American Seating Co.

National Labor Relations Board - Board Decisions

Jul 22, 1953

106 N.L.R.B. 250 (N.L.R.B. 1953)

250 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
AMERICAN SEATING COMPANY and PATTERN MAKERS'
ASSOCIATION OF GRAND RAPIDS, PATTERN MAKERS'
LEAGUE OF NORTH AMERICA, AFL. Case No. 7-CA-818.
July 22, 1953
DECISION AND ORDER
On March 9 , 1953, Trial Examiner Ralph Winkler issued
his Intermediate Report and Recommended Order in the
above - entitled proceeding , finding that the Respondent had
engaged in and was engaging in certain unfair labor practices
and recommending that it cease and desist therefrom and take
certain affirmative action, as set forth in the copy of the
Intermediate Report and Recommended Order attached hereto.
Thereafter , the Respondent filed exceptions to the Intermediate
Report and Recommended Order and a brief in support thereof.
The Board has reviewed the rulings of the Trial Examiner
made at the hearing and finds that no prejudicial error was
committed . The rulings are hereby affirmed . The Board
has considered the Intermediate Report and Recommended
Order, the exceptions , the brief , and the entire record in the
case , and hereby adopts the findings , conclusions , and recom-
mendations of the Trial Examiner with the following additions.
The facts in the case are undisputed . On September 20,
1949, following an election , the Board certified International
Union, United Automobile, Aircraft and Agricultural Implement
Workers of America , (UAW-CIO), and its Local No. 135,
herein called the UAW-CIO, as bargaining representative of
the Respondent ' s production and maintenance employees. On
July 1, 1950 , the Respondent and the UAW-CIO entered into
a 3-year collective -bargaining contract covering all employees
in the certified unit. Shortly before the expiration of 2 years
from the date of signing of the contract , Pattern Makers'
Association of Grand Rapids , Pattern Makers ' League of North
America , AFL, herein called the Union, filed a representation
petition seeking to sever a craft unit of patternmakers from
the existing production and maintenance unit . Both the Re-
spondent and the UAW-CIO opposed the petition , contending
that their 3 -year contract which would not expire until July 1,
1953 , was a bar. In a decision issued on September 4, 1952,
the Board rejected this contention .' It held that , as the con-
tract had already been in existence for 2 years, and as the
contracting parties had failed to establish that contracts for
3-year terms were customary in the seating industry, the
contract was not a bar during the third year of its term.
Accordingly , the Board directed an election in a unit of pattern-
makers which the Union won.
On October 6, 1952, the Board certified the Union as bargain-
ing representative of the Respondent's patternmakers . Approxi-
mately 10 days later , the Union submitted to the Respondent
a proposed collective -bargaining agreement covering terms and
conditions of employment for patternmakers to be effective
' Not reported in printed volumes of Board decisions.
106 NLRB No 44.
AMERICAN SEATING COMPANY 251
immediately . The Respondent replied that it recognized the
Union as bargaining representative of the patternmakers and
that it was willing to negotiate or discuss subjects properly
open for discussion , but that the existing contract with the
UAW-CIO was still in full force and effect and remained
binding upon all employees , including patternmakers , until its
July 1, 1953, expiration date.
There is no question raised as to the Board ' s power to
direct an election upon its finding that the existing contract
between the UAW - CIO and the Respondent was not a bar.2 The
parties differ , however , as to the effect to be given to the
new certification resulting from this election . The Respondent
contends that the certification of the Pattern Makers merely
resulted in the substitution of a new bargaining representative
for patternmakers in place of the old representative , with the
substantive terms of the contract remaining unchanged.' In
support of this position , the Respondent argues that the
UAW-CIO was the agent of the patternmakers when it entered
into the 1950 agreement with that organization , and that the
patternmakers , as principals , are bound by that contract to the
expiration date thereof , notwithstanding that they have changed
their agent. The General Counsel , on the other hand , contends
that the certification of the Pattern Makers resulted in making
the existing contract with the UAW- CIO inoperative as to the
employees in the unit of patternmakers.
The Respondent ' s principal agent argument assumes that
common-law principles of agency control the relationship of
exclusive bargaining representative to employees in an appro-
priate unit. We think that this assumption is unwarranted and
overlooks the unique character of that relationship under the
National Labor Relations Act.
Under the common law, agency is a consensual relation-
ship .4 On the other hand, the status of exclusive bargaining
2 The Respondent contends that the Board 's bar rules are only "procedural rules" and
refers to N. L R. B. v. Grace Company, 184 F 2d 126, 129 (C. A. 8), where the court said:
The Board 's rule that the existence of a valid written and signed bargaining agree-
ment . . is a bar to a certification for a different representation , if applicable to the
facts in this case, is a procedural rule which the Board in its discretion may apply or
waive as the facts of a given case may demand in the interest of stability and fairness
in collective bargaining agreements.
The court did not explain what it meant by "procedural" which is not a word of art. Krieg
v. Missouri, 107 U. S. 221, 231. The court in the Grace case sustained the Board's finding
that a contract that had not been reduced to writing and signed before the filing of a rival
petition was not a bar to a new election. In this connection , the court cited H . J. Heinz Co.
v N. L. R. B., 311 U. S. 514, where the Supreme Court held that an employer's refusal to
sign a contract embodying the terms of collective - bargaining agreement constituted an
unfair labor practice . The court did not decide the effect of a new certification upon an exist-
ing contract.
3 In its brief, the Respondent concedes that the procedural aspects of the existing contract
grievance procedure , the number of union stewards, and union security might be required
subjects of negotiation with the newly certified bargaining representative.
4 "Agency is the relationship which results from the manifestation of consent by one per-
son to another that the other shall act on his behalf and subject to his control, and consent
by the other so to act." Restatement, Agency § 1 (1933).
2 52 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
representative is a special one created and governed by
statute,5 "Representatives designated or selected for the
purposes of collective bargaining by the majority of the
employees in a unit appropriate for such purposes, shall be the
exclusive representative of all the employees in such unit for
the purposes of collective bargaining .... 116 A duly selected
statutory representative is the representative of a shifting
group of employees in an appropriate unit which includes not
only those employees who approve such relationship, but also
those who disapprove and those who have never had an oppor-
tunity to express their choice.' Under agency principles, a
principal has the power to terminate the authority of his agent
at any time. 6 Not so in the case of a statutory bargaining
representative.9 Thus, in its most important aspects the
relationship of statutory bargaining representative to employees
in an appropriate unit resembles a political rather than a
private law relationship. 10 In any event, because of the unique
character of the statutory representative, a solution for the
problem presented in this case must be sought in the light
of that special relationship rather than by the device of pinning
labels on the various parties involved and applying without
change principles of law evolved to govern entirely different
situations.
The National Labor Relations Act provides machinery for
the selection and change of exclusive bargaining representa-
5 Fay v. Douds, 172 F. 2d 720, 724 (C. A. 2).
6 Section 9 (a) of the Act.
7 The nature of a statutory representative's constituency is well illustrated by the facts in
this case. In the 1949 election to select a bargaining representative for the Respondent's
production and maintenance employees, including patternmakers, there were three con-
tending unions: the UAW-CIO, Upholsterers' International Union of North America, AFL,
herein called the Upholsterers, and United Furniture Workers of America, CIO, herein
called the Furniture Workers. At the first election, of approximately 1,488 eligible voters,
1,293 voted. Of these 569 voted for the UAW-CIO, 238 voted for the Upholsterers, 416 voted
for the Furniture Workers, 65 voted against all participating labor organizations, 1 voted
under challenge, and 4 cast void ballots. As this election was indecisive, a runoff election
was held with only the Furniture Workers and the UAW-CIO on the ballot. In this second
election, 594 employees voted for the Furniture Workers and 706 voted for the UAW-CIO.
