Carmichael Floor Covering Co.

National Labor Relations Board - Board DecisionsNov 9, 1965

155 N.L.R.B. 674 (N.L.R.B. 1965)

674 DECISIONS OF NATIONAL LABOR RELATIONS BOARD APPENDIX B NOTICE TO ALL OUR MEMBERS Pursuant to the Recommended Order of a Trial Examiner of the National Labor Relations Board, and in order to effectuate the policies of the National Labor Rela- tions Act, as amended, we hereby notify you that: WE WILL NOT maintain, give effect to, or enforce article I of the contract enti- tled "Retail Food, Bakery, Candy and General Merchandise Agreement" cover- ing the period from April 1, 1964, through March 31, 1969, insofar as said article I requires employees of any outside supplier or rack jobber or of any other person doing business with the employers named in Appendix A posted together with this appendix or with any other employer subject to the National Labor Relations Act, to become members of our bargaining unit described in said con- tract or to join our labor organizations as a condition of performing work in the stores of the above-described employers or such other employers; or requires any outside supplier or rack jobber to sign the concessionaire agreement incor- porated in said article I with any said employer or with any other retail food market in whose stores such employees may work, or prohibits the employees of any outside supplier or rack jobber or any other person from working in the stores of the above-named employers or in any other retail food market unless such outside supplier or rack jobber agrees to be bound by the terms and condi- tions of the aforesaid contract and signs said concessionaire agreement. WE WILL NOT enter into, maintain, give effect to, or enforce any contract whereby the above-named employers or any other employers subject to the National Labor Relations Act agree to cease or refrain from dealing in the prod- ucts of any outside supplier or rack jobber or cease doing business with any such person in violation of Section 8(e) of the Act. RETAIL CLERKS UNION LOCAL No. 137 RETAIL CLERKS UNION LOCAL No. 324 RETAIL CLERKS UNION LOCAL No. 770 RETAIL CLERKS UNION LOCAL No. 899 RETAIL CLERKS UNION LOCAL No. 905 RETAIL CLERKS UNION LOCAL No. 1167 RETAIL CLERKS UNION LOCAL No. 1222 RETAIL CLERKS UNION LOCAL No. 1428 RETAIL CLERKS UNION LOCAL No. 1442, Respondent Unions. Dated------------------- By------------------------------------------- (Representative) (Title) This notice must remain posted for 60 consecutive days from the date of posting, and must not be altered, defaced, or covered by any other material. Members may communicate directly with the Board's Regional Office, 849 South Broadway, Los Angeles, California, Telephone No. 699-5229, if they have any ques- tion concerning this notice or compliance with its provisions. Wayne Johnson , an Individual , d/b/a Carmichael Floor Covering Company and Carpet, Linoleum and Soft Tile Local Union No. 1237, Brotherhood of Painters , Decorators and Paperhangers of America, AFL-CIO John Duncan , an Individual , d/b/a Duncan Floor Company and Carpet, Linoleum and Soft Tile Local Union No. 1237, Brother- hood of Painters , Decorators and Paperhangers of America, AFL-CIO. Cases Nos. 0O-CA-3f 4-1 and 20O-CA-324-.. Novem- ber 9,1965 DECISION AND ORDER On August 11, 1965, Trial Examiner Louis S. Penfield issued his Decision in the above-entitled proceeding, finding that the Respondents 155 NLRB No. 65. CARMICHAEL FLOOR COVERING COMPANY, ETC. 675 had engaged in and were engaging in certain unfair labor practices and recommending that they cease and desist therefrom and take certain affirmative action, as set forth in the attached Trial Examiner's Deci- sion. Thereafter, the Respondents filed exceptions to the Trial Exam- iner's Decision and a brief in support thereof, and the General Counsel filed a brief in support of the Trial Examiner's Decision. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the National Labor Relations Board has delegated its powers in connection with these cases to a three-member panel [Chairman McCulloch and Members Brown and Zagoria]. The Board has reviewed the rulings of the Trial Examiner made at the hearing and finds that no prejudicial error was committed. The rulings are hereby affirmed. The Board has considered the Trial Examiner's Decision, the Respondents' exceptions and brief, the Gen- eral Counsel's supporting brief, and the entire record in these cases, and hereby adopts the findings, conclusions, and recommendations of the Trial Examiner. [The Board adopted the Trial Examiner's Recommended Order.] TRIAL EXAMINER'S DECISION STATEMENT OF THE CASE This proceeding, with all parties represented was heard before Trial Examiner Louis S Penfield in Sacramento, California, on April 13, 1965, on a complaint of the General Counsel and answers of John Duncan, an individual, d/b/a Duncan Floor Company and Wayne Johnson, an individual, d/b/a Carmichael Floor Covering Company herein jointly called Respondents.' The issues litigated were whether Respondents violated Section 8(a) (1) and (5) of the National Labor Relations Act, as amended, herein called the Act. Upon the entire record, including consideration of briefs filed by the General Counsel and Respondents, and upon my observation of the witnesses, I hereby make the following: FINDINGS OF FACT 1. THE BUSINESS OF THE COMPANIES Wayne Johnson, an individual, d/b/a Carmichael Floor Covering Company, herein called Carmichael, at all times material to this proceeding was engaged in the whole- sale and retail sale of carpets, linoleum, tile, and floor covering supplies in Sacra- mento, California. During the past year Carmichael purchased and received goods and materials valued in excess of $50,000 which were shipped to it from points located outside the State of California. John Duncan, an individual, d/b/a Duncan Floor Company, herein called Duncan, at all times material to this proceeding was engaged in the wholesale and retail sale of hardwood flooring, carpets, linoleum, tile, and floor covering supplies in Sacramento, California. During the past year Duncan purchased merchandise for use in