J. I. Case Co.

National Labor Relations Board - Board Decisions

Dec 17, 1946

71 N.L.R.B. 1145 (N.L.R.B. 1946)

In the Matter of J. I. CASE COMPANY and LOCAL 180, INTERNATIONAL
UNION, UNITED AUTOMOBILE, AIRCRAFT AND AGRICULTURAL IM-
PLEMENT WORKERS OF AMERICA, C. I. O.
Case No. 13-C-2741.-Decided December 17, 1946
Mr. Herman J. DeKoven, for the Board.
Messrs. Clark M. Robertson and 0. S. Hoebreckx, of Milwaukee,
Wis., for the respondent.
Messrs. Lawrence Carlstrom, of Milwaukee, Wis., and Harvey Kitz-
man, of Racine, Wis., for the Union.
Mr. William C. Baisinger, of counsel to the Board.
DECISION
AND
ORDER
On July 26, 1946, Trial Examiner Mortimer Riemer issued his
Intermediate Report in the above-entitled proceeding, finding that
the respondent, J. I. Case Company, had engaged in and was engaging
in certain unfair Iabor practices, and recommending that it cease and
desist therefrom and take certain affirmative action, as set forth in
the copy of the Intermediate Report attached hereto. Thereafter,
the respondent filed exceptions to the Intermediate Report and a sup-
porting brief.
The Board has reviewed the rulings made by the Trial Examiner
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 respondent's exceptions and brief, and the entire
record in the case, and hereby adopts the findings, conclusions, and
recommendations of the Trial Examiner, with the exceptions and
qualifications noted below :
U1. `The Trial Examiner has found, and we agree, that on October 8,
1945, and at all times thereafter, the respondent refused to bargain
collectively with the Union, within the meaning of Section 8 (5) of
the Act, thereby causing this strike which occurred in December of
that year. As detailed in the Intermediate Report, the respondent at
all times material herein flatly refused to consider any proposals made
by the Union which the respondent deemed to be in conflict with the
1 By orders dated October 2 and 31, 1946 , respectively , the Board denied , as untimely,
motions of the Union requesting permission to file exceptions to the Intermediate Report
and to argue orally before the Board.
71 N. L. R. B., No. 182. 1145
1146 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
terms of a letter signed by the Union on February 6, 1937,2 and in-
sisted that any new agreement must, in accordance with the terms of
said letter, recognize and not infringe upon the "right" of employees
who were not members of the Union to bargain or "deal" individually
with the respondent.3 As an affirmative defense, the respondent
contends that the Union's 1937 letter constitutes a valid and con-
tinuing written collective bargaining agreement whereby the Union
agreed to waive "certain privileges or rights which, without such an
agreement, it might be entirely free to exercise" ; that the agreement
is still binding upon the Union; and that, therefore, the respondent
was legally justified in refusing to bargain as to those demands by
the Union which conflicted wlth`the agreement.
We find it unnecessary to decide in this case whether the letter in
question constituted a valid agreement when made, or for a reason-
able time thereafter, for we are satisfied and find that, in any event,
it may not be relied upon to justify the position taken by the respond-
ent at all times material hereto. The letter purported to bind the
Union for an indefinite period of time and had been signed approxi-
mately 8 years before the commencement of the negotiations covered
by the complaint. It is our opinion, and we find, that this is an
unreasonable period to give effect to a letter which purports to limit
the scope of current collective bargaining by the statutory bargaining
agent. To hold otherwise and to sanction the letter as a perpetual
waiver by the Union would forever impair "its efficacy as a collective
bargaining agency" and forestall future collective bargaining upon
matters which are frequent subjects of negotiations, contrary to the
public policy expressed in the act.4 Indeed, acceptance of the respond-
ent's position would have the effect of nullifying its continuing obliga-
tion under the Act to bargain collectively with the Union concerning
modification of any agreement previously concluded .5
The respondent contends that, apart from the 1937 letter, its posi-
tion with respect to reserving to non-members of the Union the right
to bargain individually was proper under the holding of the Supreme
Court of the United States in J. I. Case v. N. L. R. B .' and under the
proviso to Section 9 (a) of the Act. We do not agree. In the Case
a In this letter, the Union agreed, among other things, to recognize "as long as Local ISO
is the only group collective bargaining agency," the "unquestioned right of any emploNee"
to join or refrain from joining a union and the right of "any- individual employee not a
member of Local 180 to deal individually with the Company "
Among the proposals which the respondent rejected as being in conflict with the letter,
was the one tor a closed shop and check-oft
'Thus, for example, the respondent's recognition of the Union as statutory agent was
subject to the asserted 'right" of non-nienibers to bargain individually
See N. L R B v Recd and Princc Manufacturing Company, 118 P (2d) 874 (C C A 1).
See N. L R B v Sands Manufacturing Company, 306 U S 332, N L. R B V Newark
Mo^ningLedge) Co,120F.•(2d) 262 (C C A 3)
321 U S 332
J. I. CASE COMPANY 1147
decision , the Supreme Court recognized the possibility of a permissible
area of individual bargaining, but clearly held that the right of indi-
vidual bargaining was subordinate to the collective agreement and to
the collective bargaining rights of the statutory representative, and
could not be exercised in derogation thereof. In other words, an em-
ployee and his employer may bargain individually with respect to
those aspects of the employment relationship which are not covered
by collective bargaining agreements , "provided it is not inconsistent
with the collective agreement, or does not amount to , or result from,
or is not a part of an unfair labor practice."
Thus, the collective bargaining agreement as finally consummated
defines or establishes the permissible area within which such individ-
ual bargaining may take place . Contrary to this well -established
principle, the respondent took the position that the statutory repre-
sentative must bargain subject to the "right" of non -members of the
Union to bargain individually and that the collective agreement could
contain no provisions which conflict with such individual bargaining.
Indeed, as found by the Trial Examiner, the respondent arbitrarily
rejected and refused to discuss several clauses in the Union 's proposed
agreement because they were in conflict with the respondent's concept
of the right of individual bargaining.
Nor do we think the respondent can take refuge in the proviso to
Section 9 (a), for clearly it was attempting to do more than safe-
guard the statutory right of individual employees to present griev-
ances to their employers. Thus, at the December 4, 1945, bargaining
conference , when the Union proposed an addendum to the recognition
clause of its proposed contract, setting forth the proviso to Section 9
(a) with the qualifying statement that the word "grievance" excluded
"any question concerning hours, wages, or working conditions," the
respondent rejected the addendum as being in conflict with the prin-
ciple of individual bargaining set forth in the Union's letter of
February 6, 1937. Under the holding in the Hughes Tool case,' this
addendum properly limited the scope of individual bargaining as to
grievances between employees and management . Moreover , the re-
spondent flatly rejected the Union's proposal that its shop stewards
participate in the first step of the grievance procedure. The respond-
ent's position on this point was "that if an individual could not present
his grievance in the absence of a steward, he would be denied the right
which Section 9 (a) gives him to present his grievance to his em-
plover." In the Hughes Tool case, the Court adopted the Board's
view that, whenever the employee, individually seeks to present a
grievance to his employer, the statutory representative should be
notified and , "on its request . . . be admitted to the hearing . . "
' Hughes Tool Company v N L R B , 147 F. ( 2d) 69 ( C C A 5).
1148 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
The respondent further contends that the closed shop and check-off
provisions requested by the Union were rejected not only because they
conflicted with the Union's 1937 letter but also because the respondent
opposed them as a matter of principle, and that, therefore, the refusal
to accede was not violative of the Act. However, we are convinced on
the basis of this record, and we find, as did the Trial Examiner, that
the respondent was primarily prompted to reject the closed shop pro-
posal because it conflicted with the Union's 1937 letter. This fact is
clearly revealed in the letters, set forth in detail in the Intermediate
Report, which the respondent sent to the employees from time to time
during the period of negotiations.
Our finding, as well as the Trial Examiner's, that the respondent
refused to bargain collectively as to the closed-shop and check-off
proposals, is grounded not on its failure to grant them, but rather on
its repeated refusal even to consider or discuss them as a proper
subject for collective bargaining, which of necessity foreclosed any
possibility of agreement.
Under all the circumstances, we find that on October 8, 1945, and
at all material times thereafter, the respondent refused to bargain
collectively with the Union in violation of Section 8 (5) of the Act,
by refusing to recognize the Union unconditionally as the exclusive
bargaining representative of all employees in the appropriate unit,
including non-members of the Union; by insisting, as a condition
precedent to concluding any agreement, that the Union agree to the
principle of individual bargaining by non-members ; by utilizing the
Union's 1937 letter to preclude collective bargaining with respect to
certain proposals made by the Union; and by refusing to discuss or
even consider any request made by the Union, including its request
for a closed shop and check-off, which may have conflicted with the
terms of the Union's 1937 letter.
2. The Trial Examiner found that the respondent, by sending
certain letters to its employees setting forth the position taken by it
during bargaining negotiations with the Union, violated Section 8
(1) and (5) of the Act. In its exceptions, the respondent contends
that this finding is outside the scope of the complaint as particular-
ized in the Bill of Particulars. At the hearing counsel for the Board
stated on the record that no contention was made that the issuance
of the letters constituted an independent violation of the Act, and
that the letters were introduced merely as evidence of the position
taken by the respondent in its negotiations with the Union. We
agree with and hereby sustain the respondent's exceptions in this
respect and, without passing on the merits of the issue involved, we
hereby reverse the Trial Examiner's unfair labor practice finding with
respect to the letters.
J. I. CASE COMPANY
ORDER
1149
Upon the entire record in the case, and pursuant to Section 10 (c)
of the National Labor Relations Act, the National Labor Relations
Board hereby orders that the respondent, J. I. Case Company, Racine,
Wisconsin, and its officers, agents, successors, and assigns shall:
1. Cease and desist from :
(a) Giving effect to the letter signed by the Committee for Local
180, U. A. W. A. on February 6, 1937, so as to preclude or limit
collective bargaining with Local 180, International Union, United
Automobile, Aircraft and Agricultural Implement Workers of Amer-
ica, C. I. 0., on any proposal which is or may be in conflict therewith;
(b) Interfering with or impeding collective bargaining with Local
180, International Union, United Automobile, Aircraft and Agricul-
tural Implement Workers of America, C. I. 0., by insisting that non-
members of said union shall have the right to bargain individually
with the respondent in derogation of said union's status and functions
as the duly designated exclusive representative of employees of the
respondent for the purposes of collective bargaining;
(c) Refusing to bargain collectively with Local 180, International
Union, United Automobile, Aircraft and Agricultural Implement
Workers of America, C. I. 0., as the exclusive representative of all
production and maintenance employees of the respondent employed
at its Racine County plants, excluding : (a) cooperative students not
to exceed 12 in total number and not to exceed 6 in the plants at any
one time, (b) indentured apprentices not to exceed a total of 20 at
the plants, and not to exceed 4 in each tool and die department and
2 in any other department or craft grouping, (c) work managers,
superintendents, assistant superintendents and their personal clerical
help, general foremen, foremen and assistant foremen, including those
who have the right to hire and discharge, (d) executives, salesmen
and heads of all non-productive departments, (e) employees of the
cost department, engineering department, dynamometer room, plan-
ning and rates and methods departments, employment office, medical
department, safety and compensation department, chemical and metal-
lurgical department, advertising department, printing department,
plant guards, fire department, and the main office, (f) tool designers,
telephone operators and supervisory inspectors, and (g) all Racine
Branch office employees, production control clerks, pay-roll depart-
ment employees, and timekeepers, with respect to wages, rates of
pay, hours of employment, or other conditions of employment;
(d) Engaging in any other acts in any manner interfering with
the efforts of Local 180, International Union, United Automobile,
Aircraft and Agricultural Implement Workers of America, C. I. 0.,
1150 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
to negotiate for or represent the employees in the aforesaid bargaining
unit as their exclusive bargaining agent.
2. Take the following affirmative action which the Board finds will
effectuate the policies of the Act:
(a) Upon request, bargain collectively with Local 180, Interna-
tional Union, United Automobile, Aircraft and Agricultural Imple-
ment Workers of America, C. I. 0., as the exclusive bargaining repre-
sentative of all employees in the bargaining unit described herein with
respect to wages, rates of pay, hours of employment, or other condi-
tions of employment; if an understanding is reached on such matters,
embody said understanding in a signed agreement; and, if requested
to do so by said union, incorporate in the signed agreement a clause
granting it recognition as exclusive collective bargaining representa-
tive of all employees in the appropriate unit;
(b) Upon application, offer to those employees who went on strike
on December 26, 1945, and who have not previously applied for re-
instatement, immediate and full reinstatement to their former or
substantially equivalent positions, without prejudice to their seniority
or other rights and privileges, in the manner set forth in Section 5 of
the Intermediate Report, entitled "The Remedy," placing those em-
ployees for whom no employment is presently available upon a pref-
erential list and offering them employment as it becomes available, in
the manner therein set forth;
(c) Make whole the employees specified in paragraph 2 (b) above,
for any loss of pay they may suffer by reason of the respondent's
refusal, if any, to reinstate them, by payment to each of them of a
sum of money equal to the amount that he normally would have
earned as wages during the period from five (5) days after the date
on which he applies for reinstatement to the date of the respondent's
offer of reinstatement, or placement of his name upon a preferential
list, less his net earnings, if any, during said period.
(d) Post in conspicuous places at its main works and other works
at Racine, Wisconsin, copies of the notice attached hereto, marked
"Appendix A." 8 Copies of said notice, to be furnished by the Re-
gional Director for the Thirteenth Region, shall, after being duly
signed by the respondent's representative, be posted by the respondent
immediately upon receipt thereof and maintained by it for sixty (60)
consecutive days thereafter, in conspicuous places, including all places
where notices to employees are customarily posted. Reasonable steps
shall be taken by the respondent to insure that said notices are not
altered, defaced or covered by any other material ;
8 In the event this Order is enforced by decree of a Circuit Court of Appeals, there shall
be inserted, before the words "A Decision and Order," the words : "A Decree of The United
States Circuit Court of Appeals Enforcing."
J. I. CASE COMPANY 1151
(e) Notify the Regional Director for the Thirteenth Region in
writing, within ten (10) days from the date of this'Order what steps
it has taken to comply therewith.
APPENDIX A
NOTICE TO ALL EMPLOYEES
Pursuant to a Decision and Order of the National Labor Relations
Board, and in order to effectuate the policies of the National Labor
Relations Act, we hereby notify our employees that :
WVE WILL NOT give effect to the letter signed by the Commit-
tee for Local 180, U. A. W. A., on February 6, 1937, so as to
preclude or limit collective bargaining with Local 180, Inter-
national Union, United Automobile, Aircraft and Agricultural
Implement Workers of America, C. I. 0., on any proposal which
is or may be in conflict therewith.
