Keystone Coat, Apron & Towel Supply Co.

National Labor Relations Board - Board Decisions

Sep 17, 1958

121 N.L.R.B. 880 (N.L.R.B. 1958)

880 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
jobs back at the beginning of the next busy season However, in view of the dis-
crimination against Bishop and the possibility that Bishop may not be reinstated to
the job to which she is entitled, the Trial Examiner recommends that, upon opening
of the busy season and reemployment of seasonal workers, Bishop be reemployed
in the position which she held prior to the discrimination against her-as a candler
who is also available for work as an egg breaker
Ultimate Findings and Conclusions
In summary the Trial Examiner finds and concludes
1 The evidence adduced in this proceeding satisfies the Board 's requirements for
the assertion of jurisdiction herein 9
2 Amalgamated Meat Cutters and Butcher Workmen of North America, Local
No 346, AFL-CIO, is a labor organization within the meaning of the Act
3 The evidence adduced establishes that Respondent interfered with, restrained,
or coerced employees in the exercise of rights guaranteed in the Act and thereby
engaged in unfair labor practices within the meaning of Section 8 (a) (1) of the
Act by ( a) interrogating employees concerning their union activities, (b) threatening
to shut down the plant if employees chose the Union as their bargaining represen-
tative, (c) encouraging the formation of a labor organization of Respondent's
choosing and promising rewards to employees for forming such a labor orgam-
zation ,19 and (d) by transferring Leona Bishop to a different job because of her
union activities 1
4 The aforesaid unfair labor practices are unfair labor practices affecting com-
merce within the meaning of Section 2 (6) and (7) of the Act
5 The evidence adduced does not establish that Respondent promised wage in-
creases if employees voted against the Union and does not establish that Respondent
engaged in unlawful surveillance of union activities 11
[Recommendations omitted from publication ]
9 In its answer , Respondent admitted that it is an Ohio corporation engaged in Zanes
viile Ohio , in the purchase , freezing , storing, and sale of eggs and such business activity
necessarily incidental thereto, and that it annually causes in excess of $50,000 worth of its
products to be sold and shipped in interstate commerce , and that it is engaged in commerce
within the meaning of Section 2 (0) and ( 7) of the Act
'n Respondent may have acted lawfully in attempting to ascertain whether the Union
represented a majority However, It exceeded the permissible when it went beyond this
inquiry and engaged in individual bargaining, encouraged the formation of a labor organi-
zation of its choice , and threatened economic reprisals ( See I C Sutton Handle
Factorg, 119 NLRB 951 ) Under the Act employees are guaranteed the right "to form,
join, or assist labor organizations" of "their own choosing" and employers are prohibited
from interfering with, restraining , or coercing employees In the exercise of this right.
Here, Respondent took it upon itself to induce its employees to seek representation
through a labor organization ( a committee ) of Respondent's "choosing" and promised
an economic reward for such a labor organization
ii Counsel for the General Counsel argues that the circulation of the "Petition against
Union" was with Respondent 's approval and endorsement (sponsorship ) and was part of
a'total pattern of conduct aimed at interfering with employees ' free choice of a bargaining
representative The Trial Examiner believes the facts sufficient to establish that Respond-
ent acquiesced , for a few days , in the circulation of this paper but insufficient to warrant
the findings sought by counsel for the General Counsel
Keystone Coat , Apron & Towel Supply Company, Erie Sanitary
Laundry & Linen Supply Company, and Keystone Linen Sup-
ply Company and International Brotherhood of Teamsters,
Chauffeurs, Warehousemen & Helpers of America, Local Union
No. 397, Petitioner. Case No 6-RC-2066 September 17, 1958
DECISION AND DIRECTION OF ELECTION
Upon a petition duly filed under Section 9 (c) of the National
Labor Relations Act, a hearing was held before Elmer E Hope, hear-
121 NLRB No 125
KEYSTONE COAT, APRON & TOWEL SUPPLY COMPANY 881
ing officer. The hearing officer's rulings made at the hearing are
free from prejudicial error and are hereby affirmed. On March 28,
1958, the Board, by notice and invitation to submit briefs or com-
ment, invited the parties hereto and all other interested organizations
and persons to express their views concerning certain matters involved
in this and several other related representation cases for the purpose
of considering possible revisions of some of its contract-bar policies.'
On May 23, 1958, the Board granted the requests of the AFL-CIO,
the Brewery Workers, and the UE for oral argument. On June 16,
1958, the Board heard oral argument.
