Lengel-Fencil Co.

National Labor Relations Board - Board Decisions

Sep 1, 1938

8 N.L.R.B. 988 (N.L.R.B. 1938)

In the Matter of LENGEL-FENCIL COMPANY and AMERICAN FEDERATION
of HOSIERY WORKERS
Case No. C-515-Decided September 1, 1938
Hosiery Afamufactur,,ng Industry-Interference, Restraint, r Coercion:
charges of, not sustauied-Descrannnz,ation: lock-out; charges of, not sustained-
Collective Bargaining: charges of refusal to bargain collectively not sustained-
Strike-Conciliation: efforts at, by State Commissioner of Labor.
Mr. Maurice J. Nicoson, for the Board.
Merrill, Jones cfi Whiteside by Mr. R. E. Jones and Mr. Hugh D.
Merrill, of Anniston, Ala., for the respondent.
Mr. Herbert G. B. King, of Chattanooga, Tenn., for the Union.
Mr. Francis Hoague, of counsel to the Board.
DECISION
AND
ORDER
STATEMENT OF THE CASE
Upon charges duly filed by American Federation of Hosiery Work-
ers, herein called the Union, the National Labor Relations Board,
herein called the Board, by Charles N. Feidelson, Regional Director
for the Tenth Region (Atlanta, Georgia), issued its complaint, dated
November 15, 1937, against Lengel-Fencil Company, Anniston, Ala-
bama, herein called the respondent, alleging that the respondent had
engaged in and was engaging in unfair labor practices affecting com-
merce within the meaning of Section 8 (1) and (3) and Section 2 (6)
and (7) of the National Labor Relations Act, 49 Stat. 449, herein
called the Act. In substance the complaint alleged (1) that the
respondent by threats of discharge and of removal of its plant from
Anniston, and by other activities, discouraged its employees from
remaining members of the Union; (2) that on June 3, 1937, the
respondent locked out all of its employees because of their member-
ship in the Union and has since refused to reinstate them; and (3)
that in the period from September 25 to November 3, 1937, the re-
spondent removed all of its equipment from the State of Alabama
in an attempt to prevent its employees from exercising the rights
guaranteed under the Act. The complaint and an accompanying
SN.L R B,No 122
988
DECISIONS AND ORDERS 989
notice of hearing and thereafter an amended notice of hearing were
duly served on the parties.
Pursuant to the amended notice, a hearing was held at Anniston,
Alabama, from Noi, - ember 29 through December 4, 1937, before Paul
Hennessey, the Trial Examiner duly designated by the Board. The
Board, the respondent, and the Union were represented by counsel
and participated in the hearing. Full opportunity to be heard, to
examine and cross-examine witnesses, and to introduce evidence bear-
ing on the issues was afforded all parties.'
At the beginning of the hearing the respondent appeared specially
and filed written motions to dismiss the complaint on the ground that
the complaint was improperly issued and served. The motions were
based on the fact that at the date of the issuance of the complaint the
respondent was neither resident nor doing business within jurisdiction
of the Tenth Region of the Board or within the Judicial District of
northern Alabama, and that service of the complaint had been made
on the respondent at its home office in Reading, Pennsylvania. The
motions were denied by the Trial Examiner. His rulings are hereby
affirmed. The respondent then filed an answer to the complaint in
which it denied that it had engaged in the unfair labor practices
alleged in the complaint.
During the course of the hearing the Trial Examiner made numer-
ous rulings on other motions and objections to the admission of
evidence. The Board has reviewed these rulings and finds that no
prejudicial errors were committed. The rulings are hereby affirmed.
On December 17, 1937, the respondent filed a brief on the evidence.
On April 4, 1938, the Trial Examiner filed his Intermediate Report,
finding that the respondent had engaged in unfair labor practices
affecting commerce within the meaning of Section 8 (1) and (5) and
Section 2 (6) and (7) of the Act, and recommending the dismissal of
that part of the complaint which alleged the commission of unfair
labor practices within the meaning of Section 8 (3) of the Act.