WVE WILL NOT interfere with or impede collective bargain-
ing with Local 180, International Union, United Automobile,
Aircraft and Agricultural Implement Workers of America,
C. I. 0., by insisting that non-members of said union shall have
the right to bargain individually with us in derogation of said
union's status and functions as the duly designated exclusive
representative of our employees for the purposes of collective
bargaining.
WE WILT. NOT engage in any other acts in any manner inter-
fering with the efforts of Local 180, International Union, United
Automobile, Aircraft and Agricultural Implement Workers of
America, C. I. 0., to negotiate for or represent the employees
in the unit described below as their exclusive bargaining agent.
AVE WILL BARGAIN collectively upon request with the above-
mentioned union as the exclusive representative of all the em-
ployees in the bargaining unit described herein with respect to
rates of pay, wages, hours of employment, or other conditions
of employment; if an understanding is reached, embody such
understanding in a signed agreement; and if requested to do so
by said union, incorporate in the signed agreement a clause grant-
ing it recognition as exclusive collective bargaining representa-
tive of all employees in the bargaining unit described as follows :
"all production and maintenance employees excluding: (a) co-
operative students not to exceed 12 in total number and not to
exceed 6 in the plants at any one time, (b) Indentured apprentices
not to exceed a total of 20 at the plants, and not to exceed 4 in
each tool and die department and 2 in any other department
71 7 714-47-voI 71-74
1152 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
or craft grouping, (c) work managers, superintendents, assistant
superintendents and their personal clerical help, general foremen,
foremen and assistant foremen, including those who have the
right to hire and discharge, (d) executives, salesmen and heads
of all non-productive departments, (e) employees of the cost
department, engineering department, dynamometer room, plan-
ning and rates and methods departments, employment office,
medical department, safety and compensation department, chemi-
cal and metallurgical department, advertising department, print-
ing department, plant guards, fire department and the main
office, (f) tool designers, telephone operators, and supervisory
inspectors, and (g) all Racine Branch office employees, pro-
duction control clerks, pay-roll department employees, and
timekeepers."
WE WILL OFFER, upon application, to those employees who
went on strike December 26, 1945, immediate and full reinstate-
ment to their former- or substantially equivalent positions, or in
the event employment is not immediately available, placement
upon a preferential list, without prejudice to any seniority or
other rights and privileges previously enjoyed.
WE wILL make whole the employees who went on strike
December 26, 1945, for any loss of pay suffered as a result of our
refusal, if any, to reinstate them, for the period from five (5)
days after the date of application for reinstatement to the date
of our offer of reinstatement or placement upon a preferential
list.
J. I. CASE COMPANY,
E'irmployer.
By ------------- * ------------------
(Representative ) ( Title)
Dated ------------------
This notice must remain posted for 60 days from the date hereof,
and must not be altered, defaced, or covered by any other material.
INTERMEDIATE REPORT
Mr. Herman J. De Koven, for the Board.
Messrs. Clark M. Robertson and O. S. Hoebreckr, of Milwaukee, Wis, for the
respondent.
Messrs. Lawrence Carlstrom, of Milwaukee, Wis., and Harvey K tzman, of
Racine, Wis., for the Union.
ST 1TEMENT OF THE CASE
Upon an amended charge duly filed May 21, 1946, by Local 180, International
Union, United Automobile, Aircraft and Agricultural Implement Workers of
America, 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 Thirteenth Region (Chicago, Illinois), issued its com-
J. I. CASE COMPANY 1153
plaint dated May 22, 1946, against J. I. Case Company, Racine, Wisconsin, herein
called the respondent. alleging that respondent engaged in and was engaging
in unfair labor practices within the meaning of Section 8 (1) and (5) and Sec-
tion 2 (6) and (7) of the National Labor Relations Act, 49 Stat. 449, herein called
the Act. Copies of the complaint, amended charge and notice of hearing were
duly served upon the respondent and the Union.
Concerning the unfair labor practices, the complaint alleged in substance that :
(1) the respondent on or about October 8, 1945, and thereafter, refused to bargain
collectively with the Union as the exclusive representative of its employees in
an appropriate unit, despite the fact that the Union had been and is the ex-
clusive representative of the respondent's employees; (2) by these acts the re-
spondent interfered with, restrained, and coerced its employees in the exercise
of the rights guaranteed in Section 7 of the Act; and (3) as a consequence of
the respondent's refusal to bargain, the employees went on strike on December
26, 1945, which strike was current at the time of the issuance of the complaint
herein.
On May 29, 1946, the respondent moved that the complaint be made more
definite and certain concerning the acts wherein the respondent allegedly failed
and refused to bargain collectively with the Union, and to set forth the acts which
allegedly interfered with, restrained, and coerced employees. The respondent
also moved that its time to answer be extended 10 days from the date of the
service of the amended complaint and that the hearing be adjourned to a date
not less than 15 days after service of the amended complaint On May 31, 1946,
counsel for the Board served a Bill of Particulars, in response to the foregoing
motion, and the Regional Director filed and served an order denying the respon-
dent's request for an extension of time in which to file an answer and for an ad-
journment of the hearing, with leave to renew before the Trial Examiner at the
hearing. The said motion was not thereafter renewed.
The Bill of Particulars stated that the respondent in violation of Section 8
(1) and (5) of the Act, had failed and refused to bargain collectively with the
Union in the following respects.
(1) The respondent has taken the position that employees who are not
members of the Union have a right to deal individually with the respondent,
including the right to make their own contracts of employment with the
Respondent and to adjust grievances with the respondent.
(2) The respondent has refused to bargain collectively with the Union
with respect to demands made upon it by the Union concerning various terms
and conditions of employment, on the ground that such demands are or may
be in conflict with the provisions of a certain document dated February 6, 1937
addressed to "J. I. Case Company and All Case Employees," which was signed
by a committee of the Union on or about February 6, 1937.
(3) The respondent has taken the position that it will not bargain col-
lectively with the Union with respect to any terms or conditions of employ-
ment which are or may be in conflict with the provisions of the afore-
mentioned document dated February 6, 1937.
The respondent filed an answer dated June 6, 1946, in which it neither admitted
nor denied certain factual material concerning the jurisdictional allegations of
the complaint but did deny the commission of the unfair labor practices alleged.
Pursuant to notice, a hearing was held at Racine, Wisconsin, from June 11 to
14, 1946, both dates inclusive, before Mortimer Riemer, the undersigned Trial
Examiner duly designated by the Chief Trial Examiner The Board and the
respondent were represented by counsel and the Union by its representatives and
all participated in the hearing. Full opportunity to be heard, to examine and
1154 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
cross-examine witnesses, and to introduce evidence bearing on the issues was
afforded all parties.
At the conclusion of tile Board's case, the respondent moved to dismiss the
complaint The motion was denied. The Board's motion, at the conclusion of
the hearing, to conform the pleadings to the proof was not opposed. It is herein
granted. Ruling was reserved on the respondent's motion to dismiss and it is
disposed of as hereinafter indicated An informal discussion of the issues was
presented by counsel for the Board at the hearing's conclusion and a date fixed for
filing of briefs. Thereafter the respondent submitted its brief.
Upon the entire record in the case and from his observation of the witnesses,
the undersigned makes the following :
FINDINGS OF FACT
I THE BUSINESS OF THE RESPONDENT
The respondent is now, and has been at all times material herein, a Wisconsin
corporation operating and maintaining several plants, including plants in Racine
County, Wisconsin, where it is and has been engaged in the manufacture and
sale of farm implements and, farm machinery.
The respondent, in the course and conduct of its business and in the operation
of its Racine County plants during the past year (1945), purchased raw mate-
rials valued in excess of $5,000,000, of which approximately 80 percent was
shipped to its Racine County plants from points outside the State of Wisconsin
and during the same period manufactured products valued in excess of $35.-
000,000, of which approximately 80 percent was shipped from its Racine County
plants to points outside the State of Wisconsin.
The respondent concedes that for the purpose of this proceeding it is engaged
in commerce within the meaning of the Act.
II. THE ORGANIZATION INVOLVED
Local 180, International Union, United Automobile, Aircraft and Agricultural
Implement Workers of America, affiliated with the Congress of Industrial Organ-
izations, is a labor organization admitting to membership employees of the
respondent's Racine County Plants'
III. THE UNFAIR LABOR PRACTICES
A. The refusal to bargain collectively
1. The appropriate unit
At the hearing, a stipulation was entered into between counsel for the Board
and the respondent that the unit pleaded in the complaint and herein set forth
was the appropriate unit: all production and maintenance employees of the
respondent's Racine County plants, excluding: (a) cooperative students not
to exceed 12 in total number and not to exceed 6 in the plants at any one time,
(b) indentured apprentices not to exceed a total of 20 at the plants, and not to
exceed 4 in each tool and die department and 2 in any other department or craft
grouping, (c) works managers, superintendents, assistant superintendents and
their personal clerical help, general foremen, foremen and assistant foremen
including those who have the right to hire and discharge, (d) executives, sales-
men, and heads of all non-productive departments, (e) employees of the cost
department, engineering department, dynamometer room, planning and rates
1 The facts found in the foregoing two sections are based upon stipulations entered into
between counsel for the Board and the respondent
2 This includes the 'Main Works and the South Works, the latter sometimes referred to as
the Tractor Woiks.
J. I. CASE COMPANY 1155
and methods departments, employment office, medical department, safety and
compensation department, chemical and metallurgical department, advertising
department, printing department, plant guards, fire department, and the main
office, (f) tool designers, telephone operators and supervisory inspectors, and
(g) all Racine Branch office employees, production control clerks, pay-roll de-
partment employees, and timekeepers!
The undersigned finds that the above-described unit at all times material
herein constituted and now constitutes a unit appropriate for the purposes of
collective bargaining within the meaning of Section 9 (b) of the Act.
2. Representation by the Union of a majority in the appropriate unit
The complaint alleged that on October 8, 1945, and thereafter, a majority of
the employees in the unit described above, designated the Union as their repre-
sentative for the purposes of collective bargaining with the respondent. It was
stipulated by and between counsel for the Board and the respondent that prior
to October 8, 1945, and at all times thereafter, a majority of the respondent's
employees in the above unit designated the Union as their representative for
the purposes of bargaining collectively with the respondent. It was stipulated
further, that prior to October 8, 1945, and at all times thereafter, the Union
was and now is the exclusive representative of all the respondent's employees
in the above-described unit.
The undersigned finds that on October 8, 1945, and at all times thereafter, the
Union was, and now is, the,duly designated representative of the majority of the
employees in the aforesaid appropriate unit, and that, by virtue of Section 9 (a)
of the Act, the Union at all times was, and now is, the representative of all
the respondent's employees in such unit for the purposes of collective bargain-
ing with respect to rates of pay, wages, hours of employment or other conditions
of employment
3. The collective bargaining background of the present controversy and
chronology of events from 1936 to 1945
An understanding of the respondent's relations with the Union commencing
in 1936, and continuing thereafter to 1945, is important in evaluating the ulti-
mate charge herein, that the respondent refused to bargain with the Union.
Counsel for the respondent vigorously attacked the introduction of any evidence
concerning the relations between the parties antedating October 8, 1945. At
the conclusion of the hearing and later in its brief, the respondent moved "to
strike all testimony relating to the transactions which took place prior to Oc-
tober 8, 1945, on the ground that such evidence is beyond the scope of the com-
plaint." Counsel for the Board, however, stated that his purpose in adducing
such testimony was "to apprise the Board of the background." The "back-
ground" of this case, the undersigned deems essential. The respondent's mo-
tion to dismiss on the ground above stated is denied. However, in considering
thgse events and making findings thereon, the undersigned will use the findings
only for what interpretive light they throw on the main issue. No finding will
be made that any or all acts or conduct of the respondent, occurring prior to
October 8, 1945, were violative of the Act.
The Union commenced organization of the respondent's employees in Septem-
ber, 1936. On September 23, the International Union, United Automobile Work-
ers of America, affiliated with the American Federation of Labor, issued its
3It was further stipulated that the above-mentioned rates and methods departments and
production control cleiks were formerly called time study department and production
department office clerks, respectively.
1156 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
charter to the Union.` Thereafter and in October 1936, the Union sought un-
successfully to negotiate an agreement with the respondent. On October 26,
1936, the Union called a strike.
The respondent and the Union first met to negotiate a strike settlement on
January 29, 1937. The Union was represented by its bargaining committee
including Harvey Kitzman, and Frances H. Wendt, then counsel for the Union,
and at the time of the hearing, Mayor of Racine, Wisconsin. Also present was
Henry L. McCarthy, a representative of the then Governor of Wisconsin, Phillip
La Follette. The respondent was represented by its officers, including President
Leon R. Clausen. The findings that follow hereafter are based upon the credible
and uncontroverted testimony of Wendt and Kitzman. At the conference, the
Union presented its demand that it be recognized as the sole and exclusive bar-
gaining representative for the production and maintenance employees o Clausen
countered this demand with the statement that the respondent had an agreement
with an independent union, the Independent Employees Council, hereafter called
the Council, and that the Union could not be accorded exclusive recognition.
The union representatives asserted that its majority membership entitled it to
exclusive recognition and this representation was not challenged Clausen stated
that because of the agreement with the Council, he could not grant exclusive
recognition to the Union for if the Union was accorded exclusive recognition it
would discriminate against the Council members. When Clausen was assured
that no discrimination would be practiced, he asked for a writing to present to'the
Council in order to obtain a "release" of the respondent's limited Council recog-
nition, as a condition to further negotiations with the Union.
At another meeting held on February 5, 1937, the respondent submitted to the
Union for signature by its representatives, a letter addressed to the respondent
and the Council under which in part the Union, for as long as it "is the only
group collective bargaining agency," would agree to "The full recognition of the
right of any individual employee not a member of Local 180 to deal individually
with the Company " The union representatives objected to this letter and
refused to accept it. Although opposed to the entire document, particular objec-
tion was lodged against the clause above, which recognized "the right of any
individual employee not a member of Local 180 to deal individually with the
Company." McCarthy sought to assure the Union that the letter was meaningless
and was intended only to satisfy, according to Wendt's testimony, "Mr. Clausen's
whims." None-the-less, the committee persisted in its opposition to the document.
According to Kitzman, McCarthy stated that unless the Union signed the letter
negotiations would end.
That night Clausen attended a meeting of the governing board of the Council
and reported on the Union's demands for recognition and the concessions that
he would grant. Clausen opined that the Union had a majority and he would
have to concede it exclusive recognition. He stated that he would no longer
recognize the Council for its members and if they wished to be represented as a
group it would have to be through the Union. Non-union members would however,
still retain their right to bargain individually with the respondent.