The Board has considered the entire record, the briefs of the parties,
and other amicus curiae briefs and statements, and the oral argument
in this case , and fords :
1. Keystone Coat, Apron & Towel Supply Company, Keystone
Linen Supply Company, and Erie Sanitary Laundry & Linen Supply
Company, herein called Keystone Coat, Keystone Linen, and Erie
Sanitary, respectively, each contends that it is not engaged in com-
merce within the meaning of the Act. Keystone Coat and Erie
Sanitary are Pennsylvania corporations with business establishments
located in Erie, Pennsylvania. Keystone Linen is a New York cor-
poration with its business establishment located in Olean, New York.
Keystone Coat and Keystone Linen are engaged in the renting of
linen supplies to commercial users in their respective cities and sur-
rounding areas. Erie Sanitary is engaged exclusively in the launder-
ing and repairing of linen supplies for Keystone Coat and Keystone
Linen. The controlling stock in all three companies is owned by
United Service Company, an Ohio corporation. All three companies
have the same headquarters in Erie, Pennsylvania, and are supervised
by the same manager. All three companies likewise are served by the
same office force located at the Erie headquarters, although separate
books and payrolls are maintained for each. Keystone Coat performs
packaging and sorting services for itself as well as for Keystone Linen.
As all three corporations are owned and controlled by the same
parent corporation with unified management, and are operated as a
single integrated enterprise, we find that they constitute a single em-
ployer for purposes of determining jurisdiction.' As goods worth
i Pursuant to the Board 's invitation , amicus briefs and memoranda were filed by the
American Federation of Labor and Congress of Industrial Organizations , herein called
AFL-CIO ; Chamber of Commerce of the United States, herein called Chamber of Com-
merce ; International Union of United Brewery, Flour, Cereal, Soft Drink & Distillery
Workers of America, AFL-CIO, herein called Brewery Workers ; United Electrical Radio &
Machine Workers of America ( UE), herein called UE ; and United Steelworkers of America,
herein called the Steelworkers.
'Frank S. Owens Co.,,et at., 118 NLRB 1619, and case cited therein; Ponce Electric
Company, Inc., 120 NLRB 975.
487926-59-vol. 121-57
882 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
more than $50,000 were shipped across State lines by the Employer
during the 12-month period preceding the hearing, we find, contrary
to the contention of the Employer, that it is engaged in commerce
within the meaning of the Act and that it will effectuate the policies
of the Act to assert jurisdiction in this proceeding.3
2. The labor organizations involved claim to represent certain em-
ployees of the Employer.
3. AFL-CIO Laundry and Dry Cleaning International Union
Local No. 141, the Interventor, contends that an existing agreement,
effective from November 1, 1955, to October 31, 1958, is a bar to this
proceeding. The Petitioner, inter alia, asserts that the contract is ren-
dered no bar because of the existence of a closed shop-preferential
hiring provision, and the fact that the Intervenor was not in com-
pliance on any of the dates required by Section 8 (a) (3) of the Act,
as amended, with respect to the making of agreements containing
union-security clauses. The Employer is neutral concerning the con-
tract-bar issue.
The Employer executed its first agreement with the Intervenor in
December 1952. This agreement covered only the inside, or produc-
tion, employees of Keystone Coat in Erie, Pennsylvania, but not the
employees of Erie Sanitary, likewise located in Erie but not then in
existence, nor the Keystone Linen employees in Olean, New York.
The 1952 contract was superseded by the current agreement which
was negotiated in 1955, effective from November 1, 1955,• to October
31, 1958. After Erie Sanitary was founded in June 1955, the pro-
visions of the then existing contract were extended to its employees.
The 1952 agreement contained the following clauses, all of which were
carried forward and are part of the current contract :
UNION SHOP
*
The Company shall employ only members of the Union in good
standing for production work : In the event the Employer re-
quires employees, he shall first make application to the Union,
specifying the number of and kind of workers required. If the
Union is unable to furnish union employees to report for work
within twenty-four (24) hours, the Employer shall have the right
to obtain them in the open market, provided, however, that the
Employer shall notify the union shop steward before employees
obtained in the open market commence work and provided further
" Joneeboro Grain Drying Cooperative, 110 NLRB 481.
KEYSTONE COAT, APRON & TOWEL SUPPLY COMPANY 883
that the said new employee shall register in the union office or
with the union steward for future membership in the Union
within twenty-four (24) hours after commencing to work.
