Holston Manufacturing Co.

National Labor Relations Board - Board Decisions

Dec 17, 1942

46 N.L.R.B. 55 (N.L.R.B. 1942)

,In the Matter Of HOLSTON MANUFACTURING COMPANY and AMERI-
CAN FEDERATION OF HOSIERY WORKERS, BRANCH 94, AFFILIATED WITH
THE CONGRESS OF INDUSTRIAL ORGANIZATIONS
Case No. C-2307.-Decided December 17, 19.1
Jurisdiction : hosiery manufacturing industry.
.Settlement : stipulation providing that findings of fact made by the Trial Exam-
iner in his Intermediate Report be adopted by the Board as its findings of fact;
and providing for compliance with the Act.
Unfair Labor Practices
Interference, Restraint, and Coercion: authorizing and approving circulation
• of no-strike petitions.
Discrimination: limiting reinstatement of unfair labor practice strikers who
had applied for reinstatement to extent vacancies existed without displacing
persons hired to replace strikers.
Collective Bargaining: majority established by stipulation-refusal to bargain
collectively by: attempts to unilaterally limit duration of recognition to when-
ever respondent chose to believe that union no longer represented a majority
even though it should be short of the life of any contract which respondent
might enter into with union ; limiting bargaining to existing policies;, refusing
to accede to terms in regard to grievance procedure which were customary and
normal in collective agreements while insisting on a provision against coercion
and intimidation of management by the union; attempting to undercut union's
authority by approving circulation of no-strike petitions-strike caused by
refusal to bargain-refusal to bargain collectively following strike found
although employer executed a contract granting some concessions, when its
duration was limited to the recognition offered at outset of negotiations, and
it failed to provide terms customary and normal in collective agreements which
were originally requested by union and previously denied by respondent; and
when respondent failed to provide proper facilities for meeting with the_ union
to adjust grievances.
Remedial Orders: entered on stipulation, requiring employer to cease and desist
unfair labor practices ; upon request to bargain collectively ; unfair labor prac-
tice strikers awarded reinstatement, but awarded back pay only from the
date of filing of charges in view of union's failure to file charges for more
than 2 years after agreement executed following strike.
Practice and Procedure : settlement agreement, the provisions of which would
not effectuate the policies of the Act, and executed without the presence of a
Board agent, not given effect under the circumstances.
Unit Appropriate for Collective Bargaining : production and maintenance em-
ployees, excluding clerical and supervisory employees ; stipulation as to
46 N. L. R. B., No. 8.
55
56 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
DECISION
AND
ORDER
On August 21, 1942, the Trial Examiner issued his Intermediate
Report in the above-entitled proceeding, finding that the respondent
had engaged in and was engaging in certain unfair labor practices and
recommending that it cease and desist therefrom and take certain
affirmative action as set out in the. copy of the Interme:'i^te Report
attached hereto. Thereafter the Union filed exceptions to the Inter-
-mediate Report. On October 19, 1942, the respondent and an attor-
ney for the Board entered into the following stipulation :
IT IS HEREBY STIPULATED AND AGREED by and
between the parties hereto : -
(I) That the findings of fact made by the Trial Examiner in
his Intermediate Report may be adopted by the Board as its find-
ings of fact.
(II) That, without further and other procedure- before the
Board to which the parties may be entitled under the National
Labor Relations Act, or the Rules and Regulations of the Board,
the Board may, upon the basis of the entire record in the case and
this stipulation make findings of fact and enter the following
order:
ORDER
Upon the basis of the foregoing findings of fact, stipulation and
entire record in this case, and pursuant to Section 10 (c) of the
National Labor Relations Act, the National Labor Relations
Board hereby orders that the Holston Manufacturing Company,
its officers, agents, successors and assigns, shall :
1. Cease and desist from : - ,
(a) Refusing to bargain collectively with American Federa-
tion of Hosiery Workers, Branch 94, in good faith as the exclu-
sive representative of its employees within the appropriate bar-
gaining unit in respect to rates of pay, wages, hours of employ-
ment,` and other conditions of employment;
(b) Discouraging membership in ' American Federation of
Hosiery Workers, Branch 94, or any other labor organization of
its employees, by discrimination in regard to hire, tenure, or any
term or condition of their employment;
(c) In any other manner interfering with, restraining, or
coercing its employees in the exercise of the right to self-organi-
zation, to form, join, or assist labor organizations, to bargain col-
lectively through representatives of their own choosing, and to
HOLSTON MANUFACTURING COMPANY 57
engage in concerted activities for, the purposes- of collective
bargaining and other mutual, aid or protection as guaranteed
in Section 7 of the Act.
2. Take the following affirmative action to effectuate the policies
of the-National Labor Relations Act : •
(a) Upon request, bargain collectively with American Federa-
tion of Hosiery Workers, Branch 94, in good faith as the exclusive
representative of its employees in the appropriate unit in respect
to rates of pay, wages, hours of work, and other conditions of
employment ;
(b) Offer to those employees who went on strike on August 31,
1939, and who have applied for and have not been offered rein-
statement, immediate and full reinstatement to their former or
substantially equivalent positions, without prejudice to their
seniority or other rights and privileges; dismissing if necessary, •
any persons hired by the respondent after August 31, 1939, and
not in the employ of the respondent on that date; and if there-
upon, there is not sufficient employment available for the em-
ployees to be offered reinstatement, all available positions- shall
be distributed among all employees, without discrimination
against any employee because of his union affiliation or activities,
following such a system of seniority or other non-discriminatory
practice to such extent as has heretofore been applied in the con-
duct of the respondent's business; and place those employees for
whom employment is not immediately available upon a preferen-
tial list to be offered employment in their former or substantially
equivalent positions as such employment becomes available and
before other persons are hired for such work in the order de-
termined among them by such system of seniorit' i or other non-
discriminatory practice as has heretofore been followed by the
respondent; and thereafter, offer said employees upon the pref-
erential list employment as it becomes available;
(c) Make whole the employees specified in 'paragraph 2 (b)
above, for any loss of pay they may have suffered by reason of the
respondent's refusal, if any, to reinstate them, as specified in said
paragraph 2 (b) above, by payment to each of them of a sum of
money equal to that which each would normally have earned as
wages, during the period from May 21, 1942, to the date of the
respondent's offer of reinstatement or placement upon a preferen-
tial list, less his net earnings, if any, during said period;'
(d) Post immediately, in conspicuous places throughout its
plant, and maintain for a period of at least sixty (60) consecutive
days from the date of posting, notices to its employees stating
(1) that the respondent will not engage in ' the conduct from
r
58 DECISIONS OF NATIONAL LABOR RELATIONS BOARD - - '
which it is ordered that it cease and desist in paragraphs 1 (a),
(b), and (c) hereof; (2) that the respondent will take the affirma-
tive action set forth in paragraphs 2 (a), (b), and (c) hereof;
and (3) that the respondent's employees are free to become or
remain members of American Federation of Hosiery Workers,
Branch 94, and that the respondent will not discriminate against
any employee because of membership or activity in that
organization ;
(e) Notify the Regional Director 'for the Tenth Region in
writing within ten (10) days from' the date of the receipt of this
order what steps the respondent has taken to comply herewith.
(III) That the parties hereby consent to the entry by the
United States Circuit Court of Appeals for the Sixth Circuit,
upon 'application by the Board, of a decree enforcing the Order
of the Board as above set forth, without further notice of said
application.
(IV) That the execution of this stipulation and entry of--said
decree shall conclude all proceedings before the Board in the
above-entitled case. -
(V) That the entire agreement is contained within the terms
of this stipulation and that there is no verbal agreement of any
kind which varies, alters or adds to this stipulation.
(VI) That this stipulation is subject to the approval of the
Board and shall become effective immediately upon the granting
of such approval.
On December 5, 1942, the Board issued an order approving the
Stipulation and.making it a part of the record in the case. The
Board has considered the exceptions filed by the Union and finds them
without merit. Upon the Stipulation and the entire record in the
case, the Board' hereby adopts the findings, conclusions and recom-
mendations of the Trial Examiner.
ORDER'
Upon the basis of the Stipulation and 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 Holston
Manufacturing Company, - Knoxville, Tennessee , and its officers,
agents, successors , and assigns , shall:
1. Cease and desist from: -
" (a) Refusing to bargain collectively with American Federation of
Hosiery Workers, Branch 94, in good faith as the exclusive represent-
ative of its employees within the appropriate bargaining. unit in
respect to rates of pay, wages, hours of employment , and -other con-
ditions of employment;
4
HOLSTON MANUFACTURING COMPANY 59
(b) Discouraging membership in American Federation of Hosiery
Workers, Branch 94, or any other labor organization of its employees,
by discrimination in regard -to hire, tenure, or any term or condition
of their employment;
(c) In any other manner interfering with, restraining, or coercing
its employees;inthe exercise of the right td self-organization, to form,
join, or assist labor 'organizations, to bargain' collectively through
representatives of their own' choosing, and to engage in concerted
activities for the purposes of collective bargaining and other mutual
aid or protection' as guaranteed in Section 7 of the Act.