At a further conference on February 6, the Union made clear its continued
opposition to the letter. Whereupon, Clausen talked of his "moral obligation" to
the Council ; that he had promised that he would recognize it and felt obligated
to do so; expressed fear that its members would not be taken into the Union;
+ At the time the charter was issued, International Union, United Automobile Workers of
America, was a member of the Committee for Industrial Organization, and had been sus-
pended from the American Federation of Labor by the latter s Executive Council on August
5, 1936. This action was afflimed by the 56th annual convention of the American Federa-
tion of Labor in November 1936 -
5 At this time the Union had approximately 1450 dues paying members out of a total
production and maintenance payroll of between 1950 and 2000 employees.
J. I. CASE COMPANY 1157
and that it was his duty to assure Council members the right to bargain
individually with the respondent. At this point the meeting was about to break
tip, but McCarthy asked for and obtained a recess and an opportunity to dis-
cuss the matter with management. On convening after recess, Clausen told the
conferees that he had to have the submitted document signed , for the reason as
Wendt testified, "in order to go to the Independent Employees Council and ask
them to relieve him of his promise to them " Wendt testified further that
Clausen "informed us that that document would never be used by the company,
and that he merely wished to use it to show the members of the Independent
Employees Council, and that- it would then be placed in his confidential files." 6
The union committee met separately with McCarthy who urged that the document
be signed in order not to disrupt further negotiations. This was agreed to
subject to certain changes being made in the document by the respondent. There-
after, the respondent drafted a new letter which was signed by the union com-
mittee. This letter, the subject matter from then on, of extensive debate and
conflict and the heart of the present controversy is herein fully set forth:
J. I. CASE COMPANY AND ALL CASE EMPLOYEES, FEBRUARY 6, 1937.
Racine, Wisconsin.
GENTLEMEN : As long as Local 180 is the only group collective bargaining
agency for hours, wage and working conditions for Racine Case shop
employees, we will agree for Local 180 and the U. A. W. A.-
1. That all grievances or unadjusted complaints will be carried through
normal channels of adjustments until they are presented to the President of
the Company or, in his absence, the next ranking officer, before any strikes,
interruptions or similar action.
2 To full recognition of the unquestioned right of any employee to either
join a union or similar association of his own choosing, or to refrain from
joining. _
3. That there will be no activities regarding unions, union business or
union membership on the Case Company's property, except normal functions
in presenting grievances or bargaining.
4. That there will be no coercion, intimidation or threats used against the
Case employees regarding union membership.
5. That we will at all times cooperate with the foremen and the manage-
ment in the maintenance of harmony and discipline in the shops in accordance
with shop rules
6. The full recognition of the right of any individual employee not a
member of Local 180 to deal individually with the Company'
7. That in the future there will be no interference with the free right of
the Company to the use of its property or with the free right of any employee
of the Case Company to come and go to work unmolested, in consideration
of the Company refraining from production in case more than 50% of the
employees are out on strike.
COMMITTEE FOR LOCAL 180, U. A. W. A.,
FRANK J. SAHORSKE.
HARVEY H. KITZMAN.
WALTER SEEHAFER.
JOHN A. ROSE.
THOR W. FAUCETTE.
Z. SHooP.
(S)
(S)
(S)
(S)
(S)
(S)
6 Kitzman testified to the same effect As indicated above this testimony is credible and
uncontroverted Clausen did not testify According to Kitzman, Clausen's position was
that he could not bargain or make any agieement with the Union until relieved by the
Council of his obligation to deal with it as collective bargaining agent
7Italics added.
1158 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
That night at the governing board of the Council, Clausen presented and read
the letter and asked the Council to relinquish its rights as a bargaining agent.
The next day, the governing board of the Council passed this resolution releasing
the respondent from its members-only agreement.
It was moved and seconded that the Independent Employes' Council release
the J. I. Case Company from its agreement with the Council relative to
collective bargaining on the matter of hours, wages and working conditions
for its members, upon the condition, however, that the J I. Case Company
enter into individual contract with the members of the independent's Em-
ployes' Council relative to employment with the Company.'
The, respondent and union representatives met again on February 7. The
Union was informed that the letter had been presented to the Council which had
agreed to release Clausen from "his promise of recognition." Negotiations en-
sued and agreement was reached concerning hours and other conditions of
employment. Thereafter the respondent drafted a Statement of Policy embody-
ing the negotiated and agreed upon matters. This document, although dated
February 6 by the respondent, was in fact submitted some 2 or 3 days later. The
respondent was informed that its draft would have to be approved by the union
membership. Approval was at first withheld because of lack of reference to
wages. A wage clause was then negotiated establishing a minimum wage and a
5 percent general wage increase to those not affected by the minimum established.
When this had been achieved, the membership approved the Statement of Policy.
The employees started to return to work on February 12, 1937.
The afore-mentioned Statement of Policy was not a trade-union agreement
or contract in the accepted sense in which those terms are used It was rather
a statement setting forth what the respondent would undertake in answer to
the Union's demands Since it was important in establishing the employer
employee relations that thereafter followed, pertinent provisions are herewith
presented :
FEBRUARY 6, 1937
To the BARGAINING COMMITTEE LOCAL 180 U. A. W. AND TO CASE Empi,oYEEs,
Racine, Wisconsin.
In the interest of settling the interruption to operation now existing in
the Case Plants at Racine, the Case Company makes the following state-
ment :
1. The Company will deal with the bargaining committee of Local 180
of U. A. W. A as the only group collective bargaining agency regarding
hours, wages and working conditions affecting Racine Case employees
Nothing in this statement shall abridge the right of any individual em-
ployee, who is not a member of Local 180, to deal individually with the
Company
`2 The Committee demands certain machinery for collective bargaining
in the future, providing for-
(a) Designation of management representatives;
(b) Designation of time and place of regular meetings;
(e) A system of presenting and adjusting grievances.
The Company has accepted this demand and the following detail method
of procedure is agreed to: -
Any employee who is a member of Local 180 U. A W. and who wishes
to present a grievance shall first take the matter up with his foreman
Failing an adjustment satisfactory to him, the employee may request his
8 Between February 12 and March 31, 1937, some 400 Council members joined the Union
and thereafter it ceased to function. I
J. I. CASE COMPANY 1159
appropriate committee man (designated by Local 180 U A. W.) to par-
ticipate with him in negotiating the matter with the foreman. If no sat-
isfactory adjustment is then reached the committee man may request the
foreman to join him and the steward (designated by Local 180 U. A. W.)
in presenting the matter to the department superintendent. In case no
satisfactory agreement is reached as to the disposition of the case at this
point, the committee man or steward shall submit the grievance to the
bargaining committee which will act upon it or present it for discussion
at the next regular meeting of the Bargaining Committee and the designated
representatives of the Company.
J. I. CASE COMPANY,
By H. H BIGGERT,°
Vice-President.
It is appropriate here also to consider the February 6, 1937, letter signed by
the Union. This was not a negotiated trade-union agreement, although it is
true that pursuant to union demands certain changes were incorporated therein.
It was signed on an "or else" basis. Kitzman put it this way: it was "Either
get your John Henrys on there or the meetings are over". It seems clear from
the testimony, that the Union signed it because Clausen wanted the letter to
secure a release from the Council. The Union's committee did not believe it
was a binding bilateral contract, never treated it as such, and for this reason,
did not submit the letter to the membership for approval," a requirement
of the Union's constitution, in the case of a contract covering hours, wages and
other working conditions, and a step taken in the case of the Statement of
Policy.
Some few days after the employees returned to work, a stoppage occurred at
the South Works because the respondent had distributed to all of its supervisory
personnel and posted on bulletin boards a notice signed by Clausen and Biggert,
interpreting its agreement with the Union, and attaching a copy of the February
6, letter The Union's committee protested to Manager Thon3pson, of the
South Works, that the posted and distributed notice was not a correct interpreta-
tion of the agreement and further, that the posting of the February 6, letter
was a direct violation of Clausen's promise to keep it confidential. Thereafter,
an order was issued and the notices were collected and removed from all bulletin
boards
This notice is important because it indicates how the respondent viewed its
relations to the Union, a relationship it has consistently followed ever since.
Set forth are the portions relevant to the present discussion :
To va'rions Officers, Department Heads, Foremen and Others in a supervisor?/
capacity.
In view of the misleading statements that have appeared in the public
press regarding the Case strike, it is important that our own employees,
especially those in a supervisory capacity, know the exact facts which are
as follows :
1. Representation. In the future as in the past all Case employees may
bargain and deal with the Company individually or collectively, as they
" Other paragraphs dealt with lay-offs, wage adjustments , hours of work , and the wage
increase
10 hitnuan testified the letter was not submitted to the membership for its approval
"because we never understood that to be an agreement We never felt that it was an
agi eeinent and we didn ' t feel bound by it as an agreement ." He testified further :
11 . . we didn ' t care what Mr Clausen did with it . . . We signed it because
Mr Clausen wanted it . . . What lie did with it was none of our business "
1160 DECISIONS OF NATIONAL LABOR RELATIONS BOARD .
choose. If they choose to bargain collectively it will be necessary to bargain
through one committee instead of having the option of two or three as they
had heretofore . This one committee will be the bargaining committee of
Local 180, U. A. W. A., as the Company has agreed to bargain collectively
only with this committee in the interest of strike settlement and to promote
harmony in the shops.
It should be understood, however, that this does not prevent any employee
who chooses from dealing with the Company individually, and
It should also be understood that no employee is required to join Local
180 or any other organization against his wishes.
Certain guarantees, copies of which are attached, this referred to the
February 6, 1937, letter] have been made by Local 180 to the Company
and all Case employees, including the Independent Employes' Council In
view of these guarantees the Independent Employes' Council has agreed to
discontinue collective bargaining with the Company until further notice
The Company has an oral and written obligation to deal with the Independ-
ent Employes' Council, which obligation, of course, it would carry out to
the letter ; however, the Independent Council have released the Company
from this obligation in the interest of settling the strike and promoting
harmony in the shops.
It is our understanding that the Independent Employes' Council has not
surrendered any of its rights and only this one activity is discontinued. It
may, in the future, engage in any other activity except collective bargain-
ing, and it may present petitions or grievances to the Company, and its mem-
bers can bargain individually with the Company.
You will note that this arrangement and these guarantees fully protect
the rights of the individual employee and especially his lights to bargain
and to come and go to work unmolested.
It will also be noted that there is no requirement whatever that any Case
employee shall join Local 180 or any other organization unless he desires
to do so.
In other words, a Case employee is just as free as he ever was to determine
his relationships with the Company, except for the one restriction on collec-
tive bargaining.
The relations between the parties from February 1937 to early 1942, were
governed by the respondent's Statement of Policy, previously referred to. Some
changes, not pertinent to the present discussion were negotiated over the years
but the basic document remained in effect. Late in 1941, or early in 1942, the
Union submitted a new contract, which proposed to alter the Statement of
Policy. Among other things, the Union sought sole recognition, a union shop,
check-off, and a clause which authorized union participation in all stages of the
grievance procedure. In February and March, 1942, several meetings were held
between the parties to discuss the new contract. No agreement was reached,
the respondent objecting to the grant of exclusive recognition and insisting on
the right of non-union employees to deal individually with it. The respondent
asked further that the Union's proposed contract reaffirm the provisions of the
February 6, 1937 letter. The Union insisted that in view of its majority status,
it was entitled to exclusive recognition and that the February 6, 1937, letter was
not an agreement and was never so'intended.
In April 1942, the dispute was certified to the National War Labor Board,
hereinafter called War Labor Board, with the disputes arising between other lo-
cals of the International Union, at the Rockford and Rock Island, Illinois, plants
of the respondent. A hearing was held before a War Labor Board panel from
J. I. CASE COMPANY 1161
Ju.ie 1 to 6, 1942. Thereat certain clauses were agreed upon for incorporation
in the Racine contract Left open for later decision were clauses dealing with
grievance procedure, recognition and the union shop The panel recommended
that in the initial step of the grievance procedure an employee could proceed
"with or without" his steward, stating that "No reason appears why this can
be said to conflict with Section 9 (a) of the Wagner Act." Respecting recog-
nition, the respondent insisted before the panel, upon a clause giving the non-
union employee the right to deal individually with it and recognizing the
continuing effect of the February 6, 1937 letter. On these two issues the panel
recommended :
. . . it is the recommendation of the Panel, that: (1) no reference be
made in Section 1 [the proposed contract] to the right of an individual
not a member of the Union to deal individually with the Company; and
(2) no recognition be made of the 1937 policy statement (Appendix A)
[letter of February 6, 1937] in Article X of the contract.
Whether or not the document shown in Appendix A continues in force is
not a question upon which this Panel should make recommendations. By
excluding a reference to it in Article X no reflection is cast upon its
legality. In the interests of stronger industrial relationships within the
organization, we believe no reference to this document should be made
in the new contract.
In the matter of the union shop, the majority panel recommended :
.. . that the inclusion of a maintenance of membership clause in the
contract will promote harmonious relations and will strengthen the war
effort of the Case organization. For that reason the Majority recommend
the inclusion of the maintenance of membership clause . . .
Having recommended the above maintenance clause it is the belief of the
Panel that the granting of a check-off will not be essential to the security
of the Union. Therefore, the Panel recommends that no check-off provision
be granted."
The recommendations of the panel were approved with slight amendment and
made the Directive Order of the War Labor Board on July 22, 1942" A separate
War Labor Board hearing on the subject of wages, was held in October, 1942,
followed by a Directive on this matter in January, 1943. Thereafter, the
parties met to negotiate an agreement to conform to the two War Labor Board
Directives and on February 13, 1943, the agreement was consummated. The
next day, the Union was presented with the respondent's signed copy, together
with a letter, stating that the maintenance of membership clause, a provision
of the grievance procedure, and other clauses were incorporated solely by reason
of the Directive Orders of the War Labor Board and were not voluntarily agreed
to by the respondent. The letter stated further that the execution of the agree-
ment was conditioned upon a letter that the respondent had written August
3, 1942, to the War Labor Board, setting forth the manner and method of
compliance with the July 22, Directive Order of the said Board. In this latter
letter, the respondent stated that the omission of reference in the July 22,
Directive Order, to the February 6, 1937 letter, in no respect altered its legality
and the continuing effect of the letter. Finally, the respondent concluded that
it would comply with the July 22, Directive Order for the duration of the war,
"and not because of any belief on its part that the Directive Order is either
"The employer member of the panel dissented on the recommendation of the inclusion
of a maintenance of membership clause
is The industry representatives concurred in all recommendations except the inclusion of
the maintenance of membership clause.
1162 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
economically sound, legally or morally just, or essentially constitutes a contri-
bution to the war aims or effort."
