Marathon-Clark Cooperative Dairy Association

National Labor Relations Board - Board Decisions

Jun 26, 1962

137 N.L.R.B. 882 (N.L.R.B. 1962)

882 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Marathon-Clark Cooperative Dairy Association and General
Chauffeurs, Teamsters , Warehousemen and Helpers Local
Union No. 446 , International Brotherhood of Teamsters,
Chauffeurs , Warehousemen and Helpers of America. Case
No. 18-CA-1283. June 26, 1962
DECISION AND ORDER
On February 1, 1962, Trial Examiner Eugene E. Dixon issued his
Intermediate Report in the above-entitled proceeding, finding that the
Respondent had not engaged in the unfair labor practices alleged in
the complaint and recommending that the complaint be dismissed in
its entirety, as set forth in the Intermediate Report attached hereto.
Thereafter, the General Counsel filed exceptions to the Intermediate
Report and a supporting brief, and the Respondent filed a request for
oral argument.'
Pursuant to the provisions of Section 3 (b) of the National Labor
Relations Act, the Board has delegated its powers in connection with
this case to a three-member panel [Chairman McCulloch and Members
Leedom and Brown].
The Board has reviewed the rulings of the Trial Examiner made
at the hearing and finds that no prejudicial error was committed.
The rulings are hereby affirmed. The Board has considered the Inter-
mediate Report, the exceptions and brief, and the entire record in the
case, and finds merit in certain of the General Counsel's exceptions.
Accordingly, the Board adopts the findings of the Trial Examiner
only insofar as they are consistent with the following :
We do not agree with the Trial Examiner that Respondent's course
of conduct during negotiations was lawful because it was dominated
by an intent purely economic to avoid entering into a contract with the
Union except on terms it felt were necessary to avoid eventual eco-
nomic collapse. The issue here is not whether Respondent's actions
were reasonable in light of its economic situation, but whether Re-
spondent in fact fulfilled its bargaining obligations under the Act.
We conclude, contrary to the Trial Examiner, that it did not meet
those obligations, for it is evident to us that Respondent's whole course
of conduct during the period under consideration was dictated by a
desire to rid itself of the Union, not to explore in good faith the pos-
sibilities of reaching an agreement embracing economic terms satis-
factory to both parties. Its conduct was, therefore, violative of the
Act.
1 As the record , including the exceptions and brief , adequately sets forth the issues and
the positions of the parties , the request is hereby denied.
137 NLRB No. 91.
MARATHON-CLARK COOPERATIVE DAIRY ASSOCIATION 883
Respondent's board of directors is composed of six members and a
chairman who, at the time of the 1961 "negotiations" under considera-
tion, was George Mathews. Mathews also acted as Respondent's chief
negotiator. The credited testimony demonstrates that Mathews pos-
sessed a strong antipathy toward the Union. On one occasion in 1959
Mathews stated that the employees would be better off if they got rid
of the Union. Again in August 1960 he stated that Respondent would
have to get rid of the Union. In the light of developments discussed
below, we find significant, too, the statements made at several meet-
ings of Respondent's board in the spring of 1961 that Respondent
would prolong the negotiations which are the subject of this proceed-
ing until the employees went out on strike and would then get some
one else to come in and take over the cheesemaking.
Negotiations started on March 24, 1961, after the parties had previ-
ously exchanged written demands in which the Union sought certain
increases in benefits and the Respondent sought what amounted to an
across-the-board reduction in benefits. At the meeting, Mathews out-
lined in detail Respondent's financial plight and stated that changes,
probably including the contracting out of the cheesemaking opera-
tions, were necessary. Discussion of the parties' demands proved
fruitless. Meetings were also held on April 21, May 12, and June 5
and 9. The strike commenced on June 17, 1961. At all meetings, Re-
spondent's economic and operational problems were discussed and the
possibility of contracting out was raised. As for the possibility of a
strike, Mathews was the first to raise it at the April 21 meeting or ap-
proximately some 6 weeks before the Union threatened, or the em-
ployees took any action with respect to, a strike? As for the various
economic demands, the record shows that at the meetings the Union
progressively retreated from its original position until on June 9 it
agreed to settle for the old contract. However, the Respondent took
the position not only at the meetings listed above but also at meetings
during the strike that it did not have sufficient information as to its,
own economic position to make the Union a specific offer on a new
contract. Respondent maintained this position even up to the time of
the hearing in this proceeding. Indeed, a suggestion at the April 21
meeting by two of Respondent's directors that the old contract might
serve as a basis of agreement was categorically rejected by Mathews,
and at the June 5 meeting Mathews stated he was withdrawing all out-
standing proposals. Furthermore, though consistently presenting Re-
spondent's adverse financial position as an important factor standing
in the way of agreement with the Union, Mathews, on May 12, after
2 The only possible basis for Mathews' statement that the Union was going on strike
was the fact the Union had filed, as required by State and Federal laws , certain notices
that a labor dispute existed . However, notices had also been filed in past years when no
strike in fact occurred
884 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
having asked the Union for its comments, "point blank" rejected a
Union suggestion that a consultant be hired to make operations more
efficient, stating the Company needed no outsiders to tell it how to run
its business. The consequence was that no agreement was reached and
on June 7 the Union notified the company of strike action, the walkout
occurring, as noted, on June 17.
However, late in April or May, while negotiations were going on,
Mathews began discussions with Donald and Melvin Nelson concern-
ing their taking over on a contract basis Respondent's cheesemaking
operation when the employees went out on strike. Then, in May or
early June the Nelsons, before any threat of a strike had been made,
gave up their then means of livelihood-Donald Nelson resigning
from his job as manager of a cheese factory and his father, Melvin,
giving up his farming operation-and both moved to homes nearer
the Respondent's plant. In consequence, on June 17, the day the strike
began, the Nelsons and their wives were operating, as employees, the
cheesemaking process in Respondent's plant. On July 1, an arrange-
ment was placed in effect contracting the cheese operation to the
Nelsons. As a result of the change, the Nelsons received in place of
wages, a cent and a half per pound of cheese produced, hired their
own employees, and took over day-to-day maintenance work affecting
the cheese operation, and also engaged in certain milk hauling. They
paid all their expenses out of their per pound contract price.
Additional negotiating meetings were held between the Respondent
and the Union during the strike on July 18 and August 21. However,
nothing was accomplished. Similarly, on September 26, dealings
through a conciliator proved fruitless.
