E-Z Mills, Inc.

National Labor Relations Board - Board Decisions

Aug 27, 1953

106 N.L.R.B. 1039 (N.L.R.B. 1953)

E-Z MILLS, INC. 1039
E-Z MILLS, INC. and AMALGAMATED CLOTHING WORKERS
OF AMERICA, CIO. Case No. 1-CA-1276. August 27, 1953
DECISION AND ORDER
On June 19, 1953, Trial Examiner Charles W. Schneider
is sued his Intermediate Report in the above-entitled proceeding,
finding that the Respondent had not engaged in and is not engag-
ing in certain unfair labor practices and recommending that the
complaint be dismissed, as set forth in the copy of the Intermedi-
ate Report attached hereto. Thereafter, the charging Union and
the General Counsel filed exceptions to the Intermediate Report
and supporting briefs, and the Union requested oral argument.
The Respondent filed a reply brief. The Union' s request for oral
argument is denied, as the record and briefs, in our opinion,
adequately present the issues and the positions of the parties.
The Board i has reviewed the rulings made by the Trial
Examiner at the hearing and finds that no prejudicial error was
committed. The rulings are hereby affirmed. The Board has
considered the Intermediate Report, the exceptions and briefs,
and the entire record in the case, and hereby adopts the find-
ings, conclusions, and recommendations of the Trial Examiner.
[The Board dismissed the complaint.]
i Pursuant to the provisions of Section 3 (b) of the Act, the Board has delegated its powers
in connection with this case to a three- member panel [Chairman Farmer and Members
Styles and Peterson].
Intermediate Report and Recommended Order
STATEMENT OF THE CASE
This proceeding, brought under Section 10 (b) of the National Labor Relations Act (61 Stat.
136) against E-Z Mills, Inc , Respondent, upon charges duly filed by Amalgamated Clothing
Workers of America, CIO, complaint issued by the General Counsel of the National Labor
Relations Board, bill of particulars, and answer, was heard, pursuant to due notice, in Ben-
nington. Vermont, and in New York, New York, on various dates from January 29 to February
25, 1953
All parties were represented by counsel, participated fully in the hearing, and were afforded
opportunity to present and to meet evidence, argument, and briefs, Stipulations to correct the
transcript of record were thereafter submitted and are hereby approved. Briefs were sub-
mitted by the parties on April 13, 24, and 27, 1953, respectively
On the basis of my observation of the witnesses and upon the entire record in the case, I
make the following
Findings and Conclusions
Upon the basis of conceded facts, it is found that the Union is a labor organization within the
meaning of Section 2 (5) of the Act, and that the Respondent is engaged in commerce within
the meaning of the Act
The Issue
In the spring and summer of 1952 the Respondent closed its plant at Bennington, Vermont,
and consolidated all its manufacturing operations in its Cartersville, Georgia. plant. The
106 NLRB No. 163.
1040 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
General Counsel and the Union contend that the purpose of this move was to avoid dealing with
the Union The Respondent ' s contention is that the action was for economic reasons
The Background
The Respondent Company is owned by the Haight family and has been in operation for about
50 years, beginning early in this century Everest Haight , president , and Sherman Haight, Sr.,
treasurer and chairman of the board, the second generation in the line of ownership , own over
70 percent of the Respondent' s stock and control its policies The third generation is repre-
sented by (among others ) Sherman Haight , Jr , who, from about 1946 to the time of its closing,
was the manager and operating head of the Bennington plant. The Respondent ' s general offices
are in New York City As of the time of closing of the Bennington plant , Sherman Haight, Jr.,
like his father before him, had his home in Bennington . The Haights have operated the Ben-
nington plant since 1903 The Company , and to some extent the Haight family itself , thus have
roots in Bennington going back half a century.
During the 50 years of its existence the Respondent has closed , moved, and consolidated
plants on a number of occasions . In that time it has operated some 10 plants . The original
plant was in Hossick Falls, New York, some 15 miles from Bennington Later 2 other plants
were acquired in Greenwich, New York, and Cambridge , New York. The latter 2 were
abandoned about 1926 The Hoosick Falls plant was sold in 1936, and its business transferred
to Bennington.
