Western Garment Manufacturing Co.

National Labor Relations Board - Board Decisions

Dec 13, 1938

10 N.L.R.B. 567 (N.L.R.B. 1938)

In the Matter Of WESTERN GARMENT MANUFACTURING Co., A. B.
MALOUF, AS LIQUIDATING AGENT OF WESTERN GARMENT MANU-
FACTURING CO., and A. B. MALOUF, W. B. MALOUF, FRANCES B.
MALotF, EDWARD I. MALOUF, AND BERT B. MALOUF, TRADING AS
MALOUF BROTHERS MANUFACTURING Co. and PAUL M. PETERSON,
PRESIDENT, UTAH STATE FEDERATION OF LABOR
Case No. C-658.-Decided December 13, 1938
Ladies and Children's Garnient Manufacturing Industry-Interference, Be,
stravnt, and Coercion: expression of preference for "local" or unaffiliated labor
organization-Conepany-Dominated Union: domination of and interference with
formation and administration ; activity of confidential employee ; furnishing
use of meeting room ; disestablished , as agency for collective bargaining-
Closed-Shop Contract : with company -dominated union, void-Check-Off: for
company-dominated union ; employers ordered to reimburse employees for
wages checked off as dues for company -dominated union.
Mr. Newell N. Fowler, for the Board.
Mr. Ira A. Huggins, of Ogden, Utah, for the respondents.
Air. K. Tracy Power,.of Salt Lake City, Utah, for the Association.
Hr. Richard A. Perkins, of counsel to the Board.
DECISION
AND
ORDER
STATEMENT OF THE CASE
Upon charges and amended charges duly filed by Paul M. Peter-
son, president, Utah Federation of Labor, the National Labor Rela-
tions Board, herein called the Board, by Aaron W. Warner, Regional
Director for the Twenty-second Region (Denver, Colorado), issued
its complaint dated March 9, 1938, against Western Garment Manu-
facturing Co., herein called the Corporation, A. B. Malouf, as liqui-
dating agent for Western Garment Manufacturing Co., herein called
the Liquidating Agent, and A. B. Malouf, W. B. Malouf, Frances 'B
Malouf, Edward I. Malouf, and Bert B. Malouf, trading as Malouf
Brothers Manufacturing Co., herein called the Partnership, all the
foregoing being collectively designated herein as the respondents,
10 N. L . R. B., No. 41.
567
568 NATIONAL LABOR RELATIONS BOARD
Salt Lake City, Utah, alleging that the respondents had engaged in
and were engaging in unfair labor practices affecting commerce
within the meaning of Section-8 (1) and (2) and Section 2 (6) and
(7) of the National Labor Relations Act, 49 Stat. 449, herein called
the Act.
The complaint alleged in substance that the respondents had dom-
inated and interfered with the formation and administration of Em-
ployees Association of the Western Garment Manufacturing Com-
pany of Salt Lake City, Utah,' herein called the Association, and
had by the foregoing action and by compelling their employees to
join the Association, interfered with, restrained, and coerced their
employees in the exercise of the rights guaranteed in Section 7 of the
Act.
On March 14, 1938, the respondents filed their answer in which
they admitted the allegations of the complaint relating to the nature
of their business but denied all other allegations.
Pursuant to notice, a hearing was held on March 21, 22, and 23,
1938. at Salt Lake City, Utah, before Waldo C. Holden, the Trial
Examiner designated by the Board. The Association was allowed,
,on its motion, to intervene. The Board, the respondents, and the
Association were represented by counsel and participated in the
hearing. During the course of the hearing the Trial Examiner made
several rulings on motions and on_ objections to the, admission of
evidence. The Board has reviewed these rulings and finds that no
prejudicial errors were committed. The rulings are hereby affirmed.
At the close of the hearing the Trial Examiner notified the parties
of their opportunity to file briefs and request oral argument.