The February 18, 1943, agreement contained a clause under which the re-
spondent agreed to recognize the Union as the sole collective bargaining agent
for all production and maintenance employees with certain stated exceptions
It included a maintenance of membership clause and under the initial step of
the grievance procedure, provided that, "Any employee who has a grievance shall
go to his foreman with or without his steward, as the employee desires." '3
The relations between the parties were governed by the contract of February
18, 1943, until its termination date, April 28, 1944 Pursuant to contemplated
negotiations on the expiration of the contract, the International Union submitted
in March 1944, a blanket contract covering all of the respondent's plants. The
respondent rejected the proposed blanket four-plant agreement and the matter
was referred to the War Labor Board In January or February 1945, the War
Labor Board in a Directive Order ruled that the proposed four-plant contract
raised the question of an appropriate unit which was not for it to answer. There-
tofore, while the matter was still pending before the War Labor Board, the
Union on June 8, 1944, submitted a proposed contract covering the Racine em-
ployees only After some negotiations on this contract, no agreement was reached.
In February, 1945, negotiations were resumed and agreement reached on some
provisions of the contract, but it was understood that nothing was binding until
the entire contract was negotiated and signed No agreement was reached on
the union shop and check-off clauses, or the Union's proposal that in the initial
step of the grievance procedure, grievances were first to be taken up with the
shop steward With respect to these sought for inclusions, the respondent stated
that it would not bargain on any items in the proposed agreement, which it deemed
in conflict with the February 1937 letter. At a conference on February 24, 1945,
respondent stated that the Union's proposed grievance procedure was in conflict
with the 1937 letter, in that it sanctioned in the first instance the presence of a
union steward The respondent stated, that the 1937 letter was still controlling
and that any employee, not a member of the Union, had the right to present and
adjust grievances with management without union participation.
As a result of these disagreements, the matter of contract renewal was certified
to the War Labor Board and panel hearings were held in April, 1945. At the
panel hearings, the respondent's position was that the 1937 letter was still con-
trolling and that the recognition. union shop and check-off clauses of the proposed
contract were in conflict with that letter. The Union's position was then, as it
is now, that the 1937 letter was not a binding continuing agreement. The re-
spondent did not question the Union's majority status On July 12, 1945, the
Regional War Labor Board handed down a Directive Order disposing of a vacation
issue only, and therein recommended the incorporation in a signed contract of a
vacation schedule for the respondent's Racine employees."
The remaining issues, including union security requests and many others,
totalling some 21 in number, were decided by the panel of the Regional War
Labor Board on September 26, 1945. In disposing of the issue of union security,
the panel stated that the relations between the parties had been "strained and
disordered" for some years ; that there was serious need "for a well-defined
contractual arrangement between the parties"; that the Union was confronted
13 The respondent printed a booklet for emploi ces, containing the agieement, the lettei of
Pebi nai y 17. 1943, which set forth the conditions under which the respondent accepted the
provision, of the agreement , the letter of August d, 1942 to the War Labor Board prey
oush mentioned and a reprint of the Februai v 6, 1927, letter
u This recommendation was affirmed by a Directive Order by the War Labor Board on
September 27, 1945, the industry representatives dissenting
J. I. CASE COMPANY 1163
with a major problem in dues collections and the Public member of the panel
recommended that the War Labor Board direct the inclusion of a standard
maintenance of membership and check-off clause. With respect to the grievance
procedure, the panel stated that the respondent's concern with the right of
individual employees to initiate grievances could be protected by continuation
of the clause that any employee who possessed a grievance could go to his fore-
man "with or without his steward." The majority of the panel recommended,
therefore, the incorporation of such a clause, and for the participation of the
union representative at the second step of the grievance procedure. There were
other recommendations on numerous items too detailed to be set forth in this
report. It concluded, however, with the recommendation that a negotiated
agreement between the parties become effective April 29, 1944, and continue
thereafter until April 28, 1946.'6
The foregoing covers in substantial detail, the relations between the parties
from 1936 down to September 27, 1945, the date of the War Labor Board Directive
Order on the issue of vacations. These facts have been found, in large measure,
on the credible and uncontradicted testimony of Kitzman and Wendt, together
with numerous documents introduced in evidence, the authenticity of which
was not questioned by counsel for the respondent. It seems clear from the fore-
going, that the ultimate determination, whether there has been a refusal to
bargain, is predicated in great part upon the status of the February 6, 1937.
letter, for it is apparent that throughout the history of the intervening years,
the respondent has insisted upon the legal and continuing effect of that docu-
ment, whereas the Union contends that the letter was signed to permit Clausen
to obtain his release from the Council and that the letter is no longer controlling
and binding. The letter, although not passed upon by the War Labor Board
was uppermost in the minds of the parties in their negotiations before the said
Board and its various sub-divisions. Finally, as indicated at the outset of this
section, the respondent objected to the introduction of any background ma-
terial. The objection was overruled and the motion to strike denied because
in the undersigned's opinion the background is essential for proper understanding
of the issue.
4. Collective bargaining between the parties on and after October 8, 1945
The parties met in a bargaining conference on October 8, 1945, for the first
meeting following the panel decision of the Regional War Labor Board. At this
conference the Union requested full compliance with the Directive Order of the
)Var Labor Board of September 27, 1945, dealing with the subject of vacations.
The respondent took the position that since the 1944 vacation period had passed,
it was impossible to comply with that order, but that it would carry out the Direc-
tive Order respecting 1945 vacations. The Union asked if the respondent would
not use the panel report as a basis for proceeding in negotiations and met with the
response that the respondent could not recognize the report as official, since the
industry member had, not signed the report. The parties then proceeded to the
discussion of the union shop issue and the respondent replied that since 1937, it
had always conducted business on the basis of an open shop. The company, then
asked to be more explicit concerning its position, stated that there was in exist-
ence at the present time, the 1937 letter, which recognized "the unquestioned right
of any employee to either join a union or similar association of his own choosing,
or to refrain from joining." The union representatives stated that they refused
to recognize the 1937 letter as binding and at this point, requested that the United
Staten Conciliation Service be called in to conduct further negotiations. This
latter suggestion was refused by the respondent whereupor the Union stated
11 The industry met ' er of the panel did not sign the report.
1164 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
that it saw no use in continuing negotiations and that the Union would call upon
the Conciliation Service.'0
In view of the relations then existing between the parties, the Union on Septem-
ber 17, 1945, at a meeting, approved the calling of a strike, leaving the decision
to the Executive Board of the Local. The executive Board was- likewise in-
structed to comply with the War Labor Disputes Act.' Following the conference
of October 8, the Union notified the Conciliation Service of the status of negotia-
tions and, according to Kitzman, further efforts of the Union and Conciliation
Service to meet with the respondent were rebuffed.
This record does not indicate whether in all the years that the Union was the
majority representative of the respondent's Racine employees, the respondent
followed the practice of communicating directly with its employees ignoring the
Union on matters which were in issue between the majority representative and
respondent. But as far as this record discloses, what later became a continuing
practice was initiated by a letter, dated October 10, 1945, addressed to all em-
ployees Therein, the respondent asserted, contrary to the minutes of the October
8, conference, that the first item discussed was the Union's proposal for a closed
shop. The respondent set forth its objection to the closed shop stemming from
what it called "an existing agreement entered into on February 6, 1937, and
signed by all members of the Bargaining Committee of Local 180, which continues
as long as Local 180 is the Collective Bargaining Agency." The letter stated that
the agreement, which recognized the right of any employee to join or not join a
union, was still binding. The letter concluded by stating :
It has been obvious for some time that the attitude of the Union Bargain-
ing Committee has been that its demands must'8 be granted. Its attitude
appears to be that submission by the J. I. Case Company is to take the
place of negotiating or collective bargaining. On a number of occasions the
Union has threatened a strike unless the J. I. Case Company submitted to
its demands Its latest move convinces the Company that a strike is the
declared policy of the Bargaining Committee.
This letter is not an accurate presentation of the conference issues, since it
neglected any mention of the Union's insistence that the respondent comply with
the War Labor Board Directive on vacations. Nor did the letter set forth the
Union's position that it refused to recognize,the 1937 letter as binding. Probably
realizing the shortcomings of the October 10 letter, the respondent followed it by
another on October 12, 1945. Therein, the respondent set forth substantially
what had developed at the October 8 conference concerning the vacation issue;
that it would comply with the recommendations of the War Labor Board re-
specting 1945 vacations but the Union had been informed that the recommenda-
tions respecting 1944 vacations could not be carried out. What is clear from
these two letters is that the respondent was using this method of direct com-
munication with employees to present its views of the bargaining negotiations,
rather than to allow the employees to acquire that information from their exclu-
sive representative.
The third letter dated October 15, 1945, except for the introductory paragraph
and the conclusion, is set forth in full:
As matters stand today the Union Bargaining Committee has broken off
collective bargaining negotiations because the Company has refused to ac-
cept its demand for a closed union shop
18 The above findings are based upon an approved transcript of the bargaining confeience
introduced in evidence
57 Stat 163, 50 U S C, 1940 ed, Sup. IV, App., sec 1501, et seq."I
18 Emphasis in original
J. I. CASE COMPANY 1165
This demand of the Union of Local 180 is as follows :
"Section 2. All new employees at the time of the hiring shall be required
to either join the union or secure a working permit from the union. The
members of the union shall remain in good standing in the union as a condi-
tion of employment. Present employees, who, at the date of the signing of
this agreement , are not members of the union, shall be required to either
secure a working permit from the union or membership in the union as a
condition of further employment."
The Union also demands that-
"Section 3. The Company will deduct from the earnings of each union
member, as certified to the Company, all union initiation fees, dues and
assessments." 19
Local 180 attempts to draw a fine distinction between whether these de-
mands can be called a closed shop or not. Whatever the name, the fact
remains that if the J. I. Case Company were to agree to these demands of
Local 180, the Union would then exercise complete control over who can
work in our plants and who can not ; it would be able to compel Manage-
ment to exercise the power of taxation by deducting from your wages. If
all companies in Racine also had this closed union shop and the check-off,
then a man or woman could be banished from the community or his right
to earn a living taken away by the whim of a union official.
In our letter of October 10th to you we pointed out that this demand of
the Bargaining Committee also violated a present existing agreement. A
copy of this agreement is attached and you will see that by paragraph 2 the
Bargaining Committee recognizes your right to either be a member of Local
180 or not be a member, as you may choose-you do not have to be a member
in order to work at Case. Under this agreement, both the Company and
the Union are obligated.
You will observe that this agreement is addressed, not only to the Company,
but also to all Case Employees.20 Thus you, as an employee, are entitled to
protection of this agreement
The recent action by the union committee raises two questions :
1. Does the Bargaining Committee of Local 180 intend to carry out the
clearly expressed intentions of the provisions of this contract?
2 If not, will any contract signed by the Bargaining Committee of Local
180 be carried out in letter and spirit?
That is where the matter stands today.
This was a provocative letter, appealing directly to employees and bypassing
the majority representative. It placed the Union in a position where it would
appear that its demands for a union shop and check-off were irrevocable, at a
time when so far as this record discloses, the Union had not indicated its final
position. Further, it thrust into the foreground of dispute the 1937 letter, and
raised the question whether the Union could be trusted to abide by any document
that it signed.
The parties went into conference again on October 17 Clausen attended the
meeting, at the request of Mayor Wendt, and read a statement setting forth the
respondent's position. Among other things, Clausen said :
As we understand the situation the negotiations were broken off on Oc-
tober 8th on the fundamental issue of the closed shop. This brings up the
question of whether Local No. 180 will abide by the existing agreement
signed by its regularly chosen bargaining representatives.
19 The quoted Sections 2 and 3 above referred to clauses in the Union 's proposed contract
submitted June 8, 1944.
20 Emphasis in original.
a
1166 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
This agreement provides that as long as Local 180 is the only group col-
lective bargaining agency for hours, wages and working conditions for the
Racine Case shop employees, Local 180 will agree to full recognition, of the
unquestioned right of any employee to either join a union or similar associa-
tion of his own choosing, or to refrain from joining.
This agreement was addressed not only to the Case Company but to all
Case employees and constitutes an obligation, not only to the Company, but
to all employees as well. It is obvious that the demand for the closed shop
and this agreement cannot exist together ; it is also obvious that both the
union and the Company are obligated.
You know that we cannot grant a closed union shop and break faith with
our employees.
* * * * * * *
After Clausen's statement had been read and minutes of the October 8, 1945
meeting reviewed, the respondent asserted that regardless of whether the
Union was demanding a closed shop or union shop, the demand was in con-
flict with the "contract now in existence, namely, the one dated February 6,
1937." There was inconclusive discussion of wages and vacations. The Union
Committee then stated that it did not recognize the document of February 6,
1937, as a contract and in continuing effect. The respondent was asked if
further negotiations were conditioned on reaffirmation of the 1937 letter, and
whether the respondent would be willing to discuss other items, by-passing the
.1937 agreement. In answer, the respondent stated that the 1937 letter was a
contract and remained in effect as long as the Union was the sole collective-
bargaining agency ; that it covered the question of a closed or union shop; and
that the respondent did not see how it could proceed to discuss other issues
"leaving unsettled the fundamental issue of the Bargaining Committee's recog-
nition of its signed agreement." The Union was asked if it would withdraw
from its 1944 contract those demands which were in conflict with the 1937
letter. The Union asked the respondent to itemize those matters which the
respondent asserted were in conflict. It was agreed to recess pending receipt
of such list from the respondent, the Union stating that it would then determine
whether further discussions were advisable and that a new meeting would be
agreed upon.
The following day, October 18, 1945, the respondent sent the Union a letter
setting forth six articles of the Union's proposed contract submitted on June
8, 1944, which the respondent asserted to be in conflict with the February 6,
1937 document. The letter maintained that proposed article I, sections 2 and
3 pertaining to the union shop and check-off ; article III, sections 1, 2, and 3,
dealing with the grievance procedure; article IV, sections 3 and 14 dealing with
leaves of absence and top seniority for union stewards; article VI, section 3 (c)
concerning a method of computing premium pay for over and above 40 hours ;
article VII, sections 1, 5 and 12, providing for a joint company and union ap-
prenticeship committee, sanitary and safety conditions, and maintenance of
discipline; and sections of article VIII dealing with various aspects of the wage
problem were all in conflict with the provisions of the February 6, 1937, document.
The letter concluded by stating that: "the agreement of February 6, 1937
recognizes the right of any individual employee not a member of Local 180 to
deal individually with the Company. This right includes not only the in-
dividual's right to make his own contract of employment, but also his right
to deal individually with the Company in connection with the presentation and
adjustment of grievances." Assuming, the continuing validity of the February
n
J. I. CASE COMPANY 1167
6, 1937 document, it is clear to the undersigned from a comparison of it with
the June 8, 1944 contract, that only articles I dealing with the union shop and
check-off, III concerned with the grievance procedure, and IV respecting leaves
of absence and top seniority for union stewards, could be deemed to be in conflict.
In response to this letter Kitzman answered Clausen in part as follows on
October 19, 1945:
. . ., your contentions are of such serious and far reaching effect that
we must consider our efforts to obtain a new contract by pursuing the
present means to be in vain.
No doubt you will recall our concluding remarks made at our October
17 meeting with you in -which we stated that upon receipt of your letter
outlining your position we would consider its content to determine whether
it afforded a basis for further negotiations and if so, with what personnel
as participants in the meetings.
