National Gas Co.

National Labor Relations Board - Board Decisions

May 27, 1952

99 N.L.R.B. 273 (N.L.R.B. 1952)

NATIONAL GAS COMPANY
Case No. 14-RC-1778
273
We find, in agreement with the parties, that the following consti-
tute a unit appropriate for collective bargaining within the meaning
of Section 9 (b) of the Act:
All employees at the Employer's bulk plant located at 125 Potomac
Street, St. Louis, Missouri, excluding truck drivers, professional em-
ployees, guards, and all supervisors as defined in the Act.
We shall direct separate elections in the units found appropriate
above and in the following voting groups :
(a) All production and maintenace employees at the Employer's
refinery in East St. Louis, Illinois, including the cafeteria employees,
but excluding the office clerical employees, professional employees,
guards,11 and all supervisors as defined in the Act. (Case No.
14-RC-1777.)
(b) All office clerical employees in the Employer's refinery at East
St. Louis, Illinois, excluding all other employees, ' professional em-
ployees, confidential employees, guards,12 and all supervisors as defined
in the Act. (Case No. 14-RD-55.)
[Text of Direction of Elections omitted from publication in this
volume.]
11 Excluded under this category are all employees of the guard dep artment.
See footnote 11.
NATIONAL GAS COMPANY and UNITED GAS, COKE AND CHEMICAL
WORKERS, C. I. O. Case No. 14-CA-480. May 27, 1952
Decision and Order
On August 3, 1951, Trial Examiner Eugene F. Frey issued his Inter-
mediate Report in the above-entitled proceeding, finding that the
Respondent 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 copy of the Inter-
mediate Report attached hereto. Thereafter, the Respondent filed
exceptions to the Intermediate Report and a supporting brief. The
Respondent's request for oral argument is hereby denied because the
record, exceptions, and brief, in our opinion, adequately present the
issues and the positions of the parties.
The Board 1 has reviewed the rulings of the Trial Examiner made
at the hearing, and finds that no prejudicial error was committed.
I Pursuant to the provisions of Section 3 (b) of the National Labor Relations Act, the
Board has delegated its powers in connection with this case to a three -member panel
[ Members Houston , Murdock, and Styles].
99 NLRB No. 44.
274 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
The rulings are hereby affirmed. The Board has considered the
Intermediate Report, the exceptions and brief, and the entire record
in the case, and hereby adopts the findings, conclusions, and recom-
mendations of the Trial Examiner only insofar as they are consistent
with our findings, conclusions, and order herein set forth.
1. The Trial Examiner found that the Respondent is engaged in
commerce within the meaning of the Act. The Respondent excepts
to this finding on several grounds.
The Respondent contends that its sales of bottled gas to cotton gins
that buy, gin, and sell cotton for their own account should not be
considered in applying jurisdictional standards established by the
Board in the Hollow Tree Lumber Company, 91 NLRB 635, and The
Rutledge Paper Products, Inc., 91 NLRB 625.
During the period from April 30, 1949, to April 30, 1950, the Re-
spondent sold and delivered gas in the amount of $31,242.94 to 44
gins, all located in Missouri, for drying cotton and running engines.
Each of these gins annually buys from farmers, gins, and sells cotton
valued in excess of $50,000; the total value of cotton handled by them
annually exceeds $9,000,000. With s, few exceptions, those gins ship
the cotton after ginning to various compresses or warehouses located
in Missouri, receiving negotiable warehouse receipts therefor. Title
to the cotton rests in the holders of the receipts. These receipts then
are sold by the gins to brokers or mill representatives, who either
direct the warehouses to ship the cotton or sell it to other buyers who,
in turn, direct the shipment of the cotton stored in the warehouses.
From 95 to 99 percent of the cotton handled by these compresses is
shipped directly from the compresses to points outside Missouri; the
remainder is shipped to other warehouses in the State for the purpose
of consolidation with other cotton and -reshipment to points outside
the State. 'All cotton processed by the above gins and handled by the
compresses is eventually shipped directly or indirectly to points
outside the State.
The Respondent contends that inasmuch as these gins do not ship
cotton directly out of State, they are not "enterprises engaged in pro-
ducing or handling goods destined for out of State shipment," within
the meaning of the jurisdictional formula enunciated in the Hollow
Tree Lumber Company case. We do not agree. It is true that the
gins do not ship the cotton ginned by them directly out of State, but
first send the cotton to compresses or warehouses who store and then
ship the cotton in accordance with the instructions of the holders of
warehouse receipts. It is likewise true that the warehouse receipts
are negotiable instruments and that before the cotton is shipped out of
State, title to the cotton might change hands several times. We are
nevertheless of the opinion that the cotton processed by these gins
meets the test of "goods destined for out-of-State shipment" within the
NATIONAL GAS COMPANY 275
formula of the Hollow Tree Lumber case. Admittedly, all cotton
processed by the gins eventually enters the stream of commerce. It is
further conceded that, except for the pressing of the cotton into bales,
the compresses perform no other operation; their primary function is
to serve as a warehouse for storage of the cotton ginned by the ginning
companies. Had the gins sold their warehouse receipts directly to the
representatives of the mills located outside the State, the fact that the
cotton was temporarily stored in the warehouses in the State, before
final shipment in interstate commerce, would not of itself alter the
interstate character of the transaction.2 We would have reached a
similar result had the gins, instead of selling the warehouse receipts
to mill representatives, sold them to interstate brokers who instructed
the warehouses to ship the cotton out of the State. The Board recently
held that the fact that a company engaged in strip mining coal did not
sell its coal directly to out-of-State customers but marketed it through
to interstate brokerage company, which, in turn, sold the coal to the
out-of-State customers, did not mean that the operations of the coal
producers did not affect interstate commerce .3 The fact remains, how-
ever, that in some instances the gins instead of selling warehouse re-
ceipts directly to mill representatives located out of State, or to an
interstate broker, sold them to an intrastate buyer or broker, who in
turn resold the receipts to somebody else, and that the instructions for
shipping the cotton out of State were given by the last transferee of the
warehouse receipt. Again, we do not believe that these intermediate
transactions which involve only changes in the title to cotton destined
for out-of-State shipment affect the interstate character of the ginning
business. The argument that the transfer of title is a decisive element
in determining the nature of a transaction for jurisdictional purposes
has been considered by the Board and rejected.4
Upon the entire record we find that the Respondent's sales to the
gins, who buy, process, and sell cotton for their own account in the
manner described above, constitute sales to enterprises engaged in
producing or handling goods destined for out-of-State shipment and'
therefore fall within the jurisdictional formula set ,forth in the
Board's decision in the Hollow Tree Lumber Company case.
The Respondent further contends that its sales to the additional
six "agent" cotton gins in the amount of $5,661.45 should not be taken
into account for the further reason that these six gins merely per-
formed the intrastate service of ginning and selling the cotton as
agents for farmers who own it. We do not agree. The only difference
between this method of handling the cotton and the method used by
2 Longhorn Sash and Door Company, 79 NLRB 430; Santa Cruz Packing Company v.
N. L R. B , 303 U S. 453.
t B. H. Swaney, Inc., 95 NLRB 546.
A Longhorn Sash and Door Company, 79 NLRB 1436 ; N. L. R. B. v. Sunshine Mining Co,
110 F. 2d 780 (C A. 9), cert. denied 312 U. S. 678; B. H. Swaney, Inc., supra.
276 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
the other gins, is that in the case of "agent" gins the warehouse re-
'ceipts are made out to the farmers instead of to the gins. Thus, the
,only difference is a matter of title to the cotton, which, in our opinion,
,does not make the Respondent's sales to these gins so removed in their
effect upon the interstate commerce as to make them irrevelant in
determining jurisdiction.
It is the Respondent's contention that the commerce data placed
in the record by the General Counsel covering the period from April
30, 1949, to April 30, 1950, should be disregarded and the jurisdic-
tional issue determined on the basis of the commerce data, dated from
March 15, 1950, to March 15, 1951, placed in evidence by the Re-
spondent. It is argued that the commerce data for the period used by
the General Counsel is too remote, as most of the alleged unfair labor
practices occurred after that period. We do not agree. The original
charge was filed by the Union on May 12, 1950. The complaint as
amended alleged in substance the commission of unfair labor practices
since about April 3, 1950. Most of the unfair labor practices, as found
by the Trial Examiner, occurred chiefly from May through July 1950,
in the intervening months between the 1949-50 and the 1950-51 gin-
ning seasons. Jurisdiction therefore could have been determined by
the Regional Office of the Board either upon the commerce data for
the season immediately preceding the commission of the alleged un-
fair labor practices which was from April 30, 1949, to April 30, 1950,
or the commerce data for the season following the commission of the
.alleged unfair labor practices. Without deciding that the commerce
data for the later season submitted by the Respondent is irrevelant,
we find that, from the point of view of practical administration of the
Act, the reliance upon the commerce data for the year immediately
preceding the commission of the alleged unfair labor practices was
appropriate in this case. We therefore shall take into account in our
determination of the issue of jurisdiction, the commerce data for the
period beginning from April 30, 1949, to April 30, 1950.
The Respondent contends that its sales to the Kroger Co. should
not be taken into account in applying the jurisdictional standards
established by the Board in the hollow Tree Lumber case. We agree.
Under the formula laid down in that decision, the Board by implica-
tion and in practice has excluded sales to local units operating as
integral parts of multistate enterprises from the types of sales to be
taken into account in applying the standards established in that case
unless, of course, such a local unit itself has sufficient inflow or outflow
to warrant assertion of jurisdiction over it.
The commerce data adduced in evidence shows that during the
period from April 30, 1949, to April 30, 1950, the Respondent had a
.direct inflow of materials valued at approximately $150,000 annually,
which is 30 percent of the minimum requirement of the Board for the
NATIONAL GAS COMPANY 277
assertion of jurisdiction on that basis. In addition, the Respondent
furnished goods and services to interstate water and rail carriers, to
a public utility, to a number of enterprises, each of which annually
processes or handles more than $25,000 worth of goods destined for
shipment to points outside the State of Missouri, in a total amount
$41,015.95, which is approximately 82 percent of the $50,000 minimum
indirect outflow requirement for local enterprises furnishing services
and materials to such concerns engaged in interstate commerce. The
combination of 30 percent of direct inflow requirement and 82 percent
of the indirect outflow requirement exceeds 100 percent and thus war-
rants the assertion of jurisdiction under our policy.5
Upon the entire record we find, as did the Trial Examiner, that
Respondent `vas and is engaged in commerce within the meaning of
the Act and that it will effectuate the policies of the Act for the Board
to assert jurisdiction in this case.
2. The alleged refusal to bargain prior to the strike: The Trial
Examineii found that "the Respondent was not required to negotiate
with the Union regarding the shutdown of [the installation depart-
ment] for bona fide economic reasons, and the discharge of employees
incidental thereto," but that the Respondent was "not relieved of its
duty to bargain about other employment or provision for the displaced
employees." The Trial Examiner also found that the Respondent did
not bargain with the Union on that issue in good faith, thereby
violating Section 8 (a) (5) of the Act.
In the absence of any exception thereto and without passing on
the merits thereof, we adopt the Trial Examiner's finding that the
Respondent was under no obligation to bargain with the Union with
respect to the discontinuance of the installation department. We
also adopt the Trial Examiner's conclusion that the Respondent was
nevertheless bound to bargain with the Union in good faith about the
reemployment of the installation men to be displaced by the discon-
tinuance of the installation department. Unlike the Trial Examiner,
however, we believe that the Respondent fulfilled its obligation in that
respect. We base our conclusion on the following evidentary facts
found by the Trial Examiner.
At the May 2 meeting with the Union, Respondent's Vice-President
Layton, while maintaining that the decision to contract out the in-
stallation work was not a bargainable matter, readily recognized the
interest of the Union in the problem of the displaced men and, in
answer to a question from the Union's International Representative
Wynn, explained the Respondent's willingness to offset the economic
blow to the installation workers by attempting to contract with some
of them for installation work and to absorb the others as soon as pos-
The Rutledge Paper Products Tnc, supra.
215233-53-19
278 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Bible in other departments of the business. The Union, however, sub-
mitted no counterproposal to this suggestion. It merely reiterated
its demand for a complete abandonment of the contracting plan and
retention of all installation men as employees. Thus, it appears that
the precise issue over which the parties reached an impasse at the May
2 meeting did not concern the question of the reemployment of the
installation men, but related to the question of whether the Respond-
ent's decision to contract out all its installation work should stand or
be withdrawn. The Union never withdrew or altered its adamant
opposition that the Respondent's plan must be abandoned prior to the
strike. In a discussion which occurred at the close of the May 2 meet-
ing, Wynn told Layton that the employees would strike over the pro-
posed plan to contract out the installation work because the subject
was of the greatest importance to them and that when he said they
would use every means at their command to fight it, he meant just
that. Wynn also said that he wanted to get the contracting plan out
of the way "at all costs" and suggested that, if the Respondent would
forget about the plan, the Union would be satisfied with the 5-cent
wage increase and withdraw its other demands.
During his next meeting with Layton, which occurred on May 8
just prior to the union meeting, Wynn advised Layton that he was
going to discuss the contracting problem with the employees and asked
Layton whether the Respondent still maintained its stand on the plan.
Layton replied that the Respondent would adhere to its previous
decision. Wynn then said that unless he could advise the employees
that the Respondent had changed its position, they would probably
take a strike vote and the plant would be shut down the next morning.
Immediately after this discussion with Layton, Wynn and the union
committee met with the employees and reported to them that "the
Respondent had refused to discuss its decision to discontinue the
installation department and the Respondent had determined to go
ahead and there was nothing the Union could do about it." The union
membership then authorized Wynn and the committee to see the Re-
spondent again "in an effort to change the decision and, if a satisfactory
agreement could not be reached, call a strike." Early in the morning
on May 9, Wynn and the committee went to see Layton. Wynn "ad-
vised Layton that the men were opposed to the contracting plan and
were prepared to stay on strike until the Respondent changed its
decision." The strike began on the same day and continued until
July 10, 1950.
From the above facts, as found by the Trial Examiner, we are con-
vinced that the Union called the strike on May 9 solely because the
Respondent had refused to reconsider its decision to abolish the in-
stallation department rather than because of any refusal to discuss
with the Union the matter of reemployment of the displaced installa-
NATIONAL GAS COMPANY 279
tion men. The Respondent initiated the discussion as to the reem-
ployment of these men at the May 2 meeting, but the Union did' not
pursue that subject further, merely insisting at all subsequent meet-
ings that the Respondent withdraw its contracting plan. Although
subsequent to the May 2 meeting Layton did not refer again to the
subject of the reemployment of the men, we believe he had already
made a proposal and manifested his willingness to discuss the question,
and that it was then up to the Union to take up the subject."' The
Union did not do so. Accordingly, we do not agree with the Trial
Examiner that Layton's silence indicated bad faith bargaining' -on
the part of the Respondent. We predicate our finding on the''fact
that the Union made it perfectly clear to Layton that it had at stake
a larger issue, i. e., the withdrawal of the contracting plan, and vas
not prepared to compromise its position on that by negotiating' with
the Respondent concerning the reemployment of the installation men.
3. Discharge of the installation employees: The Trial Examiner
found that by discharging the eight installation employees on May 8,
the Respondent discriminated against them in violation of Section
8 (a) (3) of the Act. We do not agree.
The Respondent discharged the eight installation employees pur-
suant to its decision to discontinue the operation of the installation
department and to contract out the work of that department to inde-
pendent contractors. The Trial Examiner concluded, and we agree,
that there is nothing in the record to indicate that in conceiving the
plan, in reaching its initial decision, and in announcing it to the em-
ployees, the Respondent "was motivated by other than economic' or
business considerations." Thus, the Trial Examiner found that the
plan was conceived and adopted in April 1950 because the installation
department had been operating at a loss; that the factors which
contributed to the failure of the department to operate at a profit
were : The impossibility to exercise close supervision over the installa-
tion crews, slow-down practices of the installation crews, and the
increase in competition resulting from the sale and installation' of
new appliances by sheet metal contractors, plumbers, etc. The Trial
Examiner also found that the Respondent made no secret of the fact
that it was considering the plan and in fact discussed it with several
installation employees including Malone, president of the 'Union's
Local, before April 5. On April 5, 1949, the Respondent sent the
Union a letter informing it of the decision and, in the middle' of the
same month, the Respondent posted a notice on the bulletin board
advising the employees of the Company's decision to contract out the
installation work. Despite these findings the Trial Examiner reached
the conclusion that the discharge was but part of a discriminatory
scheme to remove a large number of employees from the bargaining
unit. In so concluding the Trial Examiner relied on the fact (a)
280 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
that from May 3 until the strike began on May 9, Layton, Respond-
ent's vice president , never raised again the vital subject of reemploy-
ment of the installation men but remained silent while meeting with
Union Representative Wynn , ( b) that the Respondent engaged in a
"hasty and secretive institution " of what the Trial Examiner found
to be a spurious contracting plan . We do not agree . Layton's fail-
ure to refer to this subject again, either in the Respondent 's letter
of May 3 to the Union and the installation employees, or in his
conferences with Wynn on May 8 and 9, is perfectly understandable
when, considered against the background of the Union's adamant in-
sistenee upon withdrawal of the contracting plan and lack of interest
in discussing reemployment as shown by the Union 's own rejection
of Layton 's suggestion at the May 2 meeting that the Respondent
might absorb the laid-off installation employees in other departments,
and its failure to pursue the subject further. Nor can we infer such
discriminatory motivation from the Respondent 's failure to keep the
Union posted as to its negotiations with the former installation em-
ployees for installation contracts which apparently began on or about
May 8. The Union and the installation employees were advised by
the Respondent as far back as April 5 of its plan to contract out the
installation work and of its intention to favor the former installation
employees in the awarding of such contracts . The fact that some of
the installation employees did not make inquiries about the matter,
or that the Respondent preferred to award contracts to certain in-
stallation employees and not to all of them, does not in our opinion
indicate any discriminatory motivation on the Respondent 's part.
The Trial Examiner's conclusion that the discharges were discrim-
inatory, moreover , cannot be reconciled with the Respondent's subse-
quent conduct in respect to these men . The Respondent 's subsequent
conduct in reemploying Steinbeck and Malone , after they terminated
their contractual relations with the Respondent , and snaking an offer
of reemployment to Howell , Davis, A. Duke, and Martin Duke, the
other installation men, is wholly inconsistent with the Trial Exam-
iner's conclusion that the discharge of the installation men was part
of a discriminatory scheme to remove a large number of employees,
including three officers of the Union, from the bargaining unit.
Upon the entire record, we are not persuaded that the discharge of
the eight installation men on May 8 was due to discriminatory reasons
and that the Respondent thereby violated Section 8 (a) (3) of the
Act.
4.,'The strike : The Trial Examiner found that the May 9 strike
was caused by the Respondent 's discharge of the installation men,
and that as these discharges were discriminatory the strike was an
unfair labor practice strike. We do not agree.
NATIONAL GAS COMPANY 281
It has been found that the Respondent discharged the installation
employees in furtherance of its decision to discontinue the installation
department and that as this decision was prompted by bona fide
economic or business reasons, the discharge was not in violation of
Section 8 (a) (3). Assuming, therefore, as the Trial Examiner found,
that the strike was caused by such discharges, it was not an unfair
labor practice strike. If on the other hand, as we have found, the real
cause of the strike was the Respondent's refusal to comply with the
Union's demand for the withdrawal of its plan for the discontinuance
of the installation department, the strike still would be economic.in•its
inception, as it has been found that the Respondent committed no
violation of the Act in refusing to discuss the plan or by putting it
into effect.
5. Unfair labor practices during the strike: The strike which began
on May 9 continued at the Hayti and Malden plants until about June
26, and at Sikeston plant until July 10, 1950. As more particularly
described in the Intermediate Report, the Respondent during the strike
engaged in the following unfair labor practices :
(a) The discharge of the strikers: On May 9, the first day of the
strike, the Respondent mailed to all striking employees a letter stating
that their return to work not later than May 11 was imperative, that
"your failure to return will be indicative of the fact that you no longer
wish to be employed by [the Company], and consequently you will
be permanently replaced" ; and that "in the event of your failure to
return to work as directed above, this letter will serve as your discharge
notice.," (Emphasis supplied.) As the strikers were engaging in an
economic strike, a protected concerted activity, they remained "em-
ployees" within the meaning of the Act. The Respondent, therefore,
had no right to discharge 6 them because of their participation in the
strike even though it had the right to replace the economic strikers
in an effort to carry on its business. We find, as did the Trial Exam-
iner, that by the issuance of letters advising them that they would be
discharged on failure to return to work by May 11 the Respondent
violated Section 8 (a) (1) and (3) of theAct.7
(b) The alleged independent contractor agreement: The Trial
Examiner found, and we agree, that the Respondent's agreements with
its former installation employees for installation of its appliances did
not establish a true independent contractor relationship, as they pur-
6 Rockwood Stove Works , 63 NLRB 1297 ; Kallaher and Mee, Inc ., 87 NLRB 410; Happ
Brothers Company, Inc ., 90 NLRB 1513
' Assuming, however, that the letters were but a tactical maneuver intended to induce
the strikers to abandon the strike and resume work, rather than to terminate the employer-
employee relationship, the letters nevertheless were in violation of Section 8 (a) (1) of
the Act The purpose and effect of the Respondent 's action in purporting to discharge
the strikers , was to restrain them from engaging in the legitimate concerted activity for
their mutual aid and protection in violation of the Act . Rockwood Stove Works, supra.
282, DECISIONS OF NATIONAL LABOR RELATIONS BOARD
ported to do on their face, and that these men were the Respondent's
"employees." In reaching this conclusion we rely upon the following
evidentiary facts established by the record and found by the Trial
Examiner : (1) The power of the Respondent to terminate the con-
tracts at will ; (2) the work performed tinder the contract was formerly
a part of the Respondent's regular business and was carried out by the
contractors in substantially the same manner and under the same
conditions as when they were employees; (3) the Respondent sup-
plied the contractors' initial equipment and supplies, and most of
the material and supplies used during the operations; (4) the
contractors had not previously engaged in independent business
but had been employees of the Respondent; (5) in practice, the
Respondent controlled the time and sequence of operations by the
contractors; (6) in practice, the contractors worked only for the
Respondents; (7) the majority of the contractors operated as such
only a short time; and (8) on their cessation of contract operations the
Respondent took back the equipment it had sold them without loss to
the contractors, and reinstated two of them and the helper of one
as employees. The foregoing facts, in our opinion, clearly indicate
such degree of control in the Respondent over the work of the so-called
independent contractors as to make them to all intents and purposes
"employees" within the meaning of the Act."