On May 19, 1938, the Trial Examiner filed his Intermediate Re-
port, copies of which were duly served upon the parties, finding that
the respondent had engaged in and was engaging in unfair labor
practices within the meaning of Section 8 (1) and (2) of the Act
and recommending that the respondent cease and desist therefrom
and take certain affirmative action so as to remedy the situation.
On. June. 3, 1938, the respondents filed exceptions to the Inter-
mediate Report. No other exceptions have been filed. In their
statement of exceptions the respondents waived their right to request
oral argument before the Board, having been advised of their rights
in that respect by the Trial Examiner at'the -conclusion of the hear-
ing before him. The Board has considered the respondents' ex-
ceptions to the Intermediate Report and, save as consistent with the
findings, conclusions, and- order set forth below, finds them without
merit,, and they are hereby overruled.,:
Upon the entire record in the case, the Board makes the following :
1 Designated in the complaint as "Employees ' Association of the Western Garment Manu-
facturing Company."
DECISIONS AND ORDERS
FINDINGS OF FACT
1. THE BUSINESS OF THE RESPONDENTS
569
The Corporation was organized August 3, 1914, under the laws of
Utah, and from that date until December 20, 1937, manufactured
ladies and children's garments and wearing apparel at its plant in
Salt Lake City, Utah. On the latter date the Utah State courts en-
tered a decree dissolving the Corporation and appointed the
Liquidating Agent to wind up its affairs. On December 20, 1937,
the Partnership took over the assets and assumed the liabilities of
the Corporation, and since that date has carried on the same manu-
facturing operations formerly conducted by the Corporation.
The respondents' Salt Lake City factory consumed raw materials
to the value of $275,000 during 1937. All the raw materials save
only 2 per cent of the piece goods originated outside the State of
Utah. All the cotton and rayon raw materials, thread, buttons, and
trimming, and 98 per cent of the piece goods, came from one or more
of the following States : New York, Massachusetts, Rhode Island,
California, North Carolina, and South Carolina.
During 1937 the respondents sold from their Salt Lake City factory
$400,000 worth of finished goods, 18 per cent of which were shipped
to points in Utah and 82 per cent to other States.
The Corporation employed 120 persons on August 1, 1937. The
Partnership employed 65 on March 1, 1938. Most of the employees
are women.
II. THE ORGANIZATIONS YNVOLVED
Utah State Federation of Labor is a labor organization. Interna-
tional Ladies' Garment Workers' Union is a labor organization affili-
ated with Utah State Federation of Labor. The I. L. G. W. U. claims
jurisdiction over all workers employed in the manufacture of ladies
and children's wearing apparel, from cloth to finished product.
Employees Association of the Western Garment Manufacturing
Company of Salt Lake City, Utah, is a labor organization. Its con-
stitution provides that it admits to membership all permanent em-
ployees of the Corporation except corporate officers and any other
officials who have the power to hire or discharge permanent em-
ployees. The Association has in practice admitted to membership
employees of the Partnership, following the change in organization
of the respondents' business.
III. THE UNFAIR LABOR PRACTICES
A. The chronology of events
Beginning in June 1937 the Utah State Federation of Labor, by
Paul Peterson, its president, conducted in Salt Lake City several meet-
0
570 NATIONAL LABOR RELATIONS BOARD
ings of employees in the textile and garment trades for the purpose
of organizing them into several labor organizations which claimed
jurisdiction over such trades. Employees of the respondent attended
one of the early meetings where it was announced that they all came
within the jurisdiction of the I. L. G. W. U., and thereafter those
workers met with the group among which that union was organizing.
On July 8 about 21 of the respondents' employees signed applications
for membership in the I. L. G. W. U., applied for a charter as a local
union, and chose temporary officers, including Norma Franklin, pres-
ident, and Erma Earl, secretary.
On or about July 10, 1937, Earl and Mary DeVecchi, an employee
who had applied for membership in the I. L. G. W. U., gathered a
group of employees at noon in the respondents' factory and asked
Mrs. Faulds, a forelady, to call in Edward I. Malouf, who was man-
ager of the factory during all of the period here under consideration,
first under the Corporation and later under the Partnership, of which
he is a member. Edward Malouf came in accompanied by Ernest B.