This is to inform you that we have notified the Federal Conciliator who
has been assigned to this case by the U. S Government that direct negotia-
tions have proven fruitless and the issues have become stalemated, and have
asked that be call the next meeting.
Additionally we, note that you have made public to all of the employees
affected by this dispute, in Paragraph 2 of your letter to them on October
18, that you desire above all else to explore every possible avenue to avoid
a strike in this plant; therefore, we confidently look forward to seeing you
at the bargaining table in sessions presided over by the Federal Conciliator2'
The same day that Kitzman replied, the employees voted to strike pursuant to
the provisions of the War Labor Disputes Act.
On November 1, 1945, the Regional War Labor Board disposed of the various
remaining issues in dispute between the parties by passing upon the recommenda-
tions theretofore made by its panel on September 26, 1945. The Regional Board
recommended a maintenance of membership clause, with check-off, and numerous
other requests of both parties were denied or otherwise passed upon. Advance
notice of the foregoing recommendations were apparently published in Racine
on or about October 26, and as a result, respondent addressed a communication
to all of its employees on October 29, 1945, to acquaint its employees with the
fact that the recommendations of the Regional War Labor Board were only
advisory and that the said Board had no authority to enforce them. The letter
stated that the recommendations were not acceptable to the respondent, "because
many are in conflict with the existing agreement between the Company and
Local 180 " The letter stated further that :
Negotiations were first broken off by the union bargaining committee on
Monday, October 8th , because they refused to recognize and carry out the
terms and spirit of an existing and continuing agreement signed by the
bargaining committee of Local 180 on February 6, 1937 . Negotiations were
resumed on October 17th . At this meeting , the bargaining committee re-
quested a list of all the demands considered by the Company to be in con-
flict with the 1937 agreement . This list was delivered to the bargaining
committee on October 18th. The Company received a letter dated October
19th and signed by Harvey Kitzman, president of Local 180 , again definitely
breaking off collective bargaining negotiations.
21 The letter referred to in the concluding paragraph above, is the statement read by
Clausen at the bargaining conference on October 17, 1945, and which presumably was
published to all employees, by Clausen on October 18.
717734-47- - vol. 71-75
1168 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
The foregoing letter suggested conciliation. However, the question of
whether or not a union shall carry out the terms of its signed agreement is
not a subject for conciliation, mediation or arbitration. Only the union
can determine whether or not they will carry out an agreement signed by
their chosen representatives.
The Company is willing to resume negotiations on those items in dispute
which are not in con/tct with the existing agreement of Februa, y 6, 1937, or
the principles of this agreement. [Italics supplied.]
It is apparent from the foregoing, that the respondent rejected Kitzman's
reference to the Conciliation Service as well as the question whether the 1937
letter was a matter for conciliation, mediation or arbitration Every time the
Union sought to by-pass the 1937 letter, it was brought back into the area of dis-
cussion and conflict by the respondent's insistence on its continuing legality and
its position that it would not bargain upon matters at variance with it.
The next event in the relations between the parties was a letter dated November
26, 1945, sent to Clausen on behalf of the International Union and its members
at the Racine, Rockford, Rock Island, and Burlington plants of the respondent,
signed by Lawrence Carlstrom, International representative. Therein, Carlstrom
stated that all peaceful efforts to obtain working agreements on behalf of the
Union had been in vain. He charged Clausen and his associates with avoiding
the Union's efforts to obtain stabilized labor relations and stated that Clausen's
arrogance and contempt had resulted in "countless delaying tactics " Therefore,
on behalf of the four locals, Carlstrom submitted what he termed to be a "concise,
simple and fair" proposal, as follows: (1) that the respondent pay vacation
awards for 1944 and 1945 under the terms of the War Labor Board Directive;
(2) that the respondent reduce to a written contract, terms agreed to by the
various locals during negotiations and those terms recommended for contract
inclusion by the Regional War Labor Board; (3) that the 'respondent indicate
a time and place for the negotiation of a general wage increase for all Case
employees; and (4) that the respondent agree with the position of the Racine
local, that its Bargaining Committee's letter of February 6, 1937, was "no longer
of any effectiveness and is regarded as expired." On the same date but pre-
sumably after receipt of Carlstrom's letter, the respondent in another conununica-
tion to its employees, to which was attached a copy of Carlstrom's letter, set
forth the argument that Clausen had made at the conference on October 17, that
his only interest was to explore every possible means of avoiding hardship for the
employees, farmers who needed the respondent's equipment and the respondent's
stockholders whose investment was at stake The respondent stated further
that notwithstanding its desire to avoid a strike, one was threatened and Carl-
strom's letter was "in a form so insulting and contains such arbirtary conditions
and so many misstatements," that it was obvious that Carlstrom hoped that his
proposal would be rejected, so that the Union would strike at the Racine plant.
The letter concluded by stating :
. . . the company is willing to resume negotiations on wages and other
items not in conflict with the existing agreement of February 6, 1937 or the
principles of that agreement.
On November 29, 1945, in another communication to its employees, the re-
spondent published in full its reply to a letter received from Mayor Wendt. This
reply reads in part as follows:
It is, of course, true that negotiations with the Bargaining Committee
of Local 180 have proved fruitless of any result. The primary reason for
this is the refusal of the Bargaining Committee of Local 1S0 to recognize
the existing agreement of February 6, 1937. You are personally well ac-
J. I. CASE COMPANY 1169
quainted with this agreement because you were present when it was made
as attorney for Local 180 and participated in the phraseology used in the
agreement. You are fully acquainted with the reasons why this agreement
was entered into. The Independent Union of Case employees existing in
1937 were unwilling to surrender their collective bargaining rights unless
Local 180 would give certain guarantees ; these guarantees were given in the
agreement of February 6, 1937, which is addressed to the employees as well
as to the Company. It obligates both the union and the Company. This
agreement is the basis upon which Local 180 secured the sole collective or
group bargaining rights. [Emphasis in original ]
This agreement was made in good faith. We believe that we are obligated
to see that its terms are carried out in accordance with the clearly expressed
intent of the agreement, in the interest not only of the Company but of the
Case employees who were also a party thereto.
We can see nothing whatever in this agreement that any good American
could not subscribe to. We see nothing in the agreement which the Bargain-
ing Committee of Local 180 can honestly object to. We do not understand
why they insist upon refusal to carry out its terms.
They have gone further than this; they have made demands upon the
Company which are clearly in conflict with the terms of this agreement and
which would nullify it completely. These are the demands that the Bar-
gaining Committee are now presenting to us as an ultimatum which must
be agreed to to avoid a strike.
The recognition by Local 180 of its responsibilities under this existing
agreement is not a subject for conciliation, mediation or arbitration.
We appreciate very much your interest and your efforts in connection
with prevention of a strike. The Company has publicly stated, as well as in-
formed all employees, that it is ready to proceed with collective bargaining
on any matters not in conflict with the existing agreement and we still are
in this position.
The parties resumed their negotiations on December 4, 1945. At the outset of
the meeting a general discussion took place concerning the exact status of the
proposed contract. According to minutes of the meeting in evidence, several ar-
ticles were viewed as in tentative agreement and a review of these were under-
taken. The Union proposed further changes in exceptions from the appropriate
unit, as for example, the elimination of cooperative students No agreement was
reached on this. Then the Union submitted a copy of a revised recognition clause
which provided for sole recognition. In order to meet the respondent's position,
that any employee should have the right to present grievances to management,
the Union proposed as a compromise that nothing therein should be construed
"to prevent any employee or group of employees from presenting grievances di-
rectly to the Company. The word `grievance' in this sentence is understood to
exclude any questions concerning hours, wages, or working conditions." There
was no reference to the union or closed shop or check-off. Upon receipt of the new
proposal management stated that it represented a complete change from the
previous clause and that it would require considerable thought and study.
On December 6, 1945, the respondent sent another in its long series of letters
to employees. This letter referred to a news article that had apparently appeared
ii_ the Racine Journal-Times, of December 5, and which quoted Kitiman as say-
ing that at the December 4, meeting, "the union has relinquished its demand on
the J. I. Case Company for a union shop which would require all employees of
the Company to join the labor organization." The letter then went on to say
that while this was true, it was nevertheless "misleading" because it did not
1170 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
tell the whole story of the bargaining conference. The balance of the letter
follows :
While the union committee at that meeting did drop its union shop and
check-off demands, it presented new and additional demands among which
was a request that the Company waive and repudiate the agreement of
February 6, 1937 presently existing between the union and the J. I. Case
Company.
We are writing this letter so that you may be fully and correctly informed
as to all of the matters which transpired at the meeting on December 4th.
The J. I. Case Company is presently considering the new demands made by
the union and these demands will be the subject of further discussion at
the next meeting between the Company and the Bargaining Committee
called to consider contractual matters 2'
At the next conference, on December 12, the Union indicated that it was willing
to by-pass the unsettled vacation problem but that it would be a major question
for settlement at a later date. Management then recalled that it had been
previously agreed that no provisions of the contract were to become binding until
an entire contract had been negotiated and signed. The Union acknowledged
this to be true. 1Vlanagement stated that this would involve delay and proposed
a procedure to adjust wage inequalities and gave the Union a copy of its pro-
posal in this regard. This latter proposal stated that because at the conference
on December 4, the Union had presented a proposal [presumably dealing with
recognition and grievances] which left* the respondent "considerably con-
fused," the respondent therefore proposed that negotiations commence to elimi-
nate wage inequalities, and that this matter be disposed of promptly so that the
new wage rates could be put in effect without awaiting agreement on a completed
contract.
In answer to questions, the respondent stated that wage adjustments would
become effective the Monday following agreement, but that the wage adjust-
ments would not be retroactive. After a recess, the respondent was informed
that the Union would study this proposal on wage adjustments and report back
to the respondent. Discussion then centered around the Union's new recogni-
tion proposal, previously proposed at the December 4 meeting. The respondent
asked what other changes the committee expected to present and the respondent
was informed that the Union had no other proposal but it might be necessary
to make minor changes on other items as negotiations proceeded. Then the
parties reached tentative agreement on section 1 of article I which recognized the
Union as the sole collective bargaining agency. With respect to the grievance
item of the new proposal, which is set forth above in the discussion of the
December 4 meeting, respondent said that this Section was in conflict with the
1937 letter. The Union responded that the February 1937 letter was no longer
binding. It was then proposed that Article I, section 1 of the 1943 contract,
which made no reference to grievances and which recognized the Union as the
sole collective bargaining agency be accepted. When the Union indicated its
rd Although it was stipulated between counsel for the respondent and the Board that the
minutes of the December 4, meeting, contain an accurate statement of the proceedings, a
study of those minutes reveals no discussion of either the union shop or the check-off.
However, the Union in submitting a completely revised recognition clause for inclusion in
the contract omitted any reference therein to the union shop and check-off, and dealt only
with the question of recognition, presentation of grievances, non-interference by the
respondent against legitimate union activity and exclusions from the unit. Since at the
meeting, the union proposed this clause to supersede any and all previous agreements, it
would seem clear, theretore, that the Union was abandoning its demand for a union shop
and check -off in deference to the respondent 's position.
J. I. CASE COMPANY 1171
willingness to accept it, provided the word "collective" was deleted , this was
objected to and no agreement was reached.
The parties met again on December 17. At the meeting the respondent
rejected those sections of the Union's proposed recognition clause presented
on December 4, dealing with the grievance presentation by employees and non-
interference by the respondent with the right of employees to join the Union,
as being in conflict with the February 1937, letter. The Union then asked
if section 1, of the recognition clause of the 1943 contract, dealing with recogni-
tion only, was acceptable in its entirety, and the respondent indicated that it
would accept this section as part of the new contract, since it was already in
tentative agreement. After a short recess, the Union stated that since there
was tentative agreement on the inclusion of this section it would remain in
tentative agreement and that such agreement nullified "the recent proposal
which they had made for Article I, upon which the parties were unable to
reach an agreement." The Union stated that it had submitted its new recogni-
tion clause at the December 4 meeting, in order to eliminate the respondent's
opposition to the union shop and check-off clauses, but since the new proposal
was not acceptable, it would therefore reassert its demand for the union shop
and check-off. Therefore, it would now return to the original demand that
was first presented to' the company on July 8, 1944. A definite answer to the
proposal to negotiate wage adjustments would be presented at the next meeting
on December 21, at which time negotiations would continue respecting the
union shop and check-off clauses.
The parties held a further meeting on December 21, 1945, at which there was
discussion of the proposal to adjust wages. Following discussion of this
question, the Union stated it could not accept the proposal without provision
for retroactivity and other major items of the contract were still unsettled.
At this point of the meeting, a statement was read and presented by the
Union to the respondent In this prepared statement, the Union called to the
respondent's attention its efforts during the past 20 months to negotiate a new
agreement to replace the one that had expired on April 21, 1944. It called
to management's attention that the Directive Order of the War Labor Board
dealing with vacations had not been met. The statement asserted that the
Union had modified its original demands in an effort to reach an agreement
but thereafter the respondent had rejected the Union's proposal and that the
major issues of conflict were still unresolved. It concluded with an expression
of willingness to participate in further meetings if the respondent changed its
mind and indicated a desire to work out an agreement with the Union. After
this statement had been read, the committee was asked if the respondent's
proposal on wage adjustments was fair. The Union's representatives responded
that in general, they agreed to the plan but without retroactivity they would
not discuss the matter further Finally, union representatives stated that they
believed it useless to negotiate further due to the fact that every one of the
issues left unsolved was deemed to be in conflict with the 1937 agreement,
which the Union refused to recognize, but which the respondent insisted was
still in existence. For that reason, the Union expressed its belief that it
"had come to the end of the road." In response to a management inquiry to
fix the date for the next meeting, the Union replied that they did not believe
it was necessary to set a date.
Following this meeting of December 21, the Executive Board of the local
called a strike, effective December 26, 1945. The strike was pending at the
time of the hearing. Kitzman testified that the strike was called "because of
the company's refusal to negotiate an agreement with the local union taking
the position that they would not bargain on the Union's proposed agreement
1172 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
under Sections 2 and 3 in Article I of that agreement, because it was in con-
flict with the February 6, 1937 letter and they would not bargain on any item
which in their opinion was in conflict with that letter" He testified further
that the strike was called because of the respondent's position, set forth in
the letter of October 18, 1945, that various Articles of the proposed contract
were in conflict with the 1937 letter, as well as respondent's insistence upon
the right of any employee "to deal individually with the Company in connec-
tion with the presentation and adjustment of grievances" According to Katz-
man, the principal reason for the strike was the respondent's position that it
would not bargain with any matter in conflict with the 1937 letter,' and the
undersigned so finds.
While the strike was in progress, and on January 17, 1946, the respondent
published a full page advertisement in the Racine Journal-Timcs. Under a
bold caption which read: "The Real Issue In The Case Strike," the respondent
set out certain material "For The Information of Case Employees and the Public."