There were also 9 void ballots. As the UAW-CIO received a majority of valid votes cast in
the runoff election, it was certified as bargaining representative of all employees in the
plantwide unit. It is interesting to observe that before the runoff election was held, the
Pattern Makers moved to intervene in order to urge that a separate unit of patternmakers
be established. The motion was denied because the Pattern Makers' evidence of interest
was procured after the original hearing. The United Boat Service Corporation, 55 NLRB 671.
As the election was secret, it is not known how the handful of patternmakers voted. But the
Respondent and the UAW-CIO, when they entered into their bargaining contract in 1950,
must have been aware of the patternmaker interest in their own craft union. It is also sig-
nificant that this interest was sustained for the 2 years of representation by the UAW-CIO,
as evidenced by the fact that in the election held in 1952, all the patternmakers voted for
representation by the Pattern Makers.
'Restatement, Agency § 118 (b) (1933).
9N. L. R. B. v. Brooks, 204 F. 2d 899 (C. A. 9); N. L. R. B. v Century Oxford Mfg.
Co., 140 F. 2d 541 (C. A. 2); N. L. R. B. v. Botany Worsted Mills, 133 F. 2d 876 (C. A. 3);
N. L. R B. v. Appalachian Electric Power Co., 140 F. 2d 217 (C. A. 4); contra, Mid-Con-
tinent Petroleum Corp. v. N. L. R B , 104 F. 2d 613 (C A. 6).
iS Weyand, Majority Rule in Collective Bargaining, 45 Col. L. Rev. 556, 561 (1945); Note,
38 Mich. L. Rev. 516, 521 (1940).
AMERICAN SEATING COMPANY 253
tives. n If, after the filing of a petition by employees, a labor
organization, or an employer, and the holding of a hearing,
the Board is convinced that a question of representation exists,
it is directed by statute to conduct an election by secret ballot
and certify the results thereof. U The Act does not list the
situations in which a "question of representation affecting
commerce exists ." is That has been left to the Board to
decide ." One of the problems in this connection arises from
the claim that a collective-bargaining contract of fixed term
should bar a new election during the entire term of such con-
tract. In solving this problem, the Board has had to balance
two separate interests: The interest of employees and society
in the stability that is essential to the effective encouragement
of collective bargaining , and the sometimes conflicting interest
of employees in being free to change their representatives at
will . 16 Reconciling these two interests in the early days of the
Act, the Board decided that it would not consider a contract of
unreasonable duration a bar to an election to determine a
new bargaining representative. The Board further decided that
a contract of more than 1 year was of unreasonable duration
and that it would direct an election after the first year of the
existence of such a contract.' In 1947, in the further interest
of stability, the Board extended from 1 to 2 years the period
during which a valid collective-bargaining contract would be
considered a bar to a new determination of representatives.'
USection 9 (c).
It Section 9 (c) (1).
i9See Sixteenth Annual Report of the National Labor Relations Board (1951), pp. 59-84;
Fifteenth Annual Report of the National Labor Relations Board (1950), pp. 34- 36, 60- 77.
i4Except that no election may be directed in any bargaining unit or any subdivision within
which, in the preceding 12-month period, a valid election has been held. Section 9 (c) (3).
Neither may any investigation be made unless certain filing requirements are satisfied
Section 9 ( t), (g), and (h).
Is General Motors Corporation , 102 NLRB 1140; The Trailer Company of America, 51
NLRB 1106.
16 E.g., Columbia Broadcasting System, Inc., 8 NLRB 508; The Riverside and Fort Lee
Ferry Company, 23 NLRB 493; Wichita Union Stockyards Company, 40 NLRB 369.
Before deciding on the contract- bar rule, the Board moved tentatively in the direction of
conducting elections whenever employees indicated that they desired to change bargaining
representatives, notwithstanding the existence of a collective - bargaining contract . See New
England Transportation Company, 1 NLRB 130, 138, where the Board said: "The whole
process of collective bargaining and restricted choice of representatives assumes the
freedom of the employees to change their representatives , while at the same time continuing
the existing agreements under which the representatives must function." In making this
statement , the Board relied on a similar statement of the National Mediation Board National
Mediation Board, First Annual Report 23-24 ( 1935). However , collective-bargaining contracts
in the railroad industry are terminable at any time upon 30 days ' notice, unlike contracts in
other industries which are usually for fixed terms. See Rice , The Legal Significance of Labor
Contracts under the National Labor Relations Act, 37 Mich. L. Rev. 693, 720 (1939). In
Swayne & Hoyt Ltd., 2 NLRB 282, 287, after repeating the above quotation from the New
England Transportation case, the Board added "Consequently, ... whichever organization
is chosen as representative of the employees for the purposes of collective bargaining will
be free to continue the existing agreement , to bargain concerning changes in the existing
agreement , or to follow the procedure provided therein for its termination." The New
England Transportation approach was abandoned in favor of the contract -bar rule See Boston
Machine Works Company, 89 NLRB 59, 62.
i7Reed Roller Bit Company, 72 NLRB 927.
254 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Contracts for periods longer than 2 years maybe a bar , if such
longer term contracts are customary in the industry, or as
more recently stated, if "a substantial part of the industry is
covered by contracts of a similar term."'
These contract -bar rules have been affirmed many times
and have become an established part of the law of labor
relations ." They received the approval of Congress when it
amended the Act in 1947, 10 and have been "as it were , written
into the statute ." 21 Therefore , when the Respondent and the
UAW-CIO entered into their 3-year bargaining contract in
1950 , they were on notice that, after the first 2 years of its
term, unless it could be shown that longer term contracts
were customary in the industry , the contract would not prevent
the selection of a new bargaining representative for any group
of employees who might constitute an appropriate unit . 22 Neither
the Board nor the courts have decided, however, the effect
a new certification has upon an existing , collective -bargaining
contract which has been held not a bar to a new determination
of representatives because it is of unreasonable duration.28
In 1952, the Board decided that the Respondent ' s pattern-
makers , who constitute one of the most skilled craft groups,
might , after 2 years of experience as part of a plantwide
unit of approximately 1,500 employees , if they so desired,
constitute a separate appropriate unit . Apparently dissatisfied
with their representation by the UAW-CIO, all six pattern-
makers voted for a separate unit to be represented by the
Pattern Makers , which is the labor organization that tradi-
tionally represents patternmakers in industry . The Board
is General Motors Corporation , 102 NLRB 1140.
19E. g., Puritan Ice Company , 74 NLRB 1311 (1947); Schaeffer Body, Inc., 78 NLRB 1247
(1948 ); International Paper Company, 80 NLRB 751 (1948 ); Sanson Hosiery Mills, Inc., 84
NLRB 654 ( 1949); Association of Motion Picture Producers , Inc., 88 NLRB 521 (1950).
20 Sen. Rep. No. 105 , 80th Cong . 1st. Sess., p. 25; H. R. Conf. Rep. No. 510, 80th Cong
1st Sess. p. 50.
21 Fay v. Douds, 172 F. 2d 720, 724 ( C. A. 2); see N. L. R. B. v. Efco Manufacturing,
Inc., 203 F. 2d 458 (C. A. 1); N. L. R. B. v. Geraldine Novelty Co, 173 F. 2d 14, 17-18
(C. A. 2); lob v. Los Angeles Brewing Co., 183 F. 2d 398, 404 (C. A. 9); N. L. R. B. v.
Grace Company, 184 F. 2d 126, 129 (C. A. 8).
22 Compare N. L. R. B . v. J. I. Case Company , 134 F . 2d 70, 72 (C. A. 7), affd 321 U.S.
332, where the Court said:
Contracts must be understood as having been made not only with reference to existing
legislation but also with reference to the possible exercise of any rightful authority of
the Government , and no obligation of existing contracts may be invoked to defeat that
authority.