its busi- ness valued in excess of $50,000 from enterprises located in the State of California which had received such goods from points outside the State of California. Sacramento Valley Floor Covering Association, herein called the Association, is an employer association with its principal office and place of business located in Sacra- mento , California. Members of the Association are employers engaged in the whole- sale and retail sale or installation of carpets, linoleum, tile, and other resilient floor ' The consolidated complaint issued on January 26 , 1965, and is based on charges and amended charges filed on August 28, 1964, and January 13 , 1965, respectively . Copies of the complaint , charges, and amended charges have been duly served upon Respondents 212-809-66-vol. 155-44 676 DECISIONS OF NATIONAL LABOR RELATIONS BOARD covering materials. The Association exists, in substantial part, for the purpose of representing its employer members in collective bargaining, and participating in the negotiation, execution, and administration of collective-bargaining agreements on behalf of its employer members with various labor organizations, including the Union herein During the past year employer members of the Association, on whose behalf the Association bargained with the Union, purchased and received goods and mate- rials valued in excess of $50,000 which were shipped to such employer members from points located outside the State of California. Respondents and the Association are each employers within the meaning of Section 2(2) of the Act, and at all times material to this proceeding each has engaged in a business which affects commerce within the meaning of the Act, and I find that the assertion of jurisdiction over the businesses of each is warranted under current Board jurisdictional standards. II. THE LABOR ORGANIZATION INVOLVED Carpet, Linoleum and Soft Tile Local Union No. 1237, Brotherhood of Painters, Decorators and Paperhangers of America, herein called the Union, is a labor orga- nization within the meaning of Section 2(5) of the Act. III. THE ALLEGED UNFAIR LABOR PRACTICES The General Counsel alleges that: Respondents constitute a part of a multi- employer unit; the Union is the statutory representative of employees in such unit; on or about April 8, 1964, the Association and the Union executed a collective-bargaining agreement covering employees in such unit; commencing on or about April 9, and at all times thereafter, Respondents, although employers represented by the Associa- tion and a part of the multiemployer unit, refused to bargain with the Union by refusing to recognize that each was a part of the unit and subject to the collective- bargaining agreement, and by terminating their respective operations relating to the installation of floor covering materials and subcontracting such work to other employers without first bargaining with the Union. Respondents deny that the Association had authority to execute an agreement upon their behalf at this time, and assert that they terminated certain portions of their businesses lawfully without any discriminatory motivation thus necessitating the layoff of those individuals engaged in that phase of their businesses. A. The Association and its representation of Respondents Since 1954 the Association has represented various employers engaged in the sale and installation of floor covering material in matters concerning collective bargaining. Its members, and sometimes others, authorized the Association to carry on bargaining on their behalf, and to execute contracts covering those employees who were engaged in the installation of resilient floor covering materials. Such agreements as it nego- tiated were signed by the Association on behalf of those employers who had author- ized it to represent them. Carmichael was a member of the Association from its inception. At all times material to this proceeding Carmichael was signatory to an unrevoked authorization dated January 2, 1963, authorizing the Association to represent it in collective- bargaining negotiations. This authorization did not expressly empower the Associa- tion to execute agreements on Carmichael's behalf. Carmichael, however, was familiar with the-practice of the Association to execute agreements on behalf of its members as well as to negotiate them The letters from the Association to the Union dated October 2 and 16, 1964, stating Carmichael to be "bound by . . all agreements ... made ... on their behalf" and that "all agreements ... shall be entered into" by the Association, were known to Carmichael and are evidence of its intent to authorize the Association to execute agreements as well as to negotiate them. Contrary to Respondents' assertion I find that Carmichael authorized the Association not only to bargain for it but also to execute agreements in its behalf resulting from the 1963-64 negotiations. Duncan did not become a dues-paying member of the Association until August 1963. However, on May 11, 1962, it signed an authorization empowering the Associ- ation to "execute and enter into collective bargaining agreements" with the Union. This particular authorization was to remain in effect only for the calendar year 1962. Acting pursuant to it, the Association had advised the Union that it was authorized to bargain for Duncan. Thereafter, on June 1, 1962, the Association and the Union executed a collective-bargaining agreement covering employees of those employers that it represented including employees of Carmichael and Duncan. Duncan acknowl- CARMICHAEL FLOOR COVERING COMPANY, ETC. 677 edges that it was covered by this 1962 agreement.2 The 1962 agreement was for a year's duration with automatic renewal provisions absent a written notice of intention to alter or terminate. In March 1963 the Union gave notice that it desired to open the agreement. On May 20, 1963, the Association forwarded to the Union a list of the employers it was representing in the forthcoming negotiations. The list included the names of Car- michael and Duncan. Neither employer repudiated such representation. Negotia- tions between the Union and the Association