Merry Shoe Company

National Labor Relations Board - Board Decisions

Dec 10, 1938

10 N.L.R.B. 457 (N.L.R.B. 1938)

In the Matter of MERRY SHOE COMPANY and UNITED SHOE WORKERS
OF AMERICA
Case No. C-673.-Decided December 10, 1938
Shoe Manufacturing Industry-Interference , Restraint , and Coercion--Dis-
crimination: execution of closed-shop contract with organization not represent-
ing majority of employees-Contract : with organization not representing ma-
jority of employees , void and of no effect ; employer ordered to cease giving
effect to-Check - Off: agreement for, and acquiescence in, not free choice of em-
ployees; employer ordered to reimburse employees for amounts deducted from
wages as dues.
Mr. Norman F. Edmonds, for the Board.
Kobrin and Wolf, by Mr. Aaron Kobrin, of Boston , Mass., for the
respondent.
Mr. A. Raymond Rogers, of Waterville, Maine, for the Union.
Mr. Francis V. Paone, of counsel to the Board.
DECISION
AND
ORDER-
STATEMENT OF THE CASE
Charges and,amended charges having been filed by United Shoe
Workers of America, herein called the Union, the National Labor
Relations Board, herein called the Board, by the Regional Director
for the First Region (Boston, Massachusetts), issued and duly
served its complaint dated March 23, 1938, against Merry Shoe Com-
pany, Lewiston, Maine, the respondent herein, alleging that the
respondent had engaged in and was engaging in unfair labor prac-
tices affecting commerce, 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.
The complaint in substance alleged that on or about June 17, 1937,
before the respondent's plant started operations, the respondent ad-
vised applicants for positions that membership in the Lewiston and
Auburn Shoe Workers Protective Association, herein called the Asso-
ciation, would be required as a condition of employment; that on or
about July 8, 1937, the respondent entered into a closed-shop agree-
ment with the Association whereby it agreed to require as a condition
10 N. L. R. B., No. 32.
457
458 NATIONAL LABOR RELATIONS BOARD
of employment that all its employees be members of the Association;
and that by these and other acts, the respondent has interfered with,
restrained, and coerced its employees in the exercise of the right to
self-organization and collective bargaining and has encouraged mem-
bership in the Association and has discouraged membership in the
Union. The respondent thereafter filed a motion to dismiss the com-
plaint on the ground that the allegations of the complaint, if true, did
not constitute unfair labor practices within the meaning of the Act.
The respondent did not file an answer to the complaint.
Pursuant to notice, a hearing was held at Auburn, Maine, on April
14 and 15, 1938, before Samuel H. Jaffee, 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 bearing on the issues was afforded all parties.
At the beginning of the hearing, in lieu of filing an answer, counsel
for the respondent admitted that the respondent had entered into
a closed-shop contract with. the Association but denied that such
action constituted an unfair labor practice within the meaning of the
Act. The respondent also renewed its motion to dismiss the com-
plaint, which was denied by the Trial Examiner. At the close of the
Board's case, counsel for the Board moved to conform the pleadings
to the proof. The motion was granted. During the hearing, and
again at the close of the hearing, the respondent moved to strike from
the record all evidence of occurrences prior to June 29, 1937. The
Trial Examiner reserved ruling on the motion and denied it in his
Intermediate Report. During the course of the hearing the Trial
Examiner made various rulings on other motions and objections to
the admission of evidence. The Board has reviewed all the rulings of
the Trial Examiner and finds that no prejudicial errors were com-
mitted. The rulings are hereby affirmed.
On May 27, 1938, the Trial Examiner filed his Intermediate Report
in which he found that the respondent had engaged in the unfair labor
practices alleged in the complaint. He accordingly recommended
that the respondent cease and desist from engaging in such unfair
labor practices and from giving effect to its contract with the Asso-
ciation. On June 6, 1938, the respondent filed exceptions to the Inter-
mediate Report. Pursuant to notice duly served upon the parties, a
hearing for the purpose of oral argument on the exceptions was held
in Washington, D. C., on September 22, 1938. The respondent and
the Union were represented by counsel who participated in the argu-
ment. The Board has considered the respondent's exceptions to the
Intermediate Report and finds them to be without merit.