CHECK-OFF
30. On the first day of each month, initiation, membership and
apprentice fees, dues, fines, and assessments shall be deducted
from the pay of each employee by the Employer and turned over
to the Secretary-Treasurer of the Union or other duly authorized
representative of the Union.
In support of its contention that the existing agreement is a bar,
the Intervenor asserts that, in practice, there was an "open" and not
a closed shop, and sought at the hearing to elicit testimony that the
contracting parties did not follow strictly the terms of the above-
quoted union-security clause. It sought to show that there had been
a variance from the written agreement as a result of an oral "under-
standing" as to the time within which newly hired employees would
be required to join the Intervenor. The hearing officer sustained ob-
jections by the Petitioner to this line of inquiry. At the oral argu-
ment herein, the Intervenor, although conceding that the hearing
officer's ruling was consistent with past Board practice, urged that
the Board should permit the introduction of extrinsic evidence for
the purpose of showing that an oral agreement was made modifying
an invalid union-security clause so as to make it conform to the re-
quirements of the Act.
As indicated above, the Board has been reevaluating various aspects
of its contract-bar doctrine, for the purpose of achieving clarity and
simplicity in this complicated field of Board law. In furtherance of
these objectives, the Board has reexamined its rules concerning union
security and related provisions and, after full consideration of all the
contentions advanced by the parties and the amici and based upon that
reexamination, has decided that the existing rules relating to union
security should be revised.
Accordingly, we have determined, and so hold, that a contract con-
taining a union-security clause which does not on its face conform to
the requirements of the Act or which has been found to be unlawful in
an unfair labor practice proceeding will not bar an election. Ex-
amples of clauses in contracts which will be deemed to be invalid for
contract bar purposes and which will remove the contracts as bars
include those (1) requiring the employer to give preference on the
884 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
basis of union membership in hire, tenure, seniority, wages, or other
terms and conditions of employment; (2) delegating to a union un-
lawful control of hire, tenure, seniority, wages , or other terms and
conditions of employment; 4 or (3) making a condition of employment
the performance of any obligation of membership other than the pay-
ment of "periodic dues and initiation fees uniformly required."
Under our holding herein, we shall no longer treat as bars to elections
contracts whose union-security provisions do not expressly grant old,
nonunion member employees the statutory 30-day grace period within
which they are not required to join the union, or those agreements
containing clauses deferring the effectiveness of union-security provi-
sions deemed invalid for bar purposes or agreements purporting to be
rescissions or amendments curing such clauses, or contracts containing
ambiguous union-security provisions which may be interpreted as
either lawful or unlawful because the language employed is not clear
or is in general terms.
We do not believe that it will be burdensome upon any party for
the Board to insist upon compliance with the congressional policy as
reflected in the union-shop proviso of Section 8 (a) (3) of the Act.
This provision is among the most carefully considered and completely
defined elements of the policy embodied in the Taft-Hartley Act. To
hold that agreements containing union-security clauses which do not
conform to the Act are effective bars to elections the Board would
thereby impliedly recognize as valid that which by its own language
falls short of the statutory limitations. Indeed, if the Board honored
for contract bar purposes the provisions of union-security clauses that
exceed the permissive limits, it itself would be contributing to the
undermining of the freedom of choice which is guaranteed by the Act
to the individual employee-the primary beneficiary of the law.
It has been argued that the rule which we have decided to adopt
herein not only might operate to the disadvantageto those parties who,
because of sophistication and deliberate use of ambiguity seek to in-
fringe upon the rights of individual employees, but also might operate
to the detriment of those who, because of carelessness, ineptitude, or
oversight, fail to make their union-security provisions comply with
the law. Although this latter situation could conceivably arise, we
believe the answer is plain that the Board, as the agency of Govern-
ment charged with the interpretation and administration of this sec-
tion of the Act, cannot close its eyes to such failures, irrespective of the
reasons. The Board likewise has been urged by several of the labor
organizations who participated as amici curiae that the Hager Hinge
doctrine 5 should be completely reversed and in its stead a rule should
4 Mountain Pacific Chapter of Associated General Contractors , Inc., et at., 119 NLRB
883; and Pacific Intermountain Express Company, 107 NLRB 837.
5 C. Hager & Sons Hinge Manufacturing . Company, 80 NLRB 163.
KEYSTONE COAT, APRON & TOWEL SUPPLY COMPANY 885
be adopted that would eliminate entirely from representation proceed-
ings consideration of union-security clauses. The adoption of such a
rule, in our opinion, would ignore completely the realities of the situa-
tion because it would result in the Board giving effect to clauses clearly
illegal on their face, such as a closed-shop provision or one not accord-
ing new employees the statutory 30-day grace period. Moreover, the
argument that such matters should be considered in the adversary,
unfair labor practice proceeding is untenable if the Board is to carry
out its responsibility of properly administering this section of the Act,
because it overlooks the delays unavoidably inherent in complaint
proceedings.
