Lion Shoe Co.

National Labor Relations Board - Board Decisions

May 20, 1937

2 N.L.R.B. 819 (N.L.R.B. 1937)

In the Matter of LION SHOE COMPANY and UNITED SHOE AND
LEATHER WORKERS' UNION
Case No. C-9..-Decided May 20, 1937
Shoe Manufacturzny Industry-Strike-Employee Status: during strike-
Interference , Restraint or Coercion : threat to remove plant ; shut-down of plant;
soliciting individual strikers to return to work-Company-Dominated Untion:
initiation and sponsorship ; domination and interference with formation and
administraton ; soliciting membership in; coercion to join; closed shop agree-
ment with ; disestablished as agency for collective bargaining-Condition of
Employment: join company-dominated union-Discrimination : strikers: re-
quiring application for membership in company -dominated union as condition
of reemployment ; non-reinstatement-Reinstatement Ordered, Strikers: dis-
crimination in reinstatement ; displacement of employees newly-hired during
strike.
Mr. Ralph M. Cahouet for the Board.
Mr. Charles J. Goldman, of Lynn, Mass., for respondent.
Mr. Aaron W. Warner, of counsel to the Board.
DECISION
STATEMENT OF CASE
A charge and an amended charge having been duly filed by United'
Shoe and Leather Workers' Union, hereinafter called the' Union;
the National Labor -Relations Board, by its agent, the 'Regional
Director for the First Region, (Boston, Massachusetts), issued acid'
duly served its complaint, dated January 9, 1936, against the Lion
Shoe Company, the respondent herein, alleging that the respondent
had engaged in and was engaging in unfair labor practices affecting
commerce as defined in Section 8, subdivisions (1), (2), and (3), and
Section 2, subdivision (6) and (7) of the National Labor Relations
Act (49 Stat. 449).
In respect to the unfair labor practices, the complaint alleges
in substance that the respondent has dominated and interfered with
the administration of a labor organization of its employees known
as the Lynn Shoe Workers' Union, and contributed financial' and
other support thereto, contrary to Section 8, subdivisions (1) and
(2) of the Act; and that the respondent has required and is now re-
quiring all applicants for employment to sign applications' for mem=
bership in the Lynn Shoe Workers' Union and has otherwise dis-
criminated in favor of ,the Lynn Shoe Workers' Union, dnd''a la',inst
5727-37-vol u-53 819
820 NATIONAL LABOR RELATIONS BOARD
the United Shoe and Leather Workers' Union, contrary to Section 8,
subdivisions (1) and (3) of the Act.
On January 16, 1936, the respondent filed an answer to the com-
plaint, "without waiving but expressly relying on its Special Ap-
pearance and Motion to Dismiss Plaintiff's Bill of Complaint".
The answer admits that the respondent requires all applicants for
employment to sign applications for membership in the Lynn Shoe
Workers' Union, but states that this is in accordance with the provi-
sions of a valid agreement between the respondent and that organ-
ization. It denies that the respondent has dominated and interfered
with the administration of the Lynn Shoe Workers' Union, and
denies any discrimination against the United Shoe and Leather
Workers' Union, or in favor of the Lynn Shoe Workers' Union,
with respect to terms and tenure of employment. It claims that
the Act is in violation of the Constitution of the United States, and
is in any case inapplicable to it, because neither its business nor its
labor relations are in or affect interstate commerce. It further al-
leges that the proceedings instituted by the Board against the re-
spondent are "illegal, irregular and contrary to the principles of
common law". The respondent for these reasons moved to dismiss
the proceedings.
A hearing was held after postponement, on January 27, 1936,1
at Boston, Massachusetts, before John Moore, the Trial Examiner
designated by the Board, and all parties were afforded full oppor-
tunity to be heard, to examine and cross-examine witnesses and to
introduce evidence bearing upon the issues. Counsel for the respond-
ent objected to the jurisdiction of the Board and renewed the motion
to dismiss the proceedings. The Trial Examiner denied the motion,
and his ruling is hereby affirmed.