Thereafter, both the Union and the respondent filed exceptions to the
Intermediate Report. The respondent also filed a second brief on
May 12, 1938. Pursuant to request therefor and notice to the respond-
ent and the Union, a hearing was had before the Board in Washing-
ton, D. C., on May 12, 1938, for the purpose of oral argument. The
respondent was represented by counsel who participated in the argu-
ment. The' Union did not appear.
The Board has considered the various briefs submitted. It has also
reviewed the exceptions to the Intermediate Report filed both by the
respondent and by the Union, and save as they are consistent with
the findings, conclusions, and order hereinafter set forth, finds them
to be without merit.
990 - NATIONAL LABOR RELATIONS BOARD
Upon the entire record in the case, the Board makes the following :
FINDINGS OF FACT
I. THE BUSINESS OF THE RESPONDENT
Lengel-Fencil Company is a corporation organized under the laws
of Pennsylvania, having its business office in Reading, Pennsylvania.
Until December 1937, it operated a plant in Anniston, Alabama, where
it was engaged in the manufacture of full-fashioned hosiery. Its
entire work was done on a commission basis for other companies who
supplied the silk used by the respondent in the process of knitting.
From January to June 1937, the respondent used approximately
25,000 pounds of silk, all of which was shipped to the plant at Annis-
ton from outside the State of Alabama. During the same period all
of the hose manufactured by the respondent was shipped to finishing
and dyeing plants located outside of the State of Alabama.
H. THE ORGANIZATION INVOLVED
American Federation of Hosiery Workers, Local No. 60, is a labor
organization affiliated with the Committee for Industrial Organiza-
tion. It admits to its membership all employees of the respondent,
excluding clerical and supervisory employees.
III. THE ALLEGED UNFAIR LABOR PRACTICES
A. The background of the strike
Organization of the Union began in the latter part of 1936. By
June 3, 1937, it had secured the membership of 179 of the 185 efli-
ployees of the respondent eligible to join. The shop committee both
before and after June 3, 1937, met on numerous occasions with the re-
spondent's officials. At no time did the respondent or any of its offi-
cers question the right of the shop committee of the Union to act for
all the employees of the mill, excluding the supervisory and clerical
force.
One of the processes in the manufacture of hosiery at the respond-
ent's plant was performed by so-called footing machines. Until early
in 1937 each footing machine was operated by one footer, three top-
pers, and a helper. In February 1937, George R. Meinig, the
respondent's president, who directed the respondent's labor policies
from his office in Reading, in response to a demand by the Union for a
wage increase, suggested that one helper be assigned to two footing
machines and that the money saved by the elimination of the extra
helper be added to the toppers' wages. Under the plan, a helper,
who was at this time receiving 8 cents per dozen. would receive 4
DECISIONS AND ORDERS 991
cents per dozen since he would be paid according to the output of
two machines instead of one. This practice of having one helper tend
two machines had been followed, apparently successfully, in many
other hosiery mills. Raymond Matlack, the plant superintendent,
and the shop committee opposed the plan on the ground that it would
decrease production. On Meinig's insistence, however, they agreed
to try it. From February until May 1937, the plan was put into prac-
tice on one machine after another.
A few weeks after its introduction it became apparent that the plan
ww as unsuccessful. Production dropped in the footing department
by reason of the fact that part of the toppers' time was consumed
in performing operations which had formerly been handled by the
helpers. By May, production at the plant was running behind sched-
ule at the rate of approximately 180 dozen stockings per week. In-
asmuch as the employees were paid on a piece-work basis, the wages
of the employees working on the footing machines were decreased
proportionately, while the difficulty of their work had increased. The
shop committee and individual employees made numerous protests
to Matlack. He in turn reported these protests to Meinig, who took
the position that he "was convinced the department was stalling."
Feeling among the employees ran high. On two occasions toppers
were on the verge of walking out but were persuaded by the,shop
committee to remain on the job.