22 We do not consider Triboro Coach Corporation v. N. Y. S. L R. B., 286 N. Y. 314
(1941 ) as having passed upon this precise issue. In that case , the New York Court of Appeals,
by a 4 to 3 vote, set aside a certification of representatives issued by the New York State
Labor Board to Union A after an election , upon the ground that a valid contract between the
employer and Union B existed . The court rejected the finding of the New York Board that
the contracting parties had terminated their agreement . It also found that Union A, the rival
union , had not filed its representation petition in proper time . The New York court never
reached the question , posed in the present case , of the effect upon an existing contract of
the valid selection of a new labor organization as bargaining representative.
Nor do we consider that Congress in passing the 1947 amendments decided the issue in
this case . As set out by the Trial Examiner , the legislative history is ambiguous at best.
AMERICAN SEATING COMPANY 255
thereupon certified the Pattern Makers as bargaining repre-
sentative for those employees. Although the certification
of October 6, 1952, gave the Pattern Makers immediate status
as exclusive representative for the purposes of collective
bargaining " in respect to rates of pay, wages , and hours of
employment ," the Respondent would qualify the Pattern Makers'
authority as to these subjects by adding "after July 1, 1953."
If the Respondent ' s contention is sound , a certified bargaining
representative might be deprived of effective statutory power
as to the most important subjects of collective bargaining for
an unlimited number of years as the result of an agreement
negotiated by an unwanted and repudiated bargaining repre-
sentative . There is no provision in the statute for this kind
of emasculated certified bargaining representative . Moreover,
the rule urged by the Respondent seems hardly calculated
to reduce " industrial strife" by encouraging the "practice
and procedure of collective bargaining ," the declared purpose
of the National Labor Relations Act, as amended.
The purpose of the Board ' s rule holding a contract of un-
reasonable duration not a bar to a new determination of
representatives is the democratic one of insuring to employees
the right at reasonable intervals of reappraising and changing,
if they so desire , their union representation . Bargaining
representatives are thereby kept responsive to the needs and
desires of their constituents ; and employees dissatisfied with
their representatives know that they will have the opportunity
of changing them by peaceful means at an election conducted by
an impartial Government agency. Strikes for a change of
representatives are thereby reduced and the effects of employee
dissatisfaction with their representatives are mitigated. But,
if a newly chosen representative is to be hobbled in the way
proposed by the Respondent , a great part of the benefit to be
derived from the no -bar rule will be dissipated . There is little
point in selecting a new bargaining representative which is
unable to negotiate new terms and conditions of employment
for an extended period of time.
We hold that, for the reasons which led the Board to adopt
the rule that a contract of unreasonable duration is not a bar
to a new determination of representatives , such a contract may
not bar full statutory collective bargaining , including the
reduction to writing of any agreement reached, as to any group
of employees in an appropriate unit covered by such contract,
upon the certification of a new collective -bargaining repre-
sentative for them.u Accordingly , we find that by refusing on
and after October 16, 1952, to bargain with the Pattern Makers
concerning wages, hours , and other working conditions for
employees in the unit of patternmakers , the Respondent
violated Section 8 (a) (5) and ( 1) of the Act.
24See Pacific Greyhound Lines, 22 NLRB 111, 141 (Chairman Madden' s opinion). The
Respondent assumes at least partial defeasance of the existing contract in acknowledging
that such matters as union security , contract grievance procedure , and the number of
stewards may be required subjects of collective bargaining with the Pattern Makers.
256 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
2. In making the above finding, we have not relied on the
Trial Examiner's interpretation of Section 8 (d). However, we
also agree with the Trial Examiner that, for the reasons stated
by him, Section 8 (d) is "inapplicable upon an intervening
certification of the Board," thus leaving the Sands25 rule in
full vitality. For this reason , too, wefindthat the Respondent's
refusal to discuss terms and conditions of employment violated
Section 8 (a) (5) and (1) of the Act.
ORDER
Upon the entire record in the case, and pursuant to Section 10
(c) of the National Labor Relations Act, the National Labor
Relations Board hereby orders that the Respondent, American
Seating Company, Grand Rapids, Michigan, its officers, agents,
successors , and assigns , shall:
1. Cease and desist from:
(a) Refusing to bargain collectively with Pattern Makers'
Association of Grand Rapids, Pattern Makers' League of North
America, AFL, as the exclusive representative of all employees
in the patternmakers unit, in respect to rates of pay, wages,
hours of employment, or other conditions of employment.
2. Take the following affirmative action, which the Board
finds will effectuate the policies of the Act:
(a) Upon request, bargain collectively with Pattern Makers'
Association of Grand Rapids, Pattern Makers' League of North
America, AFL, as the exclusive representative of all employees
in the appropriate unit, and embody any understanding reached
in a signed agreement.
(b) Post at its plant in Grand Rapids, Michigan, copies of the
notice attached to the Intermediate Report and Recommended
Order." Copies of said notice, to be furnished by the Regional
Director for the Seventh Region, shall, after being duly signed
by the Respondent's representative, be posted by the Respondent
immediately upon receipt thereof and maintained by it for at
least sixty (60) consecutive days thereafter in conspicuous
places, including all places where notices to employees are
customarily posted. Reasonable steps shall be taken by the
Respondent to insure that such notices are not altered, defaced,
or covered by any other material.
(c) Notify the Regional Director for the Seventh Region in
writing, within ten (10) days from the date of this Decision, of
the steps taken to comply herewith.
Chairman Farmer took no part in the consideration of the
above Decision and Order.
25N. L. R. B. v. Sands Mfg. Co., 306 U. S. 332, 342.
26 This notice, however, shall be and hereby is amended by striking from the first para-
graph thereof the words "Recommendations of a Trial Examiner," and substituting in lieu
thereof the words "A Decision and Order." In the event that this Order is enforced by
decree of a United States Court of Appeals, there shall be substituted for the words "Pur-
suant to a Decision and Order" the words "Pursuant to a Decree of the United States Court
of Appeals, Enforcing an Order."
AMERICAN SEATING COMPANY 257
Intermediate Report and Recommended Order
STATEMENT OF THE CASE
Upon a charge filed by a labor organization herein called the Pattern Makers (Pattern
Makers' Association of Grand Rapids , Pattern Makers ' League of North America, AFL),
the General Counsel for the National Labor Relations Board issued a complaint on November
28, 1952, against Respondent American Seating Company alleging that the Respondent has
engaged in specified conduct violating Section 8 (a) (1) and (5) and Section 2 (6) and (7) of
the Labor Management Relations Act, 1947, 61 Stat. 136 , herein called the Act. Copies of
the complaint and charges were served upon the Respondent and a labor organization herein
called the UAW (Local 135, International Union , United Automobile , Aircraft and Agricultural
Workers of America (UAW-CIO)); the Respondent in turn has filed an answer denying the
commission of the unfair labor practices alleged.
Pursuant to notice , a hearing was held in Grand Rapids , Michigan , on January 5, 1953,
before the undersigned Trial Examiner . The General Counsel, the Respondent , and the
Pattern Makers were represented at the hearing and all parties were afforded full oppor-
tunity to examine and cross -examine witnesses and to introduce evidence bearing on the
issues . The parties were given opportunity to present oral argument at the conclusion of
the hearing and also to file briefs and proposed findings of fact and conclusions of law. The
Respondent has moved to dismiss the complaint , which motion is disposed of in accordance
with the following findings of fact and conclusions of law.