resulted in a memorandum interim agreement which was executed by the Union and the Association on June 6, 1963.3 The interim agreement provided for certain wage increases to be paid immediately and further provided: It is agreed between the parties that this temporary and interim agreement shall expire immediately upon the presentation to the Employer by the Union of a further agreement, which latter agreement the Union shall indicate as being the current standard collective bargaining agreement to prevail in the jurisdictional area controlled by the Union. The employer agrees upon the presentation of said agreement to execute the same with the Union. Said agreement will be for two years and will increase the base wage rate 25 cents per hour June 1, 1964. Presumably negotiations looking toward the full agreement continued, although the record is sparse as to their exact course. Apparently, the principal point of dis- agreement between the Association and the Union centered about a so-called subcon- tracting clause which appeared as section 12 of the 1962 agreement. At some point the Association filed charges with the Board alleging such clause to be unlawful within the meaning of Section 8(e) of the Act. Following an investigation these charges were adjusted by a settlement agreement executed by the Union and the Association and subsequently approved by the Regional Director of the Board on October 1, 1963.4 This settlement agreement provided, in substance, that the Union would no longer maintain, give effect to, or enforce the provisions of the June 6, 1963, interim agreement which incorporated by reference the last sentence of section 12(a) and all of section 12(b) of the 1962 agreement. With the disposition of the unfair labor practice charges the Union presented a new subcontracting clause to the Association. The new section 12 clause read: Employer agrees to refrain from contracting out unit work now being per- formed by his employees covered by this contract. This clause was incorporated as part of a full collective-bargaining agreement which was presented by the Union to the Association sometime in late September or early October 1963. The agreement presented, however, was not immediately executed by the Association. No representative of the Association testified, and the precise reason for its failure to sign at this time is not entirely clear from the record. How- ever, it would appear from the testimony of Wayne Johnson, owner of Carmichael, that some disagreement may still have existed with regard to section 12. Thus, Johnson states that he, at least, desired a provision which would permit subcontracting, and that the phrasing of the new section 12, although no longer illegal, still forbade 'John Duncan testified that he signed the 1962 agreement individually. The signed individual agreement, however, was not produced Duncan does not claim it to have been different from that which the Association executed, and he failed to explain how it happened that he had signed individually in the face of the terms of the authorization. I am of the opinion that Duncan is mistaken in his belief that he had signed a contract individually, and that actually what he had signed was the authorization which gave the Association authority to represent him and to execute a contract on his behalf. 3 As noted above Carmichael was not only a member of the Association at the time but also was party signatory to an unrevoked authorization and does not dispute the binding character of the interim agreement as to it. Duncan was not yet a dues-paying member of the Association, and the record does not show that he had executed a new written authorization request similar to that which he had signed in 1962 and which had expired at the end of that year. Duncan, however, did not disclaim the assertion by the Associ- ation that it had authority to represent him in the 1963 negotiations and in his testimony he concedes that he regarded his company as bound by the terms of the interim agree- ment. Thus whether or not Duncan had signed a written authorization expressly per- taining to the 1963 negotiations, I am satisfied that by its conduct not only did it sufficiently authorize the Association to represent it but also that it subsequently ratified the action that the Association undertook. ' In the matter of Carpet, Linoleum and Soft Tile Workers Union, Local 1237, Cases Nos. 20-CC-367 and 20-CE-24. 678 DECISIONS OF NATIONAL LABOR RELATIONS BOARD employers to contract out unit work. In any event there is nothing in the record to suggest any other disputed issue still remaining as an obstacle to the execution of the full agreement at this time. The Union was advised by its counsel that if fringe benefits were to be paid by the employers, signed agreements must exist. The Union thereupon approached numer- ous of the employers individually, and was successful in obtaining signed agreement from a considerable number of them identical with that submitted to the Association. Carmichael signed one such agreement individually, as did Mrs. Duncan, wife of the owner of Duncan.5 On October 2, 1963, Carmichael and the Association notified the Union by letter that as a member of the Association, Carmichael "was bound by the provisions of all agreements . . . . made for and on their behalf" by the Association and that the earlier execution of the pioffered agreement on an individual basis was null and void. On October 16, 1963, the Association sent a letter to the Union advising the Union that it "represented under power of attorney" a number of listed employers with authority to bargain collectively and execute agreements on their behalf, and that pursuant to such power of attorney any agreements which had theretofore been executed by any of such employers individually were null and void. Included among the employers listed as affected by this representation was Duncan, as well as Carmichael, and the letter also noted that copies had been sent to all members of the Association.6 On January 16, 1964, the Association advised the Union that Carmichael had "changed [its] status as employing