours. Besides providing, upon request, a suitable
meeting place for all groups and committees, the respondent is also
to indemnify each employee representative, at his average earning
rate, for time necessarily lost from work in attending joint meetings.,,
The procedure for adjustment of grievances is a six-step process
running from the employee's foreman up through the latter's suc-
cessive superiors to a possible arbitration. On the way, the works
manager may refer the matter to one of the joint_ committees. If,
satisfaction is not had, the employee may notify the president of the
Company. Finally, "if the President and Employees Executive
Committee agree thereto, the matter shall be referred to one or more
arbitrators to be agreed upon at the time according to the nature of
the discussion." (Emphasis supplied.) The machinery of arbitra-
tion is more definitely assured to Employee Representatives aggrieved
by any acts of discrimination because of their conduct in discharging
their duties as such. An unsatisfactory decision by the president
entitles them to have the question settled by an arbitrator selected
by mutual agreement. Last of the provisions is that "this plan shall
remain in effect during the term of the National Industrial Recovery
Act and thereafter may be terminated by the Management or by a
majority of the employees upon three months' notice. This agree-
ment may be amended by a two-thirds vote of the employees of the
Division voting thereon, the Management concurring ... [Italics
supplied.]
There is no provision in the Plan for the payment of dues by
employees, nor is any matter of finances touched on. No provision
is made, either , for the holding of meetings of employees themselves.
The respondent admits that, in operating under the Plan, all elec-
tions have been held on its premises in the employees' waiting room,
and that in 1 year voting booths were also located in the various
departments of the mill for the convenience of employees. The re-
spondent also admits that it has provided and paid for about two
dinners each year for Employee Representatives. It also admits
that it has furnished all stenographic help, paper, and equipment
necessary for the writing up of minutes of all meetings conducted
under the Plan.
'As the Plan got under way,-interest in the Almagamated waned
on the part of the employees. To what extent the respondent's con-
duct, apart from the role it took in the formation and administration
of the Plan, contributed to that result appears but imperfectly in the
8 Section VII, 9 of the Plan reads : "An Employee Representative shall be paid at his
average earning rate by the company for time necessarily lost in attending any Joint or
monthly General Committee meeting." However, the respondent stipulated that in prac-
tice it pays the representatives for time lost •from work while attending any meeting on
plan business, whether management representatives are present thereat or not.
AMERICAN ROLLING MILL COMPANY 451,
record. Nonetheless, it does appear from the testimony of Homer
Clayton Ray, an employee of the respondent for 20 years, that in
the summer of 1934 he received- through the pay window with his
regular pay check a printed pamphlet, in evidence, entitled Collective
Bargaining in the Steel Industry. Neither the cashier and paymaster
nor his assistant and timekeeper could deny the possibility, although
they did not remember, that that pamphlet, as with safety, health,
production, and club news bulletins, had been passed out to employees
through the pay window. At least three other persons engage with
them in distributing pay checks. None of those three was called to
the witness stand to foreclose the possibility. Ray's testimony was
positive and forthright, and is given full credence.
The pamphlet, bearing date June 1934 as a publication of the Amer-
ican Iron and Steel Institute, is subtitled : `Why Steel favors Em-
ployee Representation Plans and is opposed to Professional Labor
Unions.. Claiming adherence to the principle and practice of collec-
tive bargaining, it asserts that no union possesses "any legal or finan-
cial responsibility, which would place it on a par in contractual rela-
tionships with the companies." Industry's experience with unions, it
goes on, has revealed "jirisdictional disputes; strikes; racketeering
leadership; excessive dues, fines and penalties; limitation of output;
-intrusion of agents having no acquaintance with the industry or the
employee body they claim to represent; and a general and fundamen-
tal philosophy of conflict ..." Through the foregoing, and by
contrasting-the vices of outside unions with the virtues of employee
representation plans, the pamphlet constitutes a clear expression of
employer hostility to unionism.
C. Conclusions respecting the Plan
The respondent claims that the operations of the Plan have satisfied
a large majority of the employees; that industrial peace has been
achieved; that in its dealings with Employee Representatives it has
neither dominated nor interfered with their independence of action.
Further, denying that it dominated or interfered with the formation
and administration of the Plan, but admitting the contribution of aid
and support to it, the respondent contends that the Plan is not a labor
organization at all, within the meaning of the Act, but rather "an
agreement between a labor organization (presumably the committee
of 8 elected July 20, 1933) voluntarily created by the . . . employees
and . . . the management." The respondent sometimes refers to the
Plan as a "formula, plan or agreement" adopted through the process
of collective bargaining between the employees, by their chosen repre-
sentatives, and the respondent.