The Trial Examiner found that the Respondent by entering into
the so-called independent contractor agreements with former installa-
tion employees J. W. Smith, Noble C. Malone, John Steinbeck, and
Ralph Williams, violated Section 8 (a) (5) and (1) of the Act. These
contracts were entered into after the Respondent had, as found above,
lawfully severed its employment relationship with these individuals,
thereby removing them from the appropriate unit represented by the
Union. Moreover, as found above, the Respondent fulfilled its obliga-
tion to bargain with the Union in regard to the reemployment of the
displaced installation workers. In these circumstances we find that
the Respondent did not violate its obligations under the Act by deal-
ing with the displaced installation workers individually so long as they
remained outside the unit represented by the Union. The Respondent,
however, as we have found, failed in its attempt to establish an inde-
pendent contractor relationship with the four above-named individuals
and.in fact reestablished the preexisting employer-employee relation-
ship. Inasmuch as the so-called independent contractors were in fact
rehired as employees and as they were performing the same duties and
functions they had performed before the abolition of the installation
department, we find that upon reemployment they became a part of
the appropriate unit. The Respondent, therefore, was thereafter
8 Steinberg and Co., 78 NLRB 211, set aside 182 F. 2d 850 (C. A. 5) ; Nu-Car Carriers,
88 NLRB 75 , enfd. 189 F. 2d 766 ( C. A. 3).
NATIONAL GAS COMPANY 283
under an obligation, upon request, to bargain with the Union concern-
ing the terms and conditions of their employment, notwithstanding
the existence of the "independent contractor" agreements.9
Inasmuch as we hereinafter find, in agreement with the Trial Exam-
iner, that the Respondent violated Section 8 (a) (5) and (1) of the
Act by engaging in unilateral bargaining with its striking employees
and by refusing on May 18, 1950, to continue to recognize and deal
with the Union on the ground that it had lost its majority status, we
find it unnecessary to decide whether the Respondent's conduct in
carrying out the terms and conditions of these agreements was violative
of its obligations under the Act. In any event, our order hereinafter
set forth directing the Respondent to bargain, upon request, with the
Union as the exclusive representative of the employees in the appropri-
ate unit is broad enough to protect the Union's right to bargain for any
individual who may still be working under one of the so-called inde-
pendent contractor agreements.
(c) Individual bargaining with strikers: Although the Union was
engaged in a strike, the Respondent was still under an obligation to
bargain with the Union as the employees' exclusive bargaining repre-
sentative. The obligation being exclusive, it exacted the negative duty
to deal with no other.- Respondent, however, in disregard of its duty
and in derogation of the Union's majority status engaged in a series
of negotiations with individual employees for the purpose of securing
the return of the strikers to work, as well as to set the terms and condi-
tions on which they would return to work."'
As i more fully set forth in the Intermediate Report, the Respond-
ent's officers Moore and Layton on May 13, 17, and 18 met with groups
of strikers who were picketing the Hayti plant, and offered to make
individual arrangements with the strikers if they returned to work on
condition that they abstain from union activities; suggested that the
men form their own labor organization and forget the Union, and that
in such event the Respondent would once a year sign an agreement with
the men instead of the Union; assured the strikers that if they returned
to work and had trouble with other strikers the Respondent would
see that they were protected. Layton also stated that the Respondent
would close the place down and "see it rot," before it would sign another
union contract. The Trial Examiner found, and we agree, that these
negotiations with individual strikers were in derogation of the Union's
majority status and were violative of Section 8 (a) (5) and (1) of the
9 J. I. Case v. N. L. R. B., 321 U. S. 332.
io Medo Photo Supply Corporation v. N. L. R B ., 321 U. S. 678.
11 The Respondent did not question the majority status of the Union either at the May 12
meeting with the Union or at any time prior to the May 18 conference with Union Repre-
sentative Appelbaum. The Trial Examiner found and we agree that at all times men-
tioned in the complaint the Union represented a majority of the Respondent 's employees
in an appropriate unit.
284 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Act. This unlawful conduct of the Respondent's officers had a telling
effect on the strikers. It undermined the loyalty of the strikers to the
Union to such an extent that four of the men returned to work. Lay-
ton realized that his tactics had created a definite rift among the mem-
bers of the Union and felt no need in further dealing with the Union.
(d) Refusal to bargain with the Union: On May 18 Layton met
with International Representative Appelbaum in a hotel for the pur-
pose of discussing the compromise proposal advanced at the May 12
meeting. At this meeting Layton told Appelbaum in substance that
"things have changed," that the Respondent was "through" with the
Union and would no longer discuss matters with it, and that Layton
did not think the Union any longer represented a majority of the
employees. Appelbaum replied that the Union was still willing to
try to solve the existing problem. We find, as did the Trial Examiner,
that the Respondent's alleged doubt as to the Union's majority status
was not advanced in good faith, but rather indicated the rejection by
the Respondent of collective bargaining in furtherance of its plan
to discredit, weaken, and finally get rid of the Union, and that Layton's
remarks to Appelbaum constituted a further refusal to bargain with
the Union in violation of Section 8 (a) (5).
(e) Interference, restraint, and coercion. The Trial Examiner
found, and we agree, that the Respondent's President Moore and
Vice-President Layton before, during, and after the strike interfered
with, restrained, and coerced the employees in the exercise of the rights
guaranteed by the Act in violation of Section 8 (a) (1) of the Act by
the following statements and conduct more fully described in the
Intermediate Report: (1) Suggesting to employees that they abandon
membership in the Union and form an independent labor organiga-,
tion; (2) offering to assist employees in the formation of an inde-
pendent labor organization; (3) threatening to withhold benefits
from employees because of their union affiliation; (4) urging and per-
suading employees to abandon the strike and their other legitimate
concerted activities; (5) offering to reemploy employees if they ceased
their concerted activity; (6) persuading employees to influence other
employees to withdraw from the Union and cease concerted activity;
(7) threatening to close the business rather than sign another contract
with the Union; (8) informing employees that it would never sign
another union-shop contract; (9) offering to protect employees finan-
cially and otherwise against legitimate union activity if they aban-
doned their concerted activity; (10) warning employees that they
would not be reinstated unless they renounced and abstained from
union affiliation and concerted activity ; (11) threatening employees
with discharge and permanent replacement unless they ceased their
concerted activity; and (12) threatening to blacklist employees be-
cause of their union affiliation and concerted activity.
NATIONAL GAS COMPANY 285
6. The effect of the Respondent's unfair labor practices during the
strike: The question before us is whether the foregoing unfair labor
practices prolonged the strike thereby converting it from economic
into an,unfair labor practice strike.
The four strikers who returned to work at the Hayti plant remained
at work for about 2 days, and then resumed the picketing after talking
with the other strikers. On June 26 the strikers at the Sikeston plant
conferred with Layton about returning to work and asked Layton to
return the whole group to their former jobs "as they were." Layton
replied that he could not put them all back as business had fallen off a
great deal during the strike, and he had hired new employees, and
thus did not have openings for all the strikers. He offered to recall
the strikers as the vacancies occurred. The Trial Examiner found
the strikers' request to be an unconditional request for reinstatement
and that the offer did not cease to be unqualified merely because they
contemplated a group return. On July 10 the strikers again offered
unconditionally to, return to work. Layton said he could take back
two maintenance men, but repeated. his conditional offer of June 26
to the remaining strikers. The Trial Examiner found that Layton's
offer of July 10 was likewise qualified and discriminatory. The pick-
eting stopped on July 10, 1950. After Layton's meeting with Appel-
baum at which he refused to discuss the pending dispute and ques-
tioned the Union's majority, the Union made no further request for
a conference to negotiate a strike settlement. The strike simply wore
itself out and the employees voluntarily abandoned the strike. Some
of the strikers returned to employment with the Respondent and
others went elsewhere.
Thus it appears that by the end of the strike on July 10 the Union,
to all practical intents and purposes, had ceased to function as the
bargaining agent. Upon the facts above and more fully described in
the Intermediate Report, we are convinced, and we find, that the
Union's loss of its authority as the bargaining agent was the proximate
and natural effect of the Respondent's unlawful course of conduct,
which began on the first day of the strike when the Respondent sent
out discharge notices to the strikers and extended throughout the
strike. It reached its ultimate expression in the Respondent's bar-
gaining with individual strikers and Layton's refusal to discuss the
natters in dispute with Appelbaum on May 18 on the ground that the
Union vas no longer the employee's representative. This unlawful
course of conduct by the Respondent was intended to destroy the
Union's majority and to undermine its status as the employees, ex-
clusive bargaining agent. It also prolonged materially the strike
itself thus converting it from an economic strike into an unfair labor
practice strike 12 We find it unnecessary to appraise the precise effect
12 Rockwood Stove, 63 NLRB 1297; W1lson & Co Inc., 77 NLRB 959.
286 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
of each of the unfair labor practices of the Respondent upon the pro-
longation of the strike. Rather, we may reasonably infer that the
prolongation and conversion of the strike into an unfair labor practice
strike began on May 9 when the Respondent sent out its discharge
notices to the strikers.
Upon the entire record we find that the strike of the Respondent's
employees was converted into an unfair labor practice strike on May
9,1950.
THE REMEDY
Having found that the Respondent has engaged in unfair labor
practices affecting commerce, we shall order that the Respondent cease
and desist therefrom and take certain affirmative action designed to
effectuate the policies of the Act.
Having found that the Respondent discriminated against Chester
Bennett, Elmer Bennett, Dayton Ford, Robert McVey, Ralph Wil-
liams, James Coleman, Wayne Bush, Earl Brewer, and Henry F.
White because they engaged in. a protected concerted activity and
thereafter were discriminatorily refused reinstatement on June 26,
1950, in violation of Section 8 (a) (1) and (3) of the Act, we shall
direct the Respondent to offer to each of these employees who has not
been fully reinstated or offered proper reinstatement, immediate and
full reinstatement in the manner set forth in the Intermediate Report.
It has been found that the strike, economic in its inception, was con-
verted into an unfair labor practice strike on May 9. The strikers on
that date, therefore, became unfair labor practice strikers, and were
not vulnerable to permanent replacement because of their concerted
activity.
We shall also order that the Respondent make whole each of said
employees, including the employees that have been fully reinstated or
offered proper reinstatement, for any loss of pay he may have suffered
by reason of the Respondent's discrimination against him. Inasmuch
as the employees on June 26, 1950, unconditionally requested reinstate-
ment, the amount of back pay shall be computed in the manner de-
scribed in the Intermediate Report, from that day, rather than from
the day of their discriminatory discharges on May 9, 1950, to the date
of full reinstatement or a. proper offer of reinstatement as the case may
be, because in our opinion the loss of wages may not conclusively be
attributed to the discharge until the employees had indicated their
willingness to abandon the strike.13
Having found that the Respondent unlawfully refused to bargain
collectively with the Union as the exclusive representative of its em-
ployees 14 in the appropriate unit described in the Intermediate Re-
13 Massey (fin & Machine Works, 78 NLRB 189; Kallaher and Mee, Inc, 87 NLRB 410.
14 Including J. W. Smith, the only individual presently working under the afore-mentioned
so-called independent contractor arrangement.
NATIONAL GAS COMPANY 287
port, we shall order the Respondent to bargain, upon request, with
the Union as such exclusive representative and, if an understanding
is reached, to embody such understanding in a signed agreement 15
As the Respondent has engaged in unfair labor practices in viola-
tion of Section 8 (a) (1), (3), and (5) of the Act, and considering
the nature, extent, and variety of such practices, such violations per-
suasively relate to the other unfair labor practices and the present
danger of their commission in the future is to be anticipated from
the Respondent's conduct in the past. We shall therefore order the
Respondent to cease and desist from such acts and from in ai y other
manner interfering with the rights of employees guaranteed by
Section 7 of the Act.
Since it has been found that the Respondent did not discharge the
eight installation men on May 8 for discriminatory reasons, the com-
plaint shall be dismissed insofar as it alleges that the Respondent has
discriminated with respect to the hire and tenure of employment of
these men.
Order
Upon the entire record in the case and pursuant to Section 10 (c)
of the National Labor Relations Act, as amended, the National Labor
Relations Board hereby orders that the Respondent, National Gas
Company, Sikeston, Missouri, its officers, agents, successors, and as-
signs shall :
1. Cease and desist from :
(a) Discouraging membership in United Gas, Coke and Chemical
Workers, C. I. 0., or any other labor organization of its employees,
by discriminatorily discharging or refusing to reinstate any of its
employees, or in any other manner discriminating in regard to their
hire or tenure of employment, or any term or condition of employment.
(b) Refusing to bargain collectively with United Gas, Coke and
Chemical Workers, C. I. 0., as the exclusive representative of Re-
spondent's production and maintenance employees, excluding guards,
office, clerical, and supervisory employees as defined in the Act, with
respect to rates of pay, wages, hours of employment, and other condi-
tions of employment.
(c) Any bargaining, negotiation, or other dealing with individual
employees in the unit aforesaid regarding their rates of pay, wages,
hours of employment, or other conditions of employment, or making
any changes, including discharges, in their rates of pay, wages, hours
of employment, or other conditions of employment, without consulta-
tion and bargaining therein with the Union.
15 The Respondent may not enforce or give effect to the individual contract of employ.
ment between it and J W. Smith in derogation of the Union's right to act as his exclusive
bargaining representative with respect to rates of pay, wages, hours of employment, and
Jther conditions of employment . J. I. Case v. N . L. R B., 321 U. S. 332.
288 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
(d) Suggesting to its employees that they abandon their statutory
collective bargaining representative and form an unaffiliated labor
orgahi^ation and offering to assist in the formation of such organiza-
tion; unlawfully soliciting individual employees, where such' em-
ployees are represented by a collective bargaining agent, to discontinue
or abandon their strike activities; threatening employees with re-
prisals, unless they cease to engage in union or concerted activities,
or promising benefits if they cease to engage in such activities.
(e) In any other manner interfering with, restraining, or coercing
its employees in the exercise of their right to self-organization, to
form labor organizations, to join or assist United Gas, Coke and
Chemical Workers, C. I. 0., or any other labor organization, to bar-
gain collectively through representatives of their own choosing, to en-
gage in other concerted activity for the purpose of collective bargain-
ing or other mutual aid or protection, and to refrain from any or all
of such activities, except to the extent that such right 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 the Board finds will
effectuate the policies of the Act :
(a) Offer to Chester Bennett, Elmer Bennett, Dayton Ford, Robert
McVey, Ralph Williams, James Coleman, Wayne Bush, and Earl
Brewer immediate and full reinstatement to their former or substan-
tially equivalent positions, without prejudice to their seniority or other
rights and privileges, in the manner set forth in the sections entitled
"The Remedy" of this Order and the Intermediate Report.
(b) Make whole all the employees mentioned in paragraph (a)
above, and Henry F. White, for any loss of pay they may have suffered
as a result of Respondent's discrimination against them in the manner
set forth in the sections entitled "The Remedy" of this Order and the
Intermediate Report.
(c) Upon request, make available to the National Labor Relations
Board, or its agents, for examination and copying, all payroll records.
social security payment records, time cards, personnel records and re-
ports, and all other records necessary for a determination of the
amounts of back pay due and the right of reinstatement under the
terms of the Board's Order.
(d) Upon request, bargain collectively with United Gas, Coke and
Chemical Workers, C. I. 0., as the exclusive representative of Re-
spondent's employees in the appropriate bargaining unit, with respect
to rates of pay, wages, hours of employment, and other conditions of
employment and, if an understanding is reached, embody such under-
standing in a signed agreement.
NATIONAL GAS COMPANY 289
(e) Post at its plants in Sikeston, Malden, and Hayti, Missouri,
copies of the notice attached hereto and marked "Appendix A." 16
Copies of said notice, to be furnished by the Regional Director for the
Fourteenth Region, shall, after being duly signed by Respondent's
authorized representative, be posted by Respondent immediately upon
receipt thereof and maintained by it for sixty (60) consecutive days
thereafter in conspicuous places, including all places where notices to
employees are customarily posted. Reasonable steps shall be taken by
Respondent to insure that said notices are not altered, defaced, or
covered by any other material.
(f) Notify the Regional Director for the'Fourteenth Region, in
writing, within ten (10) days from the date of this Order, what steps
Respondent has taken to comply herewith.
IT IS FURTHUR ORDERED that the complaint be, and it hereby is, dis-
missed insofar as it alleges that the Respondent discriminated in re-
gard to the hire and tenure of employment of Noble C. Malone,
James Davis, Orville Howell, Leon Ellsworth, J. W. Smith, Adolph
Duke, Martin Ebert Duke, and John Steinbeck, and insofar as it al-
leges that the strike of May 9, 1950, was caused by the Respondent's
unfair labor practices.
Appendix A
NOTICE To ALL EMPLOYEES
Pursuant to a Decision and Order of the National Labor Relations
Board, and in order to effectuate the policies of the National Labor Re-
lations Act, we hereby notify our employees that :
AVE WILL NOT discourage membership in UNITED GAS, COKE
AND CHEMICAL WORKERS, C. I. 0., or in any other labor organiza-
tion of our employees, by discriminatorily discharging or refus-
ing to reinstate any of our employees, or in any other manner dis-
criminating in regard to their hire or tenure of employment, or
any term or condition of employment.
WE WILL NoT refuse to bargain collectively with UNITED GAS,
COKE AND CHEMICAL WORKERS, C. I. 0., as the exclusive represent-
ative of our employees in the bargaining unit described below.
WE WILL NOT bargain, negotiate, or otherwise deal with our em-
ployees individually regarding their rates of pay, wages, hours
of employment, or other conditions of employment, or make any
changes, including discharges, in their rates of pay, wages, hours
of employment, or other conditions of employment, without con-
sultation and bargaining thereon with the union named above.
10 In the event that this Order is enforced by a decree of a United States Court of
Appeals, there sliall be substituted for the words "Pursuant to a Decision and Order" the
words "I'utsuant to a Deciee of the United States Court of Appeals, Enforcing an Order."
290 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
WE WILL NOT suggest to our employees that they abandon their
collective bargaining representative and form an unaffiliated labor
organization and offer to assist in the formation of such organiza-
tion; unlawfully solicit individual employees, where such employ-
ees are represented by a collective bargaining agent , to discon-
tinue or abandon their strike activities ; threaten employees with
reprisals unless they cease to engage in union or concerted activ-
ities, or promise benefits if they cease to engage in such activities.
WE WILL NOT in any other manner interfere with, restrain, or
coerce our employees in the exercise of their right to self-organiza-
tion, to form labor organizations, to join or assist UNrrED GAS,
COKE AND CHEMICAL WORKERS, C. I. 0., or any other labor organ-
ization, to bargain collectively through representatives of their
own choosing, to engage in other concerted activity for the pur-
poses of collective bargaining or other mutual aid or protection,
and to refrain from any or all of such activities, except to the ex-
tent that such right 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 aforesaid.
WE WILL bargain collectively, upon request, with UNITED GAS,
COKE AND CHEMICAL WORKERS, C. 1. 0., as the exclusive represent-
ative of our employees in the bargaining unit described below,
with respect to rates of pay, wages, hours of employment, and
other conditions of employment and, if an understanding is
reached, embody such understanding in a signed agreement. The
bargaining unit is :
All production and maintenance employees, excluding
guards, office, clerical, and supervisory employees as defined
in the Act aforesaid.
WE WILL offer the employees named below immediate and full
reinstatement to their former or substantially equivalent posi-
tions, without prejudice to their seniority and other rights and
privileges, and will make them, and Henry F. White, whole for
any loss of pay suffered by them as a result of our discrimination
against them, in the manner set forth in the section of the Board's
decision entitled "The Remedy" :
Chester Bennett Ralph Williams
Elmer Bennett James Coleman
Dayton Ford Wayne Bush
Robert McVey Earl Brewer
All our employees are free to become or remain members of the
above-named union or any other labor organization. We will not dis-
criminate in ,regard to the hire or tenure of employment, or any term
NATIONAL GAS COMPANY 291
or condition of employment , against any employee because of mem-
bership in or activity on behalf of any such labor organization.
NATIONAL GAS COMPANY,
Employer.
Dated -------------------- By ---------------------------
(Representative ) ( Title)
This notice must remain posted for 60 days from the date hereof,
and must not be altered , defaced , or covered by any other material.
Intermediate Report and Recommended Order
STATEMENT OF THE CASE
Upon an original and three amended charges filed by United Gas, Coke and
Chemical Workers, C. I. 0., herein called the Union, the General Counsel for the
National Labor Relations Board, herein called the General Counsel and the
Board, by the Regional Director for the Fourteenth Region (St. Louis, Missouri),
issued an original complaint on December 6, 1950, and an amended complaint on
January 23, 1951, against National Gas Company, herein called the Respondent,
alleging that Respondent had engaged in and was engaging in unfair labor
practices affecting commerce within the meaning of Section 8 (a) (1), (3),
and (5) and Section 2 (6) and (7) of the Labor Management Relations Act,
1947, 61 Stat. 136, herein called the Act. Copies of the complaint as amended
and all charges, together with notice of hearing thereon, were duly served on
Respondent and the Union'
With respect to the unfair labor practices, the complaint as amended alleged
in substance that (1) since April 18, 1947, the Union has been the exclusive
bargaining representative of all Respondent's production and maintenance em-
ployees, excluding guards, office, clerical, and supervisory employees, which
constitutes an appropriate bargaining unit ; on or about April 3, 1950, and there-
after the Union requested Respondent to bargain with it as such representative,
but Respondent has refused so to do; (2) on or about May 8, 1950, Respondent
discharged 9'named employees, and has failed to reinstate them, because of their
membership in and activity on behalf of the Union, and other concerted activity ;
(3) from May 8 to June 26, 1950;'Respondent's employees engaged in a strike
because of Respondent's unfair labor practices ; on the latter date the employees
offered to return to work, but Respondent refused to reinstate 10 named em-
ployees because of their union membership and activity, and other concerted
activity; and (4) since April 3, 1950, Respondent has interrogated, threatened,
and coerced its employees in divers ways; and (5) the above conduct violated
Section S (a) (1), (3), and (5) of the Act.
Upon motion of Respondent filed December 13, 1950, General Counsel duly
furnished Respondent particulars as to the original complaint. On January 19,
1951, Respondent tiled a motion for further particulars as to the complaint,
which request was denied by order of February 28, 1951, issued by Trial Ex-
aminer Horace A Ruckel, to whom the motion had been referred for decision.
The answer of Respondent denied the jurisdiction of the Board, admitted the
appropriate unit alleged, the Union's request for bargaining, and that the Union
1 The original complaint was based upon the original charge filed May 19, 1950, and
first and second amended charges filed' Tune 8 and December 5, 1950, respectively , the
amended complaint was based on all previous charges, a third amended charge filed
January 8, 1951
292 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
was the statutory representative of its employees in said unit up to May 18,
1950. It also alleged the discharge of nine employees on May 8, 1950, was for
economic reasons, in that Respondent on that date discontinued the operation
of the department in which these employees had worked. Respondent further
admitted the strike of the, employees and the offers of some to return to work,
but denied the commission of any unfair labor practices.