On the right half of the page, there was reprinted in full, the February 6, 1937
letter. In the left margin opposite the letter, the respondent stated that : "The
J. I. Case Company is willing to negotiate on wages and other items not in con-
flict with the February 6, 1937, agreement, or the principles of that agree-
ment. This, of course, is contingent upon legal picketing and a complete mainte-
nance of law and orders [sic]. This has been and is now the position of the
Company." Thereunder, the respondent called the following seven points to
the attention of the reader: (1) the respondent noted that the February 6, 1937,
agreement was addressed to the Case employees, as well as the respondent and was
their contract , and that the respondent was obligated to see that its provisions
were enforced ; (2) the document was signed by authorized representatives of
the Union; (3) the document is a "continuing contractual obligation and exists
,as long as Local 180 is the only group collective bargaining agency' "; (4) the
agreement was given for consideration, in that more than 1,000 employees rep-
resented by the Council surrendered their bargaining rights in return for guar-
antees expressed in the agreement; (5) the document was recognized by the
International Union on February 8, 1939 in a letter to the respondent signed by
R. J. Thomas, then International President of the Union; (6) the War Labor
Board recognized the document as an agreement and refused to pass upon its
legality; and (7) "This document is American in Principle throughout. It was
written, signed and accepted in good faith and should be carried out."
Previous to the publication of this full page advertisement, the Wisconsin
Employment Relation Board had held a hearing on January 3, 1946, on the
question of an "All-Union Agreement." The said Board on January 21, issued
its Direction of Referendum to be held on February 19, at Racine to determine
whether or not the required number of eligible employees in the appropriate unit,
desired an "All-Union Agreement" between the respondent and the Union. On
January 30 , before the Referendum took place, the respondent sent all of its
employees a letter seeking to interpret the consequence of the Referendum. The
respondent asked "What Does This Mean?" Under Wisconsin law, it asserted
that, it was not permitted to sign a closed or union shop contract unless both the
employer and the union desired such a contract; and an election had been held,
participated in by more than half of the total number of employees, two-thirds
22 This refers to the union shop and check-off proposal in the Union's proposed contract
submitted June 8, 1944
24 He testified also that the other reasons for the strike were the respondent's refusal to
comply with the War Labor Board Directive on vacations , its refusal to accept the recom-
mendations of the Regional War Labor Board on other provisions of the agreement , its
refusal to agree to the retroactivity of wage adjustments , and its belief that the respondent
had set out to destroy the Union as a labor organization.
J. I. CASE COMPANY 1173
of whom favored the closed or union shop; and that even then the respondent
was qot required to sign such a contract. The respondent then recalled for the
attention of its employees that under the 1937 letter, provision was made that
no employee could be forced to join a union and pay dues to keep his job; that
the respondent would not require its employees to join a union and pay dues ;
that there was no reason for holding the election ; and regardless of its outcome,
"the Case Company will not sign a contract for an all-union shop, which would
be a repudiation of its obligations incurred under the existing 1937 agreement."
On February 19, the Referendum was conducted Of a total of 3,341 employees
eligible to vote, 2,231 votes were cast, under which 1,996 were in favor of an
"All-Union Agreement," and 232 opposed. On February 25, the Wisconsin Board
certified that the required number of employees had voted in favor of an "All-
Union Agreement" and that the respondent was therefore privileged to enter
into such an agreement.
Contract negotiations between the parties, the strike being still in progress,
resumed on April 9, 1946. The parties considered changes in certain fringe groups
to be excluded from the bargaining unit and it was agreed to let the recognition
clause of the 1943 contract stand as the recognition clause of the new contract,
with certain agreed-upon changes in the excluded groups. On April 10, the parties
took up for further consideration, the Union's demands on the closed shop and
check-off as originally presented in June, 1944. With respect to these two latter
clauses, the respondent took its historic position that they were in conflict with
the February 6, 1937, letter and additionally, the clauses were "un-American and
contrary to their principles as a company." According to Carlstrom, the Union
continued its demand for their inclusion "or approximations thereof" in the new
contract but that there seemed to be no further purpose in attempting to negotiate
in view of the respondent's position. After recess, the respondent offered a new
counterproposal consisting of four points; (1) that the parties continue to negoti-
ate the question of wages without provisions of retroactivity; (2) that any agreed
upon provision of the contract including wages be incorporated in a written docu-
ment by the parties; (3) that the strike be called off and the strikers return to
work, and the respondent would make effective at once the wage increases pro-
posed to the Union on December 4, 1945; (4) that remaining issues be negotiated
and disposed of as promptly as possible. The Union rejected the offer and
Carlstrom concluded the conference with a plea, the substance of which he gave
at the hearing as follows ;
I deplored the length of the strike and asked the company to give
sincere consideration to the fact that many of the Case employees were
suffering from what I termed "shriveled bellies" at that time, and asked that
they try to work out by some means and some method a working arrangement
between the parties.
I also pleaded that the company not resort to its ads to the newspapers
and its letters to the employees which it had been wont to do in the past;
and I assured them that the union recognized its responsibility to report
truthfully to the employees what happened during negotiations; and that
in compliance with that obligation we would give a full and complete report
to the membership of our organization.
This conference of April 10, 1946, was the last that has been held between the
pat ties, concerning the issues in dispute at Racine.
One final matter must be considered, in view of the respondent's motion to
dismiss on the ground that the Board does not have jurisdiction to determine
the legality of the February 6, 1937 letter, since that question is now pending
25 Findings based upon credible and uncontradictory testimony of Carlstrom.
1174 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
before a Wisconsin court of competent jurisdiction. In pleadings filed with the
Circuit Court of Racine County, dated May 10, 1946, in which the Union appears
as plaintiff and the respondent as defendant, the Union brought an action under
the Declaratory Relief Statute 28 of that State, to have the Circuit Court declare
the letter of February 6, 1937, to be null and void and no longer binding as a
contract. In the defendant's answer to the second amended complaint, the
defendant pleaded that the February 6, 1937, letter was a valid existing con-
tract, not terminated by writing or otherwise ; denied that it refused to bargain
collectively with the plaintiff or that an impasse had been reached ; and averred
that the letter was not a bar to further discussions, wherefore it asked that the
complaint be dismissed. No decision of the Court had been announced at the
time the hearing concluded.
5. Conclusions respecting the refusal to bargain
At the conclusion of the hearing and in its brief the respondent moved to
dismiss the complaint on the grounds :
(1) that all testimony relating to transactions occurring prior to October
8, 1945, is beyond the scope of the complaint ;
(2) that the evidence failed to establish a violation of Section 8 (1) and
(5) of that Act;
(3) that all testimony in reference to the validity under contract law
of the February 6, 1937 agreement should be stricken for the reasons that;
(a) The Board is without jurisdiction to pass upon the validity of
that document under contract law ; and
(b) the same issue is pending in the Circuit Court for Racine County
in a cause between the Union as plaintiff and the respondent as
defendant;
(4) that the proceeding is based on the legality of an agreement dated
February 6, 1937, between the respondent and the Union and that such
proceeding is contrary to the public policy of the United States as expressed
in the Frey Amendment to the Board 's appropriation for 1946; 2T
The undersigned's conclusions will be stated within the framework of the
grounds set out by the respondent in its motions to dismiss
(a) Motion to dismiss on ground that events prior to October 8, 1945, are beyond
scope of inquiry
The undersigned has heretofore disposed of and denied the motion to dismiss
on the above ground. Although the complaint alleged a refusal to bargain on
and after October 8 , 1945, an intelligent understanding of the issues in this
long controversy would be impossible without reference to the history of nego-
tiation and the events occurring prior thereto . For that reason , and in order
to make available to reviewing authorities , should the need arise , all of the
relative and probative evidence in this proceeding , the motion has been denied.
Again it is made clear that any findings of unfair labor practices will be predi-
cated upon the respondent ' s acts committed on October S, 1945, and thereafter.
(b) Motion to dismiss on ground that the evidence failed to establish a violation
of Section 8 (1) and (5) of the Act
A consideration of the reason upon which this motion is based will of ne-
cessity include reference to the remaining reasons asserted by the respondent
26 Wisconsin Revised Statutes (1945) C. 252 03 Sec. 269.56
2'r Labor-Federal Security Appropriations Act of 1946 Public Law 124, 79th Cong.,
1st Seas.
J. I. CASE COMPANY 1175
as additional grounds for dismissal. The Board's evidence was in the main
directed to support its Bill of Particulars that the respondent violated Section
8 (1) and (5) of the Act by: (1) taking the position that non-union employees
had a right to deal individually with the respondent, Including the right to make
their own contracts of employment and adjust grievances; and (2) refusing
to bargain collectively respecting the Union's demands on the ground that the
demands were in conflict with the February 6, 1937 document.
The respondent has consistently maintained since October 8, 1945, that em-
ployees who were not union members had a right to deal individually with the
respondent. This position stems from the respondent's contention that the
document of February 6, 1937, is still a binding and continuing contract as long
as the Union remains as the collective bargaining agency. This position is
inextricably interwoven with the respondent's opposition to the union shop and
check-off which it likewise considers at variance with the Union's undertaking
in that document.
Initially, therefore, proper disposition must be made of the 1937 letter. The
circumstances under which the letter was signed will be recalled by reference to
the background material. It was given to Clausen to enable him to obtain his
"release" from a minority union which had a members-only recognition. In
signing the letter the Union abandoned two rights to which the Act unquestionably
entitled it; (1) the right to bargain for union security; and (2) the right to
exclusive representation of all the employees by reason of its unquestioned
majority status. Although the Union agreed to these concessions as long as it
remained "the only group collective bargaining agency," can it be held that thereby
the parties agreed to contract in perpetuity? Certainly no reasonable interpre-
tation of the parties' intention would come to this conclusion and despite the
respondent's positive maintenance of this view, the Union, time and time again,
both before and after October 8, 1945, has argued to the contrary. Other govern-
ment agencies have pointed out, although declining to pass upon the legality of the
document, that its very existence is a continuing source of division and discord
and that stabilized and cordial relations, so necessary at the present time, can
never be achieved as long as the respondent persists in its interpretation of the
document. Indeed, the respondent is not unaware of the difficulties created by
its view. In essence it asks that the document be treated as a contract in
perpetuity and that the Union cease forever to assert its legal rights inconsistent
therewith. Realistically, this could result in the complete dissolution of the
Union. Good sense and an orderly appreciation of the statesmanship needed in
reducing to practicable and harmonious relationships the interests of employer
and employee, require that in the common desire to achieve such goal, the docu-
ment be cast aside as an inevitable and unending source of conflict.
But aside from any views of practical industrial relations which dictate the
above conclusion, the document is to be condemned as contrary to a public policy
frequently enunciated in the decisions of the Board, as upheld by the courts.
The February 6, 1937, document had a clause of limitation, which recognized "the
right of any individual employee not a member of Local 180 to deal individually
with the Company." The Union was entitled to exclusive representation for all
employees, despite its 1937 abandonment of that right 28 Nor §hould that aban-
28 Moreover, the Union was under legal obligation to represent all the employees. In
Steele v L cC N. R Co, 323 U. S 192, 200, the Supreme Court held "The labor organiza-
tion chosen to be the representative of the craft or class of employees is thus chosen to
represent all of its members, regardless of their union affiliations or want of them. As we
have pointed out with respect to the like provision of the National Labor Relations Act,
29 U S C A. § 151 et seq , in J I. Case Co. v N L R. R , supra, 321 U S 332, 64 S Ct.
580, `The very purpose of providing by statute for the collective agreement is to supersede
the terms of sepaiate agreements of employees with terms which reflect the strength and
1176 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
donment be held to operate into the limitless future because of the respondent's
determination to forever deprive the Union of what it is legally entitled to enjoy
under the Act. Although the respondent accorded recognition to the Union as
the "only group collective bargaining agency," and thus undertook not to recognize
any other representative, by reason of the limitation clause, the Union in effect
became a representative of its members only together with those who did not
choose to deal individually with the respondent. Under the Act respondent was
obliged to bargain with the Union as exclusive representative of all the Racine
employees and to embody understandings reached in a signed agreement. This
obligation can only be effected if exclusive recognition is fully and frankly given
and not partly withheld.
The fact that the Union in 1937, or the International in 1939, approved the
wording of the original document is not controlling. The record clearly shows
that at all times, particularly after October 8, 1945, the Union insisted that
the letter was not acceptable to it and the issue has never become moot. As
long as the respondent insists that sole recognition of the Union, regardless
of language used, is circumscribed by granting employees the right to deal
individually with the respondent, exclusive recognition has been withheld. The
undersigned finds that on at least these separate occasions the respondent
refused to grant exclusive recognition : on October 8. 1945, when the respondent
reasserted the 1937 letter as a binding contract and refused to discuss the
Union's proposals for a union-shop as in conflict with it; on October 18, 1945,
when the respondent insisted on the right of individuals to "deal" with it, as
well as by other acts on the same day ; and on October 29, November 26 and
29, 1945, when respondent refused to bargain on any terms, including recognition
which it deemed to be in conflict with the "existing agreement." The respond-
ent knew of its limited recognition for Clausen in his letter to Mayor Wendt,
published in full to the employees on November 29. 1945, stated clearly that
the execution by the Union of the 1937 letter was the "basis" upon which the
respondent accorded the Union "group bargaining rights " As long as the
respondent takes the position that it will grant exclusive recognition limited
by the right of any employee to deal individually with it, its obligation under
the Act has not been fulfilled and the undersigned finds that the respondent
has by this position refused and continues to refuse to bargain with the
Union."
Does the above finding conflict with the proviso to Section 9 (a) of the Act
which provides, "That any individual employee or a group of employees .shall
have the right at any time to present grievances to their employer"? This
section of the Act has been given authoritative and binding interpretation by
the Board in the Hughes Tool Company case.30 It will be recalled that the
bargaining power and serve the welfare of the group Its benefits and advantages are open
to every employee of the represented unit . . The purpose of providing for a iep-
resentative is to secure those benefits for those who are represented and not to deprive
them or any of them of the benefits of collective bargaining for the advantage of the repre-
sentative or those members of the craft who selected it " See Tunstall v Brotherhood of
Locomotive Firemen, 323 U S. 210
20 See McQuay-Norres ilifq Co. v N L. R B., 116 F (2d) 748 (C C. A. 7 ), enforcing 21
N. L. R. B. 709; 313 U S. 565, cert. denied, where the Court said :
. . . the recognition required by 9 (a) is not a bargaining matter as petitioner
sought to make it. When it was disclosed . . . that Local 226 represented a
majority of the employees in the appropriate unit . the obligation was then
fixed upon [the einplover] to recognize the Local as the sole and exclusive bargaining
agent. . . . In place of complying with this statutory requirement [ the em-
ployer] made it the subject of a long and extended bargaining process. . . In
our view of the situation, there could be no genuine bargaining as contemplated by the
Statute until complete recognition had been granted as the law requires.