2. Take the following affirmative action to effectuate the policies of
the National Labor Relations Act:
(a) Upon request, bargain collectively with American Federation
of Hosiery Workers, Branch 94, in good faith as the exclusive repre-
sentative of its employees in the appropriate unit in respect to rates
of pay, wages, hours of work, and other conditions of employment;
(b) Offer to those employees who went on strike on August 31,
1939, and who have applied' for and have, not been offered reinstate-
ment, immediate and full reinstatement to their former or substan-
tially equivalent positions, without prejudice to their seniority or
other rights and privileges, dismissing if necessary, any persons hired
by the respondent after August 31, 1939, and not in the employ of
the respondent on that date; and if thereupon, there is not sufficient
employment available for the employees to be offered reinstatement,
all. available positions shall be distributed among all employees,
without discrimination against any employee because of his union
affiliation or activities, following such a system of seniority or other
non-discriminatory practice to such extent as has heretofore been
applied in the conduct of the respondent's business; and place those
employees for whom employment is not immediately available upon
a preferential, list to be offered employment in their former or sub-
stantially equivalent positions as such employment becomes available
and before other persons are hired for such work in the order deter-
mined among them by such system of seniority or other non-discrim-
inatory practice as has heretofore been followed by the respondent;
and thereafter, offer said employees upon the preferential list' em-
ployment as it becomes available;
(c) Make whole the employees specified in paragraph 2 (b) above,
for any loss of pay they may have suffered by reason of the respond-
ent's refusal, if any, to reinstate them, as specified in said paragraph
2 (b) above, by payment to each of them of a sum of money equal
to that which each would normally have earned as wages, during the
period from May 21, 1942, to the date of the respondent's offer of
reinstatement or placement upon a preferential list, _less his net
earnings, if any,' during said period;
0
60, DECISIONS OF NATIONAL LABOR RELATIONS BOARD
(d) Post immediately in conspicuous places throughout its plant,
and maintain for a period of at least sixty (60) consecutive days from
the date of posting, notices to its employees stating `(1) that the
respondent will not engage in the conduct from which it is ordered
that it cease and desist in paragraphs 1 ('a), (b), and (c) hereof; (2)
that the respondent will take the affirmative action set forth in para-
graphs 2 (a), (b), and (c) hereof; and (3) that the respondent's
employees are free to become or remain members of American Fed-
eration of Hosiery Workers, Branch 94 and that the respondent will
not discriminate against, any employee because of membership or,
activity in that organization ;
(e) Notify the Regional Director for the-Tenth Region in writing
within ten (10) days from the date of the receipt of this order what
steps the respondent has taken to comply, herewith.
INTERMEDIATE REPORT
Mr. Alexander E. Wilson, Jr., and Mr. Ralph L Wh,ggmns, for the Board.
Mr. R. R., Kramer, Mr. Walter D. De ,Vault, and, Mr. Berry Williams, of
Knoxville , Tenn., for the respondent.
Mr. H. G. B.'King and Miss Virginia Lee Roberts, of Chattanooga, Tenn, for
the Union.
STATEMENT OF THE CASE
Upon a charge duly filed May 21, 1942, by American Federation of Hosiery
Workers, Branch 94, affiliated with the Congress of Industrial Organizations,
herein called the Union, the National Labor Relations Board, herein called the
Board, by its Regional Director for the Tenth Region (Atlanta, Georgia), issued
its complaint , dated May 21, 1942, against Holston Manufacturing Company,
Knoxville, Tennessee, herein called the respondent, alleging that the respondent
had engaged and was engaging in unfair labor practices affecting commerce,
within the meaning of Section 8 (1), (3), and (5), and Section 2 (6) and (7) of
the National Labor Relations Act, 49 Stat 449, herein called the Act. Copies
of the complaint , accompanied by notice of hearing , were duly served upon the
respondent and the Union.
In respect to the unfair labor practices, the complaint alleged in substance (1)
that since July 20, 1939, the respondent interfered with, restrained , and coerced
its employees in the exercise of the rights guaranteed in Section 7 of the Act
by a variety of statements , warnings , and threats , including statements urging
employees to abandon a strike called by the Union; (2) that from and at all
tines after July 20, 1939, the respondent refused to bargain collectively with
the Union although that organization then and thereafter represented a majority
of the, employees in an appropriate collective bargaining unit ; (3) that by the
foregoing conduct the respondent had engaged in unfair labor practices violative
of Section 8 (1) and (5) of the Act; (4) that on August 31, 1939, a large
number of the respondent's employees went on strike because of the foregoing
unfair labor practices; (5) that on and after January 12, 1940, when the strike
was terminated , all of the employees who had gone on strike applied , for rein-
statement to their former or substantially -equivalent positions , but a large
number of such employees were refused reinstatement by the respondent because
"of their union membership and activity; and (6), that by reason of the conduct
HOLSTON MANUFACTURING COMPANY 61
set forth in (5) above,* the respondent had engaged in further unfair labor
practices, in violation of Section 8 (1) and (3) of the Act.
In its answer to the' complaint, filed May 30, 1942, the respondent admitted
various of the allegations of the complaint, but denied that it had engaged in
any of the unfair labor practices alleged.
Pursuant to notice a hearing was held between June 4 and 17; 1942, at Knox-
ville, Tennessee, before the undersigned, the Trial Examiner duly designated
by the Chief Trial Examiner. The Board, the respondent, and the Union were
represented by, counsel and participated in the hearing Full opportunity to
be heard, to examine and cross-examine witnesses, and to introduce evidence
bearing on the issues was afforded all parties. On June 5, 1942, the undersigned
granted a motion' by counsel for the Board and counsel for the respondent to
adjourn the hearing until June. 15, 1942. At the close of the Board's case
following the adjournment, the undersigned, without objection, granted a motion
by counsel for the Board to amend the complaint to conform to the proof. At
the same time the undersigned denied a motion of the respondent to dismiss
the complaint for failure of proof. At the close 'of the hearing the parties
waived oral argument before the undersigned. All parties were afforded an
opportunity to file briefs with the undersigned. A brief on behalf of the
respondent was filed on July 16, 1942.
Upon the entire record thus made, and from his observation of the witnesses,
the undersigned, in addition to the foregoing, makes the following:
FINDINGS OF FACT
I `IHE BUSINESS OF THE RESPONDENT
The respondent, a Tennessee corporation having its principal office, plant,
and place of business at Knoxville, Tenn , is engaged in the manufacture, sale,
and distribution of men's and boys' hosiery. During the year 1941, approxi-
mately 14 9 percent of the raw materials used by the respondent, chiefly cotton
yarns having a total value of $519,09164, were acquired by it from points outside
the State of Tennessee. In the same period, 99 percent of the respondent's fin-
ished products, having a'total value of $1,030,40186, were sold and shipped by
it to points outside the State of Tennessee.
II TILE ORGANIZATION INVOLVED
;American Federation of Hosiery Workers, Branch 94, is a labor organization
affiliated with the Congress of Industrial Organizations. It admits to member-
ship production and maintenance employees of the respondent, excluding
clerical and supervisory employees. .
III THE UNFAIR LABOR PRACTICES
A. The refusal to bargain collectively; interference, restraint, and coercion
1, The appropriate unit
It was stipulated at the hearing that, at all times material herein on and
after August 7, 1939, all of the production and maintenance employees of the
respondent, excluding clerical= and, supervisory employees, constituted a unit of
employees appropriate for purposes of collective bargaining, within the meaning
of Section 9 (b) of the Act. The undersigned so finds.
62 DECISIONS OF NATIONAL LABOR • RELATIONS BOARD
2. Representation by the Union of a majority in the appropriate unit
It was stipulated at the hearing that, at all times material herein on and
after August 7, 1939, the Union represented a majority of the' employees in
the appropriate unit, and that, by virtue of Section 9 (a) of the Act, was the
exclusive representative of all employees in the unit for purposes of collective
bargaining with respect to rates of pay, wages, hours of employment, and other
conditions of work. , The undersigned so finds. _
3. The refusal to bargain ; interference, restraint, and coercion
(a) Chronology of events
(1) The August 1939 negotiations
In a prior proceeding against the respondent instituted under Section 10 of
the Act, the Board, on July 20, 1939, issued a decision and order directing the
respondent, upon request, to bargain collectively with the Union and to embody
any understanding reached thereby in a written, signed contract.' On July 31,
1939, the respondent notified the Union that, it was prepared to enter into.
collective bargaining negotiations in accordance with the provisions of the
order of the Board. The Union immediately indicated its readiness to negotiate,
requesting that a conference be held for that purpose.