contractors, and will contract out all work and service covered under the terms of the bargaining agreement to labor contractors signatory to the Linoleum, Carpet and Soft Tile Union Agreement." The Union immediately protested to the Association that this was contrary to the provisions of its agreement forbidding the contracting out of unit work. Carmichael, after discuss- ing the matter with representatives of the Association thereupon abandoned its con- templated action, and continued to use its own employees in the installation work in which it was engaged. By early April the agreement still had not been signed by the Association. On or about April 6, 1964, the Union advised the Association that unless the agreement "now in effect in this area" was signed by the Association "by midnight April 10, 1964, employers listed as signatory members of the Association shall not be able to have employees supplied under the terms of the aforesaid collective bargaining agreement." Following receipt of this letter the Association signed the agreement on April 8, 1964, and submitted it to the Union. The agreement signed was the same one submitted to the Association in September and identical to the agreements signed individually which had been repudiated by the Association in the October 16 letter.? On April 9, 1964, the Association sent a letter to the Union representing that the agreement submitted had been signed by the Association acting on behalf of a number of listed employers, but further representing as follows: Please be advised that Carmichael Floor Covering of 6818 Fair Oaks Boulevard, and Duncan Floor Covering of 890 Fifty-seventh Street, Sacramento, have dis- continued their operation as employing contractors and will not be party to the Master Agreement, as all installation work will be done by labor contractors parties to the agreement. John Duncan and Wayne Johnson state that each had concluded prior to the time that the Association had executed the April 8 agreement that continued use of their own employees for installation work was either too burdensome or not economical, and that in the future each would continue to do the same work using the services of contractors. Each signified that it intended to use union contractors. Both advised 5 John Duncan was ill at this particular time and his wife was undertaking to carry on the business. 6 Presumably this included Duncan since at this time he was a member of the Associ- ation. A question was raised at the hearing as to whether Duncan had received a copy of such letter inasmuch as John Duncan disclaimed personal knowledge of it. It was not established, however, that even though it may not have come to Duncan's attention, such letter had not been received. Under the circumstances it is reasonable to assume that Duncan did receive the letter and was put on notice thereby that the Association was purporting both to represent it, and to execute agreements on its behalf, and I so find. 7 The General Counsel is making no claim in this proceeding that these individual agree- ments had any binding effect. His principal contention , and indeed the only issue framed by the pleadings, is that the interim agreement of June 6, 1963, and the subsequent full agreement executed on April 8, 1964, were binding on Carmichael and Duncan and that it was their attempted withdrawal from coverage that was ineffective Accordingly, I find it unnecessary to pass upon the legal significance of the individual contracts signed. CARMICHAEL FLOOR COVERING COMPANY, ETC. 679 the Association of this decision either immediately before or immediately after the Association had executed the full agreement stating that under the circumstances neither could be a party to an agreement which forbade contracting out unit work.8 On or about April 10, 1964 , Carmichael and Duncan each terminated the employ- ment of those individuals who had been engaged in installation work. Each continued in business as before , however, except that thereafter each used the services of employees of contractors to perform its installation work.9 It stands undisputed that at no time prior to the termination of their employees did either Duncan or Carmichael , or the Association acting on their behalf , undertake to negotiate with the Union concerning the contracting out of the installation work. B. The unit and the majority The composition of the bargaining unit is generally defined by the provisions of the association agreement with the Union as including all employees of the covered employers engaged in installation work.iO It is not disputed that such a multiemployer unit, including employees of Car- michael and Duncan , could be appropriate for collective bargaining , nor is it disputed that at all times material to this proceeding the Union represented a majority of the employees in such unit . Accordingly , I find that a unit comprised of the employees described in footnote 10, above, employed by all employers who are members of the Association , including Duncan and Carmichael , constitutes a unit appropriate for the purposes of collective bargaining within the meaning of Section 9 ( b) of the Act, and I further find that at all times subsequent to June 1, 1962, a majority of the employees of the employers in such unit had designated the Union as their exclusive representative within the meaning of Section 9(a) of the Act. Although Respondents do not dispute the appropriateness of such a unit they seek to avoid their duty to bargain by claiming that each had withdrawn from such unit by its decision to contract out its work , and that the duty to bargain as a part of such unit was thereby extinguished . The issue of the effectiveness of the withdrawal will be discussed below. 