It is apparent from the foregoing that the Respondent did not at
any time material seek in good faith to explore in the various nego-
tiating sessions the possibility of reaching an agreement satisfactory
to the parties involved. Rather, the whole course of Respondent's
conduct reveals an intent to carry out Mathews' policy announced to
Respondent's board of prolonging negotiations until the employees
struck, and then contracting out the cheesemaking operation. Thus,
as noted, the Respondent, on June 5, withdrew its original proposed
changes in the contract and at all times took the position that it had
insufficient economic information to make the Union any firm offers.
Yet, despite its asserted lack of knowledge, Respondent rejected
"point-blank" a union suggestion that an expert be called in to ration-
alize the cheesemaking operation. Furthermore, while ostensibly en-
gaged in negotiations with the Union, Respondent made firm arrange-
ments 3 with the Nelsons to take over the cheesemaking operation.
8 We find without merit or record support the Respondent ' s argument that the arrange-
ment with the Nelsons was merely a precautionary one That the Nelsons would give up
their present means of livelihood and move closer to Respondent 's plant on the mere
possibility of employment based on the contingency of some, as yet , unannounced strike
MARATHON-CLARK COOPERATIVE DAIRY ASSOCIATION 885
Under the circumstances it is evident, and we find, that on and after
March 24, 1961, the Respondent did not bargain in good faith but
rather embarked upon a program, involving stalling tactics in bar-
gaining and contracting out of the cheese process, designed to rid
itself of the Union and the employees it represented. The fact that
Respondent may have also had economic reasons for its course of
conduct does not, as stated, excuse its failure to comply with the
bargaining requirements of the Act. Accordingly, we conclude that
the Respondent violated Section 8(a) (5) and (1) of the Act.
In view of his finding that the Respondent had not unlawfully
refused to bargain, the Trial Examiner concluded that the strike of
the employees commencing June 17, 1961, was not an unfair labor
practice strike. In view of our contrary determination set forth
above, we disagree. The record shows that the employees struck
because they had no contract and because of their dissatisfaction with
the progress of the negotiations. As Respondent's unlawful refusal
to bargain impeded successful negotiations and as it prevented even
the possibility of the parties reaching agreement, such unlawful
conduct was a causative factor in the walkout. Accordingly, we find
that the employees were engaged in an unfair labor practice strike,
and we further find that Respondent's refusal to reinstate them
pursuant to their unconditional demands for reinstatement, dated
July 19, 1961, violated Section 8(a) (3) and (1) of the Act.
The Trial Examiner concluded that the Respondent did not on
June 17, 1961, unlawfully discharge employees Loughead and Under-
wood or otherwise discriminate against them as alleged in the com-
plaint. The record shows that the two employees came to the plant
early the morning of June 17, that they were told by a union repre-
sentative to go in to see what was happening, and that they found that
the Nelsons and their wives were performing the cheese processing.
While Loughead and Underwood were in the plant, Plant Manager
Burke talked to them and his conversation is susceptible to the con-
struction, urged by the General Counsel, that he laid off Loughead
and Underwood. However, the record also shows that the union repre-
sentative, to whom the two employees spoke, was present in order to
lead a strike of the employees and to provide picket signs. Moreover,
in view of the union representative's conversations with Loughead
and Underwood, it cannot here be determined whether they entered
the plant for the purpose of going to work or merely to obtain infor-
mation for the Union. Consequently, we find, upon the record before
us, that the evidence does not preponderate in support of a finding that
Loughead and Underwood were unlawfully discharged on June 17.
However, the record does show that the two employees joined with
is incredible . Consequently , we disagree with the Trial Examiner that the changeover to
cheesemaking by the Nelsons was to occur only if the employees happened to go out on
a strike.
886 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
the Union in its strike effort when they talked to the union representa-
tive on the morning of June 17 and that they made no request for re-
instatement between that date and July 19 when they joined with the
strikers in requesting unconditional reinstatement. Consequently, we
find that Loughead and Underwood were unfair labor practice strikers
entitled to reinstatement pursuant to their requests dated July 19,
1961.
THE REAiEDY
As we have found that the Respondent engaged in certain unfair
labor practices, we shall order it to cease, and desist therefrom and
take certain affirmative action designed to effectuate the policies of the
Act.
Having found that the Respondent has refused to bargain in good
faith with the Union as the exclusive representative of the employees
in the appropriate unit, we shall order the Respondent upon request
to bargain in good faith with the Union, and, if agreement is reached,
to embody such agreement in a signed contract.
We have also found that Respondent contracted out its cheesemak-
ing operation without bargaining in good faith with the Union and
for the purpose, at least in part, of ridding itself of the Union and
the employees it represents. Further, we have found that the Re-
spondent unlawfully refused to reinstate its striking employees upon
their unconditional application for reinstatement. It is evident, how-
ever, that if the status quo existing prior to such unlawful conduct is
to be reestablished and if such unfair labor practices are to be reme-
died fully that the Employer must be required to discontinue any ar-
rangement involving contracting out of his cheesemaking operation
and to reestablish such operation as it existed on June 16, 1961, to the
extent necessary to accommodate the reinstatement of employees who
accept Respondent's offer of reinstatement. We shall so order. Fur-
ther, we shall order that the Respondent, if it has not already done so,
offer the unfair labor practice strikers, who made unconditional re-
quests for reinstatement, full reinstatement to their former or sub-
stantially equivalent positions, dismissing, if necessary, employees
hired to replace the strikers. If, after the dismissal of the replace-
ment employees, there are not enough positions available for all of
the workers entitled to reinstatement, available positions shall be dis-
tributed among them, without discrimination because of their union
membership, activity, or participation in the strike, on the basis of a
seniority system, or any other nondiscriminatory practice with respect
to work assignments previously followed by the Respondent in the
conduct of its business. The employees for whom no work may be
immediately available, after such distribution, shall be placed on a
preferential hiring list, with priorities determined on the basis of the
MARATHON-CLARK COOPERATIVE DAIRY ASSOCIATION 887
seniority system or other nondiscriminatory system previously fol-
lowed by the Respondent in the conduct of its business. They shall be
offered reinstatement thereafter in accordance with such a list as posi-
tions become available and before other persons are hired for work.
Reinstatement, as ordered herein, shall be effectuated without preju-
dice to the seniority of the employees or any of their other rights and
privileges. We shall also order the Respondent to reimburse all the
employees entitled to reinstatement for any loss of pay they may have
suffered by reason of the Respondent's discrimination with respect to
them, by payment to each of them of a sum of money equal to the
amount that they would normally have earned as wages during the
period between the time Respondent received the unconditional ap-
plications for reinstatement and the date of Respondent's offer to re-
instate the employees or to place them on a preferential hiring list in
the manner described above, less net earnings during that period.
Such pay loss shall be computed in the manner set forth in F. W.
Woolworth Company, 90 NLRB 289.