The first Bennington plant was established in 1903, in North Bennington . That building
burned in 1914 and the Company then moved to a site in Bennington proper . In 1941 another
plant was acquired in Bennington and the operations transferred to it
In 1933, the Respondent purchased the plant at Cartersville , Georgia , in 1937, 1 at Ware,
Massachusetts , and in 1938 , 2 plants at Rossville, Georgia . After several years the Ware
and Rossville facilities were sold.
Thus, for the 10 or more years immediately preceding the 1952 consolidation , the Re-
spondent had only 2 operations the one at Bennington , and the one at Cartersville.
Prior to 1952, the number of plants operated by the Respondent fluctuated from 2 to 5,
at different times during the Company' s existence The present is apparently the only period,
however, in which the Respondent has owned only 1 plant Bennington appears to be the only
community in which, up to 1952 , the Respondent had continuously operated The 1952 con-
solidation aside, it is not disputed that the reasons for each of the various moves, consoli-
dations, sales , and closures , were economic desire for more efficient and more profitable
operation . From 1924 on, the decisions as to these moves , including the Bennington closing,
have been made by Everest Haight and Sherman Haight. Sr
During 1937 and 1938 the Respondent had contracts with the Amalgamated Clothing Workers
of America, CIO, and in 1942 and 1943 contracts with the international Ladies' Garment
Workers' Union, covering the Bennington plant.
The Union Campaign
The Union commenced an organizational campaign at the Bennington plant in the spring of
1951 Shortly thereafter , the Board has found , i the local management and supervisors
threatened econonuc reprisals against employees favoring the Union , threatened to close
the plant if the Union were successful , engaged in surveillance, interrogated employees
with reference to their union association , and discriminatorily discharged or laid off a
number of union employees in September 1951.
In February 1952, a hearing was held upon the Union's unfair labor practice charges which
culminated in the Board decision previously referred to. On April 8, 1952 , agreement was
reached between the parties for a consent election, which was held on April 22, 1952, and
which the Union won.
On the day before the consent election, Supervisor Thomson told employee Emma Hoyt
that there would be a "lot of changes after tomorrow."
At a unit captains ' meeting around March or April 1952, Manager of Special Products
Gates told employees that he would "rather see the doors of the shop closed than to have
the employees represented by the Union."
At another unit captains ' meeting sometime before the election , Sherman Haight, Jr.,
plant manager , stated (with reference to the fact that the plant had been closed down some
iE-Z Mills , Inc., 101 NLRB 979.
E-Z MILLS , INC. 1 041
years before for 16 weeks by a strike ) that he would "hate to see the Union come in and if
it did, if [the employees ] thought [they] had a long vacation before, [ they would] have a longer
one this time "
The Shutdown
The Union made no formal request for a bargaining meeting with the Respondent until
about May 15, 1952 . However , in late April or early May , negotiations were undertaken
on behalf of the Union, through an intermediary , to arrange a meeting between Sherman
Haight , Sr., and Jacob Potofsky , president of the International Union , for an "informal"
discussion of their "mutual problems " Haight indicated his willingness , but due to conflicts
in engagements of both parties , it was not until May 26 that a meeting could be held. On
May 15, Haight wrote Potofsky to inform him that, because of economic considerations, the
Respondent planned to suspend operations at the Bennington plant about July 1, and to consoli-
date all its operations at the Bennington plant about July 1, and to consolidate all its opera-
tions in the plant at Cartersville. Around the same time the Union ' s regional director made a
formal request for a collective - bargaining meeting, and such sessions were arranged.
On May 19 notice was posted in the Bennington plant to the effect that it would be closed
for economic reasons 2
Several bargaining meetings were held in June , at which the Respondent ' s representatives
explained the reasons for the move to Cartersville , and the Union presented counterargu-
ments During the negotiations the Union , arguing that the Respondent ' s production methods
at Bennington were antiquated , offered to bring in engineers , at no cost to the Respondent,
to devise more efficient operational and managerial procedures . The Union also offered
to submit to arbitration the question as to whether the Respondent should move . The Re-
spondent refused both these offers During succeeding months the transition was effected,
the Bennington plant was closed , its operations and some machinery and key personnel
transferred to Cartersville , and the remainder of the property , including the plant and
Sherman Haight , Jr 's home in Bennington , put up for sale.
