Pioneer Photo Engraving, Inc.

National Labor Relations Board - Board Decisions

Jun 12, 1963

142 N.L.R.B. 1099 (N.L.R.B. 1963)

PIONEER PHOTO ENGRAVING, INC. 1099
shall permit all striking employees," in the election hereinafter di-
rected, to vote subject to challenge.
[Text of Direction of Election omitted from publication.]
Is No evidence has been introduced to show that any strikers , other than those who
returned to work for the Employer herein , have in any manner abandoned the strike. In
the absence of such evidence , the Board presumes that they continue as economic strikers.
Pacific Tile and Porcelain Company, supra.
Pioneer Photo Engraving , Inc. and Photo-Engravers ' Union,
Local No. 32 , AFL-CIO . Case No. 21-CA-4843. June 12, 1963
DECISION AND ORDER
On December 19, 1962, Trial Examiner Eugene K. Kennedy issued
his Intermediate 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 attached Inter-
mediate Report. Thereafter, the Respondent and the General Coun-
sel filed exceptions to the Intermediate Report, and the Respondent
filed a supporting brief.
Pursuant to the provisions of Section 3(b) of the Act, the Board
has delegated its powers in connection with this case to a three-
member panel [Chairman McCulloch and Members Rodgers and
Leedom].
The Board has reviewed the rulings made by the Trial Examiner at
the hearing and finds that no prejudicial error was committed. The
rulings are hereby affirmed. The Board has considered the Inter-
mediate Report, the exceptions and briefs, and the entire record in
the case, and finds merit in the Respondent's exceptions for the rea-
sons discussed below. Accordingly, the Board only adopts those find-
ings, conclusions , and recommendations of the Trial Examiner which
are consistent with this Decision and Order.
There is no dispute as to the essential facts. At issue here is whether
or not the Respondent terminated employee Gershon Malley in viola-
tion of Section 8 (a) (3) and (1) of the Act.
The Respondent is a small photoengraving company which has been
owned at all times relevant to this action by Ernest Baca, Fulton
Toub, and Armando Gonzales. It started operating in September
1961 and, as of November 1, 1961, had a work force consisting of the
three owners, Foreman Wallace Barnes, and employees George Orcutt,
Edward Sterling, Walter McCormick, and Gershon Malley. All eight
were journeymen photoengravers and were members of the Charging
Union.
142 NLRB No. 118.
1100 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
In early November 1961,; the Respondent terminated employees
Orcutt, Sterling, and McCormick for economic reasons. The work of
these terminated employees was taken over by the three owners who
had previously devoted their time primarily to sales and administra-
tive duties.
Sometime after the November terminations and before the termina-
tion of its contract with the Union,' the Respondent decided that
certain conditions under which it was working, including a restriction
of staggered shift hours, high hourly wage rates, and a prohibition re-
stricting apprentices to the ratio of 1 to 10 journeymen, made its
operation uneconomical. The Respondent felt that much of the photo-
engraving work could be done by persons who would need consider-
ably less experience than journeymen and who would require less
pay.
On February 15, 1962, the Respondent terminated Foreman Barnes
and employee Malley. By letter, dated that same day, the Respond-
ent notified the Union as follows :
In view of the fact that you have failed to negotiate a new
agreement with us, we hereby notify you that the collective bar-
gaining agreement executed . . . September 20, 1961, is deem
[sic] terminated as of the close of business on February 14, 1962.
Because of our special problems as a small and new business
we are unable to continue as a union shop. We are releasing all
union employees and shall henceforth operate on a non-union
basis.
Prior to Malley's termination, Fulton Toub, one of the three owners,
discussed with Malley the question of continuing to work for the
Respondent when it no longer had a contract. Toub explained to
Malley that he expected a picket line when Respondent no longer op-
erated under a contract and that Malley would jeopardize his status
with the Union if he attempted to work under such circumstances.
Malley indicated his interest in continuing to work after the contract
expired. Toub then advised Malley that he did not think that he
should work "for that," indicating an apprentice wage,' but no specific
amount was indicated by Toub. The skilled photoengraving work
done by Barnes and Malley before February 15 was thereafter done
by the three owners. Unskilled employees were hired to assist the
three owners and these unskilled employees received a starting wage
rate of $1.80 per hour. The Respondent, by letters dated July 2 and
19, 1962, offered Malley reinstatement to his job at the then current
wage rate of $1.80 and $2.25 per hour, respectively. Malley, who had
'On September 20, 1961, the Respondent executed a contract with the Union having
its term run from said execution date through February 14, 1962
1 Toub testified that the term "apprentice " did not mean apprentices affiliated with the
Union, but that it meant individuals who are learning the trade.
