Schieber Millinery Co.

National Labor Relations Board - Board Decisions

Aug 22, 1940

26 N.L.R.B. 937 (N.L.R.B. 1940)

In the Matter of ISAAC SCHIEBER, A. J. ROSENBERG, AND BEN L.
SHIFRIN (THE LAST OFFICERS AND DIRECTORS OFSCHIEBER MILLINERY
CO.) AS TRUSTEES OF SCHIEBER MILLINERY CO. and ISAACSCHIEBER,
INDIVIDUALLY, and ALLEN HAT CO., and UNITED HATTERS, CAP
AND MILLINERY WORKERS' INTERNATIONAL UNION, AFFILIATED
WITH THE AMERICAN FEDERATION OF LABOR
Case No. 0-1436.-Decided AuguLt 22, 1940
Jurisdiction : hat manufacturing industry.
Where the Board was not a party to proceedings before a State court,
a decree of said court is not res judicata on the issue as to the Board.
Unfair Labor Practices
In General: employer's responsibility for acts of corporate officers and supervisory
employees.
Corporation formed after commission of unfair labor practices, held
responsible for unfair labor as alter ego of employer also found responsible.
Interference, Restraint , and Coercion: anti-union statements; threats of discharge;
interference with right to bargain collectively; removal of operations; attempt
to induce employees not to remain members of union by offer of employment
at new location.
Discrimination : lock-out of employees and removal of plant to evade obligations
under contract to employ union members
Collective Bargaining designation of majority by membership in union; employer's
breach of collective agreement and refusal to meet with union to discuss con-
tract violations.
Where an employer has removed his plant, under circumstances amounting
to an unfair labor practice and the union has indicated its desire to bargain,
the union is under no further duty to request collective bargaining since the
employer by his conduct has demonstrated the futility of such request
An employer is obligated to meet with union to adjust disputes arising
under signed agreement existing between them.
Mere fact of existence of agreement does not bar consideration of facts
showing that employer dealt with union in bad faith.
Remedial Orders : employer ordered upon request to bargain collectively; rein-
statement and back pay awarded.
Employer ordered to offer reinstatement to locked-out employees and either
to return millinery plant to point from which he removed it to evade respon-
sibilities under the Act or to pay the expenses entailed by reinstated employees
and their families in moving to the point to which the plant had been re-
moved.
The provisions of an order, addressed to a dissolved corporation, which
contemplate business activity are applicable only in the event it reenters
business in the future.
Possible ineffectiveness of a Board order held no bar to its issuance.
Order, addressed to individual owner of corporation as well as to the
26 N. L. R. B., No. 99.
937
938 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
corporation, requires said individual to cause his corporate alter ego to
comply therewith.
Fact of regular and substantially equivalent employment, if proved, held
no bar to reinstatement under the Act.
Unit Appropriate for Collective Bargaining : all production employees engaged in
the operations of blocking, cutting, operating, making, and trimming, but
excluding foremen, foreladies, supervisory employees, and designers, employed
in respondent's St Louis plant.
Definitions
Where the owner of a corporation, who was also its president, acted in the
interest of the corporation as well as in his personal capacity in committing
unfair labor practices, he was an employer within the meaning of the Act.
Mr. David Y. Campbell, Mr. Norman Edmonds, and Mr. Herbe7t 0.
Eby, for the Board.
Taylor, Mayer cf; Shifrin, by Mr. Ben L. Shifrin, of St. Louis, Mo.,
for the respondent.
Mr. Joseph M. Jacobs, of Chicago, Ill. and Mr. Harry Fromkin, of
St. Louis, Mo., for the Union.
Mr. Malcolm A. Hoffmann, of counsel to the Board.
DECISION
AND
ORDER
STATEMENT OF THE CASE
Upon charges and amended charges duly filed by United Hatters,
Cap and Millinery Workers' International Union, affiliated with the
American Federation of Labor, herein called the Union, the National
Labor Relations Board herein called the Board, by Dorothea de
Schwemitz, Regional Director for the Fourteenth Region (St. Louis,
Missouri) issued its complaint dated March 31,.1939, against Schieber
Millinery Co., St. Louis and De Soto, Missouri, Allen Hat Co., De
Soto, Missouri, Isaac Schieber, individually, and Isaac Schieber,
doing business as Schieber Millinery Co., and Allen Hat Co., herein
sometimes collectively called the respondents, alleging that the
respondents had engaged in and were engaging in unfair labor prac-
tices affecting commerce within the meaning of Section 8 (1), (3),
and (5) and Section 2 (6) and (7) of the National Labor Relations Act,
49 Stat. 449, herein called the Act. Copies of the complaint, accom-
panied by notices of hearing, were duly served upon the respondents.
On April 4, 1939, the respondents Allen Hat Co., and Isaac Schieber,
filed applications for extensions of time in which to answer' and for
postponement of the hearing, addressed to the Regional Director
but referred by her to the Trial Examiner for ruling.
On April, 5, 1939, the respondents Isaac Schieber and Allen Hat
Co., filed separate answers to the complaint; and motions to dismiss
the complaint were filed by all the respondents.
SCAIEBER MILLINERY CO. 939
The motion filed by the respondent Schieber Millinery Co., alleged
that the Board was without jurisdiction to proceed against it since at
the time of filing the complaint the charter of Schieber Millinery Co.
had been-revoked by the State of Missouri,' and consequently being no
longer a corporation, purported service upon it was void. The motion
on behalf of Allen Hat Co. alleged that the Board in respect to it was
without jurisdiction because at no time was Allen Hat Co. an employer
of the employees here involved. A similar objection was contained
in the motion on behalf of Isaac Schieber, which recited that he did no
business individually, and thus was not an employer within the mean-
ing of the Act and had never engaged in commerce.
Pursuant to notice, a hearing was held at St. Louis, Missouri, on
April 6, 1939, before J. J. Fitzpatrick, the Trial Examiner duly
designated by the Board. The Board and the respondents were
represented by counsel and participated in- the hearing.' Full
opportunity to be heard, to examine and cross-examine witnesses, and
to introduce evidence bearing on the issues was afforded all parties.
During the hearing on April 6, the Trial Examiner denied the respond-
ents' motions to 'dismiss the complaint, and the applications for
extension of time for answering, and for an extension of time of the
hearing.' After the taking of some testimony and argument by
counsel, the Trial Examiner granted the Board's request for a continu-
ance of the hearing.
On April 19, 1939, the Board issued an amended complaint on
the basis of an amended charge. The amended complaint lists as
respondents "Isaac Schieber, A. J. Rosenberg, and Ben L. Shifrin,
(the last officers-and directors of Schieber Millinery Co.), as trustees of
Schieber Millinery Co.,' and Isaac' Schieber, individually, and Allen
Hat Co." The amended complaint in regard to the alleged unfair
labor, practices did not differ materially from the original complaint.
Copies of the amended complaint, accompanied by notices of hearing,
were duly served upon the respondents and the Union.
In respect to the unfair labor practices, the amended complaint
alleged in substance (1) that Schieber Millinery Co.' maintained both
I On January 1, 1939 , pursuant to Section 4619 , Mo Rev Stat ( 1929), the Secretary of State of Missouri
declared the corporate rights , privileges , and franchises of Schieber Millinery Co , "forfeited and canceled
and the corporation dissolved , subject to rescision as in this Act provided."
s The Union was represented by an officer
3 These rulings were not unqualified The Trial Examiner indicated that on a proper showing motions
to amend the answers would be allowed , and a continuance granted the respondents at the close of the
Board 's case . No motion to amend or for a continuance was thereafter made by the respondents
4 Isaac Schieber was president and treasurer , A J Rosenberg , vice president , and Ben L Shifrm , secretary
of Schieber Millinery Co ., Sections 4561, 4622 , Mo Rev Stat . ( 1929) provide in substance that the last officers
of the corporation at the time of the dissolution and forfeiture , respectively , shall be trustees with stated
powers for settling its affairs , and be responsible to creditors and stockholders to the extent of assets received.
See Nudelman v. Thrmbles Inc et of , 225 Mo App 553, 40 S W (2d) 475, Watkins v Mayer, et al , 103 S W.
(2d) 566, 569 (Me App ).
5 Incorporated under Missouri law in 1932.
940 DECISIONS OF NATIONAL . LABOR RELATIONS BOARD
plant and office at St. Louis, Missouri, until about August 25, 1937,
when it moved to De Soto, Missouri, and that until July or August
1938, it carried on the same business at De Soto; (2) that Isaac
Schieber, acting in the interest of Schieber Millinery Co., and Schie-
ber Millinery Co., through its officers and agents, interfered with, re-
strained, and coerced its employees in the exercise of the rights guar-
anteed in Section 7 of the Act by various acts and statements; (3)
that on or about August 25, 1937, Schieber Millinery Co. discharged
and locked out its St. Louis employees, and since has refused to rein-
state them, in order to avoid collective bargaining with the Union;
(4) that Isaac Schieber and Schieber Millinery Company, by moving
its plant to avoid collective bargaining with the Union, violated the
Act while bound by a closed-shop contract with the Union; (5) that
during July of 1938 Isaac Schieber and Schieber Millinery Company
caused Allen Hat Co., to be formed for the purpose of evading the
obligations and the liabilities of Schieber Millinery Co. and Isaac
Schieber under the Act and that Allen Hat Co., continued the same
business at the De Soto plant and St. Louis office previously done by
Schieber Millinery Co., which thereafter withdrew from business, and
that Allen Hat Co. always was Isaac Schieber carrying on the busi-
ness previously done under the corporate framework of Schieber Mil-
linery Co., and that both companies were owned and dominated by
Isaac Schieber; (6) that consequently the discharged employees be-
came and continued to be employees of Allen Hat Co., and that both
companies discriminatorily refused and refuse to reinstate them; (7)
that the Union represented and represents a majority in the unit
appropriate for collective bargaining, and that since about June 15,
1937, both companies and Isaac Schieber have, in violation of Section
8 (1) and (5) of the Act, refused to bargain in good faith with the
Union; (8) that, since on January 1, 1939, the charter of Schieber
Millinery Co. was declared forfeited by the Secretary of State of
Missouri, the last officers of that company are named as trustees by
virtue of Missouri law.
Thereafter the respondents filed separate motions to dismiss and
answers to the amended complaint, denying that they had engaged
in the alleged unfair labor practices.'