Upon the entire record in the case, the Board makes the following :
DECISIONS AND ORDERS
FINDINGS OF FACT
459
I. THE BUSINESS OF THE RESPONDENT
The respondent, a corporation organized under the laws of the Com-
monwealth of Massachusetts, is engaged in the manufacture and sale
of women's novelty shoes, at its plant in Lewiston, Maine. The raw
materials used-by the respondent consist principally of upper leather,
sole leather, leather bindings, counters, cloth, fabric, box toes, linings,
nails, and tacks, of which approximately 95 per. cent are purchased
outside the State of Maine. Approximately 95 per cent of its finished
products are shipped to points outside the State of Maine., The re-
spondent's sales for the period from July 1, 1937, to April 1, 1938,
totaled approximately, $376,987.
It. THE ORGANIZATIONS INVOLVED
United Shoe Workers of America is a labor organization affiliated
with the Committee for Industrial Organization, admitting to mem-
bership the production employees of the respondent. The precise
limits of its jurisdiction do not appear in the record.
• Lewiston and Auburn Shoe Workers Association is an incorporated
labor organization not affiliated with any national union, admitting
to membership all production employees of the respondent, as well as
other shoe manufacturers of Lewiston and Auburn, but excluding
office help, foremen, assistant foremen, and salesmen.
III. THE UNFAIR LABOR PRACTICES
A. The background
During the early part of 1937 the Union conducted an organization
drive among the shoe workers of Lewiston and Auburn, adjoining
cities which comprise the shoe-manufacturing center of Maine. Union
activity culminated in a strike called by the Union on March 24, 1937,
which succeeded in completely shutting down many factories and cur-
tailing production in other factories in this area.
Earl .-7 in May 1937 the Morphy Shoe Company, which then oper-
ated the plant now owned and operated by the respondent, agreed with
the Union to settle the question concerning the representation of its
employees. Accordingly, on May 17, the Regional Director for the
First Region and a conciliator of the United States Department of
Labor conducted a consent election among the employees of the Mor-
phy Shoe Company. Of the 282 employees who participated, 188 in-
dicated their desire to be represented by the Union. Shortly there-
after the plant closed and the Morphy Shoe Company went out of
business.
460 NATIONAL LABOR RELATIONS BOARD
Early in June 197 several individuals who later became the officers
and directors of the respondent, negotiated for the purchase of the
plant and equipment of the Morphy Shoe Company, and shortly be-
fore June 29 they took possession of the plant. On July 1, 1937, the
respondent was chartered as a Massachusetts corporation and on July
8 was authorized to do business in Maine as a foreign corporation. On
this latter date title to the plant and equipment, ofAlieMo.rphv. Shoe
Company was legally transferred to the respondent.
B. The negotiation of the contract with the Association
During the period of negotiations for the purchase of the plant
and equipment, the organizers of the respondent, including John C.
Merry, who had had considerable experience in the management and
operation of shoe factories in Lewiston and Auburn, prepared to
start manufacturing operations. On June 27, 1937, they called a
conference with Frank W. Linnell, the attorney for the Association,
for the purpose of determining the labor policy they would pursue.
At the conference, Linnell stated that the Association had over 4,000
members among the 6,000 shoe, workers in Lewiston, and Auburn. On
the same day the respondent's organizers decided that the Association
was the "best" organization to deal with and that they would enter
into a closed-shop agreement with it. In explaining why they thought
the Association was the "best" organization, Merry testified that they
were impressed with the large membership in the Association as
described by Linnell, together with the "general hearsay" throughout
the cities of Lewiston and Auburn that the Association had a majority
of all the shoe workers in this area.
Pursuant to its plan to install the Association as the representative
of its employees, the respondent, before the plant opened, demanded
membership in the Association as a condition of prospective employ-
ment. From June 27 workers who came to the plant to apply for
work were advised that they would have to be members of the
Association in order to secure employment.
On June 29 Merry, on behalf of the respondent, signed a closed-
shop contract with the Association. The contract provided in sub-
stance for the recognition of the Association as the exclusive
bargaining agent of all the respondent's employees, for the check-off
of Association dues, and for the acknowledgment in writing of all
the respondent's employees of their intention to abide by the rules
and laws of the Association during the term of their employment.
No scale of wages or minimum wage was provided for, although the
respondent agreed "to keep its piece prices at the level prevailing in
this community for the same type and quality of work."
DECISIONS AND ORDERS 461
On the same day, June 29, the respondent hired some 15 production
workers and started manufacturing operations. The employees so
hired were required to show Association membership cards. During
the course of the next few days the number of employees increased.