Pursuant to notice, a hearing was held at Sikeston, Missouri, from April 2
through 7, 1951, before the undersigned Trial Examiner. All parties were rep-
resented by counsel, participated in the hearing, and were afforded full oppor-
tunity to be heard, to examine and cross-examine witnesses, and to introduce
evidence bearing on the issues. At the close of General Counsel's case, the
amended complaint was dismissed as to George Rooney and Robert McFall on
motion of General Counsel. Respondent's motions to dismiss the complaint for
lack of jurisdiction and on the merits were denied, with leave to renew at the
close of the case. At the close of the testimony, General Counsel's motion to
conform the pleadings to the proofs as to formal matters was granted. Respond-
ent's renewed motions to dismiss for lack of jurisdiction and on the merits were
taken under advisement by the Trial Examiner : they are disposed of by the
findings in this Report. At the conclusion of the hearing ; all parties were
afforded an opportunity to present oral argument and submit briefs and pro-
posed findings of fact and conblusions of law ; General Counsel and Respondent
presented oral argument and have filed briefs with the Trial Examiner!
Upon the entire record in the case, and from my observation of the witnesses,
I make the following :
FINDINGS OF FACT
1. THE BUSINESS OF RESPONDENT
Respondent is a Missouri corporation, with its principal office and place of
business located in Sikeston, Missouri , where it is engaged in the retail sale
and distribution of bottled gas, chiefly butane and propane gas , and gas appli-
ances. It operates retail outlets for these products at Sikeston, Malden, and
Hayti, all in Missouri.
In the course of its business , Respondent annually purchases raw materials,
equipment, and supplies valued at approximately $200,000, of which approxi-
mately 75 percent is shipped to Respondent's plants in Missouri from points
outside that State.
The parties stipulated the following -facts regarding the dollar volume of
Respondent's business during two periods : first period, April 30, 1949, to April
30, 1950; second period March 15, 1950, to March 15, 19513
Respondent sold and delivered gas to two interstate truck lines, located in
Missouri, in the amounts of $502.59 and $453, and to Ark-Mo Power Company, a
public utility supplying electric power to customers in Missouri and Arkansas,
in the amounts of $122.44 and $108.84.
Respondent sold and delivered gas to 44 cotton gins , all located in Missouri,
for heating, drying cotton, and running engines, in the following amounts :
$31,242.94 and $26,566.75. Each of these gins annually gin, buy from farmers,
and sell cotton valued in excess of $50,000; the total annual value of cotton
2 Since the hearing closed, the parties have stipulated certain corrections in the record,
which have been allowed by the Trial Examiner ; the record will be considered corrected
accordingly, the stipulation has been marked and filed, as a matter of convenience, as
General Counsel's Exhibit No 16
2 See General Counsel's Exhibit No. 2, and Respondent's Exhibits Nos. 6 and 7. In
each category of sales listed, the first figure represents sales in the first period, the
second figure sales in the second period.
NATIONAL GAS COMPANY ' 293
handled by them exceeds $9,000,000. With a few exceptions, these gins ship
the cotton immediately after ginning to various compresses located in Missouri,
receiving negotiable warehouse receipts therefor, which are sold by the gins
to brokers or mill representatives. Title to the cotton vests in the buyers of
the receipts, who either direct the compresses to ship the cotton, or sell it to
other buyers who, in turn, direct the shipment of the cotton. From 95 to 99
percent of the cotton handled by the compresses is shipped directly from the
compresses to points outside Missouri ; the remainder is shipped to other com-
presses in the State for purpose of consolidation with other cotton and reship-
ment to points outside the State. All cotton processed by the above gins and
later handled by the compresses is thus destined for and eventually shipped
directly or indirectly to-points outside the State.4
Respondent sold and delivered gas for the same purposes to six other cotton
gins, all located in Missouri, in the following amounts : $5,661.45 and $3,241.83.
Each of these gins annually gin and sell cotton valued between $50,000 and $100,-
000; the total annual value of cotton handled by them exceeds $900,000. With
the exception of the fact that these gins do not buy cotton from farmers but
merely sell it and remit the proceeds to the farmers, after deducting their ginning
charges, the cotton processed by them is handled, and has the same ultimate
out-of-State destination, as described in the preceding paragraph.`
Respondent sold and delivered to Roberts Gin, Cairo, Illinois, gas in the
following amounts : $45198 and $1,01118.`
Respondent sold and delivered gas to three milling concerns located in Mis-
souri, in the following total amounts : $2,874.31 and $2,285.71. Each of these
concerns annually ships goods valued in excess of $25,000 to points outside Mis-
souri. Respondent sold and delivered gas to an interstate railway and to Missouri
plants of a national grocery chain, in the following amounts :
First Period Second Period
St. Lpuis & Southwestern Railroad________________ $260. 24 $184 40
The Kroger Company 7____________________________ 867.64 1,189.68
4 Respondent 's sales to all of these gins, which buy and process cotton for their own
accounts , have been taken into consideration , contrary to Respondent's contention , because
they all handle and perform an essential processing operation on goods destined for
out-of-State shipment, which clearly brings them within the third class of enterprises
listed in Hollow Tree Lumber Company , 91 NLRB 635 , over which the Board would assert
jurisdiction directly . See Queens -Premier-TTalltams Fur Dressing Corp, 92 NLRB 42.
The fact that the gins do not ship directly across State lines does not prevent the exercise
of jurisdiction , for under the Board ' s recently announced policy , it would take jurisdiction
over a firm that sells its product within the State to another firm for shipment by the
latter to another State . See Jacksonville Processing Corporation , 93 NLRB 943 Nor
is it material that title to the cotton processed by the gins may change hands many
times, through the negotiation of warehouse receipts issued therefor , before eventual ship-
ment of the product out of the State The gins hold title to the cotton at least during
the ginning process which is preliminary but essential to the interstate shipment , and
intermediate transfers of title which precede but do not prevent the ultimate shipment out
of the State cannot alter the interstate character of the whole transaction. Even if the
gins never had title, they would still be within the jurisdiction of the Board, for it has
been clearly established that an employer is not required, for jurisdictional purposes, to
have title to goods which enter the stream of interstate commerce , it is sufficient that
he process the goods See Texsun Citrus Exchange, 82 NLRB 540; N. L R B. v. Bradford
Dgeinq Association, 310 U S. 318.
i Sales to the "agent" gins are included in the calculations , because they fall within the
class of local enterprises over which the Board would exercise jurisdiction , for the reasons
stated in footnote 4, above
6 Since this sale is an instance of direct outflow, for convenience of calculation, the
figures are doubled so as to represent the same ratio to $50 , 000 as the original figures
would bear to $25 , 000, the minimum requirement as to direct outflow.
7 The Board has previously asserted jurisdiction over this concern. Kroger Company,
88 NLRB 194, and 93 NLRB 274.
215233-53-20
294 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
The above facts indicate that in the first period Respondent had a direct inflow
of materials value at approximately $150,000 annually, which is 30 percent of
the minimum requirements of" the Board for assertion of jurisdiction on that
basis.' In addition, Respondent furnished services and materials to interstate
motor and rail carriers, a public utility, local enterprises each of which process
and handle annually more than $25,000 worth of products destined for shipment-
out of the State, and local enterprises each of which annually ship more than
$25,000 worth of goods directly to points outside the State, in a total amount
of $41,883.59, which is approximately 83 percent of the $ 50,000 minimum indirect
outflow requirements for local enterprises furnishing services and materials to
such concerns engaged in interstate commerce.' The combination of 30 percent
of the direct inflow requirement and 83 percent of the indirect outflow require-
ment exceeds 100 percent 1D
In the second period, Respondent had the same direct inflow of 30 percent
of the minimum requirement. Its services and materials furnished to the same
customers as in the first period amount to $35,223.30," or approximately 70.4
percent of the minimum indirect outflow requirement. The combination of the
two percentages still exceeds the required 100 percent.
In both periods Respondent's business clearly exceeded the minimum require-
ments set up by the Board's existing policy, and requires the assertion of
jurisdiction."
Respondent argues, however, that certain changes occurring in the liquid
gas industry locally and beyond its control are curtailing its service to cotton
gins to an extent which will shortly bring the volume of Respondent's sales
-to customers operating in commerce below the minimum requirements of the
Board's policy, and that the Board should therefore decline to assert juris-
diction. In support of this contention, Respondent adduced proof" that :
In recent years the liquid gas producers have required Respondent to buy gas
on a ratio basis, i. e., a fixed number of gallons in the winter for every gal-
lon during the summer ; that ratio has declined recently to 11/2 to 1, and will
.shortly become 1 to 1, so that Respondent will he compelled to buy a constant
volume of fuel throughout the year. In turn, Respondent will be forced to
ask its customers to take fuel under contract on the same basis, or agree to
.accept gas from Respondent only to the extent that Respondent has gas available
in the "peak" seasons. This will require the cotton gins, in particular, to install
,storage tanks to accommodate purchases during their "off" season ; under
these circumstances, the gins will probably install storage equipment which
will enable them to purchase gas directly from the producer in carload lots
.at substantial savings. Due to improved methods of operation, many gins
are using more liquid gas in their business, particularly in the "peak" seasons ;
Respondent will be unable to service these concerns in such seasons because
of the limitations imposed on it by the "ratio" system of purchasing ; thus,
these gins will likewise install storage equipment to meet their needs, and
buy gas direct from the producer. For these reasons, Respondent is already
losing some gins as customers and will lose more in the future. However,
Respondent does not show how many of its gin customers have installed storage
equipment ; and there is no definite proof of their reactions to its new con-
8 Federal Dairy Co , Inc., 91 NLRB 638.
° Hollow Tree Lumber Company, 91 NLRB 635
10 The Rutledge Paper Products Co., 91 NLRB 625.
11 This includes sales of $181.91 to International Shoe Company, over which the Board
has repeatedly exercised jurisdiction.
12 See footnote 10 above, and Brooks-Noble Auto Parts & Machine Co , Inc., 94 NLRB 915.
13 Testimony of Kenneth C. Layton
NATIONAL GAS COMPANY 295
tract proposals, except that one of the smaller gins has rejected them and
converted to another type of fuel. Respondent also shows that: The advent
of a natural gas line in the Sikeston area will make inroads on Respondent's
business because that fuel is much cheaper than liquid gas; there has been
a recent increase in the allocation of natural gas by the Federal Power Com-
mission for this area, and the operator of the gas pipeline has plans for exten-
sion of its facilities to adjacent areas where it will be available to more of
Respondent's customers ; some of Respondent's industrial customers have already
switched to natural gas. Respondent claims that cotton gins will probably
convert to natural gas as soon as the distributor can assure them an uninter-
rupted supply However, it does not indicate how many of its industrial cus-
tomers have made the change, when it occurred, how much business it lost
thereby, or whether any of these customers are listed in the stipulations of
facts offered by the parties. Respondent admits that none of Respondent's
gin customers have yet converted to natural gas; one gin tried natural gas,
found the supply unsatisfactory and reverted to liquid gas, but is preparing
to use natural gas again; however, it does not appear that Respondent has
yet lost this customer. There is no proof as to when the local cotton gins
will be assured of a continuous supply of natural gas, which is the critical
factor in permanent conversion to that fuel. While it appears that six or eight
of Respondent's gin customers are near the natural gas pipeline, none of them
has converted ; and assuming that the gas facilities may soon be extended,
Respondent could- not state which, if any, of its present. customers would be
lost to Respondent, or when that loss would occur. It thus appears that the
present threat from natural gas facilities is slight, and there is no substan-
tial proof that it will definitely affect Respondent's business in the immediate
future. Considered together, all of the above facts are at most a prognosti-
cation of possible future changes in Respondent's operations affecting commerce.
The nature, extent, and time of such changes is highly speculative and uncer-
tain, and they cannot afford any justification for a refusal to take jurisdiction
over Respondent, in the face of the clear facts and figures regarding Respond-
ent's past experience, as found above, which demonstrate that Respondent has
been since April 1949 and up to March 15, 1951," at least, clearly within the
Board's present jurisdictional requirements.
I therefore conclude and find, contrary to Respondent's contention, that
Respondent was and is engaged in commerce within the meaning of the Act,
and that it will effectuate the policies of the Act to assert jurisdiction in this
case
II. THE LABOR ORGANIZATION INVOLVED
United Gas, Coke and Chemical Workers, C. I. 0., is a labor organization which
admits to membership employees of Respondent.
III. THE, UNFAIR LABOR PRACTICES
A. Past relations between Respondent and the Union
Pursuant to an agreement for consent election executed by Respondent and
the Union, to election by secret ballot was held by the Regional Director
14 The alleged unfair labor practices occurred about the middle of the combined periods.
15 See Model Dairy. 72 NLRB 544; Hollow Tree Lumber Company, 91 NLRB 635 The
Board would have jurisdiction to remedy any unfair labor practices found against Respond-
ent, even if at the time of the Board's order it was established that the Respondent had
withdrawn entirely from interstate commerce See N L R. B v. Cowell Portland Cement
Co , 148 F. 2d 237, 241, enforcing as modified 40 NLRB 652, cert den 326 U S. 735
296 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
for the Fourteenth Region among Respondent's employees, as a result
of which said Regional Director issued a consent determination of representa-
tive on April 18, 1947, in Case No 14-R-1731, in which he certified the Union
as the exclusive bargaining representative of Respondent's employees in an
appropriate unit consisting of all production and maintenance employees, ex-
cluding office, clerical, and supervisory employees (as defined in the Act prior to
the amendment of 1947). Upon a petition filed by the Union pursuant to Section
9 (e) of the Act in Case No. 14-UA-883, the same Regional Director certified on
April 30, 1948, that a majority of the employees in the above unit had authorized
Loral 340 of the Union at Sikeston to make an agreement with Respondent re-
quiring membership in the Union as a-condition of employment as provided in
Section 8 (a) (3) of the Act.
Within a few days after the initial certification of the Union in April 1947,
Repondent and the Union negotiated and executed a 1-year collective bargain-
ing contract which provided for a checkoff of union dues . In April 1948 the
parties negotiated and executed a similar 1-year contract. On April 24, 1949,
the parties executed a similar 1-year contract, containing a union-security
clause, which was to remain in effect until April 23, 1950, and thereafter until
canceled by either party on 60 days' notice.18 The 1947 and 1948 contracts were
executed after only one or two meetings between the parties; the 1949 contract
required two bargaining sessions and was finally settled and executed at a third
meeting before a member of the Federal Mediation and Conciliation Service.
During the operation of these contracts, the relations between Respondent and the
Union were amicable ; only one grievance arose, which was settled informally ;
during the operation of the 1949 contract, which did not contain a checkoff pro-
vision, Respondent cooperated fully with the Union in correcting the delin-
quencies of several employees who were behind in their union dues 11
B. The alleged refusal to bargain
1. The appropriate unit ; the Union's majority status
The amended complaint alleges, the Respondent 's answer admits, and I there-
fore find, that all production and maintenance employees of Respondent, ex-
cluding guards, office , clerical, and supervisory employees as defined in the Act,
constitute a unit appropriate for purposes of collective bargaining within the
meaning of Section 9 (b) of the Act. Respondent also concedes that the Union
was the statutory representative of the employees in the unit from April 18,
1947, to May 18, 1950. The latter date was the occasion of Layton's final con-
ference with Joseph Appelbaum, a representative of the Union, at St. Louis,
at which Layton told Appelbaum, among other things, that he did not think
the Union represented a majority of the employees any more Respondent and
the Union operated between April 24, 1949, and April 23, 1950, under a contract
containing a union-security provision, which in effect gave the Union a potential
100 percent membership among the employees in the unit to the extent permitted
by the Act. Since Respondent adduced no proof that the Union had in fact
lost its majority status before or after the latter date, it must be presumed that
such status continued indefinitely thereafter" This presumption is strengthened
16 General Counsel's Exhibit No. 5
19 These findings are based on stipulated facts and the uncontradicted testimony of
Layton
18 It is well settled that a union's representative status established by Board certifica-
tion is conclusively presumed to continue for a reasonable time, usually 1 year after
certification, and indefinitely thereafter until rebutted. Toolcraft Corporation , 92 NLRB
655; United States Gypsum Company, 90 NLRB 964; Poole Foundry and Machine Com-
pany, 95 NLRB 34.
NATIONAL GAS COMPANY 297
by the fact that all Respondent's employees in the unit, following a strike vote
at a meeting called by the Union on May 8, 1950, went on strike at all plants
on May 9, 1950, and a majority of them remained on strike at least until June
26,1950.'8 I therefore find that at all times mentioned in the amended complaint,
and since April 18, 1947, the Union has represented a majority of Respondent's
employees in the above unit, and the Union therefore was and is the exclusive
representative of all said employees, within the meaning of Section 9 (a) of
the Act.
2. The request to bargain ; the May 2 negotiations ; the termination of the
installation employees
In the negotiations set forth below, the principal correspondents and actors
were Kenneth C. Layton, vice president, for Respondent, and William M. Wynn,
international representative, for the Union.
By letter dated February 10, 1950, the Union notified Respondent that it
desired to modify the existing contract of April 24,1949, and requested Respondent
to meet with it to negotiate terms of a new contract, advising that the Union's
new proposals would be forwarded shortly2° Shortly thereafter, Layton advised
Wynn by telephone that Respondent would be willing to confer with the Union
regarding a new contract. By letter dated April 3, 1950, the Union sent a new
proposed contract to Respondent, and requested a meeting with Respondent to
discuss it.21 By letter of April 7, 1950, Respondent advised the Union that it
would meet with the union representatives to discuss the new contract pro-
posals on or after April 19, the date to be fixed by the Union.n
On April 5, 1950, Respondent sent Local 340 of the Union at Sikeston a letter
reading as follows : R2
APRIL 5, 1950.
UNITED GAS, COKE & CHEMICAL WORKERS OF AMERICA,
Sikeston, Missouri.
(ATTENTION : Noble C Malone, President, Local 340
GENTLEMEN : We take this occasion to inform you of the intention of our
company to make certain changes in our method of operation which are made
necessary and advisable for economic reasons. The change in our method
of operation will probably take place within the very near future and consists
of the following :
"Installation of all equipment and appliances including service during the
warranty period and the delivery of gas will be handled by independent
contractors instead of direct company employees."
The above mentioned change in operations will necessarily entail the
termination of our employment of the personnel of our company presently
performing those duties We wish to advise you, however, that in contract-
ing with independent contractors for this work that we intend to offer the
opportunity to our present employees to submit bids and you may rest assured
that we shall favor our present employees if they care to submit bids as
independent contractors in every reasonable manner.
We wish to make it clear to you that the change in operation is brought
about simply because of economic conditions which we have carefully
"Amalgamated Meat Cutters and Butcher Workmen of North America (The Great
Atlantic and Pacific Tea Company), 81 NLRB 1Q52.
20 General Counsel's Exhibit No 6. Under article XV of the 1949 contract, this letter
effectively terminated that, contract on April 23, 1950.
21 General Counsel's Exhibit No. 7
22 General Counsel's Exhibit No 8
E2 General Counsel ' s Exhibit No. 9.
298 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
analyzed before making this decision and if you should desire to be supplied
with any additional information in connection with the matter, please feel
free to call upon us.
Very truly yours,
NATIONAL GAS COMPANY,
KENNETH C. LAYTON,
Vice-President.
A copy of this letter was sent to Wynn at the Union's office in St. Louis, Missouri.
On April 10, 1950, the Union replied to the letters of April 5 and 7 as follows : Z'
Mr. KENNETH C. LAYTON,
Plant Mgr., National Gas Company,
Sikeston, Missouri.
DEAR MR. LAYTON : Am in receipt of your letter of April 7th, informing us
that you are willing to meet to discuss the proposed changes in the present
Union contract after April 20th. Of course, I am very much interested in
the letter which you sent out April 5th, in regard to contracting the work
out.
I am meeting with your employees on Friday, April 14th, and after that
meeting I will get in touch with you for a meeting with the Committee and
myself.
Very truly yours,
/s/ William Wynn,
WILLIAM WYNN,
International Representative.
On April 14,1950, Wynn talked with Layton at Respondent's office in Sikeston,
just before attending a meeting of the employees, and arranged with Layton to
hold a bargaining conference on April 20, which was 4 days before the expiration
of the 1949 contract. However, Layton suffered an injury shortly before and
arranged with Wynn to hold the conference on May 2, 1950.
During their discussion on April 14, 1950, Wynn told Layton he wished' to
advise Layton of the Union's position regarding Respondent's proposal to con-
tract out the installation work, and to obtain some information about the plan
prior to meeting with the employees. He told Layton that the Union could not
"go along" with Respondent's plan which would result in the loss of jobs by
eight members of the Union, and that the Union was opposed to that type of
operation. Layton explained that the Union already knew about Respondent's
poor competitive position among liquid gas distributors in southeast Missouri,
which was a reason for the change, and that Respondent had come to that
decision after careful investigation. He said Respondent felt the decision to.
contract out this work was a management prerogative, but also felt that it was
proper to notify the Union of the decision. Layton also said that, although
Respondent had made a careful study of the new plan, its feasibility in Re-
spondent's operations was still an unknown quantity, and Respondent was will-
ing to discuss it with the Union, but he felt that the only way Respondent could
ascertain whether it was advantageous for the Company was by actual experience
in the use of independent contractors. Layton also mentioned Respondent's
tentative idea of taking care of the employees displaced under the plan by
making independent contracts with some of them for the installation work.
Wynn reiterated the Union's opposition to any plan which would result in the
loss of jobs by members of the Union, and said that it would fight the change
with every means at its command.
21 Respondent's Exhibit No. 1.
NATIONAL GAS COMPANY 299
The first bargaining conference between Respondent and the Union was held
on the afternoon of May 2, 1950, at Respondent's office in Sikeston. The Union
was represented by Wynn and a committee of Local 340 consisting of Noble C
Malone, president of the Local, Chester (Jack) Bennett, Gene Campbell, and
Dayton Ford. Respondent was actively represented by Layton ; James Ward,
manager of its Hayti branch, and Earl Corlew, manager of its Malden branch,
were also present but took no part in the discussions. The meeting lasted about
31/ hours.
At the outset, before consideration of the proposed contract, Layton reminded
Wynn and the union committee that they had already received a letter indicating
Respondent's intention to contract out the installation work, and said Respond-
ent's stockholders had reached the decision on economic considerations. Wynn
replied that the Union could not accept that decision. Layton then said the
Company took the position that the matter of discontinuance of the installation
department and handling of that work through independent contractors was a
management prerogative, and was not a matter for negotiation with the Union ;
however, he did not want the Union to feel that Respondent did not care to,
discuss it with the Union at all, as Respondent recognized it was a "mutual
problem." Layton suggested that, in the interest of reaching some agreement
that day on the new contract proposals, the conferees should put aside discussion
of the contracting plan for the moment and go through the new contract. This
procedure was followed. The conferees took up and discussed the 17 clauses
of the new contract one by one, comparing them with similar provisions in the
expired contract.
The first three articles of the new contract were identical with those in the
old agreement and were agreed to with little or no discussion. The new article
IV, relating to seniority, was substantially the same as the old clause ; Layton
suggested it be modified to provide a more equitable plan under which employees
could carry their seniority from one department to another when transferred ;
after discussion, the parties agreed that any problems arising on this subject
could be handled under the grievance machinery, and Layton then agreed to
accept the clause as proposed. At first, Layton would not accede to the union
demand for increased overtime, holiday, and Sunday pay contained in new
article V, but after discussion he agreed to accept the new clause, contingent upon
agreement of the parties on all other clauses. New articles VI and 'VII, relating
to grievance procedure and protection of rights of employees called to military
service, were accepted by Respondent as proposed by the Union.