Upon the entire record in the case , 'including a consideration of the Respondent 's brief,
I make the following:
FINDINGS OF FACT
1. THE BUSINESS OF THE RESPONDENT
The Respondent is a New Jersey corporation engaging in the manufacture of seating in
Grand Rapids , Michigan . During the year ending October 15, 1952, the Respondent has pur-
chased materials worth more than $ 500,000 from out-of-State sources and has shipped more
than $ 1,000,000 worth of finished products in interstate commerce.
The Respondent is engaged in commerce within the meaning of Section 2 (6) and (7) of the
Act.
IL THE UNFAIR LABOR PRACTICES
This case involves no evidentiary conflicts , and the facts are as follows:
On September 20, 1949 , following a Board-directed election (85 NLRB 269), the Board
certified the UAW for a production and maintenance unit at the Respondent 's operations,
including patternmaking employees . The UAW and the Respondent executed a collective-
bargaining agreement on July 1, 1950, covering all employees in the certified unit. This
agreement deals with wages , hours , seniority , and other subjects usually found in such
agreements , including grievance procedures , checkoff of union dues , and union-shop pro-
visions . The agreement prescribes a 3-year term with provisions for periodic wage and
insurance reopenings and for automatic renewal in the absence of termination notice more
than 60 days before the anniversary date, the first such date being July 1, 1953 . The agree-
ment has a modified no-strike and no-lockout clause and also provides that neither party
has a right to negotiations on any subject during the term of the agreement except as to
wages and insurance for which periodic review is provided , as already noted. Also executed
by the Respondent and the UAW on July 1 , 1950 , was a pension agreement covering the entire
bargaining unit, effective by its terms until July 1, 1955 , and with provisions for indefinite
extension until either party serves the other with a 60-day notice. The pension agreement
also prohibits strikes respecting matters covered therein during its operative period. The
parties have entered into supplemental wage agreements in accordance with the terms of the
general labor agreement of July 1950 , none of the supplements extending the agreement's
original termination date.
The Pattern Makers , on May 29 , 1952, filed a representation petition in Case No. 7-RC-
1812, seeking, in effect , to sever a unit of approximately 6 patternmakers from the UAW's
production and maintenance unit of approximately 1,700 employees . At the hearing on this
i The transcript is hereby corrected at line 23 , page 25, by substituting the word "none"
for the word "enough " The pertinent phrase reads , as corrected , "that none of the. . .
258 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
petition in Case No. 7-RC-1812, the Respondent urged that its agreements of July 1950 be
held a bar to the proceeding. The Board issued a Decision and Direction of Election on
September 4, 1952, overruling the Respondent's contract-bar contention and directing an
election to determine whether the patternmaking employees desired to be established in a
bargaining unit apart from the UAW's plantwide unit. The Respondent had adduced evidence
to the effect that it is the most diversified and one of the largest seating manufacturers in
the country, that no other principal seating manufacturers are located in its proximate
labor vicinity, and that practically all other principal manufacturers within the Grand Rapids
labor market have collective-bargaining agreements of from 3 to 5 years' duration. The
Respondent thereupon had contended in the representation case that, as the Respondent is
required to compete for its labor supply with these other industrial employers in the same
labor vicinity and as, therefore, it is of little or no consequence what contract-duration
practice other seating manufacturers have outside the Respondent's labor market, the Board
should consider the local industrial practice, albeit in different fields of manufacture from
the Respondent, in determining whether the July 1950 agreements were of reasonable dura-
tion for contract-bar purposes. The Board held, however, that "as the record fails to
establish that 3-year contracts are customary in the seating industry, and as more than 2
years have elapsed since the effective date of the existing contract, 2 we find that it is not a
bar."
The craft-severance election was accordingly held, and on October 6, 1952, the Board
certified the Pattern Makers as statutory bargaining representative for its proposed unit.
At a meeting on October 16, 1952, the Pattern Makers presented to the Respondent a proposed
agreement covering recognition, wages, hours, seniority, grievance procedure, and other
conditions of employment for its unit. The Respondent replied, in substance, that it "recog-
nized the [Pattern Makers] as the exclusive representatives for collective bargaining purposes
of the employees in this [patternmaking ] unit and that the company was ready to negotiate
upon and discuss any subjects properly open for negotiation or discussion." Then referring
to the fact that the UAW's aforementioned general labor agreement "covering wages, hours
and other conditions of employment" would not expire until July 1, 1953, the Respondent
declared its position to be "that all matters covered by this contract would remain in full
force and effect for the full term of the contract and that this contract was binding upon
the company and the employees represented by the Pattern Makers Union, as well as all
other employees for whom and on whose behalf the contract was negotiated and executed."
The Respondent further declared that on this basis it "believed that none of these subjects
were now open for negotiation but that as soon as it was proper to negotiate upon them, this
union [the Pattern Makers] would be recognized as a proper agent for this purpose." The
Respondent also referred in this context to the pension agreement which does not expire until
July 1, 1955.
At this same meeting on October 16, the Pattern Makers inquired as to the deduction of
UAW dues which the July 1950 agreement requires upon authorization of the individual
employee. The Respondent replied that, as the patternmaking employees had not counter-
manded their checkoff authorization as to UAW dues, the Respondent believed it "was bound
to continue the deduction of these dues unless the UAW waived its right thereto, in which
event the company would gladly terminate such deductions." Sometime after this meeting
the UAW informed the Respondent that it would waive the checkoff of UAW dues from pattern-
making employees, and the Respondent accordingly has stopped deducting UAW dues from
the patternmaking unit. It further appears that the Respondent has not, since the Pattern
Makers' certification, inquired into the union membership of these patternmaking employees
or otherwise applied to them the union-shop provision of the UAW's agreement. The matter
of grievance procedure was also raised at the October 16 meeting, with the Respondent taking
the position that the 1950 agreement giving individual employees a right to present their
own grievances might provide a workable solution to the matter. The Respondent also has
stated its position to be that, in accordance with the 1950 agreement, it was required to give
the UAW an opportunity, for the duration of the agreement, to be present at the adjustment
of all grievances, including those originating in the Pattern Makers unit.
This present action arises out of the irreconcilable, but good-faith, positions of the
Respondent and the Pattern Makers, the latter claiming during its meeting with the Respondent
that the Board certification entitled it to immediate negotiation on all subjects of collective
bargaining as exclusive representative of the patternmaking unit.
2 The Board apparently considered the 5-year pension agreement to be covered by its
decision on the 3-year contract of July 1950.
AMERICAN SEATING COMPANY 259
Contentions of the Parties
The General Counsel contends that, upon the certification of the Pattern Makers , the UAW's
agreements become inoperative as regards the patternmaking unit. He urges that to hold
otherwise under the circumstances present here would make a representation proceeding
and its resulting certification of the Pattern Makers an exercise in futility . Therefore,
claims the General Counsel, the Respondent was obliged to bargain immediately with the
Pattern Makers in regard to wages , hours , and other terms and conditions of employment,
and, conversely , the UAW agreement is no excuse for refusing so to bargain . 'lhe Respondent,
on the other hand , claims that the agreements of July 1950 were really made with the em-
ployees (as distinguished from their bargaining representatives ) and that these agreements
are lawful and therefore binding until termination by their own terms . The theory advanced
by the Respondent is that the employees , and not the employees ' bargaining representative,
are the principal party in interest to a collective -bargaining agreement and that, in this
instance , the UAW was merely the agent of all employees, including the patternmakers, for
the purposes of negotiating , executing , and administering the July 1950 agreements. The
Respondent urges , alternatively , that at most what the Pattern Makers ' certification accom-
plished , was a substitution of the Pattern Makers for the UAW in administering the July 1950
agreements as to the patternmakmg unit, in which event the substantive provisions dealing
with wages , hours , and other conditions of employment would continue as binding obligations
on the patternmaking employees and their new agent , the Pattern Makers , for the duration
of the agreements . The Respondent 's supporting arguments are, in brief : (1) The granting of
the representation election did not decide the rights of the parties under the July 1950 agree-
ments ; (2) in effectuating the right of employees to choose their bargaining representatives,
the Board is not compelled to invalidate agreements ; (3) the Act imposes no duration limits
on agreements and the Board is therefore without authority to set aside agreements on the
basis of their duration ; and (4) if the Board should invalidate agreements under the circum-
stances at bar , employers would be placed in the dilemma of being unsuccessful defendants
in contract actions brought by original contracting unions in State courts for the very breach
which the Board 's order would require.