Malouf, then president of the Corporation, who was making one of
his periodical visits to the Salt Lake City plant. Franklin acted as
spokesman for the employees. She stated that labor unions were
being organized all over the country and that the respondents' em-
ployees wanted to know how the management felt about their joining
a national union. Edward Malouf said that the question was an un-
usual one, and that he thought the employees were "putting him on the
spot," but stated that he had no objection to answering the query, and
that employees were free to join any union they chose. He went on
to say that a union would be a fine thing, but that since conditions in
the garment trade iri the Rocky Mountain area were peculiar to that
region, it would be better if the employees joined a local union, and
he preferred that they would. He told the employees that they could
hold their meetings in the factory lunchroom. Edward Malouf testi-
fied at the hearing that when this conversation took place he did not
know what union the employees had under consideration, but that he
had seen Textile Workers Organizing Committee handbills near the
factory and that he knew that no "inside" union then existed among
the respondents' employees.
Some of the employees present complained that their wages were
lower than they had been under the National Industrial Recovery Ad-
ministration codes. Ernest Malouf said he would look into the matter.
One of the Malouf brothers stated he would give the employees a 5-
per cent increase in piece rates. Ernest Malouf said that the Salt
Lake City plant was "his baby" and that he would try to keep it
going.
A few days after the foregoing conversation took place Florence
Pilkington, a marker in the respondents' factory, drafted a petition
0
DECISIONS AND ORDERS 571
for the formation of an "inside" union later named Employees Asso-
ciation of the Western Garment Manufacturing Company of Salt
Lake City. Pilkington dictated the petition to Mary Anderson, secre-
tary to Edward Malouf, in Malouf's office during working hours but
not in Malouf's presence. Anderson typed the petition and Pilkington
circulated it among the employees in the plant, securing between 60
and 80 signatures. Pilkington induced Forelady Faulds to send
various employees to her during working hours. When they reported,
Pilkington solicited their signatures for the petition. Pilkington testi-
fied that she had not disclosed to Faulds the purpose of her errands.
Faulds did not testify.
Pilkington consulted K. Tracy Power, an attorney, for assistance
in the formation of the Association. Power came out to the factory
one morning to interview Pilkington and while there posted an un-
signed notice on the factory bulletin board stating that there would
be a meeting of employees in the lunchroom at 1 :00 p. m.-on Saturday,
July 17. The exact terms of the notice are not in evidence.
About 50 employees met in the lunchroom in response to the notice.
Pilkington presided and introduced Power, who made suggestions for
the procedure to be followed in organizing a local or "inside" union.
The group was then divided into eight units corresponding to the
several departments of the plant. The employees present from each
department chose a representative to the "Central Council" or govern-
ing body of the Association. Thereupon the general meeting ad-
journed and the Central Council held a session where they chose
Pilkington permanent chairman and Anderson secretary.
On July 21 the Central Council adopted a constitution prepared by
Power and 'drawn up by Anderson, to whom Power had dictated a
draft. On the same day Pilkington appointed a committee to nego-
tiate with the management. On July 29 the Corporation and the Asso-
ciation entered into a temporary contract providing that the work-
week should be reduced from 45 to 40 hours and that all employees
hired thereafter should be required to join the Association within 3
months after being employed. At this time the Association claimed
about 74 members. On August 13 the Corporation and the Associa-
tion executed a closed-shop contract abrogating the temporary agree-
ment. At this time the Association claimed to represent 85 per cent
of the employees. The management then posted a notice over Edv and
Malouf's signature announcing the execution of the contract and
directing employees to familiarize themselves with its provisions.
By August 25, the end of the period of grace provided in the con-
tract for the enforcement of the closed-shop provision, nearly all the
employees had joined the Association.