Article VIII of the new contract contained the Union's proposals for increased
wages for employees in all departments, including the installation department.
Wynn suggested that the Company might approve the clause as submitted, and
they could settle the whole contract at that meeting. Layton referred to Re-
spondent's decision to contract out the installation work (which would have
deleted the installation department from the wage schedule), and said there was
not much use in discussing the wages of the installation men, as Respondent had
decided on that plan. After some discussion, Layton and Wynn agreed that
since the wage problem was tied in with other conditions the Union wanted
changed, it would be better to discuss the remaining clauses, and then come back
to wages.
Article IX of the new contract contained the same union-security clause as in
the expired contract. Layton said Respondent did not favor a "union shop,"
reminding Wynn that they had run into difficulty on that point in the negotiation
of the previous contract. Wynn pointed out that Respondent had operated for
a year under a union-shop agreement without misunderstandings or bad.feelings.
300 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Layton finally agreed to accept the union-shop clause again , if agreement was
reached on all other terms of the contract . Article X of the ilew contract
provided for checkoff of union dues . There had been no checkoff provision in the
previous contract , and Layton objected to it because of Respondent 's difficulties
in administering the clause in an earlier- contract . When the parties could not
agree on the clause, it was decided to pass it for the moment and return to it
later during the discussion of wages. After discussion , the parties agreed on
changes in proposed articles XI, XII, XIII, XIV, and XV which represented
compromises between the terms of the old contract and the new union demands.
Layton concurred in the idea of termination or severance pay, as provided in
new article XVI, but said he thought Respondent could work out a more liberal
severance pay arrangement for later consideration by the Union ; on the basis of
this representation , the terms of that clause were left open for later discussion,
so that the parties could return to a discussion of wages. After discussion, Re-
spondent acceded to article XVII, providing for termination of the contract on
substantially the same terms as in the prior agreement ; however, the no-strike
clause in this provision related only to the period of negotiation of a new contract
after cancellation or expiration of the existing contract , in contrast to the broad
no-strike clause in the old contract which had been applicable throughout the
effective period of that instrument.
The parties then resumed discussion of the wage proposals , and Respondent's
plan for contracting the installation work was again brought up by Wynn.
Layton reiterated Respondent 's decision to go ahead with the plan , and Wynn
asked him how many of the installation men would have work with the Company
under it Layton replied that he recognized the long service of these men
with the Company , and their family obligations , and said that Respondent would
attempt to make contracts with any of them who were interested , as suggested
in Respondent 's letter of April 5, 1950. He also stated that for several months
Respondent had not been replacing employees who resigned , thus keeping its
force at a minimum, in hope that some of the installation men could be retained
to do maintenance work, which Respondent intended to carry on with its own
employees. Layton suggested that Respondent could place the installation
employees , who did not become independent contractors , on a preferential
hiring list from which they would be called for maintenance work as needed, and
Respondent was willing that they should retain all their seniority when so
rehired Wynn asked Layton how many installation employees could continue
that work for Respondent under the new plan, and Layton replied that two or
three could be used as independent contractors . Wynn asked Layton for a copy of
Respondent 's proposed contract under which the installation work would be
performed , but Layton did not have a contract form available nor did he give
Wynn any information on the plan . The union men asked Layton whether
the new plan also involved the gas delivery work, inasmuch as the letter of
April 5 had mentioned that phase of the work. Layton replied that Respond-
ent considered it impractical at the moment to contract out any work but the
installation of new equipment , and that no change in the gas delivery department
was contemplated at that time.
At this point , the discussions were susrended for a short time during which
Wynn and the union committee held a private conference After the recess,
the Union proposed a new wage scale for employees in all departments , including
installation , which was 20 percent less "across the board" than its original de-
mands, but still 10 percent above existing rates Wynn said the Union would take
the reduced pay increase and accept Respondent 's idea as to a liberal termination
NATIONAL GAS COMPANY 301
pay clause , if Respondent would abandon its contracting plan and accept the check-
off. Layton declined to accept this proposal . Wynn then said the parties should
quit "sparring around, " that no agreement could be reached on the contract until
the matter of contracting the installation work was disposed of, that the entire
matter hinged on the contracting plan, and that the Union would not stand
for any change in Respondent ' s operation which would result in eight union
members losing their jobs , and would fight the change with all available means.
Just before adjournment of the meeting , Wynn requested that Respondent
reconsider its decision and take no immediate steps to carry out the plan, in
order to give the Union a chance to discuss the problem among its members,
and work out a solution satisfactory to both parties . Layton replied that he
would discuss the Union 's last proposal with his directors , and would advise
Wynn of their decision , and that Respondent would not take any definite action
on the contracting plan until he had notified the Union . At the end of the
meeting , Layton and Wynn tentatively agreed upon May 15 as the date for the
next bargaining conference.
Immediately after the meeting closed, Layton called Wynn into his private
office and asked Wynn if the employees would strike over the contracting of
the installation work, and Wynn replied that that was their intention, because
the subject was of the greatest importance to them, and that when he said they
would use every'means at their command to fight it , he meant just that. Wynn
then said he wanted to get the contract plan out of the way "at all costs," and
suggested that if Respondent would forget about the plan, Wynn would persuade
the employees to accept a 5-cent an hour increase , abandon their new demands
and make a new contract in the terms of the old one, with the exception of the
5-cent increase. Layton said he could not agree to that without discussing
it with his directors 25
That evening Layton discussed the contracting plan further with Ward and
Corlew, his branch managers, J. E. Moore, Jr ., president of Respondent, and
Leonard Colley , se6retary and general office manager of Respondent The next
morning, May 3, 1950 , Layton called a special meeting of Respondent 's board
of directors , which was attended by three of them : Moore, Layton , and Colley.
Verona Moore, the fourth director and wife of J. E. Moore, Jr , was not present ;
she is not active in the affairs of Respondent Layton reported to the directors,
that it appeared the Union 's prime motive was to have the contracting plan
dropped ; he outlined Wynn's final private proposal to Layton and his sentiment,
indicated at the meeting , that the contract could be settled quickly if the contract-
ing plan was abandoned . After discussion ( the details of which do not appear
in the record ) the directors decided to proceed with their plan to contract
the installation work and abolish that department . Late that afternoon Layton
prepared and mailed a letter to Wynn, reading in pertinent part as follows :
WILLIAM WYNN,
Int'l. Representative , United Gas Coke and Chemical Workers,
St. Louis, Missouri.
DEAR BILL: As I promised , I am notifying you of our decision to contract
our installation work.
As I have repeatedly said, we do not consider this matter to be a bargain-
able issue , but do recognize your wish to be kept informed of our contemplated
operations.
25 The above findings are based on uncontradicted documentary evidence and a com-
posite of credited testimony of Layton, Ward, Corlew, Wynn, Chester Bennet, and Ford.
Testimony in the record which conflicts with these findings is not credited.
302 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
We sincerely feel that this is the best approach to this situation , and that
it represents the most economical type of operation that we can effect.
Very truly yours,
NATIONAL GAB COMPANY,
/s/ Kenneth C. Layton,
KENNETH C. LAYTON,
Vice President.
kcl/s
Enclosure
Layton enclosed in the letter a mimeographed notice of the same date, also
prepared by him, which stated :
MAY 3, 1950.
Effective Monday, May 8th, 1950 the National Gas Company will discontinue
the regular installation of appliances and equipment. This of course means
that effective as of this date your services will no longer be required. Work
of this type will be handled in the future by independent contractors.
Your past service to the company is appreciated, and if you require a service
letter we will be glad to furnish it to you.
If there are any questions concerning this matter, I will be glad to discuss
them with you.
Your final check which will be available Wednesday, May 10th will include
all of your work through May 7th plus any vacation time you would be
normally due, less any money due the company on advances or unsecured
accounts.
Very truly yours,
NATIONAL GAS COMPANY,
/s/ Kenneth C. Layton,
KENNETH C. LAYTON,
• Vice President.
At the same time Layton caused a copy of this notice to be mailed or delivered
to each installation employee ; the installation men at the Hayti branch found
their copies in the time-card rack, where they had been placed by Ward on orders
from Layton."
3. The strike of May 9, 1950
Upon receipt of Respondent's letter of May 3, Wynn called a meeting of Re-
spondent's employees at Sikeston on Monday evening, May 8, 1950. Just prior
to the meeting, Wynn advised Layton in the latter's office that he was going to
discuss the contracting problem with the employees, and asked Layton whether
Respondent still maintained its stand on the contracting problem, and whether
Layton would not try to work out the problem with the Union. Layton replied
that Respondent would adhere to its previous decision. Wynn then said that
unless he could advise the employees that Respondent had changed its position,
they would probably take a strike vote, and the plant would be shut down the
next morning. Layton replied that he would regret it if they struck, but if that
was their attitude, they could go ahead and strike ; the Company would stick to
its decision. Wynn asked Layton for figures and other details of the proposed
contracting arrangement. Layton said the figures had not yet been compiled,
as Respondent was still exploring that subject. Wynn asked Layton to meet
"These findings are based on General Counsel's Exhibits Nos. 10 and 11, and credited
testimony of Layton and Ward.
NATIONAL GAS COMPANY 303
with him after the employees' meeting, saying the men did not want to strike,
as that would hurt both the employees and Respondent, but wished to try and
work out the problem with Respondent first. Layton said he would not be avail-
able for a conference that evening. Wynn then suggested a meeting about 7 a. in.
Tuesday ; when Layton demurred at 'the early hour, Wynn said the matter was
serious, for if there was a strike vote that night, and the Union did not give
Respondent a chance to' arrange another meeting to settle the dispute, there
would be a strike. Layton did not suggest or agree to another meeting. Im-
mediately after this discussion, Wynn and the union committee met with the
employees and reported to them that Respondent had refused to discuss its
decision to discontinue the installation department, that Respondent had deter-
mined to go ahead with the plan, and there was nothing the Union could do
about it. The union membership authorized Wynn and the committee to discuss
it further with Respondent in an effort to change the decision and, if a satis-
factory agreement could not be reached, to call a strike.
Early Tuesday morning, May 9, 1950, as the employees were reporting for
work, Wynn and a union committee, consisting of the two Bennetts and Dayton
Ford, met,Layton in his office. Wynn advised Layton that the men were opposed
to the contracting plan and were prepared to stay on strike- until Respondent
changed its decision, but were still willing to sit down and negotiate a satisfastory
settlement. Layton replied that there was nothing Respondent could do if that
was their attitude, and that Respondent had definitely decided to go ahead with
its plan. The employees at Sikeston did not report to work, and started to picket
the plant. All employees at the Hayti and Malden plants went on strike the same
day. The strike continued at all plants until about June 26, 1950, and at Sikeston
-until July 10, 1950.'
4. The meeting of May 12, 1950
On May 9, 1950, shortly after the strike started, Arthur Hale, a member of
the Federal Mediation and Conciliation Service, U. S. Department of Labor,
had a short discussion with Layton at Sikeston about the strike. The details
of the conversation are not in the record. On May 12, 1950, Hale came to
.Sikeston and arranged and presided at a meeting that afternoon in Respondent's
office between Layton, Wynn, Joseph Appelbaum, another representative of the
Union from St. Louis, and the two Bennetts and Ford from Local 340. At the
outset Hale asked the parties whether Respondent would be willing to put the
installation men back to work, discuss and settle with the Union the problem
of contracting out that work, and then work out and sign a new contract with
the Union. The Union was agreeable to this, but Layton in effect rejected the
suggestion , saying Respondent would be willing to talk about the matter as
long as the Union desired, but its position on the contracting plan remained the
same, that the decision on that subject was a management prerogative, and was
not negotiable, and Respondent would continue with its plan because it needed
actual experience to determine whether the plan was advantageous for the
Company. He also said he felt that this decision was "in line," because the
Union had never presented any counterproposition which could be compared
as to cost with the contracting plan, and had never indicated that it would
accept any modification of that plan, and thus he could see no reason for putting
these men back to work and then be faced with another shutdown after another
bargaining session ; any arrangement to put the former installation men back
27 These findings are based on credited testimony of Layton, Wynn, Ward, Howell, and
Chester Bennett.
304 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
to work would only be "borrowing trouble." Layton added that he could see no
reason why they could not continue contract negotiations regarding the remainder
of Respondent's operations which were covered by the contract and involved
most of its employees.2' Wynn stated that the Union had an interest in Respond-
ent's problems and appreciated its difficulties, and that he felt the employees
could go a long way toward straightening out the problems without the necessity
of contracting out the installation work. Appelbaum then referred to negoti-
ations the Union had held with LaClede Gas Light Company in St. Louis, Mis-
souri, regarding its procurement of a large installation job by independent
contract, in an effort to indicate that independent contracting was not the solu-
tion for Respondent.20 At this point, the conciliator suggested that Respondent
allow. one independent contractor to do its installation work -on a trial basis,
to ascertain how it worked out over a period of time such as 1 year, and that
Respondent rehire the installation men during that period. Layton said he
thought that was "something that I could be sold on," and said Respondent would
be willing to try that plan for a year, at the end of which period it could com-
pare the cost figures on performance of installation work by independent con-
tract and by it own employees. Wynn asked Layton how any of Respondent's
employees could arrange to handle the installation work on a contract basis,
and Layton replied that if any former employees were interested in becoming
independent contractors, he would see that they were financed, and they could
use company trucks ; that could be worked out and was not a problem. During
this discussion, Layton pointed out that one independent contractor would re-
place two installation employees, I. e., an installation man and his helper ; the
contractor would also have to hire a helper, who might well he a displaced
installation helper, especially if the contractor was a former installation em-
ployee. Appelbaum would not agree to this suggestion, taking the position that
the Union could not agree to anything that would cost any union member his
job. He said he thought he could show Layton where Respondent's thinking on
the plan was wrong, but when Layton asked for facts supporting his contention.
Appelbaum produced none, repeating that Respondent was wrong in its view,
and "at least the Union could take no other position." Layton told the con-
ciliator that if the Union would not compromise on the contracting plan, where
Respondent had gone more than halfway by agreeing to use only one independent
contractor, he did not see how they could come to any understanding, and
Respondent could not see its way clear to go beyond Hale's suggestion At
the close of the meeting, the union representatives suggested another meeting
at which the parties might attempt to resolve the dispute. Layton said he
would take it under consideration. Layton also asked about the bargaining
meeting tentatively scheduled for May 15. Wynn replied that the Union would
not attend any further meetings for discussion of the contract until the con-
tracting problem was settled and the strike discontinued. This was the last
formal meeting between Respondent and the Union ; neither party made later
overtures to resume contract negotiations 30
"The discontinuance of the installation department affected only 8 employees out of a
total of about 30 in the 3 plants.
29 Appelbaum produced no figures or details regarding the St. Louis case to support his
contention Wynn testified credibly, and I find, that LaClede Gas Light Company con-
tracted out the entire installation job to an independent contractor, after discussion with
Local 6 of the Union at St. Louis, none of the installation work was performed by members
of the Union as employees of LaClede
30 These findings are based on a composite of credited testimony of Layton, Wynn,
Appelbaum, Ford, and the two Bennetts. Testimony of any of these witnesses in conflict
with the findings is not credited
NATIONAL GAS COMPANY
5. Contentions of the parties
305
The principal issue raised by the pleadings, the record, and the arguments
of counsel is whether Respondent 's decision to contract out its installation
work and discontinue its installation department was a subject on which it
was required to bargain with the Union, on request, before carrying out the
decision. The corollary issue is: Assuming the shutdown was a bargainable
matter, whether Respondent in fact refused to bargain with the Union thereon.
In urging the affirmative on both issues, General Counsel contends that, although
Respondent appeared to bargain with the Union on many provisions of a new
contract at their sole bargaining session, such bargaining was not bona fide be-
cause it was prefaced by Respondent's adamant and illegal refusal to bargain
on the contracting issue, which refusal was part and parcel of a predetermined
course of conduct designed to discredit and eventually aet rid of the Union in
Respondent's plants On the other hand, Respondent argues that it was under
no legal obligation to bargain with the Union concerning the discontinuance
of a department of its business and contracting out the work therein for economic
reasons ; and even if obligated to bargain thereon, Respondent fully discharged
that duty and also engaged in bona fide bargaining on all provisions of a new
contract. The legality of the discharge of the employees in the discontinued
department is directly affected by the resolution of these issues. The principal
issue stated above is primarily a legal problem and will be considered first.
Section 7 of the Act establishes the right of employees, among other things,
to bargain collectively through representatives of their own choosing Under
Section 9 (a) of the Act, the bargaining agent selected liy the majority of
employees in an appropriate unit is constituted the exclusive representative of
all employees in the unit for purposes of collective bargaining "in respect to
rates of pay, wages, hours of emplyoment, or other conditions of employment "
It has been held that termination of employment by discharge is an action
affecting a "condition of employment" or the "tenure of employment," and
is therefore a proper subject for collective bargaining, upon the theory that
by such action the employee loses his job at the command of the employer. and the
effect upon the "conditions" of employment is that the employment, or the man's
tenure of his job, is terminated.' If this reasoning is valid as to discharge of
individual employees, it would appear to apply a fortiori, to employer actions
resulting in the termination of groups of employees, where the impact and results
of the discharges are greater and more widespread However, the Board has
consistently held that an employer is not required to consult or bargain with
a union regarding a major change in its operations effected for nondiscriminatory
reasons. In the early case of Brown-McLaren Manufacturing Company, 31
NLRB 984, the Board absolved the employer of any duty to bargain with a union
regarding the removal or transfer of operations from one plant to another, where
the move was brought about by a bona fide desire to avoid continued operation
at a loss at the first plant, which was occasioned in part by the refusal of the
union to agree to a reduction in wages. The Board found that the economic
factors which dictated the removal of operations were beyond the control of
the employer. In re !llahaiirnq Mivinq Corn pony, 61 NLIiIl 792, the Board held
that an employer who contracted out the operation of certain mines for economic
reasons, and thereafter refused to bargain with the union regarding the workers
31 See Inland Steel Co . v N L R B , 1'70 F 2d 247 (C A 7). enforcing 77 NLRB 1,
cert. den. 336 U. S 960 It should be noted that, by section 11 of arhrle VII of the union-
security contract of April 23. 1949 (General Counsel's Exhibit No 5). Respandent here,
like the employer in the Inland Steel case, had recognized that the dicoharge of an em-
ployee was a subject for discussion under the grievance procedure set up by the contract
306 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
in those mines, did not thereby violate the Act, notwithstanding the fact that
former employees of the employer in those• mines had been included in a cer-
tified appropriate unit, and the employer and union had made prior collective
bargaining contracts covering such employees. In reversing the Trial Examiner
on this point, the Board said (61 NLRB 792, at page 803) :
Since changing conditions in industry necessitate revision of bargaining
units which will best effectuate the policies of the Act; the Board has never
held that once it has established an appropriate unit for bargaining pur-
poses, an employer may not in good faith, without regard to union organi-
zation of employees, change his business structure, sell or contract out a
portion of his operations, or make any like change which might affect the
constituency of the appropriate unit without first consulting the bargain-
ing representative of the employees affected by the proposed business change.
In re Walter Holm ,& Company, 87 NLRB 1169, the Board held that an employer's
sudden unilateral discontinuance of its trucking operations, and concomitant
discharge of the drivers engaged therein, for economic reasons, without prior
consultation with the union, did not violate the Act. In reaching that con-
clusion, the Board specifically found that the discontinuance of the operation
was for nondiscriminatory reasons, and then said (87 NLRB at page 1172) ;
"And Section 8 (a) (5) does not require an employer to consult with its em-
ployees' representative as a prerequisite to going out of business for nondis-
criminatory reasons," citing the Mahoning Mining case. At first glance, these
cases appear to support Respondent's contention that its refusal to bargain
with the Union regarding the proposed contracting out of its installation work,
and the contemporaneous discharge of its installation employees, was justified
and did not constitute a refusal to bargain within Section 8 (a) (5) of the
Act. On that premise the discharge of the installation employees must be
considered nondiscriminatory, and would not constitute a violation of Section
8 (a) (3) of the Act.
However, in view of the secondary issues litigated herein, Respondent's bare
decision to shut down a department and discharge the workers therein cannot
be considered in vacuo. General Counsel argues that the decision, Respond-
ent's attitude thereon during the negotiations, and the subsequent discharge
of the employees, were only part of a discriminatory scheme to discredit and
finally get rid of the Union. He claims that the scheme comprised the following
steps : (1) The decision of April 5, 1950, to contract out the installation work,
discontinue that department, and discharge the employees therein; (2) the
refusal to bargain with the Union thereon after April 5, 1950; (3) the actual
discharges of those employees on May 8, 1950; (4) the resultant precipitation
of the strike of May 9, 1950; (5) negotiation of ostensible but spurious inde-
pendent contracts with individual employees for the installation work before
and during the bargaining negotiations and the strike; (6) coercive statements
to striking employees during the strike designed to break the strike and dis-
credit the Union; (7) individual bargaining with employees in derogation of
its duty to bargain with the Union as their statutory representative. This
contention requires careful analysis of the factors leading to Respondent's
decision for the shutdown, the manner in which it carried out its contracting
plan, and an appraisal of its bargaining at the meetings of May 2 and 12 in the
NATIONAL GAS COMPANY 307
light of its contemporaneous and later conduct toward its employees during
the contract negotiations and the strike.'
6. The evolution of the contracting plan
Respondent first began to consider the possibility of contracting out part of
its operations in the latter part of 1949 . For some time before, its new business
department , which handles the sale and installation of new gas appliances, had
been operating at a loss for several reasons. Respondent had found it impossible
to exercise close supervision over the work of its installation crews, who operated
over an area comprising more than six counties, because it was impractical to
hire a supervisor for every installation crew of two men ; consequently, Respond-
ent was forced to rely upon occasional inspection of the work of the crews, but
could not thereby, assure efficient use of working time by the men ; as a result, the
labor cost of installation work tended to remain constant , despite fluctuations in
the volume of new business, due to slow-down practices of the installation crews
during slack periods designed to assure them full workweeks and often overtime
pay ; Respondent's attempts to correct these practices through appeals to the
Union proved unsuccessful . In addition , Respondent was encountering increased
competition locally in the sale of new appliances . Respondent's price for a gas
heating furnace included the cost of installation, which in turn included the cost
of sheet metal work that is performed for Respondent by sheet metal contractors
under contract ; the selling price thus included Respondent's markup on the
appliance and the sheet metal contractor 's profit on his work. In these sales,
Respondent cannot compete with the sheet metal contractors who also directly
sell and install appliances , but at an over-all price which includes only the actual
cost of the appliances, the contractor making his profit on the sheet metal work
involved in the installation ; the dealer's markup on the appliance is thus
eliminated . For the same reasons, Respondent was finding it difficult to compete
with independent plumbers in the sale and installation of gas water heaters.