7 The motion by the alleged trustees recited that Schieber Millinery Co had no assets at the time its
charter was forfeited , and that under Missouri law the last board of directors become trustees only when
they receive corporate assets, and , hence , service upon them was improper and the Board without juris-
diction. Their answer averred that when Schieber Millinery Co. moved to De Soto, its employees were
offered and refused employment , and that Schieber Millinery Co . had nothing to do with the formation
of Allen Hat Co. Isaac Schieber , in addition to a general denial of the allegations of the amended com-
plaint, inter atia set forth that he was never in business as an individual , and had no contract with the
Union . Allen Hat Co .'s answer alleged in part that it was not formed to evade the Act but was organized
as a new corporation with fresh capital, and denied that any employees of Schieber Millinery Co became
its employees or that it had contractual relations with them , or that they ever requested employment of
it, or that the Union ever represented a majority of its employees or requested bargaining of it None of
the respondent 's pleadings denied that part of the amended complaint which alleged in substance that
Schieber directed and managed the affairs of both corporations.
SCHIEBER MILLINERY CO. 941
Pursuant to notice, the continued hearing was held at St. Louis,
Missouri, on April 27, 28, 29, and May 1 and 2, 1939, before Samuel
H. Jaffee, the Trial Examiner duly designated by the Board in the
place of J. J. Fitzpatrick.' The Board, the respondents, and the
Union were represented by counsel and participated in the hearing.
Full opportunity to be heard, to examine and cross-examine witnesses,
and to introduce evidence bearing upon the issues was afforded all
parties. During the hearing the Trial Examiner denied the pending
motions to dismiss the amended complaint and at the conclusion of
the Board's case, the Trial Examiner denied a motion of the respond-
ents to dismiss on the ground of insufficient evidence. During the
course of the hearing the Trial Examiner made a number of rulings
on other motions and objections to the admission of evidence. The
Board has reviewed all the rulings of the Trial Examiner and finds
that no prejudicial errors were committed. The rulings are-hereby
affirmed.
Upon leave granted by the Trial Examiner, the respondents and
the Union filed briefs which have been considered by the Board.
Thereafter, the Trial Examiner filed his Intermediate Report, dated
November 29, 1939, finding that the respondents had engaged in and
were engaging in unfair labor practices, within the meaning of Section
8 (1), (3), and (5) and Section 2 (6) and (7) of the Act, and recom-
mending that the respondents return to St. Louis the business con-
ducted at De Soto, and offer reinstatement to those persons who were
employees of Schieber Millinery Co., on August 24, 1937, making
whole said employees for losses of pay suffered by reason of the
respondents' discrimination, and further recommending that Isaac
Schieber cause the offers of reinstatement to be made. The Trial
Examiner inter alia also recommended that Schieber Millinery Co.,
upon its resumption of business, if any, and Allen Hat Co., bargain
collectively with the representative of a majority of the employees in
an appropriate unit, and that Isaac Schieber cause such bargaining
to take place.'
On December 22, 1939, the Union filed exceptions to -the Inter-
mediate Report. On December 26, 1939, the respondents filed their
exceptions, and on January 15, 1940, a brief in support thereof. On
February 12, 1940, pursuant to notice duly served on all the parties,
oral argument, in which counsel for the respondents and the Union
participated, was had before the Board at Washington, D. C. The
Board has considered the respondents' brief filed in support of the
exceptions to the Intermediate Report and has reviewed all the excep-
7 Isaac Schieber was the only witness to testify at the April 6 , 1939, hearing before Trial Examiner Fitz-
patrick. Schieber later testified at length before Trial Examiner Jaffee.
9 The Trial Examiner recommended that no order be addressed against the trustees of Schieber Millinery
Co. whom he found to have served "merely as representatives of Schieber Millinery Co . for purposes of
service on that company."
942 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
tions of the respondents and the Union, and, to the extent that they
are inconsistent with the findings, conclusions, and order set forth
below, 'finds them to be without merit.
Upon the entire record in the case, the Board makes the following:
FINDINGS OF FACT
1. THE BUSINESS OF THE RESPONDENTS
Schieber Millinery Co., a Missouri corporation, incorporated in 1932,
was engaged in the manufacture, sale, and distribution of women's
hats and headgear. Until on or about August 24, 1937, It,maintained
its office and place of business in St. Louis. Schieber Millinery Co.
then discontinued operations at its St. Louis plant, although continu-
ing maintenance of its -St. Louis office, and removed to De Soto,
Missouri, some 50 miles away.
At De Soto, Schieber Millinery Co. continued the same business
previously done at St. Louis until June of 1938 when it ceased opera-
tions. On July 1, 1938, Schieber Millinery Co. assigned its assets for
the benefit of creditors.' On January 1, 1939, its charter was for-
feited, and, subject to rescission, the corporation dissolved, for failure
to comply with certain provisions of Missouri law.lo
Allen Hat Co. is a Missouri corporation incorporated on July 29,
1939, and formed for the purpose of acquiring the assets of Schieber
Millinery Co. and enabling Isaac Schieber to continue. in business.
Allen Hat Co. continued at De Soto substantially the same business
formerly done by Schieber Millinery Co.
The principal raw materials used by Schieber Millinery Co. con-
sisted of ribbon, silk, felt, and velvet. From July 1, 1937, through
June 16, 1938, Schieber Millinery Co. purchased approximately
$60,623.24 in raw materials. During the same period its total net
sales were approximately $127,321.17, and its products were sold
through five or six salesmen scattered throughout the country. The
respondent's bookkeeper testified that about 90 per cent of its pur-
chases of raw materials, as well as of its total sales, crossed State lines.
Although this percentage may not be accurate, it is apparent that
more, than 50 per cent of sales and purchases were to and from points
outside the State of Missouri.]' The respondents' attorney conceded
that Schieber. Millinery Co. was engaged in commerce within the
meaning of the Act.
The precise purchase and sales figures of Allen Hat Co. do not
appear, but it was admitted by the respondents that they were at
about the same ratio as those of Schieber Millinery Co., and that 90
Y See Section III A, infra
io Me Rev. Stat . (1929) Sections 4613-14-15-17-19, 4620.
11 These figures are based upon Respondents Exhibits Nos. 4 and 6 , and Board Exhibit No. 6
SCHIEBER MILLINERY CO. 943
per cent of Allen Hat Co.'s purchases of raw materials, and 90 per
cent of its total sales were across State lines.
II. THE ORGANIZATION INVOLVED
United Hatters, Cap and Millinery Workers' International Union
is a labor organization affiliated with the American Federation of
Labor, admitting to membership through its locals, certain produc-
tion employees engaged in the hat, cap, and millinery business in-
cluding employees of the respondent.
III. THE UNFAIR LABOR PRACTICES
A. The chronology of events
From 1934 to 1938 Schieber Millinery Co. was a member of Asso-
ciated Millinery Industries of St. Louis, herein called the Association,
an association composed of millinery manufacturers and jobbers, one
of the purposes of which is "to adjust relations with labor."12 In 1933,
acting for itself and its members, the Association 13 entered into a
contract with the Union concerning wages, hours, and working con-
ditions of employees of the respective members. The contract was
thereafter renewed each year, after negotiations and resultant modi-
fications.
Schieber Millinery Co., although a party to these agreements, was
reluctant to accept the Union as a collective bargaining agent. Union
Representative Harry Fromkin 14 testified, and his testimony is un-
denied, that he had a hard time maintaining a shop committee at
Schieber Millinery Co. because negotiations with Schieber were a
nerve-wracking job. In June of 1937, Isadore Pergament, Schieber
Millinery Co.'s plant foreman, told Aleck Zembalist, an operator, that
lie was too active in union committee work, that Schieber did not like
this activity, and that he should mind his own business or quit his job.
Pergament stated, "If you mind your own business and sit down, you
have a job here as long as you want it." Zembalist resigned his posi-
tion on the union price committee. Pergament denied none of the
foregoing testimony.
There is also testimony from Fromkin that in a conversation with
him after the removal to De Soto, Schieber admitted that lie had
caused the arrest of Fromkin's predecessor, because he was soliciting
membership outside Schieber Millinery Co.'s plant and that on one
occasion Schieber had locked out his employees telling them, "You
can go to your Union and get paid by Max Zaritsky [International
president]; I am through paying you any money." This incident
appears to have occurred in or about March 1937. At Zaritsky's
12 Schieber Millinery Co continued to pay Association dues until January 24, 1938.
18 It appears that 37 St Louis manufacturers and jobbers were members of the Association in 1937.
14 International vice president and local manager of the Union.
944 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
intervention the employees were reinstated . Although Schieber later
testified , he did not deny Fromkin ' s version of the conversation.
Schieber is quoted as having said to one union representative that he
"wouldn't have any god damned old son of a bitch tell him how to run
his business ." Fromkin was characterized by Schieber as a "little
bastard," and the Union International president as, "that little
shrimp Max Zaritsky."
Pursuant to the terms of the contract dated July 15, 1936, the Union
notified the Association that modification thereof was desired as of
July 15, 1937, the expiration date of the contract negotiated in 1936.
On July 15, 1937, no agreement as to the modified contract had been
reached. In the meantime Schieber , sole owner , and director of the
business and policies of Schieber Millinery Co ., had been apprised by
Union Representative Fromkin that the Union demands included
both a wage increase and a , change from an open to an "all-union"
shop.
About July 15 Schieber called the employees together in the plant
and informed them that under no circumstances would he operate
under an " all-union" shop . He declared that rather than do so he
would close his St . Louis plant , and move out of town, and that he
already had a place in mind for his relocation . Schieber observed that
an all-union or closed shop was a vicious thing, that the workers did
not know what they were in for, that a closed shop would result in the
Union obtaining the upper hand over the workers , that the Union was
driving the manufacturers out of St. Louis , and the employees should
be careful how they voted on the question. He asserted that all the
Union wanted was dues and characterized the union representatives as
racketeers. He suggested that his employees tell Fromkin that they
did not want a union shop , and requested that they induce the Union
to give him notice of strikes when impending, and that the employees
give him such notice even without permission from the Union. He
also asked whether the employees would stay with him should he
decide to operate an open shop.
As already noted, prior to July 15, 1937, the expiration date of the
1936 contract between the Union and the Association, the Union gave
notice of its desire to modify the contract, and negotiations with
reference to the new contract were instituted in June of 1937 . Several
meetings between representatives of the Association and the Union
were held, during which modifications of the earlier contract were
agreed upon . The Union 's demand for a closed shop contributed to
delay in reaching final agreement, and this demand was later modified
to what is described as a "union shop." On August 7 Max Zaritsky,
International president, attended a meeting of the millinery manufac-
turers at which a large percentage. of the Association membership,
including Isaac Schieber, was present . Zaritsky explained the mean-
SCHIEBER MILLINERY CO. 945
ing of the "union shop115 and then left the meeting. The manufac-
turers remained in session to discuss the proposed "union shop"
provision. One firm suggested its acceptance, another that the Asso-
ciation demand of the Union that enforcement of the provision be
postponed for 6 months. Four firms stated as their positions that
they would not be parties to a contract embodying a "union shop,"
but when the question was put, all present, except these four, voted for
its acceptance. Schicber Millinery Co. was not one of the four
dissenting firms.