8 There is some conflict as to the exact timing of this notification . According to the union representative he was given the signed contract on April 8, and nothing was said about the withdrawal of Carmichael and Duncan . This suggests that the agreement was already signed when Carmichael and Duncan sought to withdraw . Duncan and Johnson, however, both testified that there had been a meeting of the Association which they believed to have taken place prior to the execution of the agreement , and that at this time each signified its intent to withdraw from the unit and not be bound by the agree- ment. I find it unnecessary to resolve the conflict , since for reasons which will appear below its resolution either way would not affect the ultimate conclusion as to the time- liness of the withdrawal. O Duncan testified that his employees had been directed by the Union to leave his establishment on April 10, because Duncan was not bound by the association agreement. This was denied by the Union , and there is no other showing indicating that the Union directed any of the men to leave Duncan ' s employ. Duncan 's claim is inconsistent with his assertion that he was abandoning installation work using his own employees. Aban- donment of this work necessarily would result in the termination of the employees. The Union took a consistent position throughout that the agreement would not permit an employer to contract out the unit work. Directing the employees to leave would hardly support such a position . Accordingly , contrary to Duncan's claim, I find that the em- ployees of Duncan did not leave his employ voluntarily on April 10 , 1964, but that they were terminated because Duncan had undertaken to have all future installation services performed by outside contractors. 10 This unit is more specifically described as all employees engaged in the measuring, cleaning, cutting, waxing, and laying new and old carpet, linoleum, rubber, cork carpet, oilcloth, mastipave, matting, linen, crash, cork, mastic, vinyl, plastic, and asphalt tile, and all resilient floor coverings , whether in sheets , squares , rolls, or interlocked ; linoleum , rubber, cork , plastic , and metal tile on walls and ceilings , fitting devices or attachment of carpets , linoleum , rubber, and all resilient floor coverings and fittings of metal edges , metal corners , and caps used in the installation of linoleum, rubber, and all resilient floor coverings on floors , sinks , counters , tables , and steps, and the preparation work of the craft for all the aforesaid , including the handling of the above-mentioned materials but excluding salesmen , office clerical employees , guards , and supervisors as defined in the .Act. 680 DECISIONS OF NATIONAL LABOR RELATIONS BOARD C. Discussion of the issues and concluding findings The unlawful character of the refusal to bargain by Respondents initially turns on_ the timeliness of their attempt to withdraw from the multiemployer bargaining unit. I have found Carmichael and Duncan to be part of a multiemployer unit, and each to have been covered by the terms of the 1962 collective-bargaining contract executed on their behalf by the Association. I have further found that each had authorized the Association of bargain for it and to execute contracts on its behalf in the negotia- tions which led up to the execution of the June 1963 interim agreement. Each acknowledges that it regarded such agreement as binding on it. The interim agree- ment by its own terms contemplated that further negotiations leading to a full con- tract were to be undertaken. Nevertheless, prior to April 9, 1964, the record shows no affirmative attempt made by either Carmichael or Duncan to repudiate the author- ity that each had apparently vested in the Association. On the contrary each know- ingly permitted the Association to represent to the Union in the letter of October 16, 1963, not only that the Association had authoriy to negotiate and execute agreements on its behalf, but also that the individual contracts negotiated by each Respondent were null and void. Under the circumstances the attempt to withdraw from the unit whether it occurred either immediately before or immediately after the Association. signed the full contract on April 8, 1964, must be regarded as untimely and ineffective. The circumstances under which an employer may withdraw from a multiemployer unit are most clearly enunciated in Retail Associates, Inc., 120 NLRB 388, 395, where the Board stated: Among other things, the timing of an attempted withdrawal from a multi employer bargaining unit, as Board cases show, is an important lever of control in the sound discretion of the Board to ensure stability of such bargaining rela- tionships. We would accordingly refuse to permit the withdrawal of an employer or a union from a duly established multiemployer bargaining unit, except upon adequate written notice given prior to the date set by the contract for modifica- tion, or to the agreed-upon date to begin the multiemployer negotiations. Where actual bargaining negotiations based on the existing multiemployer unit have begun, we would not permit , except on mutual consent, an abandonment of the unit upon which each side has committed itself to the other , absent unusual circumstances. In a recent case, Sheridan Creations, Inc., 148 NLRB 1503, 1505, also involving an attempted withdrawal under circumstances parallel in many respects to those in the instant case, the Board reaffirmed these principles setting forth that the good faith of an employer in seeking to withdraw from a unit was not the controlling factor and stating: . Although the Respondent evinced an intent to withdraw from multiemployer bargaining after negotiations for renewal of the multiemployer contract had begun and before agreement had been reached, the evidence is clear that the Respondent neither sought nor obtained union consent for such withdrawal.. In the absence of such consent, it is well settled now that an attempted with- drawal at that stage of negotiations is neither timely nor effective. The instant case falls clearly within the doctrine of these cases. No adequate writ- ten notice of withdrawal had been given before negotiations had begun, and no consent had been sought or obtained from the Union. Accordingly, I find the attempted withdrawal from the unit by Respondents to be untimely. I further find that Respondents at all material times properly comprised a part of the multiemployer unit heretofore found to be appropriate, and that