The Contentions and Evidence
The Respondent asserts that the decision to close the Bennington plant was made for
economic reasons. In support of this assertion the Respondent produced voluminous docu-
mentary material , including forecasts of economic conditions , analyses of its operations,
financial reports , and the testimony of Everest Haight , Sherman Haight , Sr., and M. W.
Morris , the Respondent's assistant treasurer and head accountant . Sherman Haight, Jr.,
called as a witness by the General Counsel , also testified in support of the Respondent's
assertions In sum, the Respondent ' s evidence is to the effect that operational losses, need
for greater economy and efficiency in operations , drop in sales, and impairment in financial
condition , dictated the move.
Apart from policy control and ultimate executive direction, which are centered in the
New York offices, the Respondent ' s production and fiscal affairs are directed by its vice
president in charge of manufacturing , John Fowler , and its assistant treasurer, M. W.
Morris , both headquartered at the Cartersville plant Sherman Haight, Jr., in charge of
the Bennington plant, and George Getty, comptroller at Bennington, were subordinate,
respectively , to Fowler and Morris Fowler had long favored consolidation of the two plants
at Cartersville
2 This notice, over the signature of Sherman Haight, Jr , stated:
The E-Z Mills, Inc., have operated a plant in Bennington , Vermont during the past
forty-nine years.
The competitive nature of the industry and the present economic condition of textiles
preclude further sound operation in Bennington during the forseeable future. Consoli-
dation of the company's manufacturing will be made in the plant of the E-Z Mills, Inc.,
in Cartersville , Georgia.
Production in Bennington will begin gradual curtailment immediately and will be
complete by mid - summer.
Major machinery will not be transferred to Cartersville but will remain in place in
the Bennington plant . We hope that future conditions will permit us to resume operation
in Bennington at a later date
1042 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
The Respondent ' s data is attacked by the General Counsel and the Union as self -serving,
contradicted by testimony or other evidence , and not establishing the conclusions the Re-
spondent seeks to have drawn from it. The testimony of the Respondent ' s officials is as-
serted to be incredible.
The Respondent ' s testimony and the purport of its documentary evidence , are, in summary,
as follows:
The Respondent ' s fiscal year begins on December 1
In the spring of 1951 the Respondent refinanced some $ 700,000 in bank loans by a loan from
the Metropolitan Life Insurance Company in the amount of $ 1,000,000- - slightly more than one-
third of the Respondent ' s net worth . Inter alia , the loan agreement required the Respondent to
maintain net current assets in the amount of $ 2,250 , 000, as a condition of issuance of dividends.
In 1951 the Respondent ' s business , as well as that of others mthetextile industry , began to
slump Beginning in the summer of that year, the Bennington and Cartersville plants began to
operate on short time, averaging 3 or4days a week , a condition which continued through most
of the year . The Respondent ' s operating profit during the last 6 months of fiscal 1951 dropped
to $159,000 , from a figure of $ 602,000 in the comparable period of 1950; a loss of $443,000.
This decline continued into 1952 . By the spring of 1952, profits had fallen over $750,000. Thus
from December 1, 1951, to April 1, 1952 , there was a drop of $312j000 as compared with the
comparable period of the previous fiscal year , and by spring of 1952 , the accumulated decline
in profits over a 10-month period was more than $ 750,000.
Concurrently with this , orders and sales declined At the beginning of March 1952 , unfilled
orders were $2,384,000 less than at the beginning of March 1951; and by the end of March,
$4,750,000 less In November 1951 in order to maintain operations , the Respondent accepted
a contract for the production of goods for the Marine Corps at an anticipated loss.