PIONEER PHOTO ENGRAVING, INC. 1101
been receiving the wage rate of $4.91 per hour, made no reply to these
offers. At the hearing, Malley stated that he would not work for a
wage rate of $2.25 per hour.
The Respondent contends that Malley's termination was neither
motivated by an antiunion bias nor for the purpose of discouraging
membership in the Union. It points out that all three owners had
been members of the Union for years, and that its sole objective was
purely economic in that it desired to reduce the cost of operations by
hiring unskilled employees, who it felt could perform the required
duties, at a pay rate of $1.80 to $2.25 per hour to do the work in place
of journeymen photoengravers whom it would have to pay $4.91 per
hour. The Respondent further contends that the term "union em-
ployees" in the letter to the Union on February 15 meant the remain-
ing journeymen, namely, Barnes and Malley.
In finding that Malley's termination was unlawful, the Trial Ex-
aminer reasoned that it was motivated by union affiliation. In so rea-
soning, he stressed the language appearing in the last paragraph of
the February 15 letter, supra. We do not agree with the Trial Ex-
aminer that this language warrants such an interpretation. To the
contrary, we find, in agreement with the Respondent's contention,
that the letter was merely a notification to the Union that the remain-
ing journeymen photoengravers were being terminated. Moreover,
we note that the language includes "employees," when, in fact, one
of the two remaining journeymen was Barnes, a foreman.
The Trial Examiner found, and we agree, that (1) the Respondent
was seriously troubled by economic burdens; (2) Malley's termina-
tion, along with the termination of other journeymen photoenb avers,
was part of a program for the three owners to do the work being done
by five journeymen supplemented by lower paid workers; and (3) the
Respondent was not possessed of union animus. An employer's con-
duct is not unlawful, however, merely because it results in the termina-
tion of the employment of a union member, and we are not satisfied
that Respondent acted for unlawful reasons in the circumstances of
this case. Accordingly, we find that Malley's termination was not in
violation of Section 8(a) (3) and (1) of the Act, and we shall dismiss
the complaint in its entirety.
[The Board dismissed the complaint.]
INTERMEDIATE REPORT AND RECOMMENDED ORDER
STATEMENT OF THE CASE
A hearing in this proceeding was held before Trial Examiner , Eugene K. Kennedy
in Los Angeles , California , on August 30, 1962 . The issue presented is whether
Respondent , Pioneer Photo Engraving , Inc., violated Section 8(a)(1) and (3) of
the National Labor Relations Act, herein called the Act, by discharging employee
Gershon Malley on February 15, 1962.
1102 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Upon consideration of the entire record, including my observation of the wit-
nesses and a consideration of briefs submitted by the Respondent and the General
Counsel, I make the following:
FINDINGS OF FACT
1. THE BUSINESS OF RESPONDENT AND JURISDICTION OF THE BOARD
Respondent, Pioneer Photo Engraving, Inc., is a California corporation with
its principal office and place of business in Los Angeles, California. It is engaged
in the business of producing and selling photoengraving negatives and related prod-
ucts. It annually purchases products valued in excess of $50,000, shipped to it
from points located outside the State of California, and in addition purchases
products valued in excess of $50,000 which originate outside the State of California
but which are purchased within the State of California. Respondent is an em-
ployer engaged in commerce or in an industry affecting commerce within the mean-
ing of the Act.
II. THE LABOR ORGANIZATION INVOLVED
Photo-Engravers' Union, Local No. 32, AFL-CIO, herein called the Union, is a
labor organization within the meaning of the Act.
III. THE UNFAIR LABOR PRACTICES
A. The events
Gershon Malley, the Charging Party and the alleged discriminatee, was em-
ployed by Respondent as a journeyman photoengraver on September 28, 1961. The
principal owners and responsible managers of Respondent are Ernest Baca and
Fulton Toub, each of whom owned a 45-percent interest in Respondent Company.
