International Harvester Co.

National Labor Relations Board - Board Decisions

Sep 25, 1962

138 N.L.R.B. 923 (N.L.R.B. 1962)

INTERNATIONAL HARVESTER CO., INDIANAPOLIS WORKS 923
International Harvester Company (Indianapolis Works) and
Thomas D. Ramsey
International Union , United Automobile , Aircraft and Agricul-
tural Implement Workers of America , AFL-CIO, Local 98 and
Thomas D. Ramsey
International Union , United Automobile , Aircraft and Agricul-
tural Implement Workers of America , AFL-CIO; Interna-
tional Union , United Automobile, Aircraft and Agricultural
Implement Workers of America , AFL-CIO, Local 98; Pat
Greathouse ; Arthur D. Shy; and Edgar Barnard and Inter-
national Harvester Company. Cases Nos. 25-CA-1306, 25-CB-
419, and 25-CB-434. September 25, 1962
DECISION AND ORDER
On November 13, 1961, Trial Examiner David London issued his
Intermediate Report in the above -entitled proceeding , finding that
Respondents had engaged in certain unfair labor practices and recom-
mending that they cease and desist therefrom and take certain
affirmative action, as set forth in the attached Intermediate Report.
Thereafter, the Respondents and the General Counsel filed exceptions
to the Intermediate Report and supporting briefs.
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 Inter-
mediate Report , the exceptions and briefs , and the entire record in the
case, and for the reasons set forth below has decided to dismiss the
complaint in its entirety.'
The Trial Examiner found , in substance , that the Respondent Local
Union 98 and its agent , Barnard , violated Section 8 ( b) (2) and (1) (A)
of the Act by pursuing a grievance to arbitration to compel the
Respondent Company to fulfill its contractual obligation to discharge
employee Ramsey for failing to pay his union membership dues dur-
ing the term of a valid union-security agreement , and by insisting that
the Company put into effect a rendered arbitration award which sub-
sequently resulted in Ramsey 's layoff in an economic reduction in
force. The Trial Examiner further found that the Respondent Com-
pany violated Section 8 (a) (3) and ( 1) of the Act by reducing
Ramsey 's seniority in compliance with the arbitration award and
thereafter laying him off. Without passing upon the merits of the
alleged unfair labor practices , we find that the Trial Examiner erred
1 The International 's request for oral argument is hereby denied inasmuch as the
record , including exceptions and briefs , adequately presents the issues and positions of
the parties.
138 NLRB No. 88.
924 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
in not honoring the arbitration award and dismissing the complaint
herein.
The facts pertinent to our determination may be summarized as
follows : The Respondents were parties to a collective-bargaining
agreement which was executed in 1955 for a term expiring on August
1, 1958. This agreement contained a valid union-security provision
requiring employees, as a condition of employment, to join the Union
and maintain membership for the duration of the contract to the
extent of paying an initiation fee and regular periodic dues. In addi-
tion, the agreement provided for a voluntary dues checkoff. In coln-
pliance with the terms of this agreement, Ramsey reluctantly joined
the Union and authorized the Company in writing to deduct his
periodic dues from his wages. Regular deductions were made through
April 1958 and forwarded to the Union. Thereafter the Company
discontinued this practice on the basis of a letter it had received from
Ramsey which it interpreted as a request to cancel his checkoff author-
ization. The Company gave prompt notice to both Ramsey and the
Union of the action thus taken. Ramsey did not disapprove the
cancellation.
Although fully apprised that dues were no longer being deducted,
Ramsey made no effort to meet his dues obligation. Thereupon the
Union sought to collect the accrued dues from the Company under the
checkoff authorization but met with no success. As a result, the Union
on July 1 certified to the Company that Ramsey was more than 60
days in arrears and requested that "appropriate action be taken
against this employee." Under the contract, Ramsey was thereby
allowed 10 more working days to comply with the union-shop require-
ments of the contract. When Ramsey failed to rectify his default, the
Union, on July 21, filed a grievance with the Company, complaining
that the Company had violated its contract obligation in not discharg-
ing Ramsey. On August 6, following the expiration of the contract,
the Company informed the Union that it rejected its grievance be-
cause a State court order-of dubious validity 2-prohibited it from
2As discussed in the Intermediate Report, this referred to a declaratory judgment
rendered on February 4, 1957, in a suit instituted against the Company and a sister local
of Respondent Local 98 by employees of another plant which was covered by the same
contract as the one here involved ( Snavely v. International Harvester Company) The
court there simply decreed that the union -security provisions were null and void and
unenforceable under Indiana 's Anti-Injunction Act of 1933 . However, on June 20, 1957,
in another action involving General Motors Corporation and the Respondent International,
the Appellate Court of Indiana found contrary to the lower court in the Snavely case
and held that the 1933 Anti-Injunction Act did not invalidate the union shop ( Smith v.
General Motors Corporation , 143 N.E. 2d 441 ). In addition , that court ruled that the
Indiana right-to-work law , which was passed in 1957, was not retroactive to invalidate
contracts in existence at the time of its passage , as was the contract involved in the
present case . The Snavely decision was appealed , but the appeal was dismissed in 1959
on the ground of mootness because the contract had expired in the meantime . In this
connection , it appears that a declaratory judgment under Indiana law is not self-executing
but requires the institution of another action to enforce rights decreed thereunder
( Brfndley v. Meara, 198 N.E. 310).
INTERNATIONAL HARVESTER CO., INDIANAPOLIS WORKS 925
enforcing the union-security provisions of the contract. The Com-
pany also directed the Union's attention to the fact that upon the
expiration of the contract these provisions became inoperative by
reason of Indiana's right-to-work law. The Union thereupon
promptly took its grievance to arbitration as provided in the contract.'