The Respondent's conduct in the commission of the unfair labor
practices found herein gives us cause to believe that the Respondent
may commit other violations of the Act in the future. We shall, there-
fore, issue a broad cease-and-desist order forbidding the Respondent
from infringing in any other manner upon the rights of its employees
as guaranteed by the Act, in addition to those rights found to have
been violated herein 4
ORDER
Upon the entire record in this case, and pursuant to Section 10(c)
of the National Labor Relations Act, as amended, the National Labor
Relations Board hereby orders that the Respondent, Marathon-Clark
Cooperative Dairy Association, Abbotsford, Wisconsin, its officers,
agents, successors, and assigns, shall :
1. Cease and desist from :
(a) Refusing to bargain collectively with General Chauffeurs,
Teamsters, Warehousemen and Helpers Local Union No. 446, Inter-
national Brotherhood of Teamsters, Chauffeurs, Warehousemen and
Helpers of America, as the exclusive representative of all Respond-
ent's intake employees, cheesemakers, helpers, and warehousemen at
its Abbotsford, Wisconsin, dairy plant, excluding office clerical em-
ployees, professional employees, and supervisors as defined in the Act.
(b) Discouraging membership in the above-named Union, or any
other labor organization, by refusing to reinstate any of its employees
who are unfair labor practices strikers upon their unconditional re-
quests for reinstatement, or by discriminating in any other manner
in regard to their hire or tenure of employment or other terms and
' Federal Dairy Company, Inc., 130 NLRB 1158. Cf. Caroline M. Layton White, d/b/a
Layton Oil Company, 128 NLRB 252, 261.
888 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
conditions of employment, except to the extent permitted by Section
8(a) (3) of the Act, as modified by the Labor-Management Reporting
and Disclosure Act of 1959.
(c) In any other manner interfering with, restraining, or coercing
its employees in the exercise of their right to self-organization, to form
labor organizations, to join or assist General Chauffeurs, Teamsters,
Warehousemen and Helpers Local Union No. 446, International
Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers
of America, or any other labor organization, to bargain collectively
through representatives of their own choosing, and to engage in other
concerted activities for the purpose of collective bargaining or other
mutual aid or protection as guaranteed in Section 7 of the Act, or to
refrain from any or all such activities, except to the extent that such
right may be affected by an agreement requiring membership in a labor
organization as a condition of employment, as authorized in Section
8(a) (3) of the Act, as modified by the Labor-Management Reporting
and Disclosure Act of 1959.
2. Take the following affirmative action which the Board finds will
effectuate the policies of the Act :
(a) Terminate any arrangement for contracting out its cheese-
making operation and reestablish such operation as it existed on
June 16, 1961, to the extent necessary to accommodate the reinstate-
ment of employees who accept Respondent's offer of reinstatement.
(b) Upon request, bargain collectively with the above-named Union
as the exclusive representative of all the employees in the appropriate
unit with respect to rates of pay, wages, hours of employment, or other
terms and conditions of employment, and embody any understanding
reached in a signed agreement.
(c) Offer to the employees who were on strike on July 19, 1961,
reinstatement to their former or substantially equivalent positions,
without prejudice to their seniority or other rights and privileges, and
make them whole for any loss of pay they may have suffered in the
manner set forth in the section of this Decision and Order entitled
"The Remedy."
(d) Preserve and, upon request, make available to the Board or its
agents, for examination and copying, all payroll records, social se-
curity payment records, timecards, personnel records and reports, and
all other records necessary to analyze the amounts of backpay due
and the rights of employment under the terms of this Decision and
Order.
(e) Post at its plant at Abbotsford, Wisconsin, copies of the notice
attached hereto marked "Appendix." I Copies of said notice, to be
furnished by the Regional Director for the Eighteenth Region, shall,
5 In the event that this Order is enforced by a decree of a United States Court of
Appeals, there shall be substituted for the words "Pursuant to a Decision and Order" the
words "Pursuant to a Decree of the United States Court of Appeals , Enforcing an Order."
MARATHON-CLARK COOPERATIVE DAIRY ASSOCIATION 889
after being duly signed by the Respondent's authorized representa-
tive, be posted by the Respondent immediately upon receipt thereof,
and be maintained by it for a period of 60 consecutive days thereafter,
in conspicuous places, including all places where notices to employees
are customarily posted. Reasonable steps shall be taken by the Re-
spondent to insure that said notices are not altered, defaced, or
covered by any other material.
(f) Notify the Regional Director for the Eighteenth Region, in
writing, within 10 days from the date of this Order, what steps the
Respondent has taken to comply herewith.
IT IS FURTHER ORDERED that the complaint, insofar as it alleges viola-
tions of the Act not found herein, be, and it hereby is, dismissed.
APPENDIX
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, as amended, we hereby notify our employees that :
WE WILL, upon request, baragain collectively in good faith with
General Chauffeurs, Teamsters, Warehousemen and Helpers Local
Union No. 446, International Brotherhood of Teamsters, Chauf-
feurs, Warehouseman and Helpers of America, as the exclusive
representative of all our employees in the following appropriate
unit with respect to rates of pay, wages, hours of employment, and
other terms and conditions of employment, and, if an agreement is
reached, embody such agreement in a signed contract. The ap-
propriate unit is :
All intake employees, cheesemakers, helpers, and warehouse-
men employed at our Abbotsford, Wisconsin, dairy plant, ex-
cluding office clerical employees, professional employees, and
supervisors as defined in the Act.
WE WILL NOT discourage membership in General Chauffeurs,
Teamsters, Warehousemen and Helpers Local Union No. 446, In-
ternational Brotherhood of Teamsters, Chauffeurs, Warehousemen
and Helpers of America, or any other labor organization, by re-
fusing to reinstate any of our employees who are unfair labor prac-
tices strikers upon their unconditional requests for reinstatement
or by discriminating in any other manner in regard to their hire
or tenure of employment or other terms and condition of employ-
ment, except to the extent permitted under Section 8(a) (3) of the
Act, as modified by the Labor-Management Reporting and Dis-
closure Act of 1959.
890 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
WE WILL NOT in any other manner interfere with, restrain, or
coerce our employees in the exercise of their right to self-organiza-
tion, to form labor organizations, to join or assist General Chauf-
feurs, Teamsters, Warehousemen and Helpers Local Union No.
446, International Brotherhood of Teamsters, Chauffeurs, Ware-
housemen and Helpers of America, or any other labor organiza-
tion, to bargain collectively through representatives of their own
choosing, and to engage in other concerted activities for the pur-
pose of collective bargaining or other mutual aid or protection
as guaranteed in Section 7 of the Act, or to refrain from any or
all such activities, except to the extent that such right may be
affected by an agreement requiring membership in a labor organi-
zation as a condition of employment, as authorized in Section
8(a) (3) of the Act, as modified by the Labor-Management Re-
porting and Disclosure Act of 1959.