30 Matter of Hughes Tool Company, 56 N. L. R. B. 981.
J. I. CASE COMPANY 1177
Union, in addition to' refusing to be bound by the 1937 letter, first demanded
union shop and check-off clauses. In order to overcome the respondent's posi-
tion that these demands were objectionable in principle as well as for the reason
of conflict with the 1937 letter, the Union withdrew those demands and proposed
on December 4, 1945, a simple recognition clause, section 1 (a) of which pro-
vided, that nothing in the proposed agreement was to be construed to prevent
any employee from presenting grievances to the respondent on all matters
except "hours, wages, or working conditions." This was rejected on December
12, 1945, as in conflict with the 1937 letter. What does Section 9 (a) grant
the individual employee, in the presence of a statutory representative? In
the Hughes Tool Company case referred to above the Board held:
We interpret the proviso to Section 9 (a) of the Act to mean that indi-
vidual employees and groups of employees are permitted "to present griev-
ances to their employer" by appearing in behalf of themselves-although
not through any labor organization other than the exclusive representa-
tive-at every stage of the grievance procedure, but that the exclusive
representative is entitled to be present and negotiate at each such stage
concerning the disposition to be made of the grievance. If, at any level
of the established grievance procedure, there is an agreement between the
employer, the exclusive representative, and the individual or group, dis-
position of the grievance is thereby achieved. Failing agreement of all
three parties, any dissatisfied party may carry the grievance through sub-
sequent machinery until the established grievance procedure is exhausted.
The individual employee or group of employees cannot present grievances
under any procedure except that provided in the contract, where there
exists a collective agreement . . . Where there has been no grievance
machinery provided by agreement between the employer and the statutory
representative, the employer must bargain in good faith with the represent-
ative respecting the procedure to be followed. Only where the exclusive
representative refuses to attend meetings, as prescribed in the grievance,
procedures established, for the purpose of negotiating in regard to the dis-
position of grievances presented by individuals or groups of employees, or
otherwise refuses to participate in the disposition of such grievances, may
the employer meet with the individuals or groups of employees alone and
adjust the grievances. . ..
The approved procedure is totally at variance with the respondent's position
so frequently enunciated, that any employee must retain the right to deal in-
dividually with the respondent, even to the extent of concluding individual con-
tracts of employment, despite the presence of the exclusive statutory representa-
tive. The undersigned finds that, the proviso in Section 9 (a) of the Act does not
sanction or otherwise authorize the respondent to insist upon the right to deal
individually without limitation with non-union employees where an exclusive
representative exists ; such insistence is inconsistent with the broad public
policies and purposes of the Act to accord exclusive recognition to a majority
union for all employees; and that the respondent has since October 8, 1945,
refused to bargain collectively with the Union for all employees in the appro-
priate unit ui
The undersigned deems the above findings of controlling effect unless two
other contentions raised by the respondent bar consideration of the 1937 letter.
nId., pp 982, 983; Hughes Tool Company v N. L R B, 147 F (2d) 69 (C C A. 5).
32 This finding is not inconsistent with the decision of the Supreme Court in J. I. Case
Company V N L R B , 321 U. S 332, where the Court held : "The Board, of course, has
no power to adjudicate the validity or effect of such contracts [individual contracts of
employment] except as to their effect on matters within its jurisdiction" [Italics added.]
1178 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
First, the contention that the Board lacks authority to consider the legality
of the letter because it is a private contract between the parties and for the
further reason that a court of competent jurisdiction is presently considering the
nature and effect of the 1937 letter33 The other contention is that the legisla-
tive rider to the Board's 1946 appropriation [the so-called Frey Amendment] op-
erates as a bar to this proceeding. This latter contention is separately considered
hereafter.
Were the respondent's first contention to prevail, the Board would be forever
stopped from carrying out the mandate of the Act, the congressional intent,
and the judicial sanction granted the Board decisions, because of the respond-
ent's position that the 1937 letter is not only of continuing effect but a presently
valid and existing contract of the parties. The Board has never sought, nor does
the undersigned now seek, to disturb and set aside valid, private contracts freely
entered into between parties. But, where such an agreement or undertaking is
contra to public policy or contravenes the Act, then it is proper to declare that
so much of a private agreement as reaches this result should be declared nuga-
tory. In Amalgamated Utility Workers v. Consolidated Edison Co., the Supreme
Court held that the Act confers exclusive power on the Board to prevent unfair
labor practices, "a power not affected by any other means of `prevention that
has been or may be established by agreement, code, law, or otherwise.' " 34 In
the National Licorice Co. case,3° where individual employment contracts, under
which the employees agreed not to demand a closed shop or a signed agreement
from their employer with any unioh, were under review, the Supreme Court
held that:
Since the contracts were the fruits of unfair labor practices, stipulated
for the renunciation by the employees of rights guaranteed by the Act, and
were a continuing means of thwarting the policy of the Act, they were ap-
propriate subjects for the affirmative remedial action of the Board authorized
by § 10 of the Act 3°
The Court held further that the Board was vested with a public right and duty
to prevent unfair labor practices and that:
The public right and the duty extend not only to the prevention of un-
fair labor practices by the employer in the future, but to the prevention of
his enjoyment of any advantage which he has gained by violation of the Act,
whether it be a company union or an unlawful contract with employees, as
the means of defeating the statutory policy and purpose. Obviously em-
ployers cannot set at naught the National Labor Relations Act by inducing
their workmen to agree not to demand performance of the duties which it
imposes or by insisting, more than in a private litigation, that the em-
ployer's obedience to the Act cannot be compelled in the absence of the
workers who have thus renounced their rights.37
The undersigned is of the opinion, therefore, that nothing in the Act prevents the
Board from proceeding in a case where an agreement is a "continuing means of
thwarting the policy of the Act," and it will hereafter be recommended that the
document of February 6, 1937, be set aside as contrary to both the spirit and
"This contention is another ground for the motion to dismiss the complaint.
84 309 U. S. 261, 269, 270.
35 National Licorice Company v. N. L. R B., 309 U. S. 350.
3s Id at 361
17 Id. at page 364.
J. I. CASE COMPANY 1179 ,
intent of the Act and that the respondent cease from demanding its continued
recognition 38
In view of the foregoing, the undersigned is of the opinion that there are no
contract rights involved that prevent consideration by the Board of the respond-
ent's position, that other demands of the Union could not be discussed because of
conflict with the 1937 document, and that the document is a valid defense to the
charge of refusal to bargain Therefore, it is proper to consider the Union's de-
mands for a union shop and check-off.
.The Union in its proposal submitted June 8, 1944, asked for a union shop and
check-off. This was refused. In September 1945, the Regional War Labor
Board Panel recommended the inclusion of a standard form maintenance of
membership provision with check-off. The respondent on October 8, 1945, re-
fused to accept the panel report as an acceptable basis for bargaining or even to
consider the union shop as in conflict with provisions of the 1937 letter. There-
after, throughout the numerous conferences that were held between the parties
from October 8, 1945 to April 10, 1946, and in the countless letters that were
sent to employees, the respondent unequivocably refused to discuss any matters
including the union shop and check-off which it contended conflicted with the
1937 letter. On October 17, 1945, for example the respondent suggested that
negotiations "could proceed" if the Union abandoned as demands "those items
which are in conflict with the 1937 agreement." On October 29, the respondent
notified all of its employees that it was only willing to resume negotiations on
those items not in conflict. It would belabor the point to repeat other examples
of the same attitude but this sums up the respondent's entire position through-
out the long history of negotiations It was repeated on November 26, in a letter
to employees, and on November 29, in another letter. When the Union abandoned
these demands on December 4, the respondent then stated it was "considerably
confused" and jockeyed itself into a new position where the parties became in-
volved in a dispute over wage retroactivity. Finally on December 17, the recog-
nition clause, minus union shop and check-off provisions was rejected on the same
ground of conflict.
This record discloses that the respondent entered into every conference with
a single predetermined and fixed position to force the Union to acquiesce in its
acceptance of the 1937 letter and then to reject every demand at variance with it.
This pattern colors every conference without exception. The Act does not re-
quire acceptance of a closed or union shop, but it does require something more
than a blind rejection beforehand of union proposals on the ground that they
conflict with previous commitments. The gravamen of the charge here is not
that the respondent refused to grant a union shop, which would mean no more
than that an empasse had been reached, but rather that the respondent at the
outset of every conference, had determined in unvarying fashion not to discuss
any matter in conflict with the 1937 letter. Once it took that position the Union
was forced, as said before, to either reaffirm its adherence to the 1937 letter or
abandon any and all demands which the respondent asserted were in disagree-
ment with it. This was not collective bargaining in good faith between two
parties but rather a one-way insistence by the respondent of acceptance of a
predetermined position, in lieu of which, negotiations would suspend.
Another facet of this matter which highlights the respondent's position and
reflects on its good faith was the series of letters frequently commented upon
above, and the advertisement in the Racine Journal-Times. Counsel for the
Board conceded that the letters were not per se a violation of Section 8 (1) of
18 Cf Matter of Alexander Milburn Company , 62 N. L. R B. 48 , where the Board held
that disputes ausng out of a collective agreement were not determinable "solely under the
law of contracts"
1180 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
the Act, but were rather introduced to show the respondent 's position and that
the 8 ( 1) violation of the Act was predicated upon and derivative of the refusal
to bargain . The undersigned agrees that the publication of direct appeals to
employees , establishing in advance of negotiations outright rejection of the
demands of the statutory representative is a violation of Section 8 (5) of the
Act. No better method can be devised to undermine authority , circumvent the
Union, and create confusion and dissension , than to publicize in advance of
negotiations that the Union 's demands are doomed to failure . There is no in-
dication in the record that the respondent 's letters were necessary , in order to
protect the respondent from unfair , indecent or intemperate public attacks or
because the Union was hiding from the employees ' contract developments. In
the absence of any argument that the issuance of letters was necessary to keep
the record straight , it would appear to be abundantly clear that the respondent's
only purpose was to sow disruption and discord among the union members and
employees . The undersigned concludes and finds that by so doing , the respondent
violated its duty to bargain collectively with the Union and it will be recom-
mended hereafter that it cease and desist from issuing further letters to em-
ployees concerning those matters which are properly the subject of collective
bargaining.
For all of the foregoing reasons the respondent ' s motion to dismiss on the
ground that the evidence fails to establish a violation of Section 8 (1) and (5)
of the Act is denied . The undersigned concludes and finds that the respondent,
by reason of its insistence upon the right to deal individually with non-union
members; its refusal to discuss or even consider any union demands in conflict
with the 1937 letter ; and by its repeated and continuous resort to the use of
employee letters in an effort to disrupt, weaken and destroy the Union's bar-
gaining position , violated Section 8 ( 1) and ( 5) of the Act.
For reasons likewise indicated above, the respondent ' s motion to dismiss on
the grounds that the Board lacks jurisdiction to pass upon the validity of the
1937 document and that an action is pending before a court of competent juris-
diction to test the validity of the document , is denied.
(e) The motion to dismiss on the ground that the proceeding is barred by the
rider to the Board's appropriation
The Labor-Federal Security Appropriation Act of 1946, herein called the 1946
Appropriation Act, imposed certain restrictions on the use of the funds therein
appropriated , in connection with complaint cases arising over agreements between
management and labor which had been in existence for 3 months or longer without
complaint being filed a0
The 1946 Appropriation Act is not a substantive amendment to the Act but
imposes a limitation on the use of funds. A rather thorough review of the
Congressional debates and committee discussions in connection with the 1944
rider convinced the court in N. L. R. B. v. Thompson Products , Inc.,40 that the
89 The limitations in the 1946 Act read as follows : "No part of the funds appropriated in
this title shall be used in any way in connection with a complaint case arising over an
agreement , or a renewal thereof, between management and labor which has been in exist-
ence for three months or longer without complaint being filed by an employee or employees
of such plant ; Provided, That, hereafter, notice of such agreement , or renewal thereof shall
have been posted in the plant affected for said period of three months , said notice contain-
ing information as to the location at an accessible place of such agreement where said
agreement shall be open for inspection by an interested person: Provided further, That
these limitations shall not apply to agreements with labor organizations formed in violation
of Section 158, paragraph 2, title 29 , United States Code." [Sec. 8 ( 2) of the N. L. R B.]
40141 F. ( 2d) 794 (C C A. 9). This was in general the same limitation as in effect
during the 1946 fiscal year, except in respects not here material
J. I. CASE COMPANY 1181
purpose to be achieved by the rider was "the elimination of jurisdictional disputes
between unions (89 Cong. Rec. 6648, 6650, 7103)," and that a "limitation on
appropriations, not an alteration in the basic act, was contemplated." The
contention of the respondent that the complaint should be dismissed because
based on the legality of an agreement between the respondent and the Union, on
the ground that the proceeding is barred by the 1946 Appropriation Act must
therefore fail. Moreover, the undersigned is convinced that the 1946 Appropria-
tion Act is not applicable to the matter involved herein for additional reasons.
First, the rider is intended to apply to those situations where attack is made
upon a bona fide negotiated approved trade union agreement between employer
and union. It is to be questioned whether that situation exists here. The
document that is questioned here is rather an undertaking on the part of the
Union, executed long prior to enactment of the first rider, that it would not
assert certain rights to which it was entitled under the Act. Certainly this is
not a contract embodying terms concerning wages, hours, and working conditions
which is looked upon "as the final step in the bargaining process." 41 In addition,
it will be recalled that following execution of the 1937 letter, the parties agreed
upon a Statement of Policy that was superseded by the 1943 contract. The
respondent makes no contention that the Statement of Policy is still in existence
and since it treated the 1937 letter and the Statement of Policy as two integrated
documents, how it can now urge that the Board is prevented from considering
only part of the undertaking between the parties and not the entire undertaking,
remains inexplicable to the undersigned Although no finding is made to that
effect, the undersigned is of the opinion, despite respondent's contrary assertions,
that when the Statement of Policy expired in February 1943, the 1937 letter
expired as well. Finally, it is doubtful whether the respondent ever complied
with the provisions of the 1946 Appropriation Act, requiring posting and mention
of an accessible place where the agreement was open for inspection by any
interested person. So far as this record discloses the 1937 letter was posted
for a very short duration in 1937, at the South Works only, and then removed
at the insistence of the Union. The Board has held that posting of notices by an
employer, which did "not mention the location at an accessible place of such
agreement where said agreement shall be open for inspection by any interested
person," as required by the limitation, is not compliance with the posting require-
ment of the limitation 42 It is true that at various dates subsequent to October 8,
1945, the respondent published and circularized copies of the 1937 letter. But
the Board has likewise held that distribution of copies of an agreement does not
give the actual notice, required by the limitation, where it does not appear that
every employee received copies during any 3-month period prior to the filing of
any charge.41
The undersigned is convinced and finds that the 1946 Appropriation Act is
not a bar to these proceedings and the respondent's motion to dismiss on those
grounds is denied
The undersigned finds therefore, by reason of all of the foregoing, that on
October 8, 1945, and at all times thereafter, the respondent refused to bargain
collectively with the Union as the exclusive representative of its employees in
an appropriate unit with respect to rates of pay, wages, hours and other condi-
tions of employment, and that the respondent has thereby interfered with, re-
strained, and coerced its employees in the exercise of the rights guaranteed in
Section 7 of the Act.