Respondents were bound by the contract executed by the Association, their authorized representative, with the Union, the statutory representative of employees in such unit. Respondents' refusal to acknowledge the binding character of the April 8, 1964, contract is premised upon their claim that they had effectively withdrawn from the unit. Since this claim must be rejected it follows, and I find, that such refusal is a refusal to bargain within the meaning of Section 8(a) (5) of the Act, and that it also constitutes interference, restraint, and coercion within the meaning of Section 8 (a) (1) of the Act. As we have seen, it stands undisputed that Respondents neither individually, nor through the Association, undertook to bargain with the Union regarding the issue of carrying on future installation work by using contractors rather than their own employees. Their decision on this matter was first presented to the Union as a fait accompli by the letter of April 9, 1964. Simultaneously, with this announcement Respondents terminated the employees in the unit and thereafter carried on their installation work using employees of contractors. Respondents defend this conduct by arguing that it only amounted to an abandonment of one phase of their businesses, CARMICHAEL FLOOR COVERING COMPANY, ETC. 681 and that absent a showing of antiunion motivation pursuit of such a course of action was lawful. It is asserted that the situation is controlled by the rationale of the United States Supreme Court in Textile Workers Union v. Darlington Manufacturing Co., 380 U.S. 263. Respondents rely upon a statement by the court in that case to the effect that a partial closing of an employer's business will not be an unfair labor practice unless found to be "motivated by a purpose to chill unionism." Respond- ents' reliance upon the rationale of Darlington is misplaced. In Darlington the court was concerned with an issue of discriminatory motivation and its application, if any, to a complete or a partial closing of a plant. The charge in the instant case, how- ever, relates solely to Respondents' statutory duty to bargain. The alleged violation concerns the consequences of their failure to fulfill such duty regardless of the existence of any discriminatory motivation. The controlling principle is not to be found in Darlington, but in the decision of the Supreme Court in Fibreboard Paper Products Corp., 379 U.S. 203. The issue in Fibreboard concerns the lawful char- acter of an employer's contracting out maintenance work formerly done by its own employees without first bargaining with the statutory representative of such employees. The Court upheld the Board in its conclusion that such conduct was a breach of the employer's duty to bargain regardless of its lawful economic motivation, and that such breach must be remedied by restoring the status quo and directing the employer to bargain with the union on the issue. Among other things the Court stated: The inclusion of "contracting out" within the statutory scope of collective bargaining also seems well designed to effectuate the purposes of the National Labor Relations Act. One of the primary purposes of the Act is to promote the peaceful settlement of industrial disputes by subjecting labor-management controversies to the mediatory influence of negotiation. The Act was framed with an awareness that refusals to confer and negotiate had been one of the most prolific causes of industrial strife. . . . To hold, as the Board has done, that contracting out is a mandatory subject of collective bargaining would pro- mote the fundamental purpose of the Act by bringing a problem of vital concern to labor and management within the framework established by Congress as most conducive to industrial peace. . The Company's decision to contract out the maintenance work did not alter the Company's basic operation. The maintenance work still had to be per- formed in the plant. No capital investment was contemplated; the Company merely replaced existing employees with those of an independent contractor to do the same work under similar conditions of employment. Therefore, to require the employer to bargain about the matter would not significantly abridge his freedom to manage the business. The situation in the instant case is similar. The concern here also centers on a change in the manner in which Respondents proposed to carry on their businesses. The Union was the statutory representative of the employees engaged in installation work. Respondents' decision to contract out the installation was unilateral, and had the effect of terminating the employment of all those employees of each who were engaged in such work. As in Fibreboard Respondents continued to carry on the same business but now using employees of contractors rather than their own. The vice of the conduct is found not in the change in mode of operation, but in the failure to deal with the Union concerning it. Fibreboard stands for the proposition that employers may not effect a change which will result in transferring out unit work in derogation of their statutory duty to bargain with the designated representative of their employees. Respondents here clearly failed to fulfill such a duty, and as in Fibreboard their failure constitutes a refusal to bargain within the meaning of Sec- tion 8(a) (5) of the Act, and interference, restraint, and coercion within the meaning of Section 8(a) (I) of the Act, and I so find. IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The activities of Respondents as set forth in section III, above, occurring in con- nection with the operations of Respondents 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 Respondents have engaged in violations of Section 8(a) (1) and (5) of the Act, I shall recommend that they cease and desist therefrom, and take certain affirmative action designed to effectuate the policies of the Act. 682 DECISIONS OF NATIONAL LABOR RELATIONS BOARD The Board has heretofore pointed out that it may be an exercise in futility to attempt to remedy a violation involving unilateral changes if an employer's decision to subcontract is permitted