Upon the record thus made, the Trial Examiner, on May 9, 1936,
filed an Intermediate Report, finding and concluding that the re-
spondent had engaged in unfair labor practices affecting commerce,
within the meaning of Section 8, subdivisions (1) and (3), and Sec-
tion 2, subdivisions (6) and (7) of the Act, recommending that the
respondent (a) discharge all production employees who were not on
its payroll on September 20, 1935, and offer employment on a senior-
ity basis to all employees who were on its payroll on September 20,
1935, and had not been in its employment since November 20, 1935;
(b) abrogate its contract with the Lynn Shoe Workers' Union, and
cease and desist from further dealings with that organization; (c)
1 Prior to the hearing, on January 15, 1936, a bill in equity was brought by the Lion
Shoe Company in the United States District Court for the District of Massachusetts
against the Board and its agents to enjoin further enforcement of the Act. The Lynn
Shoe Workers Union petitioned the Court for leave to intervene as party plaintiff.
The bill was dismissed on January 20, 1936, upon the motion of the defendants in the
case.
DECISIONS AND ORDERS 821
post notices in its factory, stating that the respondent has terminated
its relationship with the Lynn Shoe Workers' Union, and stating that
its employees have the right to self-organization, to form, join, or
assist labor organizations, to bargain collectively through representa-
tives of their own choosing, and to engage in concerted activities, for
the purpose of collective bargaining or other mutual aid or protec-
tion; and (d) file a written notification with the Regional Director
for the First Region within a stated time, setting forth the manner
and form of compliance with the foregoing recommendations.
The respondent thereafter filed exceptions to the record and Inter-
mediate Report, taking exceptions to 'the alleged irregularity of the
proceedings and to the Trial Examiner's rulings upon its motions.
and objections, as well as to the Trial Examiner's Intermediate
Report.
We find no error in the Trial Examiner's rulings upon the re-
spondent's motions and objections, and such rulings are hereby af-
firmed. As set forth below, we also find that the evidence supports
the findings and conclusions made by the Trial Examiner in his.
Intermediate Report that the respondent has engaged in unfair labor
practices affecting commerce, within the meaning of Section 8, sub-
divisions (1) and (3), and Section 2, subdivisions (6) and (7) of
the Act. Although the Trial Examiner found that the respondent
was dominating and interfering with a labor organization of its em-
ployees, and had contributed financial and other support thereto, he
neglected to conclude as- a matter of law that the respondent had
thereby committed acts in violation of Section 8, subdivision (2) of
the Act.
Upon the entire record in the case, the Board makes the following :
FINDINGS OF FACT
I. THE RESPONDENT AND ITS BUSINESS
The respondent, Lion Shoe Company, is and has been since 1921,
a corporation duly organized and existing by virtue of the laws of
the State of Massachusetts, having its factory and its principal place
of business in Lynn, Massachusetts, where it is engaged in the manu-
facture of women's shoes. It employs between 300 and 350 workers.
Leather is the principal item used by the respondent in the manu-
facture of its product. It also uses wood heels, eyelets, buckles,
thread, shoe tape, and nails. It purchases sole leather from the Bos-
ton office of Armour & Company, and upper leather in Boston and'
Peabody, Massachusetts. Between 90 and, 95 per cent of its raw
materials are purchased in Massachusetts, although it is not indicated
in the record in which states such materials originate.
822 NATIONAL LABOR RELATIO1,T9 BOARD
The respondent manufactures its shoes in accordance with a care-
fully planned production process, the various materials moving-con-
tinuously and methodically from the stock room, through a large
number of operations from the cutting of the leather to shape and
size to the finishing and packing department. The major shop di-
visions are cutting, stitching. lasting and stock fitting, heeling, edge
making, packing, and finishing. The production time from raw
stock to packing is three to four weeks.