B. The strike
On June 2, 1937, a topper on one of the footing machines failed to
report to work on the afternoon shift. This necessarily shut down
his machine for that shift. With only one machine to operate at a
piece rate of 4 cents per dozen, the helper refused to work. Despite
Matlack's efforts, the toppers on the second machine refused to do the
helper's work and, without conferring with the shop committee, went
out on strike, taking the toppers from all the other machines with them.
Because this closed down the other machines the footers followed the
toppers. The other departments of the plant, however, continued to
operate.
On the morning of June 3, the toppers and footers who had walked
out the previous afternoon appeared at the plant and peacefully per-
suaded the toppers and footers who were due to work on the morning
shift not to report. When Matlack arrived at the plant the shop com-
mittee met him and explained that the employees wanted a helper on
each footing machine. Matlack told the committee that he would
advise Meinig to abandon the plan and to assign one helper to each
machine on the basis of 6 cents per dozen for experienced helpers and
992 NATIONAL LABOR RELATIONS BOARD
-$5 per week for novices. The committee reported this proposal to the
footers and toppers, who rejected the wage feature and instructed the
committee to demand that the experienced helpers receive 8 cents per
dozen and the novices either 6 cents per dozen or $5 a week for 3 months
and then 6 cents per dozen. Matlack had in the meantime consulted
Meinig by telephone and the latter agreed to assign one helper to each
machine at Matlack's suggested wage scale.
Later in the day, when Matlack again met the committee, he told
it that Meinig had agreed to his proposal concerning the helpers. The
committee replied that it was not acceptable inasmuch as it would
constitute a wage cut for the helpers. Instead, the committee advanced
the wage, proposal that the toppers and footers had made. 0. B.
White, a footer and a member of the committee, then told Matlack that
if he did not accede to the employee's demands the Union would shut
down the plant. Matlack thereupon lost his temper and said that the
Union would not get the chance to shut it down, but that he would shut
it down himself. He thereupon directed that the foreman notify the
afternoon shift to quit work. The next morning a typed notice was
posted at the employees' entrance announcing that the plant was closed
until further notice.
C. Efforts to settle the dispute
On June 11 the shop committee and William J. Frazier, an organ-
izer for the Union, met with Matlack. The latter announced that he
was authorized to give the experienced helpers 8 cents per dozen
and the novices $8 per week with a $2 a week raise every 3 months
for 6 months. The committee answered, however, that since the em-
ployees were out, they would insist that the respondent enter into a
written contract with the Union. As Matlack had no authority to
negotiate a contract, the meeting adjourned. A few days later F. J.
Fechtner, Meinig's assistant in several business enterprises, arrived
from Reading and during the next 3 or 4 days met several times with
the shop committee, Frazier, and Edward F. Callahan, second vice
president of the Union, who had also come to Anniston in an attempt
to settle the dispute. The committee opened negotiations with a de-
mand for a 15-per cent general raise in wages and for the adoption
of the Reading agreement.' Fechtner replied that he would ascertain
Meinig's attitude toward signing the Reading agreement, but that he
was sure that no wage raise could be granted.
I The Reading agreement was a contract that had recently been drawn up between the
Union and certain hosiery manufacturers in Pennsylvania. Although the agreement con-
tains a wage schedule, we infer that the schedule was not included in the Union's demand,
inasmuch as the wage question was discussed apart fioui the agreement
DECISIONS AND ORDERS 993
Before the next conference Meinig authorized Fecltner to enter
into the Reading agreement but to reject any wage increase proposal.
When this was reported to the committee, it offered to settle the mat-
ter by the signing of the Nashville agreement. This was an agree-
lnent drawn up as a standard for southern manufacturers, the adop-
tion of which would involve a 15-per cent general wage increase.
The respondent flatly refused this proposal. The Union thereupon
demanded a closed shop, the check-off system, and Philadelphia
wages. At this time Philadelphia wages were froln 20 to 30 per cent
above those given by the respondent. Fechtner countered with an
offer to make certain changes in the machinery, which while they
might have increased the wages of the toppers, would also have resulted
in eliminating the services of one topper from each machine and
would have entailed more work for those remaining. The committee
was of the opinion that such a plan would only cause further diffi-
culty and rejected it. At all of these conferences the respondent
stressed the fact that if no agreement could be reached, it would have
to liquidate.