During the first quarter of fiscal 1952, the Respondent sustained a net operating loss of
over $ 46,000; a sum greater than had been sustained in any full year of operations during
the previous 10 years; and its net worth declined . Net current assets were $2,247 ,414.49,
$2,000 less than the amount required by the insurance loan for the declaration of divi-
dends. 3
In early March 1952, Everest Haight received the financial and operations report for the
first quarter of fiscal 1952. After a study of this report , and budget and business forecasts,
Everest Haight concluded that consolidation of the two plants was desirable . Haight spent
the following weekend drafting a projection for a one-plant operation at Cartersville, which
he presented at a board of directors ' meeting held in New York City on March 13, 1952,
where it was discussed Haight then asked Vice - President Fowler at Cartersville (who
had long favored the move ) to prepare an analysis of the projected consolidation . The Car-
tersville staff thereupon drafted a booklet entitled "ONE PLANT ESTIMATE DATA," which
thereafter became known as the "Green Book "
This document , some 70 pages in length, consisted of an exclusive analysis of the various
factors involved in consolidation at Cartersville , and estimates of the savings in the way of
plant, administrative , and other costs to be achieved thereby.
The conclusion of the analysis was that had the 1 - plant operation been in effect in 1951,
the profit before taxes for that year would have been 213 percent greater than it actually
was, $1 , 025,836 as against $480,770. For 1952, the report concludes , the profit on the
consolidated operation would be $ 910,734, rather than $ 352,415, as forecast in the Re-
spondent ' s 2-plant budget for 1952. The reason for these differences was summarized
in the Green Book as follows
This amazing indicated possibility of savings , of course arises from the fact that at
the present time, we are maintaining two organizations to do a peak job for about
3 months in the year and that during the remainder of the year , at neither plant do
we operate to a reasonable capacity to utilize the organization that we maintain
3The above-stated facts as to the Respondent's fiscal position are largely from its op-
erating reports and financial statements . Except as to whether the Respondent ' s net worth
declined (a question discussed in footnote 5, below) I do not understand them to be disputed
and find them established The position of the General Counsel and the Union is that, when
considered in connection with the other evidence , the figures do not succeed in sustaining
the Respondent ' s contention as to its motivation in closing Bennington.
E-Z MILLS, INC. 1043
This report was received in New York City about April 5 or 6, 1952 Everest Haight
and Sherman Haight, Sr , read it and discussed it, and concluded that the consolidation
should be effected A board of directors' meeting was held on April 10, 1952. Prior to
that meeting, Sherman Haight, Jr., manager of the Bennington plant, in a memo to Everest
Haight, questioned many of the assumptions and conclusions in the Green Book, advanced
arguments against ready acceptance of the consolidation plan, and suggested additional
studies which would have the effect of delaying the action. It is evident that Sherman Haight,
Jr., was reluctant to close Bennington.
Nevertheless, the decision was made at the April 10 meeting to proceed with the con-
solidation. However, in view of Sherman Haight, Jr.'s objections, he was authorized to
take several members of the Bennington and New York City staff and go to Cartersville
to check the validity of the estimates and assumptions in the Green Book; with the under-
standing that if substantial ground were found for criticism, the decision might be recon-
sidered. Several days later, Sherman Haight, Jr., accompanied by others on the staff,
arrived at Cartersville and spent 3 days reviewing the estimates and conclusions in the
Green Book As a result, they recommended some modifications in the conclusions, but
nothing substantial Another board of directors' meeting was held early in May, and on
May 15, 1952, Sherman Haight, Sr , wrote to President Potofsky of the Union informing
him of the decision to close Bennington. On May 19 the decision was publicly announced.
Findings as to the Consolidation
. a strong suspicion of causal relationship is raised where a shutdown , or other
economic action affecting employees , coincides with a Union's success at the polls
or with other crucial phases in the organizational life of employees . And in connec-
tion with other probative evidence , such circumstances may properly sustain a find-
ing of unlawful motive [Walter Holm & Co., 87 NLRB 1167, 1171.]