WE WILL offer all our employees who were on strike on July 19,
1961, immediate and full reinstatement to their former or sub-
stantially equivalent positions.
WE WILL terminate any arrangement made for contracting out
our cheesemaking operation and reestablish such operation as it
existed on June 16, 1961, to the extent necessary to accommodate
the reinstatement of employees who accept our offer of reinstate-
ment.
WE WILL make our striking employees who for any loss of pay
each of them may have suffered as a result of our discriminatory
refusal to reinstate them on or after their unconditional requests
for reinstatement dated July 19, 1961.
All our employees are free to become or remain, or to refrain from
becoming or remaining, members of General Chauffeurs, Teamsters,
Warehousemen and Helpers Local Union No. 446, International Broth-
erhood of Teamsters, Chauffeurs, Warehousemen and Helpers of
America, or any other labor organization, except to the extent that
this right may be affected by an agreement requiring membership in
a labor organization as a condition of employment as authorized in
Section 8(a) (3) of the Act, as modified by the Labor-Management Re-
porting and Disclosure Act of 1959.
MARATHON-CLARK COOPERATIVE
DAIRY ASSOCIATION,
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.
Employees may communicate directly with the Board's Regional
MARATHON-CLARK COOPERATIVE DAIRY ASSOCIATION 891
Office, 316 Federal Building, 110 South Fourth Street, Minneapolis 1,
Minnesota, Telephone Number, 339-0112, Extension 2601, if they have
any question concerning this notice or compliance with its provisions.
INTERMEDIATE REPORT AND RECOMMENDED ORDER
STATEMENT OF THE CASE
This proceeding, brought under Section 10(b) of the National Labor Relations
Act, as amended (61 Stat. 136), herein called the Act, was heard before Trial
Examiner Eugene E. Dixon at Abbotsford, Wisconsin, between October 3 and 6, 1961.
The complaint, issued August 22, 1961, by the General Counsel of the National Labor
Relations Board (herein called the General Counsel and the Labor Board) on behalf
of the Regional Director for Eighteenth Region (Minneapolis, Minnesota), based
upon charges duly filed and served by General Chauffeurs, Teamsters, Warehousemen
and Helpers Local Union No. 446, International Brotherhood of Teamsters, Chauf-
feurs, Warehousemen and Helpers of America, herein called the Union or the Charg-
ing Party, alleged that Marathon-Clark Cooperative Dairy Association, herein called
the Respondent, the Company, or the Co-op, had engaged in and was engaging in
conduct violating Section 8(a) (1), (3), and (5) of the Act.
Specifically the Respondent is charged with: (1) From on or about March 24,
1961, failing and refusing to bargain collectively with the Union as the exclusive
bargaining representative of its employees in an appropriate unit by (a) entering into
negotiations with a "fixed and determined intent not to arrive at a collective-
bargaining agreement, with the intention of causing its employees to engage in a
strike, thereby enabling Respondent to replace them with nonunion employ-
ees .. ," (b) on or about June 5, 1961, withdrawing from consideration previous
proposals made to the Union and threatening the Union with subcontracting its
cheese making operation, (c) suggesting to its employees that Respondent was ready
to negotiate individually with its employees in derogation of the collective-bargaining
rights of the Union, and (d) on or about June 17, 1961, unilaterally contracting out
its cheesemaking operation without notification, consultation, or bargaining with
the Union; (2) on or about June 17, 1961, discharging its employees Lyle E. Under-
wood and William B. Loughead because of their membership in, support of, and
activities on behalf of the Union; (3) failing and refusing since on or about July 24,
1961, to reinstate its striking employees upon their unconditional applications to
return to work; and (4) engaging in various specifically described other acts of inter-
ference, restraint, and coercion impinging upon rights of its employees guaranteed
in Section 7 of the Act.
In its duly filed answer Respondent, besides denying the Board's jurisdiction in this
matter, also denied the commission of my unfair labor practices.
All parties were represented at the hearing and were afforded full opportunity to
participate, to examine and cross-examine witnesses, to present oral argument, and
to file briefs. A brief has been received from the General Counsel.
Upon the entire record, and from my observation of the witnesses, I make the
following:
FINDINGS OF FACT
1. THE BUSINESS OF RESPONDENT
Respondent is, and has been at all times material herein, a corporation organized
and existing under the laws of the State of Wisconsin, having its principal place of
business at Abbottsford, Wisconsin, where it is engaged in the manufacture and sale
of cheese and related dairy products. In the course and conduct of its business dur-
ing its fiscal year ending December 31, 1960, Respondent caused to be manufac-
tured, sold, and distributed products valued in excess of $964,000 of which products
valued in excess of $500,000 were sold and shipped to the Wisconsin Cheese Pro-
ducers Association.
Wisconsin Cheese Producers Association is a corporation having its principal place
of business at Plymouth, Wisconsin. During the calendar year 1960 the Wisconsin
Cheese Producers Association sold approximately $4,000,000 worth of cheese about
90 percent of which was sold to sources outside the State of Wisconsin.
Notwithstanding that the cheese Respondent sells to the Wisconsin Cheese Pro-
ducers Association is sold f.o.b. Abbotsford and not withstanding that there is no
specific indication that any of Respondent's cheese is actually included in the cheese
892 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
that the Association sells outside the State of Wisconsin , I find Respondent to be
engaged in commerce within the meaning of Section 2 ( 6) and (7) of the Act.
Siemons Mailing Service, 122 NLRB 81.
U. THE LABOR ORGANIZATION INVOLVED
General Chauffeurs, Teamsters, Warehousemen and Helpers Local Union No.
446, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Help-
ers of America, is a labor organization within the meaning of Section 2(5) of the Act.
III. THE UNFAIR LABOR PRACTICES
From 1950 to April 30, 1961,1 when their last collective-bargaining contract
expired, the Respondent and the Union had maintained a collective-bargaining rela-
tionship in which the Union represented all the "intake employees, cheesemakers,
helpers, and warehousemen employed at Respondent's Abbotsford, Wisconsin,
plant." 2 On February 23, pursuant to the contract then in force, the Union requested
that the contract be reopened for negotiation. On March 7 Respondent (by the presi-
dent of its board of directors, George Mathews) 3 replied by letter that its board
would meet on March 13 at which time the Union could appear and submit in writing
"the desires of the employees" and at which time the Co-op would indicate in writing
"the minimum terms which must be met before the employer can consider continuing
or signing any new contract...."