On August 11 another conference between committees of the Asso-
ciation and the Union was held and a modified form of the "union
shop" demand was agreed upon.16 It was also understood that the
Association's committee would present the final contract thus agreed
upon to the Association membership, and the Union conceded that any
member desiring not to be bound could so indicate without relin-
quishing his Association membership, provided, however, that the
Union was given a list of employers claiming exemption within 24
hours after ratification of the contract.
Accordingly, a draft of the contract was sent to the Association
members and on Saturday, August 14, a meeting of all the manufac-
turers was held in order to ratify the contract. At the start of the
meeting George H. Sherman, Association president, who presided,
advised the membership of the arrangement about exemption. Dur-
ing the discussion of the contract Schicber took the floor to announce:
"I will under no circumstances permit you to act for the Schieber
Millinery Co. on the matter of the pending contract with the Union."
Schieber forthwith left the meeting as did the representative of another
firm who protested about the conduct of the meeting. A vote was
then taken on a motion to accept the contract "with certain minor
corrections if possible." Exclusive of the two who left the meeting,
the vote indicated the position of the manufacturers as follows: for
acceptance-15; against acceptance-3; voting "present"-l. The
chairman thereupon declared the motion carried and the contract
ratified." Later Sherman agreed with Union Representative Fromkin
on certain minor changes which the Association president had been
authorized to make.
On August 16, in accordance with the prior understanding, Sherman
wrote Fromkin enclosing a draft of the agreement and stating that
the Association's counsel, who was authorized to sign the agreement,
was then out of town and would sign when he returned. He also
is As interpreted by him, manufacturers were to employ only union members for designated crafts, manu.
facturers would call on the Union for new help (present employees were to become union members), and on
failure of the Union to furnish new help within 24 hours, manufacturers would be free to employ non-union
help who would be required to join the Union at the end of a 3-week period.
16 Under which regular non-union employees would be given until December 31, 1937, to join the Union
i7 The matter of "certain minor corrections if possible" was not considered as in any way modifying the
ratification of August 14.
946 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
wrote that within 24 hours after the Union had signed the agreement,
the Association would furnish it with "a list of manufacturers who had
elected not to adhere to the contract although remaining at the same
time members of our Association." Fromkin received this letter on
August 16; that night the members of the Union ratified the agreement,
and the next day the contract was signed by Fromkin on behalf of the
Union and its locals. Fromkin then saw Sherman and requested the
list of manufacturers desiring exemption. He acceded, however, to
Sherman's request for an additional 24 hours in which to furnish the
list.
Sherman thereupon communicated with those firms, other than
Schieber Millinery Co., which had voted against ratification at the
August 14 meeting. He informed them of the list which he was to
furnish to the Union and asked whether or not they wished exemption
from the contract in accordance with the union concession presented
at the August 14 meeting. With the exception of Baer, Sternberg &
Cohn, Inc., the manufacturers informed Sherman that they did not
desire exemption but would be bound by the contract. Samuel J.
Margulis, then vice president of the Association," was delegated to
telephone Schieber to ascertain whether he desired exemption.
Margulis did so sometime between August 17 and August 20 and re-
ported back to Sherman There is conflict, however, as to just what
Margulis told Sherman. Sherman testified that Margulis reported
to him that Schieber had said he did not want to be included in the
letter and that Schieber felt "he might as well stay with the rest of
the boys; he didn't want to go in on the letter." According to Sher-
man, "The way we all took it he was going to go on with the rest of
the boys in the city as he had in the past." It was Margulis' tes-
timony that he had reported merely to the effect that Schieber "didn't
want to be in on the letter." The Trial Examiner in his Intermediate
Report found that Margulis did not, in fact, tell Sherman that
Schieber felt "he might as well stay with the rest of the boys." The
Trial Examiner's analysis of the evidence was that Sherman had sim-
ply implied from Margulis' statement that Schieber "didn't want to
be in on the letter," that Schieber "was going to go on with the rest
of the boys." Such was a reasonable inference, under the circum-
stances, and there is testimony indicating that Margulis, himself,
may have reached the same conclusion.19
In any event, it is clear that Margulis did not reach the conclusion
18 Now Association president
i Schieber in substance testified that when Margulis asked him whether he wished to be included in the
letter as not bound by the contract he replied that he stood by his action at the August 14 meeting, had
not changed his mind since, that the Association was not representing him in the matter, and that he
did not want his name included in any letter We do not credit Schieber 's testimony that he told Margulis
he would stand by his action at the August 14 meeting From his observation of Schieber on the witness
stand , the Trial Examiner concluded that he was "shifty and evasive " The record amply supports the
conclusion that Schieber was not a credible witness
SCHIEBER MILLINERY CO. 947"
from his conversation with, Schieber that the latter intended to be
exempt from the contract'." 'On AugustOthre "Umon complained that
Schieber Millinery Co. had violated the new,dontract by discharging
and locking out its employees and, pursuant to the terms of the new
contract, called a meeting of the labor committee.20 Margulis, who
was present, said nothing whatever to indicate that Schieber had
earlier told him that the Schieber Millinery Co. was not to be bound
by the contract. To the cgntrary, as the Minutes of the August 26
meeting indicate, Margulis obviously assumed the company had been
included in the contract. The conclusion'is inescapable that, what-
ever Schieber may have told Margulis, he did not make apparent to
Margulis that his company was not to be bound by the contract, but
merely made it clear that he did not want to be listed as refusing to
be bound. Under all the circumstances of the case, it is a fair infer-
ence, and we find, that Schieber intended to deceive Margulis as to
his true position, and thus made clear to Margulis only the fact that
the Schieber Millinery Co. did not want to be listed as refusing to
accept the contract. As a reasonable man Margulis then inferred
that, not wishing to be so listed, Schieber was willing to be bound.
We find, moreover, that Schieber reasonably believed that Margulis
would draw such an inference from what Schieber told him.21
As a result of Schieber's representations to Margulis, Sherman
reasonably assumed on August 20 that Schieber had decided to abide
by the contract. On that date, after the contract was signed, the
Association wrote all of its member manufacturers enclosing a final
draft of the contract and referring to minor changes which had been
made in accordance with the authority earlier conferred. The expira-
tion date of the contract was fixed at July 15, 1939.
At the time that negotiations between the Association and the
Union began in June 1937, one of the Association members, Baer,
Sternberg & Cohn, Inc., operated a millinery plant in De Soto,
Missouri, in addition to its plant in St. Louis. Schieber, who believed
that De Soto was a strong "non-union" town, began negotiations fate
in May with Baer, Sternberg & Cohn, Inc., directed towards purchas-
ing its De Soto plant and moving Schieber Millinery Co. there from
St. Louis. The negotiations thus commenced were carried on through-
out the period of negotiations between the Association and the Union
as to the contract. Although it is not clear whether or not Schieber
had definitely made up his mind to move by July 15, 1937, the day
Schieber called his employees into a meeting with reference to the
20 Article 15 of the contract provides inter atia that complaints arising under the contract , shall be referred
to representatives of the Union and the Association known as the "Labor Board," and also called the "Labor
Committee " Article 15 thereof prohibits lock-outs
71 It is entirely clear that Schieber at no time intended that Schieber Millinery Co should be bound by
the contract As appears below, he had at the time of the foregoing events already decided to move his
business to De Soto , Missouri , for the purpose of avoiding any contractual relations with the Union, and
any collective bargaining with it.
948 DECISIONS OF. NATIONAL LABOR RELATIONS BOARD
closed-shop provision of the contract as set forth above, it is certain
that Schieber had definitely decided to move to De Soto by August
1, 1937 . On that day he gave notice to his landlord in St. Louis of his
intention to move out within 30 days and, although negotiations with
Baer, Sternberg & Cohn , Inc., were not completed on August 1,
Schieber felt confident by that day that the negotiations would be
successfully consummated '. It appears from the record , nevertheless,
that with the exception of Baer, Sternberg & Cohn, Inc., members of
the Association were not aware of Schieber 's intention to move, nor
was the Union . Although during the middle of August rumors were
current among the Association members that Schieber had been
negotiating with Baer , Sternberg & Cohn, Inc., there is testimony
indicating that the Association had no knowledge of the negotiations
other than these rumors until later in the month . Despite the fact
that at the July 15 meeting with his employees , Schieber informed
them that he would move out of town rather than agree to a closed
shop and that he had a place in mind to which to move, it is indicated
that the employees considered Schieber 's statement merely as a threat
and that neither they nor the Union had any facts on the subject
beyond this statement.
As noted above, Schieber on August 7, 1937 , attended a meeting
of the Association and was present during negotiations between
the-Association and the Union with reference to the new contract.
Schieber at this meeting said nothing to indicate that Schieber
Millinery Co. was going to De Soto, nothing to indicate that Schieber
Millinery Co. did not wish to be included in the contract , and said
nothing purporting to revoke the authority of the Association to act
for Schieber Millinery Co. in , the negotiations with the Union. It
was not until on or about August 14 that the De Soto deal was closed
or virtually closed. It was on this day that Schieber made an an-
nouncement at the Association meeting purporting to revoke the
Association 's authority, and Schieber testified that at that time
his "deal was cooked ," that be had "virtually bought" the 'D^ ^ Soto
plant and was " almost ready to move ." Schieber testified that
consequently he had no interest in the negotiations but participated
in them merely because "he still owed the manufacturers here a little
allegiance ." Even then it was not generally known that Schieber
Millinery Co. was imminently to move, and the Union was not aware
of the removal until the day before it actually took place: Thus, on
August 17, being informed that a non-union man had been hired at the
Schieber plant, Fromkin visited the plant and complained to Perga-
ment, shop foreman (Schieber then being absent ) that hiring a non-
union man was in breach of the contract with the Union; that under
the contract Schieber Millinery Co. was required to hire new workers
through the Union. Pergament agreed to let the new man go. On
SCHIEBER MILLINERY CO. 949
Saturday, August, 21, Fromkin was informed that one or two of the
Schieber employees were working,in violation of the contract provision
forbidding Saturday work and again visited the plant. Rosenberg,
vice, president of Schieber Millinery Co., and Pergament were then
present; and Fromkin complained to them of the violation. Rosenberg
explained that the men were working on samples and that be was under
the impression, that such ,work was permissible on Saturday. "Rosen-
berg asked [Fromkin] not'to be too hard on the boys, because it was
strictly a, misunderstanding on, his part." Fromkin thereupon left
the, plant with the two Saturday employees.