452 DECISIONS OF NATIONAL LABOR' RELATIONS BOARD ' r
The respondent's first contention may be disposed of in the language
of the Supreme Court of the United States in Newport News Ship-
building and Dry Dock Co. et at. v. N. E. R. B.: 0
In applying the statutory test of independence it is immaterial
that the plan had in fact not engendered, or indeed had obviated,
serious labor disputes in the past, or that any company interfer-
ence in the administration of the plan had been incidental rather
than fundamental and with good motives. It was for Congress
'to determine whether, as a matter of policy, such a plan should
be permitted to continue in force. We think the statute plainly
evinces a contrary purpose. . .
The next contention, that the Plan is not a labor organization,
ignores the express definition written into the Act. Section 2 (5)
defines "the term 'labor, organization' [as] any organization of any
kind, or any agency or employee representation-committee or plan,, in
Nihich employees participate and which exists for the purpose, in whole
or in -part, of dealing 'with employers concerning grievances, labor
disputes, wages, rates of pay, hours of employment, or conditions of
work." The Plan is clearly an "employee representation plan" within
that statutory definition.10
In no sense, moreover, can the Plan be construed to be an agreement.
arrived at after genuine collective bargaining between the respondent
and freely chosen representatives of the employees. Not only does the
Plan lack the attributes of an agreement,11 but the circumstances of
its adoption clearly indicate that the respondent conceived the Plan
and foisted it upon the employees.
The record shows that the respondent took the initiative, upon the.
entry of the Amalgamated on the field and the scrapping of the old
. dvisory Committee, to urge its employees to form some organization
which the respondent could deal with. It gave direction to this urge
both by deflecting the interest of employees from "outside" unions
find by encouraging and supporting "self-organization" along the old
committee or district-representational lines, with a plan of representa-
tion in view. In this the respondent accorded employees their
accustomed use of company time and facilities, thus stamping their
new endeavors with advance approval.
° 60 S Ct 203, rev'g 101 F (2d)' 841 (C C A 4) and enf'g Matter of Newport News
Shipbuildinq • and Dry Dock - Company and Industrial Union of Marine and Shipbuilding
If orl, ers of America , 8 N L. R. B 866
10 See Matter of Bethlehem Steel Corpoiatlon , etc and Steel Weil, ers Organizing Com-
mittee, 14 N L R B 539; Matter of The Duffy Silt, Company and Sill, Throwsters Union,
Local 81, Tc ile Workei.s Union of America. 19 N L R B 37
11 Cf Matter of Newport News Shipbuilding and Dry Docl Company and Industrial
Union of Marine and Shipbuilding Workers of America, 8 N L R B 866, enf'd National
Labor Relations Board v. Newport News Shipbuilding and Dry Dock Company , 308 U S.
241 ,
_AMEtRICAN ROLLING MILL COMPANY 453
The respondent, published "suggestions" of an Armco, Plan of
-Representation while the employees were still engaged in primary
c-lection of representatives. Immediately upon the latter's convening
for their first meeting, the respondent furnished each of them witli
ii s own proposed plan and the assurance of its acceptability to the
management. The failure of this representative committee to vote in
the Amalgamated as bargaining representative of the employees and
its adoption of the Plan may be attributed, at least in part, to the
commanding force of the respondent's expressed wish and preference.
When the committee adopted the Plan, the respondent can be said to
have established it and dominated and interfered with its formation
as surely as though the respondent had imposed it upon them by sheer
fiat, without the formality of proposals, deliberations, and adoption by
vote. The further formality of ratification by the employees as a
body was no less an imposition of the Plan upon them-as a whole.
Not content to let the representatives recommend approval, the
respondent itself clinched it with a subjoined recommendation to that
effect. The coercive effect of the respondent's "'recommendations" in
these circumstances is manifest.
In less than 6 months a sentiment- voiced by a better than 21/2 to
1 vote of employees against the old Advisory Committee was con-
verted to an expression of approval for the Plan by a 2 to 1 vote.
if there was any difference between tie Advisory Committee and
the Plan it lay only in the greater intricacy of structure of the
-latter. Otherwise, in manner of inception, in effectiveness as a
collective bargaining agency, and in situs of ultimate control, they
were one and the same. The one was voted out while the employer
control was relaxed, the other was,voted in when that control was
reasserted.