On March 10 the Union wrote to say that it could not meet on March 13. In this
letter it enclosed a brief statement of its demands. The most important of these
were requests for six paid holidays (where there had been none), an increase in
vacations, and a reduction of the workweek from 48 to 40 hours with no reduction
in the take-home pay or in the alternative a 15-cent increase.
On March 20 Mathews sent the Union Respondent's "minimum terms" proposal
and suggested March 24 as a possible meeting date. The most important of Respond-
ent's proposals (all of which offered less than the employees were then receiving) were
a decrease in both vacations and sick leave and a commitment by the Union to keep
the cost of handling and manufacturing 100 pounds of milk no higher than 53.89 cents
or to accept a cut in wages to achieve such a figure.
On March 24, the first of eight negotiating meetings took place. As appears from
the testimony of Raymond Yessa, the Union's president and business agent and its
chief spokesman in the negotiations,4 in this meeting Mathews gave `a detailed
description of [the Co-op's] financial problems. ' He also stated "that there
was going to have to be some changes made" and indicated that they would prob-
ably involve contracting out the cheesemaking. Thereafter both sides' proposals
were discussed but no agreement was reached.
On March 28 the Union, as was its practice, filed with the State Board and the
Federal Mediation and Conciliation Service a 30-day notice of the existence of a
dispute as required by Section 8(d) of the Act. On April 12 the Union also filed a
similar 10-day notice to the same agencies, this time pursuant to section 111.11 of
the Wisconsin statutes .5
The next bargaining session took place on April 21. Mathews opened the re-
marks with a reiteration of his contentions that a change in operations would have
to be made and commented "that the Union was going on strike." He again pointed
out that the Co-op "wasn't making any money" and again stated that "the Co-op
'All dates herein are in 1961 unless otherwise indicated.
2It is admitted and I find that these employees, excluding office clerical, professional,
and supervisory employees as defined in the Act, at all times material herein constituted
an appropriate unit for collective bargaining within the meaning of Section 9(b) of the Act.
3 The board of directors is composed of seven members, all of whom are patrons of the
Co-op (i e , sell their milk to it). They are elected annually by the members of the Co-op,
all of whom are also its patrons. At all times material Mathews was the board president,
Ralph Woik, its vice president, Fred C. Timm, its secretary-treasurer. The other four
members were Ernest Bergman, Arnold Baake, Morris Mantos, and Ben Riehle.
What was said at this as well as the other meetings is all based essentially on Yessa's
testimony (much of it undenied) except where otherwise noted.
5 Mathews admitted that in all prior negotiations they received the same kind of notice
from the Wisconsin Board. Section 111.11(2) provides for a 10-day notice to the State
Board of intention to strike in connection with the "Initial processing . . . of . . .
any . dairy product...." which notice is immediately brought to the attention of
the employer Involved.
MARATHON-CLARK COOPERATIVE DAIRY ASSOCIATION 893
was contemplating contracting the cheese out to an independent contractor." In
this connection Mathews made mention "of other plants that had this system of
contracting out their cheesemaking operation and what wonderful results they got
and how much profit they made."
There was some inconclusive discussion of both sides' proposals. Then board
members Bergman and Riehle made the suggestion that they thought that a settlement
could be made on the basis of "last year's contract." Mathews retorted that if any
commitment was to be made it would be made by him or the entire board. The
union negotiators were then asked to step out which they did for about 45 minutes.
When they returned they were informed that the board "would like time to consider
the welfare-of the Co-op" and asked the Union to do the same.
May 12 was the next meeting. The full board was present as it or a majority
thereof had been at the previous meetings .6 Again, the matter of contracting the
cheesemaking came up and Respondent's operation was discussed "pro and con."
The Company asked the Union if it had any suggestion to make as a solution to
its problem. Yessa replied that he thought that the operation of the plant was the
Company's responsibility, "but as long as they asked (he) had a suggestion that
maybe they should do the same thing as another Co-op had done, hire somebody as
a consultant to make their operation more efficient." Mathews replied "point blank"
that the Co-op would take care of its own operation-that it needed no "outsiders
in it." In this meeting, Bergman asked what the Union was seeking. Yessa replied
that the Union was asking for 15 cents an hour.
It is clear from the undenied and credited testimony of several of Respondent's
witnesses that from the very beginning the Union was offered the chance to take
over the operation of the plant on a contract basis of a cent and a half a pound.
Timm, Mathews, and Baake so testified. But, as Baake explained, there was not
much discussion on the matter because the Union was not interested.
Prior to the next meeting which took place on June 5, the Union asked the State
Board for conciliation assistance which thereafter was furnished. Also prior to
that meeting (specifically on May 1), the employees took a strike vote. At the
June 5 meeting the matter of changing the operation and contracting the cheese-
making again came up. Mathews, who on this occasion headed a three-man nego-
tiating committee for Respondent, said that whoever took it over was going to do
the milk hauling 7 also and would operate with a smaller crew. Yessa told Mathews
"that he had the right, under the contract, if he wished to change his operation, that
[the union] would not stop him from doing anything like that."
Finally, Yessa (who was the only one representing the employees on that occasion)
was asked by the conciliator to step out to permit the latter to talk to the Company
alone. When he was called back in about 45 minutes, Yessa was asked what the
Union's "current offer was." Yessa replied that they "would take last year's contract
and six paid holidays." Mathews again brought up the matter of changing the
operation presumably by contracting the work. Yessa charged that Mathews' posi-
tion was inconsistent with the Company's March 20 written proposal that the Union
guarantee not to exceed a set cost for processing a hundredweight of milk. Mathews
then stated that he was withdrawing any outstanding proposals. He further com-
mented that he had someone who was going to take over on a per pound basis who
would do the cheesemaking and the milk hauling.8 He pointed out that this would
also eliminate the manager and the office girl and would result in a saving of $32,000
a year. When Yessa was about to leave the meeting, Mathews came over and shook
his hand saying, "There's no hard feelings, and we'll give our employees good
references."
The following day Yessa met with the employees 9 and as a result on June 7 the
following letter was sent to each of the board members by Yessa:
This is to notify you of the action taken by your Employee's [sic]. They
have decided that if they have no contract signed, "No work." In plain and
simple words there will be a strike.
In some of the subsequent meetings the Respondent was represented by a committee
composed of Mathews, Timm, and Baake.
T While the patrons pay some of the cost of transporting their milk to the plant, vari-
ous amounts of subsidies are paid to them by Respondent for the cost of hauling due to
the differences of the distances they are located from the plant. In 1960 the total pay-
ments under this subsidy policy amounted to $22,000.
BAs will appear later, this was Melvin Nelson and his son, Donald. The circumstances
of the Nelson's connection with Respondent will be treated below.