In August 1939, three meetings were held between representatives of the
respondent and of the Union. The first meeting was held on August 7. The
Union was represented by Edward F. Callaghan, second vice president of the
American Federation of Hosiery Workers, and Frank Bradshaw, a representative
and former president of the Union. The respondent was represented by Joseph
P. Gaut, its president and general manager ; Lucien C Greene, its sepretary
and superintendent ; J. W. Pickell, its auditor 'and cost accountant ; and
Walter D. DeVault, its attorney and a member of its Board of Directors. At
the outset, Callaghan tendered Gaut a proposed contract which embodied the
demands, of the Union The contract was read in its entirety and each of its
sections was then discussed separately. Section I of the contract proposed by
the Union provided that neither of the parties would exercise their rights op-
pressively in dealing with each other and that neither would in any manner
coerce or intimidate any of the -employees. , This was not satisfactory to the
respondent. Gaut insisted that, in addition, this section should in terms pro-
vide that the Union would not coerce or intimidate the respondent. Gaut testi-
fied that he desired such provision because the Union was "trying" to intimidate
the respondent. However; when asked at the hearing to state any particular-
of such action by the Union, Gaut replied, "No: ^ I can't make any statement
in regard to that." Section 2 of the Union's proposal provided for the recognition
of the Union by the respondent as exclusive bargaining representative of the
employees throughout the life of the agreement, the initial term of which was to,
extend for 1 year. Gaut would not agree to this provision. He proposed, as
he testified, that recognition of the Union be limited to the life of the contract
"'or until such time as the company had reason to believe that the union did not
represent a majority of the workers." Although neither Gaut nor any other
'The rorder of the Board in that case rested upon the finding that the respondent had'
violated Section 8 (1) and (5) of the Act by refusing to embody any, understanding which
might be reached between it and the Union in a written, signed contract. , Matter of Holston
Manufacturing Company and American Federation of Hosiery Workers, 13 N. L R. B. 783.
HOLSTON MANUFACTURING COMPANY 63
representative of the respondent had ever questioned or demanded proof of the
majority status of the Union, Gaut testified that his insistence upon so limit-
ing the term of recognition was based upon the fact that the respondent "never
thought" that a majority of the employees favored the Union and "didn't know
what changes would take place."
Section 3 of the Union's proposed contract provided for the maintenance of
union membership. It read : "The Company agrees that all of its employees
who are, and those that shall hereafter become members of the Union, shall re- -
main members of the Union during the life of this agreement." The union
representatives pointed out that this clause was a prevalent feature of collective
bargaining contracts in the hosiery industry and that it was "the best means of
keeping the contract in order and in effect." According to Gaut, the respondent
rejected this provision because "it had no way of enforcing such an agreement
as that, and the company did not believe 'it was proper for, it to require any
worker to join any union or any other organization." In addition, as Callaghan
testified, Gaut declared, over the disavowal of the union representatives, that
such an agreement was tantamount to or would lead to a closed shop, and that
the respondent was "not going to be the means of helping the organization in any
way " 2 Section 4 provided for the check-off of dues from the wages of union
members.upon the written authorization of such members. Gaut opposed this
provision for substantially the same reasons that he had rejected Section 3_
Gaut testified :
. . . the first reason I gave was that it would entail additional expense, and,
I didn't want to do it for that reason ; and another reason was, I was
opposed to it, and I think it is only a step in the direction of a closed shop,
and I was opposed to a closed shop.
Further, as Gallaghan testified, Gaut repeated that the acceptance of this
provision "meant that the company was helping to promote the organization "
Section 5 provided for an 8-hour day and a 40-hour week, with compensation
at time and a half for overtime. Gaut objected to this provision. He ad-
mitted that the mill ordinarily operated on an 8-hour day, 40-hour week basis
but refused to commit the plant to such schedule since "in a pinch" it "occasion-
ally" was necessary to operate some departments longer The union representa-
tives advised Gaut that they would be willing to modify the union proposal on
this subject to conform with the respondent's existing practice in such depart-
ments, with time and a half to be paid only for overtime worked in excess of
the prevailing work day or week. Gaut insisted, however, that he would not
concede more than the federal law required in this regard ; that the respondent
reserved the right to operate at straight time on a 9-hour day, 44-hour week
basis, as the Fair Labor Standards Act then permitted. The respondent also
refused, to agree to Section 6 of the proposed contract which provided for a 15
percent wage increase. In reply to the Union's contention that the wages paid
by the respondent were below the scale paid by other mills, Gaut stated that
the respondent could not afford to increase its labor costs because of the highly
competitive market in which it operated, and that, in fact, it had investigated
the wage scales of its competitors and found that' its wages were "in line."
On cross-examination, Gaut admitted that the investigation to which he referred,
and upon the basis of which he discussed wages with the Union, had been con-
ducted in 1934, five years prior to the conference with the Union.
S, Gaut sought to have it appear at the hearing that the Union desired the respondent to
require all new employees hired by it to become members of the Union , but admitted that,
In'fact , the Union never insisted upon such a demand. .. ,
64 DECISIONS , OF NATIONAL LABOR RELATIONS BOARD
Section 7 provided for a commitment by the respondent to respect the "equal
distribution of work in all departments and seniority rights of the employees,
all other things being equal" The respondent did not dispute the propriety of
this demand. It insisted, however, that it was the best judge as to how the prin-
ciple of seniority should be applied. It proposed, therefore, to apply seniority,
only in those cases in which the work of employees was performed with "equal
efficiency and satisfaction to the Company." This, in the view of the Union,
'would effectively nullify the seniority provision since the ultimate decision in
any case would be "a one-sided affair." In addition, Gaut desired to incorporate
the following sentence in the section regarding equal distribution of work and
seniority : "The Company insists that it has always been governed by both
of these principles in•dealing with its employees." Gaut denied that the purpose
of this sentence was to impress upon the employees the view that the Union
had not obtained any concession for them in this regard which they were not
already receiving without the Union. He testified that he only wanted the union
negotiators to know that. Nevertheless, Gaut further testified: "Well, it looked
to us like the union was trying to leave the impression that we hadn't done that,
and they had to force us into a contract to cause us to do that, when we had been
doing it all the time."
Section 8 provided as follows : "The Company shall continue to make all
proper and reasonable provisions for the safety and health of its employees in
its plant during the hours of employment." Although not in disagreement with
the substance of this provision, the respondent, as in the case of Section 7, de-
sired to recast the provision to read. "The Company insists that it has always
made all proper and reasonable provisions for the safety and health of its em-
ployees in its plant during hours of employment, and it agrees that it will con-
tinue to do so." The reason advanced by Gaut for so rephrasing this provision
was the same as that advanced for the similar revision of Section 7.
Section 9 provided for the recognition of five holidays; ' employees required to
work on these days were to be compensated at time and a half. The respondent
rejected this provision. It desired to continue its existing practice which did
not, penalize employees desiring to celebrate these holidays, but allowed those
who desired to work to do so at their regular rate of pay. In addition to the
fact that Section 9 would entail additional labor costs, it was Gaut' s position
that the employees were "pleased" with the arrangement under which the re-
spondent operated, depite the fact that their authorized representatives were
demanding more favorable terms. Section 10 recognized the right of the respond-
ent-to employ and discharge workers in accordance with the necessities of its
business , provided that discharges were made in good faith and without dis-
crimination against union members, and that, upon request, the respondent
show the cause of such discharge to officials of the Union authorized to handle
grievances. The respondent objected to this provision insofar as it required
that its reasons for discharge be given to the Union. The respondent would
only agree to state its reasons to the union member directly affected. Accord-
ing to Gaut, the respondent had been advised by counsel that to give the Union
the reason for a discharge might subject the company to a damage suit by the
worker involved.
Section 11 established a procedure for arbitration. According to Callaghan,
the respondent would not agree to the principle of. arbitration at this meeting
and refused the Union's proposal outright. Gaut testified that the respondent
was' opposed only to particular features of the proposed arbitration clause.
Tbanks3iving , Christmas , New Years , July 4, and Labor Day.
El
HOLSTON MANUFACTURING COMPANY 65
Under Section 11, there was to be an arbitration board of three members, one
selected by the Union, one by the management, the two were to select a third
member, but, in the event they disagreed, the third member was to be selected
by the Director of the Conciliation Service of the United States Department of
Labor. Gaut was opposed to the selection of such third member by the Director
of the Conciliation Service. Further, under Section 11, "any dispute, claim or
difference arising out of or relating to" the agreement would be a proper subject
of arbitration. According to Gaut, the respondent took this to mean that all
differences between the parties, including the question of a closed shop, would
be subject to arbitration. The respondent, Gaut testified, was willing to submit
to arbitration differences only regarding the interpretation of the contract and
claims of its breach.