Approximately 21/2 years prior to September 1961, Baca was instrumental in
obtaining a job for Malley in a nonunion shop. Malley had arrived in this coun-
try as an immigrant after many years of experience as a photoengraver outside the
United States. At this time Baca was operating a union shop. Subsequently when
Malley had obtained union membership, he was employed by Baca as a journey-
man photoengraver at a rate of $4.91 an hour.'
The photoengraving company which Baca and Toub had been operating had be-
come defunct by September 1961. During the period of its operation, Baca and
Toub were involved in many disputes with the Union over the terms and enforce-
ment of the Union's contract. In September 1961, the newly formed Respondent
Company executed a contract with the Union, having its term from September 1961
until February 14, 1962. In September 1961, or shortly thereafter, there were five
union employees, including the foreman? In November 1961, Baca and Toub were
responsible for the discharge of three of these union employees, and after their dis-
charge, owners Baca, Toub, and Gonzales took over the bulk of the work that had
been done by them.
Malley and the other union employee who was the foreman were discharged on
February 15, 1962. Prior to Malley's discharge, Toub had discussed with him the
question of continuing to work for Respondent when it no longer had a union con-
tract. Toub explained to Malley that he expected a picket line when he no longer
had a union contract and that Malley would jeopardize his status with the Union
if he attempted to work for Respondent under such circumstances. Malley, who
had some difficulty in expressing himself in English, conceded that he had stated
to Toub during this discussion that he had worked for a nonunion shop for 21/z
years without any trouble with the Union, but denied that Toub had expressed
some apprehension about Malley's getting into difficulty with the Union. I find
Toub's version more credible and that Malley was in error in disavowing such a
statement by Toub. It is further found that Toub, during this discussion, asked
Malley whether he would be interested in continuing work when the union contract
expired, and that Malley indicated his interest in so continuing to work. Toub,
in this connection, also advised Malley that he didn't think that he should work
"for that," indicating an apprentice or nonskilled employee's wages. It is clear
that no specific amount was indicated by Toub that was to be paid to Malley if
he continued to work under nonunion conditions.
i The General Counsel's motion to strike the testimony concerning the past relationship
of Malley and Baca is denied.
'Baca and Toub were union members but are not here included within the meaning
of the term "employees."
PIONEER PHOTO ENGRAVING, INC. 1103
In any event, Malley was discharged on February 15, 1962, although he had pre-
viously indicated that he desired to continue to work for Respndent. The reasons
assigned by Respondent for Malley's discharge included the belief of Baca and Toub
that Malley would not work for an unskilled worker's wage and also because they
did not want him around because they felt he would not perform his work as
efficiently at a lower wage scale, and that he would have a chip on his shoulder
and would create bad morale in the shop. Also the prospect of Malley's con-
tinued employment after the termination of the union contract was to some extent
a source of concern to Baca and Toub because they believed he would jeopardize
his union status and because they were unable to assure him any job security.
On the day of Malley's discharge Respondent sent the following letter to the
Union:
FEBRUARY 15, 1962.
GENTLEMEN: In view of the fact that you have failed to negotiate a new
agreement with us, we hereby notify you that the collective bargaining agree-
ment executed between Pioneer Photo Engraving Co. and the Los Angeles
Photo Engravers Union Local No. 32, I.P.E.U. of N.A., dated September 20,
1961, is deem [sic] terminated as of the close of business on February 14, 1962.
Because of our special problems as a small and new business, we are un-
able to continue as a union shop. We are releasing all union employees and
shall henceforth operate on a non-union basis.
Very truly yours,
PIONEER PHOTO ENGRAVING,
By (S) LORNA HEWITT, Secretary.
On the occasion of Malley's discharge Toub told Malley to call back in a couple
of weeks when circumstances might change. Malley did so and Toub at that time
told him that his lawyer had advised him that he would not be able to rehire
Malley. On frequent occasions after this Malley continued to call Taub but was
unsuccessful in obtaining employment. Finally on June 12, 1962, an unfair labor
practice charge was filed with the National Labor Relations Board by the Union
protesting the legality of Malley's discharge. Following this Malley received the
following communications from Respondent.
JULY 2, 1962.
GERSHON MALLEY,
13832 Van Owen,
Van Nuys, California.
DEAR MR. MALLEY: By this letter we offer to reinstate you immediately to
the position you held with us prior to February 15, 1962, and to pay you at
this company's current rate of pay for this work, which is $1.80 per hour.