In May 1960, following several fruitless attempts to settle the
Union's grievance, the matter was heard by David L. Cole, the perma-
nent arbitrator appointed under the contract. On August 12, the
arbitrator issued his decision sustaining the Union's grievance that
the Company had failed to perform its contractual obligation to dis-
charge Ramsey during the contract term for nonpayment of union
dues.' However, because Indiana's right-to-work law barred union-
shop agreements at the plant in question after the contract's expira-
tion on August 1, 1958, the arbitrator, with the Union's consent, treated
Ramsey as having been reemployed as of that date with his seniority
unbroken for all purposes except job tenure. Thereafter, the Com-
pany notified Ramsey it was reducing his seniority in compliance with
the award. As a consequence of this reduction in seniority, Ramsey
was laid off when the Company curtailed operations.
As indicated above, the Trial Examiner found the Respondents
guilty of unfair labor practices essentially because the Union pursued
its contractual remedy to arbitration and the Company complied with
the award rendered by the arbitrator. Unlike the Trial Examiner,
we find that it will effectuate the purposes and policies of the Act to
honor this award.
There is no question that the Board is not precluded from adjudi-
cating unfair labor practice charges even though they might have
been the subject of an arbitration proceeding and award. Section
10 (a) of the Act 5 expressly makes this plain, and the courts have
uniformly so held.' However, it is equally well established that
"Article VII, section 1, defined "an arbitrable grievance" as a claim that the Company
or the Union "has violated some provision of this Contract or failed to perform some
obligation assumed under this Contract. , " It further provided that such grievances
"which are not disposed of In Step 2 of the grievance procedure . . . may be appealed to
final and binding arbitration by either the Company or the Union . . . under the provi-
sions and procedures of this Article. .. Section 12 of the article provided that "the
function of the Arbitrator shall be of a judicial rather than a legislative nature . . .
His decision shall not go beyond what Is necessary for the interpretation and application
of this Contract or the obligation of the parties set forth in this Contract."
' The arbitrator further held that the Company's contract violation was not excused
by the declaratory judgment in the Snavely case for the reasons , among others , that it
was In conflict with the holding of the appellate court and that the declaratory judgment
was not self-executing . See footnote 2, supra.
5 Section 10(a) provides that the Board' s power to prevent unfair labor practices affect-
ing comme, ce "shall not be affected by any other means of adjustment or prevention that
has been or may be established by agreement, law or otherwise . . "
9 N L R.B. v. Walt Disney Productions, 146 F. 2d 44, 48 (C A 9), cert denied 324 U.S
877; N.L.R.B. v. Hershey Chocolate Corporation , et at, 297 F. 2d 286, 293-294 (C.A 3).
However , in the Hershey case, the court added that it had "serious doubts whether the
Board in this Instance wisely rejected the arbitration decision . . . . It seems to us that
such course would have resulted In the effectuation of the final adjustment policy de-
clared desirable by Section 203(d ) of the Labor-Management Relations Act, 1947 . . . ."
926 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
the Board has considerable discretion to respect an arbitration award
and decline to exercise its authority over alleged unfair labor prac-
tices if to do so will serve the fundamental aims of the Act.
The Act, as has repeatedly been stated, is primarily designed to
promote industrial peace and stability by encouraging the practice
and procedure of collective bargaining. Experience has demonstrated
that collective-bargaining agreements that provide for final and bind-
ing arbitration of grievance and disputes arising thereunder, "as a
substitute for industrial strife,"' contribute significantly to the at-
tainment of this statutory objective. Approval of the arbitral tech-
nique, which has become an effective and expeditious means of resolv-
ing labor disputes, finds expression in Section 203(d) of the Labor
Management Relations Act, 1947. That provision declares : "Final
adjustment by a method agreed upon by the parties is hereby declared
to be the desirable method for settlement of grievance disputes aris-
ing over the application or interpretation of an existing collective-
bargaining agreement." The Board has often looked to this declara-
tion as a guideline in administering its Act.
Recognizing arbitration as an instrument of national labor policy
for composing contractual differences, which it found imbedded in the
quoted statutory provision and other Federal legislation and sources,
the Supreme Court of the United States has given this policy mean-
ingful substance. In the landmark decision in Lincoln Mills and
related cases," it held that in suits under Section 301 of the Act,'
courts were empowered to compel parties to observe their arbitral
commitments and that the mere expiration of the contract did not
relieve- the parties of their obligation to arbitrate grievances arising
during the contract term.10 So important a role did the Court regard
arbitration as plaiying in the national labor scheme as "a stabilizing
influence" 11 that the Court in later cases 12 cautioned the lower courts
in Section 301 suits to - refrain from passing on the merits of the
grievances under the guise of determining the question of arbitra-
bility, but to construe contractual arbitration provisions expansively
' United Steelworkers of America v. Warrior & Gulf Navigation Company, 363 U.S.
574, 578.
8Textile Workers Union of America, AFL-CIO v. Lincoln Mills of Alabama, 353 U.S.
448; Goodall-Sanford, Inc. v . United Textile Workers of America , 353 U.S. 550 ; General
Electric Company v . Local 205, United Electrical, Radio and Machine Workers of America,
353 U . S. 547.
6 This section provides for suits by employers and labor organizations for violation of
collective-bargaining agreements in an industry affecting interstate commerce.
10 Textile Workers Union of America, AFL-CIO v. Lincoln Mills of Alabama, supra;
United Steelworkers of America v. Enterprise Wheel and Car Corp ., 363 U.S . 593. The
Board itself has recognized the survival of such obligation after the contract 's expiration.
Local No. 611 , International Chemical Workers Union , AFL-CIO, at at. (Purex Corpora-
tion, Limited ), 123 NLRB 1507.
n United Steelworkers of America v. American Manufacturing Co., 363 U.S. 564, 567.