Section 12 provided that in carrying out the provisions of the agreement the
respondent would be responsible for its supervisory employees and the Union
for its members, and that both parties would cooperate to see that non-members
carried out the provisions of Sections 1 and 2 of the agreement. The respondent
objected to the part of this section relating to non-members on the ground, as
Gaut put it; "we couldn't enforce it."
Section 13 provided that the initial term of the agreement was to be 1 year,
to be automatically renewed from year to ' year "unless changed or terminated
by mutual consent." Gaut objected that the renewal feature of this section was
"one-sided"; as he put it, "it didn't give us a fair chance as the union . . . I
didn't think there was any chance of having any mutual consent."
Following the foregoing exposition by the parties of their views regarding the,
union's proposal, the meeting adjourned with the understanding, expressed by
Gaut, that Gaut would take up the proposed agreement with the respondent's
board of directors before again meeting with the Union. In fact, as Gaut admit-
ted, he did not present the,matter to the board of directors; he testified that he
was the sole representative of the respondent and was fully authorized to sign
a collective bargaining contract for the respondent without recourse to the board
of directors. '
The next meeting was held August 17. The union's proposal was again dis-
cussed, but without more progress toward an agreement than obtained at the
August 7 meeting. At the conclusion of the meeting it was agreed that the re-
spondent would draw up a proposed contract containing terms of agreement
which would be satisfactory to it This was done, and at the next meeting,
held August 24, the respondent presented its proposal to the union representatives.
The respondent's proposal merely embodied in written form the views expressed
by Gaut at the previous two meetings. Although, as seen above, there was no
evidence of any effort on the part of the Union to intimidate or coerce the re-
spondent, the respondent's proposal provided that the Union would not intimi-
date or coerce the respondent. Such clause had never appeared in any contract
to which the American Federation of Hosiery Workers or any of its affiliated
locals had been a party; nor had the respondent theretofore ever charged the
Union with such improper conduct. During the meeting, the respondent's repre-
sentatives could justify the provision, on the ground only that the Union in
some vague and unparticularized fashion "might" intimidate the respondent.
At the hearing, Gaut, as seen above, indicated that the respondent believed the*
provision necessary because the Union had been seeking to intimidate the man-
agement ; yet Gaut could not specify any detail of such conduct. '
The respondent's proposed contract qualified the demand of the Union' for
recognition as exclusive representative of the employees during the life of the
contract, by limiting the duration of such recognition, in the alternative, until
504086-43-vol 46--5
66
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DECISIONS,OF NATIONAL LABOR RELATIONS BOARD
such time as the respondent had good reason to believe that the Union did not
represent a majority of the employees 4 The respondent was repeatedly requested,
but refused to recede from its insistence upon this form of recognition.
Despite the fact that the respondent in the main operated regularly on an
8-hour day, 40-hour week basis, with occasional exceptions in some departments
to which the Union agreed to conform its original demand, the respondent
proposed the establishment of a 9-hour day, 44-hour week for all departments,
with time and a half to be paid only for work in excess of such hours. In
regard to seniority, the respondent's proposal provided for the application of
seniority only as between employees who were otherwise equally efficient and
satisfactory in the view of the respondent. In regard both to seniority and to
measures looking toward the safety and health of employees, the proposal of
the respondent contained declarations setting forth that it insisted it had
always been governed by these provisions. The respondent's proposal agreed.
to recognize the holidays desired by the Union, but made no provision for extra
compensation to employees who worked on such days. Further, the respondent
agreed that it would not discriminate against union members and that, it would,
provide such members with a written statement setting out the reasons for
discharge ; it would not, however, agree to provide the Union with such state-
ment. The proposed contract contained a provision for arbitration. Arbitra-
tion, however, was limited to the settlement of disputes regarding the interpre-
tation of the contract and the breach of its' articles. The initial term of the
agreement was 1 year, to be renewed automatically from year to year unless
terminated "by either party." The respondent's proposal made no provision
for any wage increase and rejected the demand of the Union for maintenance
of membership and check-off of dues. The respondent insisted that the latter
two demands were tantamount to or would lead to a closed shop, despite Gaut's
admission at the hearing that in the entire period of these negotiations the
Union never demanded a closed shop.
In sum, as Gaut conceded, the agreement tendered the Union by the respondent
did not provide for any alteration in the conditions of employment under which
the employees were then working. Apart from arbitration the offer of the
respondent merely embodied its existing employment practices in contract form.
In limiting arbitration to disputes regarding the interpretation and bleach of
the terms of such contract, the respondent merely offered a procedure for the
adjudication of possible claims that it had departed from its existing policy.
The respondent's proposal was not acceptable to the Union. According to
Gaut and Greene, the union representatives insisted unalterably that the re-
spondent accept all of the union's demands and stated that unless the respondent
did so the Union would go out on strike. Pickell testified that the representa-
tives of the Union stated only that the general membership believed that the
respondent had not given "satisfactory consideration" to the union's demands,
and that if not given "satisfactory consideration" the members proposed to
strike. The union representatives, on the other hand, denied advising the
respondent that there would be a strike if it did not yield on all of the points-
requested by the Union. They testified that the respondent's position had been
placed before the union membership following the August 7 and 17 meetings
The respondent's proposed provision on this point read in foil as follows :
The COMPANY recognizes the UNION as the exclusive collective bargaining agency
in all matters relating to wages, hours and'working conditions, for all productive and
maintenance employees (excepting clerical and supervisory employees) throughout the
life of this agreement, or until such time as the COMPANY has good reason to believe
that the UNION does not represent a majority of the workers in the COMPANY.
HOLSTON MANUFACTURING COMPANY 67
and that prior to the August 24 meeting the members had voted to take strike
action if no further progress were made. They testified further that they told
the respondent's representatives that they did not believe the management's
proposal would be accepted by the membership because it was "so vastly differ-
ent" from the proposal of the Union and failed to concede "a number of
important and vital requests." According to their testimony, they stated that
the matter was in the hands of the membership, but they believed a strike
would be called "because of the poor results obtained." As they; testified, they
demanded only that the respondent agree to "some of the things" asked by
the Union, and that "some progress" be made, that "some kind of settlement"
be reached, and pointed out that a strike "would be prevented if we made any
progress whatever." To that end, the uncontroverted evidence shows, the union
negotiators advised the respondent that they would be willing to submit any
or all of the union's demands to arbitration The union representatives testified
that they were advised that the respondent's proposal was "fi.ial" and that
the management would "stand by" it and "wouldn't do anything further."
Although Gaut denied making such statement, the record is void of any
evidence indicating a willingness by the respondent to yield in any part from
the proposal tendered by it to the Union. Affirmatively, the evidence indicates
that the respondent was disposed not only to "stand by',' its "final" offer, but
also was determined at the time not even to discuss the matter further with the
union representatives. On August 30, the uncontroverted evidence shows, a,
conciliator of the United States Department of Labor, invited by the Union,
called Gaut and asked whether another meeting could be arranged in an effort,
to avert strike action. Gaut refused. In all of the circumstances disclosed
by the record, and from his observation of the witness, the undersigned credits
the testimony of the union representatives, as set forth above, in regard to the
respective positions of the parties at the August 24 meeting The undersigned,,
accordingly, finds that in placing its offer before the union representatives the
respondent declared and intended it to be its one and final proposal of collective
bargaining terms from which it would not yield in any part. The undersigned
further finds that the Union did not during the course of these negotiations
insist unalterably upon the acceptance by the respondent of its proposal and
that the Union representatives so advised the respondent.
.Following the August 24 meeting, the entire matter was placed before the
union membership. A strike vote was taken and carried, and the respondent
was notified of the union's decision to strike.
(2) The no-strike petitions
On August 30, the day Gaut was called upon to meet further with the
Union in an effort to prevent the impending strike, petitions appeared in
various of the plant departments calliiig upon the employees to affix their
signatures to the petitions if they were opposed to the strike. Mrs. Robert
Bradshaw, one of the employees, testified that such petition was circulated
throughout the looping department by one of her fellow employees, Laura
Carter, who, during working hours, left her machine' and approached in turn
each of the more than 100 girls in the department, soliciting their signatures
to the petition. This activity was carried on in open view of Joe Ferguson,
the foreman' in charge He made no effort to interfere. Indeed when Mrs.
Bradshaw, as she testified, asked Ferguson whether permission had been ob-
tained to circulate the petition, as had always been required by the respondent'
before any papers could be passed about in the plant, Ferguson replied: "I did
not have anything to do with this paper. . . . I don't know who okehed it."