P There were seven employees in the unit which was augmented at rush periods by three
or four part-time employees. The usual rush period, which is known as the "flush,"
occurs in the late spring and early summer.
894 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
I regret sending you this notice, but you leave us no alternative . In fact we
would not have to give you this notice.
I believe your Employee's [ sic] are giving you a great deal more consideration
than you are giving them. This is what you call loyalty. I remain,
In addition to the above letter, on June 8 Yessa called board member Bergman
and told him there would be a strike the following day due to the employees' disgust
with the way the negotiations were going. Bergman thereupon sought out Union
Steward Lawrence Jacobi and asked if the employees could delay the pending strike
for one more day to permit the board of directors to meet again on the matter.
Jacobi assented thereto and as a result another meeting was arranged between the
board and the Union for June 9.
Six members of the Board attended the meeting. The Union offered to settle for
the old contract terms. After a 30-minute caucus by the company officials the Union
was informed that the Company could not or did not want to make a decision with-
out the full board and asked that a strike be held in abeyance for a week until the
full board could meet the following Friday, June 16. Assured that this request was
not made "for stalling purposes," the Union agreed.
On the night of June 16 the board met and voted 4 to 3 to reject the Union's
offer to accept the old contract. As had been promised, Burke, Respondent's man-
ager, called Yessa to inform him of the result telling him at the suggestion of one
of the board members that the vote had been unanimous. In a few minutes Yessa
called back to see if he had correctly heard the decision . Finding that he had, he
told Burke to tell the board that Respondent would "have to suffer the consequences."
The next day picketing began at the plant. This picketing continued from that date
to July 20, when in connection with the striking employees' unconditional demand for
reinstatement to their "former or substantially equivalent employment" it was ter-
minated. By July 25, however, not having been taken back to work, the picketing
was resumed. Before going into the circumstances surrounding that picketing and
its significance, we turn to the balance of the evidence on the refusal-to-bargain
allegation.
On July 18, while the picketing was in progress, at the Union's request the parties
met again ii with the conciliator present. The latter met with both sides separately
and then they all met together. The conciliator stated that the Company "still didn't
know how they were going to operate their plant, it would depend on the volume
and price and so on.. . The Company confirmed this stating (according to
Mathews' testimony) that Respondent needed more facts before it could come up
with a proposal.
Another meeting took place on August 21. Again the financial situation of the
Respondent came up A "general discussion of the pros and cons" took place. Then
Yessa asked if the Respondent could make an offer. The Company offered $1.15
an hour.ii When asked if this included .the terms of the old contract the Company
indicated that it did not No discussion took place. At the Union's suggestion that
Respondent put the employees back to work and continue to negotiate, the company
committee indicated that it would have to have a board meeting and would call a
special meeting.
Thereafter, another negotiating session took place on September 26. At this time
the parties did not meet together but acted through the conciliator. Nothing was
accomplished.
The Arrangement With the Nelsons
Melvin Nelson is a cheesemaker by trade who, prior to June 1, 1961, was living
on and operating a leased farm at Stetsonville in the general vicinity of Abbotsford,
Wisconsin. His son, Donald Nelson, is also a cheesemaker and immediately prior
to June 10 was employed as manager of a cheese factory at Fremont, Wisconsin,
about a hundred miles from Abbotsford. The Nelsons owned two trucks valued
about $12,000 with which they were hauling milk under State franchises as of the
above dates to Respondent's plant for Respondent's patrons.
Sometime around the latter part of April or the first part of May, Respondent's
board president, Mathews, talked to the senior Nelson about purchasing his milk
routes and about the possibility of Nelson taking over the cheesemaking for Respond-
ent in the event of a strike. Mathews asked if the plant could be run on a per pound
10 The Respondent was represented by its three-man labor committee and its attorney.
For the Union, in addition to Yessa all the striking employees appeared
n Up to the time of the picketing the Respondent complied with the terms of the old
contract which included hourly rates from $1 70 to $1 80 plus the bookkeeper's weekly
salary of $63 50 The latter apparently was mutually considered to be in the unit al-
though technically not covered by its description
MARATHON-CLARK COOPERATIVE DAIRY ASSOCIATION 895
basis. Nelson said that it could and that it ought to be possible to do it for a cent
and a half a pound. Two or three weeks after this conversation Nelson appeared
before the board of directors and gave his expert opinion on how Respondent's oper-
ation could be improved. At this time Nelson was asked if he would be willing to
take over presumably on a contract basis as the board was "going to try to let it out
that way if things worked out." Nelson indicated that he would be willing to take
over.
Thereafter, Nelson got in touch with his son Donald at Fremont about the situation
at Abbotsford. As a result, sometime in the latter part of May Donald gave his
employer, Wilbert Drews, notice of his resignation to be effective June 15. In
explaining his action Donald told Drews that he might have a chance to go to work
for Respondent, that because of "conditions they had at that time they were going
on strike and they'd have to shut the doors," and in such event he and his father were
going to take over the cheesemaking function and simultaneously protect their invest-
ment in their two milk routes. Actually, Donald left Drews' employment on June 10,
having called Drews on June 9 about an emergency requiring his premature leaving.
,On the night of June 16, after the Board had voted to reject the Union's offer to
continue working under the old contract, the Nelsons were called to the board and
asked if they would take over in case of a strike. They indicated that they would.
The next morning, when Respondent's Manager Burke arrived and saw the union offi-
cials outside with picket signs, he called the Nelsons and asked them to come to work
as soon as they could. This they did, bringing with them their wives to help. From
this time to July 1 the two Nelson men were paid $1.50 per hour and their wives $1.15
per hour.12 Apparently all other help, truckdrivers, the part-time bookkeeper, and
the manager were also paid by the Co-op until July 1. After that date the Nelsons
began operating on a payment of a cent and a half a pound for cheese produced and
assumed the cost of all help except that of the part-time bookkeeper, the plant
manager, and the whey truckdriver. As of the time of the hearing the Nelsons had
two full-time employees to whom they were paying $330 a month each and a part-
time employee whose rate was $10 a day. They were also operating four trucks on
the milk routes, two of which were owned by Respondent. To about the middle of
September the Respondent paid a 10-cent subsidy to the Nelsons for the milk hauling.
Thereafter the subsidy was discontinued and the Nelsons received, in addition to
their basic 11/z cents a pound, only what the patrons themselves paid for the milk
hauling.
In addition to producing the cheese and hauling the milk, the Nelsons also per-
form the day-to-day maintenance work-all out of their contract price of 11/2 cents
per pound. If any special maintenance work is required, the Co-op pays for it.13
Since the first week in September, Respondent has been without the services of a man-
ager, Burke having voluntarily resigned at that time.