This suspicion is even stronger where, as here, the advent of the Union evokes opposition
and unfair labor practices by the Employer
In the instant case the basic question is simply stated: Does the evidence preponderantly
establish that the Respondent closed the Bennington plant to avoid dealing with the Union9
The Respondent's contention that economic reasons motivated the closing is supported
by the testimony of its officials--the only persons who have firsthand knowledge of the
Respondent's motives. The asserted motivation, if established, constitutes adequate justi-
fication for the Respondent's conduct in closing the plant Whether the Respondent's con-
clusions were correct, or were improvident folly, is immaterial if they were nondiscrimi-
natory Whether it was sound business judgment to close the plant bears only on the
plausibility of the Respondent's assertions
In my judgment, the evidence of the Respondent establishes prima facie plausible
nondiscriminatory ground for its action. The only question, then, is whether the evidence
preponderantly destroys that plausibility The General Counsel and the Union point to many
factors in the evidence which, they assert, have that result.
The Union and the General Counsel contend, firstly, that the Respondent determined
to move only in the event the Union won the election and, further, that the Respondent's
documentary evidence, • including the Green Book, was contrived prior to the election for
the purpose of providing a defense if the Union did win the election That the Respondent
concocted such a plan is, of course, within the realm of possibility; but I think not probable
here, if for no other reason, simply because of the magnitude and elaborateness of the
contrivance. In addition, if the Respondent were contriving beforehand, I think it could
have done a far more effective job of preparing self-serving data than it actually did.
The Union and the General Counsel attack many points in the Respondent's evidence
as contradictory; but some of the contradictions themselves seem refutative of the thesis
of fabrication. A contriver could scarcely have overlooked them. Too, I see little profit
to the Respondent in remaining in Bennington in the event the Union won if, as the Union
suggests, the Respondent disliked unions so intensely as to flee from them; for if the Union
came once, it could--and probably would--come again. For these reasons I do not deem
it likely that the Respondent devised the entire consolidation plan as insurance in the event
that the Union were successful in the election
As I see it, the decisive issue of motivation boils down to a determination of the credibility
of President Everest Haight, who initiated the consolidation plan, was its proponent, and
322615 0 - 54 - 67
1044 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
who succeeded in having it effected. From my observation, fallible though it may be, I
would Credit his testimony.
The opposition manifested to the Union when it first appeared in 1951--ordinarily strong
(sometimes compelling) indication of motive--seems to have been confined to the local
management. That Sherman Haight, Jr., did not want the Union is quite evident; but no
such conclusion can be drawn with respect to Everest Haight or Sherman Haight, Sr. More-
over, opposition to the Union by Sherman Haight, Jr , does not necessarily imply his equal
readiness to close the Bennington plant if the Union succeeded. While he undoubtedly wished
to eliminate the Union, Sherman Haight, Jr., also had compulsions moving ban to oppose
the elimination of the plant ; and the record establishes that he did oppose or seek to delay
it. Sherman Haight, Jr., in my estimation, had great pride in the Bennington plant; he had
sought to make it successful and competitive with Cartersville--which, justifiably or not,
seems to have been regarded within the organization as the more efficient and more im-
portant of the two facilities Under Sherman Haight, Jr.'s management the Bennington
plant had been modernized, Bennington was his home. To some extent, the closing of Ben-
nington was an indictment of Sherman Haight, Jr.'s management of it. In my opinion he
so viewed the problem, felt both he and the plant prematurely judged, had confidence in
Bennington's potentialities, and so sought to avoid the consolidation
That conclusion is not affected by evidence, adverted to heretofore, to the effect that
several antiunion comments were made to Bennington employees prior to the election.
The General Counsel and the Union point to evidence indicating that as late as May 5
or 14, 1952, Sherman Haight, Jr , told Bennington village officials that the decision as
to whether to close the plant would be made at the next board of directors' meeting. The
Respondent's evidence is that the decision was made at the April meeting of the board of
directors This conflict, if it be a conflict, is not of critical importance. It seems to me
indicative mainly of Sherman Haight, Jr.'s reluctance to admit that the closing decision
was firm. Moreover, the conflict is not consistent with the hypothesis that the closing was
dependent upon whether the Union won the election
Other actions by Sherman Haight, Jr., relied upon as establishing that the decision to
close was made in May, and not in April, is also consistent with the conclusion that he
hoped to the last to avoid the consolidation Thus, on April 10 the Bennington workweek
(up till then on a 5-day basis since late 1951) was reduced to 4 days. In announcing this
curtailment , Sherman Haight notified the employees that:
We hope that this condition will be of a temporary nature and assure you that we will
take every step possible to put this plant back on full schedule at the earliest moment.