68 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Mrs. Bradshaw then . called Ferguson 's 'attention to the fact that on a pre-'
vious occasion he had refused to permit her to circulate a petition in the
department regarding the Fair Labor Standards Act, but Ferguson merely
advised her that he "couldn 't help it." Mrs. Bradshaw's testimony stands
uncontradicted in the record . Ferguson did not testify . Pearl Anderson,
employed in the knitting department , testified that two of her fellow employees,
Vestal Whaley and Irene Roberts , shut down their machines and spent about
one and a half hours circulating like petitions among the 100 workers in that
department . They advised her that there would be "plenty of protection" if
she came to work in defiance of the strike. Luther Lindsay, foreman of the
department , was present while the petition was being circulated . Two of the
employees asked him to stop the circulation of the petition , but Lindsay
refused. Anderson 's testimony also was uncontradicted . Lindsay did not
testify.
Raymond Noe , foreman of the finishing room, testified that 3 or 4 em-
ployees asked his permission to circulate a petition in favor of strike action
and that another group of employees requested permission to circulate the
petition not to strike . In both cases , Noe testified , he stated that there was
nothing he could do about it. Superintendent Greene testified that he knew
nothing about the no-strike petitions , that he never saw or authorized their
circulation, and that he was out of town at the time. He testified further that
,Gaut was in charge of the plant during his absence and "could have known
about it." Gaut , however, testified that he never authorized or saw such
petitions. '
The respondent , in the view of, the undersigned , may not avoid responsibility
for the circulation of the no-strike petitions . The undersigned is unpersuaded
by and does not credit the testimony of Greene and Gaut that the circulation
of the petition was unauthorized The respondent's normal practice did not
permit the circulation of unauthorized petitions or other papers. Unless
authorized , therefore, it would appear that the respondent 's foremen would
have taken steps to prevent the circulation of the ' no-strike petitions. Even
in the absence of, any practice in this regard , it would not seem likely that
the management would have allowed employees to absent themselves from
their work, to the extent even of shutting down their machines , in order to
solicit the signatures of other employees in a wholesale canvass, if it did not
fully approve of such action. Nor does it appear reasonable to suppose that
such action would have been undertaken by any of the employees , - without, at
the , least , the full consent of the management . In the circumstances, the
rank and file of employees could not be expected to view the solicitation of
their signatures to the no -strike petitions except as meeting with approval
of the respondent or, indeed , as having been undertaken at its request. Nor
does the undersigned credit the testimony of Noe that he was requested to
allow the circulation of strike petitions in his department. He could not
name a single individual claimed by him to have requested such permission.
If, as Noe testified , he did not forbid such circulation , it would appear entirely
likely that the proponents of the claimed strike petition would have proceeded
to secure its"circulation . The record, however, does not contain any evidence
that such petition was circulated in the plant at any time. In all of the
circumstances disclosed by the record , the undersigned finds that the circu-
lation of the no-strike petitions was authorized, approved by, and attributable
to the respondent.
HOLSTON MANUFACTURING COMPANY 69
(3) Negotiations during the strike period and the contract of January 1940
In accordance with the vote taken by the union members following the
August 24 meeting with the respondent, the strike went into effect on August
31. Three days later the plant shut down. Operations were not resumed until
October 25. Immediately prior to the resumption of operations, a meeting
between representatives of the respondent and a committee of the Union was
held as a result of the efforts of Williams, a conciliator of the United States
Department of Labor. Williams was not present since, as both Gaut and
Greene testified, Gaut refused to meet with the Union in the presence of the
conciliator. At the meeting Gaut proposed that the strikers return to work.
The union committee suggested that the parties first "attempt to reach some
kind of a settlement on the Union proposal." On this point Gaut replied that
his proposal "still stood," that it was his "final offer" and "the people could
accept it or else the mill would run without an agreement." According to
Gaut's notes of what occurred, the meeting concluded as follows :
Mr. Abbott [a member of the Union committee] then asked if a dis-
interested party could be brought in to help get the two sides together.
Mr. Gaut replied that the mill would do anything it could for its employees,
ten times more for them than it would for an outsider. • Mr. Gaut said
ours people were satisfied, but the trouble was caused by outsiders who
were getting a salary for it. Bradshaw [the Union representative who
participated in the August negotiations] said he guessed that meant him.
Mr. Gaut said it did.
Through the Intervention of the Mayor of Knoxville, further meetings between
the parties were held in late October and early November. Little, however, was
accomplished. At the last meeting the -Union desired the attendance of Hoffman,
first vice president of the American Federation of Hosiery Workers, who was
an expert in the seamless hosiery field in which the respondent was engaged.
Gaut refused to meet with Hoffman present. At an earlier meeting, the Mayor
had- limited the number of representatives to partake in the meetings to three
individuals on each side. There was conflicting testimony as to whether the
Union, in compliance with the 3-man rule, offered' to withdraw one of its other
representatives in order to allow Hoffman to be present. Gaut admitted, how-
ever, that be would have objected to Hoffman in any event. ' He testified that
be "didn't want an outsider to come in."
Finally, as a result of meetings arranged by Conciliator Williams, an agree-
ment between the parties was reached and signed on January 12, 1940. The
agreement, as amended February 16, 1940, provided for the settlement of the
strike and embodied terms governing collective bargaining relations and condi-
tions of employment. The provisions relating to the strike called for its
immediate termination, and the reinstatement of the 'strikers upon -application.
Reinstatement was to be effected as rapidly as the respondent had need for the
strikers in the order of their departmental seniority, without, however, requiring
the respondent to discharge employees hired for the first time during the strike.
The other provisions of the agreement concerned the terms discussed by the
parties prior to the strike. The provision regarding coercion of the respondent
by the Union was eliminated. Recognition of the Union as exclusive bargain-
ing representative, however, was limited to "the life of this agreement, or until
such time, as the Company has reason to believe that the Union does not
represent a majority of the employees coming within the scope of this agree-
ment, and has requested'the National Labor Relations' Board to hold an election
to determine the question, and until sixty (60) days after the making of such
70 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
request, if the National Labor Relations Board shall not sooner hold and make
its report of such election , or certify Second Party [ the Union]."
Provision was made for a 9-hour day , 42-hour, week, with time and a half to
be paid 'for work in excess of such hours . The respondent agreed to respect the
principles of equal distribution of work and seniority and to make proper
,provision for the safety and health of the employees In this regard, the
agreement contained statements setting out*that the respondent "insists" that it
,'always" was governed by these principles and "always" made proper provision
for safety and health . The respondent recognized the holidays requested by the
Union and agreed to pay time and a half for work performed on such days.
The parties agreed to submit the question of wage rates to the United States
Department of Labor ; if it were found by the Department that the average
wages, paid by specified mills were in excess of the wages paid by the respondent,
it was agreed the respondent would increase its wages accordingly. The
respondent agreed not to discriminate against union members and to furnish
employees with a written statement of the reasons for discharge . Provision
also was made for the arbitration of any dispute ' "as to the interpretation of
-'this agreement ,` or claim of the breach thereof by the Company." The term of
the agreement was for 1 year, automatically renewable from year to year unless
terminated by bppropriate notice of either party prior to the expiration of any
'annual period. .
In addition to the foregoing ; the agreement provided that the Union would
-withdraw and not thereafter file charges relating to any matters occurring
prior to the execution of the agreement.
The parties operated under the contract from January 12, 1940, until January
12, 1942, when it was terminated at the option of the Union . In this period,
representatives of the Union handled a, considerable number of grievances on
behalf of the employees . In meeting with the union representatives to discuss
grievances , Superintendent Greene for a considerable period, ending, as he
testified , in March 1941 , required the union committee to stand in the passageway
,outside his office and to speak'to him through a small window looking into his
office. The union representatives testified that under this procedure a full discus-
sion was seriously handicapped , since only one of their number at a time could see
and carry on any conversation with Greene. After repeated complaints regard-
ing this practice , Greene adopted the procedure of meeting with the union
committee in the passageway outside his office: But no chairs were provided
the committee and discussion with Greene was constantly interrupted by persons
using the passageway leading to and from- the mill proper . At no time did
Greene invite the committee into his office.
During the life pf the contract , a considerable number of matters not adjusted
between Greene and the union committee were referred to and disposed of by
arbitration.
No wage increase was ever put into effect under the terms of the contract. A
wage survey was undertaken and a report made to the parties by representatives
of the Department of Labor showing that the respondent 's wages were less
than those paid in the mills with which comparison was to be made under the
.terms of the contract . The respondent maintained , however, that the survey
was based upon the wages paid by such mills for all production and•that the
contract required the comparison to be based only upon wages paid for the
production of goods of the same kind and quality that the respondent manufac-
tured. The Department of Labor, apparently, was not prepared to conduct such
a survey. The matter was never submitted to arbitration.