Thus, on July 8 the. respondent' had 96 employees on its pay roll and
by August 1 over 200, from, all of whom the respondent exacted the
same proof of membership in the Association.
On July 8, the day it was authorized to do business as a foreign
corporation in Maine, the respondent reexecuted its contract of June -
29 with the Association.
C. Conclusions with respect to the contract
The respondent maintains that its contract with the Association is
valid within the meaning of the proviso of Section 8 (3) of the Act
and that, consequently, its conduct in carrying out the provisions of
the contract cannot constitute an unfair labor practice within the
meaning of the Act. The proviso of Section 8 (3) reads as follows:
That nothing in this Act . . . shall preclude an employer
from making an agreement with a labor organization (not estab-
lished, maintained, or assisted by any action defined in this Act
as an unfair labor practice) to require as a condition of employ-
ment membership therein, if such labor organization is the
representative of the employees as provided in section 9 (a), in
the appropriate collective bargaining unit covered by such
agreement when made.
In the light of the issues here involved, the validity of the contract
depends upon whether the Association represented a majority of the
employees in the appropriate unit when the contract was made. The
respondent admits that the contract was entered into before any
employees had been hired. We have consistently held that the validity
of a contract conferring exclusive bargaining rights upon a labor
organization which,does,not represent a majority of employees in an
appropriate unit cannot be supported by the proviso of Section 8 (3).1
A fortiori, the validity of such a contract when executed by an
employer and a labor organization even before the former has hired
any employees cannot be sustained.
It is apparent, moreover, that by the very negotiation of the con-
tract, the respondent precluded its employees from making their
own choice of a collective bargaining respresentative. By entering
into the contract of June 29, the respondent usurped the right of its
I See Matter of National Electric Products CBrporation and United Electrical and Radio
Workers of America, Local No. 609, 3 N. L. R . B. 475.
462 NATIONAL LABOR RELATIONS BOARD
employees to choose their own representative and foisted its own
choice upon the employees it hired after June 29, 1937.
We find that the respondent by entering into and giving effect
to the above-described contracts with the Association discriminated
in regard to the: hire and tenure of employment of its employees,
thereby encouraging membership in the Association and thereby in-
terfering with, restraining, and coercing its employees in the exercise
of the rights guaranteed in Section 7 of the Act.
IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON. COMMERCE
The activities of the respondent set forth in Section III above,
occurring in connection with the operations of the respondent de-
scribed in Section I above, have a close, intimate, and substantial
relation to trade, traffic, and commerce among the several States, and
tend to lead to labor disputes burdening and obstructing commerce
and the free flow of commerce.
THE REMEDY
We have found that the contract of June 29, as reexecuted on July
8, 1937, was with an organization which did not represent a majority
of the respondent's employees. For,this reason the contract is void
and of no effect and the respondent will be ordered not to give effect
to it or to any extensions or renewals thereof. Since the respondent
required the check-off of Association dues from the wages of its
employees pursuant to its illegal contract with the Association, we
shall require the respondent to reimburse its employees for amounts
so deducted from their wages.2 We shall also order the respondent to
perform such other acts as will tend to assure to its employees com-
plete freedom to exercise the rights guaranteed in Section 7 of the
Act.
Upon the basis of the above findings of fact and upon the entire
record in the case, the Board makes the following:
CONCLUSIONS OF LAW
1. United Shoe Workers of America and Lewiston and Auburn
Shoe Workers Protective Association are labor organizations within
the meaning of Section 2 (5) of the Act.
2. By discriminating in regard to the hire and tenure of employ-
ment and terms and conditions of employment of its employees,
thereby discouraging membership in United Shoe Workers of Amer-
ica, the respondent has engaged in and is engaging in an unfair labor
practice, within the meaning of Section 8 (3) of the Act.
2 Cf. Matter of The Heller Brothers Company of Newcomerstown and fnternational
Brotherhood of Blacksmiths , Drop Forgers , and Helpers , 7 N L R. B 646
DECISIONS AND ORDERS 463
3. By interfering with, restraining, and coercing its employees in
the exercise of the rights guaranteed in Section 7 of the Act, the
respondent has engaged in and is engaging in an unfair labor practice,
within the meaning of Section 8 (1) of the Act.