We feel that the rule we have adopted is simple, and will be clearly
understood by all, including the worker in the plant as well as the
attorney who specializes in labor law. It merely will require a
Board finding that, for contract-bar purposes only, the questioned
union-security provision is or is not sufficient to permit the contract
containing it to operate as 'a bar to an election. The rule may be
easily interpreted by all parties concerned and is consistent with the
statutory intent.
It should not be difficult for the parties who draft union-security
clauses to adhere to the statutory requirements clearly set forth by
Congress more than 11 years ago. But, in order to assist any parties
who might encounter difficulty in drafting, the following model union-
security clause, deemed by the Board to- be the maximum permissible
in conformity with the requirements of the Act, is set forth as a
guide :
It shall be a condition of employment that all employees of the
Employer covered by this agreement who are members of the
Union in good standing on the effective date of this agreement
shall remain members in good standing and those who are not
members on the effective date of this agreement shall, on the
thirtieth day [or such longer period as the parties may specify]
following the effective date of this agreement, become and remain
members in good standing in the Union. It shall also be a condi-
tion of employment that all employees covered by this agreement
and hired on or after its effective date shall, on the thirtieth day
following the beginning of such employment [or such longer
period as the parties may specify] become and remain members
in good standing in the Union e
Consistent with our findings concerning union-security clauses, we
likewise hold that failure of a checkoff provision on its face to con-
form to Section 302 of the Act removes as a bar any contract contain-
Where the effective date of the agreement is made retroactive , the execution date shall
be substituted for the effective date.
886 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
ing such a clause. In our opinion , the considerations mentioned above
which underlie our determination concerning union -security clauses
invalid for bar purposes apply with equal force to contracts urged as
bars that contain such invalid checkoff provisions. Consequently, we
have decided no longer to follow the policy that failure of a checkoff
provision in the contract to conform to Section 302 of the Act does
not remove the contract as a bar.
We have further decided that no extrinsic evidence will be admis-
sible in a representation proceeding for the purpose of determining the
validity of a union-security or checkoff clause in a contract for bar
purposes. In sum, we are abandoning the practice of permitting the
admission of external evidence to show whether an ambiguous union-
security provision or a clause that fails to specify 30 days' grace for
nonmember incumbent employees does in fact conform to the Act.
Under this holding, examination of a union-security or checkoff clause
in a representation proceeding simply will be a matter of contract
interpretation. It is not intended that this examination shall result
in a purely technical approach in the construction of the contract
language or that the Board should look solely to the niceties of preci-
sion . Prior Board representation proceedings have demonstrated
that the permissive use of extrinsic evidence generally has protracted
the hearings involved. Moreover, representation proceedings which
are investigatory in character do not afford satisfactory means for de-
termining matters that essentially are subjects properly encompassed
by adversary unfair labor practice proceedings with their accompany-
ing safeguards.
Finally, the Board has decided to modify its existing rules relating
to the effect of a contracting union's compliance or noncompliance
with Section 9 (f), (g), and (h) of the Act upon contracts containing
union-security provisions which are otherwise valid for bar purposes.
The new rules provide that a contract containing an otherwise valid
union-security clause does not bar an election if :
1.1 A majority of the employees in the unit have voted within 1 year
preceding the execution of the contract to rescind the authority of the
union to make an agreement pursuant to Section 9 (e) (1) of the
Act; or,
2. The local union or its affiliated parent are not in compliance with
the filing requirements of the Act. For the purposes of these rules, a
union is deemed to be in compliance with the filing requirements of
the Act if it meets any one of the following requirements :
(a) It was in compliance at the time of the execution or renewal of
the contract; or,
(b) It received a notice of compliance within the 12-month period
preceding the execution or renewal of the contract; or,
KEYSTONE COAT, APRON & TOWEL SUPPLY COMPANY 887
(c) It received a notice of compliance before the filing of the pe-
tition if initial steps to achieve such compliance were taken before the
execution or renewal of the contract; or,
(d) It achieved compliance after the filing of the petition if initial
steps to achieve compliance were taken before the execution of the
contract and actual compliance was achieved within a reasonable
period of time.