On hearing of the results of Fechtner's visit to Anniston, Meinig
called a meeting of the respondent's stockholders on June 23, 1937, who
passed a resolution "that the President, Mr. George R. Meinig, is
hereby authorized to act in his best judgment in the present labor
controversy . . . and is hereby authorized to move the equipment of
the Lengel-Fencil Company to the premises of the Corinth Hosiery
Mill." The Corinth Hosiery Mill, Corinth, Mississippi, it should be
explained, is a subsidiary of E. Richard Meinig Company.2
During July and August, however, no steps were taken toward liqui-
dation. The respondent kept the plant at all times ready to open up.
Repairs were made on the machines and for some time the humidifier
was kept in operation. During July negotiations and conferences
continued both in Anniston and in Reading, where the president of the
Union met Meinig on several occasions. At all times after June 11, it
was clear that the employees could have returned to work at the wages
in effect prior to June 2, 1937. The Union, however, adhered to its
demand for a 15-per cent general increase in wages.,' Several times the
Union offered to arbitrate the matter of wages. The respondent re-
'The E Richard Meinig Company. of which George R Meinig is a director , and his
father, E . Richard Meinig , president , owns all of the common stock of the Meinig Hosiery
Company, which in turn owns all of the common stock in the Corinth Hosiery Mills
George R Meinig is the president and a director of the P orinth Hosiery Mills E Richard
Meinig is also a director of the respondent Thus the respondent, E Richard Meinig Com-
pany, Meinig Hosiery Company , and Corinth Hosiery Mills are all controlled by the Meinig
family.
80D July 19, the Union offerad to call off the strike if the respondent would grant a 7
per cent increase , with the pimnise of a further 8 per cent to take effect on the first of
September
994 NATIONAL LABOR RELATIONS BOARD
jected this offer on the ground that it had everything to lose and noth-
ing to gain by arbitration. At every conference the respondent re-
iterated its threat to liquidate unless some settlement could be reached.
D. The ballot
On July 17 the respondent, in collaboration with the mayor of
Anniston and the local Chamber of Commerce, mailed to each em-
ployee an anonymous ballot together with a stamped envelope ad-
dressed to the mayor. The ballot set out the wage scale in effect prior
to June 2, 1937, and a place for the employee to signify whether or
not he desired to return to work at that scale.' Of 220 ballots mailed
out only 20 were returned to the mayor, 17 of which signified the
desire of the respective voters to return to work and 3 to remain out.
Between 150 and 160 ballots were turned over to the union leaders by
their recipients. After this showing of 'union strength the respond-
ent made no further attempt to deal with its employees except through
the shop committee.
E. Further negotiations
On August 7, 1937, Callahan advised Meinig that on August 10 he
was to meet with 14 hosiery manufacturers in Chattanooga, Tennessee,
to negotiate for a standard contract between the Union and the manu-
facturers represented at the meeting. Meinig and the Union agreed
to enter into whatever contract might be concluded at that meeting.
Meinig explained his willingness to sign such a contract on the ground
that any increase in wages involved in the agreement would react
upon all hosiery manufacturers in the South, who constituted the
competition that the respondent was obliged to meet. The Chatta-
nooga conference never took place, however, and the situation at
Anniston remained in status quo.
Following the collapse of the Chattanooga conference, negotia-
tions continued until the early part of September. Efforts of the
State Commissioner of Labor, who had intervened, Were unavailing.
Early in September Meinig negotiated with the City of Corinth, Which
* The ballot was as follows :
BALLOT
Ate you, the Lengel -Pencil Co., employees, willing to return to work under the same
conditions which existed when the mill was closed?
Make a cross (X) mark after your choice "yes" or "no," seal in the stamped envelope
and return to the U. S. mail.