HOLSTON MANUFACTURING COMPANY 71
(b) Concluding findings
(1) The refusal to bargain prior to the strike
Examination of the record of events prior to the strike on August 31, 1939,
discloses,'in the vie* of the undersigned, a failure on the part of the respondent
to comply with the obligation imposed upon it by the Act to bargain collectively
with the representative chosen by a majority of its employees. Satisfaction-of
that obligation, or course, does not require an employer to capitulate to the
demands addressed to him. It does, however, require that he accord full
recognition to the collective bargaining representative of his employees and that
he undertake with that representative in good faith to explore the total situation
presented with the sincere purpose of finding a common ground of understanding.
While purporting to accord recognition to the Union as exclusive bargaining
representative in accordance with the, terms of the Act, the respondent sought
to limit the duration of such recognition to such time, short of the life of any
contract which it might enter into with the Union, as it had reason to believe
that the Union no longer represented a majority of the employees. By virtue
of its uncontested majority standing, however, the Union was entitled to' exclu-
sive recognition for a reasonable period of definite duration. The respondent
could not, consistently with its obligation under the Act, require the Union to
condition its right to be recognized as statutory representative upon the
uncontrolled opinion of the respondent regarding its status as-majority repre-
sentative. The term of recognition insisted upon by the respondent subjected to
the respondent's will alone the basic right of the Union to represent the
employees. Whenever the respondent - chose , to believe the Union no longer
represented a majority, however unfounded such belief might be, the terms of
the' respondent's proposed -agreement would require the Union to surrender its
right to recognition. The respondent's position would accord the Union little
more than recognition at will. To countenance such a stand would, in the view
of the undersigned, be in defiance of the fundamental policy and purpose of
the Act. That policy and purpose, as set out in Section 1 of the Act, con-
templated stabilization of the relationship between employers and employees
"by encouraging practices fundamental to the friendly adjustment of industrial
disputes . . . and by restoring equality of bargaining power between employers
and employees." It appears plain, however, that stability may not be achieved,
nor equality of bargaining power established, if the right of duly designated
bargaining representatives to act for employees is subject to the constant threat
of unlimited and uncontrolled challenge by.the employer. Recognition qualified
in the form tendered by the respondent is not recognition at all. It is only
the semblance of recognition from which the substance has been extracted.
A labor organization which knows that its right Jo be recognized as an
accredited bargaining representative is defeasible at the will of the employer
cannot treat with an employer upon a basis of equality ; nor may it be viewed
by the employees as an effective instrument for achieving their desires. Any
relationship between an employer and a labor organization holding so tenuous
a tenure rests upon the most insecure of foundations and falls far short of
achieving the stabilization of relations which the Act was designed to establish.
The statute clearly imposes duties consistent with its purpose. Insistence by
an employer that it will recognize the representative of his employees for such
period as he may have reason to believe it represents a' majority contravenes
the statutory purpose. It neither creates nor maintains a relationship between
the employer and the bargaining representative which is conducive to the
successful operation of the bargaining process. If that process is* to operate
I
72 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
at all, the, representative of the employees must be recognized as such for a
reasonable period of definite duration." An employer who is willing only to
grant less than this cannot be held to have fulfilled the statutory obligation
,encompassed by the duty to bargain collectively. The demand of the Union
for unqualified recognition for the 1-year term of the contract was entirely
reasonable. Employers who have fully accepted the principle and procedure'of
true collective bargaining have never hesitated to grant recognition coextensive
with the term of the collective bargaining contracts to which they are parties.
That is normal and accepted practice. The Board has given full effect to that
practice by refusing, in the absence of special circumstances, to entertain
petitions for the investigation and certification of representatives under Section
9 prior to the imminent expiration of existing bargaining agreements. Con-
comitantly, the policy of the Board has been to give full effect to its certifications
of representatives for reasonable periods, ordinarily one year. This policy of
the Board it rooted in the recognition that otherwise the procedure of collective
bargaining is illusory and the achievement of industrial stabilization impossible.
The refusal of the respondent, to accord recognition to the Union for the term
of the contract can only be viewed as a rejection by it of the entire process of
collective bargaining. This appears to be especially true in view of the showing
that, in withholding the recognition to which the Union was entitled' as of right,
the respondent was not motivated by the good faith required of it under the
statute in treating with 'the representative of its employees. The respondent
at no time questioned, or, so far as appears, had reason to question, the fact
that the Union represented a majority of its employees. In the prior unfair
labor practice proceeding, it stipulated that to be the fact as early as 1938.
It again stipulated that to be the fact during the period covered by the present
proceeding. Despite these stipulations, Gaut insisted that the reason he would
not accord the Union full recognition was that he "never thought" the Union
represented a majority of the workers, a palpable pretext, in the view-of the
undersigned, to cover the respondent's lack of good''faith in dealing with the
Union.
A' finding that the, respondent refused to bargain with the Union is, moreover,
warranted upon this record wholly apart from the question of recognition. The
respondent's part in the negotiations prior to the strike was marked, in the view
of the undersigned, by a steadfast resistance, in large'part, not to the demands
of the Union, but t6 the Union itself, as representative of the employees. The
respondent did'not participate in the negotiations in a good faith effort to arrive
at an understanding with, the Union. While going through the form of bargaining,
it was determined, the record shows, to yield nothing to the Union in variance
with existing conditions of employment, and at every point, as where the demands
of the Union did not require alteration of existing conditions, to make it clear
that the Union had achieved nothing for the employees which they did not already
have without the Union. Thus, for example, while not opposed to the, Union's
demands regarding the equal division of work, seniority, and safety measures,
the respondent would not agree to the embodiment of such terms in contract form
without inclusion of an express statement of its "insistence" that it had "always"
operated under such conditions. The appearance of such statements in a formal
contract would be extraordinary in any circumstances. At the very least, Gaut's
own testimony in this connection establishes that the purpose of the statements
was to make it clear to the union representatives that they were gaining nothing
. ° See Matter of Woodside Cotton Mills Company and Tewtile Workers Organizing Commit-
tee, 21 N L R B. 42. In Matter of McQuay-Norris Manufacturing Company and United
Automobile Workers of America, Local No. $26, 21 N. L. R. B. 709.
HOLSTON MANUFACTURING COMPANY 73
that the respondent was not already giving the employees without the intercession
of the Union. That would be equally clear to the employees reading such state-
ments in the contract. Gaut's' own further testimony makes plain that the
respondent was interested only in dissipating any "impression" the employees
might have that these provisions were gained for them by the Union Such con-
duct clearly was intended to undermine the prestige of the Union among the
workers, and indicates the antithesis of the good faith which is mandatory in
negotiations under the Act.
The record compels a like conclusion in regard to the respondent's refusal to
accede to the request of the Union that it be supplied with a statement of the
reason for discharge of the employees it represented. The ground for such a
refusal advanced by the respondent, that it might thereby be subjected to a
damage suit by the employees involved, appears to the undersigned only as a flimsy
excuse to cover in fact the desire of the respondent to subordinate the role of
the Union in its relations with the employees and the management. Such provi-
sions are a normal feature of collective bargaining contracts. The respondent's
position in this regard is allied with its insistence that the employees were
"pleased" to work on holidays, although their chosen representative was then
requesting on their behalf that the management honor holidays and pay time and
a half for work performed on'such days. In both cases the respondent undertook
to view the Union as an interloping stranger speaking on its own behalf and having
no real connection with its employees.
Lack of good faith on the part of the respondent is further shown by its insistence
upon a provision against coercion and intimidation of the management by the
Union. As seen above, Gaut testified that he believed such provision necessary
because the Union was "trying" to intimidate the respondent. Yet, Gaut could not
point to any particular act of such conduct,by the Union. In these circumstances,
it can only be concluded that in raising the subject at all the respondent sought to
inject a false issue in the negotiations. That also would appear to be true of the
respondent's consistent efforts to convert the demands for maintenance of member-
ship and check-off of dues into a, closed shop issue In any event, the refusal of
the respondent to agree to those demands at least in part because it did not want
"to be the means of helping the organization in any way" only illustrates further
its preoccupation, not with the merits of the demands of the Union, but with the
position of the Union as representative of the employees. In sum, the record of
the negotiations prior to the strike demonstrates, as Gaut's own notes expressly
indicated of the negotiations thereafter held, that "the mill would do anything it
could for its employees, ten times more for, them than it would for an outsider,"
in disregard of the fact that the outsider was the duly designated representative
of the employees. The respondent's relations with the Union in this period,
viewed in their totality, fall far short of the minimal standards prescribed by the
Act and encompassed in the term collective bargaining.
In all of the circumstances presented, the undersigned finds that the respondent
on August 7, 1939, and at all times thereafter prior to the strike on August 31,
1939, refused- to bargain collectively with the Union in good faith as exclusive
representative of its employees in an appropriate unit, and has thereby interfered
with, restrained, and coerced its employees in the exercise of the rights guaranteed
in Section 7 of the Act.