The Plan as formulated and established by the respondent made
-no provision for self-organization, assemblage, or discussion by em-
ployees. Their sole participation in the Plan from the first consisted
of voting approval or disapproval of the proposition of its adop-
tion, as initiated and recommended by the respondent, and there-
after was confined to the annual exercise of the privilege of nomi-
nating and electing representatives. The representatives were not
.made in any way responsive to their constituents. Even the right of
recall might be exercised only upon a petition signed by two-thirds
of the voters in the district and then approved by the Employees
Executive Commaittee consisting of all departmental chairmen.
Service as an elected employee representative is subject to the re-
spondent's control and will, in that it is contingent upon continua-
tion of employment. That severed, he "shall be deemed to have
wacated his office." Indeed, he vacates his office upon being trans-
454 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
ferred by the respondent from one voting district to another, except
that he may hold office for 3 months thereafter, "providing the voting
district in which he was elected so desires." No provision is made
-for the manner of expressing such desire.- •
As the respondent reserved to itself the power thus to determine
the continuance of employee representatives in office,. so it prede-
termined in some measure who such representatives might be. This
was done by fixing the eligibility requirements so that nominees must
have been in the continuous service of the respondent for at least
1 year, and must be on the active pay roll. To the degree that this
presents the possibility of manipulation by the respondent in limiting
the field of choice, the employees' statutory right "to bargain collec-
tively through representatives of their own choosing" 'is further
impaired. - /
While either the respondent or' a majority of the employees may,
upon notice, terminate the Plan, the Plan provides that it may be
amended, not by a vote of the representatives, but "'by a two-thirds
-vote of the employees of the Division voting thereon, the 'Manage-
ment concurring." (Emphasis supplied.) This veto power residing
in the respondent is enough to stifle the employees' right to change
their form and method of representation, a right integral with that
of self-organization • itself.'' The law denies to employers any part
in the manner of field of choice of their employees' bargaining repre-
sentatives. Yet, both by' existing provision of the Plan and by the
exercise of such veto power, the respondent reserves control of that,
sphere oft employee interests with which it has no legitimate concern.
Altogether, in its initiation and sponsorship, the Plan was a device
imposed by the respondent upon the employees for the ostensible
purpose of collective bargaining, and was not their own -form of
self-organization. In structure and 'function the Plan was devised
and calculated to afford the employees nothing but the semblance
of collective bargaining, through representatives not of theirt ir own
unrestricted choosing. Favors, assistance, and support rendered by
the respondent to the Plan and the employee representatives, by way
-of accommodation with facilities for the conduct of their business
and indemnification for all loss and expense therein, are cogent
means of company domination and interference with the administra-
tion of a collective bargaining agency under the circumstances here
present.
It is undisputed that the Plan has continued unchanged from the
- -'a See National Labor Relations Board v. Newport News Shipbuilding and Dry Dock
Company, 308 U S 241, where the Court said. "The plan may not be amended if the
company disapproves the amendment Such control of the form and structure of an em-
ployee organization deprives' the employes of the complete freedom of action guaranteed
to them by the Act , and justified an order such as was here entered."
AMERICAN ROLLING MILL COMPANY 455
date of its inception, and that the manner of its administration- in-
cluding the respondent's participation, aid, and support therein, has
not' been varied. The passage of the Act on July 5, 1935, and the
issuance of the decisions of the United States Supreme Court on
April 12, 1937, upholding the constitutionality of the Act, so often
the cues for some revision in other employee representation plans
which have come under our notice, gave the 'respondent no pause. Of
course; nothing which it did prior to July 5, 1935, constitutes unfair
labor practices under the Act. Findings in this decision respecting
events prior to that date are only made for purposes of continuity
and for the light they throw.on the practices in which the respondent
has engaged since then. -
- -The respondent claims that some of its practices have been ex-
pressly approved by the Board, and that it has continued in them
in reliance of such approval. That claim relates only to the pro-
cedure of holding joint meetings under the Plan on company prop-
erty. The Trial Examiner received in evidence a copy of a charge
filed on May 29, 1937, with the Regional Director for the Ninth
Region (Cincinnati, Ohio) alleging, among other things, -the existence
of a "company union" at this respondent's plant in Ashland, Ken-
tucky; together with copies of correspondence between the respond-
ent's counsel and said Regional Director, from June 4 through June
'18, 1937. By that correspondence it appears that the Regional Di-
rector, after studying a "proposal" made by the respondent's coun-
sel concerning the matters contained in the charge, wrote him that
it "constitutes satisfactory compliance" and that he was closing his
files in the matter. So far as relates to the claim made-here, the
respondent's proposal was that, since Employee- Representatives meet
alone on company property only in preparation for the entrance of
management representatives for collective bargaining and do not de-
sire to use the property except in conference with management, "it is
entirely agreeable to the (latter) not to make it available to them for
other meetings." A. F. Murphy, works manager, was shown this
correspondence in the fall of 1937 on a visit he made to the respond-
ent's main office at Middletown, Ohio. He testified that joint meet-
ings were still held on the premises "because it is O.K.'d by the
Labor Board."