.0n ;or about August 24 Schieber's negotiations with Baer,,,Stern-
berg & Cohn, Inc., were completed and, on the,same day, the effects of
this transaction were made known to the employees of Schieber
Millinery Co.- Nora Baumann, one of the employees, testified .that
Pergament said, the company was moving out- of town; that there was
no more, work. Maple McNeece testified to the same effect. Employee
George Bailery testified that Pergament said the company was not
going to continue to make hats'in St. Louis; that it was moving out of
town to avoid trouble with the Union. To this extent the testimony
was uiicontradicted and, we accordingly find that Pergament made
the remarks attributed to him. ,
There is, however, considerable disparity as to whether or not the
St. Louis employees .were offered work in De Soto, and, as alleged by
the respondents, whether they refused such work. , The testimony of
Schieber and Pergament to;the,point is unsatisfactory. 12
Ten witnesses called by the Board to testify about the alleged offers
of employment at De Soto disputed the versions of both Schieber
and Pergament. Eight testified that they received no offers what-
22 Schieber testified that he talked to one or two employees about going to De Soto and instructed Perga-
ment to invite others, Schieber then added that he talked to two or three of the blockers and one or two
of the operators , he named three blockers, one sof them since deceased , he commented that he asked these
employees if they would like to go to Do Soto and they replied that they did not thmk , so Schieber later
inconsistently testified that he offered employment to one or two employees in each department , and that
lie did not remember who these employees were, that he did not select individual employees but made the
offers in casual conversation and that he had left the matter to Pergament Pergament 's testimony was
especially contradictory and evasive Pergament stated that he offered positions to "quite a few of them,"
and that none wanted to go; Pergament next asserted he offered jobs in De Soto to "all my old people,"
explaining that he had been a foreman for other shops in St Louis , and that some of Schieber Millinery Co
employees had worked under him in these other shops for 10 years or more , and that by "old people" he
referred to such employees Pergament commented that he offered jobs " to around 15 or 18 or 20". thereafter
Pergament designated three employees he claimed were offered jobs It is to be recalled that Schieber named
three in all, one deceased In other context Pergament claimed he asked " ten or twelve girls I raised
In all Pergament specifically named eight employees , asserting his memory for names was had Four of the
named employees were witnesses who flatly contradicted Pergament , two of the employees contradicting
him were at the time of the hearing working under Pergament at another plant in St Louis In meeting the
testimony of several other employees, that no jobs were offered them , Pergament observed on the stand as
to some that he did not remember them at a11, as to others that he did not remember whether or not he ,
offered them jobs , and as to the balance , that he made no offer at all But Pergament insisted that "every-
body turned me down", that the employees did not want to leave St Louis Frank Bickle , Edward Par-
rott, and Wolford Hudson, employees called by the respondents , testified that Pergament had offered them
employment in De Soto and that they had refused it One of these , Frank Bickle , said that Pergament's
statement was that the company wanted to take some help along and that Pergament had chosen Bickle
if Bickle cared to go.
323429-42-61
950 DECISIONS OP NATIONAL'' LABOR ' RELATIONS BOARD
soever. One; Harry, Faintich,' testified -that Pergament' offered him
and Allen Bagwell; another employee, jobs in De'Soto, but added that
if they accepted they would never be-able to get a job wherever there
was a union. "In other words," commented Faintich, "he made' it
clear tome to go down'as'non-union members." Faintich also testified
that Schieber made the same proposal to him.' Employee Meyer
Millstone testified that he asked Pergament for' a job iii' De Soto; 'that
Pergament replied he'would take him' on' but' did not do'so; and that
about 2 days thereafter Millstone urged Schieber to' give' him a job
without an offer being made to ' him, and that` upon meeting Perga-
ment'about`a week after the removal to De Soto he reminded Pe'rga-
merit of 'his promise and `Pergament replied that' Millst'one'"wouldh't
work' for the mon'o' we are paying"'in De Soto, and,' moreover, they
"wouldn't hire any union men." About the same time Mill'store
testified he also'saw Schieber again and the latter said, he "wouldn't
hire any union man; that he only would employ' people what he, got
over there"; that "he has got 'all the' people from' Dc Soto, Missouri
and'he wouldn't employ anybody from St. Louis."
` Schieber did' not testify to conversations with either Faintich or
Millstone. Pergament did not testify in respect to Millstone's asser-,
tion but denied that he offered Faintich a job.23 We find, as did the
Trial' Examiner, that the statements attributed to Schieber andPer-
gament ' were made by' them. ' Significantly' it is Schieber's own testis
niony "that " there was a ' genet al understanding" with the 'town of
De Soto that "natives of 'D'e Soto" would be 'employed. Schieber,
moreover, testified that when Schieber Millinery Co. moved to Do
Soto it acquired those employees formerly employed by Baer, Stern-
berg & Cohn. Considering testimony already noted above that De
Soto was' known to be a "non-union" town, and that Scbieber's under-
standing to employ natives of De Soto was reached with a corpora-
tion acting for the municipality of De Soto,24 we find that Schieber
intended to give De Soto employment to few if 'any of his former
employees, and did not in fact offer in good faith to employ the St.
Louis employees of Schieber Millinery Co. at De Soto.25
23 Asked by respondent's counsel . "Did you ever say 'I would like to have you come to De
Soto, but if you do, remember you will be blackballed by the Union and you will lose your Union stand-
ing'?" Pergament replied, "I don 't remember " Pergament contradictorily later testified that he did not
offer employment in De Soto with the understanding that the employees should quit the Union He ex-
plained the inconsistency in his testimony by indicating 'that lie had misunderstood the first question
put to him.
'4 The building in which the De Soto plant was located was owned by the De Soto Development Com-
pany, a municipally owned corporation set up by the town of De Soto for the purpose in part at least of
attracting new industries to the town. The property had been leased by De Soto Development Company
to Baer, Sternberg & Cohn, Inc., from which Schieber Millinery Co acquired the lease . The Development
Company paid all taxes and exacted but a nominal rent -$250 a year It is clear that Schieber Millinery
Co. moved to De Soto under the common inducement offered by non-union communities See 36 Col. L.
Rev. 776, 779
23 It is a fair inference that, with the possible exception of the three witnesses called by the respondents,
any others who received offers received them subject to the condition that they drop out of the Union.
' ' SCHIEBER MILLINERY CO:- 951'
Froinkin''appeared at -the' 'plant on' August' 25 and to'ld"Rosenberg
that the shut-clown constituted' a lock-out in breach of the contract.
Being unable to locate' Schieber, Fromkin'arranged with the Associa-
tion for a meeting of the labor committee, and next morning sent a
letter by messenger requesting the company to appear, at, the meeting
to be held that day. No representative of Schieber Millinery Co. ap-
peared, however, and the ineetmg was adjourned, by Margulis in
order that he might consult with Schieber'.26 Schieber later told Mar-
gulis'that he was "not interested" iii the Association and would not
meet with the committee since he had "no contract" with the Union.
On August 25, 193,7, Baer, Sternberg & Cohn, Inc., sold its machinery,
furniture, and fixtures at De Soto'to Isaac Schieber.1.7 Within a few
days Schieber Millinery Co. began' operations at De Soto, using the
former employ'ees' of Baer, Sternberg & Cohn, Inc., in the plant.
On or about September 15, 1937, the Union filed a petition for_ an
injunction in'the Circuit Court of'the city of St. Louis, alleging that
Schieber Millinery Co:, Isaac Schieber, and Rosenberg were violating
the contract by the lock-out and removal of the plant and praying
for an order restraining' such violation.28 A hearing in the Circuit
court was held on September 24, and after its conclusion Schieber
met Fromkm and' his attorney at the 'Mayfair Hotel in St. Louis.
Fromkin testified that Schieber then said:
now that he was through'with the trial in so far as the civil
suit was concerned, he was satisfied there was nothing that the'
Union could possibly, do to touch him in any way, shape, or
'iriahner, in so far as unionsun is concerned. He went' on to
say', that "While I had at all times had a large percentage of
my workers as members of the Union, I have been' fed'up with
it, and I have been looking for an opportunity to, get out from
under', because it was getting unbearable, and now that I have
found this, place in De Soto, Missouri and the city [St. Louis]
is over with, I am satisfied I can go on with my business without
26 Schieber testified that he received Fromkin 's letter and ignored it.
27 Schieber 's consideration was $3 ,000, of which $500 was paid in cash and the balance in 25 monthly
notes of $100 each secured by a chattel mortgage Schieber leased these chattels to Schieber Millinery Co
for a consideration of $100 a month . Schieber Millinery Co. also took to De Soto most of its own machinery
and fixtures
29 Prior thereto, on August 30, 1937, the Union filed charges with the Board Neither the filing of the
petition nor the decree later entered thereon barred the Union from asserting its rights under the Act It is
fundamental that the doctrine of election of remedies is applicable only where there are two or more coex-
istent remedies available to the litigant which are repugnant and inconsistent ' Pacific S - S Co v Peterson,
278 U S 130, 49 S Ct 75, Zimmerman v Harding , 227 U S 489, 33 S Ct 389 , Robb v Nis , 155 U S 13,
15 S Ct 4 The rule, of course , does not apply where the remedies are merely cumulative , Pierce v . United
States , 255 U. S ' 398, 41 S Ct 365, or where the remedies are for the enforcement of different rights or the
redress of different,wrongs , United States v. Rizzo, 297 U. S 530 , 56 S Ct 580 Where a new remedy is
provided by statute for an existing right, not incompatible with the continued existence of an existing
remedy, the new remedy is i'egarded as cumulative and'the person seeking redress may adopt and pursue'
either at his option , Shriver v. Woodbine San Bank , 285 U S 467 , 52 S Ct 430 Moreover, the Board was
not a party to the Circuit Court proceeding and its remedy redresses wrongs declared by Congress to be
public and not private.
952 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
being bothered further, because neither you or that little shrimp
Max Zaritsky. [President of the, International Union] can do
anything which would : organize the people out in De Soto
Missouri.""
Fromkin further testified:
I recall him making the following statement, that for a long,
while, for a long time lie tried to find such a place as what he
now has in De Soto, Missouri, in so far as unionsim in the plant
is concerned, so he can get away from a union plant, now that he
found it [sic] feels, certain there is not anything I could do which
would change the status of those workers in De Soto as far as
membership in the Union is concerned, and if I ever 'came into
De Soto I would be out much faster than I can possibly drum of.