to stand. Therefore it has sought to adapt the remedy to the situation by ordering the employer to restore the status quo by reinstituting the operations terminated, and thereafter to fulfill its statutory duty to bargain.11 The Board has also held that in this type of case, it may be equally futile to direct an employer to bargain with a bargaining representative on the termination of jobs which they no longer hold. Thus it has held that where the loss of employment stems directly from the employer's unlawful action in bypassing its bargaining agent, a meaningful bargaining order can only be fashioned by directing the employer to restore the employees to the positions which they held prior to this unlawful action. No reason appears why such remedial action is not appropriate here. Accordingly, I shall order Respondents, respectively, to offer reinstatement to those employees previously engaged in their respective installation operations and terminated when the work was given to contractors, to their former or substantially equivalent posi- tions without prejudice to their seniority or other rights and privileges. I shall also order that Respondents, respectively, make each whole for any loss of earnings he may have suffered as a result of Respondents' unlawful action in bypassing their bargaining agent and unilaterally subcontracting their jobs out of existence. Back- pay shall be based upon the earnings which they normally would have received from the date of their terminations to the date of Respondents' offer of reinstatement less any interim earnings, and shall be computed in accordance with the formula and method prescribed by the Board in F. W. Woolworth Company, 90 NLRB 289, and Isis Plumbing & Heating Co., 138 NLRB 716, to which the parties hereto are ,expressly referred. The unfair labor practices committed by Respondents strike at the heart of the rights guaranteed employees by Section 7 of the Act.12 The inference is warranted that Respondents maintain an attitude of opposition to the purposes of the Act with respect to the protection of employees in general. It will accordingly be recommended that they cease and desist from infringing in any manner upon the rights guaranteed in Section 7 of the Act.13 Upon the basis of the foregoing findings of fact and upon the entire record in this proceeding, I make the following: CONCLUSIONS OF LAW 1. Respondents and the Association, and each of them, are employers within the meaning of Section 2(2) of the Act. 2. The Union is a labor organization within the meaning of Section 2(5) of the Act. 3. All employees of the employer-members of the Association, including employees of Respondents, engaged in the installation of resilient floor coverings, as more par- ticularly described above in section III B, constitute a unit appropriate for the purposes of collective bargaining within the meaning of Section 9(b) of the Act. 4. At all time since June 1, 1963, the Union has been, and now is, the exclusive representative of all the employees in the aforesaid appropriate unit for the purpose of collective bargaining within the meaning of Section 9(a) of the Act. 5. By refusing on and after April 8, 1964, to bargain with the Union as the exclu- sive representative of its employees in the aforesaid unit, and by refusing on and after that date to acknowledge that they were bound by the terms and conditions of the collective-bargaining agreement negotiated between the Union and the Associa- tion, Respondents have engaged in and are engaging in unfair labor practices within the meaning of Section 8(a) (5) of the Act. 6. By unilaterally discontinuing their floor covering installation operations without first bargaining collectively with the Union as the exclusive representative of the employees in the aforesaid appropriate unit, Respondents have refused to bargain and have committed unfair labor practices within the meaning of Section 8(a) (5) of the Act. 7. By the foregoing conduct, Respondents have interfered with, restrained, and coerced employees in the exercise of rights guaranteed them by Section 7 of the Act, and have thereby committed unfair labor practices within the meaning of Section 8(a)(1) of the Act. 31 Town & Country Manufacturing Company, Inc., 136 NLRB 1022; Fibreboard Paper Products Corporation, 138 NLRB 550. 12 N.L.R.B. v. Entwistle Mfg. Co., 120 F. 2d 532 (C.A. 4). Is May Department Stores d/ b/a Famous-Barr Company v. N.L.R.B., 326 U.S. 376; Beth- lehem Steel Company v. N.L.R.B., 120 F. 2d 641 (C.A.D.C.) CARMICHAEL FLOOR COVERING COMPANY, ETC. 683 8. The aforesaid unfair labor practices are unfair labor practices within the mean- ing of Section 2(6) and (7) of the Act. RECOMMENDED ORDER Upon the basis of the foregoing findings of fact and conclusions of law, and upon the entire record in the case, and pursuant to Section 10(c) of the National Labor Relations Act, as amended, I recommend that Respondent Wayne Johnson , an indi- vidual, d/b/a Carmichael Floor Covering Company, and John Duncan, an individual, d/b/a Duncan Floor Company, their officers, agents, successors , and assigns, shall: 1. Cease and desist from: (a) Refusing to bargain collectively with the Union as the exclusive representative of Respondents' employees in the appropriate unit described above, with respect to wages, hours, and other terms and conditions of employment. (b) Refusing to acknowledge that they are bound by the terms of the collective- bargaining agreement executed by the Union and the Association on April 8, 1964. (c) Refusing to bargain collectively by unilaterally contracting out unit work, or otherwise unilaterally changing the wages , hours, and other terms and conditions of employment of unit employees without prior bargaining with the Union. (d) In any other manner interfering with, restraining, or coercing employees in the exercise of their rights to self-organization , to form labor organizations , to join or assist the above-named Union, or any other labor organization, to bargain col- lectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection, and to refrain from any and all such activities except to the