°' United Steelworkers of America v. American Manufacturing Co., supra ; United Steel-
workers of America v . Warrior & Gulf Navigation Company, supra; United Steelworkers
of America v. Enterprise Wheel and Car Corp ., supra.
INTERNATIONAL HARVESTER CO., INDIANAPOLIS WORKS 927
if "congressional policy in favor of settlement of disputes by the
parties through the machinery of arbitration" is to be realized.i8
If complete effectuation of the Federal policy is to be achieved, we
firmly believe that the Board, which is entrusted with the administra-
tion of one of the many facets of national labor policy, should give
hospitable acceptance to the arbitral process as "part and parcel of
the collective bargaining process itself,714 and voluntarily withhold
its undoubted authority to adjudicate alleged unfair labor practice
charges involving the same subject matter, unless it clearly appears
that the arbitration proceedings were tainted by fraud, collusion,
unfairness, or serious procedural irregularities or that the award was
clearly repugnant to the purposes and policies of the Act. As the
Court has reminded the Board in another context but in language
equally applicable to the situation here presented : 15
... that the Board has not been commissioned to effectuate the
policies of the Labor Relations Act so single-mindedly that it
may wholly ignore other and equally important Congressional
objectives. Frequently the entire scope of Congressional purpose
calls for careful accommodation of one statutory scheme to an-
other, and it is not too much to demand of an administrative
body that it undertake this accommodation without excessive
emphasis upon its immediate task.
Consistent with this reminder, and aware of the underlying objectives
of the Act, the Board in the appropriate case has not permitted par-
ties to bypass their specially devised grievance-arbitration machin-
ery for resolving their disputes 16 and where an arbitration award had
already been rendered has held them to it."
From what has been said previously, it is quite clear that, in pursu-
ing its grievance to arbitration, the Union in the present case was
simply exercising a contractual right to have that tribunal vindicate
its claim that the Company breached its obligation by refusing to en-
force their concededly valid union-shop agreement to discharge Ram-
sey for failing to pay his regular membership dues. The Company
did not challenge the Union's right to resort to arbitration and prop-
erly so, for this was the very procedure which the parties had agreed
in their contract was "adequate to provide a fair and final determina-
tion of all grievances arising under the terms of this Contract," 18 and
13 United Steelworkers of America v. Warrior & Gulf Navigation Company, supra , at 582.
is Id. at p. 578.
15 Southern Steamship Company v N.L R.B., 316 U S. 31, 47.
19 Local No . 611, International Chemical Workers Union , AFL-CIO, at al. (Purer Corpo-
ration, Limited ), 123 NLRB 1507 ; see also N L.R.B v Knight Morley Corp , 251 F. 2d
753, 759-760 ( C.A. 6), whose rationale the Board expressly adopted in its decision in
Local No. 611 , at al, supra
17 See, for example, Spielberg Manufacturing Company, 112 NLRB 1080
is Article x, section 1
928 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
which justified the Union's no-strike commitment. 19 Furthermore,
it is apparent that the parties' submission of their controversy was not
only required by their agreement, but also, under established law, was
mandatory and survived the contract term.
The record is clear that the issue of the Company's contractual
obligation to comply with the Union's demand for Ramsey's discharge
was fully and fairly litigated before an impartial arbitrator. In a
well-reasoned and informed decision, the arbitrator sustained the
Union's grievance. There is certainly not the slightest suggestion-
nor is such a contention even urged-of fraud, collusion, or other ir-
regularity on the part of any party to "railroad" Ramsey out of his
job. Admittedly, Ramsey was in default in his dues payments which,
under the contract at least, made him vulnerable to discharge. Al-
though Ramsey was not given notice of the arbitration hearing, his
interests were vigorously defended there by the Company, which had
at all times supported Ramsey's position that he was not legally re-
quired to maintain his union membership and stubbornly resisted the
Union's efforts to secure his removal from his job. For these reasons,
we find no serious procedural infirmities in the arbitration proceedings
which warrant disregarding the arbitrator's award.2° After all is
said and done, "procedural regularity [is] not . . . an end in itself, but
[is] ... a means of defending substantive interests." 21
Nor do we find, as the Trial Examiner did, that the resolution of
the legal issue before him was at variance with settled law and there-
fore clearly repugnant to the purposes of the Act. In the light of
recent Board decisions and the rapidly developing body of Federal
labor law reflected in the Lincoln Mills line of cases, the decisions relied
upon by the Trial Examiner to support his finding are not conclusive.
For example, they do not answer basic questions respecting the Union's
contractual right to pursue arbitration to enforce its demand, first
made during the contract term, for the discharge of Ramsey for fail-
ing to make dues payments as required by a concededly valid union-
security agreement.22 However, we need not decide these questions
19 Article X, section 2. In Textile Workers Union of America , AFICIO v Lincoln Mills
of Alabama, 353 U S. 448, 455 , the Court observed : "Plainly the agreement to arbitrate
grievance disputes is the quid pro quo for an agreement not to strike "
20 The present case is plainly distinguished from Gateway Transportation Co . 137 NLRB
1763 where the Board refused to give effect to an arbitration award le i' ii,e thw nihi-
tration proceeding did not measure up to the standards of fairness There, unlike here,
the employee contested the employer's right to discharge him and, although neither the
union nor anyone else sponsored his cause, he was denied the opportunity to do so luny
self . In the present case , on the other hand , the Company was aligned in interest with
Ramsey and both before and at the arbitration proceeding strenuously resisted the Union's
asserted right to demand Ramsey's discharge Indeed, the arbitration proceeding was
Initiated by the Union because the Company refused to heed its demand
u Charles Pay, as president of Amalgamated Machine Instrument and Metal Local 475,
UE (Parker-Kalov Corp .) v. Douds, 172 F. 2d 720, 725 (CA 2)
22Phelps Dodge Copper Products Corporation, Habarshaw Cable and Wire Division, 68
NLRB 686, cited by Member Rodgers, is therefore inapposite as there was no issue in the
case concerning the effect to be given to arbitration proceedings
INTERNATIONAL HARVESTER CO., INDIANAPOLIS WORKS 929
in determining to accept the arbitrator's award since it plainly ap-
pears to us that the award is not palpably wrong. To require more
of the Board would mean substituting the Board's judgment for that
of the arbitrator, thereby defeating the purposes of the Act and the
common goal of national labor policy of encouraging the final adjust-
ment of disputes, "as part and parcel of the collective bargaining
process." 23
In sum, while an arbitrator's award concededly cannot oust the
Board of its jurisdiction to adjudicate unfair labor practice charges,
we conclude that, under the facts and circumstances herein, it will
effectuate the policies of the Act to respect the award and dismiss the
complaint in its entirety.