To show Mathews' antiunion animus and intent to eliminate the Union as the
bargaining agent of the employees, the General Counsel adduced evidence as follows:
1. A former employee, LeRoy Fritche, testified that about 3 years prior to the
hearing in a social conversation with Mathews at the Airport Bar the latter said he
thought the employees would be better off to drop out of the Teamsters and have
their own organization. As to this conversation Mathews testified that he told
Fritche that he "had no right to advise them what unit to belong to but as far as
the Co-op was concerned [he] thought it would be more desirable if [Respondent]
could talk to them as a unit of their own rather than have to talk to a business
representative from Wausau, or elsewhere." Previously in his testimony, Mathews
had denied having suggested to some of the employees "at times in the past . that
they get rid of the Teamsters and form their own organization to bargain." I credit
Fritche here.
2. Lyle Underwood, one of the union employees, testified that sometime after the
signing of the 1959 contract in a social conversation with Mathews at the Farmer's
Home Tavern, the latter said, "Why don't you guys get rid of that union and form a
little union of your own, you'd be much better off." Except for the above general
denial by Mathews this stands undenied in the record. I credit Underwood.
3. Board member Bergman testified on direct examination that after an arbitration
hearing involving the Union at Wausau, Wisconsin, in August 1960, Mathews
(in front of the courthouse after leaving the hearing) made the statement to him and
two other board members, Baake and Timm, that they would "have to quit doing
12 The striking employees had been paid in the area of $1 70 to $1.80 per hour.
13 Before the strike the maintenance work was done by Lyle Underwood whose rate was
$1 80 per hour. At that time any special maintenance work was handled by outside
contractors
896 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
business with these hoodlums" and would "have to try to get rid of the Union." On
cross-examination he testified that Mathews said, "We can't have these guys running
our business, its just a bunch of hoodlums." He also testified that he could not say
if the remarks on this occasion were in a serious or "kidding" vein and added that
he imagined that rather than serious "it was just an off-the-cuff discussion." This
also took place just after the 1960 contract had been signed. Mathews denied making
such statements . I credit Bergman.
4. Bergman further testified that he heard Mathews on three or four occasions in
board meetings in 1961 say he was going to get rid of the Union. He mentioned it
at practically every meeting saying, "If the union would walk out on strike, then
Nelson would take over." In this connection he further stated (in the June 9 meet-
ing) that if they prolonged this bargaining the Union would finally walk out, that if
the employees did not strike and Nelson took over Respondent would get in trouble
legally. He also testified that Mathews had pointed out that the way they would
"prolong the negotiations and stall until the employees did go on strike" was "by not
accepting the old contract."
5. Board member Ralph Woik testified that he never heard Mathews say "in so
many words" that he wanted to get rid of the Union but that on at least two oc-
casions in 1961 board meetings he indicated the same thing by explaining that "by
prolonging the negotiations to the point where the union would go on strike and then
we would have somebody else taking over the making of cheese."
In his testimony Mathews denied telling the board members they "could get rid of
the union" by contracting out the cheesemaking or that the way they could get the
employees to strike was to stall on negotiations. According to Mathews what he did
say was that he "thought it would be desirable to have this on a contract per-pound
basis, that [Respondent] couldn't do anything about it with anyone else as long as
the Union was in here but it wouldn't be desirable to renew the contract in the form
as it was at that time. [Respondent] couldn't renew the old contract and remain in
business." He also told the board "that unless [the employees] went out [Respond-
ent] couldn't hire anybody else." To the extent that there are any differences between
Mathews and the two other board members here I credit the latter.
In his testimony Mathews reviewed the financial circumstances and background
of Respondent's operation without contradiction as follows:
The Co-op "was always in financial difficulty and never seemed to get out of it
and no one ever seemed to be able to do anything about it." As long as Mathews
had been on the board (41/2 years) and even before that Respondent had never paid
any dividends on its $245,000 worth of capital stock. Nor had it paid any interest
or been able to retire any preferred stock. Even stock that is involved in the admin-
istration of an estate cannot be retired. With these things in mind Mathews, who
besides farming had experience in business, decided to make a thorough study of
Respondent's operation. On the basis of this study he became "firmly convinced that
drastic changes had to be taken in the reorganization of the business and the con-
duct thereof." He found that the plant was operating inefficiently and that no
changes were being made to keep up with the times. At one time Respondent had
300 patrons and a 33-million pound volume of production. At the time of the hear-
ing their patrons numbered about 140 and their volume was down to about 24,500,-
000 pounds. As a result the unit cost of operation has been constantly rising. While
they depreciate their equipment on their books they have no depreciation reserves.
In addition to this jeopardy in which they stand regarding the replacement of equip-
ment, much of their equipment is obsolete.
After they got the 10-day strike notice of April 13 he spent most of his time on
this matter. In case of a strike there were two things Respondent could do. They
could have other dairy plants process their milk or they could find somebody to op-
erate the plant while the strike was in progress.
Mathews' investigation revealed that other plants were operating successfully on
a per-pound or commission basis. In these plants the cost of hauling came within the
contract price. He found that Respondent's cost-of-hauling milk was excessive and
that Respondent's overhead was too high. It was his opinion that Respondent would
have to adopt the same method of operation to compete with the commission-
operated plants. He cited one unnamed example of another cheese factory operating
in the same area as Respondent showing $31,000 less operating costs than Respondent
yet operating on a volume of some 31/z million pounds less than Respondent while
at the same time the hauling process or cost was included in these figures. His object
as a member of the board of directors was to put Respondent's operation on a sound
financial basis. While the overall operating statement for 1960 showed a $2,500
profit this was not made from cheesemaking but from trucking cheese to Marshfield,
refunds from other cooperatives, and the sale of surplus equipment. A $901.89
MARATHON-CLARK COOPERATIVE DAIRY ASSOCIATION 897
profit for the first 6 months of 1961 was also derived from similar sources and not
from cheesemaking.
Contentions and Conclusions as to the 8(a) (5)
In his brief the General Counsel states that "what, in fact, happened here is that
the Respondent had limited itself to complying with only the outward manifestations
of collective bargaining. In contrast with these outward manifestations, the record
reflects with remarkable clarity that Respondent entered negotiations with a fixed and
determined intent never to reach a collective-bargaining agreement. Among the
indicia leading to this conclusion are Respondent's evasive and dilatory tactics, its
shifting position on wages, its continual insistence on its own terms and its refusal
to submit reasonable counterproposals. Above all else, Respondent violated the good
faith test when it handed the Union a fait accompli on the subcontract arrangement
with the Nelsons."