The respondent's sales fluctuate with the season. For the Easter
and autumn trade, it manufactures most of its shoes for cutomers'
orders. During the balance of the year it manufactures shoes and
puts them in stock to fill' future orders. About 60 per cent of its
shoes are made for stock and 40 per cent made for order.
The respondent ships between 40 and 50 per cent of its product
out of Massachusetts to jobbers in New York, Pennsylvania, Missouri,
Ohio, Illinois, Virginia, North Carolina, Texas, California, and Porto
Rico. Shipment is made by truck to Boston at the respondent's ex-
pense, and the product is then forwarded by truck, boat, or railroad,
as directed by the purchaser. In 1935 the respondent sold 15,000
cases, which amounts to 600,000 to 700,000 pairs of shoes, ranging in
price from 60 cents to $1.10 per pair, with an average sale price of 85
cents to 90 cents per pair. The respondent's annual net sales, pur-
chases and payroll for 1934 and 1935, respectively, were as follows :
1934 1935
Net Sales____________________________ $651,645.54 $602,161.92
Purchases --------------------------- $342, 442.93 $318, 618.09
Payroll______________________________ $188,172.84 $185, 016.33
II. THE UNION
The United Shoe and Leather Workers' Union, hereinafter re-
ferred to as the Union, is a national labor organization with about
35,000 members. It has branches in 18 factories in Lynn, Massa-
chusetts. The Union has jurisdiction over and has organized six
crafts, which include the cutters, stitchers, lasters and stock fitters,
heelers, edge makers, and packers and finishers. Each craft is or-
ganized in Lynn into a city-wide local, with a business agent who
represents it in its dealings with all employers throughout the city.
The six locals constitute the Lynn Joint Council, to which each local
sends three delegates and one alternate. The Council is the govern-
ing body of the shoe workers organized in the Union in Lynn.
III. NEGOTIATIONS BETWEEN THE RESPONDENT AND THE UNION PRIOR TO
-THE UNFAIR LABOR PRACTICES
On July 27, 1934, the Lynn Joint Council, acting for the Union,
entered into a contract with the respondent relating to rates of pay,
DECISIONS AND ORDERS 823
wages, hours of employment, and other conditions of employment.
By its terms, the contract expired on October 31, 1935. About the
second week in October, 1935, Thornton, the president of the Lynn
Joint Council, accompanied by eight agents of the craft locals, called
-on the respondent with the intention of arranging an extension of
the contract until the first of the year 1936. They talked with
Nathan Gass, Morris Gass, and Abraham Gootman, the respondent's
president, vice-president, and treasurer , respectively. The respond-
ent refused to extend the life of the agreement unless the Union
agreed to a 15 per cent reduction in the existing rates of pay, to-
gether with the elimination of one of the Union's business agents.
Five or six conferences between the representatives of the Union
and of the respondent followed, at intervals of three or four days,
all taking place in the respondent' s office. The respondent finally
offered an alternative wage plan, and it appeared for a time, accord-
ing to the testimony of the Union's representatives, that a settlement
would be effected. However, the conferences ceased when the re-
spondent abruptly refused to meet further with the Union.
The respondent denies having entered into negotiations with the
Union, but admits having had three conferences with the Union's
representatives prior to October 31, 1935. It claims that it had
already formulated its plans to remove its plant from Lynn, but
said nothing to the Union prior to October 31, 1935, because it feared
that its employees would stop working before their jobs were finished.