- Without now concerning ourselves with the circumstances under
which that correspondence was written, or with what effect it was
exchanged, suffice it in this case to repeat what we recently said in
Matter of The Duffy Silk Company and Silk Throwsters Union,
Local 81, Textile Workers Union of America: 13
7319 N L R. B 37.
456 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Counsel for the respondent refers to cases in which we have
refused for reasons of policy, to disturb agreements purporting
to settle past unfair labor practices when our agents have par-
ticipated .in or lent approval to such agreements. (Cases cited.)
This rule, however, does not apply in the instant case where
the unfair labor practices consist of the establishment and con-
tinued maintenance of a labor organization which by its very
nature defeats the rights guaranteed by the Act. The action of
one of our agents cannot constrain us from `considering conduct
in violation of the Act which endured for 3 years thereafter
and may . . . continue indefinitely.
We find that the respondent dominated and interfered with the
formation and administration of the Plan, and contributed financial
and other support to it prior to July 5; 1935. We further find that
the respondent thereafter continued to and does still dominate and
interfere with the administration of the Plan, and contribute such
support to it; and that the respondent thereby has interfered with,
Iestrained, and coerced its employees in the exercise of the rights
guaranteed in Section 7 of the Act.
D. Alleged interference, restraint, and coercion
E. A. Luster- testified, that in September 1936 he was called into
the office of the assistant manager, Ross Little, and was asked what
he knew of the coming drive by the C. I. O. in the steel industry.
Little-is said to have asked him whether Luster was in favor of
Armco policies, and to have added that one must be either for Armco
or for the C. I. O. • Murphy came in and asked Luster, the latter
further testified, about certain union organizers in town, about
Luster's having made,a speech,at a labor demonstration, about the
identity of union officials; and told him, "You cannot organize this
mill; Payne tried it, and different other ones tried it . . . Why
don't you send your charter back . . . You haven't got any member-
ship anyhow." Both Murphy and Little are said by Luster to have
made various other anti-union statements and threats on that oc-
casion. They both denied- Luster's testimony pointblank. Only the
three of them, concededly, were in the room during the entire time.
It clearly appears that the occasion was in,June 1936, and not Sep-
tember. Little testified that his reason for calling Luster in was
that complaints had been received as to his work from the latter's
supervisor. When Little mentioned that to him, Luster said he
was surprised, and protested that his labor activities were the reason
for his being called in. Little immediately denied it, testifying that
he had heard of Luster's union membership and was quick to assure
AMERICAN ROLLING MILL COMPANY - 457
him that the respgnd nt was only interested in his workmanship,
and that Murphy would confirm that fact. Murphy came . in and all
ended pleasantly , Little testified , without mention of anything but
Luster's work and the complaints. Luster admitted on the witness
stand that there had been complaints about his work at about that
time. There is insufficient evidence to sustain that part of the com-
plaint, alleging that Murphy and Little had made anti -union state-
ments to Luster on the occasion referred to.
Luster also testified to a conversation with Little in the summer
of 1937, with no one else present, in which they discussed the S. W.
0. C., the Plan, and the Act, and in which Little is said to have
suggested, "Well, why don't you set up an organization . . . that
would be within the law . . . -you know what you have to do."