[The Board dismissed the complaint.]
MEMBER RODGERS, dissenting :
I disagree with my colleagues' decision to dismiss this complaint,
and I would find, as did the Trial Examiner, that the Respondent
Union unlawfully caused the Respondent to discriminate against em-
ployee Ramsey.
The facts are not in dispute. Employee Ramsey became delinquent
in his dues payable to the Union under a union-security clause in its
contract with the Company, and the Union, pursuant to that contract,
filed a grievance seeking Ramsey's discharge. On August 1, 1958,
and before anything else occurred, the contract expired. Although
the contract was no longer in effect and Indiana's right-to-work law
made it unlawful for the Company and Union to enter into any new
union-security agreement, the Union continued to press for Ramsey's
discharge. At one point, the Union rejected an offer which would
have given it all back dues owed by Ramsey, adamantly insisting that
Ramsey be discharged. The matter was ultimately considered by the
permanent arbitrator appointed under the contract. The arbitrator
sustained the Union's position that the Company should have dis-
charged Ramsey. Because of Indiana's right-to-work law, the arbi-
trator ruled that Ramsey "be regarded as having been reemployed
on August 1, 1958." The effect of this award was to deprive Ramsey
of 15 or 16 years' seniority, and within a few days after the Company
notified Ramsey it was complying with that award, Ramsey was caught
in a layoff because of reduced seniority brought about by this award.
In reversing the Trial Examiner and dismissing the complaint, the
majority rely on the fact that we have here an arbitrator's award,
and that it was pursuant to this award that Ramsey lost his seniority
rights and perforce his job. It must be noted that the majority does
' United Steelworkers of America v. Warrior & Gulf Navigation Company, 363 U.S.
574, 578
930 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
not say that Ramsey suffered no unlawful discrimination. They do
not say that in pressing for this arbitrator's award the Union was
acting within the law. They do not say that the award itself was
one consonant with rights secured to employees under the National
Labor Relations Act. The majority has avoided these basic issues
and has chosen to "honor" the award solely because that "award is
not palpably wrong." I disagree.
Under established Board precedent, a union cannot lawfully demand
an employee's discharge for nonpayment of union dues absent the
existence of a valid union-security agreement 24 Material here, of
course, is the word "existence." The Board has consistently held
that a union can justify such a demand for a discharge only by show-
ing that a permissible union-security agreement was in effect at the
moment the attempted or actual discharge action is taken, and the
fact that the employee may have failed to satisfy dues obligations
accrued under a prior union-security agreement does not make the dis-
charge demand lawful.25 The facts recited above show that after the
contract expired the Union continued to press for, and ultimately
succeeded in obtaining, Ramsey's "discharge." Since no union-
security agreement existed during this period, the Union had no law-
ful basis for pressing for Ramsey's discharge, and, it follows, the
arbitrator's award upholding the Union's position conflicted with
Ramsey's rights guaranteed under the Act. The award being so
clearly at odds with the statute is not one which I think the Board
should honor.
For the foregoing reasons, I would sustain the Trial Examiner and
find the violations alleged.
MEMBER FANNING, dissenting :
I would affirm the Trial Examiner for the reasons set forth in his
Intermediate Report.
24 New Jersey Bell Telephone Company, 106 NLRB 1322, enfd. 215 F. 2d 835 (C A 2) ;
Hagenrefer & Co., Inc ., 104 NLRB 206 ; Marlin Rockwell Corporation, 114 NLRB 553;
The Public Utility Construction and Gas Appliance Workers of the State of New Jersey,
Local 27 4, et at ( Public Service Electric and Gas Company ( Gas Distribution Depart-
ment ) ), 120 NLRB 355.
25Ibid. While the Union here first demanded Ramsey 's discharge while the union-
security contract was still in force, this is not a factor materially distinguishing the in-
stant case from those cited. The principle set forth in these cases is simply that to
justify a discharge demand for nonpayment of dues, the union must show a cur rent valid
union- security contract . See Phelps Dodge Copper Products Corporation, Habirshaw
Cable and Wire Dtviston, 63 NLRB 686.
INTERMEDIATE REPORT
STATEMENT OF THE CASE
This proceeding , brought under Section 10(b) of the National Labor Relations
Act, as amended ( 61 Stat . 136), herein called the Act, was heard at Indianapolis,
Indiana, on June 6 through 8, 1961 , before Trial Examiner David London. The
INTERNATIONAL HARVESTER CO., INDIANAPOLIS WORKS 931
consolidated complaint herein alleges, in substance, that in violation of Section
8(b) (1) (A) and 8(b) (2), Respondent Unions and their agents since April 196Q
attempted to cause, and caused, Respondent Company to reduce the seniority of
its employee Thomas D. Ramsey, and to discharge or otherwise terminate his em-
ployment on August 22, 1960, because he refrained from assisting Respondent
Unions and engaging in concerted activities for the purpose of collective bargain-
ing, and because he expressed disapproval of Respondent Unions' practices and
conduct. It is further alleged that, in violation of Section 8(a)(1) and (3) of the
Act, Respondent Company reduced Ramsey's seniority and terminated his employ-
ment although it had reasonable grounds to believe, and in fact believed and knew,
that the Respondent Unions caused Ramsey's termination for the reasons alleged
above. The answers of all the Respondents denied the commission of any unfair
labor practice.