Origin and Administrative Status of the Problem
The question concerning the impact of a collective -bargaining agreement between an
employer and a supplanted union on the employer 's obligation to bargain with another union
arises, initially , out of the Board 's representation functions under the Act. While the Act
was still in its infancy , the Board had to determine whether to process representation
petitions filed by a rival union where an incumbent union and the employer enjoyed a collec-
tive-bargaining agreement which had some time to run . The rival union might then be seeking
a bargaining unit identical to, or smaller or larger than , the unit covered by the agreement.
The 1947 amendments created further like situations . Thus , so-called RD petitions may be
filed under Section 9 (c) (1) (A) (11) in which employees seek to decertify a union which is
party to agreement with the employer ; and the unit sought to be decertified may be identical
to, or smaller than, the unit covered by the agreement. And as a result of a so-called RM
petition filed by employers under Section 9 (c) (1) (B ) of the Act , a determination may be
made that a union , with whom the employer has an agreement , is no longer the statutory
representative . And under Section 9 (c) (1) (A) (i) of the Act we have the so-called RC cases
involving the same aforedescribed situations as were presented during the Wagner Act period.
Whenever an agreement is raised as a bar to an election in these various representation
situations the Board interprets its function as requiring it to resolve the conflict between
"stabilizing labor relations for the duration of a contract secured through bona fide bargain-
ing, and protecting the exercise by employees of full freedom of designation of representatives
of their own choosing" (General Motors Corporation , 102 NLRB 1140). The body of decisional
law resulting from the Board 's resolution of these contract -bar cases is fairly voluminous
and well established , 3 though still evolving in the light of changing industrial practices. The
July 1950 agreements under consideration in this case were held to be no bar because, under
recognized administrative criteria , they had been operative an unreasonably long time when
sSee, e g., Sixteenth Annual Report of the National Labor Relations Board ( 1951), p 64;
Fifteenth Annual Report of the National Labor Relations Board ( 1950), p 60; Fourteenth
Annual Report of the Board ( 1949), p 22. Also, N L R B. v Geraldine Novelty Co., 173
F 2d 14, 17, 18 (C A 2); Fay v Douds , 172 F. 2d 720 , 724 (C A. 2); N. L R. B v. Grace
Co , 184 F 2d 126, 129 ( C A. 8); lob v. Los Angeles Brewing Co., 183 F 2d 398, 404
(C A 9)
322615 0 - 54 - 18
260 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
the Pattern Makers' petition was filed, and this rule of unreasonable duration is one of the
established contract-bar principles.4
As far as the parties herein have demonstrated and my own research revealed, the Board
has not decisively resolved the question presented here. Going back to volume 1 of the
Board's Decisions, we find the Board stating in New England Transportation Company, l NLRB
130, 139 (a representation case), that the "whole process of collective bargaining and unre-
stricted choice of representatives assumes the freedom of employees to change their repre-
sentatives, while at the same time continuing the existing agreements under which the
representatives must function." Passing to Pacific Greyhound Lines, 22 NLRB 111 (an
unfair labor practice proceeding), we find the Board divided on the point, Chairman Madden
then espousing the view that insofar as affected employees are concerned, a contract becomes
"inoperative as a matter of law" upon the certification of a new bargaining representative
(id., at p. 141). In that same case, Member Smith was of the opinion that the certification of
a new representative "result[s] merely in the termination by operation of law of the out-
standing collective contract or its terms where they conflict with action by the certified
representative as representative, and not in a termination of all substantive terms of the
contract otherwise valid" (id., at p. 145). (This Pacific Greyhound decision was vacated in
30 NLRB 439.) Next along the line we find the Board refraining from taking any position on
the matter, as for example, in Hueneme Wharf & Warehouse Company, 39 NLRB 636, 639,
a representation case. Soon afterward, however, in another representation case, Harrison-
Walker Refractories Co., 43 NLRB 1349, 1352, the Board, in directing an election, states
that "The election which we shall hereinafter direct is for the purpose of determining the
representative who shall administer the contract." The Board again used the Harrison-Walker
decisional language in The Register and Tribune Company, 60 NLRB 360, 363, meanwhile,
however, having also reverted to the Hueneme Wharf language in Illinois Gear & Machine
Co., 53 NLRB 179, 181.
In Boston Machine Works Company, 89 NLRB 59, a representation case decided after the
1947 amendments to the Act, the Board noted its holdings in the Harrison-Walker and Register
and Tribune cases, supra, that the elections involved there "would be for the restrictive
purpose of determining the representative to administer the current contract." 'Die Board
went on to say, however, that "we need not now decide whether the representatives to be
certified herein must assume the existing contract. To the extent these cases purport to
decide that question ... they are hereby overruled" (at p. 61). And then discussing Member
Reynolds' dissenting view that subsisting agreements follow a newly certified representative
and that a certification should be restricted to such effect, the Board held it "neither neces-
sary nor proper in a representation proceeding to rule upon the collective bargaining duties
of the parties or on other issues not before us" (at pp. 61-62).
The Board's ruling in the Boston Machine case represents the Board's consistent view
since then, and this had been the Board's view for several years before, so far as determining
in representation cases the effect of certifications on existing agreements . Thus, the matter
has been left, if at all in Board proceedings, to unfair labor practice cases, and, as far as I
can ascertain, this problem has arisen but once in such latter-day cases, namely, the Grace
Company, 84 NLRB 435. In that case the employer in question refused to recognize and
bargain with a newly certified union because of an existing agreement with the supplanted
union; the Board had rejected the agreement as a bar in an antecedent representation case
because the agreement in question had not been executed when the representation petition
was filed (73 NLRB 1286, 1287). The Trial Examiner was of the opinion that, when the Board
rejected the contract-bar contention in the representation case, it was holding in effect that
the agreement "became defeasible, subject to the outcome of the representation proceeding"
(84 NLRB at p. 448). The Board sustained the Trial Examiner's conclusion of a refusal to
bargain, and issued the conventional order requiring the employer to bargain and to reduce to
writing any understanding reached between the parties. Notwithstanding such order, the Board
nevertheless stated that "We do not determine what effect our certification of the [newly
certified] union had upon the contract between the Respondent and the[supplanted union], except
to affirm that the certification made clear the duty of the Respondent to recognize the Union
as the [statutory representative of the affected employees]...." (84 NLRB at p. 436). In
enforcement proceedings in the Grace case, the Eighth Circuit agreed, in effect, that the
4See, e. g., Reed Roller Bit Co., 72 NLRB 927, 928-930; Puritan Ice Co , 74 NLRB 1311,
1313-1314; General Motors Corporation, 102 NLRB 1140; Sixteenth Annual Report of the
National Labor Relations Board (1951), pp. 72-73; Fifteenth Annual Report of the National
Labor Relations Board (1950), p. 68; Fourteenth Annual Report of the National Labor Rela-
tions Board (1949), p. 23. Cf. N. L. R. B. v. Sanson Hosiery Mills, 195 F. 2d 350 (C. A. 5),
certiorari denied 344 U. S. 863.