(2) The no-strike petitions
Although the Union was the authorized bergaining representative of the
employees, and the respondent knew that the Union was taking concerted action
against it, as was its unquestionable right under the Act, the respondent authorized
and approved of the circulation of petitions requesting the employees,to register
74 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
their disapproval of the strike. In so doing, the respondent sought to undercut
the authority of the Union as exclusive representative of the employees. The
respondent clearly intended by dealing directly with the employees to secure their
defection from the Union,; that very day, as seen above, it had rejected the Union's
offer to meet in, an effort to avert impending strike action. The respondent's
conduct in connection with the no-strike petitions amounted to an effort to secure
abandonment of the Union at a critical period in its relations with the respondent,
and reflected further upon the good faith of the respondent in the4bargaining
negotiations. In all of the circumstances presented, the undersigned finds that, by
authorizing and approving the circulation of the no-strike petitions, the respondent
interfered with, restrained, and coerced its employees in the exercise of the rights
guaranteed in Section 7 of the Act, and that, by simultaneously rejecting the
request of the Union to meet in an effort to avoid the strike, further refused to
bargain collectively with the Union in good faith.
(3) The strike caused by the refusal to bargain
The evidence clearly demonstrates that the strike commencing on August 31,
1939, was caused by the respondent's refusal to bargain. The undersigned finds no
merit in the contention, urged by the respondent in its brief, that an impasse in
negotiations was reached only because the Union insisted upon acceptance of its
demands for maintenance of membership , the check off of union dues , and a wage
increase. It is, of course, true that the Union did not offer to recede from these
'demands. The record plainly shows, however, that the position of the Union was
not unalterable, that it sought to discover a common ground of agreement with
the respondent, that toward that end it offered to submit any or all of its
demands to arbitration; that it asked of the respondent only that "some progress"
be made and "some kind of settlement" be effected with regard to "some of the
things" it demanded, .and that it finally advised the respondent that a strike
"would be prevented if we made any progress whatever." Indeed, when the
Union submitted a request to the respondent that a further meeting be held after
August 24, in an effort to avert strike action, the respondent refused. Throughout
the negotiations prior to the strike the respondent evidenced its willingness only
to "stand by" its one and "final" offer. As found above, the conduct of the
i spondent constituted an unlawful' refusal by it to bargain collectively with the
Union in good faith. Upon the totality of the circumstances herein disclosed, the
undersigned - finds that the strike of the respondent 's employees commencing
August 31, 1939, was caused by the unfair labor practices of the respondent in
refusing to bargain collectively with the Union in good faith.
(4) The refusal to bargain during and following the strike
The negotiations during and following the strike period show no basic alter-
ation in the respondent's conception of the part required of it in the collective
bargaining process. At the meeting following the resumption of mill opera-
tions the respondent merely reiterated that its earlier proposal still constituted
its "final offer" which the Union could accept or reject as it pleased The re-
spondent did not recede from its purpose to condition recognition of the•Union
upon its will. -Indeed, it was at this meeting that the respondent openly showed
its hand and its lack of good faith in treating with the Union. According to
Gaut's own notes of what occurred, Gaut, alone fully authorized to deal for the
management , announced that the respondent would do "ten times more" for
the employees than it would for "an outsider ," i. e.; the Union or its repre-
sentatives Nor does the record reveal any material change on the'part of
HOLSTON MANUFACTURING COMPANY - 75
the respondent during the negotiations at which the Mayor of Knoxville pre-
sided. Without regard for the fact that the Union was entitled to choose for
itself the personnel to speak for it in negotiations with the respondent, Gaut
refused to meet with the Union if it were represented by Hoffman . The only
reason forwarded for assumption of the right to dictate who should represent
the employees , an unlawful intrusion in any circumstances , was the fact that
Hoffman was "an outsider."
In the negotiations leading to the execution of the contract of January 12,
1940, the respondent granted some substantive concessions which it had there-
tofore withheld . It prevailed, however, in withholding any right of the Union to
receive directly from the management the reasons for the discharge of em-
ployees. It was successful in including among the provisions regarding work
distribution , seniority , and health and safety , a statement of its "insistence"
that it had "always" operated in accordance with the terms of those provisions.
It refused , moreover, to accord full recognition of the Union as bargaining
representative for, a reasonable period of definite duration . If in the opinion
of the respondent the Union no longer represented a majority of the em-
ployees, it was not bound , under the terms of the agreement , to continue to
recognize the Union beyond 60 days after any request of the respondent, ad-
dressed to the Board , to hold an election . Although altered in form, the
recognition accorded the Union by the respondent did not in substance differ'
materially from the recognition offered , at the outset of negotiations prior to
the strike . The right of the Union to recognition by the respondent, in
decisive part, was still subject to the view of the respondent regarding the
Union's majority status regardless of what the facts actually might be in that
regard. If the Board did not deem it proper to hold an election , or if the
Board undertook to conduct an election but did not issue a report or certifica-
tion within 60 days, the right of the Union to recognition would be at an end.
Following the execution of the contract , the respondent continued to evidence
its resistance to the Union and unwillingness to accept it upon a plane of equality,
by refusing , as seen above , to meet with it, in the adjustment of grievances,
under conditions which would make full and proper discussion , possible.
The facts , in the view of the undersigned , speak for themselves. For
reasons already sufficiently detailed, and upon all of the circumstances dis-,
closed by the record , the undersigned finds that at all times during and follow-
ing the strike, commencing on August 31, 1939, the respondent refused to
bargain collectively with the Union in good faith as the exclusive representa -
tive of its employees in an appropriate unit, and has thereby interfered with,
restrained , and coerced its employees in the exercise of the rights guaranteed'
in Section 7 of the Act. _
B. Discrimination
The strike terminated on January 12, 1940. Thereafter , a large number of
the striking employees applied for reinstatement. Since, as found above, the
strike was caused by unfair labor practices , the striking employees were en-
titled to reinstatement , and the respondent was under a duty to offer rein-
statement to the strikers upon their application , displacing , if necessary, all
persons first hired during the strike to fill positions formerly held by the
strikers . This the respondent failed to do. It agreed to, and in fact did, re-
instate striking employees in the order of their departmental seniority only'
to the extent that vacancies existed without the displacement of any individuals
first hired during the strike to fill positions theretofore held by the strikers.'
The record shows that the respondent followed this practice throughout the
entire period following the strike down to and including the date of the hear-'
76 DECISIONS OF NATIONAL LABOR RELATIONS. BOARD
ing. The failure of the respondent to reinstate the striking employees who
made application therefor , by displacing persons first hired during the strike
period constituted , as the Board - has uniformly held, a discriminatory prefer-
ence of a kind which discourages union membership and activity.
In all of the circumstances presented , the undersigned finds that by refusing
reinstatement to the striking employees , who on and after January 12, 1940,
applied therefor , the respondent discriminated in regard to the hire and tenure
of employment of such employees , thereby discouraging membership in the
Union, and interfering with, restraining ,, and coercing its employees in the
exercise of the rights, guaranteed , in Section 7 of the Act.
IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE
The undersigned finds that ' the activities of the iespondent set forth in
Section III above, occurring in connection with the operations of the respondent
described ' 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. .
i
V. THE REMEDY
Having found that - the respondent has engaged in certain 'unfair labor prac-
tices, the undersigned will recommend that it cease and desist therefrom and
take certain affirmative action which the undersigned finds will effectuate the
policies of the Act. In so doing the undersigned has,given full consideration
to the fact that the agreement of January 12, 1940, between the respondent and
the Union , provided that the Union would withdraw any charges then pending
with the Board and would not thereafter file' further charges regarding any
matter occurring prior to January 12, 1940 . In proper cases, particularly if the
agreement is concluded with the safeguard of the presence of a governmental
representative; the Board , in'the exercise of its discretion , has refused to disturb
the' settlement . The Board ,' however, was not a party to the agreement in this
case. As in the case of all agreements purporting to settle disputes in which
unfair labor practices are involved, the agreement must be carefully scrutinized.
Upon careful examination of all of the circumstances here involved , the under-
signed is of the opinion and finds that the purposes of the Act will not be effectuated
by withholding the power of the Board to remedy the unfair labor practices com-
mitted by the respondent to the extent that the public interest in the matter
requires.
The undersigned has found that on August 7, 1939, and at all times thereafter,
the respondent has refused to bargain collectively with the Union in good faith
as exclusive representative of its employees in an appropriate unit. In order to
correct the situation and to effectuate the policies of the Act by restoration,
insofar as may be possible,' of the status quo existing prior to the respondent's
unfair labor practices , the undersigned will recommend that, upon request, the
respondent bargain collectively with the Union in good faith as exclusive repre-
sentative of all of the employees in the appropriate unit in respect to rates of
pay, wages , hours, and other terms and conditions of employment.