At the hearing before me, all parties were afforded full opportunity to examine
and cross-examine witnesses, to introduce relevant evidence, to present oral argu-
ment, and thereafter to file briefs. The parties waived oral argument. The time
to submit briefs having been several times extended, they were filed by all the
parties hereto on or about September 25, 1961, and have been duly considered.
Motions, on which ruling was reserved during the hearing, are disposed of in
accordance with the findings and conclusions that follow.
Upon the entire record in the case and upon my observation of the witnesses,
I make the following:
FINDINGS OF FACT
I. THE BUSINESS OF THE COMPANY
International Harvester Company, herein called Employer or Company is, and
has been at all times material herein, a corporation duly organized under, and
existing by virtue of, the laws of the State of New Jersey, with principal offices in
Chicago, Illinois. It is engaged in the business of manufacture and sale of farm
machinery, motor trucks, and allied equipment at many locations throughout the
United States, including the Indianapolis Works, located at Indianapolis, Indiana,
where the incidents involved in this proceeding took place. During the 12 months
preceding the filing of the consolidated complaint herein, which period is repre-
sentative of all times material herein, the Company manufactured, sold, and shipped
from its plants located in the States of Illinois, Indiana, Ohio, Kentucky, Tennessee,
Wisconsin, California, and Louisiana, finished products valued in excess of $500,000
to points outside the State of location of said plants. All the parties admit, and I
find, that at all times material herein the Company engaged in commerce within the
meaning of Section 2(6) and (7) of the Act.
II. THE LABOR ORGANIZATIONS INVOLVED
International Union, United Automobile, Aircraft and Agricultural Implement
Workers of America, AFL-CIO, hereinafter called the International, and its Local
98, hereinafter so described,' are labor organizations within the meaning of the
Act and admit to membership employees of the Company.
III. THE UNFAIR LABOR PRACTICES
Thomas D. Ramsey has been employed by the Company since February 10, 1942,
as a tool grinder. When he was first employed, the Company's employees were not
represented by any union, but in 1947, when the UAW-CIO won a Board-conducted
election and Local 98 was certified as bargaining representative, Ramsey became a
member of that local. He maintained that membership until about September 1949,
when he "escaped" from the Union's security clause then apparently incorporated
in the collective-bargaining agreement existing between Local 98 and the Company.
In about 1950, he "encouraged or contacted" employees in an endeavor to have
the Union decertified as collective-bargaining representative. In August 1954,
following a reduction in force in which he was "bumped" by another employee,
Ramsey filed a grievance which was "denied under the terms of the contract." He
then filed charges with the Board against both the Union and the Company charging
discrimination, but the record fails to disclose what further action, if any, was taken
pursuant thereto.
i Both of these unions are collectively referred to herein as the Union.
662353-63-vol. 138-60
932 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
In accordance with the provisions of the existing collective -bargaining agreement
between the Company, the International , Local 98, and other locals, executed on
and effective from September 16, 1955 , until August 1, 1958 ,2 and which contained
valid union-security and checkoff clauses, Ramsey, in 1955 , "received a notice from
the Company that all employees would have to join the Union under a union-shop
.agreement ." Though he voiced "an objection to being forced to join the Union,''
he complied with the notice , signed an application for membership and checkoff
agreement , but did so "only under protest ." Thereafter , he made the required pay-
ment of union dues through April 1958. '
On or about April 22, 1958 , Ramsey had a conversation with Mr. Swem , person-
nel manager of the Company 's foundry department, about the "possibilities of getting
,out of the Union under the [Indiana ] Right-to-Work Law" and Swem expressed the
opinion "that there wasn 't any reason why [he] couldn't get out because he didn't
see anything in the law . . . that [he] had to pay dues as a condition of employment."
The reference to the Indiana right-to-work law was to chapter 19 of the Act of
1957 , General Assembly. By that Act , it became unlawful , thereafter, to "enter
into or extend" any contract or agreement conditioning employment upon member-
ship in a labor organization.
During the course of the conversation with Swem , the latter also discussed with
Ramsey the effect of the decision of an Indiana circuit court at Fort Wayne, Indiana,
in Snavely v. International Harvester Company, concerning which more will be said
in later portions of this report.
On April 29 , 1958, Ramsey, by registered mail, sent the following letter to both
the Company and Local 98:
Gentlemen : I have contientious [sic] objection to "Union-methods and their
implications ." My convictions will not permit support of such actions.
I request , no deduction be made from my pay , except that which is a condi-
tion of employment . If at any time such condition ceases to exist, by law
or otherwise , I request my release from membership in Local No. 98.
Yours truly,
(S) Thomas D. Ramsey,
THOMAS D. RAMSEY.
On May 5 , 1958, upon receipt of Ramsey 's letter, L. E. Strickler , assistant man-
ager of industrial relations for the Company, sent a written memorandum to the
Company's payroll department advising the latter of Ramsey 's request and instruct-
ing that department to discontinue deductions for union dues and assessments from
Ramsey's wages. Copies of this memorandum were sent to both Ramsey and Local
98. It is undisputed that Ramsey 's and Strickler 's instructions were complied with,
that Ramsey had knowledge thereof, and that his union dues payable in May 1958
and thereafter have not .been paid.