AMERICAN SEATING COMPANY 261
employer was obliged to bargain upon the certification of a new union, but it held that the
employer was entitled to reasonable time to obtain dissolution of a State court order restrain-
ing it from engaging in the bargaining which the Board 's order required . N. L. R. B. v. Grace
Co., 184 F.2d 126, 130(C. A. 8). (The court later denied enforcement when it appeared that the
employer had closed down the operations in question . 189 F. 2d 258.)
The 1947 Amendments
The House Bill (H. R. 3020), which eventually was modified and enacted as the Taft-Hartley
Act in 1947, provided in Section 9 (f) (8) that if a representation election be held to choose a
representative for any unit covered by a collective -bargaining agreement, "certification of
the new representative shall not be effective unless and until such new representative be-
comes a party to such contract and agrees to be bound in all respects by its terms for the
remainder of the contract period." T e accompanying House Report (H. Rep. No. 245, 80th
Cong., 1st Sess ., p. 39) states that this proposal "seems to be consistent with present law."
However, the provision was deleted from the amended Act as finally enacted , and the explana-
tion of the House conferees for the omission is that "since the inclusion of such a provision
might give rise to an inference that the practice of the Board with respect to conducting
representation elections while collective bargaining contracts are in effect, should not be
continued , it is omitted from the conference agreement " (H. Conf. Rep . No. 510 , 80th Cong.,
1st Sess., p. 50).5
The 1947 Amendments include a new provision, Section 8 (d), which defines the statutory
duty of collective bargaining . Section 8 (d) provides in part that the bargaining obligation
also means that no party to an existing collective bargaining agreement:
... shall terminate or modify such contract , unless the party desiring such termination
or modification--
(1) serves a written notice upon the other party to the contract of the proposed
termination or modification sixty days prior to the expiration date thereof, or in the
event such contract contains no expiration date, sixty days prior to the time it is
proposed to make such termination or modification;
(2) offers to meet and confer with the other party for the purpose of negotiating a
new contract or a contract containing the proposed modifications;
(3) notifies the Federal Mediation and Conciliation Service within thirty days after
such notice of the existence of a dispute, and simultaneously therewith notifies any
State or Territorial agency established to mediate and conciliate disputes within the
State or Territory where the dispute occurred , provided no agreement has been reached
by that time; and
(4) continues in full force and effect, without resorting to strike or lock-out, all the
terms and conditions of the existing contract for a period of sixty days after such
notice is given or until the expiration date of such contract , whichever occurs later:
Section 8 (d) then further provides that:
The duties imposed upon employers , employees , and labor organizations by paragraphs
(2), (3), and (4) shall become inapplicable upon an intervening certification of the Board ,
under which the labor organization or individual , which is a party to the contract, has
been superseded as or ceased to be the representative of the employees subject to the
provisions of section 9 (a), and the duties so imposed shall not be construed as requiring
either party to discuss or agree to any modification of the terms and conditions contained
in a contract for a fixed period if such modification is to become effective before such
terms and conditions can be reopened under the provisions of the contract. Any employee
who engaged in a strike within the sixty-day period specified in this subsection shall lose
his status as an employee of the employer engaged in the particular labor dispute, for
the purposes of sections 8, 9, and 10 of this Act, as amended, but such loss of status for
such employee shall terminate if and when he is reemployed by such employer . [ Empha-
sis added.]
5 That Congress , in 1947, was aware of and approved the Board's contract-bar decisional
policy also is evident from S. Rep. No. 105, 80th Cong., 1st Sess , p. 25 See also, Fay v.
Douds, 172 F. 2d 720, 724 (C A. 2) ("though we assume that the 'contract bar' is, as it
were, written into the statute , it is so written in its entirety.... and other cases cited
in footnote 3, supr.
262 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
The portion of Section 8 (d), which provides that paragraphs (2), (3), and (4) do not require
a party to a contract for a fixed term to bargain or agree concerning contract modifications
to become operative before the contract itself permits , changes the rule of N. L. R. B. v.
Sands Mfg. Co., 306 U. S. 332, 342. The doctrine of the Sands case was that "an employer
was under a duty , upon request , to bargain with the representatives of his employees as to
terms and conditions of employment whether or not an existing collective bargaining agree-
ment bound the parties as to the subject matter to be discussed ." N. L. R. B. v. Jacobs
Manufacturing Company, 196 F. 2d 680, 683 (C. A. 2). As Section 8 (d) also provides that
paragraphs (2), (3), and (4) do not apply when there is an intervening certification, one
possible construction is that by thus removing the statutory teeth from the section in such a
situation, Congress implied that Section 8 (d) (1) also does not apply and thereby manifested
a congressional assumption that an agreement does not continue upon an intervening certi-
fication--for, if agreements do continue in such circumstances, there is as much need for
8 (d) (2), (3), and (4) as in any other contract situation. The other possible construction is,
of course , by a converse application of mclusio unius est exclusio alterius , that Section 8
(d) (1) was intended to operate , a construction which then would indicate congressional
understanding that contracts remain effective despite an intervening certification . If the first
interpretation be accepted , the Respondent was obviously obliged to negotiate with the Pattern
Makers concerning all subjects of collective bargaining , there being no contract question
under this hypothesis. But even if the second construction be made and it accordingly be
assumed that the July 1950 agreements do continue, the Respondent would still be obliged to
bargain immediately concerning present changes in terms and conditions of employment; for
that portion of Section 8 (d) which changes the sands doctrine is, by its own terms , " inappli-
cable upon an intervening certification of the Board, " thus leaving the sands rule in full
vitality under the second hypothesis stated.
The Postponement Theory
The Respondent 's first theory is that, even as to patternmakmg employees and despite the
Pattern Makers' certification , it is obliged to perform its agreements with the UAW and
therefore cannot negotiate with the Pattern Makers while these agreements are operative.
Should this theory prevail--and it appears to have been the Respondent 's position at the
October 16 meeting- -the Respondent would be required to perform, in the UAW's behalf
and at the UAW's insistence , the union -shop and checkoff provisions as to patternmakers
for the contract term , and it also would be required to treat with the UAW in regard to all
other matters involved in the administration of the July 1950 agreements as such matters
pertain to the patternmakers , including the adjustment of grievances arising from the
patternmaking unit.
One of the basic precepts of the Act is that an employer is required to recognize and
bargain with the statutory representative and that this bargaining obligation also imposed
"the negative duty to treat with no other " (N. L. R. B. v. Jones & Laughlin Steel Corp.,
301 U. S. 1, 44; Medo Photo Supply Corp. v. N. L. R. B., 321 U. S. 678, 683-684). Unless
the July 1950 agreements justify conduct to the contrary , the Respondent was therefore
required , under Section 8 (a) (5) of the Act, to recognize and bargain with the Pattern Makers
and also not so to treatwiththeUAW in regard to the patternmaking unit. But it is the Board's
function , under Section 9 of the Act, to ascertain and certify bargaining representatives; and
in certifying the Pattern Makers , the Board exercised this statutory authority in conformity
with established contract-bar principles , which principles apply "in complaint cases no
less than in representation cases " (N. L. R. B. v. Geraldine Novelty Co., 173 F. 2d 14,
18 (C. A. 2)). The July 1950 agreements are therefore in conflict with this exercise of the
Board 's representation functions to the extent that, during the operative period of the Pattern
Makers ' certification , they purport to vest a representative status in the UAW in respect to
patternmaking employees and thus would postpone the effective date of the certification issued
by the Board. "Whenever private contracts conflict with [the Board's] functions, they ob-
viously must yield or the Act would be reduced to a nullity" (J. 1. Case Co. v. N. L. R. B.,
321 U . S. 332, 337); T indeed , the Act itself states that the power of the Board "to prevent
any person from engaging in any unfair labor practice ... shall not be affected by any other
means of adjustment or prevention that has been or may be established by agreement, law,
or otherwise " (Section 10 (a)). 2b the extent , therefore , that the July 1950 agreements pur-
6See the other authorities collected in Miami Copper Company , 92 NLRB 322, 338
7 National Licorice Co. v. N L. R B , 309 U. S. 350, 362- 367; Phelps Dodge Co v.
N. L. R B, 313 U. S. 177, 192-193 Compare Consolidated Edison Co. v N. L. R B ,
305 U. S 197, 235-236; Colgate-Palmolive Peet Co. v. N L R B., 337 U S 913
AMERICAN SEATING COMPANY 263
port to cause representative rights to exist after the Pattern Makers' certification in a
union other than the Pattern Makers, they are, in such respects, inconsistent with the Act
and of no force and effect in regard to patternmaking employees.