After the Association was organized the employees ceased to attend
I. L. G. W. U. meetings. Early in September 1937 the local union
572 NATIONAL LABOR RELATIONS BOARD
organized among the respondent 's employees by the I. L. G. W. U.
was dissolved.
On December 20, 1937, the Partnership took over the business
formerly conducted by the Corporation. The Association continued
to discuss grievances with the Partnership as it had with the Cor-
poration, and treated the contract of August 13, 1937, as governing
its relations with the Partnership.
B.. Conclusions with respect to the Association
A review of the formation and administration of the Association
leads to the conclusion that it came into being as an attempt to adapt
the form of organization among the employees to the pattern sug-
gested by the Maloufs, i. e., a "local," or "inside" union . The sugges-
tions made by the Maloufs at the July 10 conference- were not very
positive , and of themselves may not decide the issue . It is true that
the Maloufs' remarks were solicited by employees who were active in
promoting the I . L. G. W. U., but all the circumstances indicate that
the employees ' request - was the result of a naive conception of the
nature of . collective bargaining , not an attempt to- entrap the em-
ployer. The employees had just begun to organize. It seems likely
that their interest in 'the employer's attitude toward "outside" unibns
was more than idle curiosity ; their inquiry was in effect a request for
assurance against reprisals , or at least an' effort to ascertain what sort
of organization would, by reason of its acceptability to the employer,
be able to bargain to best advantage . But any encouragement of any
particular sort of labor organization by making concessions as a re-
ward for compliance with the employer's preference is unlawful under
the Act. And a question from well-meaning employees concerning
the employer 's preference as to type of labor organization is char-
acteristically an inquiry as to the likelihood of unlawful discrimina-
tion. In the normal relationship between employers and workers, at
least in the early stage of organization, any answer by the employer
which evinces a preference is technically likely to constitute an unfair
-labor practice within the meaning of Section 8 (1)'of the Act. • In the
instant case the respondents urge that the employees "insisted" upon
an answer . While - a situation might conceivably exist in which em-
ployees' insistence might intimidate the employer , no such case is here.
The brief history of organization among these workers and the
hesitant manner of their approach to the management indicate no
such militancy as to oppress the employer.
The rapid sequence of events following the Maloufs' remarks on
July 10 suggests that the formation of the Association was the em-
ployees' response to the preference expressed by the management for
DECISIONS AND ORDERS 573
an "inside" union.2 When the Association took form and commenced
to operate, its character became apparent. The Association accepted
the Maloufs' offer of the use of the lunchroom, and always met there.
One of the Association's first official acts was to choose Edward
Malouf's secretary to serve as Association secretary. Anderson pre-
pared Association membership application blanks, kept minutes of
Central Council meetings, and typed the constitution, the contracts,
and the correspondence of the Association. For these services the
Association paid her $5 a month. In her capacity as Association sec-
retary she prepared letters addressed to Malouf and laid them on
his desk, since her status as his secretary gave her access to his office.
When Malouf replied to the Association by letter he dictated to An-
derson, who resumed her position then as his secretary. Having
typed the letter, she thereupon accepted delivery of the same on
behalf of the Association.
Anderson's duties toward the respondents and the Association
were, we think, incompatible. She testified that she had been loyal
to both interests. That may be true so far as her situation has per-
mitted, and that condition may persist so long as the relationship be-
tween the respondents and the Association remains free from stress
and strain. We do not find that Anderson conspired with the re-
spondents to control the routine of the Association. But Anderson's
position was such as necessarily to create a suspicion in the councils
of the Association that the employees' activities were proceeding un-
der the general eye of one who enjoyed a close and confidential rela-
tionship with their employer. Under such conditions the freedom of
association guaranteed by the Act can hardly exist.