extent that such rights may be affected by an agreement requiring membership in a labor organization as a condition of employment as authorized in Section 8(a)(3) of the Act. 2. Take the following affirmative action which is necessary to effectuate the policies of the Act: (a) Bargain collectively with the Union by acknowledging that it is bound by the terms of the collective-bargaining agreement executed by the Union and the Association on April 8, 1964. (b) Reinstate the respective floor covering installation operations previously per- formed by their respective employees, and offer to those employees terminated on or about April 10, 1964, immediate and full reinstatement to their former or sub- stantially equivalent positions without prejudice to their seniority or other rights and privileges, and make each whole for any loss of pay suffered by him in the manner set forth in the section above entitled "The Remedy." (c) Notify any individual entitled to reinstatement if presently serving in the Armed Forces of the United States of his right to reinstatement upon application in accordance with the Selective Service Act and the Military Training and Service Act of 1948, as amended, after discharge from the Armed Forces. (d) Preserve and, upon request, make available to the Board or its agents, for examination and copying, all payroll records, social security payment records, time- cards, personnel records and reports, and all other records necessatry to an analysis of the backpay due. (e) Post in conspicuous places at their usual places of business, including all places where notices to employees are customarily posted, copies of the attached notice marked "Appendix A." 14 Copies of said notice, to be furnished by the Regional Director for Region 20, shall, after being signed by Respondents, be posted by them immediately upon receipt thereof and maintained by them for 60 consecutive days thereafter in such conspicuous places. Reasonable steps shall be taken by Respondents to insure that said notices are not altered, defaced, or covered by any other material. (f) Notify the Regional Director for Region 20, in writing, within 20 days from the receipt by Respondents of a copy of this Decision, what steps Respondents have taken to comply therewith.15 11 In the event that this Recommended Order be adopted by the Board, the words "a Decision and Order" shall be substituted for the words "the Recommended Order of a Trial Examiner" in the notice. In the further event that the Board's Order be enforced by a decree of a United States Court of Appeals, the words "a Decree of the United States Court of Appeals , Enforcing an Order" shall be substituted for the words "a Decision and Order." 15In the event that this Recommended Order is adopted by the Board , paragraph 2(f) shall be modified to read: "Notify said Regional Director, in writing, within 10 days from the date of this Order, what steps Respondents have taken to comply therewith." 684 DECISIONS OF NATIONAL LABOR RELATIONS BOARD It is further recommended that unless on or before 20 days from the date of their receipt of this Trial Examiner's Decision Respondents notify the Regional Director that they will comply with the foregoing recommendations, the National Labor Rela- tions Board issue an order requiring Respondents to take the action aforesaid. APPENDIX NOTICE TO ALL EMPLOYEES Pursuant to the Recommended Order of a Trial Examiner of the National Labor Relations Board, and in order to effectuate the policies of the National Labor Rela- tions Act, as amended, we hereby notify our employees that: WE WILL NOT refuse to bargain collectively with Carpet, Linoleum and Soft Tile Local Union No. 1237, Brotherhood of Painters, Decorators and Paper- hangers of America, AFL-CIO, as the exclusive representative of our employees as part of a multiemployer unit , and we acknowledge that we are bound by the terms of a collective-bargaining agreement executed by that union and Sacra- mento Floor Covering Association, on April 8, 1964. WE WILL resume our respective installation operations, and we will offer reinstatement to their former or substantially equivalent positions, to each of the employees previously terminated by our unilateral discontinuance of such operations , and make each such employee whole for any loss of pay which he may have incurred as a result of such termination. WE WILL NOT in any other manner interfere with the rights granted our employees by the National Labor Relations Act to organize or bargain collectively. WAYNE JOHNSON, an Individual , d/b/a CARMICHAEL FLOOR COVER- ING COMPANY; JOHN DUNCAN, an Individual, d/b/a DUNCAN FLOOR COMPANY, Employers. Dated------------------- By------------------------------------------- (Representative) (Title) NOTE.-We will notify the employees entitled to reinstatement if presently serving in the Armed Forces of the United States of their right to full reinstatement upon application in accordance with the Selective Service Act and the Universal Military Training and Service Act of 1948, as amended, after discharge from the Armed Forces. This notice must remain posted for 60 consecutive days from the date of posting and must not be altered, defaced, or covered by any other material. Employees may communicate directly with the Board's Regional Office, 450 Golden Gate Avenue, Room 13059, San Francisco, California, Telephone No. 556-3197, if they have any questions concerning this notice or compliance with its provisions. Los Angeles Mailers' Union No. 9, a Subordinate Union of the International Typographical Union and Dow Jones & Com- pany, Inc. Case No. 21-OR-2310. November 9, 1965 DECISION AND ORDER On June 28 , 1965, Trial Examiner James R. Hemingway issued his Decision in the above-entitled proceeding , finding that the Respond- ent had engaged in and was engaging in certain unfair labor practices and recommending that it cease and desist , therefrom and take certain affirmative action, as set forth in the attached Trial Examiner 's Deci- sion. Thereafter , the Respondent filed exceptions to the Trial Exam- iner's Decision and a supporting brief. 155 NLRB No. 68.