4. The aforesaid unfair labor practices are, unfair labor practices
affecting commerce, within-the meaning of Section 2 (6) and (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
respondent, Merry Shoe Company, and its officers, agents, successors,
and assigns, shall:
1. Cease and desist from :
(a) In any manner interfering with, restraining, or coercing its
employees in the exercise of the right to self-organization, to form,
join, or assist labor organizations, to bargain collectively through
representatives of their own choosing, and to engage in concerted
activities for the purposes of collective bargaining and other mutual
aid and protection, as guaranteed in Section 7 of the National Labor
Relations Act;
(b) Encouraging membership in Lewiston and Auburn Shoe
Workers Protective Association or any other labor organization of
its employees, or discouraging membership in United Shoe Workers
of America, or any other labor organization of its employees, by
discriminating in regard to hire or tenure of employment or any term
or condition of employment ;
(c) Giving effect to its contracts of June 29, 1937, and July 8, 1937,
and to any extensions or renewals thereof with the Lewiston and
Auburn Shoe Workers Protective Association.
2. Take the following affirmative action, which the Board finds
will effectuate the policies of the Act:
(a) Reimburse the employees who were members of Lewiston and
Auburn Shoe Workers Protective Association for the dues it has
deducted from their wages on behalf of Lewiston and Auburn Shoe
Workers Protective Association, pursuant to the contracts of June
29 and July 8, 1937;
(b) Immediately post notices in conspicuous places throughout its
factory, and maintain such notices for a period of at least sixty (60)
consecutive days, stating (1) that the respondent will cease and
desist in the manner set forth in paragraphs 1 (a), (b), and (c)
of this Order; (2) that the contracts signed with the Lewiston and
Auburn Shoe Workers Protective Association are void and of no
effect; (3) that dues of said Association will no longer be deducted
464 NATIONAL LABOR RELATIONS BOARD
or collected by the respondent under said contract; (4) that the re-
spondent's employees are free to join or assist any labor organiza-
tion of their own choosing for the purposes of collective bargaining
with the respondent; and (5) that to secure employment in the re-
spondent's factory a person need not become or remain a member of
the Lewiston and Auburn Shoe Workers Protective Association;
(c) Notify the Regional Director for the First Region in writing
within ten (10) days from the date of this Order what steps the
respondent has taken to comply herewith.
[SAME TITLE]
ORDER VACATING AND SETTING ASIDE FINDINGS OF
FACT, CONCLUSIONS OF LAW, AND ORDER, AND RE-
OPENING RECORD
January 27, 1939
A charge, and amended charge, pursuant to Section 10 (b) of the
Act, having been filed, a complaint having been issued, a hearing
having been held before a Trial Examiner duly designated, the Inter-
mediate Report of the said Trial Examiner having been issued and
served upon the parties herein, and exceptions thereto having been
filed by the respondent, and the Board having issued its findings of
fact, conclusions of law, and order in the above case on December 10,
1938; and the transcript of the record in the said case not having
been filed in any court; and the Board having given notice that on
January 23, 1939, unless sufficient cause to the contrary should then
appear, it would vacate and set aside its findings of fact, conclusions
of law and order for th(I purpose of further proceedings before the
Board, and the respondent having requested a postponement to show
such cause, and the Board having granted all parties an extension of
time to this date, January 27, 1939 to show cause; and no sufficient
cause to the contrary appearing; and the Board desiring to take fur-
ther proceedings in this matter;
IT is HEREBY ORDERED that the findings of fact, conclusions of law,
and order, issued by the Board on December 10, 1938, be, and they
hereby are, vacated and set aside, and
IT Is FURTHER ORDERED , in accordance with Article II, Section 38 (d),
of National Labor Relations Board Rules and Regulations-Series 1,
as amended, that the hearing in the above proceeding be, and it hereby
is, set aside, and that the testimony, evidence, and exhibits taken in
the hearing in the above proceeding, and the motions, rulings, and the,
Intermediate Report of the said Trial Examiner be, and they hereby
are, set aside and stricken from the record herein, and
DECISIONS AND ORDERS 465
IT IS FURTHER ORDERED that the record in this case be reopened, that
a new hearing be held and that the proceeding be remanded to the
Regional Director for the First Region for the purpose of conducting
such new hearing herein, and
IT is FURTHER ORDERED that the Regional Director for the First Re-
gion be, and he hereby is, authorized to issue an amended complaint
and to issue notice of such new hearing in this proceeding.
10 N. L. R. B., No. 32a.