YES ( )
NO ( )
SCHEDULE OF WAGES
(A listing of the specific rates followed )
DECISIONS AND ORDERS 995
owned all the preferred stock in Corinth Hosiery Mills, to move the
respondent's equipment to that city. Meinig, who as stated above, was
the president and a director of the Corinth Hosiery Mills, was able
to obtain several substantial concessions for that concern conditioned
on the installation of this equipment. On September 20, 1937, the
E. Richard Meinig Company, from which the respondent leased its
machinery, canceled its lease for non-payment of rent and demanded
repossession of the machines. The rent was in fact several years in
arrears, and the cancelation at this particular juncture was obviously
due to the failure of the respondent to arrive at a settlement with the
Union. On September 27, 1937, dismantling of the equipment was
started. A last endeavor by the State Commissioner of Labor to
bring about a settlement was unproductive, the Union remaining
adamant in its demand for a general wage increase. During the
following days all the equipment was shipped to Corinth Hosiery
Mills. On November 30, 1937, when the lease on the building pre-
viously occupied by the respondent expired, it was not renewed.
F. Conclusions
We are of the opinion that by its actions related above the respond-
ent did not engage in unfair labor practices. The original strike of
the toppers and footers was caused by the introduction of the plan
which reduced the number of helpers employed by the respondent.
This plan was intended to increase the toppers' wages without add-
ing to the respondent's costs and was not intended as a discriminatory
measure against the Union. The closing of the plant on June 3, was
the direct result of a heated argument between Matlack and the
committee. The negotiations which followed preclude a finding that
the lock-out was intended to discourage collective bargaining or any
other form of union activity. _
The, Trial Examiner found that the threats of liquidation and
removal of equipment by the respondent constituted unfair labor
practices. Although such threats are often made to discourage union
organization, the evidence does not here justify such conclusion. The
financial report of the respondent which was introduced into evi-
dence shows that since 1929 the respondent had, with the exception of
1934 and 1935, operated at a substantial loss. At the beginning of
1937 the accumulated loss amounted to $209,182.59. This fact was
mentioned specifically throughout the negotiations. Here there are
no indications that the respondent's threats of liquidation were made
for the purpose of weakening or destroying the Union, but rather
that they were motivated by the straightened financial condition of
the respondent.
11 i 213-59-vol 8-64
996 NATION AL LABO1t RELATIONS BOARD
The Trial Examiner further found that the respondent, in, con-
ducting a vote by mail among its employees, attempted to bargain
with the employees individually and thereby refused to bargain col-
lectively. Under all the circumstances of this case, however, we do
not feel that the respondent's action in this respect should be isolated
from its context and held to constitute a refusal to bargain collec-
tively. At the time that the ballots were issued, the respondent had
negotiated with the shop committee for a month and a half without
getting any nearer to an agreement. A definite impasse in the. nego-
tiations had been reached, neither the respondent nor the Union
being willing to recede from its respective position. After the bal-
loting the respondent continued to bargain collectively with the
Union. We are of the opinion that the ballots did not in fact oper-
ate as a refusal to bargain collectively.
Upon the basis of the foregoing findings of fact, and upon the
entire record in the case, the Board makes the following :
CONCLUSIONS OF LAW
1. American Federation of Hosiery Workers, Local No. 60, is a
labor organization within the meaning of Section 2 (5) of the Act.
2. The respondent has not engaged in and is not engaging in unfair
labor practices within the meaning of Section 8 (1), (3), or (5) of
the Act.
3. The operations of the respondent occur in commerce, within the
meaning of Section 2 (7) of the Act.
ORDER
Upon the basis of the above findings of fact and conclusions of law,
and pursuant to Section 10 (c) of the National Labor Relations Act,
the National Labor Relations Board hereby orders that the complaint
issued against Lengel-Fencil Company, dated November 15, 1937, be,
and it hereby is, dismissed.
MR. EDWIN S. SMITH took no part in the consideration of the above
Decision and Order.