On June 18, 1958 , Local 98 filed a policy grievance against the Company by
reason of the latter 's failure to forward Ramsey's union dues for the preceding
month and requesting prompt payment thereof. On July 1, 1958 , Local 98 certified
to the Company that Ramsey was more than 60 days in arrears in the payment of
his dues and requested "that the appropriate action be taken against this employee." 3
On July 16 , the Company denied the grievance of June 18 and quoted Ramsey's
letter of April 29 as the reason for its failure to forward his union dues.
On July 21, 1958 , the Union filed another grievance with the Company , charging
"that the Company is violating the contract by allowing Thomas Ramsey to continue
to work even though they [ sic] have had ample notification from the Union that
he is more than 60 days in arrears in his dues."
On August 6, 1958 , the Company rejected this second grievance , designated as
1566 X-98, on the ground that "the Company has been prohibited by a court
2 On July 30 , 1958 , the Company and the Union entered into an agreement indefinitely
continuing this agreement in effect , except for modifications not material to this proceed-
ing, until terminated by either party upon 5 days' written notice . On November 7, 1958,
the Company served such a notice upon the Union making the termination effective at the
start of the first shift on November 13, 1958
3Article V, section 1(g), of the existing collective -bargaining agreement provided that
"any member whom the Union certifies to the Company as having failed to make the re-
quired payment of dues and initiation fees shall be allowed a period of ten (10)
working days following such certification by the Union , within which to comply with the
requirements of this contract."
INTERNATIONAL HARVESTER CO., INDIANAPOLIS WORKS 933
order in Snavely, et al. v . International Harvester Company from enforcing the
Union 's security provisions of the 1955 contract in Indiana ." It also directed the
attention of the Union "to the fact that upon the expiration of the 1955 contract,
the union -security provisions of such contract became inoperaive in Indiana because
of the provisions of" the Indiana right-to-work law.
The Snavely case was a class action for a declaratory judgment against the Com-
pany, the International Union , and Local 57 thereof , in the Circuit Court of DeKalb
County, Indiana , brought by Snavely in behalf of himself and other employees of
the Company at its plant at Fort Wayne, Indiana. At that plant, the employees
were represented by Local 57 of the International Union and were governed by the
same collective-bargaining agreement heretofore described and effective from Sep-
tember 16 , 1955 , to August 1, 1958.
On February 4, 1957, the above-named circuit court entered its judgment in the
Snavely case decreeing that by reason of the Indiana Anti-Injunction Act, enacted
in 1933 , the union-security provisions of the aforesaid collective-bargaining agree-
ment with the International and Local 57 were "null, void , and unenforceable" in
Indiana. The Company joined the Union in appealing that judgment . On June
10, 1959 , the Appellate Court of Indiana dismissed that appeal because the contract
under consideration having expired on August 1, 1958 , there remained "nothing for
[the appellate court 's] determination but a moot question as to the correctness of
the judgment of the [ lower] court in declaring the `union shop ' clause in such con-
tract invalid." 4
In the meantime , on June 20 , 1957, the Appelate Court of Indiana handed down
its decision (143 N.E. 2nd 441 ) in Smith v. General Motors Corporation and the
same International Union involved in the instant proceeding . In the Smith case,
which was also a class action but in which injunctive relief against all the respondents
therein was demanded , the appellants sought , inter alia, a judgment decreeing that a
union-security clause , almost identical with the union-security provisions with which
we are concerned , was illegal and in violation of the Anti-Injunction Act of 1933
aforementioned and the constitution of Indiana . Both the lower and the Appel-
late Court rejected both contentions and dismissed the action . The Appellate Court
also considered the effect of the 19-97 Indiana right-to-work law and concluded that
it had no retroactive effect and was operative only upon "contracts entered into or
extended after the effective date of the Act."
In accordance with the provisions of the 1955 collective-bargaining agreement, the
Union's national headquarters , on August 22, 1958 , certified its grievance of July
21, 1958, "to formal arbitration ," and on the same day docketed the matter on the
arbitration docket as No. 2948.
On November 13, 1958 , the International Union called an "industry-wide strike"
which was imposed upon the Company's operations at its Indianapolis plant and in
which all the employees represented by Local 98, except Ramsey, participated. Ram-
sey went to the plant on November 13, "with the intention of continuing to work."
However, when he found some of his equipment "greased up," he decided to go else-
where to seek a job. While the strike was still in progress , on January 13, 1959•,
he drove through the picket line and returned to work. The strike was terminated
on January 16, 1959.
Between October 1958 and March 1959 , several meetings were held at the Com-
pany's main offices in Chicago in which meetings representatives of the Company
and the Union participated in an endeavor to settle the Union 's grievance. How-
ever, 'both sides remained adamant in the positions previously taken-the Union insist-
ing upon its 1955 contract right that Ramsey be discharged because of his failure
to pay dues, and the Company replying it could not do so because of the Snavely
decision and the aforementioned right-to-work law. At the conclusion of the last
of these futile meetings , the Union announced that it was submitting the matter to
David L. Cole, the impartial arbitrator provided for by the 1955 collective-bargaining
agreement .5
Though the collective -bargaining agreement made no provision therefor, it had
been the practice of the parties , where cases were submitted for arbitration to Mr.
4 At the hearing before me, I sustained objections to the introduction into evidence of
the decisions of both the lower and appellate court in Snavely, General Counsel's Exhibit
No. 28 and Employer's Exhibit No. 5, respectively. I hereby reverse both rulings and
receive both exhibits as part of the record herein.