On November 8, 1935, after the contract had expired, Thornton,.
with a large committee of Union representatives, entered the respond-
ent's office despite the fact that the management had left orders
with its office help to say they "were not in". Nathan Gass, Morris
Gass, and Gootman were present, and stated that the respondent
was not interested in a new contract. In the words of Morris Gass :
"We sat down with them and figured out all the troubles we had
with them during the year prior to the expiration of the contract,
explained to them every point and we told them that is the reason
we cannot do any business with the United and that we have defi-
nitely decided to move." The "troubles" referred to and brought
forward by the respondent resolved themselves into the following
15 points of difference : (1) reduction of 15 per cent in all wages
and prices of piece work; (2) elimination as business agent of Arthur
Walsh, representative of one of the craft locals of the United; (3)
a nine hour day for eight weeks in each of the two busy seasons in
each year; (4) minor complaints to be adjusted by the shop stewards
in the shop; (5) reduction of the number of Union agents with whom
respondent had been dealing from six to two or three; (6) right to
hire a new employee immediately in an emergency without first
824 NATIONAL LABOR RELATIONS BOARD
securing a permit from the Union; (7) employer alone to schedule
manufacturing operations and eliminate operations it deems unneces-
sary; (8) right to hire temporary Union help when necessary because
of rush of business and lay same off when rush is over-temporary
period to be limited to six weeks and the persons so hired not to be
classified as permanent employees; (9) right to shift employees from
one operation to another within the same craft; (10) prices on new
operations to be based on prices of existing similar operations; (11)
Union not to impose new working rules without consulting manage-
ment; (12) right to make compo shoes if desired, with right to train
help to make same-prices on operations on compo shoes to be based
on prices of similar work in other Massachusetts shops; (13) arbi-
tration agreement which shall be final and binding on both parties;
(14) no over-staffing of departments with workers ; (15) contract
to expire on October 31, not on December 31, as in the other union
contracts in Lynn.
The 15 points were discussed on November 8, and the parties were
unable to agree -on' any one. Late in November, 1935, the Lynn
Chamber of Commerce took cognizance of the dispute, and called
a meeting of the parties. The respondent and the Union were repre-
sented, and had their attorneys present. The 15 points were again
brought forth by the respondent as the reason for the inability of
the parties to reach an agreement. In addition, the respondent's
attorney stated that "We now have a contract with the Lynn Shoe
Workers' Union which I consider legal and binding". Nevertheless,
there were further conferences at the Chamber of Commerce, and,
on or about November 23, 1935, the respondent and the Union agreed
to refer the 15 points to a board of arbitration made up of the
attorneys for the disputants and the president of the Chamber of
Commerce. On the following day, however, the Union was notified
that the meeting of the arbitration board had been called off. The
respondent refused to have further dealings, and the negotiations
thereupon ceased.
During this period, two strikes had been called by the Union at
the respondent's plant, and were still unsettled at the time of the
hearing. The first was called on November 1 or 2 by the Lynn
Joint Council because the respondent failed to pay an award of an
arbitration board on a claim of ten or 12 employees. The second
strike was called about a week later, after the respondent's proposals
in regard to a modified agreement were voted down unanimously at
a meeting of about 300 of the respondent's employees.
In the light of these circumstances, we conclude that, at the time
of the occurrence of the unfair labor practices described below, there
existed a. current labor dispute in the respondent's plant.
DECISIONS AND ORDERS 825
IV. THE UNFAIR LABOR PRACTICES -
A. Formation of the Lynn Shoe Workers' Union
As already indicated, the contract between the respondent and the
Union expired on October 31, 1935. The respondent so scheduled its
shop operations for October that when the contract should expire
the last shoes put in process would be completed. Cutting, the initial
operation, ceased about September 28. By October 31, all operations
had ended and the plant became idle. Then the respondent caused
to be published in the two daily newspapers in Lynn, on the front
page, a notice to all employees to remove their tools from the factory.
These newspapers also published, as news, a statement that the
respondent was going to move its business from Lynn. Morris Gass
and Gootman both testified that a decision to remove from Lynn
had been made in July or August, 1935. However, the respondent,
had made no actual preparations for moving, and had never bought
or leased any factory space outside of Lynn.