Furthermore , Respondent is in competition with an increasing number of small
concerns selling gas heating appliances, many of which are family-owned and
-operated businesses , such as hardware and general stores, with small invest-
ments, low overhead and upkeep, whose proprietors can afford to sell and install
appliances at cut rates. To compete with these concerns, Respondent would have
to install a complete sheet metal department or attempt to procure that work
on a fixed-fee basis, both of which plans were explored and found costly and
impractical. As a result of these conditions, Layton started in December 1949
to investigate the practices and experience of major oil companies, large fuel
distributors, and other firms in the handling of various operations through the
use of independent contractors, and ascertained that many concerns found that
plan economical both for the installation of equipment and delivery of products
to customers. As a result, Respondent also investigated the feasibility of
contracting out the delivery of gas and servicing of equipment, but concluded that
it would be impractical to handle those operations through independent con-
sr The applicable rule has been stated by the Board as follows : "We recognize that an
employer may lawfully discontinue or reduce operations for any reason whatsoever, good
or bad, sound or unsound , in its sole discretion , and without censorship from this Board,
provided only that the Employer's action is not motivated by a purpose to interfere with
and defeat its employees' union activities . If the latter is the true purpose , it is unlaw-
ful " Pepsi Cola Bottling Company of Montgomery , 72 NLRB 601, 602 , and see Eva-Ray
Dress Manufacturing Company, Inc, 88 NLRB 361. In the Mahoning Mining and Walter
Holm cases , cited above , the Board examined the circumstances surrounding the change in
the employer 's operations , in determining the issue of discriminatory motive rel non.
1
308 DECISIONS OF NATIONAL LABOR RELATIONS, BOARD
tractors, because of the high degree of control over such operations required to
maintain satisfactory service, which did not lend itself to an independent con-
tractor setup. However, Respondent finally decided to contract out the installa-
tion of its new gas appliances because it concluded that it could thereby effect
,in over-all saving of approximately 15 percent in the actual cost of installation ;
it would also eliminate the cost of public liability insurance, which would be
borne by the contractors, and Respondent's direct liability to customers for neg-
ligence of its employees In reaching this decision, Respondent acted upon the
advice of counsel, both with respect to the legality of the proposed change and
the independent contractor plan, and its duty to bargain with the Union regarding
the change of operations. Respondent's officers reached the decision to proceed
with the plan in the latter part of March 1950, but the official letter announcing
the decision was not sent to the Union until April 5, 1950: Respondent delayed
publication of the decision awaiting final approval of the plan by its counsel,
which was apparently not forthcoming until that date. About the middle of
April, Respondent posted a notice to employees on the bulletin boards in all plants,
stating the decision to contract out the installation work and advising that
Respondent was also considering the possibility of handling gas delivery by that
method
During its study of the contracting plan, Respondent made no secret of the
fact that it was considering the plan involving discontinuance of its instal-
lation department and possibly other operations. Malone, the installation man
at Malden, and installation men at the other plants, learned of it and discussed
it among themselves early in 1950, and as a result, Malone broached the sub-
ject to Layton several months before he received the letter of April 5, 1950. At
that discussion, Layton asked Malone what he thought about the plan, and
Malone replied he did not know whether "we could make a go of it" (apparently
meaning, as independent contractors) but was willing to talk about it. There
Has some mention of the prices at which Malone, as a contractor, could make
installations, but no definite figures were submitted by him nor was any con-
clusion reached on the subject at that time; nor did Layton indicate that Respond-
dent had reached any decision on the plan. After Respondent posted the notice on
the bulletin boards in April, and before the strike, Dayton Ford, gas deliveryman
it Sikeston, asked Layton for data on the proposed contracting of gas delivery.
Layton replied that he had no data,on. it, but promised to notify him when he
nad something definite ; he never discussed it further with Ford.33 In the same
period, when Ralph Williams, night mechanic at Sikeston, asked Layton for
details about the contracting plan, Layton replied that he had no figures then,
no contracts had been prepared, and he did not know just how he would do it.
Layton asked Martin E Duke, installation man at Sikeston, what he thought
about the plan, and when Duke expressed his ignorance about the matter, but
said he thought the men would know more about it when it was put "on the table"
in discussion with the employees and their union leaders, Layton replied that
it would never be "put on the table." 34
I find nothing in the above facts to indicate that Respondent, in its investi-
gation of the feasibility of contracting the installation work, or in reaching
its initial decision to take that step, was motivated by other than economic or
business considerations. There is no conduct of Respondent up to and including
the announcement of the decision on the bulletin boards about April 15, 1950,
33 Respondent gave up the idea of contracting out the gas delivery work before its nego-
tiations with the Union on May 2, 1950.
34 These findings are based on the credited testimony of Layton, Malone, Ford, Bush,
Martin E. Duke , Chester Bennett, and Ralph Williams.
NATIONAL GAS COMPANY 309
which substantially indicates any antipathy toward , or scheme to get rid of, the
Union ,5
When Layton indicated to Wynn, the union agent, on April 14, 1950, that
Respondent would not bargain with the Union over its decision to contract out
the work, Layton learned for the first time from Wynn that the Union was
definitely opposed to the contracting plan and would fight it. Respondent had
experienced a strike of its employees in 1947 which was settled after charges
were filed by the Union,3' and Layton could reasonably have inferred from Wynn's
statement on April 14 that the Union might call a strike if Respondent pro-
ceeded with its contract plan . In fact, a week before the strike , Moore, president
of Respondent , asked Ralph Williams, night mechanic , and Clark Mattison,
janitor , at the Sikeston shop one night , whether they thought the men would
strike. Williams said he did not know. The record also shows that at least
after Respondent posted its announcement of the decision to discontinue the
installation department , there was discussion among some of the employees
about the possibility of a strike . Moreover , it is a fair inference that in an organ-
ization of about 30 employees , Respondent 's officers and managers were cog-
nizant of such discussion.' I therefore find that between April 14 and May 2,
1950, Respondent knew that the employees were discussing the possibility of
a strike if Respondent discontinued its installation department and terminated
the jobs of the installation men.
Turning to the events of May 2, 1950 , I am unable to agree with General
Counsel 's contention that Respondent 's conduct during the bargaining session
of that date of itself evidences a lack of good faith in dealing with the Union.
I have concluded , as a matter of law, that Respondent was not obligated to bar-
gain with the Union on its decision to contract the installation work. It follows
that Layton 's insistence throughout the meeting that the decision was a manage-
ment prerogative and not negotiable as such. does not constitute a refusal to
bargain , nor does it taint the bargaining on other issues . Layton had previously
explained to Wynn the economic reasons which led Respondent to its decision,
and I do not consider his failure on May 2 to repeat or further explain those
reasons as indicative of bad faith , particularly when the Union did not question
the need for the contract plan , produced no arguments or facts in ' an attempt
to convince Respondent that the plan was economically unsound , and proposed
no definite substitute.
However , Respondent was still obligated to bargain with the Union re-
garding the reemployment of the workers who would be displaced by operation
of the plan " I am persuaded that Respondent fulfilled its obligation in this
regard at the meeting of May 2 . While Layton maintained the decision to con-
tract was not negotiable, he readily discussed its effects with the Union, recog-
nizing it was a "mutual problem ." In answer to Wynn 's questions , he explained
35 The history of amicable relations with the Union since 1947 overweighs any sinister
inference which might be drawn from Layton 's early discussion of the contracting plan
with Malone , president of the local Union, or from Layton's equivocal statement to Wil-
liams that he was prohibited by some law from negotiating on the contracting plan with
the Union , or even from his remark to Martin E. Duke that the plan would never be laid
"on the table" for discussion with the Union ; the latter remark obviously stemmed from
advice of counsel.
36 Respondent executed a settlement agreement on April 4, 1947, in Case No . 14-C-1277,
which was approved by the Fourteenth Regional Director and provided only for reinstate-
ment of 16 named employees , without back pay or posting of` notices ( General Counsel's
Exhibit No. 4).
37 See Quest-Shop Mark Brassiere Company, Inc., 80 ,NLRB 1149, 1150.
5 Brown -McLaren Manufacturting Company, 34 NLRB 984; Syncro Maehine Company,
Inc., 62 NLRB 985.
215233-53-21
p
310 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Respondent's willingness to offset the economic blow to the installation workers
by attempting to contract with some of them for that work, and its plan to
absorb the others as soon as possible in other departments of the business. The
Union submitted no counterproposals to these suggestions ; it merely reiterated
its demand for complete abandonment of the contracting idea and for retention
of all installation men as employees. Layton's suggestions for taking care of
these employees was consistent with the offer contained in Respondent's initial
announcement of the plan to the Union in April, and also indicated a proper
regard for their welfare. Such conduct is more indicative of sincerity than
of bad faith in bargaining.
Aside from the contracting issue and the effects of the plan, the record indi-
cates that there was bona fide bargaining on other contract provisions: the
parties discussed and arrived at agreement on most of the union proposals,
subject only to reaching agreement on the whole contract (which included
proposed wage increases for the installation men). Moreover, the parties
followed the same method of bargaining they had used in their negotiation of
three previous contracts : the Union submitted a new contract form at the outset,
which was discussed by the parties paragraph by paragraph, the Respondent
offering some oral counterproposals which were discussed ; Respondent rejected
some proposals, accepted some as offered, and reached a compromise with the
Union on others. There was no deviation by Respondent from the previous
method of bargaining which would warrant an inference of bad faith. Con-
sidered as a whole, the open meeting of May 2 presents a picture of bona fide
and progressive bargaining between the parties which broke down only when
the parties reached an impasse at the end over the contracting issue. However,
neither party closed the door to further discussion in an effort to eliminate
the impasse : a date for another bargaining meeting was tentatively fixed, and
Respondent promised to reconsider its decision on the installation department
and advise the Union before taking definite action thereon. Immediately after
the meeting, Respondent learned of the anxiety of the Union to avoid the,dis-
continuance of that department "at all costs," when Wynn indicated to Layton
that the Union would probably yield on practically all its demands if Respondent
would abandon its plan. When Layton reported this fact to the directors the
next morning, they immediately decided after a short discussion to proceed
with the contracting plan, authorizing Layton to take the necessary steps.
The same day he sent the notices to the eight installation employees, termi-
nating their employment effective the next Monday, May 8, ,1950, and at the
same time sent the letter to Wynn reaffirming Respondent's decision to proceed
with its plan. Although the notices to the employees were effective 5 days
hence, they constituted the first definite step toward consummation of the plan,
and when Layton issued them, without advising the Union beforehand, he in
effect broke his promise of the previous day to Wynn and the union committee.
The breach of this promise on a matter he knew to be of vital importance to
the Union, raises some doubt as to the bona fides of the promise itself, and
Layton's motive in making it. However, I cannot resolve that doubt into a
finding of bad faith bargaining, first, because Respondent was not legally bound
to bargain with the Union about its decision to shut down a department and,
secondly, because Layton did not learn until after the meeting of Wynn's anxiety
to have the contracting plan abandoned ; and it was only after Layton reported
that attitude to the directors the next morning, that they determined to go
ahead with the plan. Even then, Layton did not utterly flout the Union; he
NATIONAL GAS COMPANY 311
disregarded his promise only to the extent of advising the Union of the decision
to go ahead simultaneously with, rather than before, the sending of the termi-
nation notices. Indeed, in a technical sense, it can be said that the Union
still received notice of the decision before the first step in execution of the plan
became effective, as the termination of the installation employees took effect
May 8; and Wynn told Layton on the telephone on May 4 that he had received
Respondent's letter of May 3, was disappointed in Respondent's decision, and
was going to meet with the employees shortly to discuss it further. The Union
thus received some advance notice of the terminations ; it was not suddenly pre-
sented with a fait accompli. I therefore do not regard Respondent's deviation
from its promise of May 2 as substantial evidence in itself of a refusal to bargain,
nor as sufficient to warrant the conclusion that Respondent's entire dealing
with the Union on May 2, 1950, was in bad faith.
Although Respondent knew, when it sent out the termination notices, that the
Union would fight the contract plan and that Respondent was risking a strike
if it went ahead with the plan, this is far from saying, as General Counsel con-
tends, that by this move Respondent was deliberately precipitating a strike in
order to discredit the Union ; that conclusion would also require the assumption
that Respondent was consciously inviting a possible shutdown of its whole busi-
ness (which in fact occurred) in order to undermine the Union. At this point,
I cannot lightly infer the existence of such an intent, in the face of the substantial
proof that Respondent's original conception of the' plan arose from economic
considerations, and that those considerations were made known to the Union
before the installation employees were discharged.
As evidence of bad faith, General Counsel points to Respondent's omission to
advise the installation employees or the Union, at the time of their discharge, of
its plan to absorb them in its maintenance operations.39 Layton had already
explained the plan to the Union on May 2, and it would have been consistent and
indicative of continued good faith to mention it in the termination notices to the
employees directly concerned. At the hearing, Layton attempted to explain
this omission by saying that, although he recognized the terminated employees
were entitled to be advised of Respondent's plans for their reemployment, he did
not think it proper to mention that in their notices, because he considered it a
"condition of their employment, and as such should be properly discussed with
union representatives" and "not with the individual employee." This explana-
tion is not convincing, because he did not mention the subject in his letter of
May 3 to the Union ; if he had done so, he would have avoided the appearance of
ignoring the Union. The omission of this important subject from Respondent's
first letter to the Union after the contract negotiations broke down, in sudden
contrast to Layton's open discussion of the problem with the Union the day
before, is a persuasive indication that Respondent's attitude toward the Union
had changed, and that on May 3, 1950, it was no longer desirous of talking with
the Union on a matter which it was obligated to discuss with that organization.
This sudden change of attitude raises the question whether Respondent's conduct
on and after that date was motivated by other than business reasons. This leads
to a consideration of the manner in which Respondent proceeded subsequently to
make contracts with certain employees regarding the installation work, and its
relations with those men under the contracts.
r Layton and Ward testified credibly , and I find, that at the time of the negotiations in
May, Respondent had accumulated a 2-year backlog of field maintenance work to be per-
formed on company -owned equipment ; little of this work had been done since May 1950,
and at the time of the hearing the Company still had a substantial backlog thereof.
312 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
7. The contracts for installation work 4°
General Counsel argues that Respondent made contracts with four employees
which in form appeared to set up a true independent contractor relationship,
but in substance and actual practice gave Respondent such control over the opera-
tions of the contractors that they remained in fact "employees" of Respondent.
The Employer argues the converse of the proposition. In determining whether
an employer-employee relation or that of independent contractor exists, the Board
has consistently applied the "right-of-control" test, under which it has been held
that an employee relationship exists where the person for whom the services
are performed reserves the right (even if not exercised) to control the manner
and means by which the result is accomplished ; conversely, an independent
contractor relationship exists where the control is merely limited to the result
to be accomplished and does not apply to the method and manner of services
rendered. In ascertaining the degree and nature of the control exercised, the
Board has considered all relevant facts showing the background of the parties, the
circumstances under which the contract relationship was created, its relation
to the employer's business, the manner in which the parties carried out the
contract, the permanence of the arrangement, and similar factors. 41
The notice of May 3 to the installation men terminated their services "effective
May 8th, 1950," and advised that they would be paid for work performed through
May 7; in effect they were off the payroll at the close of business on May 7 and
were no longer employees on May 8, so far as Respondent's records were con-
cerned. On the morning of May 8, 1950, Malone was advised by Corlew, manager
at Malden, at the request of Layton, that Respondent was having a meeting
that day at Sikeston with men interested in contracting for the installation
work, and that Malone should go to Sikeston if he was interested. Malone met
Layton at Sikeston that morning, and submitted a bid for the work, consisting
of a list of rates at which he proposed to install appliances. The same day
Layton extended invitations, through Ward, manager at Hayti, to J. W. Smith,
installation man, and Clifford James, service and installation man, both at Hayti,
to s';e him about the contracting. That afternoon, Malone, Smith, and James met
with Layton at Sikeston, where all four reviewed and discussed the price list
which Malone had submitted to Layton earlier that day ; the three employees
had previously discussed and agreed upon these figures among themselves.
After some bargaining on the rates, Layton told the men the prices appeared
acceptable as submitted, but the Company desired to consider them further.
There was some discussion of other terms of a contract, and the conditions
under which the installation work would be done, and Layton made notes thereof
for the purpose of preparing a contract. Layton had a contract form
prepared on May 9, the day the strike started, and personally took it to
St. Louis the morning of May 10, where it was reviewed by Respondent's
counsel to make sure that it set forth a true independent contractor relationship;
certain clauses were added by counsel to achieve this result. Layton brought the
corrected draft back to Sikeston that afternoon and had it prepared in final
40 The findings in this subsection are based on credited testimony of Layton, Malone, and
williams , except where otherwise noted. Testimony of these and other witnesses in con-
flict with the findings is not credited. Smith, Steinberk, and James, .who were ,involved
in the contracting arrangements and operations, did not testify ; James is still employed
by Respondent, and'Smith has likewise continued as an employee, though under the guise
of a contractor, as will appear below.
41 Steinberg & Company, 78 NLRB 211 , 221-223; Alaska Salmon Industry , Ine., '81 NLRB
1335, 1338 ;and other cases cited In' Waiter Holm & Company, 87 NLR11 1169, at 1172;
N. L. R B. V. Nu-Car Carriers, Inc., 88 NLRB 75, order enforced 189 F. 2d 756 (C. A. 3)
decided June 13, 1951.
NATIONAL GAS COMPANY 313
form .42 As soon as he returned, he had Ward and Corlew get in touch , with the
three men and advise them that the rates they submitted were acceptable, that
the contract form was ready, and Respondent was in a position to enter into
contracts with them. Smith signed the first contract on the evening of May 12,
1950. Malone signed his about June 1, 1950. There is no proof that James
signed the contract, or ever became an independent contractor . John Steinbeck,
former installation man at Sikeston , signed a contract on June 1 or 2, 1950.
Ralph Williams , maintenance man at Sikeston, signed a contract sometime after
the strike ended on July 10, 1950.
Although Layton claimed Respondent had all the installation men in mind as
possible independent contractors, which would be consistent with Respondent's
April 5 letter to the Union, he admitted that when Respondent first decided to
contract the work, he had Malone, Smith, and Steinbeck' particularly in mind.
There is no proof that he invited any but Malone, Smith, and James to the first
contract discussion on May 8.44 Layton testified he had known Malone for a
long time and trusted him. Although Malone was at the initial discussion of
May 8, and learned on the 10th that Respondent was ready to sign a contract
with him, he did not sign up for several weeks ; in the interim he participated in
the picketing at Malden. During that period Layton and Moore asked him on one
occasion if he wanted to sign the contract, but he hesitated, saying that because
of his position as president of the Union, be would have to wait until the strike
was settled. He asked Layton to hold a position as contractor open for him at
Malden until after the strike was over, and Layton agreed to do so, saying that
if Malone decided on it, he should come to the office and sign up. Smith stopped
work when the strike started on May 9, but never took part in the picketing; he
signed the first installation contract on May 12, 1950, under circumstances which
will be discussed below, started work thereunder about May 28, 1950, and is still
handling installation work at Hayti under the contract. It is evident from the
above facts that when Respondent decided on the contracting plan, it had already
chosen the particular employees with whom it desired to make independent
contracts. This finding is further supported by Layton's admission that, although
he claimed Respondent was much interested in the stability of the persons with
whom it contracted," he made no investigation of the financial ability and re-
sources of Malone, Smith or Steinbeck to ascertain whether they could operate
as^_independent contractors. Layton knew that Smith was a man of modest
means, and did not ask him for any financial statement, because he knew he
could furnish none. There is no proof that he required such statements from the
other two. Malone and Steinbeck, like Smith, had been hourly paid employees
of Respondent, and there is no proof that they were any more affluent than
Smith. Furthermore, Respondent executed the contract with Smith without
first ascertaining whether he would be an acceptable risk to the Fidelity and
Casualty Company, which was the only insurance company willing to insure
u General Counsel's Exhibit No. 13.
,a The record does not show when Layton conferred with Steinbeck about his contract.
s+ The polite but vague offer In the termination notice of May 3 to discuss with the termi-
nated employees "any questions concerning this matter" could not reasonably be construed
as an offer to discuss a contract ; nor was it considered such by the displaced men: as will
appear below, Howell reproached Moore at Hayti on May 13 for not giving the employeev
-a fair chance to bid on the installation work ; as this occurred after Layton's negotiation
of a contract with Malone, Smith, and James, on the 8th, and Smith's execution of the
first contract on the 12th, It Is obvious that the other installation employees were cognizant
of these facts and felt they had been deliberately overlooked.
+a Layton contradicted himself on this point on redirect examination, when he admitted
that during the Investigation of the contracting' plan, Respondent neglected to consider
the ability of a capable workman to operate his own business , which was the major weak-
ness in the independent contract plan.
314 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
contractors in this type of work.'8 That Respondent was motivated in selection
of these men by reasons other than their business ability is also demonstrated
by Layton's admission that, after Respondent's directors gave him authority
to proceed with the contracting plan, his principal, efforts involved,the procure-
ment of bids from only three men, and he "assured" himself "of the support. of
the individuals involved." Since Smith never took part in the strike activities,
of which Respondent- was aware from May 9 onward, and Malone was apparently
willing to operate at once under a contract, were it not for his position in the
Union, it is clear that the "support" Respondent expected from these men involved
a willingness to ally themselves with Respondent in its plan to carry out, the
installation work by independent contracts despite the Union's opposition ; none
of the usual business considerations in dealing with independent contractors
was involved." The above facts impel the belief that Respondent was guided in
dealing with these men, not by its original economic motive, but by a recently
formed intent to operate at least part of its business without the necessity of
consultation or negotiation with a labor organization, in contrast to its practice
and obligation under the recently expired union contract.
The circumstances under which Smith, Malone, Williams, and Steinbeck
signed their contracts are also enlightening. Smith signed his contract on the
evening of May 12, 1950, at the Sikeston office. Before signing, he went over its
terms with Layton ; only one change was made, at Smith's request, in the per-
centage of installation charges Respondent was entitled to retain in order to
guarantee performance by the contractor.98 Smith had never seen a copy of the
contract before, and prior to signing he did not have independent advice of counsel
as to its terms and effect. In entering into the contract, he was clearly accept-
ing without question substantially' all of the terms and conditions stipulated by
Respondent. In the absence of contrary testimony by Layton and the other
contractors on that subject, it is a reasonable inference, and I find on the basis
thereof, that Malone, Williams, and Steinbeck executed the same contract under
similar conditions ; in fact, Williams testified credibly, and I find, that when he
arranged with Layton to undertake work under a contract, Layton already had
the schedule of rates worked out (obviously the price list attached to Smith's
contract) ; there was apparently no bargaining between them on the rates. or
other terms. All of these circumstances indicate an absence of that dealing at
arm's length which usually accompanies the-creation of true independent contract
relationships.