The Respondent urges, however, that to require an employer to bargain with a newly
certified union and to ignore its obligations under an agreement with a superseded union
would place the employer in the difficult position of being confronted with State court action
by the supplanted union to enforce the agreement in the very respects in which the Board's
order has caused the agreement to be breached. The Supreme Court seems to have answered
this contention in National Licorice Co. v. N. L. R. B., 309 U. S. 350, 365: . . it will not
be open to any tribunal to compel the employer to perform the acts which even though he has
bound himself by contract to do them, would violate the Board's order or be inconsistent with
any part of it." [Emphasis added.] ISee also , Hill v. Florida, 325 U. S. 538, 539, 543; Sola
Electric Co. v. Jefferson Co., 317 U. S. 173, 176-177; Hamilton v. N. L. R. B., 160 F. 2d
464, 471 (C. A. 6), certiorari denied sub nom. Kalamazoo Stationery Co. v. N. L. R. B.,
332 U. S. 762.
The Respondent was accordingly obliged to bargain and otherwise to treat with the Pattern
Makers and not with the UAW concerning terms and conditions of employment and concerning
all other subjects of collective bargaining affecting patternmaking employees, whether or not
the substantive provisions of the July 1950 agreements be held to continue to apply to the
patternmakuig employees after the Pattern Makers' certification. This obligation to bargain,
in its affirmative and negative aspects, became immediately effective upon the Pattern
Makers' certification. The Respondent refused so to bargain and I conclude that it thereby
violated Section 8 (a) (5) and (1) of the Act.
The usual order in a refusal-to-bargain case is to require the employer to bargain with the
union in question. This is not the ordinary case, however, and the conventional bargaining
order without any clarification would, in the present situation, require the parties to specu-
late at their peril concerning the impact, if any, of the July 1950 agreements on the labor-
relations situation of the patternmakmg employees. The precise question in this connection
is, of course, whether the July 1950 agreements are binding, until changed, on the pattern-
making employees and the Pattern Makers as their agent, as the Respondent contends, or
whether these agreements become wholly inoperative, upon the Pattern Makers' certification,
in regard to the employment and bargaining relationship between these parties, as the Gen-
eral Counsel contends. As I have already indicated (see footnote 8, su ra , I believe the
parties are entitled to a resolution of this matter inasmuch as it seems necessary to an
understanding of the meaning of a bargaining order in these circumstances.
The Substitution and Defeasance Theories
The Respondent contends that the July 1950 agreements should be held to continue to be
binding on patternmaking employees except that the Pattern Makers are substituted for the
UAW to administer the agreements in behalf of the patternmaking unit.
To so hold would immediately raise certain obvious difficulties. Thus, there would be the
legal issues in determining which provisions of an agreement are inherently inconsistent
with the certification of another union and then in deciding what befalls those provisions
which are inconsistent. The recognition clause of the agreements would of course have to
be changed by substituting the new union for the superseded union, and this raises no par-
ticular problem. But how does substitution affect the union-security and related provisions
of an agreement?
Experience has shown that employers are sometimes willing to grant union-shop agree-
ments to some unions while they are unwilling to enter into such agreements with other
unions. If agreements are held to be continued with a newly certified union substituted for
the original contracting union, should the employer in question be required by operation of
law to honor such union-shop agreement with the new union? The employer would have no
choice if the substitution theory be applied in full. On the other hand, it is highly doubtful
that an employer can be required to honor a union-shop agreement in behalf of a union with
8 It is for the very reason of not requiring a party "to proceed more or less in terrorem"
(N. L R. B v. Sterling Furniture Company, 202 F 2d 41 (C. A. 9) and also to enable the
Respondent to defend itself in a contract action resulting from compliance with a Board order
that I consider it necessary, in fairness to the parties, to spell out the employer's rights and
obligations as to the agreements in question, insofar as the Act is concerned. Cf. N. L. R B
v. The Grace Co , 184 F 2d 126 (C. A. 8)
264 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
whom he never freely negotiated on the subject.9 It may be contended, in any event, that
union-security provisions are so intimate a matter between an employer and a specified
union that, as a matter of law, such clause should be considered as terminated upon a
change of representatives. The same problem arises as to dues-checkoff provisions and
grievance clauses. In dealing with one union an employer may believe one type of grievance
procedure to be desirable, whereas he might prefer another type in dealing with another
union. Should it be said that, by operation of law, the employer has no choice as to such
grievance procedures or should it be held that this matter, like the union-shop clause, is
inconsistent with a change of representative and therefore becomes inoperative as a matter
of law when such representation change occurs? Also there is the matter of a no-strike
provision, or its absence in an agreement. Employers might insist on such provision in
agreements with certain unions but would not consider it necessary to include that safe-
guard in agreements with other unions, depending in large part on the organizational and
collective-bargaining experience of the employer with the respective union s. Should an
employer be required, by operation of law, to continue the obligations of an agreement with
a substitute union where such agreement does not contain a no-strike clause in a case where
he would not have entered into such agreement with the substitute union unless the agreement
had included a no-strike clause? Or should a no-strike clause also be considered so personal
and also so vital a matter between an employer and a specified union that its absence in an
agreement be considered sufficient reason for holding the entire agreement to be inoperative
as a matter of law upon a new union being certified?
Those provisions, which deal with such matters as wages , hours, seniority, etc., also
may be troublous if a newly certified union would be required to administer agreements
executed by another union. Frequently, for example, the new union is certified for a unit
which is substantially either larger or smaller than the unit covered by the agreement.
Where, therefore, an agreement with a supplanted union provides that matters such as
wages and hours and seniority cut across various divisions of an employer's operations,
the agreement, as a result, may be difficult, if not impossible, of administration by the
newly certified union when the scope and composition of the respective units are changed
by a certification. Additional confusion, in requiring a new union to become a substitute
administrator of an agreement , also may arise from the fact that unions themselves differ
in administrative structure and in policies, and such difference "might make it highly
impracticable" for the new union to take over the agreements of the supplanted organiza-
tion.10
Assuming that an employer and a new union are able to resolve the inherent legal conflicts
between an agreement with one union and the certification of another union, and also assuming
they can overcome all difficulties in applying an agreement to a unit which is of greater or
smaller scope and composition than the original unit covered by the agreement, and as-
suming further that administrative and policy differences between the original and the
succeeding unions offer no insuperable obstacles --assuming the happy disposition of all
these problems created by the substitution theory, what additional problems would the
adoption of this theory by the Board create in various actions on contracts in the State
courts? The Respondent asserts , for example, that in its opinion the UAW would be suc-
cessful in the Michigan courts in seeking to compel the Respondent to comply with all
provisions of the UAW agreements. including their application to patternmaking employees,
for the duration of agreements' terms . This opinion, however, seems at variance with the
Supreme Court's aforementioned declaration in the National Licorice case, supra, to the
extent that such State court orders might require action by the Respondent which is inimical
to a Board order sustaining the statutory representative status of the Pattern Makers. But,
if this be the law of the State of Michigan, and if the law were to be changed to comport with
the Supreme Court's decision, what then would be the enforceable rights under the agreements
should the substitution theory be applied? Would the courts of Michigan and of other juris-
dictions permit the Pattern Makers to maintain an action to obtain performance of an agree-
ment executed by a rival union? Would these various courts entertain an action against the
Pattern Makers in which the Respondent sought to hold the Pattern Makers liable on an
agreement which they never had executed? But unless these rights and liabilities are held
to arise--and there is a substantial question, at the least, that they would be so held--the
substitution theory would be lacking in practical juridical effect. The nature of the collec-
tive-bargaining agreement has always been a source of interest to the legal scholars and.