Schieber did not deny having made these statements," and we find
them to have been made by him substantially as set forth above.
On May 23, 1938, the Circuit Court of the city of St. Louis in effect
found that the defendants were violating the contract with the Union
in continuing to,lock out the employees who had been employed on
August 25, 1937, and ordered that the defendants undertake collective
bargaining with the Union "in the City of St. Louis" in accordance
with the contract. It also ordered the defendants to place the locked-
out employees in status quo by immediately offering them reinstate-
nient,,through the Union, and employing them to the extent of work
available.
On or about June 1, 1938, Schieber Millinery Co., after failure to
comply with the order of the Circuit Court, discontinued its opera-
tions. In explaining this, Schieber testified that since the firm
was in "financial difficulty" he started negotiations with his creditors
early in June in an attempt to effect a settlement with them. During
June Schieber went to New York, where most of the creditors were
situated, and there discussed the possibility of an adjustment with
Ribbon, Silk & Velvet Association, Inc., an organization representing
these creditors. The latter Association then requested Sidney I.
Cohen, a certified public accountant and its St. Louis auditor, to make
an audit of Schieber Millinery Co.'s books. Cohen, although also the
auditor for Schieber Millinery Co., proceeded to comply with this
request. On June 16, 1938, Cohen submitted a report listing Schieber
Millinery Co.'s liabilities at $21,246.06 and assets at a book value of
$22,031.17. Cohen, however, estimated their realization value as
only $8,970 73. He listed preferred claims against the company at
$1,548.60, leaving as "net free assets" $7,422.13, or 37.68 per cent of
the general claims. Cohen's report recites that it was prepared in
29 See Section III D, 3n(ra
30 A witness called by the respondents indicated that he had no particular memory of the conversation,
although present through a small part of it.
SCHIEBER MILLINERY CO. 953
haste and was based upon the books and records examined, and the
information furnished, and that it does not presuppose a direct verifica-
tion of assets and liabilities. Cohen testified that the assets' were
appraised at "quick sale" figures.31
About June 20, 1938, the Ribbon, Silk & Velvet Association, Inc.,
decided to accept Schieber's 30-per cent offer -of settlement on con-
dition that the St. Louis creditors should also agree. Harry Gleick,
'attorney for a creditors' association at St. Louis, then conducted a
meeting of the St. Louis creditors, at which the 30-per cent offer was
rejected. Thereupon Gleick insisted on the making of an assignment
for the benefit of creditors. On July 1 Schieber Millinery Co. voted
to make the assignment and executed the same. One Robert Mass
was named as assignee, and Gleick was named 'attorney for the
assignee. By the terms of the assignment the corporation conveyed
all its assets to the assignee who agreed to liquidate them as soon as
expedient and, after deduction of expenses, taxes, and fees, to dis-
tribute'' the balance ratably ' to- creditors. The assignee, however,
'agreed not to confirm any sales unless the creditors should net at
least 30 per cent of their claims.
Pursuant to the assignment, the assignee took possession of the
assets; caused' an 'appraisal to be made, and advertised a sale of the
physical assets at public auction on July '5. The auction was con-
ducted by a public auctioneer at the De Soto plant and several
prospective purchasers were present The machinery, fixtures, and
merchandise were knocked down to an attorney 'associated with
counsel for the respondents, whose bid-of $1,500 was in the name of
one William Levitt, who in turn was acting for Isaac Schieber.
Schieber admittedly planned, to bid in the assets if possible and con=
tinue the business as a new corporation. Within a day or two there-
after, the assignee sold the accounts receivable, reported by Cohen as
having a stated 'value of $8,279.66, to Isaac Schieber personally for
$3,197.13. -In addition thereto, collections had beer' made on the
receivables prior to the sale and there' was cash on hand totaling
$2,270.51. The total thus realized by the assignee was $7,467.64.32
About July 7 the assignee, after deducting expenses and fees, paid the
preferred claims in full and distributed to the general creditors a first
and final dividend of 30 per cent. The balance of 70 per cent remained
due.
As already noted, prior to the" assignee's sales Schieber had deter-
3I The largest items of difference between book and appraised' values were in dies and blocks and the
machinery and equipment The dies and blocks had a stated value of $6,707 72 They were appraised,
however, at only $100 The machinery and equipment had a stated book value of $4,315 99, but were
appraised at only $600
32 There are large withdrawals from the Schieber Millinery Co. bank account between June 16 and the
date of the assignment , which are umnvestigated and unaccounted for by either the auditor , the assignee,
the assignee's attorney , Schieber, or Scbieber 's bookkeeper . The Trial Examiner found that the assignment
was involuntary , although he observed that it was surrounded by "suspicious circumstances."
954 DECISIONS Or NATIONAL LABOR RELATIONS BOARD
mined to form Allen Hat Co: in order, to continue business. The,
assignee's bill of sale,of the accounts receivable ran to I. Schieber, but
the list of accounts attached thereto referred to Allen Hat Co. as the
purchaser. Allen Hat Co., however, was not incorporated until
several weeks later, on July 29, 1938 33 In order to'get, cash for his
purchases and for the new company, Schieber arranged to have
$2,000, borrowed from his attorney. This loan was effected by a
check from the attorney payable to the order of Schieber's wife, who
endorsed the, check in blank. Schieber also borrowed $750 from
Levitt, a nephew by marriage; $500 from one Carafoil, a brother-in-
-
I
law; $400 from his bookkeeper; $200 from one Lazarus;, and an
undisclosed amount from his brother, Jacob A. Schieber. , ;
Of , the 100 shares,issued, by Allen Hat Co , 90 went to Schieber's
wife, 9 to Schieber's brother, and 1 to Lillian L. Coxwell, Schieber's
nominee. , Assuming that Mrs. Schieber's contribution was the $2,000
borrowed from Isaac Schieber's attorneys, her consideration for the
stock issued to her would account for only, 20 shares, since, each has a
par value of $100; it thus, appears that Mrs.Schieber received 70
shares above her purported contribution. As to, this, Isaac Schieber
testified in substance that the extra 70, shares were; a gift from, him.
After first, stating that this,gift, was,prompted by,,affection, Schieber
later added that the loan from, his attorneys would not have, been
made unless ,Mrs. Schieber received a substantial majority of the
stock. Schieber further, testified that the nine shares acquired by his
brother, Jacob Schieber, ,were given him' in consideration of an old
debt of $1,000. The. Trial Examiner did not credit this testimony,
nor; do we., It further appears, that Schieber, through his. nominee,
acquired but one share of stock for his apparent contribution of sub-
stantially, all the,assets.3'
, Upon the incorporation of Allen Hat Co.' on July, 29, Schieber
leased to the Allen Hat ,Co. that part of ^ the, machinery and fixtures
which had previously been. purchased in his name, from, Baer, Stern-
berg & Cohn, Inc. About the same time William LevittI signed a bill
of, sale for the machinery, fixtures,, and merchandise purchased, at the
auction sale, transferring property, in them to Allen Hat Co. Allen
33 The articles of association of Allen,Hat Co show an authorized capitalization of $15,000, divided into
150s hares of a par value of $100 , and that 100 shares were issued for the assets listed as follows Cash, $1,459,
receivables , $5,741, macfiineri and fixtures , $1,500, merchandise, *$ 1,300, totaling $10,000. These figures
show a large mark-up on Schiebgr 's purchases from the assignee. Receivables which had been purchased
for $3 ,197 13 were valued by the new corporation at $5,741., Machinery, fixtures , and merchandise which
had been purchased at the auction for $1,500'were valued at $2,800
J4 We do not believe that the $ 2,000 was Mrs Schieber's contribution but find that it was lent by Schieber's
attorney to him The following testimony summarizes Mrs Schieber's relation to Allen Hat Co
Q And what connection does she have with the Allen Hat Company'
A She is a stockholder, an officer and director
Q And what does she have to do with the management of, the Company?
A. She leaves that to me
Q. And you manage and direct the affairs of the Allen Hat Company yourself?
A. That i' right , , , 1 1
SCHIEBER, MILLINERY Co.. - 955
Hat ,Co; then started ,operation, at the De: Soto plant of ,the same
business, previously, conducted by Schieber Millinery.Co.35 The plant
had, bee,n,closed for a period not exceeding 2'mbnths.
-.'B. The refusal to 'bargain collectively
1. The appropriate unit
It was stipulated at the hearing that all production employees en-
gaged in the operations of blocking, cutting, operating, making, and
trimming; but ,ex'cludin'g foremen, foreladies;supervisory employees,
and designers, employed by the 'respond'ent Schieber Millinery Co.•,at
its St.'Louis plant 'constituted a unit' of einpioyees' appropriate for
liurposes of'collective'bargaiiung within the meaning of Section .9 (b)
of the, Act.36
"Although thel respoiide'nts contend' `th'at the employees within the
above unit, as stipulated ceased to be employees' of,'the respondents
after 'the lock-out 'and removal to Do Soto, this contention'is withoiit
merit since the employer-employee relationship was not terminated'
by acts of the respondents hereinafter found to constitute unfair labor'
practices' and the employees within said unit continued to be and are
now the employees' of the respondents within the meaning of the Act.
We find that all' the production employees of the respondent 'Schie-
ber Millinery Co. engaged in the operations of blocking, cutting, oper-
ating; 'making,` and trimming, exclusive ' of ''foremen, foreladies, and
supervisory employees, at all times material herein constituted and'
that they now constitute a unit appropriate for the purposes of col-
lective bargaining with ' respect' to rates ' of pay, wages, hours 'of em-
ployment, and other `conditions 'of' employment,' and that said unit
insures to the employees 'of the"repondents, the full benefit of their,
right. to self-orgaliizatiofi and to 'collective bargaining and otherwise
effectuates the policies. of `the Act.
.
I
"I i . I
2. Representation by the Union of the majority, in the, appropriate; unit
"It was "stipulated that at -least .98' per cent of the production em-
ployees' at the St. Louis plant'from June 1, 1937, to-the time that'
the plant' was closed, were members of the Union and that) since' the'
closing''" up' to the present' time" all but six' or seven of, them con'-
timed as union members. ' The employees included in the appropriate
unit averaged approximately 40 in'number.