The spurious nature of the contract arrangement is further indicated by the
clear proof that, after the contracts were signed, each contractor was set up in
business with equipment and material supplied by Respondent, upon terms fixed,
and through financing secured, by Respondent. When each man signed his
contract, Layton agreed to sell him a company truck, and the heavy equipment,
material, and supplies necessary to enable him to start operations ; the contractor
contributed only the few hand tools he already owned. Layton fixed the price
of the truck, equipment, and supplies, caused to be prepared a promissory note
to Respondent for that amount, together with a blanket chattel mortgage cover-
49 It is significant that Layton made sure to protect both Respondent and the loan com-
pany which financed Smith's purchase of truck and equipment from Respondent, by having
Smith sign a blanket chattel mortgage which covered not only the property he bought from
Respondent, but also a stock of hand tools he already owned, and any other equipment he
might use in his business.
47 The same conclusion applies to Clifford James : he had -formerly been a service and
installation man at Hayti, but was brought by Respondent into the office there as chief
clerk at the time of the strike, and was thus removed from the bargaining unit; the record
does not disclose why he did not sign or operate under a contract.
48 Paragraph 5 of General Counsel's Exhibit No. 13.
NATIONAL,, GAS COMPANY 315
ing the, truck, tools, equipment, and supplies, and had these papers signed by the
contractor and endorsed by Respondent over to Delta Loan Finance Corporation;
which then paid Respondent the entire purchase price. The finance company
was chosen by Layton ; it was the concern through which Respondent' s instal-
lation sales of gas appliances were financed . None of the contractors put any
money into the business, or made any down payments to Respondent on the
purchase price." In all cases, except that of Steinbeck, the whole transaction
was handled in Respondent's office ; Steinbeck alone visited the finance company
before signing his loan papers, to arrange for the amalgamation of an existing
unpaid personal loan into the total amount of his note and mortgage . The above
facts further indicate that Respondent was the dominant figure in the contracting
arrangements, and that the men selected by Respondent to play the part of osten-
sible independent contractors had little or no voice in making the arrangements,
and were entirely dependent upon Respondent for their start in the installation
business . Moreover, these facts further support the finding above that these
men were not chosen by Respondent for their business stability or financial ability
to do the work, but for other reasons. It should also be noted that the sale and
financial arragements outlined above apparently had been conceived by Respond-
ent sometime before Smith signed his contract on the 12th,60 for Layton told the
union representatives at the Hale meeting that afternoon, as found above, that
if any former employees desired to try contracting, Respondent would see that
they were financed , and they could use company trucks."
The doubt raised by the above facts as to authenticity of the contractual
relations created between Respondent and its former employees requires a
careful scrutiny of the terms of the contracts and the manner in which the
parties operated thereunder.
Certain terms of the contract are indicative of an independent contractor
relationship. The contractor is bound to install appliances at fixed rates on
30 out of 32 types of installation ; an hourly rate is fixed on only 2 general types
of work. The fiat rate also covers necessary service on the appliance during a
]-year warranty period. These rates are fixed, regardless of the amount of
time consumed in either installation or service. The contractor can hire any
employees he desires, and they operate under, his exclusive control. He is also
required to make installation in accordance with rules of the National Board
of Fire, Underwriters, Underwriters Laboratory specifications, and local build-
ing codes and standard trade practices; none of these standards was specially
fixed or controlled by Respondent, but must be followed whether the work is
done by Respondent's employees or independent contractors.
Many other provisions of the contract, both in their terms and in the practical
construction the parties gave them by their operations thereunder, persuasively
indicate that the "contractors" continued to operate in fact as employees, subject
at all times to the substantial control and supervision of Respondent. Thus,
although the contract provides that the contractor shall furnish all tools, special
equipment, pipe, fittings, materials, and transportation necessary to perform
any installation or service job, without requirement that he procure them from
Respondent, in practice each contractor started operations with a truck, equip-
ment, and supplies sold to him by Respondent; and during the contract, he
purchased substantially all his pipe, fittings, and other supplies from Respondent,
procuring them from the same stockroom as when he had been an installation
40 Smith received some cash in addition to the price of his truck , etc., out of his $1,500
loan ; and Williams , at least, paid the insurance premiums on his truck out of his loan.
60 The record does not indicate whether Layton discussed the question of use of company
trucks and equipment with Malone , Smith, and James on the Sth.
51 The bona' lldt's•,of this offer to the Union will be considered below.
316 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
employee. Although the contractor was required to produce public liability
insurance at his own expense,62 Respondent specifically provided in paragraph
8 of the contract that:
In order to safe-guard the Company from any expense made necessary by
any acts of negligence on the part of the Contractor in the performance of
work contemplated under this agreement, the Contractor agrees that the
insurance policies obtained by him shall specifically protect not only the
Contractor but also the Company.
It is significant that, although under paragraph 9 Respondent purported to
give the contractor the right to work for others, who would presumably be
protected against negligence of the contractor by virtue of the independent
contractor relationship, Respondent was not content to rely on, that relationship,
but insisted upon specific protection for itself in the contractor's insurance
coverage. While paragraph 9 purported to give the contractor the right to
contract with others and in effect to refuse to handle work orders for Respond-
ent, in practice the contractors actually worked for no one but Respondent, and
in addition, the contractor received his work orders from the same clerk of
Respondent as when he was an employee, and that clerk usually scheduled the
time and sequence of installations as before.63 In this connection, it should be
noted that, despite the apparent freedom of operation given the contractors
by paragraphs 2, 3, 9, and 10 of the contract, Respondent still retained an effec-
tive control over the contractor's operations through paragraph 12 of the con-
tract which provided that the contract could be canceled by either party on
15 days' written notice; in effect the contract could be terminated at will by
Respondent without liability if it were dissatisfied with the contractor's opera-
tions; in practice, Respondent once threatened to use this clause against
Steinbeck when he failed to make an installation at a time desired by Respond-
ent; on that occasion, Layton angrily told Steinbeck that if he did not do as
Respondent wanted him to, Respondent would get someone else who would 64
"in the case of Williams, Layton arranged to secure his liability insurance : only one
company would issue coverage in this type of work, and then only for persons of responsi-
bility ; when Respondent performed its own installation work, that company wrote the
public liability coverage for Respondent ; when Williams undertook to contract with
Respondent, he had no independent means nor substantial experience in installation-work,
and was obviously not a person of responsibility; nevertheless the insurance carrier wrote
coverage on Williams after Layton had arranged for the local insurance agent to talk
with Williams ; under the circumstances, it is a fair inferemve that the coverage was
written at the instigation of Respondent and on the basis of Respondent's responsibility
and past relations with the carrier.
53 This finding is based on the credited testimony of Williams. I attach no significance
to Malone's testimony that he took time off from work under his contract when he pleased,
without clearing with Respondent ; he did this only once, and it does not appear that this
vacation involved any refusal to perform work for Respondent in order to work for
others. Nor do I credit Layton's vague testimony that the contractors at times worked
for others.
54 This finding is based on the uncontradicted and credible testimony of Earl Brewer.
I discredit the general testimony of Layton that Respondent avoided control over the
time of installations by the contractors : Williams testified credibly that, while he had
the right under the contract to work for others, in practice he worked only for Respondent,
feeling that, in view of the Steinbeck incident, if be refused to perform any work order
issued by Respondent, he would not receive further orders from that source. Since there
is no substantial evidence that the contractors worked for others, or developed other
sources of business, it is apparent that a refusal of Repondent to give a contractor work
orders would have put him out of business . Another indication that Respondent made
the final decision as to whether a contractor would carry out a work order, lies in
Layton's own testimony that when Williams and Steinbeck balked at installation of some
natural gas lines , Respondent did not require them to perform the work on their Drotest8-
tion that they would lose honey thereon under the terni§ of their contracts.
NATIONAL GAS COMPANY 317
There are other factors militating against the existence of a true independent
contractor relationship . First , it is significant that, the contractors performed
for Respondent precisely the same installation and service work which Respond-,
ent previously performed with its own employees as part of its regular
business . Second , it does not appear that any. of the four contractors had ever
before operated independently in this or other lines of work ; the contracts
with Respondent apparently represented their first venture into the field of
private enterprise . Third, while Layton, professed to, be vitally interested in
contracting with men who had the ability to do the work , he made a contract
after the strike ended with Williams , his former mechanic and gas delivery
man, who knew so little about installation work that Layton had to accompany
him at the start to show him how to make proper installations . Fourth, the
contracting operations of three of the four contractors lasted only a short while.
Malone gave it up after 21/2 months , partly because he felt he had more responsi-
bility as a contractor but earned no more money than while working as an instal-
lation employee . Williams stopped contract work after about 2 months because
he could not make enough money as a contractor . Steinbeck ceased operations
about January 20, 1951 , for reasons not disclosed in the record . When each
contractor decided to cease work under his contract , Respondent readily took
back his truck , equipment , and materials , assumed the payments on his loan,
and procured his release from that debt ; each contractor was thus cleared of
any, obligation arising from his contract operations. Furthermore , when Wil-
liams quit, Respondent took him back as an installation man, and also hired as
his helper Cranvell Matison , who had been William's last helper while operating
under contract . In changing from a contractor to an employee status, Williams
suffered no loss of working time . As an employee he continued to receive work
orders from the same clerk who issued them to him as contractor , handled
installations the same way, and continued to use the same truck which he had
operated as contractor . The only substantial change in his method of operation
was the elimination of the billing procedure by which he had been paid under
his contract . When Malone gave up contracting , Respondent offered him a job
and took him back as a serviceman at Sikeston 66
The above facts constitute substantial evidence that the independent con-
tractor relationships set up by Respondent were spurious and at most temporary
expedients devised primarily to operate during the period of the strike and
pending its outcome . This conclusion is also supported by Layton's remarks
to Adolph Duke in September or October 1950, when the latter came in about
a job. When Duke ( who was still a union member ) asked about the contracting
plan , Layton replied that he did not know, that Respondent had not acquired
enough experience to decide whether it was good or bad , that if it was good
it would be retained , and if bad , it would be discontinued, but that he thought
it would soon be "cut out." By that time, Malone and Williams had quit con-
tracting and were back on the payroll. The strike had ended July 10, 1950.
Since Steinbeck quit on January 20, 1951, Respondent has performed all its
installation and service operations at Sikeston and Malden with its own em-
ployees, operating at the time of the hearing with three at Sikeston and two
at Malden."' I am convinced , and find, that at the time of Layton's remarks
to Adolph Duke, Respondent had practically abandoned the contracting plan.
The compensation of these men on their return to the payroll will be discussed below.
6e See General Counsel 's Exhibit No. 14 . It is significant that only J. W. Smith, who
never took part in the strike against Respondent , has appeared able to continue operations
under his contract ; he performs all of the installation and service work originating out of
the Hayti branch.
318 DECISIONS OF ' NATIONAL LABOR RELATIONS BOARD
Tested by the standards set forth in the cases cited above,67 I am convinced
that the factors denoting,an employee status far outweigh those indicating
an independent contractor relationship. In reaching this conclusion, I rely-
principally on these factors: (1) The power of Respondent to terminate the
contracts at will, (2) the work performed under contract was formerly part
of Respondent's regular business, and was carried out by the contractors in
substantially the same manner and under the same conditions as when they
were employees, (3) Respondent supplied the contractor's initial equipment-
and supplies, and most of the material and supplies used during their opera-
tions, (4) the contractors were not previously engaged in independent busi-
ness, but were employees of Respondent, (5) in practice, Respondent con-
trolled the time and sequence of operations by the contractors, (6) in practice,
the contractors worked only for Respondent, (7) the majority of the con-
tractors operated as' such only a short time, and (8) on their cessation-
of contract operations, Respondent took back the equipment it sold them
without loss to the contractors, and reinstated two of them, and the helper
of one, as employees, with one man performing the identical work as under
his contract.
On the basis of all the above facts and circumstances, I conclude and find
that Smith, Malone, Steinbeck, and Williams were in fact "employees" of
Respondent during the periods they purported to operate under the so-called
"independent contracts," and that those "contracts" were but cloaks designed-
to give them the appearance of bona fide contractors while they actually
continued as employees. This deceptive conduct, when considered in the light
of (1) the Union's expressed anxiety on May 2 to eliminate the contracting
plan at any price, (2) the quick decision of Respondent's directors the next
morning to proceed with the plan, (3) the prompt implementation of that
decision by issuance of the termination notices the same day, (4) the hasty
negotiation and preparation of contracts with specially selected employees,
and execution of the first contract immediately after the inconclusive meet-
ing with the Federal conciliator, all during the first week of the strike, and
(5) Respondent's failure after May 2, 1950, to discuss with the Union or the
terminated employees its previously announced plans to reemploy them at
other work, raises a strong suspicion bordering upon certainty that, while
Respondent originally conceived a bona fide independent contracting plan
for economic reasons, it put into effect on and after May 3, 1950, an ostensible
but spurious arrangement with selected and trusted employees, of whose "sup-
port" it was assured, in order to remove a large group of employees from
the bargaining unit and a substantial portion of its business from the sphere
of collective bargaining with the Union, as an initial step in a campaign to
discredit and undermine the Union.
Any doubts about the nature and purpose of Respondent's course of conduct
are dispelled by its attitude after May 2, 1950, on the subject of other employ-
ment of the employees who would be displaced by the discontinuance of the
installation department. In contrast to his offers of May 2 on this -subject.
which the Union did not directly reject in stating its opposition to the whole
contracting plan, Layton did not mention the subject in his May 3 letter to the
Union, nor in his telephone conversation with Wynn on May 4, nor his discussions
with the latter on May 8 and 9, the eve of the strike. While his remarks at the
meeting of May 12, as found above, particularly his favorable reception of the
Federal conciliator's compromise proposal, appear to be consistent with Respond-
ent's professed desire to provide for the displaced installation men, his state-
67 See footnote 41 above.
NATIONAL GAS COMPANY 319
ments must be appraised in the light of the significant facts that he had already
reached substantial agreement' on the 8th with Malone, Smith,. and James on
basic terms of a contract, and had advised them• on the 10th that itheir rates were
acceptable and Respondent was ready, to sign°c6ntracts,with them. , Layton had
told, Wynn on May 2 that Respondent would use two or three contractors for the
installation work ; and the first three contracts were made with Malone, Smith,
and Steinbeck, whom Respondent-had long had in mind for that purpose. Thus,
when Layton told the conferees on the 12th that he would consider using one con-
tractor for a year, and would rehire the remaining installation men, and also
assured Wynn that Respondent would finance any men interested in undertaking
contract work, Respondent had aready filled its need for contractors. Layton
kept silent about this fact, as well as his earlier negotiations with Malone, Smith,
and James. These circumstances lead me to believe that Layton's remarks to
Hale and Wynn were made in order to maintain a consistent outward appearance.
of bona fide bargaining and a desire to compromise with the Union and work
out a solution which would take care of all displaced employees, while at the
same time concealing from the Union the fact that the contract arrangements
were practically completed. Layton's secretiveness on this vital subject, which
he had previously been willing to discuss with the Union, is a clear indication of
bad faith bargaining on that date. As I have found above, while Respondent
was not required to negotiate with the Union regarding the shutdown of part of
its plant for bona fide economic reasons, and the discharge of employees incidental
thereto, it was not thereby relieved of its duty to bargain about other employment
or provision for the displaced employees. I have concluded that it fulfilled that
duty at the May 2 bargaining session, when the Union rejected its contract
proposals, thus creating an impasse. However, the existence of the impasse
did not destroy the authority of the Union as the statutory representative of
the employees to act within the sphere of its representation, nor the right of
the employees to seek by collective action (either further negotiation or a strike)
to persuade the employer to accede to their demands ; consequently, the impasse
did not relieve Respondent, from its continuing duty to bargain with the Union on
reemployment of displaced workers, and to take no action which the employees
might interpret as a "disparagement of the collective bargaining process," or
which might amount to a withdrawal of recognition of the Union's representative
status or to an undermining of its authority.68 Furthermore, the impasse was
broken by the strike of May 9, 1950, and thereafter the fulfillment of the em-
ployer's duty to bargain in good faith became doubly important"' Considering
the facts that Layton did not mention the subject of reemployment of the installa-
tion employees in his May 3 letter to the Union announcing their forthcoming
discharge, nor in his discussions with Wynn on May 4, 8, and 9, I am convinced
that Respondent's silence on the, subject from May 3 onward, which was clearly
deliberate, and particularly Layton's "surface" bargaining thereon at the May
12 meeting, was indicative of bad faith bargaining, and evidenced a design and
intent to stall the Union and avoid any conclusive bargaining with it regarding
these employees, while Respondent proceeded furtively with its spurious con-
tracting arrangement in furtherance of its plan to free itself of legitimate union
concern with a part of its business and its relations with the employees engaged
therein . I therefore conclude and find that, Respondent has failed and refused
to bargain in good faith with the Union since May 3, 1950, and has thereby violated
Section 8 (a) (5) and (1) of the Act.
68 Central Metallic Casket Company , 91 NLRB 572.
69 Jeffrey-De Witt Insulator Company v . N. L. R. B ., 91 F. 2d 134 (C. A. 4), cert. den.,
802 U. S. 731.
320 DECISIONS OF NATIONAL -LABOR RELATIONS BOARD
Respondent's sudden and illegal refusal to bargain with the Union after May 2,
1950, on the vital subject of reemployment of the installation employees, con-
sidered in conjunction with its hasty and secretive institution of the false con'
tracting plan, as found above, further convinces me that Respondent engaged
on and after May 3, 1950, in a discriminatory scheme to remove a large number
of employees, including three officers of the Union, from the bargaining unit,
thus avoiding the necessity of bargaining with the Union regarding those em-
ployees and the operations in which they were engaged, with the purpose of
discrediting and undermining the Union. Inasmuch as the discharge of the eight
installation employees, and the subsequent creation of the false contractual
relationships with three of them and Williams, was part of the discriminatory
scheme , it follows that the discharges themselves were discriminatory. I there-
fore conclude and find that, by its discharge on May 8, 1950, of Noble C Malone,
James Davis, J. W. Smith, Adolph Duke, Martin Ebert Duke, John Steinbeck,
Leon Ellsworth, and Orville Howell, Respondent discriminated against said
employees in regard to their tenure of employment in order to discourage mem-
bership in the Union, and thereby violated Section 8 (a) (3) of the Act. In
addition, such discharges interfered with, restrained, and coerced employees in
the exercise of rights guaranteed by Section 7 of the Act, in violation of Section
8 (a) (1) of the Act.
The above conclusions are bolstered by other evidence which indicates that;
even before the strike, Respondent was evincing definite hostility toward the
Union and trying to discredit it in the eyes of the employees.
About a week before the strike began, when Moore, president of Respondent,
asked Williams and Mattison if they thought the men would strike, as found
above, he also asked them why they did not stop paying their money into the
international union and form an independent union of their own. Williams re-
plied that he did not think much of that idea because the employees could pay
dues to the international union which could handle some matters for them which
the men themselves could not handle BO Moore's statement to these men, though
in the form of a question, was in effect a suggestion that they abandon their
present bargaining representative, and form a labor organization of their own.
As such, the suggestion was a form of coercion calculated to discourage continued
affiliation with the Union, and to interfere with employees in their choice of
representatives. I conclude and find that Respondent thereby violated Section
8 (a) (1) of the Act.
On a later occasion, still before the strike, Williams overheard Moore tell
Mattison one night in Moore's office, that Moore knew the men neeeded more
money, and he would like to give it to them, but he could not do so "because you
belong to a damned union" 81 This remark clearly implied that the employees
would fare better financially without a union, was calculated to discourage
union membership, and therefore violated Section 8 (a) (1) of the Act6,
The credible testimony of Wynn, Howell, Malone, and Chester Bennett indi-
cates, and I find on the basis thereof, that the employees struck on May 9, 1950,
because of Respondent's discharge of the installation employees in furtherance of
GO This finding is based on the credible testimony of Williams . Mattison, presently
employed by Respondent , was not called to testify. I do not credit Moore's categorical
denial of the incident. .
61 This finding is based on the credited testimony of Williams, corroborated in part by
that of Moore.
621 have not considered these remarks as evidential on the issue of the bona fides of
Respondent's bargaining on May 2, 1950, as the record does not clearly indicate that
Moore made them Before the meeting of that date with the Union.
NATIONAL GAS COMPANY 321
tits contracting plan . As I have found those discharges were discriminatory, it is
clear that the strike was caused by Respondent 's unfair, labor practices."
C. Interference, restraint, and coercion during and after the strike
On May 9, 1950, the day the strike started, Respondent mailed to all striking
,employees, except the installation men, a letter requesting their return to work,
as follows : 04
MAY 9, 1950.
(Name of employee)
DEAR SIR : In order to continue the operation of National Gas Company,
it is imperative that you return to work not later than 8: 30 a. in. Thursday,
May 11th, 1950.
Your failure to return will be indicative of the fact that you no longer
wish to be employed by the National Gas Company and consequently you will
be permanently replaced.
In the event of your failure to return to work as directed above, this letter
will serve as your discharge notice and any money due you can be obtained
by calling at the office.
Very truly yours,
NATIONAL GAS COMPANY,
/s/ Kenneth C. Layton,
KENNETH C. LAYTON,
Vice President.
As found above, the employees struck in protest against Respondent's discrimi-
natory discharge of the installation employees. This was a legitimate concerted
activity involving a "labor dispute" within the meaning of Section 2 (9) of the
'Act, and the strikers became unfair labor practice strikers. While engaged in
42 While certain testimony of Wynn, Chester Bennett, Howell , and Layton , relied on
by Respondent , tends to indicate that the strike was called because the Union could not
persuade Respondent to abandon its contract plan and work out a satisfactory agreement
regarding continuance of the installation department , this testimony must be considered
in connection with the findings above that Wynn told Layton on April 14 and May 2,
1950 , that the Union would not accept any plan involving a change of Respondent's
operations which would result in loss of employment by eight members of the Union.
Since the discontinuance of the installation department and contracting out of the work
thereof would result directly in the loss of jobs, it was natural for Wynn to focus his
attack on the underlying contract plan, in an attempt to persuade Respondent to abandon
it, for this would achieve the Union's prime objective , the retention of the Installation
men in their jobs. That the Union was not particularly interested In the shutdown of
operations, purely as an economic problem, is indicated by the facts that (1) the union
leaders did not marshall or present any real arguments against the plan on May 2, but
only at the conference of May 12, after the discharges had occurred and the strike was
underway, and (2) when the negotiations of May 2 reached an impasse over the institu-
tion of the contract plan , the Union did not then threaten an immediate strike, or take a
strike vote , which is explained by the circumstances that, at the close of that meeting,
both parties left the door open for further discussion , that the Union had not specifically
rejected Respondent 's tentative proposals for other employment of the displaced men
in maintenance jobs, and that Respondent gave no Indication as to when the installation
'men would be terminated ; the Union was thus led to believe that it had time for further
consideration of the proposals , and that the jobs of the installation men were in no
Immediate danger. However, as soon as Respondent terminated these men effective May
8, 1950 , the Union acted by calling a strike vote of the members that night , and initiated
the strike the next morning, immediately after the men had been discharged. I am
satisfied from a consideration of all pertinent evidence on this point , and I find, that the
actual discharges were the proximate cause of the strike.