The foregoing modifications do not substantially change current
Board policy within this area, In essence, these rules provide that a
union-security agreement shall be considered valid where the con-
tracting union has met the literal requirements of the statute and in
certain other instances where the purposes of the statute have in a
realistic sense been served. In the latter situation, we believe that if
the receipt of notice of compliance before the execution of the con-
tract meets the statutory requirements, as it does in fact, then notice
of compliance received after execution should cure any defect in the
agreement. In other words, we are of the opinion that a more recently
issued notice of compliance would seem a more certain guarantee that
the contract is not being utilized to serve the ends of persons to whom
Congress intended to deny the benefits of the Act.
With all the foregoing principles in mind, we now turn to a con-
sideration of the specific issues involved in this aspect of the case.
It is apparent that the so-called "union-shop" clause of the current
agreement between the Intervenor and the Employer essentially is a
closed shop-preferential hiring provision that exceeds by far the per-
missive limits of union security allowed by the proviso to Section 8
(a) (3). As this clause does not on its face conform to this section
of the Act, we find that the current contract will not bar an election.
For the reasons more fully set forth hereinabove, we also find no merit
in the Intervenor's contention that the Board should permit the intro-
duction of extrinsic evidence for the purpose of showing that the
parties orally agreed to modify this union-security clause to make it
conform to the statutory requirements. As the clause of the existing
agreement providing for the compulsory checkoff of union dues,
initiation fees, fines, and assessments, evidently without individual
written authorizations, also does not on its face conform to Section
302 of the Act, we find that the contract likewise is no bar for this
reason. Finally, as the Intervenor had not achieved compliance with
Section 9 (f), (g), and (h) during any of the critical periods pre-
scribed by the Act and as set forth in the Board's new rules,quoted
above, we likewise find for this reason, and apart from any other con-
siderations, that the current agreement is no bar to an election 7
7 To the extent that all prior cases are -inconsistent with our determinations herein, they
are hereby overruled.
888 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Accordingly , we find that a question affecting commerce exists con-
cerning the representation of employees of the Employer within the
meaning of Section 9 (c) (1) and Section 2 (6) and (7) of the Act.
4. The 'Petitioner seeks to represent a unit composed of all produc-
tion and maintenance employees of Erie Sanitary and Keystone Coat
at Erie, Pennsylvania8 Although the parties agree substantially
concerning the composition of the requested unit , only the Petitioner
and the Employer agree to its scope . The Intervenor contends that
the two-company unit sought is inappropriate because each corpora-
tion is a separate legal entity whose employees should be represented
in separate units.
As stated heretofore , all three corporations maintain common head-
quarters at Erie, Pennsylvania , and are under the direction of the
same manager . Keystone Coat rents linens and towels to commercial
users within the Commonwealth of Pennsylvania . Erie Sanitary
performs all the laundering of these goods for Keystone Coat, as well
as for Keystone Linen at Olean , New York . Although separate
bookkeeping is maintained for each corporation , all three share the
same clerical force. Since 1955 employees of Keystone Coat and
Erie Sanitary , with the exception of truckdrivers who work only for
Keystone Coat and are separately represented , have been covered by
contract between the Employer and the Intervenor. As a consequence
of this agreement, benefits for employees of both of these corporations
have been the same. In view of the common ownership and unified
control of both corporations , their high degree of integration, the
proximity of location of both corporations , and particularly the his-
tory of collective bargaining on a joint, two -company basis , we find,
contrary to the contention of the Intervenor, that a single unit of
employees of both corporations is appropriate.'
Accordingly, we find that all production and maintenance employ-
ees employed by Keystone Coat, Apron & Towel Supply Company
and Erie Sanitary Laundry & Linen Supply Company at their Erie,
Pennsylvania , plants, excluding office employees , truckdrivers, pro-
fessional employees , guards, and all supervisors as defined in the Act,
constitute a unit appropriate for the purposes of collective bargaining
within the meaning of Section 9 (b) of the Act.
[Text of Direction of Election omitted from publication.]
8 At the hearing the Petitiorer requested a unit consisting of employees of the Erie
corporations mentioned above together with those of Keystone Linen at Olean , New York.
After tLe hearing it filed a motion to amend its petition to exclude the employees at Olean
from the proposed unit. As no objection has been interposed to the motion and the
appropriateness of the two-company unit sought by the amendment was fully litigated
at the hearing , we grant the motion to amend the petition.
9 Crenshaw's, Inc., et at ., 115 NLRB 1374. See, also, Frank S. Owens Co., et at., 118
NLRB 1819.