33 Schieber testified that after the removal to De Sotb,'operations there were substantially'the same'as'
before, that the salesmen were substantially the same ; 'and that the business was substantially the some as'
that formerly conducted at St Louis. He further testified that with little variation,,the hats made by Allen,
Hat Co , after its incorporation , were of the same grade and quality and sold to substantially the sane cus-
tomers as the hats made by Schieber Millinery Co
3e Counsel for the respondents stated "we want it distinctly understood that • they constituted a unit as
long as they were working for us. We don' t want to admit that they were any employees after we went out
of business
956 DECISIONS OF ' NATIONAL LABOR RELATIONS BOARD
We find that on June 1, 1937, and at all times material herein, 'tlie
Union was the duly designated representative of the majority of the
employees in the appropriate unit for the purposes of collective
bargaining, and pursuant to Section 9 (a) of the Act,,was the exclusive
representative of all the employees in such unit for purposes of
collective bargaining.
3. The' refusal to bargain
The amended complaint alleges that the respondents since on or
about June 15, 1937, have refused, and continue to refuse, to bargain
collectively with the Union in respect to rates of pay, wages, hours of
employment or other conditions of employment. We have already
noted the circumstances surrounding the Union's negotiation of the
1937 contract. Schieber prior thereto began his efforts to acquire the
Dc Soto plant, of Baer, Sternberg & Cohn, and had determined to
remove from St. Louis to this "non-union" community. Throughout
negotiations with the Union, Schieber concealed from both the Asso
ciation and the Union his intention to remove the plant from' St.
Louis and to avoid collective bargaining. Thereafter he breached
the agreement, and refused to meet with union representatives for
the purpose of discussing the violation' thereof. As already noted,
the Circuit Court for the city of St. Louis found that Schieber Mil-,
finery Co. had violated the agreement, and ordered that it undertake
collective bargaining with the Union. There was rio compliance with
this order.
The respondents raise the following contentions: (1) that the Union
made no request of the respondent to bargain, and hence there could
have' been no refusal; 3' (2) and that, if it is found that Schieber
Millinery Co. was bound by, the 1937 Contract,"' there could be no
refusal to bargain collectively since the goal of collective bargaining
had been reached.
Schieber was present at the' August 7, 1937, and other meetings
after he had already made definite his decision to go to De Soto; and
during, these, negotiations concealed his purpose by actively, partici-
pating therein while planning to move his plant, to avoid the -Union.
It, is ;apparent, . therefore, that during these negotiations Schieber
failed to make a bona fide attempt to reach an agreement with the
'bargaining representative of its employees.' -Instead; he sought to
lull the Union into a false sense of security by maintaining a. pretense
of participating in the bargaining negotiations and of being bound by
the resultant contract until he had fully perfected his plans to move
e7 In support of this contention the respondents cite the decision of the Supreme Court in National Labor
Relations Board v Columbian Enameling & Sta7apeng Co , 306 U S 292 But that case is not apposite here
Not only had the Union given, to use the language of the Supreme Court, "some indication . of the
desire or willingness to bargain," but Schieber participated in negotiations iesulting from the Union's
request to modify the 1036 contract and during most of the negotiations pi for to the renewal of that contract,
Schieber was present and took an active part.
19 This the respondents deny.
SCNIEBER MILLINERY CO.- 051
away from,St. Louisa, There can be'no doubt that the 'respondent 'is
obliged by the terms of the, Act to 'enter-into real bargaining and not
a, chimerical substitute:' ' Real bargaining means' negotiation,'in ,a
-bona .fide attempt to reach an , agreement. if agreement -is possiblei.39
Atinoi time during, the 1937 negotiations, did Schieber int6nd-,to- deal
withi the Union in good faith. There is'no substance to. the, argument
that :after , the shut-down-of the St. Louis plant ' and the,removal, to
De .Soto the ,Union was under further duty to request collective tbar-
gaining: ' On August 26, following the lock-out of the St.--Louis em-
ployees" the Union did in fact request Isaac Schieber to meet with' the
labor committee, as piovided by the contract between the Union and
the Association. We leave repeatedly held that when the employer
has committed an unfairlabor practice by closing its plant and locking
oiit its employees it is not relieved of its obligation to bargain collec-
tively because of the shut-down.40 Under • the circumstances. of this
case, which. reveal' that Schieber. Millinery Co: and Isaac Schieber
removed, business operations to a non-union community in, order, to
avoid dealing with the Union, we do not deem a further.request••to
bargain on the part of the Union necessary, and deem it controlling
that Schieber by his prior conduct had demonstrated the futility of
such a request.41
Equally specious. is the,respondents' second objection tliat,;if' it
were bound by the contract-there could' not be a violation, of Section
8 (5) of the Act since the,end and purpose. of collective, bargaining had
been achieved.42 There is no doubt that Schieber was bound,by,the
39 Matt er of Atlas'Mille, Inc and Textile House Workers Union, No 2269, United Textile Workers of Americii,
3N.L R B 10,21 ' ,
40 Matter of Omaha Hat Corporation and United Hatters, Cap & Millinery Workers International Union,
Local Nos 7 and 8, 4 N L R B 878, Matter of Somerset Shoe Company and United Shoe Workers of America,
5 N L R B 486, Matter of American Radiator Company, a corporation , and Local Lodge No 1770, Amalga-
mated Association of Iron, Steel, and Tin Workers of North America, affiliated with the Committee for Industrial
Organizations, 7 N L R B 1127, Matter of Kuehne Manufacturing Company and Local 'No 1791,- United
Brotherhood of Carpenters and Joiners of America, 7 N ` L R B 304, Matter of Edward F Reichelt, Robert J
Hill and Russet J Jensen, doing business as a co-partnership under the name and style of Paul A Reichelt Co
and Chicago Fur Workers Union, Local No 45, 21 N L'R B 262 • In Matter of Kuehne Alanufacturinp
Company, etc supra, 321 ne stated.
Since we have, found that the closing of the Flora plant involved a discriminatofy lock-out, the shut-
down did not relieve the respondent of its obligation under the Act to bargain with its employees or
their duly chosen representatives Obviously, the respondent can neither rely upon; its own wrongful
"abandonment" of the plant as an excuse for its refusal to bargain collectively with the Union, nor argue
with good grace that such bargaining would have been fruitless I ' -
!i On. August' 26 Schieber refused to discuss the'Union's charge that Sebieber Millinery Co had breached
the contract on,the ground that so far as the company was concerned there was no contract at all What
respondents urge m effect is-that even though the Schieber'Milluiery Co employees'were discharged and
locked'out, even though it was made obvious that they would not be relined, at least as union employees,
even though the company ran away to evade the Union, to avoid the necessity for bargaining with it, a
further request should have been made after the runaway to De Soto.
4i In National Labor Relations Board v The Sands Manufacturing Company, 306 U S 332, 342 [af 'g 96 F.
(2d) 721 (C C A 6), setting aside on other gi ounds Matter of the Sands Manufacturing Company and Mechan-
ics Educational Society of America, 1 N L R. B. 546], the Court stated "But we assume that the act imposes
upon the employer the further obligation to meet and bargain with his employes' representatives respecting
proposed changes of an existing contract and also to discuss with them its interpretation " Cf Matter of
Essex Wire Corporation and United Electrical, Radio and Machine Workers of America, Local No 797, 19 N L.
R B 51. -
958 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
contract, as the Circuit Court for the city of St. Louis found. The
mere. fact that a contract existed, however, does not bar us from -a
consideration of,the facts showing that Schieber had no intention of
dealing with the Union in good faith. We deem it certainly a•vio-
lation of the Act for-an employer to engage in conduct demonstrating
a,continuing intent,not to comply with a collective agreement and to
refuse,to ,discuss continued- violations thereof.43 As the Circuit Court
for the city of St.; Louis found, Schieber refused to adjust disputes
arising under the agreement by which he was bound.44 We agree
with this determination. Such refusal was both a violation of the
agreement and of the Act.
We find that the respondents'since August 1937, and at all times
thereafter, refused and are refusing to bargain collectively with
United Hatters, Cap and Millinery Workers International Union as the
exclusive representative of their production employees, in respect to
rates of pay, wages, and hours of employment, and other conditions of
employment, and have thereby interfered with, restrained, and coerced
and are interfering with, restraining, and coercing these employees in
the exercise of the rights guaranteed by Section 7 of the Act.
6. 'Discrimination as to hire and tenure of employment
The ,complaint alleges in substance that the discharge of the St.
Louis employees on or about August 25, 1937, and the removal to
De Soto' constituted a discriminatory lock-out, that this was followed
by, a discriminatory refusal to reinstate the employees, and that these
acts were done by Schieber Millinery Co. and Isaac Schieber to avoid
bargaining with the Union; that the assignment for the benefit of
creditors following closely after the Circuit Court of the city of St.
Louis decree against the defendents, and the later formation of Allen
Hat Co., comprised part of the same integrated scheme to evade the
Act which resulted in the lock-out, the removal to De Soto, and the
refusal to reinstate the locked out employees.
The respondents urge in substance that the removal to De Soto
was for legitimate business reasons, primarily to obtain the benefit of
lower production costs and cheaper rents and that the employees
were offered jobs in De Soto but refused them.
It is apparent, as was found by the Circuit Court of the city of
St. Louis, that the 1937 contract bound Schieber. Millinery Co.
despite its lack of good faith throughout the negotiations.45 We have
i7 We have reference to the breach of Section 13 of the 1937 agreement countermanding strikes and lock-
outs and Sections 14 and 15 providing for arbitration of alleged violations of Section 13.
i+ The implications of the respondents ' contention would make static the continuing process of collective
bargaining.
ii The decree of this Court, of course , is not res adjudicata on the issue since the National Labor Relations
Board was not a party to the proceedings Compare Matter of the United States Stamping Company and
Enamel Workers Unoin, No 18630 , 5 N. L R B. 172 , 185, Matter of Williams Manufacturing Company,
Portsmouth , Ohio, and United Shoe Workers of America, 6 N. L. R. B 135, 143-4.
SCHIEBER 'MILLINERY CO. ' I '. ' 9591,
already observed that the Union was not notified and had received'
no knowledge that the authority of the Associated Millinery Industries-
of St. Louis to act for Schicber Millinery Co had been revoked. 'Thus
the Association continued with ostensible or apparent authority to dear
with the Union on behalf of Schieber Millinery Co." Moreover,-even:
had these circumstances not resulted in Schieber Millinery Co. becom-'
ing a party to the contract, it must be deemed by acts subsequent there
to to have affirmed and ratified the contract.
While it may be true that the removal'to De Soto was motivated
in part by ordinary business reasons, 47 it is clear that there were,
other factors of more immediate importance to Schieber. " The,follow-
ing testimony of Schieber is noteworthy in this connection:
Q. And at 'Dc Soto, you understood then, did you, that there,
would be no union?
A. Yes.
Q. When did you first become aware of 'the fact that there
would be no union at De Soto?
A. That we' always knew.
Q. What part, if any, and if any part, to what extent did the
fact that there was no union at De^Soto'have a bearing on your
moving to De Soto?