To be sure, this and other statements by the Respondent were not completely candid nor
consistent with the thesis that the decision was that Bennington be closed permanently.
Thus, in his May 15, 1952, letter to Union President Potofsky, Sherman Haight, Sr., indicated
that operations were only being "indefinitely suspended," and stated that the Respondent
intended to retain the property and hoped to be able to resume operations at sometime
in the future. Again, in announcing the closing to the employees on May 19, 1952, Sherman
Haight, Jr , concluded with the statement that:
Major machinery will not be transferred to Cartersville but will remain in place in
the Bennington plant. We hope that future conditions will permit us to resume operation
in Bennington at a later date.
These expressions of hope for resumption of operations can no doubt be interpreted as
attempts to sugar-coat an unpalatable fact, a kind of white lie; but the declarations that
the property and machinery would be retained can scarcely reasonably be explained upon
such a basis The machinery was in fact dismantled and the plant put up for sale. Those
facts are consistent only with the conclusion that the decision to dismantle and sell was
made thereafter, a theory inconsistent with my understanding of the Respondent's evidence;
namely that the decision to abandon Bennington permanently was made before mid-May.
This is one of the contradictions which the Respondent has not satisfactorily explained;
but in balancing the whole complex of facts I have concluded that it is not controlling What
seems to me impelling is that, even if it be concluded that the decision was made in May,
and not in April, the effect upon the issue would still be largely collateral Such a conclusion
would, of course, seriously, perhaps fatally, impair Everest Haight's testimony But it still
might not be dispositive on the issue of motivation And it would also impair the General
Counsel and the Union's hypothesis of beforehand contrivance.
E-Z MILLS, INC. 1045
Of the same enigmatic character is the action of Vice-President Wilson Haight who,
on March 17, 1952, after the March board of directors' meeting at which consolidation
was discussed, wrote to Vice-President Fowler at the Cartersville'plant. In this letter
Haight approved Fowler's plan to cut back the Cartersville workweek to 3 days because
of inventory pileup. Haight further suggested that in view of industry conditions, discus-
sions be initiated with the view of putting operations on a more profitable basis. The letter,
though suggesting subjects for discussion, does not advert to the possibility of consolida-
tion. This, though not determinative, is puzzling It reflects upon the Respondent's testimony
that the project was proposed on March 13; but again is a fact inconsistent with the conclusion
that the consolidation was contrived as insurance against a union victory. It does not seem
likely that if the Respondent was preparing self-serving data, it would have overlooked this
opportunity, or have so clumsily provided such ready refutation.
The Union and the General Counsel also contend that the Respondent's financial condition
was not "as precarious as Respondent would have us to believe." The Respondent's financial
statements do not indicate to me that its condition was precarious; but I do not understand
it to be the Respondent's position that it was The Respondent had, however, lost money in
the fiscal quarter, its financial condition had been impaired, the outlook for textiles was
not encouraging, and there was reasonable ground for the belief, summarized in the Green
Book, that consolidated operations at Cartersville would prove more efficient and profitable.
While the Union and the General Counsel attack the conclusion that the one-plant operation
would be more efficient, I find no adequate ground for questioning it.
In December 1951 the Respondent's board of directors voted a 5-percent wage boost to
the Bennington employees, in order to equalize wage scales with those as Cartersville
While it is urged, and I think correctly, that that action does not indicate concern over
financial condition at that time, it will be noted that this was at the very beginning of the
fiscal quarter of 1952, and before the first quarter experience had been ascertained
Also asserted as militating against the Respondent's defense is that the Respondent had
planned in 1951 to meet the expected forthcoming slump in textiles by modernizing the
Bennington plant and by a vast advertising and promotional campaign. That that was the
Respondent's 1951 plan there is no doubt Also included was a program for increasing the
efficiency of the Bennington operations However, accepting what to a nonexpert in textile
manufacturing, such as myself, are the apparently reasonable and substantially unimpeached
conclusions of the Green Book, it is not implausible that the Respondent concluded in 1952
that consolidation was a more desirable solution than to attempt to make Bennington more
competitive.