Little unequivocally denied having had any such conversation with
Luster. As the complaint alleges that the respondent thereby "at-
tempted to persuade E. A. Luster to start an `independent ' union in
May 1937 to combat the organizational efforts of the (S. W. 0. C.),"
the evidence does not sustain it. -
Other employees, H. W. Spangler and Arthur J. Dickey, testified
to various anti-union statements alleged in the complaint to have been
uttered to them by Little in 1935 and 1936. Their testimony, relating
to matters . so remote in their memories , taken with Little's specific de-
nials and the equally plausible versions he rendered of the conversa-
tions actually had, leave the record with insufficient evidence to
sustain the complaint in that regard . Similarly , as to the allegations
relating to other anti -union conversations , statements , and petitions
through those years. the record is inadequate to support affirmative
findings of interference , restraint , and coercion . Several pieces of
literature of that nature offered in evidence by the Board's attorney
were properly rejected upon the failure of Board witnesses to connect
their distribution with the respondent , other than by the fact that
those witnesses picked the literature Lip in the plant.
We find that , other, than as found in subdivision III C above,
the respondent has not interfered with, restrained , or coerced its
employees in the exercise of the rights guaranteed in Section 7 of
the Act.
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 its operations 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. -
-458 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
V. THE REMEDY
Having found that the respondent has engaged in unfair labor
-practices, we shall order it to cease and desist therefrom and to take
certain affirmative action designed to effectuate the policies of the
-Act.
We have found that the respondent has dominated and inter-
fered with the administration of the Plan and contributed financial
-and other support to it, thereby interfering with, restraining, - and
coercing its employees in the exercise of the rights- guaranteed in
'Section 7 of the Act. Accordingly, we shall order the respondent
to cease and desist from such unfair labor practices-and, so as to
-assure the complete remedial effect of that provision of the order,'4
since the Plan persists as a continuing obstacle to the free exercise
by the employees of the rights guaranteed in the Act, we shall also
order the respondent, to withdraw all recognition from and com-
-pletely disestablish the Plan as a representative of the respondent's
employees for the purposes of collective bargaining.
- Upon the basis of-the above findings of fact and upon the entire
-record in the case, the Board makes the following :
CONCLUSIONS OF LAW
1. Steel Workers Organizing Committee, affiliated with the Con-
gress of Industrial Organizations, and Zanesville Armco Plan of
Employee Representation are- labor organizations, within the mean-
ing of Section 2 (5) of the Act.
2. By dominating and interfering with the administration of
'Zanesville Armco Plan of Employee Representation, and by contrib-
uting financial and other support to, it, the respondent has engaged
in and is engaging in unfair labor practices, within the meaning
,Of Section 8 (2) of the Act.
3. , 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.
4. The aforesaid unfair labor practices constitute unfair labor
practices affecting commerce, within the meaning of Section 2 (6)
and (7) of the Act.
ORDER
Upon the basis of the foregoing findings of fact and conclusions
of law, and pursuant'to Section 10 (c) of the National Labor Rela-
tions-Act, the National Labor, Relations Board hereby orders that
14 Consolidated Edison Co et at v. N. L R . B. et at, 305 U S 197.
AMERICAN ROLLING MILL COMPANY 459
the respondent, American Rolling Mill Company, Zanesville, Ohio,
and its officers, agents, successors, and assigns shall:
1. Cease and desist from :
(a) Dominating or interfering with the administration of Zanes-
ville Armco Plan of Employee Representation, or the formation
and administration of any other labor organization of its employees,
and from contributing financial or other support to said Plan or
to any other labor organization of its employees;
(b) In any other manner interfering with, restraining, or coercing
its 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, and to engage in
concerted activities for the purposes of collective bargaining or other
mutual aid or protection.
2. Take the following affirmative action which the Board finds
will effectuate the policies of the Act :
(a) Withdraw all recognition from Zanesville Armco Plan of
Employee Representation as the representative of any of its em-
ployees for ' the purpose of dealing with the respondent concerning
grievances, labor disputes, wages, rates of pay, hours of employment,
or conditions of employment, and completely disestablish Zanes-
ville Armco Plan of Employee Representation as such representative;
.,(b) Post immediately in conspicuous places throughout its plant,
and maintain such notices for a period of at least sixty (60) con-
secutive days from the date of posting, notices to its employees
stating : (1) that the respondent will not engage in the conduct
from which it is ordered to cease and desist in paragraphs 1 (a)
and (b) of this Order, and (2) that the respondent will take the
affirmative action, set forth in paragraph 2 (a) of this Order;
(c) Notify the Regional Director for the Eighth 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-HERESY FURTHER ORDERED that the complaint, in so far as
it alleges that by acts other than unfair labor practices within the
meaning of Section 8 (2) of the Act the respondent has engaged* in
unfair labor practices within the meaning of Section 8 (1) thereof,
be, and the same is hereby, dismissed.