A few days after the closing of the factory on October 31, 1935,
one of the employees, Edward T. Barron, who had worked for the
respondent for 11 years, talked with Nathan Gass in an effort to
find out if the respondent was really going to move from Lynn, and
to dissuade him from moving. Barron had been a member of the
Union, but had left, because of difficulties, in August, 1934. Barron
testified : "I told him I thought from my contact with the different
members of the shop's crew, that a large majority of them was in
favor of seeing the factory open up. They wanted to see the factory
opened up and they wanted their jobs." Nathan Gass ventured no
response other than a shrug of his shoulders, NNhereupon Barron ap-
proached Morris Gass, who was apparently equally indifferent. The
next conversation in this connection, according to Barron's testi-
mony, took place "after I went around and talked with different
members of the shop's crew to find out how they felt about it. We
had been doing that anyway, different ones of us, meeting in the
street and talking it over. I felt from the conversation I had with
different ones in the shop's crew, that if the Gasses knew about this
and the Lion Shoe Company knew of their attitude, it might in-
fluence them to open the factory or to reconsider their idea of mov-
ing out of town . . ." Two of the employees with whom Barron
spoke were John J. Couhig and Linwood T. Goodwin, both of whom
had been in the respondent's employ for a considerable time.
Couhig went to the factory on November 11, 1935, and talked with
Morris Gass. He, too, made an appeal for a reopening of the factory
and argued that the firm owed something to the loyal employees of
long standing. He said he "felt sure a majority of the shop's crew
826 NATIONAL LABOR RELATIONS BOARD
would be willing to enter into a reasonable business proposition
which would assure their employment being given back to them".
According to Couhig, Morris Gass replied : "I don't care to open up
on an open shop basis. It is an irresponsible manner of doing business.
As for a company union, we are not interested in that because it is
too one-sided. As far as the United Shoe and Leather Workers are
concerned, we are through with them. There is nothing else I can
see except to go ahead with our plans." Couhig asked, "If we formed
an independent legitimate labor union with representatives of all
the departments in the factory represented in that membership, would
he consider reopening the factory." Morris Gass hesitated, and
finally said, "I will have to talk that over with the boys (his asso-
ciates) . . . I am not interested in an open shop proposition again.
We did have it for eight or ten years, but times and conditions have
changed ; people have changed. We don't care to involve ourselves
in that mess . . . . If agreeable to the rest of the boys, if you can
show us where you will be able to get a sufficient number of our
employees in an organization that is a legitimate organization capa-
ble of entering into a contract, I will recommend to the rest of them
that we will give you that opportunity. But you have got to
show us."
Barron testified that on his own responsibility he hired the Paul
Revere Hall in Lynn, on November 12,1935, and invited the employees
to "get together and talk it over". About 40 employees came to the
meeting. Barron's description of what occurred at the meeting is as
follows : "At that meeting, after we had talked for some little while,
the question came up as to whether or not we could form a union
ourselves, and I thought we could. Others thought we could. So we
decided we would try it. They elected me temporary chairman at
that time, and then I called the meeting to order and they elected me
permanent chairman and they elected Mr. Goodwin secretary. We
went ahead and we formed a setup of a simple organization, as far
as I know about it, and we appointed a committee out of the group.
They appointed a committee and they instructed the committee to go
to the firm and see if they could not make some kind of an agreement
with them, let them see their attitude". On the next day, the com-
mittee went co the plant, and had a talk with the management. Bar-
ron says that as a result of the talk he "came to the conclusion that if
the firm could be convinced that we could show them that we could
provide a responsible organization, that they would do business with
us". Couhig, who had seen Morris Gass, told him about the meeting,
and stated that "the attendance was not satisfactory to us, and we are
going to have another meeting to see if we couldn't interest and get
more people there". Gass said "that was all right so far as he was
DECISIONS AND ORDERS 827
concerned," and that "his plans would be held in abeyance until a
reasonable time".