If you wish to accept this offer of employment you must contact the under-
signed prior to 1:30 P.M., Thursday, July 5, 1962.
PIONEER PHOTO ENGRAVING, INC.,
By (S) Ernest Baca.
ERNEST BACA.
JULY 19, 1962.
GERSHON MALLEY,
13832 Van Owen,
Van Nuys, California.
DEAR MR. MALLEY: By this letter we offer to reinstate you immediately to
the position you held with us prior to February 15, 1962, and to pay you at
this company's current rate of pay for this work, which is $2.25 per hour.
If you wish to accept this offer of employment you must contact the under-
signed prior to 1:30 P.M., Monday, July 23, 1962.
PIONEER PHOTO ENGRAVING, INC.,
By (S) Ernest Baca.
ERNEST BACA.
This record does not reflect that Malley responded to either the letters of July 2
or 19, 1962. At the hearing on August 30, 1962, Malley was definite in indicating
he was not interested in returning to work at a rate of $2.25 per hour. As indicated
previously his union rate of pay was $4.91 per hour.
After February 15, 1962, Respondent continued its operation by having the owners
perform work that required special skill and by hiring low,paid unskilled workers
to assist them. The records reflecting the hours of work performed by Respondent's
employees and the volume of sales during 1962 do not indicate whether or not
Respondent's economic position was improved by substituting this method of opera-
1104 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
tion inasmuch as the record is barren of figures indicating profit before or after the
change in method of operating the plant.
B. Discussion and concluding findings
A summary of the facts in this record which has no significant credibility questions
may be stated as follows: (1) Respondent has operated a small plant and it is a
reasonable inference from considering all the factors in this record that its owners
were seriously troubled by the economic burdens fastened upon it by operating under
a union contract including a restriction on staggered shift hours, high wage rates,
and the prohibition restricting apprentices to the ratio of 1 to 10 journeymen; (2)
Malley, the alleged discriminatee, was a union member at the time of his discharge
on February 15, 1962; (3) Respondent did not discharge Malley because of any
lack of skill or poor workmanship and to some extent the responsible managers of
Respondent, Toub and Baca, as demonstrated by their past assistance to Malley in
securing employment for him in a nonunion shop and hiring him when he finally
became a union member, were concerned with Malley's welfare if he continued
to work for them during a dispute with the Union when an anticipated picket
line would be established; (4) Malley's discharge, along with other union journey-
men, was part of a program for the owners of Respondent to do the work done by
five union journeymen supplemented by lower paid workers; (5) it is clear that
Respondent's decision to sever any association with the Union and to discharge em-
ployees was motivated by economic considerations, which involved a plan to eli-
minate union employees.
This record poses the question whether special circumstances may exempt an
employer from the proscription of Section 8(a)(3) of the Act. In pertinent parts
Section 8 (a) (3) provides:
It shall be an unfair labor practice for an employer by discrimination in
regard to hire or tenure of employment or any term or condition of employ-
ment to encourage or discourage membership in any labor organization.
Respondent, in effect, concedes a position that it was discharging its employees,
including Malley, because of their union affiliation. This finding of discharge be-
cause of union affiliation does not indicate that Respondent was opposed to union
affiliation per se but because union affiliation of its employees was regarded as an
unfavorable economic circumstance.
A concession that the discharge was occasioned and motivated by union affiliation
is reflected in the letter of February 15, 1962, addressed by Respondent to the Union,
which states:
Because of our special problem as a small and a new business we are un-
able to continue as a union shop. We are releasing all union employees and
shall henceforth operate on a nonunion basis.
Union affiliation was intertwined with other reasons entering into the decision to
discharge Malley. Baca was concerned that when the shop did not operate under
a union contract Malley would have to cross a picket line that was anticipated. Baca
also evidenced disinclination to continue Malley at the union scale which was $4.91
per hour.
Establishment of union affiliation as a consideration for Malley's discharge is also
found in Toub's testimony, wherein he stated that in his opinion it would be in-
advisable for union men to work in Respondent's shop after February 15, 1962.
The discharge of Malley would have a natural tendency to discourage or en-
courage his membership in the Union. In this situation the Employer's motive to
accomplish this result of discouraging or encouraging union membership is presumed.
Radio Officers' Union of the Commercial Telegraphers Union v. N.L.R.B., 347 U.S.