The undersigned has also found that the respondent discriminated in regard
to the hire and tenure of its striking employees who applied for but were refused
reinstatement on and after January 12 , 1940. Although , the agreement of Jan-
nary 12, 1940 , may be construed as constituting a waiver on the part of the Union
for reinstatement of the striking employees by displacement of persons first hired
during ,the strike , the undersigned finds that it would not, in the circumstances
1
IHOLSTON MANUFACTURING COMPANY - 77
of this case, effectuate the policies of the Act to give effect to such waiver. Even
'if this were not so, the undersigned, entirely independently of any discrimination
against such employees, and for the, reasons that it would be in proper aid of the
recommendation that the respondent bargain collectively with the Union and
that effectuation of the policies of the Act requires restoration of the status quo
existing prior to the respondent's commission of unfair labor practices, would
recommend that such employees be offered reinstatement. Accordingly, the
undersigned will recommend that the respondent offer reinstatement to their
former or substantially equivalent positions, without prejudice to their seniority
and other rights and privileges, to those employees who went on strike on August
31, 1939, and who have applied for but have not been offered reinstatement, dis-
missing if necessary any persons hired by the respondent after August 31, 1939,
the date of the strike, and not in the employ of the respondent on that date. If
thereupon,, because of a reduction in force, there is not sufficient employment
available for the employees to be offered reinstatement, all available positions
shall be distributed among all employees, without discrimination against any
employee because of his union affiliation or activities, following such a system of
seniority or other non-discriminatory practice to such extent as has heretofore
been applied in the conduct of the respondent's business. Those employees, if
any, remaining after such distribution, for whom no employment is immediately
available, shall be placed upon a preferential list and offered employment in their
former or substantially equivalent positions as such employment becomes avail-
able and before other persons are hired for such work, in the order determined
among them by.such system of seniority or other non-discriminatory practice as
has heretofore been followed by the respondent.
In view of the fact, however, that the Union made no complaint and filed no
charges with the Board for more than,2 years after entering into the agreement
of January 12, 1940, and because, in the view of the undersigned, it would not
effectuate the policies of the Act so to require, the undersigned will not recom-
mend that the respondent make whole the striking employees found to have
been discriminated against for any period prior to the filing of the charge in
this case. In order to effectuate the policies of the Act, the undersigned will
recommend only that the respondent make whole those employees who went
on strike on August 31, 1939, and who have applied for but have not been offered
reinstatement, for any loss of pay they may have suffered by reason of the
respondent's refusal, if any, to reinstate them,' as provided above, by payment
to each of them of a sum of money equal to that which he would normally have
earned as wages during the period from May 21, 1942, to the date of the respond-
ent's offer of reinstatement or placement on a preferential list, less his net
earnings,' if any, during such period.
Upon the foregoing findings of fact, and upon the entire record in the case,
the undersigned makes the following :
E By "net earnings" is meant earnings less expenses, such as for transportation, room, amt
board , incurred by an employee in connection with obtaining work and working elsewhere
than for the respondent, which would not have been incurred but for the unlawful disciimn'a-
tion of his hire or tenure of employment and the consequent necessity of his seeking employ-
ment elsewhere . See Matter of Crossett Lumber Company and United Brotherhood of Car-
penters and Joiners of America, Lumber and Sawmill Workers Union, Local 2,90, S N L R 13.
440. Monies received for work performed upon Federal, State, county, municipal, or other
work-relief projects shall be considered as earnings Republic Steel Corporation v National
Labor Relations Board, 311 U. S. 7
78 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
CONcLusIONs OF LAW
1. American Federation of Hosiery Workers, Branch 94, affiliated with 'the
Congress of Industrial Organizations, is a labor organization, within the meaning
of Section 2 (5) of the Act.
2. By refusing to bargain collectively with the Union in.
.
good faith as exclu-
sive representative of all of the employees in the appropriate unit, the respond-
ent has engaged and is engaging in unfair labor practices, within the meaning
of Section 8 (5) of the Act.
3. By discriminating in regard to the hire and tenure of employment of its
striking employees who applied for but were refused reinstatement on and after
January 12, 1940, the respondent has engaged and is engaging in unfair labor
practices, within the meaning of Section 8 (3) of the Act
4. By interfering with, restraining, and coercing its employees in the exercise
of the rights guaranteed in Section 7 of the.Act, the respondent has engaged
and is engaging in unfair labor practices, within the meaning of Section 8 (1)
of the Act.
5. The foregoing unfair labor practices are unfair labor practices affecting
commerce, within the meaning of Section 2 (6) and (7) of the Act.
. RECOMMENDATIONS
Upon the basis of the foregoing findings of fact and conclusions of law, the
undersigned recommends that the respondent, Holston Manufacturing Company,
Knoxville, Tennessee, and its officers, agents, successors, and assigns, shall:
1: Cease and desist from :
(a) Refusing to bargain collectively with American Federation of Hosiery
Workers, Branch 94, in good faith as the exclusive representative of its em-
ployees within the appropriate bargaining unit in respect to rates of pay, wages,
hours of employment, and other conditions of employment ;
(b) Discouraging membership in American Federation of Hosiery Workers,
Branch 94, or any other labor organization of its employees, by discrimina-
tion in regard to hire, tenure, or any term or condition of their employment
(c) In any other manner interfering with, restraining, or coercing its em-
ployees in the exercise of the right to self-organization, to form, join,,or assist
labor organizations, to bargain collectively through representatives of their own
choosing, and to engage in concerted activities for the purposes of collective
bargaining and other mutual aid or protection as guaranteed in Section 7 of
the Act.
2. Take the following, affirmative action which the undersigned finds will
effectuate the policies of the National Labor Relations Act:
(a) Upon request, bargain collectively with American Federation of Hosiery
Workers, Branch 94, in good faith as the exclusive representative of its em-
ployees in the appropriate unit in respect to rates of pay, wages, hours of
work, and other conditions of employment ; '
(b) Offer td those employees who went on strike on August 31, 1939, and
who have applied for and have not been offered reinstatement, immediate and
full reinstatement to their former or substantially equivalent positions, with-
out prejudice to their seniority or other rights and privileges, in the manner
provided in the section entitled "The remedy" above ; and place those employees
for whom employment is not immediately available upon a preferential list in
the manner set forth in said section, and thereafter, and in said manner, offer
them employment as it becomes available ;
HOLSTON MANUFACTURING COMPANY 79
(c) Make whole the employees specified in paragraph 2 (b) above, for any
loss of pay they may have suffered by reason of the respondent's refusal, if
any, to reinstate them, as specified in said paragraph 2 (b) above, by pay-
ment to each of them of a sum of money equal to that which each would nor-
mally have earned as wages, during the period from May 21, 1942, to the date
of the respondent's offer of reinstatement or placement upon a preferential list,
less his net. earnings, if any, during said period ;
(d) Post immediately in conspicuous places throughout its plant, and main-
tain for a peiiod of, at least sixty (60) consecutive days from the date of
posting, notices to its employees stating (1) that the respondent will not
engage in the conduct from which it is recommended that it cease and desist
in paragraphs 1 (a), (b), and (c) hereof; (2) that the respondent will take
the affirmative action set forth in paragraphs 2 (a), (b), and (c) hereof; and
(3) that the respondent's employees are free to become or remain members
of American Federation of Hosiery Workers, Branch 94, and that the respond-
ent will not discriminate against any employee because of membership or
activity in that organization;
-,(e) Notify the Regional Director for the Tenth Region in writing within
ten (10) days from the date of this Intermediate Report what steps the
respondent ha"s.taken to comply herewith.
It is further recommended that unless on or before twenty (20)• days from
the receipt of this Intermediate Report the respondent notifies said Regional
Director in writing that it will comply with the foregoing recommendations,
the National Labor Relations Board issue an order requiring the respondent
to take the action aforesaid.
As provided in Section 33 of Article II of the Rules and Regulations of the
National Labor Relations Board, Series 2-as amended-any party may within
thirty (30) days from the,date of the entry of the order transferring the case
to the Board, pursuant to Section 32 of Article II of said Rules and Regula-
tions, file with the Board, Shoreham Building, Washington, D C, an original
and four copies of a statement in writing setting, forth such exceptions to the"
Intermediate Report or to any other part of the record or proceeding (includ-
ing rulings upon all motions or objections) as he relies upon, together with
the original and four copies of a brief in support thereof. `As further pro-
vided in said Section 33, should any party desire permission to argue orally
before the Board, request therefor must be made in writing to the Board
within twenty (20) days after the date of the order transferring the case to
the Board.
SAMUEL EDES,
Trial Examiner.
Dated'August 21, 1942