Various other factors in the evidence, cited in the General Counsel's and the Union's
briefs, which it is asserted establish the Respondent's satisfactory financial and operational
position, do not, in my judgment, substantially affect the ultimate conclusion. Some are
attributable to apparent effort by Bennington officials to demonstrate that they were in-
creasing efficiency; 4 some represent prophecies (of doubtful probity here) by Bennington
officials to employees in early 1952 to the effect that business would be good in 1952; and
some appear to be the result of misinterpretation of financial data. 5
4Thus, a report by Sherman Haight, Jr , and Comptroller Getty as to the first quarter's
operations at Bennington.
5 Thus, the Union's brief correctly states that in the first quarter of 1952, the Respondent's
net current assets increased by $646,877 to a total of $2,247,414 But this increase results,
as I interpret the financial statemtns, from the fact that $700,000 in bank loans carried in
1951 as current liabilities were discharged from the proceeds of the insurance loan of
$1,000,000. Thereafter, only the annual payment on the insurance loan ($80,000) was carried
as a current liability; the remainder of the loan as a long-term one Thus, the gain in net
current assets is only an increase in working capital, and not a reflection of greater earnings
or higher net worth. It will be noted that the total of net current assets on March 1, 1952,
was still less than the $2,250,000 required by the insurance loan as a condition of declaration
of dividends. This suggests that, between the time of addition of the proceeds of the loan to
cash and March 1, 1952, net current assets actually declined. As I compute it, the loan
should have had the immediate effect of increasing net current assets by $920,000 ($1,000,000
less the first year's payment of $80,000)
The Union's brief also asserts that the Respondent's net worth increased in the first quar-
ter of fiscal 1952. As I interpret the financial statements and the testimony, however, the
Respondent's net worth decreased. The figures cited by the Union in support of this contention
represent the sum of the net worth and the long-term debt.
1046 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Ultimate Conclusions as to the Consolidation
As has been seen, the Respondent has presented what is--at least in my judgment--
substantially plausible explanation, testimony, and documentary evidence in support of
its defense that the consolidation was economically motivated. As the foregoing findings
suggest, I think it true that there are apparent contradictions and inconsistencies involved in
the conclusion that the Respondent was so motivated, but there are equally contradictions
and inconsistencies in the theory that it was not
In the main, I think, the defense hangs together. When the testimony of the Respondent's
officials as to their motives is added, the preponderance, in my judgment, is in favor of
the Respondent. Self-serving though it may be, that testimony is the only primary evidence
of motivation we have. It cannot be said to be patently incredible; and in its principal par-
ticulars it is not substantially impeached. Accepting, as I do, the testimony of Everest
Haight that he was the initiator and proponent of the consolidation plan, I see no ground
for inferring discriminatory motivation as to him. Neither he nor Sherman Haight, Sr.,
are involved in any of the established unfair labor practices, and there is no suggestion
of animus or opposition to the Union on their part. Sherman Haight, Jr., who--because
of his unfair labor practices at Bennington- -would be most suspect, not only did not propose
the consolidation, he was not in favor of and sought to avoid it. Though one may quarrel
(as even Sherman Haight, Jr., initially seemed to) with the Respondent's judgment as to
how serious a problem was presented, whether a solution was necessary, and that consoli-
dation was the answer to it, on the facts its conclusions on those points are not demonstrably
unreasonable. Even though concurrent with union activity and backstopped by unfair labor
practices, it is difficult to find necessarily sinister implications in the consolidation, pro-
spectively sound, of operations by an organization which over a period of almost half a
century has closed and consolidated a number of plants for economic reasons, whose chief
of production had long urged this very action, and where the timing is contemporaneous
with adequate operative conditions plausibly asserted as the motivation for the action.