64 General Counsel's Exhibit No. 12.
322 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
that concerted activity, they remained "employees" within the meaning of.Section
2 (3) of the Act and were not vulnerable to discharge by permanent replacement
because of their concerted activity. Therefore, when Respondent, by its letters
of May 9, 1950, requested their return to work by May 11, 1950, under penalty of
discharge and permanent replacement, it was penalizing them for their legiti-
mate concerted activity, in derogation of their statutory rights to engage in'that
activity. I find that, by the issuance of such letters, Respondent further violated
Section 8 (a) (1) and (3) of the Act.85
On Saturday, May 13, 1950, while all the Hayti employees m (except Smith)
were picketing the Hayti plant, Moore, president of Respondent, drove up to
the plant in the gas delivery truck formerly driven by McVey, one of the picketers,
and had a conversation with the group. In response to some remark about
Moore's driving the truck, Moore told them Respondent was going to operate
the trucks whether the men liked it or not. He also told them "don't be, kidding
yourself about this strike," and "the other time that we had a strike, we did
not know what we were getting into, this time we went into it with our eyes wide
open ; we contacted some of the best labor lawyers in the United States, and
they tell us we can contract this work out and the Union can't do anything about
it." He further said "Personally, I don't believe in the Union ; so far as they
are concerned, they are not going to run my business." He then said that if
the men wanted to come back to work, and work "straight time," without a
contract, he would be glad to sign an "agreement" with them, and if they wanted
to make "big checks," they could work day and night, and put in long hours,
but Respondent would not pay them time and a half for overtime 87 Orville
Howell complained to Moore that the employees at Hayti had not received a
fair chance tt bid on the contracting work, as no one from the Company had
talked to them about it since they got the first notice from the Company.°
Moore replied that if the men were interested in that, he would talk to Layton
and send him down to Hayti to see what could be worked out.
Moore's offer to make individual arrangements with the employees if they
returned to work, at rates of pay less favorable than those included in their
last bargaining contract, were in effect solicitations of individual employees
to abandon the strike, as well as attempts at individual bargaining with employees
in the appropriate unit, all in derogation of Respondent's duty to deal with
their statutory representative, and constituted a refusal to bargain in violation
of Section 8 (a) (5) of the Act, and an interference with employees in viola-
tion of Section 8 (a) (1) of the Act70 Moore's statements to the strikers that
he did not "believe in the Union, and that it was "not going to run my business"
clearly indicated Respondent's hostility to the Union, and its desire to operate
its business without further dealings with that organization. When coupled
with Moore's illegal individual bargaining offers to the employees, these remarks
65 Rockwood Stove Works, 63 NLRB 1297; Kallaher cf Mee, Inc., 87 NLRB 410; Happ
Brothers Company, Inc., 90 NLRB 1513.
e° Orville Howell, Wallace White, Henry F . White, Robert McVey, Gene Campbell, and
James Davis. Henry F. White is the correct name of the "Fred White" named in the
amended complaint.
67 Under the expired 1949 contract, the employees had received time and a half overtime
pay after 40 hours.
68 Apparently referring to the April 5 letter, General Counsel's Exhibit No. 9.
00 These findings are based on the preponderant, credible , and mutually corroborative
testimony of Howell, McVey, Wallace, and Henry F. White. Moore admitted Howell's
testimony about the bids on the contracting work, merely placing that portion of the dis-
cussion on May 16. I do not credit his categorical denials of the remainder of the discus-
sion.
70 See footnote 58 above , and The Cincinnati Steel Castings Company, 86 NLRB 592,
595,596.
NATIONAL GAS COMPANY 323
were calculated to dissuade the employees from bargaining through their chosen
representative, and further interfered with their right of free choice of such
representative, in violation of Section 8 (a) (1) of the Act",
On the afternoon of Tuesday, May 16, 1950, while the same six employees were
congregated in front of the plant at Hayti, Layton and Moore called them into
the' garage for a discussion. Layton did most of the talking. In response to
a query from one of the men, Layton said "I think I can tell you how you boys
can go back to work," " and then explained that he thought he could put them
all back to work under the old contract terms, with all seniority rights, if they
would break up the picket line, but that he would have to check with his lawyer
to make sure, and would return to let them know the next day. He also said
that the employees at Sikeston were getting tired of picketing, and if those at
Hayti would stop picketing and return to work, the picket lines at Sikeston and
Malden would also break up. Layton further said that he did not believe in
a union, that they might be alright up North in a factory where the men could
be watched, but were not "worth a damn" down South. He suggested, however,
that if the men wanted a union, they should get one of their own and forget
about the one they were in, and that Respondent would sign an agreement with
the men once a year. He further said that he would close the place down and
"see it rot" before he would sign another union-shop contract. Moore told the
strikers that there was no use "kidding themselves," that the Union would starve
them to death, and that he had been out with union business agents in St. Louis,
who did not ride in Buick automobiles (as he did), but drove around in
Cadillac convertible automobiles, and were spending union members' money
up there.
Moore and Layton returned to Hayti on May 17, 1950, and had anothed meeting
about 11 a. m. in the garage with the employees. One of the strikers, Gene
Campbell, said that the Hayti men were ready to go back to work, because they
were dissatisfied with the progress of the strike at Sikeston, where the strikers
had not been able to shut down operations, that the men at Hayti were broke,
and had debts to pay, but they received no funds from the Union as promised,
and they felt they had been "let down" by the Union at Sikeston, they had no
officers" or representation in the Union and were not going to support it any
longer." Layton and Moore said the men might as well go back to work, as the
Union was not getting them anywhere but in trouble, and would starve them.
Layton said that, so far as he was concerned, the men could have been working
right along, and need never have quit, and that they could punch a time clock
in the next 30 minutes and go back to work. However, he warned them that if
they went back to work and stopped picketing, they would have trouble with
the Sikeston employees, who would set up a picket line, which they would have
to cross going to work, and they would be called "scabs." Moore then said that
"Moore's offer to have Layton talk with the men about submission of bids on the in-
stallation work is further evidence of Respondent's bad faith in dealing with the Union,
similar to Layton's deceptive remarks to the union representatives the day before. I find
no violation of the Act in Moore's equivocal remarks to the men "don't be kidding yourself
about this strike," and "this time we went into it with our eyes open" ; he explained this
by reference to the legal advice Respondent had received regarding its right to contract
part of the work without consultation with the Union.
'r' Moore had apparently had a previous talk with the strikers, at which some of them
asked if he could figure out a way for them to go back to work. Moore promised to have
Layton come down and talk to them about it.
48 Layton says Howell acted as the spokesman for the strikers ; and since, the other
strikers did not make the same statements, but merely indicated they desired to,return
to work, it is apparent that Campbell was speaking mainly for himself . As will appear
below, Campbell dropped out of the picketing activity and remained at work with Respond-
ent after May 19, 1950.
324 DECISIONS OF' NATIONAL LABOR RELATIONS BOARD
'if the Hayti men had any trouble with the employees from Sikeston , and if any-
thing happened to the Hayti 'men, "they will be paid for," and "your fines will
also be paid." 44 Wallace White indicated his fear that the Union might evict
them from membership if they went back to work, and he raised the-question of
forming their own union in that event. The strikers disagreed on this subject,
and discussed it in front of Layton, Moore, and Ward : Henry F. White, McVey,
and Campbell indicated they favored leaving the Union; Wallace White was
doubtful, saying the men needed a union at Hayti for their protection; Howell
said there were not enough employees at Hayti to form a labor organization,
and Campbell then suggested creation of a fund of their own for social and
benefit purposes. Henry F. White asked Layton if they could have their own
organization at Hayti, and Layton replied that he had talked to his lawyer on
the subject, and discovered it would cost the men a lot of money to form their
own union, and then suggested that "the best thing we can do about this union
is just get an agreement between ourselves," which would be signed yearly, and
not have a union "between you and the company," but that this would have to
wait until the dispute with the Union was over. Layton also suggested that the
men form their own benefit fund, in which they could deposit their money for
their own use instead of paying it into the Union. With regard to formation of
their own union, Layton suggested that the men should see a lawyer skilled in
labor matters ; when the men asked if they could talk to his attorney, he hesitated,
saying he would get the name of a laywer for them 7 Layton then said he
' would put the men back at their old jobs, with the same pay and seniority as
before, except for Howell and Davis, (the terminated installation men), to
whom he offered jobs as maintenance men with the same pay and seniority
as they enjoyed in their previous jobs. Howell asked Layton how the in-
stallation work would be handled, and Layton replied that Respondent would
contract out that work as planned, and that J. W. Smith would be the con-
tractor at Hayti. The meeting ended about noon, and the strikers went to
lunch. About 1 p. in., McVey, Campbell, and the two Whites returned to work
in accordance with Layton's offer, but neither Howell nor Davis returned.76
The men who returned remained at work through Friday, May 19, 1950; that
afternoon Howell and Davis, who had resumed picketing after the May 17 con-
ference, and some of the strikers from Sikeston spoke to the Whites and McVey,
and induced them to resume picketing. Campbell stayed at work as a salesman,
filling a vacancy which had occurred during the strike . That afternoon or
Saturday morning, Moore called Wallace White and McVey into the garage,
74 While Moore said he did not know the meaning of the phrase "they will be paid for,"
his testimony indicates that it referred to a warning which a local deputy sheriff had
previously given the Hayti strikers ( whether at the request of the Respondent does not
appear ), advising them of their right to picket peacefully , but warning them to refrain
from stopping company trucks, accosting customers , and the like. It is obvious that
Moore's whole remark was intended to reassure the Hayti strikers that they would be
protected by the Company against activities of other striking employees if they went
back to work , and had trouble with the remaining strikers.
as On advice of counsel , he never kept this promise.
46 The findings as to the events of May 16 and 17 are based on a composite of the
credible testimony of Howell , McVey, Wallace and Henry F. White, which is corroborated
in part by that of Layton , Moore, and Ward. Although the witnesses for General Counsel
placed these events on May 15 and 16, respectively , I credit the testimony of Respondent's
witnesses on the exact dates, because the two Whites testified credibly that the four
strikers who returned stayed at work 2% days , and that Howell and other union men
persuaded them late Friday afternoon • or that evening to resume picketing . This would
indicate that the group returned to work Wednesday , the 17th , which is consistent with
the facts that Layton ' s offer was made about noon that day and that the men punched
their time clocks about 1 p. m. To the extent that categorical denials and other testimony
by Layton , Moore, and Ward conflict with these findings, such testimony is not credited.
NATIONAL GAS COMPANY 325
and asked why they resumed picketing. White said that he had been on "both
sides of the fence, and I got on one side and I was going to stay there regardless
of what happened." Moore told them they were "good men," and he hated to
see them leave, but said that if they did not return to work, he was going to
replace them permanently, that he was going to run the business as he pleased,
and the Union was not going to do anything about it, and that "if you boys go
back, to hell with the rest of them." "
Layton's offer on May 16 and 17 to return the strikers to work under the
terse of their old contract, and to rehire Howell and Davis, who had been
discriminatorily discharged, at other work, all conditioned on abstention from
union activity, constituted further attempts at illegal individual bargaining
with, and coercion of, employees, in violation of both Section 8 (a) (1) and (5)
of the Act." I further find that the following remarks of Layton on the 16th
were each independent violations of Section 8 (a) (1) : (a) The suggestion
that if the employees at Hayti ceased picketing and returned to work, the
picket lines at Sikeston and Malden would also break up; (b) the statement
that Layton did not believe in a union, that they were "not worth a damn" in
the South;" (c) the suggestion that the men form their own labor organi-
zation and forget the present Union, and that Respondent would sign an
agreement with the men once a year; (d) the statement that he would close
the place down and "see it rot" before he would sign another union-shop
contract. In addition, Moore's statement that the Union would starve the men
to death, and that union agents used their members' money to purchase ex-
pensive automobiles, was a disparagement of the Union, in violation of Sec-
tion 8 (a) (1) of the Act. I further find that the following remarks of Layton
and Moore on the 17th constitute independent violations of Section 8 (a) (1)
of the Act: (a) Moore's assurance to the Hayti employees to the effect that
if they returned to work and had trouble with the Sikeston strikers and if
anything happened to the Hayti men, Respondent would see that they were
protected, and their fines would be paid; (b) Layton's suggestion that the
employees form their own benefit fund instead of paying money to the Union,
that they dispense with a union "between you and the company," and his
offer to get them a lawyer to aid them in forming their own union; and (c)
Layton's offer to sign a yearly agreement with the employees instead of the
Union. In addition, Moore's remarks to White and McVey on May 19 or 20
'(a) that he would run the business as he pleased and the Union was not
going to,do anything about it, and that "if you go back, to hell with the rest
of them," and (b) his threat that they would be replaced permanently (thus
losing their Jobs) if they did not return to work (and thus cease their con-
certed activity), were likewise coercive and in violation of Section 8 (a) (1)
of the Act.
These coercive remarks of Layton and Moore to the Hayti strikers, at the
moment when they appeared to be wavering in their loyalty to the Union, had
a telling effect, for they undermined that loyalty to such an extent that four
of them returned to work. That Layton felt certain his tactics had created
a definite rift among the members of the Union is indicated by his remarks to
Union Representative Appelbaum on May 18, the day before the Sikeston
strikers persuaded the Hayti men to resume picketing. On or about May 13,
1950, Layton had sent Wynn a telegram at St. Louis, which stated in substance
"These findings are based on the credited testimony of Wallace and Henry F. White,
corroborated in part by that of Moore.
18 See footnote 70 above, and Palmer Manufacturing Corporation, 94 NLRB 1477.
Tf In its context, this remark appears to be more than mere opinion protected by Section
8 (c) of the Act.
215233-53-22
326 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
that "your proposal" was not acceptable to Respondent, but it would be will-
ing to discuss some modifications8° Appelbaum called Layton on the tele-
phone to ask what he meant by "modifications." Layton said he would discuss
that when he came to St. Louis in the near future. On the morning of the
18th, Layton wired the Union that he would be in St. Louis that day ; on ar-
rival he called Appelbaum and met him at a hotel (Wynn being out of town).
At this talk, Layton bluntly told Appelbaum in substance that "things have
changed," that Respondent was "through" with the Union and would no longer
discuss matters with it, and that Layton did not think the Union any longer
represented a majority of the employees. Appelbaum replied that the Union
was still willing to try to solve the existing problem, but if that was the posi-
tion of Respondent, the Union would continue its legitimate efforts to settle
the matter in a manner satisfactory to the Union, and also the Company. This
was the last discussion between Respondent and the union representatives
regarding the pending dispute. It is clear, from the sequence of events, that
Layton's change of attitude toward the Union, and his new doubt of its major-
ity status, was caused by Respondent's coercive and illegal tactics of May 13,
16, and 17, related above. Even in the absence of such coercive conduct, Re-
spondent's sudden questioning of the majority status of the Union with which
it had negotiated three successive contracts after its certification, in itself
would render its good faith suspect. I am convinced that Respondent's doubt
was not bona fide, but rather indicated a rejection by Respondent of the col-
lective bargaining principle in furtherance of its plan to discredit, weaken,
and finally get rid of the Union. I conclude and find that by Layton's remarks
to Appelbaum on May 18, 1950, Respondent further refused to bargain with
the Union, in violation of Section 8 (a) (5) and (1) of the Act.
On May 18, 1950, while Elmer Bennett was on the picket line at Sikeston,
he spoke to a customer of Respondent entering the company office. Shortly
after, Moore approached Bennett outside the office, told him not to talk to any-
one who came into the office, and advised him to go home because he did not
have a job there any longer. It'is not clear from the record whether Respond-
ent started hiring replacements for the strikers on or before this date, nor
whether Bennett's job had been filled' However, regardless of that, Moore's
remark was coercive in that it clearly implied Bennett no longer had his job
because of his participation in the strike ; and since the strike was caused by
Respondent's unfair labor practices, Bennett and all the other strikers were
still "employees" within the meaning of Section 2 (3) of the Act, and as such
immune from discharge for their concerted activity.' I find that by Moore's
remark to Bennett, Respondent further violated Section 8 (a) (1) of the Act.
On a date about 2 weeks after the strike started, while Earl Brewer was picket-
ing at Sikeston with Clark Mattison, Layton drove up in a gas delivery truck,
stopped and asked the two men "Why don't you boys come on back in and go to
work?" Brewer answered "Kenneth, I just can't go in like that." Layton then
said "I'll guarantee you there will be no trouble" and that "there won't be any-
thing happen." He also said "about 2 or 3 guys are leading this" and "I will
80 This is Appelbaum's uncontradicted version of the wording of the telegram. The record
does not indicate the specific union proposal to which Layton referred ; the original tele-
gram was not produced. Wynn could only recall that the wire mentioned further discussion
of the contracting plan. Since it was sent the day after the Hale meeting, it is a reason-
able Inference that Layton had reference to the compromise proposal made by Hale.
B1 Layton testified only that Bennett's job as meter reader was filled at some unspecified
date during the strike by B. W. Gunn.
s, See cases in footnote 65 above. The above findings are based on the credited testimony
of Elmer Bennett, which is corroborated by that of Moore.
NATIONAL GAS COMPANY 327
break it up." ' Layton's remarks were a solicitation to individual employees to
return to work and thus violated Section 8 (a) (5) and (1) of the Act; his
assurance that Respondent would protect them against the Union if they returned,
and his threat to "break up" the strike, were calculated to discourage concerted
.activity and adherence to the Union, and also violated Section 8 (a) (1) of the
Act.
On an occasion about the first of June 1950, while Brewer was picketing at the
Hayti plant, Moore approached Brewer and asked "Did you see about a job in
the gas company this morning at Sikeston? We are hiring new men there now,
putting them on every day." Brewer replied he did not know about it, and asked
who was being hired. Moore said he did not know, but reiterated "we are putting
them on every day." Brewer then said "I don't know how long this thing is going
to drag along," to which Moore replied "Well, I can tell you, you will be walking
out there in 1952." Moore's first remarks amount to an individual solicitation of
,Brewer to come back to work in violation of Section 8 (a) (5) and (1) of the
Act. His final remark prophesying the length of the strike clearly implied Re-
spondent's determination not to take back any men as long as they engaged in
the concerted activity fostered by the Union. As such, the remarks were clearly
coercive and violated Section 8 (a) (1) of the Act $'
After the strike ended on July 10, 1950, Respondent continued to express to
the employees its determination not to recognize or deal with the Union, nor to
have any labor organization in its plants, and coerced its employees in other
ways.
As the employees returned to work at Sikeston after the strike, Layton inter-
viewed them in the office. He told each man in substance that he had had
enough of the trouble with the Union, that from then on he was going to be
"the boss" and wanted it clearly understood that he would run the business.
When each employee asked if there would still' be a union in the plant, Layton
replied that Respondent felt the men did not need a union,' as the Company
was too small for it ; that a union would serve no practical purpose there, as the
men were free to come and talk to him as their boss whenever they wanted to.
He also told them that he would never sign another union contract. Several of
the men asked if new employees would have to belong to the Union," and Layton
replied he did not know, reminding them there was no union contract then in
effect, and he did not know whether the Union still represented a majority of
the workers, but he presumed that if the new employees objected to a union,
there might be an election, but he rather doubted it. He also told the men that
if there was an election , he did not want any employees "teaming up against me,"
that if they did, he would not like it, and would know which side they were
'm These findings are based on the credited testimony of Brewer . Layton's categorical
denial is not credited. Mattison did not testify.
' These findings are based on the credited testimony of Brewer, corroborated in large
part by that of Moore. General Counsel's Exhibit No. 14 indicates that the first new
permanent employee, Satterfield, was hired at Sikeston on June 1, 1950.
I make no finding of violation of the Act on the basis of Moore's remarks to Brewer on
the picket line at Sikeston sometime after June 1, 1950, in which Moore gave his opinion
as to the past earnings of the men with Respondent and the futility of the strike from a
monetary standpoint, as these remarks appear to be mere expressions of opinion protected
by Section 8 (c) of the Act. In view of the findings of numerous other violations of Section
8 (a) (1), I make no finding on the basis of Moore's equivocal remark to Brewer that he
had "got enough of the damned thing, I just broke it up."
as In making these remarks to Williams , he mentioned the filing of the charges herein
against the Company, alleging, in part, that it was trying to "knock out" (Layton's
words) the Union, and commented, "Now they are right, this company don't consider it
needs an organization."
I" They apparently referred to the 1949 union-shop contract.
328 DECISIONS OF ,NATIONAL LABOR RELATIONS BOARD
,on, and they would know how he felt about it. He also said that a lot of the
strikers had been "so dirty," that he would sit up to midnight for 6 months, if
necessary, to see that they did not get jobs in southeast Missouri." Layton's
remarks that he was going to be "boss" and would run the business, that a union
was not needed in the plant, that the employees could talk to him directly, and
that he would never sign another union contract, further demonstrated Respond-
ent's determination not to recognize the Union, to operate henceforth without any
labor organization, and to deal only with employees individually, and constituted
a clear refusal to bargain collectively, and an attempt to persuade employees
to substitute individual for collective bargaining and to abandon the Union, all
in violation of Section 8 (a) (5) and (1) of the Act. His expresed doubt about
the Union's majority status was not bona fide, but clearly induced by Respond-
ent's prior coercive tactics against the Union and its members, and was like-
wise coercive. His admonition to the employees not to "team up against me"
in any future election under pain of his displeasure constituted, in the context,
illegal warnings to vote against union affiliation and a thinly veiled threat of
dire consequences if they voted for it. The same is true of his threats, in
effect, to blacklist the strikers in retaliation for their union activity. I con-
clude and find that Respondent, by each of the above remarks, further violated
Section 8 (a) (1) of the Act.
Layton admitted that when Adolph Duke interviewed him about a job in
September or October 1950, he told Duke he would like him to come back
to work, but reminded him that Respondent had taken on new employees and
was just getting over the effects of a very crippling strike ; that "we have had
meetings and private discussions with several of the men here, and the feeling
is good" ; that "we are in harmony, and it has been agreed among us that we can
have only a single purpose, and that is to the advancement of the company,
that there can be no middle ground, that everyone has to work to the company's
best interests," and he told Duke "I'd want you to have made the choice before
you came to work for us, that you were either for us or against us." Duke
-testified credibly that Layton told him that from now on, anybody who worked
for him had to be against him or for him ; that Layton was strictly antiunion,
and those who were not "for him" would not work. It is clear from these
remarks that Layton plainly gave Duke (whether he be considered an "employee"
or applicant for work) the choice of becoming completely subservient to Re-
.spondent's desires and interests, to the exclusion of all union and other concerted
activity, as a condition of reemployment, or adhering to the Union and fore-
going reemployment. I conclude and find that by these remarks Respondent
violated Section 8 (a) (1) of the Act. They also clarify further the dis-
criminatory nature of the campaign upon which Respondent embarked on May
3, 1950, and demonstrate its clear hostility to the Union and its rejection of the
collective bargaining principle.