There was a larger. attendance at the next meeting, held on Novem-
ber 13th, in the evening. The main question discussed was the selec-
tion of one of two wage reduction plans proposed to the committee
that afternoon by the respondent. It was decided to accept a 15 per
cent reduction in all wages, five per cent to be refunded in December
to employees who had, during the year, conformed to the rules of the
organization. A committee of five was then appointed to notify
the firm that the employees were ready to enter into negotiations with
the management. The committee met with Morris Gass and Nathan
Gass on the morning of November 14th. In the words of Couhig,
"they were pleased to learn that the shop's crew were willing to co-
operate to that extent with them. But they did then insist that they
would not want to enter into an agreement unless they were assured
that every department would have at least a working basis, and we
assured them that we were in a position to do that".
That afternoon, about 60 or 70 of the employees attended a meeting
in the packing room of the closed plant. The Union was picketing
the plant at the time. The management had been notified by Barron
that " there was going to be a crowd", and all of them attended except
Sam Gass. Morris Gass was invited to address the meeting. He tes-
tified that he spoke as follows : "I told them that the committee of
theirs approached us about making an agreement with this newly-
formed union and I told them that although we have decided before to
move, we felt a duty to the people who have been with us so many
years that we should listen to their proposition, and we agreed to talk
to them about an agreement with the new union". He advised them
to get a lawyer and "we will get our attorney so we can discuss and
finish up the agreement". There was an additional talk by Mr. Lalime
of the Chamber of Commerce, whom Barron had invited to the meet-
ing. A committee was chosen and instructed to engage the services of
Mr. Morgan, an attorney. Morgan did not accept, and the committee
secured the services of an attorney named Hadley, who drew up the
by-laws and a constitution.
The next meeting was held on November 17, 1935, at Paul Revere
Hall. On this occasion, the organization changed its name from the
Shoe Workers Protective Association to Lynn Shoe Workers' Union,
and ratified a draft of a proposed closed shop contract with the
respondent. At this meeting, 35 "former employees of the Lion
Shoe Company" signed a statement 2 that they "desire to enter into
membership in the Shoe Workers Protective Association for the pur-,
pose of gaining employment in the Lion Shoe Factory".
2 Board's Exhibit No. 6.
828 NATIONAL LABOR RELATIONS BOARD
On November 20, 1935, there was another meeting at Paul Revere
Hall, at which time the by-laws were adopted, and instructions given
to Barron and Goodwin to sign the proposed closed shop agreement
with the respondent. The agreement had been drawn in the follow-
ing manner : Hadley, counsel for the Lynn Shoe Workers' Union,
prepared a first draft, which he submitted to Barron, who, in turn,
gave it to Morris Gass; a second draft was prepared by the respond-
ent's attorney, Mr.' Goldman, and submitted to Hadley; there was
then a conference at Hadley's office, attended by Goldman and the
Executive Committee of the Lynn Shoe Workers' Union, when a
final agreement was decided upon; the final agreement was drawn
up in Goldman's office, and was later discussed by a group consist-
ing of Hadley, several members of the Executive Council of the
Lynn Shoe Workers' Union, Morris Gass, Nathan Gass, and, Gold-
man. The agreement was signed on behalf of the respondent by
Abraham Gootman, its treasurer. The agreement 3 thus prepared
and signed provides for the demands which the respondent had pre-
viously made in its dealings with the United Shoe and Leather
Workers' Union. About a week later, the factory resumed operations.
The respondent has at all times displayed a lively interest in the
new organization. In spite of its assumed indifference as to whether
or not it would reopen its factory in Lynn, it was obviously anxious
that the Lynn Shoe Workers' Union should successfully organize.
As soon as it recognized that the efforts of Barron and Couhig were
meeting with success, it began openly to urge its employees to become
members of the new organization. Robert Cyr, one of the striking
employees, testified that when he approached the plant seeking infor-
mation during the period described above, he was met