6 Article VII, section 1, of that contract made the arbitrator's award "final and bind-
ing" on both the Company and the Union Section 12 of the same article defined "the
934 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Cole, that he first serve as a mediator in an endeavor to arrive at a settlement accep-
table to both parties. This practice was adhered to in April and May 1959 with
respect to the Union's grievance under consideration, and pursuant to which the
mediator, on or about June 1, 1959, recommended that the matter be settled by the
payment, by the Company, of Ramsey's dues to August 1, 1958. The Company
agreed to do so, but the Union declined the recommendation, taking the position
"that this case had become an important issue in Local 98 and it would have to
insist on a ruling and formal arbitration." 6 Edgar Barnard, president of the local,
testified that strong feelings had been aroused because Ramsey, who had defaulted in
his dues, was working, while union members in good standing were in layoff status.
The matter was accordingly submitted to Mr. Cole for formal arbitration under the
colective-bargaining agreement.
After an additional hearing before the arbitrator "in late May 1960," attended by
representatives of the Company, the International and the Local, and the submis-
sion of briefs by both the Company and the Union, Mr. Cole, on August 12, 1960,
issued his arbitration award granting and sustaining the union's grievance that
Ramsey's employment should have been terminated for failure to pay his union dues.
However, because of the intervention of the Indiana right-to-work law, the impact
of which became effective with respect to the union-security clause of the 1955
collective-bargaining agreement upon its original expiration on August 1, 1958, the
arbitrator decided, with the Union's consent, that Ramsey "be regarded as having
been reemployed on August 1, 1958." On August 18, 1960, the Company notified
Ramsey that it was putting the award into effect.
The net result of the award, insofar as Ramsey was concerned, his having been
retained in the Company's employment during all this period, was that his seniority
was thereafter to be computed as of August 1, 1958, instead of February 10, 1942,
when he first entered the Company's employment .7 As a consequence, he was
caught in an economic reduction in force on August 22, 1960, and was in layoff
status thereafter until April 17, 1961, when he was returned to work. Had the
Union's grievance not been sustained and Ramsey's seniority not been reduced, he
would not have been caught in the August 22, 1960, layoff.
Concluding Findings
Though the pleadings and the remainder of the record as made at the hearing
present a number of issues, which number the Company and Ramsey sought to
increase by their posthearing briefs, I find it unnecessary, in order to arrive at a
decision herein, to give consideration to more than the three following issues:
(1) What effect must be given to Mr. Cole's arbitration award; (2) assuming that
the Union's demand of July 21, 1958, for Ramsey's discharge was made in good
faith because of his failure to pay dues and not for the reasons alleged in the com-
plaint, did the Union's right to insist upon that discharge survive beyond August-
1, 1958, the expiration date of the Union's security clause contained in 1955 collec-
tive-bargaining agreement; and (3) whether violations of the Act occurred within
the limitation period imposed by Section 10(b) of the Act.8
It is well settled that the Board is not bound, as a matter of law, by an arbitration
award. Though mediation and arbitration are to be encouraged in order to avoid
or reduce industrial strife, agreements between private parties cannot restrict the juris-
diction of the Board. It is the duty of the Board to exercise its jurisdiction in any case
of an unfair labor practice when, in its discretion, its interference is necessary to
function of the Arbitrator [ to] be of a judicial rather than a legislative nature. He
[had no] power to add to, to ignore or to modify any of the terms and conditions of this
Contract."
8 This finding is based on Mr. Cole's notes of the June 1 meeting
° The Union agreed, however, "that for all purposes other than the maintenance of his
seniority rights relating to job tenure, it would not object if the Company treats his
services [ from 1942] as unbroken ." This understanding and agreement was made a part
of the arbitrator's award. Consequently, Ramsey was allowed to retain the vacation
and other rights to which he might be entitled arising out of seniority dating back to 1942.
8 Because the issues have been thus limited, I have granted the International Union's
alternative motion, filed on or about October 12, 1960, to "disregard" portions of the
posthearing briefs of the Company and Ramsey dealing with "the tender of union dues"
by the Company.
INTERNATIONAL HARVESTER CO., INDIANAPOLIS WORKS 935
protect the public rights defined in the Act, or when the arbitration award con-
travenes the declared or apparent policy of the Act 9
Spielberg Manufacturing Company, supra, summarizes the conditions under which
the Board will, in the exercise of its discretion, decline to assert jurisdiction: Where
"the proceedings appear to have been fair and regular, all parties had agreed to be
bound, and the decision of the [arbitrator] is not clearly repugnant to the purposes
and policies of the Act."
All are agreed here that the arbitration proceedings were "fair and regular" as
to the parties who participated therein. It is conclusively established, however, that
Ramsey, the party most vitally affected by the award, never agreed to be bound by
that award, had no notice of the hearings in that proceeding, and did not participate
therein. Though the foregoing facts are themselves sufficient to justify exercise of
the Board's jurisdiction herein notwithstanding the arbitrator's award, there is
another reason for doing so which also disposes of the second and major issue which
I must decide herein.
Section 8(b) (2) of the Act makes it unlawful for a union "to cause or attempt
to cause an employer to discriminate against an employee in violation of" Section
8(a)(3) of the Act. While the proviso to the latter section sets up a provable
defense in the limited situation where the Union can show the existence of a contract
with a permissible union-security provision, the Board has consistently held that
to constitute that defense, the union-security clause must be "in effect at the moment
the attempted or actual [discriminatory] action is taken." Marlin Rockwell Corpo-
ration, 114 NLRB 553, 556; New Jersey Bell Telephone Company, 106 NLRB 1322.
"Whatever rights the Union may have had with respect to the delinquency of
[Ramsey] during the term of the contract which ended [July 31, 1958, by reason of
the Indiana right-to-work law], such rights could not, in view of the lapse of the
contract, thereafter be asserted." The Public Utility Construction and Gas Appli-
ance Workers of the State of New Jersey, Local 274, et al. (Public Service Electric
and Gas Company (Gas Distribution Department) ), 120 NLRB 355; see also
Haff enreff er & Co., Inc., 104 NLRB 206.