41 Cf. H. J Heinz Company v. N. L. R B., 311 U. S 514
42
Matter of Ken-Rad Tube and Lamp Corporation, 62 N. L. R. B. 21.
43 Ibid.
1182 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
The undersigned finds further that the strike of December 26, 1945, was caused
and prolonged by the respondent's insistence upon the continuing validity of the
1937 letter, its refusal to accord the Union sole and exclusive recognition for all
employees, as well as its refusal to discuss other terms and conditions of em-
ployment as being in conflict with the 1937 letter, and that this refusal constituted
and now constitutes a refusal to bargain in violation of Section 8 (5) of the
Act.
W. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE
The activities of the respondent 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 and have led to labor disputes burden-
ing and obstructing commerce and the free flow of commerce
V. TIIE REMEDY
Having found that the respondent has violated Section 8 (1) and (5) of the
Act, the undersigned will recommend that it cease and desist therefrom and
take certain affirmative action the undersigned finds necessary to effectuate the
policies of the Act.
It has been found that the respondent on October S, 1945, and at all times
thereafter refused to bargain collectively with the Union concerning terms and
conditions of a contract on the ground that proposed provisions of the contract
were in conflict with the document executed by the Union on February 6, 1937.
More particularly it has been found that, despite the respondent's willingness
to accord in words an exclusive recognition to the Union, it in fact refused to do
so by insisting upon the right of any employee who is not a member of the Union
lo deal individually with the respondent. The respondent maintained a pre-
determined and fixed position respecting the Union's demand for a union shop
and check-off and refused to bargain with the Union concerning those and other
proposals on the ground that they were inconsistent with the afore-mentioned
1937 document. The logical inference to be drawn ftom the respondent's con-
duct in this respect is that it insisted that either the Union reaffirm and adhere
to the 1037 document or else as the other alternative, that it withdraw all
demands which the respondent deemed to be in conflict. Failing to accept either
alternative the Union was then in a position to bargain upon only those matters
acceptable to the respondent.
The undersigned has also found that on various dates subsequent to October 8,
1945, the respondent addressed letters to its employees in an effort to create con-
fusion and disrupt the attempts of the Union to achieve a collective bargaining
contract with the respondent, by warning all union members as well as non-union
employees that the efforts of the Union to achieve exclusive recognition for all
employees, union security and check-off were doomed in advance of discussion.
In order to effectuate the policies of the Act, the undersigned will recommend
that the respondent cease and desist from its efforts to have the Union acknowl-
edge the continuing existence and validity of the February 6, 1937 letter and
further that the respondent cease from distributing direct appeals to its em-
ployees concerning all matters which are properly the subject of collective bar-
gaining between the exclusive representative and the respondent, and finally,
that upon request of the Union the respondent bargain collectively with the
Union as the exclusive representative of its employees in the appropriate unit
in respect to rates of pay, wages, hours and other terms and conditions of em-
ployment.
J. I. CASE COMPANY 1183
The undersigned has found that the unfair labor practices of the respondent
caused and prolonged the strike which began on December 26, 1945. In order
to restore the situation as it existed prior to the time the respondent committeed
the unfair labor practices, the undersigned will recommend that the respondent,
upon application, 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 the said date and who had not pre-
viously applied for reinstatement, dismissing if necessary any persons hired by
the respondent after December 26, 1945, the date of the strike, and not in the
employ of the respondent on said date. If thereupon, despite such reduction in
foice, there is not sufficient employment available for the employees to be offered
reinstatement, all available positions shall be distributed among such employees
without discrimination against any employee because of his union affiliation or
activities, following such a system of seniority or other non-discriminatory prac-
tice to such an extent as has heretofore been applied in the conduct of the
respondent's business. Those employees, if any, remaining after such distribu-
tion, for whom no employment is immediately available, shall be placed upon a
preferential list and offered employment in their former or substantially equiva-
lent positions as such employment becomes available 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.
The undersigned will also recommend that the respondent make whole those
employees who went out on strike on December 26, 1945, and who have not
previously applied for reinstatement, for any loss of pay they may suffer by reason
of the respondent's refusal, if any to reinstate them, as provided above, by pay-
ment to each of them of a sum of money equal to that which he would normally
have earned as wages during the period from five (5) days after the date on
which he applies for reinstatement to the date of the respondent's offer of
reinstatement or placement on a preferential list, less his net earnings , ' if any,
during such period.
Upon the basis of the above findings of fact and the entire record in the case,
the undersigned makes the following :
CONCLUSIONS OF LAw
1 Local 180, International Union, United Automobile, Aircraft and Agricul-
tural Implement Workers of America, affiliated with the Congress of Industrial
Organizations, is a labor organization within the meaning of Section 2 (5) of
the Act.
2. A unit consisting of all production and maintenance employees of the
respondent employed at its Racine, Wisconsin, plants excluding: (a) cooperative
students not to exceed 12 in total number and not to exceed 6 in the plants at
any one time, (b) indentured apprentices not to exceed a total of 20 at the
plants, and not to exceed 4 in each tool and die department and 2 in any other
department or craft grouping, (c) work managers, superintendents, assistant
superintendents and their personal clerical help, general foremen, foremen and
assistant foremen including those who have the right to hire and discharge, (d)
na By "net earnings" is meant earnings less expenses , such as for transportation, room,
and board incurred by an employee in connection with obtaining work and working else-
where than ton the respondent, which would not have been incurred but for his unlawful
discharge and the consequent necessity of his seeking employment elsewhere . See Matter
of Crossett Lumber Company, 8 N. L R B 440 Monies received for work performed upon
Federal , State , county , municipal, or other work -relief projects shall be considered as earn-
ings See Republic Steel Corporation v. N. L. R. B ., 311 U. S 7.
717734-47-vol 71-76
1184 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
executives, salesmen and heads of all non-productive departments, (e) employees
of the cost department, engineering department, dynamometer room, planning
and rates and methods departments, employment office, medical department,
safety and compensation department, chemical and metallurgical department,
advertising department, printing department, plant guards, fire department and
the main office, (f) tool designers, telephone operators and supervisory inspec-
tors, and (g) all Racine Branch office employees, production control clerks,
pay-roll department employees, and timekeepers, at all times material herein
constitutes and now constitutes a unit appropriate for the purposes of collective
bargaining within the meaning of Section 9 (b) of the Act.
3. Local 180, International Union, United Automobile, Aircraft and Agricul-
tural Implement Workers of America, affiliated with the Congress of Industrial
Organizations, was at all times material herein, and now is, the exclusive
representative of all the employees in the above unit for the purposes of collec-
tive bargaining within the meaning of Section 9 (a) of the Act.
4. By refusing to bargain collectively with Local 180, International Union,
United Automobile, Aircraft and Agricultural Implement Workers of America,
affiliated with the Congress of Industrial Organizations, as the exclusive repre-
sentative of the employees in the above-described unit, respondent has engaged
in and is engaging in unfair labor practices within the meaning of Section 8
(5) of the Act.
5. 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
in and is engaging in unfair labor practices within the meaning of Section 8 (1) of
the Act.
6. The aforesaid 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 above findings of fact and conclusions of law, the
undersigned recommends that the J. I. Case Company, Racine, Wisconsin. its
officers, agents, successors, and assigns shall :
1. Cease and desist from :
(a) Insisting that the Union reaffirm and acknowledge the continuing exist-
ence and validity of the letter signed February 6, 1937, as a valid and presently
binding contract and refusing to bargain with the Union concerning terms and
conditions of a proposed contract on the grounds that the Union's proposals are
or may be in conflict with that document;
(b) Interfering with or impeding collective bargaining, by issuance of
letters or otherwise, in an attempt to influence or alienate the employees from
their chosen representatives;
(c) Refusing to bargain collectively with Local 180, International Union,
United Automobile, Aircraft and Agricultural Implement Workers of America,
affiliated with the Congress of Industrial Organizations, as the exclusive repre-
sentative of all of its production and maintenance employees at Racine, Wis-
consin, in the appropriate unit found above, with respect to rates of pay, wages,
hours of employment and other conditions of employment.
(d) Engaging in any other acts in any manner interfering with the efforts
of Local 180, International Union, United Automobile, Aircraft and Agricultural,
Implement Workers of America, affiliated with the Congress of Industrial
Organizations, to negotiate for or represent the employees as the exclusive
bargaining agent in the aforesaid appropriate unit.
2. Take the following affirmative action which the undersigned finds will
effectuate the policies of the Act.
J. I. CASE COMPANY 1185
(a) Abandon any insistence for recognition of the February 6, 1937, docu-
ment as a presently binding and existing contract, and upon request bargain
collectively with Local 180, International Union, United Automobile, Aircraft
and Agricultural Implement Workers of America, affiliated with the Congress
of Industrial Organizations, as the exclusive representative of all the respond-
ent's production and maintenance employees at its plants at Racine, Wisconsin,
in the unit described herein with respect to rates of pay, wages, hours of em-
ployment and other conditions of employment and if an agreement is reached,
embody such understanding in a signed agreement ;
(b) Upon application offer to those employees who went on strike on Decem-
ber 26, 1945, and who have not previously applied for 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 on a preferential list in
the manner set forth in said section, and thereafter, in said manner , offer them
employment as it becomes available;
(c) Make whole the employees specified in paragraph 2 (b) above, for any
loss of pay they may suffer by reason of the respondent' s refusal , if any, to
reinstate, by payment to each of them a sum of money equal to that which he
would normally have earned as wages during the period from five (5) days after
the date on which he applies for reinstatement to the date of the respondent's
offer of reinstatement or placement upon a preferential list, less his net earn-
ings, if any, during said period ;
(d) Post in conspicuous places at the Main Works and South Works at
Racine, Wisconsin, copies of the notice attached hereto marked "Appendix A."
Copies of said notice, to be furnished by the Regional Director for the Thirteenth
Region, after being signed by the respondent's representative, shall be posted
immediately by the respondent upon receipt thereof and maintained by it for
sixty (60) consecutive days thereafter in conspicuous places, including all places
where notices to employees are customarily posted. Reasonable steps shall be
taken by the respondent to insure that said notices are not altered, defaced,
or covered by any other material;
(e) Notify the Regional Director for the Thirteenth Region in writing, within
ten (10) days from the date of the receipt of this Intermediate Report, what
steps respondent has taken to comply therewith.
It is further recommended that unless on or before ten (10) days from the
date of the receipt of this Intermediate Report, respondent notifies said Regional
Director in writing that it will comply with the foregoing recommendations, the
National Labor Relations Board issue an order requiring 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 3, as amended, effective November 27,
1945, any party or counsel for the Board may, within fifteen (15) 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 Regulations, file with the Board,
Rochambeau Building , Washington 25, 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 (including rulings upon all
motions or objections) as he relies upon, together with the original and four
copies of a brief in support thereof Immediately upon the filing of such state-
ment of exceptions and/or brief, the party or counsel for the Board filing the
same shall serve a copy thereof upon each of the other parties and shall file a
copy with the Regional Director. As further provided in said Section 33, should
1186 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
any party desire permission to argue orally before the Board, request therefor
must be made in writing to the Board within ten (10) days from the date of the
order transferring the case to the Board. Any party desiring to submit a brief
in support of the Intermediate Report shall do so within fifteen (15) days from
the date of the entry of the order transferring the case to the Board, by filing
with the Board an original and four copies thereof, and by immediately serving a
copy thereof upon each of the other parties and the Regional Director.
MORTIMER RIEMER,
Trial Examiner.
Dated July 26, 1946.
APPENDIX A
NOTICE TO ALL EMPLOYEES
Pursuant to the recommendations of a Trial Examiner of the National Labor
Relations Board, and in order to effectuate the policies of the National Labor
Relations Act, we hereby notify our employees that:
WE WILL NOT ask that Local 180, International Union, United Auto-
mobile, Aircraft and Agricultural Implement Workers of America, CIO, re-
affirm and acknowledge the continuing existence and validity of the letter
executed February 6, 1937, or refuse to bargain with the said Union on
the ground that certain terms and conditions of a proposed contract are
or may be in conflict with the said letter.
WE WILL NOT interefere with or impede collective bargaining, by issuance
of letters or otherwise, in an attempt to influence or alienate the employees
from their chosen representatives.
WE WILL NOT engage in any other acts in any manner interfering with
the efforts of the Union to negotiate for or represent the employees as the
exclusive bargaining agent for the unit found below.
WE WILL BARGAIN collectively upon request with the above-mentioned
Union as the exclusive representative of all the employees in the bargaining
unit described herein with respect to rates of pay, hours of employment or
conditions of employment, and if an understanding is reached, embody such
understanding in a signed agreement. The bargaining unit is:
"all production and maintenance employees excluding: (a) cooperative
students not to exceed 12 in total number and not to exceed 6 in the plants
at any one time, (b) indentured apprentices not to exceed a total of 20
at the plants, and not to exceed 4 in each tool and die department and 2
in any other department or craft grouping, (c) work managers, superin-
tendents, assistant superintendents and their personal clerical help, general
foremen, foremen and assistant foremen including those who have the right
to hire and discharge, (d) executives, salesmen and heads of all non-pro-
ductive departments, (e) employees of the cost department, engineering
department, dynamometer room, planning and rates and methods depart-
ments, employment office, medical department, safety and compensation de-
partment, chemical and metallurgical department, advertising department,
printing department, plant guards, fire department and the main office, (f)
tool designers, telephone operators and supervisory inspectors, and (g) all
Racine Branch office employees, production control clerks, pay-roll depart-
ment employees, and timekeepers." -
WE WILL OFFER, upon application, to those employees who went on
strike December 26, 1945, immediate and full reinstatement to their former
or substantially equivalent positions, or in the event employment is not
J. I. CASE COMPANY 1187
immediately available, placement upon a preferential list, without prejudice
to any seniority or other rights previously enjoyed.
WE WELL make whole the employees who went on strike December 26,
1945, for any loss of pay suffered as a result of our refusal, if any, to reinstate
them, for the period from five (5) days after the date of application for
reinstatement to the date of our offer of reinstatement or placement upon
a preferential list.
J. I. CASE COMPANY,
Employer.
Dated --------------------- By ------------------- -------------------
(Representative ) ( Title)
This notice must remain posted for 60 days from the date hereof, and must
not be altered, defaced, or covered by any other material.