A. I cannot say that. I don't think in actual fact it had a hell
of a lot to do with it, but I knew I could operate cheaper there.
Q. Did it have something to do with your moving?
A. I couldn't say.
Q. Do you deny it had something to do with it?
A. I couldn't gauge it and I am not a psychiatrist.
Schreber's grudging admission that the union activity of the St. Louis
employees was a factor in the removal of the plant is better understood
in the light of his conduct at the meeting of the employees called by
him on July 15. As already noted, 48 Schieber then declared that- he
would under no circumstances operate under an "all-union" shop, that
he would close his St. Louis plant and move out of town rather than
do so. The record as a whole presents a background expressive of
Schieber's anti-union bias which would provide a strong motive for
locking out the unionized St. Louis employees and moving to a town
believed by Schieber to be "non-union." The true relation between
this anti-union motive and the closing of the St. Louis plant appears
in the statement of Pergament to Bailey that the company was "going
4' See Restatement of the Law of Agency (1933) Sections 125, 127, 129, 135 and 136 ,
4' It appears that rents were cheaper at De Soto and it may reasonably be inferred that other production
costs were lower Schieber Millinery Co had been losing money The fiscal year ending November 30,
1937, partly spent in De Soto, showed a loss of about $5,600 . Moreover, in the period from December 1,1937,
to June 16 , 1938, there was an apparent loss of about $ 12,000 In the audit report of Cohen there is nothing to
explain the size of this loss. The books of the company had been destroyed at the time of the hearing.
48 Section III A, supra. .
960 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
out of town to avoid trouble with [the Union]" Schieber and Perga-
ment attempted to,get two employees to desert the Union!and,.go to
De. Soto as non-union men. Near the end of August Schieber told
Employee Millstone that "he wouldn't hire any union man." The
arrangement Schieber had made with De Soto to hire only inhabitants
of that town also shows that Schieber had, determined to adhere to a
"non-union" policy. The vaunt of Schieber to Fromkin in September
of 1937 that the latter could do nothing.to organize in De Soto;49 that
for a long time Schieber had tried to find such a place, and that if
Fromkin came to De Soto ,be would "be out much faster than [he]
could possibly dream of," serve to strengthen this conclusion., We
ford that the removal of Schieber.Millinery Co from St. Louis to
De Soto was primarily for the purpose of ridding Schieber Millinery
Co. and Isaac Schieber of the unionized employees and replacing them
with non-union workers. - ,
Since we find that the removal to De Soto was made for the primary
purpose of avoiding the Union, and of escaping collective bargaining
with it, it is clear that the conduct of the respondent "was motivated
by, and part ,of a scheme to deny to its employees their rights to join
a union of their own' choosing and to rid itself of the Union, and that,
to achieve this purpose, the respondent broke its contract with the
Union.""
We find that the respondents by closing their St. Louis plant and
discharging their employees oil 'August 24, 1937, discriminated against
them in regard to their hire and tenure of employment thereby dis-
couraging membership in the Union.51
We further find by thereafter failing to reinstate the St Louis em-
ployees, the respondents discriminated in regard to hire and tenure of
employment thereby discouraging membership in the Union. By
the aforesaid discharges and failures to reinstate, the respondents
interfered with, restrained, and coerced their employees in the exercise
of the rights guaranteed in Section'7 of the Act.
D. Interference, restraint, and coercion
•We 'have already noted Schieber's expressions of anti-union bias
in 'talking with his employees and with union representatives, includ-
ing his description of the•latter as "racketeers," and his convocation'
of a meeting of employees on July 15, 1937, at which he counseled the
employees how to vote-at`union meetings, threatened that he would
remove his plant, and urged them to abandon collective bargaining.52
We have also noted that Schieber and Pergament conditioned offers
of employment at De Soto upon withdrawal from th-e Union.
40 See Section III A, supra.
.so Matter of Jacob H Klotz, etc , 13 N. L R B 746 at 760.
81 Compare Matter of S & K. Knee Pants Company, Inc., and Amalgamated Clothing Woriers of America,
2N.L.R.B 940.
62 Section III , A supra.
SCf3IEBER MILLINERY CO. '961
We find that the respondents by the-foregoing acts and statements,
and by other conduct described in Section' IIIA, B, and 'C,,'above,
have interfered with, coerced, and restrained their employees- in' the
exercise 'of their rights guaranteed in Section 7 of the Act.
E. Conclusions as td the unfair labor practices.
We have found that the respond ents'liave' engaged in' violations'of
Sectioii 8 '(1), (3), and (5) of the Act. There remains the questioii'of
whether and to what' extent responsibility for the unfair labor' prac-
tices attaches to Schieber Millinery Co., Isaac Schieber, as an indi-
vidiial, and/or to Allen Hat Co.
The respondents contend that no order'may be entered against
Schieber Millinery Co. since it has ceased doing business ,' and` its
corporate rights and privileges' have been revoked by -the, State of
lvi isso [II' 1, 53
The possible inefl'ectivenes's of an order does not require that we
not enter' the order . b4,' Because it appears that under Missouri law
the corporate rights and privileges of 'Schieber Millinery Co. may
legally be revived, we shall issue an appropriate order against it.55 ' In
so far as our order contemplates continued business activity, it will
lie inapplicable to Schieber Millinery Co. while it remains dissolved,
but it will be applicable otherwise, 'as; for example, in its provisions
for back pay- 56 :
T "It is contended that no order may be entered against Isaac Schie-
hersince lie did not do' business as an individual, was not the em-
ployer of the employees here involved; and was not engaged in'coin-
merce.' Tile 'language of the Act demonstrates that there is no merit
to this contention. Section 2 (2) thereof defines an "employer" as
'inehiding "any,'person acting in the interest of an employer, directly
l .,
or indirectly . . . Section 2 ( 1)' defines a " person" as including
"one'or more'individuals." Section 10 (a) empowers the Board'"to
prevent any person from engaging in any unfair labor practices' (listed
55 See footnote 1, supra The respondents further contend that the alleged trustees are not in fact trustees
under Missouri law since no assets came into tlieir hands,' and ,'consequently ; service upon them wa's im-
proper , leaving the Board without jurisdiction to proceed against them . This contention is without merit.
Under Missouri law proof that assets were received ismot necessary to the merits of a claim, but serves
only to' delimit'the'trustees ' liability Sections 4561 and 4622 Mo ' Rev Stat provide; in substance, that
the last officers of the corporation at the time of dissolution and forfeiture , respectively , shall be trustees
thereof with stated powers in settling corporate affairs, and that the trustees shall he responsible -to cred
itors and stockholders to the extent of assets received ' See Nudelman v. Thimbles , Inc et at 225 Mo. App
.553, 40 S W (2d) 475, Watkins v • P layer et al , 103 S W (2d) 566, 569 (Mo App ) Nevertheless , we shall
not direct our order against the trustees since they have acted merely as the representatives of Schieber
Millinery Co for purposes of sera ice " .
54 In Matter of Grower- Shipper Vegetable 4ssociation of Central California and Trait and Vegetable Workers'
Union of California , No 18211 etc , 15 N L R B 322, at 367, we said " Moreover , proof of dissolution
of a corporation occurring after its commission of unfair labor practices would not appear to require dis-
missal of a complaint against it " Cf • Matter of Union Drawn Steel Co et at • ,v National Labor Relations
Board, January 20, 1940 (C C A 3), enforcing as modified 10 N L' R B 868
55 Section 4621 Mo. Rev Stat Cf Estel et at v Dlidgand Inv Co el at , 46 S W (2d) 193 (Mo App
56 Platter of Grower - Shipper Vegetable Association of Central California and l• ruit and Vegetable Workers'
Union of California, No 18211 , etc , footnote 54, supra , at page 370 .
-962 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
in Section 8) affecting commerce." Section 10 (b) empowers the issu-
ance of complaints on charges "that any person has engaged in or is
engaging. in any such unfair labor practice." Section 10 (c) provides
that if the Board, is, of the opinion "that any person named in the
complaint has engaged in or is engaging in any such unfair labor
practice, then the Board shall state its findings of fact and shall issue
,and cause to be served on such person an order requiring such person
to cease and desist from such unfair labor practice, and to take such
affirmative action, including reinstatement of employees with or with-
out back pay, as will effectuate the policies of this Act." Schieber, a
"person" within the meaning of Section 2 (1) of the Act, acted "In the
interest of" Schieber Millinery Co., as, well as in his personal capacity,
in committing the acts found to be unfair labor practices; he is, there-
,fore,, himself an "employer" within the meaning of Section 2 (2) of
the Act.57
We find that Isaac Schieber is an "employer" within the meaning
of the Act, and is responsible under the Act for the unfair labor-prac-
tices herein. In, order to effectuate the policy of the Act we shall
address oui' order against Isaac Schieber individually.58
We have already considered the circumstances precedent to the
formation of Allen, Hat Co." The complaint in substance alleges
that the respondent Isaac Schieber caused the respondent Allen Hat
Co. to be formed for the purpose of evading the liabilities of Isaac
Schieber and Schieber Millinery Co. arising under the Act, that Allen
Hat Co. is in fact Isaac Schieber carrying on. the same business
formerly carried on by Schieber under the corporate framework of
Schieber Millinery Co., and that under these circumstances the
employees, discharged by Schieber Millinery Co. and Isaac Schieber
became and continue to be employees of Allen Hat Co. It is urged
by the Union that Allen Hat Co. is the mere alter ego of Isaac Schieber,
that Schieber and, Allen Hat Co. together have discriminatorily
refused and continue to refuse to reinstate the discharged employees,
and consequently the Board may disregard "the corporate fiction"
-and enter a remedial order affixing liability upon "the real party in
interest."
As already noted, Schieber shut down the De Soto plant but a
week after the adverse decree in the Circuit Court of the city of St.
67 The Board has numerously applied this principle, for example, in cases involving parent and sub-
sidiary corporations, Matter of Sterling Corset Co , Inc and International Ladies' Garment Workers' Union,
Local 85, 9 N. L. R. B. 858, Matter of Weinberger Banana Co , Inc etc. and United Dock and Fruit Workers'
Union, 19 N. L. R B , No 92, Matter of Waggoner Refining Company etc. and International Association
of Oil Field, Gas Well and Refinery Workers of America, et at, 6 N. L R B 731, Matter of National Supply
Company and Steel Workers Organizing Committee , 16 N L R B. 304.
As We do not imply that all persons committing unfair labor practices in the interest of an employer are
to be made subject to an order by the Board. As appears below it is appropriate under the circumstances
of this case to hold Schieber personally responsible for the unfair labor practices. Cf National Labor Rela-
tions Board v. Hopwood Retinning Co., Inc , 98 F. (2d) 97 (C C A 2), enforcing as modified 4 N. L. R B.