Here, throughout the entire mediation and arbitration procedings after July 31,
1958, the Union repeatedly demanded and insisted that Ramsey be discharged
because of his dues delinquency. Each such affirmative demand by the Union to
cause discrimination under Section 8(a)(3) of the Act constituted a separate
"attempt" to cause the proscribed discrimination within the meaning of Section
8(b)(2) of the Act. Hershey Chocolate Corporation, 129 NLRB 1052; Plumbers
& Pipe Fitters Local Union 214 (D. L. Bradley Plumbing and Heating Co.), 131
NLRB 942. Indeed, the record clearly establishes that, absent the Union's demands
after July 31, 1958, Ramsey's reduction in force would never have been brought
about.
The Union, in its brief, makes an appealing argument that because the Union's
original demand in July 1958 was admittedly lawful, "the fact that the Company
did not honor its contractual obligations until the conclusion of the arbitration
process [should] not enable the Company [nor Ramsey], thereby to gain by the
delay, or convert a lawful demand for discharge into an illegal one." However, the
Board decisions cited above require a different conclusion and a result adverse to the
Union's contentions..
There remains for consideration the third issue: Was the Act violated within the
6-month limitation period imposed by Section 10(b) of the Act.1e The charges
against the local and the Company in Cases Nos. 25-CA-1306 and 25-CB-419,
respectively, were filed and served, on October 21, 1960, the charge against the
International Union, Pat Greathouse, its vice president, Arthur B. Shy, its assistant
director of the International Harvester department, and Edgar Barnard, president of
the local, was filed and served on February 13, 1961. The Section 10(b) cutoff
date therefore, with respect to the Company and the local, is April 21, 1960; as to
the remaining Respondents, it is August 13, 1960.
9 N.L R.S. v Walt Disney Productions , 146 F. 2d 44 (C A. 9) ; Monsanto Chemical Com-
pany, 97 NLRB 517, enfd 205 F. 2d 763 (C A. 8) ; Wertheimer Stores Corp , 107 NLRB
1434 ; Spielberg Manufacturing Company, 112 NLRB 1080.
10 Section 10(b) provides , in pertinent part, that "no complaint shall issue based upon
any unfair labor practice occurring more than six months prior to the filing of the
charge with the Board and the service of a copy thereof upon the person against whom
11such charge is made. . . .
936 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Accordingly, no problem is presented on this phase of the case with respect to
the liability of the Company or the local, both of them having violated the Act after
April 21, 1960, or that of Barnard, who called Hill, the Company's manager of
industrial relations, on or about August 14, 1960, and then "insisted" that the Com-
pany "put the award into effect." However, with respect to the International Union,
Greathouse, and Shy, no probative evidence was offered that any of them were
engaged in unlawful conduct on or after August 13, 1960. It will therefore be rec-
ommended that the allegations of the complaint charging them with violations of
the Act be dismissed.
In sum, therefore, I find that the local, after April 21, 1960, and Barnard, after
August 13, 1960, caused and attempted to cause the Company to unlawfully dis-
criminate against Ramsey, thereby violating Section 8(b)(2) and 8(b)(1)(A) of
the Act. I further find that by reducing Ramsey's seniority on August 18, 1960,
and laying him off on August 22, 1960, the Company violated Section 8 (a) (3) and
(1) of the Act.
W. THE EFFECT OF ' THE UNFAIR LABOR PRACTICES UPON COMMERCE
The activities of the Company and the Union set forth in section III, above, occur-
ring in connection with the operations of the Company 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.
V. THE REMEDY
Having found that certain of the Respondents have engaged in unfair labor prac-
tices, I recommend that they cease and desist therefrom and take certain affirmative
action designed to effectuate the policies of the Act.
I have found that the Company on or about August,18, 1960, discriminatorily re-
duced the seniority of Thomas D. Ramsey. I therefore recommend that the Com-
pany immediately reinstate his seniority to February 10, 1942, so that he may enjoy
all the rights and privileges of such seniority as were taken away from him by the
arbitrator's award. Not being convinced that the record justifies any variance from
the remedy usually prescribed by the Board in this type of proceeding, I further
recommend that the Company, jointly and severally with Local 98, make Ramsey
whole for any loss of earnings he may have suffered as a result of the discrimina-
tion against him since August 22, 1960. Loss of earnings shall be computed in
accordance with the formula and method prescribed in F. W. Woolworth Company,
90 NLRB 289.
Upon the basis of the foregoing findings of fact, and upon the entire record in
the case, I make the following:
CONCLUSIONS OF LAW
1. The Company is engaged in commerce within the meaning of Section 2(6) of
the Act.
2. The International Union and its Local 98 are labor organizations within the
meaning of Section 2(5) of the Act.
3. By attempting to cause, and by causing, the Company to discriminate against
Ramsey, Local 98, and Barnard have engaged in and are engaging in unfair labor
practices within the meaning of Section 8(b)(2) of the Act.
4. By restraining and coercing employees in the exercise of rights guaranteed by
Section 7 of the Act, Local 98 and Barnard have engaged in and are engaging in
unfair labor practices within the meaning of Section 8(b) (1) (A) of the Act.
5. By discriminatorily reducing Ramsey's seniority on August 18, 1960, and laying
him off on August 22, 1960, the Company has engaged in unfair labor practices
within the meaning of Section 8(a)(3) and (1) of the Act.
6. The aforesaid unfair labor practices are unfair labor practices affecting com-
merce within the meaning of Section 2(6) and (7) of the Act.
7. Neither the International Union, nor its agents, Greathouse and Shy, have
engaged in violations of the Act.
[Recommendations omitted from publication.]