87 These findings are based on the credible and mutually corroborative testimony of
Williams, Brewer, and Bush, as corroborated in large part by admissions of Layton. Wil-
liam Sutton , plant manager at Sikeston , was present at several of the discussions with the
men, but was not called by Respondent to testify.
I have not credited Layton's categorical denials of many of the statements attributed
to him by the above witnesses , because Layton impressed me as a ready and fluent talker,
inclined to be voluble , verbose and at times argumentative in his testimony ; from his de-
meanor on the stand and manner of testifying , I cannot conceive of him being as taciturn
at the meetings with the employees on and after May 16, as his denials would indicate. I
have therefore credited so much of his testimony on the events of those days as appears
consistent with testimony of other witnesses whose testimony has been credited.
NATIONAL GAS 'COMPANY ' 329'
D. Individual bargadning with employees
Aside from the instances, of individual dealing with employees in violation of
the Act, as found above, Respondent further violated Section 8 (a) (1) and (5)
-of the Act by the following individual bargaining with rehired employees and
.unilateral changes in terms of their employment which had been the subject of
the-pending bargaining negotiations:'
(a) Ralph, Williams was employed before the strike as night mechanic, or
maintenance man, at Sikeston, at a rate of 95 cents an hour, with time and a
half overtime pay after 40 hours. Layton took him back on July 12, 1950, after
the strike, at the same work but at a monthly wage of $180, working 45 hours
a week without overtime pay ; lie was paid twice a month, in contrast to weekly
payments every Friday under the union contract. Up to the time of the hearing,
he had received no vacation pay ; under the contract, he would have been entitled
to a week's vacation with pay, having completed 1 year of service. Under his
new pay arrangement, he received about $500 a year less than under the union
,contract.
(b) Wayne Bush was employed before the strike as a gas delivery truck
driver at Sikeston, with the same pay rate and terms as Williams. After Layton
rehired him at the same job on July 15, 1950, he worked a 45-hour week (in-
-eluding half a clay Saturday) without overtime pay, and was paid $190 a month,
in bimonthly installments. At the time of rehiring, Layton also mentioned
the possibility of additional compensation from a profit-sharing plan, but he has
received nothing from that source.
(c) Earl Brewer worked before the strike as a shop maintenance man and
mechanic at Sikeston, at 95 cents an hour with overtime after 40 hours, wages
payable weekly. After the strike he was rehired at the same job, but worked
a 45-hour week with no overtime, receiving $192.50 a month, payable in bi-
monthly installments ; at this rate of compensation, he receives between $600 and
$700 less per year than under the union contract.
(d) When Noble C. Malone gave up contracting and returned as an employee,
as found above, he was taken back as a serviceman at Sikeston, at $220 a month
payable $110 twice a month ; he also received several small "bonus" checks, in
the nature of a profit-sharing arrangement. Prior to the strike, he had received
$55 per week as installation and service man ; he said that under the new arrange-
ment,-his total yearly pay, including bonuses, totaled less than he received under
the union contract
(e) Martin E Duke-Prior to the strike, he had performed installation work
at Sikeston at the contract rate of 95 cents an hour, with overtime after 40 hours ;
he was paid weekly. After the strike, he was reemployed as a plant maintenance
man at $190 a month, payable in bimonthly installments ; he was raised to
$197.50 a month late in 1950 and to $200 a month at the beginning of 1951. At
the start of his reemployment, he was given small bonus checks for several
months, but had received none in the last 2 months before the hearing. Counting
the bonus checks, his total take-home pay after reemployment was about the
same as prior to the strike."D
88 See May Department Stores Co. v. N. L. R. B., 326 U. S. 3T6; Medo Photo Supply
Corp. v. N. L. R. B., 321 U. S. 678; Central Metallic Casket Co., 91 NLRB 572; N. L. It. B.
v. The Blanton Company, 121 F. 2d 564 (C A. 8). The findings as to each employee are
based on his uncontradicted and credited testimony.
89 Although Duke's refusal on July 15, 1950, to accept any employment with Respondent
obviates an order for reinstatement and tolls his back pay as of that date, he was still
an "employee" within Section 2 (3) of the Act, whether he be considered a former
employee whose work ceased as a result of the labor dispute, or an applicant for employ-
ment. See Briggs Manufacturing Company, 75 NLRB 569, 571. Respondent apparently
placed him in the latter category, for Layton did 'not accept his first refusal of employ-
ment , but later Importuned him to return until he was reemployed in August.
3 30 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
E. The offers of reinstatement
I have found that the strike of May 9, 1950, was an unfair labor practice
strike from its inception, caused by Respondent's discriminatory discharge of
eight installation employees as part of its discriminatory campaign against
the Union. It is Well settled' that the employees so discharged are uncondi-
tionally entitled to immediate and full reinstatement to their former or sub-
stantially equivalent positions ; it is also settled that the unfair labor practice
strikers were engaging in a protected concerted activity, and retained their
status as employees during the strike; upon -unconditional applications for
their positions, they are entitled to full reinstatement, and the Employer is
required to discharge any replacements hired during the strike to the extent
necessary to effect such reinstatement" Respondent's offers of reinstatement
will be considered in the light of these rules.
On June 26, 1950, the striking employees"' conferred with Layton at Sikeston
about returning to work. Chester Bennett, the union steward, speaking for
the group, told Layton the men had decided they wanted their jobs back, and
requested Layton to return the whole group to their former jobs "as they were."
Layton told them that he could not put them all back to work at that time, as
business had fallen off a great deal during the strike, and he had hired new
employees, and thus did not have openings for all of the strikers. He offered,
however, to recall the strikers according to their old seniority status as vacancies
occurred ; he also said he would first have to consult his lawyer about the offer.
Bennett agreed to this arrangement, saying that employees not immediately
rehired would continue picketing. Layton asked Bennett whether employees
taken back would be allowed to cross the picket line, and Bennett said he would
discuss that with Wynn and let Layton know." There is no proof that Bennett
reported back to Layton after talking with Wynn, nor that any of the strikers
returned to work pursuant to Layton's offer of that date. I conclude and find
that the group offer of the employees to abandon the strike' and return to work
was unqualified except for the legitimate condition that the whole group be
returned to work en masse ; the offer did not cease to be unconditional merely
because it contemplated a group return'8 When Layton offered to recall the
strikers only as vacancies occurred, and refused in effect to displace new
employees in order to reinstate all the strikers, he was further discriminating
against the striking employees because of their legitimate concerted activity,
in violation of Section 8 (a) (3) and (1) of the Act 94 Obviously, his proposal
was less than the unconditional offer of reinstatement required under the Act "°
On July 10, 1950, through Chester Bennett, the strikers again offered uncondi-
tionally to return to work. Layton said he could take back Brewer and Williams,
maintenance men, at their old jobs, but he repeated his conditional offer of June
9* N. L. R . B. v. Mackay Radio A Telegraph Co., 304 U. S. 333; N. L. R. B . v. Remington
Rand, Inc, 130 F 2d 919, 928 (C . A. 2) ; Eagle-Picher Mining f Smelting Company v.
N. L. R. B., 119 F. 2d 903 (C. A. 8) ; Rapid Roller Co. v. N. L. R B., 126 F. 2d 452 (C. A.
7), cert. den. 317 U. S. 650 ; N. L. R. B. v. Poultrymen'a Service Corporation, 138 P. 2d
204 (C. A. 3).
91 The group included Chester Bennett, Elmer Bennett , Adolph Duke , James Coleman,
Earl Brewer , Ralph Williams , Dayton Ford , and Wayne Bush, from Sikeston , Howell,
McVey, and Henry F. White from Hayti, and others not named in the record.
sz These findings are based on a composite of the credited testimony of Chester and
Elmer Bennett , Henry F. White, McVey, Howell , and Layton.
13 Draper Corporation, 52 NLRB 1477 , 1479 , and cases there cited , reversed on other
grounds, 145 F. 2d 199 (C. A. 4) ; Rockwood Stove Works, 63 NLRB 1297 , 1298 ; N. L. R. B.
v. Poultrymen's Service Corporation, 138 F. 2d 204 ( C. A. 3) ; Spencer Auto Electric, Inc.,
73 NLRB 1416.
"' See cases in preceding footnote.
95 N. L. R . B. v. Poultrymen's Service Corporation, supra.
NATIONAL GAS COMPANY 331,
26 to the remaining strikers. His July 10 offer was likewise qualified and
discriminatory.
'The picketing stopped July 10, 1950. Ralph Williams was reinstated July 12,
1950, Wayne Bush on July 15, 1950, and Brewer on an unspecified date after the
strike ended , each to his former job, but with lower pay and different terms of
employment , as found above. During the strike, Chester Bennett , Elmer Bennett,
Dayton Ford, and James Coleman were replaced at Sikeston by new employees,
and Respondent has never offered them proper reinstatement. Henry F. White
and Robert M; ;Vey were replaced at Hayti by new men during the strike ; White
was reinstated to his old job on August 1, 19,50; McVey applied for reinstatement
at Hayti on an unspecified date after termination of the strike , but has never
been reinstated.
Orville Howell-He was discriminatorily discharged on May 8, 1950 , but has
never been offered proper unconditional reinstatement . Respondent 's offer of May
17, 1950, to rehire him as a maintenance man was not an adequate offer : it did
not involve reinstatement to his old job, which had not been filled ," and the
maintenance work offered to him consisted of irregular , seasonal work involving
the repair , painting , and other maintenance of company-owned tanks, pipes, and
equipment located on customers ' premises ; this work had been done intermit-
tently by installation and other employees in the past ; none of it had been per-
formed by Hayti employees at least since February 1950; since the strike, it
has been carried on by the employees only after they are caught up with their
regular work ; moreover , it had not been previously treated by Respondent as a
definite category or department of work, for it was not mentioned as such in the
1949 union contract ; it was clearly not substantial , continuous work for the
specific performance of which Respondent hired men, but rather intermittent,
temporary work performed by employees in addition to their regular duties.
I am not satisfied by the record that maintenance work , as such, was employ-
ment substantially equivalent to that which Howell had done before his dis-
charge 87
James Davis-He was an installation helper to Howell at Hayti and was
illegally discharged with the latter on May 8, 1950 . Layton offered him a main-
tenance job with Howell on May 17, 1950, but he has never been offered un-
conditional reinstatement.
Martin E. Duke and Adolph Duke-Following their discriminatory discharges
on May 8, 1950 , Respondent offered them reemployment on July 15, 1950, but
without specifying the jobs; since the installation work at Sikeston was then
being performed by Steinbeck under the guise of an independent contractor, it is
reasonable to infer , and I find, that the offer to the Dukes did not involve a re-
turn to their former installation jobs ; nor does it appear whether the jobs
sa J. W. Smith and Howell had been the installation men at Hayti before the strike.
Smith did not start work under his installation "contract" until about May 28, 1950.
At the time of the hearing, Smith was still operating at Hayti under the "contract,"
apparently handling all the installation work which he and Howell had performed before
the strike.
eT See, The Warren Company, Incorporated, 90 NLRB 689. I do not credit Layton's
testimony that his offer to keep Howell on as a maintenance man would afford him the
same pay, seniority, and other privileges as installation man. Layton's theory that both
types of work fell in the same department under the 1949 contract Is belied by the fact
that article VIII, section 1 of the contract lists only a "service and installation depart-
ment" with a single set of pay rates ; there Is no mention of a "maintenance department."
"Maintenance" and "service" work are not the same, for Layton testified that "service"
work involved service on customer-owned gas appliances, and Ward testified that "main-
tenance" work covered only company-owned equipment in the field. Moreover, Layton
contradicted his own theory by his testimony that In making his offer to absorb the
displaced installation workers, he had in mind the creation of a new maintenance depart-
ment,
332 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Layton had in mind for them were substantially equivalent positions. How
ever, at the time of the offer, the Dukes refused reemployment with Respondent
in any capacity for personal reasons. While it is not clear that Respondent's
offer was a proper unconditional offer of reinstatement to their former or sub-
stantially equivalent positions, I am of opinion that their refusal to accept em-
ployment of ahy kind absolves Respondent of any further obligation in, this
respect '
John Steinbeek-Following his discriminatory discharge on May 8, 1950, he
worked for Respondent under the false independent contractor arrangement
from about June 1, 1950, to January 20, 1951, when he voluntarily ceased opera-
tions, grid took a job in another State. It does not appear that Respondent has
ever offered him reinstatement.
J. W. Smith-Since his discriminatory discharge on May 8, 1950, Smith has
performed installation work for Respondent under the spurious independent,
contract arrangement from about May 28, 1950, to the date of the hearing. Al-
though he did not take part in the strike, and has continued the contracting
arrangement, the fact of his discriminatory discharge requires that he still be
treated as an "employee" within the meaning of Section 2 (3) of the Act, en-
titled to reinstatement and back pay. This is necessary particularly because
of the recommendation hereafter that Howell be offered full reinstatement, and
that Respondent cancel the false contracting arrangement with Smith in grder
to restore the status quo : ante for purposes of proper evaluation of the respgctive
rights of Howell and Smith to reinstatement at Hayti. There is no proof that
Respondent has ever offered to return Smith to his former position as an installa-,
tion employee.
Noble C. Malone-After Malone ceased operations under his installation con-
tract, he was rehired by Respondent about November 1, 1950, as a serviceman at
Sikeston, and worked in that capacity until January 20, 1951, when he voluntarily
quit to take other employment. At that time Respondent did not offer him re-,
instatement as an installation employee, although Respondent has since per-
formed installation work at Sikeston and Malden with its own employees. Prior
to his discriminatory discharge, Malone had performed both service and in-
stallation work at Malden. It is clear that Malone was rehired to perform only
one phase of the work he had done before the strike ; and he was taken back at
lower pay and under unilaterally changed terms of employment, as found:abisve.
I find that Malone has not been offered proper reinstatement.
Leon Ellsworth-He had been helper to Malone on installation work at Malden
before the strike and continued in that capacity as an employee of Malone, while
the latter operated under his contract. Layton testified without contradiction,
and I find, that Malone discharged Ellsworth for drinking on the job during
the course of the contract, and at some unspecified time thereafter, Ellsworth
applied to Layton for employment, but was refused a job on the strength of his
discharge by Malone. Malone did not testify on the point. Ellsworth did not
testify at the hearing. Under these circumstances, I do not consider that the
purposes of the Act would be effectuated by requiring Respondent to offer
Ellsworth reinstatement at this time.
^ See Federal Stores Division of Spiegel, Inc, 91 NLRB 647 Martin E. Duke was later
hired by Respondent about August 15, 1950, to perform plant and truck maintenance
work, which he did until January 20, 1951, at which time Steinbeck ceased performing
installation work under contract at Sikeston ; since that date, Duke has performed both
maintenance and installation' work there for Respondent . Adolph Duke never returned
to work for Respondent , although he received other offers In August and September or
October 1950.
NATIONAL GAS COMPANY
IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE
333
The-activities of Respondent set forth in Section III, above, occurring in con-
nection with the operations of Respondent set forth in Section 1, 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.
V. THE, REMEDY
Having found that Respondent engaged in certain unfair labor practices, the
undersigned will recommend that it cease and desist therefrom and take certain
affirmative action designed to effectuate the policies of the Act.
I have found that Respondent discriminated against Noble C. Malone, James
Davis, Orville Howell, Leon Ellsworth, J. W. Smith, Adolph Duke, Martin Ebert
Duke, and John Steinbeck by discharging them, and by refusing reinstatement
to all but Adolph Duke and Martin Ebert Duke, in order to discourage mem-
bership in the Union. I shall recommend that Respondent offer each of said
employees, who has not been fully reinstated or offered proper reinstatement,9D
immediate and full reinstatement to his former or substantially equivalent
position, without prejudice to his seniority and other rights and privileges. I
have also found that the unfair labor practice strikers, Chester Bennett, Elmer
Bennett, Dayton Ford, Robert McVey, Ralph Williams, James Coleman, Wayne
BtIsh,`Earl Brewer, and Henry F. White were discriminatorily refused rein-
statement by Respondent on June 26, 1950. I shall recommend that Respondent
offer each of these employees, who has not been fully reinstated or offered proper
reinstatement,' immediate and full reinstatement to his former or substantially
equivalent position, without prejudice to his seniority and other rights and
privileges, and that Respondent dismiss, if necessary, any employees hired
since May 9, 1950, to replace any of these employees. If, after such dismissal,
there are insufficient positions remaining for all these employees,2 the avail-
able positions shall be distributed among them, without discrimination because of
their union membership, activity, or participation in the strike, under such
system of seniority or other nondiscriminatory practice as heretofore has been
,applied in the conduct of Respondent's business ; those employees for whom no
r.;
employment is immediately available after such distribution, shall be placed
on a preferential hiring list with priority determined among them by such
system of seniority or other nondiscriminatory practice as heretofore has been
applied in the conduct of Respondent's business, and thereafter, in accordance
with such list, shall be offered reinstatement as positions become available,
and before other persons are hired for such work.
I shall also recommend that Respondent make each of said employees, includ-
ing• each already fully reinstated or offered proper reinstatement, whole for any
loss of pay he may have suffered by reason of Respondent's discrimination
against him. The loss of pay for each employee shall be computed on the basis
of each separate calendar quarter or portion thereof during the period from
Respondent's discriminatory action to the date of full reinstatement or a proper
"For reasons stated above, Leon Ellsworth, Adolph Duke, and Martin Ebert Duke need
not ha offered reinstatement.
I Henry P. White appears to have been properly reinstated, obviating any offer.
2 General Counsel's Exhibit No. 14 indicates that, at the time of the hearing, Respondent
was operating with only 19 employees in the appropriate unit in all plants. The record
contains other evidence of some curtailment of Respondent 's operations
334 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
offer of reinstatement, as the case may be.8 The quarterly periods, hereinafter
called "quarters," shall begin with the first day of January, April, July, and
October. Loss of pay shall be determined by deducting from a sum equal to
that which each employee would normally have earned for each quarter or
portion thereof, his net earnings,' if any, in other employment during that
period. Earnings in one particular quarter shall have no effect upon the back-
pay liability for any other quarter. It is also recommended that Respondent
be ordered to make available to the Board upon request payroll and other records
to facilitate the checking of the amount of back pay due.'
I have found that Respondent initiated and operated the false "independent
contract" arrangement with Smith and three other employees as part of its
discriminatory scheme and plan against the Union. Inasmuch as Smith is the
only employee still operating under that arrangement, and in pursuance thereof
is handling at the Hayti plant all installation and service work formerly handled
by himself, Howell, and Davis, all discriminatorily discharged employees, I shall
recommend that Respondent forthwith cancel, cease operating under, or giving
any effect to, its contract of May 12, 1950, with J. W. Smith, in order that those
discharged employees may be offered proper reinstatement.
Having found that Respondent refused to bargain collectively with the Union
as the exclusive representative of its employees in the appropriate unit described
above, I will recommend that Respondent bargain collectively, upon request,
with the Union, as such exclusive representative, and if an understanding is
reached, embody such understanding in a signed agreement.
I have found that Respondent, by the illegal acts related above, has violated
Section 8 (a) (1), (3), and (5) of the Act. Considering the nature, extent,
and variety of such acts, I aW of opinion that the commission by Respondent
in the future of such acts and other related unfair labor practices may reason-
ably be anticipated from its conduct in the past. I shall therefore recommend
that Respondent cease and desist from such acts and from in any other manner
infringing upon the rights of employees guaranteed by Section 7 of the Act.
On the foregoing findings of fact and the entire record in the case, I make the
following :
CONCLUSIONS OF LAW
1. United Gas; Coke and Chemical Workers, C. I. 0., is a labor organization
within the meaning of Section 2 (5) of the Act.
2. All production and maintenance employees of Respondent, excluding guards,-
office, clerical, and supervisory employees as defined in the Act, constitute a unit
appropriate for purposes of collective bargaining within the meaning of Section
9 (b) of the Act.
3. The Union named above was on April 18, 1947, and has been at all times
thereafter, the exclusive representative of all employees in the unit aforesaid
for purposes of collective bargaining within the meaning of Section 9 (a) of
the Act.
8 For the discharged installation employees, the period starts on May 8. 1950, the date
of their discharges. For the strikers, it begins from the date, following their unconditional
offer to return on June 26, 1950, when each was or would be entitled to reinstatement in
accordance with the reinstatement formula described above, to the date of Respondent's
offer of reinstatement. As to Martin E. Duke and Adolph Duke, the period is tolled on
July 15, 1950; as to Henry F. White, it ends on August 1, 1950; as to Leon Ellsworth,
it should end on the date when be was discharged for cause by Malone while working for
the latter under his false "contract."
4 See, Crossett Lumber Company, 8 NLRB 440; Republic Steel Corporation v. N. L. R. R.,
311 U. S. 7. In the cases of Smith, Malone, Steinbeck, and Williams, their net earnings
received from their installation contracts with Respondent are also deductible.
OP. W. Woolworth Company;• 90 NLRB 289.
'CHICAGO RETORT AND FIRE BRICK DIVISION, LACLEDE-CHRISTY CO.335
4. By its refusal to bargain collectively with the Union as the exclusive rep-
resentative of its employees in said unit , Respondent has engaged in and is
engaging in unfair labor practices within the meaning of Section 8 (a) (5) of
the Act.
5. By its discriminatory discharge of certain employees named above, and
its discriminatory refusal to reinstate those employees 'and other striking em-
ployees named above , Respondent has engaged in and is engaging in unfair
labor practices within the meaning of Section 8 ( a) (3) of the Act.
6. By the above refusal to bargain and discrimination , as well as by other
conduct found above, Respondent has interfered with, restrained , and coerced
its employees in the exercise of rights guaranteed by Section 7 of the Act, and
has thereby engaged in and is engaging in unfair labor practices within the
meaning of Section 8 ( a) (1) of the Act.
7. The aforesaid unfair labor practices are unfair labor practices affecting
commerce within the meaning of Section 2 (6) and (7) of the Act.
[Recommendations omitted from publication in this volume.]
CHICAGO RETORT AND FrRE BRICK DIVISION or LACLEDE-CHRISTY COM-
PANY and DISTRICT No. 132, INTERNATIONAL ASSOCIATION OF MA-
CHINISTS , AFL, PETITIONER . Cases Nos. 13-RC-2285,13-RC-2286,
and 13-RC-2287. May 27, 1952
Decision and Order
Upon petitions duly filed under Section 9 (c) of the National Labor
Relations Act, a consolidated hearing was held before Irving W. Fried-
man, hearing officer. The hearing officer's rulings made at the hearing
are free from prejudicial error and are hereby affirmed.
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 [Members Houston, Murdock, and Styles].
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 organizations involved claim to represent employees
of the Employer.
3. No question affecting commerce exists concerning the representa-
tion 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 seeks to represent at the Employer's Ottawa plant
separate units of (1) "all machine repair, machinists, welders, and
machine set-up employees, automobile mechanics and helpers, and
their apprentices" (petition No. 13-RC-2285), ( 2) all electricians and
their helpers (petition No. 13-RC-2286), and (3) all carpenters, their
99 NLRB No. 53.