Although neither of the contracts between the Association and the
Corporation provided for a check-off the Association was able to
effect the same in the following manner. Anderson and Pilkington
secured signed pay-roll orders from applicants for membership in
the Association. Beginning in August Anderson collected the dues
from Aileen Moffat, the respondents' bookkeeper, and furnished
Moffat with Association receipts to justify the deductions from the
pay roll. Anderson kept the pay-roll deduction orders in her pos-
session at all times; Moffat never inspected them, relying rather on
a list furnished by Anderson. Edward Malouf, Anderson, and
Moffat all testified that Malouf had never discussed the check-off
with either of the women.
In thus instructing the bookkeeper to check off Association dues
without specific authority from Malouf and without furnishing proof
of the authenticity of the pay-roll orders which she claimed to have,
Y See Matter of Crawford Manufacturing Company and Textile Workers Organizing Com-
mittee, 8 N. L It. B. 1237.
574 NATIONAL LABOR RELATIONS BOARD
Anderson employed in aid of her position as Association secretary
some of the authority of management which her position as secretary
to Edward Malouf made possible. In another respect Anderson
acted in a manner which tended to give the Association an official
status as a preferred organization. She commonly posted notices of
Association meetings on the factory bulletin board. These notices,
signed by Anderson as secretary of the Association, invited all em-
ployees to attend. On the notice of July 26, 1937, she added the com-
ment "However, this is not compulsory." There was some evidence
that the bulletin board had not previously been reserved for the use
of the management, and that announcements of factory entertain-
ments had appeared there. But we may gather from her postscript
that employees commonly attributed some managerial authority to
Anderson.
Many of the events above recited occurred prior to December 20,
1937, when the Partnership took over the business. The transfer of
ownership, however, did not materially affect the relations between
the Association and the management. As set forth above, the con-
tract remained in effect with the Partnership. The activities of
Anderson continued as before. It also appears from the testimony
of Anderson and Moffat that the check-off was still in effect at the
time of the hearing. By these actions the Partnership continued in
effect the unfair labor practices initiated by the Corporation.
We find that the Corporation has dominated and interfered with
the formation and administration of the Association and contributed
support thereto. We further find that the Partnership has domi-
nated and interfered with the administration of the Association and
contributed support thereto. We further find that both the Cor-
poration and the Partnership have interfered with, restrained, and
coerced their employees in the exercise of the rights guaranteed by
Section 7 of the Act.
IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE
We find that the activities of the respondents set forth in Section
III B above, occurring in connection with the operations of the
respondents set forth in Section I above, have a close, intimate, and
substantial relation to trade, traffic, and commerce among the several
States, and tend to lead to labor disputes burdening and obstructing
commerce and the free flow of commerce.
V. THE REMEDY
We have found above that the Corporation and the Partnership
have dominated and interfered with the Association and have con-
tributed support thereto. We have also found that, following the
order of the Utah court on December 20, 1937, dissolving the Cor-
DECISIONS AND ORDERS 575
poration, the Liquidating Agent was appointed to wind up its affairs,
and that on the same day the Partnership took over the business
formerly conducted by the Corporation and has continued to operate
the same.
In order to remedy the result of the unfair labor practices described
in Section III B above we shall therefore order the respondents to
cease and desist from interfering with, restraining, and coercing
their employees in the exercise of the rights guaranteed by Section 7
of the Act; from dominating and interfering with the administration
of the Association or with the formation or administration of any
other labor organization of its employees; from contributing support
to the Association or to any other labor organization of its employees;
from recognizing the Association as bargaining representative; and
from giving effect to the contract of August 13, 1937.
We shall also order the respondents affirmatively to reimburse the
employees the amounts which have been checked off as Association
dues, to disestablish the Association as a bargaining representative,
and to post appropriate notices.
Upon the basis of the above findings of fact and upon the entire
record in the case, the Board makes the following :
CONCLusIONs OF LAW
1. Employees Association of the Western Garment Manufacturing
Company of Salt Lake City, Utah, Utah State Federation of Labor,
and International Ladies' Garment Workers' Union are labor organi-
zations within the meaning of Section 2 (5) of the Act.