17, 45. The action of Respondent in discharging Malley because of his union affilia-
tion is unlawful discrimination violative of Section 8(a)(3) of the Act. Radio
Officers, supra, at p. 39. The only remaining quesiton here is whether Respondent's
claim of economic motivation in discharging union employees affords it a defense.
C. Economic justification as a defense
As indicated above, this record does not establish that the Respondent was pos-
sessed of union animus directed against the Union or its members merely because
of Respondent's dislike for unions or people that belong to them. It does establish
unequivocally that Respondent was opposed to operating under a union contract
and to have Malley, a union member, in its employ because it regarded its obliga-
PIONEER PHOTO ENGRAVING, INC. 1105
tions under a union contract and the difficulties that would flow from having a union
member working in a nonunion shop as disadvantageous to it.
Recognizing that Respondent was faced with economic problems of a degree not
usually present in cases of alleged unlawful discrimination, its action in discharging
Malley nevertheless has no defense sanctioned by legal precedent . N.L.R.B. v.
McCatron, 216 F. 2d 212 (C.A. 9), cert. denied 348 U.S. 943. In McCatron it was
held economic exigencies will not justify an employer 's action which impinges the
statutory rights of its employees . See also N.L.R.B. v. Preston Feed Corp., 309 F.
2d 346 (C.A. 4)?
IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE
The activities of Respondent set forth in section III, above, occurring in connection
with its operations described in section I, above, have a close, intimate, and substan-
tial 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 thereof.
V. THE REMEDY
Having found that Respondent engaged in certain unfair labor practices it will
be recommended that Respondent cease and desist therefrom and take affirmative
action which, it is found, is necessary to effectuate the policies of the Act.
With respect to the reinstatement of Malley it is noted that the two letters ad-
dressed to Malley by Respondent after he filed an unfair labor practice charge
offered him reinstatement to his same position although at greatly reduced rates of
pay. In view of this it seems reasonable to conclude that the same type of work
was available for Malley at Respondent's plant, after his discharge. The fact that the
owners assumed a portion of his duties may be factually unique but does not suggest
a different remedial principle should be recommended than in the plant closure 4
or department elimination situations.5
Accordingly, it will be recommended that Malley be reinstated to a position with
Respondent at the rate of pay that he was receiving on February 15, 1962. It will
further be recommended that Malley be made whole by Respondent for any loss
of wages suffered by him due to his discharge and that Respondent pay interest on
the backpay due Malley, such interest to be computed at the rate of 6 percent per
annum and, utilizing the Woolworth formula (90 NLRB 289), to accrue commenc-
ing with the last day of each calendar month of the backpay period on the amount
due or owing for each quarterly period and continuing until compliance with the
recommended order is achieved.
However, as was noted by the Fourth Circuit in Preston Feed Corp, supra, under
comparable circumstances this remedy, if enforced, does not preclude the Respondent
from taking economic steps which are advantageous to its business operations as
long as they are disassociated from violations of the Act.
CONCLUSIONS OF LAW
1. Respondent is an employer engaged in activities affecting commerce within the
meaning of the Act.
2. The Union is a labor organization within the meaning of the Act.
3. By discharging Gershon Malley, Respondent has violated Section 8 (a) (1) and
(3) of the Act.
4. The aforesaid unfair labor practices are unfair labor practices affecting com-
merce within the meaning of Section 2(6) and (7) of the Act.
[Recommended order omitted from publication.]
"The qnestion of whether some decisions are contrary or distinguishable need not be
reached here as Radio Officers and McCatron, supra , are controlling precedent as far as
the facts presented by this record are concerned. See, for examples, N.L R.B. v. New
England Web, Inc, et al., 309 F. 2d 696 (C.A. 1) ; N.L.R.B v. J. M. Lassing, 284 F. 2d 781
(C A. 6) cert. denied 366 U.S 909; NLRB v R C Mahon Company, 269 F 2d 44
(CA. 6) ; N.L.R B. v. Adkins Transfer Company, 226 F 2d 324 (CA 6) and N.L.R.B, v.
Houston Chronicle Publishing Company, 211 F 2d 848 (C A. 5).
4 Darlington Manufacturing Company , 139 NLRB 241
5 N.L R.B. v. Preston Feed Corp, 309 F. 2d 346 (C A 4).