922; contempt citation granted 104 F. (2) 302.
60 Section III A, C, supra.
SCHIEBER MILLINERY CO. 963°
Louis. 8° There are numerous circumstances suggesting that ; the'
assignment of the assets of Schieber Millinery. Co. for the benefit of
its creditors was not in fact involuntary." It is not necessary to
decide whether or not the assignment was in fact, fraudulent, however,
and it is here assumed that the assignlient'was forced upon Schieber
Millinery.Co. At the time of. the assignment Isaac Schieber. planned
to continue in the millinery business .and was of the erroneous, belief
that the debts of Schieber Millinery Co. were wiped out by the assign-
ment.82 It is apparent that Schieber's plan for the continuation !of
his millinery business included the formation of Allen 'Hat. ' Co.
The record further "makes clear' that. Schieber's, motive in forming
Allen Hat Co.. included, in substantial measure, avoidance of, the
Circuit Court: decree, which ran against. both Isaac Schieber and
Schieber Millinery Co., and liability under the Act..
It is - alleged in .the amended complaint that '-.the. ,'respondent,
Isaac Schieber has at all, times managed,+ directed, and controlled the
business 'and policies of respondent Schieber, Millinery, Co.. ,and-, of
respondent Allen Hat Co." This allegation. was not deniedby any. of
the respondents and is amply supported. by the evidence. The briefs
of the. respondents and the Union,presenta.n abundant citation of cases:
on the subject of the corporate entity.. Although the tests invoked by,
the courts as to when,the corporate entitymay be disregarded, are both
flexible and various,83 the primary consideration in disregarding the1
corporate personality is the use to which he personality is put. When
the facts are such as to make "necessary^to the justice of.the case ." 84
the substitution of,a responsible reality for a corporate fiction,•,the
substitution is generally made. Great consideration is to be given;to
eo See Section III A, supra . . I I ,
6 It appears ( 1) that the audit for the Ribbon, Silk & Velvet Association,was made by Sidney S. Cohen,
who prior thereto had been auditor for Schieber Millinery Co .; '(2) that the appraisal of dies, blocks , machin-'
cry, and equipment was far below cost and stated book value; (3) that books and records of Schieber Milli-,
nery Co . were destroyed soon after the assignment by bookkeeper Otto A. Fabian ; (4) that large bank
deposits and withdrawals between the day of the ' audit and the assignment , as well as certain later'with
drawals, were uninvestigated and unaccounted for by the assignee , by his attorney , by. Schieber : and by-.
Schieber 's bookkeeper ; and that (5) Schieber purchased the assets from the assignee through intermediaries
and created nominal stockholders in forming Allen Hat Co.
e3 The following testimony indicates that Allen Hat . Co. was not formed to avoid possible-liability to
creditors of Schieber Millinery Co.
Q. Can you tell me .whether or not any of the assets of the Allen Hat Company were used to pay any
of the creditors of the Schieber Millinery Company after the time of the assignment?
A. Not with my knowledge.
Q. So far as you were concerned then, the debts of the Schieber Millinery Company were wiped out
with the assignment for the benefit of creditors?
A. I would say so, yes.
Nevertheless there was no provision in the instrument of assignment that dividends should be in full of
outstanding claims . Such a provision is illegal under Missouri law. DT. L. Barrett & Co. v. Chilton, 304
Mo. 679 , 264 S . W. 802.
63 See: In re Armbruster Stone Co . etc., 66 Fed . (2d) 110 (C.- C. A. 6), 112, "to prevent fraud*or an unjust
result, or when one corporation is in its essence but a continuation of the activities and interests of the
other" ; Commerce Trust Co . et at. v . Woodbury , et at., 77 Fed . (2d) 478, (C. C. A. 8) 487, 'when it is used as
a subterfuge to defeat public convenience ,'justify wrong , or perpetuate a fraud .",'
64 U. S. v. Reading Co. et at ., 253 U . S. 26; U. S. v. Lehigh ' Vatley R . R. Co., 220 U : S. 257; U. S.'v.'Del.
Lack . Q N'. RR. Co., 238 U. S . 516; Chi . W. V. St, P. Rg. Co . v. Minn . Civic & Corn : 2 4 7U. S 490;
964' DECISIONS OF NATIONAL I LABOR RELATIONS BOARD
the fact'that what..is sought to be remedied is a public wrong. The
Supreme Court: per'Mr. Justice Van Devanter'has said:
'As a'gelieral rule a corporation and its stockholders. a`re'deeined
separate. "entities . . .' of course, the rule is s'fibje'ct'to''tl e qual='
ificatiorihat the "separate identity'may be disregarded' in' exceip=
•tiorial situations'wheie it'otherwise would' pieseilt an obs'tacle 'to'
the due'protect+ion orenforcement of public or private rights.65
In. United States, v.. Milwaukee 'Refrigerator, Transit Co., Judge
Sanborn; observed: 66
If any general' rule ' can be: laid down; • in the present state 'of
authority; it is. that a corporation' will be looked upon as alegal
entity as a general rule, and until sufficient reason to-the contrary'
appears;. but, when 'the notion of 'legal 'entity is used 'to• defeat
public convenience, justify' wrong; protect fraud, or'defend crime,
t e law, will regard the corporation as' an 'association of persons:
The respondents contend that Isaac 'Scli'ieber and Allen' Hat Co.
cannot b'e• made to: account for the unfair labor practices' set forth
above since Schieber never did' business as l,n`individual'and since' the
involuntary' nature of Schieber 'Millinery Co.'s assignment, and the
new capital' investedd 1'n Allen' Hat Co'.','in effect`mad'e the latter a'new,
company iather'than a "successor" to Schieber Millinery Co. and
therefore, the' corporate entity. may not be disregarded. As'alread-y
rioted Scliieher at all' times owned. and controlled Schieber Milmery
Co,indsha.pedl its labor relations policies' which resulted in violation
of the Act:
I, We are eoi'1ce' ncd -with the 'policy 'and ''construction of inn' Act-
of Congress empowering the, Board to take such action against guilty
persons "as will effectuate.the policy of.the.Act." In National Labor.
Relations Board v. Arthur 'L. Colton and. Abe J. Colman, co-partners
doing business 'as Kiddie Kover Man4acturing,Company,67 the•United
States Circuit Court of . Appeals for the Sixth Circuit; state(1 in dis-
posing of a similar defense: 68
This contention however, igrlores the essenti l nature, of `l egli-
latory' statutes 'of the 'class here considered,' acid the scope-and
purpose' of administrative orders' made ifi exercise of powers
conferred by such legislation. They-are. to implement a public,
social or economic policy not primarily concerned with private
rights, and' through' remedies not only-unknown to the' common'
law h'ut often in derogation of it It is the employing industry
as New ' colonial Ice Co., Innc. v. Ilelvering , Corn miss)oner of Internal Revenue , 292 U . S. 436 , 442, and cases
there cited.
e6 142 Fed . 247, 255 (E. D., Wisc.)..
r 105 F. (2d) 179 (C. C., A. 6), enf'g. , Matter of Arthur.L. Cotten , et at. and Amalgamated Clothing Workers
of America , 6 N. L.. R. B.; 3551.
ea To the effect that the dissolution of a partnership by death of a co-partner precluded affirmative action
by the Board against the survivor.
SCHIEBER MILLINERY CO. 965
that is sought to be regulated and brought within the corrective
and remedial provisions of the Act in the interest of industrial
peace . . . It needs no demonstration that the strife which is
sought to be averted is no less an object of legislative solicitude
when contract, death, or operation of law brings about change of
ownership in the employment agency.69
We believe that the power vested by Congress in the Board to
remedy the wrong committed, which has been described as a "public
tort,i70 defeats the asserted right of Isaac Schieber to insulate himself
from effective liability under the Act by doing business as a corporation
in which there is a unity of interest, ownership, and control in Schieber
himself.71 It is clear that at all times Schieber has owned and
dominated. both. corporations and has been responsible for their labor
relations policies. He thus is the real party in interest who must be
held responsible under any appropriate order which the Board might
enter. It would defeat the purposes of the Act to permit Schieber
to take refuge behind the corporate entity of Allen Hat Co. Under
the circumstances here presented we find that all the respondents,
including Allen Hat Co., are so inter-related as to be jointly and
severally liable for the unfair labor practices.72
Concluding Findings
In summary, we find:
(1) That the activities of Pergament and Schieber set forth in
Section III A above constituted violations by Schieber Millinery Co.
and Isaac Schieber of the provisions of Section 8 (1) of the Act, by
interfering with, restraining, and. coercing their employees in the
exercise of rights guaranteed them by Section 7 of the Act;
(2) That the discharge and lock-out of the St. Louis plant employees
oil or about August 24, 1937, the removal to De Soto on or about
<° Cf. Matter of The Baldwin Locomotive Works and Steel Workers Organizing Committee , 20 N. L. R. B.
1100.
70 See National Labor Relations Board v. Remington Rand , Inc., 94 F . (2d) 862 (C. C. A. 2), cert. den. 304
U. S. 576.
71 The circumstances of the distribution of stock in Allen Hat Co . should be here recalled. Ninety of the
100 shares went to Isaac Schieber's wife, nine to his brother , and one to Isaac Schieber. The evidence dis-
closes no reason why all of the shares should not have been in the name of Isaac Schieber who solely ran
the business . Schieber 's testimony that he was "involved" at the time was not credited by the Trial
Examiner. We have already found (Section III B above ) that Schieber owned the nine shares put in his
brother 's name. Ninety shares of a par value of $9,000 were placed in the name of Mrs . Schieber though
her purported contribution was only $2 , 000, representing money borrowed from Scbieber 's attorney. Schic-
her admitted that the extra 70 shares constituted a gift to his wife: It is significant that this loan came from
the attorneys representing the respondents throughout the transactions herein set forth, including the pro-
ceedings in the Circuit Court of the city of St. Louis , the assignment for the benefit of creditors, the formation
of Allen Hat Co., and the Board proceedings . One member of the law firm was also an officer and director
of Schieber Millinery Co ., and a holder of a qualifying share therein. It is a reasonable inference that the
attorneys knew of the facts creating liability under the Act at the time the monies were advanced , and this
inference is consistent with our finding that Allen Hat Co. was formed , in part, to evade such liability on
the part of Schieber . Moreover , these facts, and the consideration that loans from Schieber 's attorneys
and relatives comprised the bulk of the assets of Allen Hat Co., throw doubt on the contention of the respon-