2. By dominating and interfering with the formation and adminis-
tration of Employees Association of the Western Garment Manu-
facturing Company of Salt Lake City, Utah, and contributing
support thereto, the Corporation has engaged in and is engaging in
unfair labor practices within the meaning of Section 8 (2) of the
Act.
3. By dominating and interfering with the administration of
Employees Association of the Western Garment Manufacturing
Company of Salt Lake City, Utah, and contributing support thereto,
the Partnership has engaged in and. is engaging in unfair labor
practices within the meaning of Section 8 (2) of the Act.
4. By interfering with, restraining, and coercing their employees
in the exercise of the rights guaranteed in Section 7 of the Act, the
Corporation and the Partnership have engaged in and are engaging
in unfair. labor practices within the meaning of Section 8 (1) of
the Act. .
5. The aforesaid unfair labor practices are unfair labor practices
affecting commerce within the meaning of Section 2 (6) and (7)
of the Act.
576 NATIONAL LABOR RELATIONS BOARD
ORDER
Upon the basis of the above findings of fact and conclusions of
law, and pursuant to Section 10 (c) of the National Labor Relations
Act, the National Labor Relations Board hereby orders that the
respondents, Western Garment Manufacturing Co., A. B. Malouf,
as liquidating agent of Western Garment Manufacturing Co., and
A. B. Malouf, W. B. Malouf, Frances B. Malouf, Edward I. Malouf,
and Bert B. Malouf, trading as Malouf Brothers Manufacturing Co.,
and their officers, agents, successors, and assigns, shall:
1. Cease and desist :
(a) From dominating or interfering with the administration of
Employees Association of the Western Garment Manufacturing
Company of Salt Lake City, Utah, or with the formation or ad-
ministration of any other labor organization of their employees, or
from contributing support to the Association or to any other labor
organization of their employees;
(b) From giving effect to the contract of August 13, 1937, with
Employees Association of the Western Garment Manufacturing
Company of Salt Lake City, Utah, or to any assignment, novation,
or renewal thereof;
(c) From recognizing Employees Association of the Western
Garment Manufacturing Company of Salt Lake City, Utah, as rep-
xesentative of any of the respondents' employees for the purpose of
dealing with any of the respondents concerning grievances, labor
disputes, wages, rates of pay, hours of employment, or other condi-
tions of employment;
(d) From in any other manner interfering with, restraining, or
coercing their employees in the exercise of the rights to self-organiza-
tion, to form, join, or assist labor organizations, to bargain collec-
tively through representatives of their own choosing, and to engage
in concerted activities for the purpose of collective bargaining or
other mutual aid or protection, as guaranteed in Section 7 of the Act.
2. Take the following affirmative action which the Board finds will
effectuate the policies of the Act:
(a) Withdraw all recognition from Employees Association of the
Western Garment Manufacturing Company of Salt Lake City, Utah,
as representative of their employees for the purpose of dealing with
the respondents in respect to grievances, labor disputes, wages, rates
of pay, hours of employment, or other conditions of employment,
and completely disestablish said Association as such representative;
(b) Reimburse the employees who were members of Employees
Association of the Western Garment Manufacturing Company of
S11t Lake City. Utah, for the dues which have been deducted from
said employees' wages on behalf of said Association;
DECISIONS AND ORDERS 577
(c) Immediately post notices in conspicuous places throughout
their plant and maintain such notices for a period of thirty (30)
consecutive days, stating: (1) that the respondents will cease and
desist as aforesaid, and (2) that the respondents withdraw all recog-
nition from Employees Association of the Western Garment Manu-
facturing Company of Salt Lake City, Utah, as representative of
any of their employees for the purpose of dealing with the respond-
ents concerning grievances, labor disputes, wages, rates of pay, hours
of employment, or other conditions of employment, and completely
disestablish it as such representative;
(d) Notify the Regional Director for the Twenty-second Region
within ten (10) days from the date of this Order what steps the
respondents have taken to comply herewith.