9N. L. R. B. v. American National Insurance Co., 343 U. S. 395, 404 ". . the Board may
not, either directly or indirectly, compel concessions or otherwise sit in judgment upon the
substantive terms of collective bargaining agreements."
10 "Developments, Taft-Hartley Act," 64 Harv. Law Rev 781, 841(1951).
AMERICAN SEATING COMPANY 265
more directly, to the courts which have had to determine rights thereunder. The problems
in the field are myriad, the theories many, and judicial results conflicting." Are not the
legal problems multiplied if a new union is to be held in this proceeding as having assumed
all or part of another union's agreement? While it may be said that the matter of private
contract actions plays no relevant part in deciding a question under this Act, to ignore the
juridical facts of life is hardly fair to employers or unions or employees or to the public
good in seeking a result consonant with the stability in this field sought to be attained by the
Act.
It should be pointed out that not all of the aforementioned problems are involved in the
present case. But it is a policy of general application we are attempting to formulate here,
and in doing so I would consider myself remiss should I fail to consider matters which
appear to bear on the problem.
There are still further problems created should the theory be adopted here that a col-
lective-bargaining agreement remains a binding obligation on employer and employees
despite the impact of intervening representation proceedings . Let us take a typical RD
case, for example, where the Board decertifies a union which holds an unexpired contract,
and as a result of the proceeding the employees affected have no bargaining representative.
(Contract-bar rules apply to RD proceedings, as well.) A similar decertifying result may
occur pursuant to an employer's RM petition, as to which contract-bar rules also apply. If
the contracts in these cases are held to continue despite the lack of a statutory bargaining
representative, is the employer required to take up matters arising under the contract with
the entire employee body? Is the employer bound to observe the contract provisions in a
situation where an employer is otherwise completely free, so far as the Act is concerned,
to take unilateral action in changing wages, hours, and other substantive terms of employ-
ment?
It would appear that the substitution theory, with the numerous problems it would create
in the variety of representation situations arising under the Act, is hardly conducive to the
peaceful labor-management relations which the Act would promote. Tb adopt the theory in
these cases would compound complexity in a field already overflowing with difficulties. On
the other hand, the General Counsel's defeasance or inoperation theory, which would wipe
the bargaining slate clean upon the certification of a new union, raises none of these prob-
lems. But the Respondent further asserts, in support of the substitution theory, that em-
ployees should not be enabled, by a change of representatives, to open up negotiations on
matters which are otherwise closed under an agreement, unless employers be afforded
similar opportunity for reopening. That the Act itself requires negotiations upon a change
of representatives, even as to matters which were included in an agreement, has already
been discussed. It is to be emphasized, moreover, that the issue in these cases arises be-
cause the Act grants employees the right, and Section 9 provides the manner in which
employees may exercise the right, to designate or decertify their bargaining representatives
and because it is therefore necessary to accommodate Section 9 with Section 8 (a) (5) of the
Act which latter provision requires employers to recognize and bargain with the statutory
bargaining representatives. u
The adoption of the substitution theory would not necessarily redound to an employer's
advantage in all situations , nor would it be , necessarily , to a newly certified union's dis-
advantage under all circumstances; this would depend entirely, it seems to me, on the
economic picture at any given time as it bears on the employer's operations. I am of the
opinion, however, that the cause of industrial stability would not be served by holding a unit
of employees and their new statutory representative to be bound by the terms of an agreement
executed by a superseded rival union. Confusion rather than stability would result. I agree
"See, generally, and on the specific questions raised here: J. I. Case v. N L R. B.,
321 U. S. 332, 334-339; Note, 51 Y. L. J. 465 (1942); Rice, "Collective Labor Agreements,"
44 Harv. L Rev. 572 (1931); Witmer, "Trade Union Liability," 51 Y. L. J 40 (1941); Anno-
tations, 95 ALR, 467-471; 95 ALR 10; 18 ALR 2d 352
i2 Another instance of such necessary accommodation of representation and unfair labor
practices provisions of the Act is reflected in the cases dealing with the so-called Midwest
Piping situation. See, Midwest Piping & Supply Co., Inc., 63 NLRB 1063; Tenth Annual Report
of the National Labor Relations Board (1946), pp. 38-39; Eleventh Annual Report of the
National Labor Relations Board (1947), pp. 35-36; Twelfth Annual Report of the National
Labor Relations Board (1948), p. 26; Thirteenth Annual Report of the National Labor Relations
Board (1949), pp. 52-53; Fourteenth Annual Report of the National Labor Relations Board
(1950), p 53; Fifteenth Annual Report of the National Labor Relations Board (1951), p 97,
Sixteenth Annual Report of the National Labor Relations Board (1952), p. 160. Cf The Hoover
Company v. N L R B., 191 F. 2d 380 (C A 6).
266 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
with the General Counsel that the employees and the new union are not so bound so far as
the Act is concerned , and I find no warrant in the Act, its legislative history, or in sound
labor-management relations for holding the Pattern Makers to be a substituted agent for the
UAW to administer the July 1950 agreements of the UAW or for otherwise engrafting the
July 1950 agreements as a limitation on the Respondent 's obligation , under the recommended
order in this case , to treat with the Pattern Makers "in respect to rates of pay, wages,
hours of employment , or other conditions of employment" (Section 9 (a) of the Act).
IlL THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE
The activities of the Respondent, set forth in section II, above, occurring in connection with
the operations of the Respondent 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.
IV, THE REMEDY
I shall recommend, as already indicated, that the Respondent negotiate on all subjects of
collective bargaining with the Pattern Makers in behalf of the patternmaking unit.13 As
also explained above, this means that the July 1950 agreements impose no legal qualification
on such bargaining and also that the Respondent shall desist from treating with the UAW in
behalf of these employees as long as the Pattern Makers is their statutory representative.
No broad order will be recommended here, for the Respondent's unfair labor practices
arose entirely out of a legal question involving no antiunion animus of any sort and as to
which the Respondent's position was taken in good faith.
CONCLUSIONS OF LAW
1. The Respondent has engaged in unfair labor practices within the meaning of Section 8
(a) (1) and (5) of the Act.
2. The aforesaid unfair labor practices affect commerce within the meaning of Section 2
(6) and (7) of the Act.
[Recommendations omitted from publication.]
is This case is not moot or about to become so merely because the general labor agreement
of July 1950 is soon open for negotiations by its own terms (J I. Case v. N L. R B , 321
U S 322, 324); in any event, the pension agreement of July 1950 does not expire until July
1955
APPENDIX A
NOTICE TO ALL EMPLOYEES
Pursuant to the recommendations of a Trial Examiner of the National Labor Relations
Board, and in order to effectuate the policies of the National Labor Relations Act, we hereby
notify our employees that:
WE WILL bargain collectively with Pattern Makers' Association of Grand Rapids,
Pattern Makers ' League of North America, AFL, in behalf of the patternmakmg unit.
AMERICAN SEATING COMPANY,
Employer.
Dated ................ By................................................................ ............................
(Representative ) ('title)
This notice must remain posted for 60 days from the date hereof, and must not be altered,
defaced, or covered by any other material.