I therefore conclude that the evidence does not preponderantly establish that the Respondent
closed the Bennington plant in order to avoid dealing with the Union
Other Alleged Violations
On April 23, 1952, the day following the consent election, the Respondent closed its Ben-
nington plant cafeteria, previously in existence for many years. On the same day and on
June 3, 1952, it also posted notices at Bennington concerning rest periods and other re-
strictions. On April 28, the Respondent also announced that it would no longer underwrite
the expenses of the plant's Federal Credit Union, which it had previously done All these
actions, which were for economic reasons, were taken without prior notice to or consultation
with the Union
Since the Union was the representative of the Bennington employees, this unilateral action
of the Respondent would ordinarily constitute a refusal to bargain. However, as has been
seen, the parties met and negotiated thereafter. The Union did not indicate at any of the
bargaining sessions that it wished to bargain about the matters, or to have the action with-
drawn Indeed, at one of the meetings, one of the employees specifically brought up the
subject of the cafeteria closing and the credit union withdrawal, but the Union's regional
director, and its principal negotiator, Salerno, indicated that the Union did not wish to
discuss the subjects, saying that there were "more important things than grievances" to
discuss. The record does not reveal that the Respondent refused to talk about the matters.
It is consequently found that these questions were waived by the Union, or that it acquiesced
to the Respondent's action, and that there was therefore no refusal to bargain respecting
them.
On June 20, 1952, the Respondent notified the Union of its intention to give severance pay
to employees terminated by reason of the closing, and stated what formula was contemplated.
The Union made no objections, made no request for discussions on the subject, and makes
no contention in its brief (though the General Counsel does) that this action constituted unfair
labor practices. I find no basis for a finding of violation therein.
The remarks of Supervisor Thomson to employee Emma Hoyt, and of Manager of Special
Products Gates and Manager Sherman Haight, Jr., to unit captains, related earlier in this
report, are asserted as violations of Section 8 (a) (1). Thomson's remark, made the day
before the election, was to the effect that there would be a "lot of changes after tomorrow."
UNITED TRANSIT COMPANY 1047
Since there is no indication that the "changes" were dependent upon the result of the election,
I do not construe the statement , in its context , as necessarily a threat of reprisal.
As to the statements of Haight and Gates, even if they are to be construed as coercive
under the circumstances (and as to this I make no finding ), they were two isolated instances
of such conduct. In such circumstances I do not think they warrant a finding of violation.
[Recommendations omitted from publication.]
UNITED TRANSIT COMPANY and DIVISION 618 OF THE
AMALGAMATED ASSOCIATION OF STREET, ELECTRIC
RAILWAY AND MOTOR COACH EMPLOYEES OF AMERICA,
AFL, Petitioner. Case No . 1-RC-3258. August 27, 1953
DECISION AND ORDER
Upon a petition duly filed under Section 9 (c) of the National
Labor Relations Act, a hearing was held before Harold Kowal,
hearing officer . The hearing officer's rulings made at the
hearings are free from prejudicial error and are hereby
affirmed. I
Pursuant to the provisions of Section 3 (b) of the Act, the
Board has delegated its powers in connection with this case
to a three - member panel [Chairman Farmer and Members
Styles and Peterson].
Upon the entire record in this case , the Board finds:
1. The Employer is engaged in commerce within the meaning
of the Act.
2. The labor organization involved claims to represent
certain employees of the Employer.
3. No question affecting commerce exists concerning the
representation of employees of the Employer within the
meaning of Section 9 (c) (1) and Section 2 (6) and (7) of the Act,
for the following reasons:
The Petitioner currently represents a unit of the Employer's
operating and maintenance employees . It now seeks to add to
this unit chief inspectors , inspectors , and starters . The Em-
ployer contends that the employees sought by the Petitioner
are supervisors and that the petition should therefore be dis-
missed.
The employees sought work in the Employer ' s transportation
department , which is directed by the superintendent of trans-
portation . Under the superintendent are 2 assistant super-
intendents of transportation , 3 division superintendents, and
2 assistant division superintendents , all of whom are conceded
to be supervisors . There are also 2 chief inspectors, 20
inspectors , and 13 starters , who the Employer contends
are supervisors while the Petitioner ' s contention is to the
1 The hearing officer referred to the Board the Employer's motion to dismiss. For the
reasons hereinafter set forth, this motion is granted.
106 NLRB No. 149.