In support of his contention the General Counsel points to the "long harbored
resentment against the Union" by Mathews as exemplified by Respondent's unsuc-
cessful arbitration proceeding with the Union in 1960; the several occasions from
the time negotiations began that Mathews "informed his Board of Directors of his
intent to oust the Union, or at least expressed himself in favor of the idea." The
way to do this, according to Mathews, was to stall on negotiations until the em-
ployees became disgusted and walked out. Besides placating some board members'
misgivings about the fate of the employees by saying they would have first choice to
work for whatever the contractor would be willing to pay them, Mathews indulged in
"threats" and "bait" to win approval of his objective. The "threat" was to stop
selling his milk to Respondent. The "bait" was a saving of a $22,000 milk hauling
subsidy plus the expense of an office girl.
The General Counsel further attacks Respondent's defense that the subcontract
arrangement with Nelson was undertaken and consummated as a result of the Union's
threat to strike. In this connection the General Counsel points to some vagueness
and inconsistency in the evidence as to when the Nelsons were first contacted about
taking over the cheesemaking. On this basis the General Counsel contends that
"this evidence strongly supports the conclusion that Respondent was busy making the
arrangement with Nelson before it had any inkling of a possible strike and even be-
fore it received the April 13 letter from the State Conciliator." The General Coun-
sel also contends that the "evidence also strongly supports the General Counsel's
position that the arrangement with Nelson was made permanent from the outset."
In this connection the General Counsel points to the move to Abbotsford on or about
June 1 by the senior Nelson and the junior Nelson's leaving his job on June 9 at
Fremont, Wisconsin, and his moving to Abbotsford He also points to the fact that
Nelson's son-in-law also quit his job to come to work for Nelson at Abbotsford.
He further points to the younger Nelson's comment to one of the patrons on June 10
or 11 to the effect that his father was "going to start making) cheese at Marathon-
Clark on June 16."
While admitting that the Respondent "deluged the Union" with its financial plight,
the General Counsel contends nevertheless "that Respondent never gave the Union
an opportunity to bargain over any contemplated change in operations." This argu-
ment the General Counsel illustrates with his comment that it was not until May 12
that Respondent ever ventured to ask the Union for any suggestions or comments.
The General Counsel concludes that "it requires no great argument to prove that
the Union was never given any opportunity to discuss, let alone bargain, on the
change in operations." He further states that none of the problems in connection with
making cheese for a cent and a half per pound "were ever explained to the Union."
Although there is some merit in the General Counsel's position, I am unable to
agree with him that the preponderance of the evidence in this record considered as
a whole establishes a violation of Section 8(a)(5) of the Act. If the record shows
with "remarkable clarity" a fixed intent on the part of Respondent (or its president)
when it entered negotiations, that intent as I see it was purely economic and was to
avoid entering into a contract with the Union except on the economic terms it or its
president felt, rightly or wrongly, were necessary to avoid eventual economic col-
lapse.
One of the allegations of the complaint (and one of the main points in the Gen-
eral Counsel's position) is that it was Respondent's purpose by stalling in the nego-
tiations, to provoke the employees into striking. Yet, contrary to this purpose, on
two occasions the Union was requested by Respondent's officials to postpone its an-
nounced and imminent strike-which it did This is hardly consistent with a pur-
pose to provoke a strike. Furthermore, if dilatory tactics were being engaged in by
649856--63-vol. 137-58
898 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Respondent to provoke a strike, it is difficult to understand why the same kind of
conduct was engaged in after the strike occurred.14
The General Counsel refers to Respondent's "shifting position on wages" and
makes much of the fact that in the June 5 meeting when the Union charged that
Respondent's then insistence on contracting the cheesemaking was inconsistent with
its initial written proposals, Respondent's president withdrew all previous proposals.
The General Counsel's position would be more persuasive if it were not for the fact
that regardless of Respondent's written proposals (all of which offered less in benefits
than were granted under the contract then in force) the position it took in the very
first meeting with the Union was that "the changes that would have to be made"
would probably involve contracting out the cheesemaking. From that point on
Respondent's position remained unchanged. Indeed, Union President Yessa testified
about Respondent' s insistence in this respect is as follows: "I mean it [the question
of having the cheese made under the contract] always came in the picture. They
were using it as a weapon against us, it could be made cheaper and [they could]
operate the plant cheaper."
The General Counsel also contends that Respondent's offer in the August 21 meet-
ing of $1.15 per hour was substantially less than was being paid the Nelsons who
had taken over the operations and was "a sham, a hoax and a travesty on the require-
ment on good faith bargaining." There is nothing in the record to show that it was
less than the Nelsons were then getting 15 While it is true that for about 2 weeks
after the Nelsons took over, the father and son were ,being paid $1.50 per hour, it is
also true that the two Nelson women were being paid $1.15 an hour. In any event,
the circumstances in which the "offer" was made would seem to mitigate whatever
semblance bad faith there may be in this particular instance 16
The major indicia however, of Respondent's bad faith, according to the General
Counsel, occurred "when it handed the Union a fait accompli on the subcontract
arrangement with the Nelsons." Again I disagree with the General Counsel's inter-
pretation of the facts. In my opinion, the Union was not presented with a fait
accompli when it was told that Respondent "had someone who was going to take over
on a per pound basis." The employees were still working and continued to work
for another week or more and were not replaced until they went on strike. And there
is no indication that they would ever have been replaced had they not gone on
strike. Indeed the inferences are just the contrary.
So much for the General Counsel's main points . I turn now to his subsidiary con-
tentions. I do this by way of my overall analysis of the situation as I see it.
The record shows a declining trend in Respondent's operations 17 I am convinced
of Mathews' sincerity of purpose in attempting to reverse this trend. This does not,
of course, necessarily preclude the possibility that Mathews' real motive in part, at
least, was to eliminate the Union. I have no doubt that much of the opposition that
employers demonstrate toward unions is not the kind that originates in philosophic
principle but is based solely on economic considerations . To determine just what
the motive is, is always difficult. While there is evidence tending to show an anti-
union bias by Mathews it is hardly overwhelming. A couple of isolated remarks in
social conversations 2 or 3 years in the past and a more or less current (i.e , only
1 year old) comment which is characterized as not having been made seriously is what
the General Counsel relies on in this connection. On this evidence, considered in the
light of the record as a whole, I am reluctant to find that Mathews' position was based
on opposition to the Union as such. But even if Mathews' real motive was to eliminate
the Union, which I do not believe, I doubt that such a fact on this record would
establish that Respondent, whose ultimate actions were those of a seven-man
board of directors, violated the Act.
14 Both in the July 18 and August 21 meetings Respondent asked for more time to con-
sider its bargaining position. As to this matter I will comment more fully below.
15 As of July 1 the Nelsons went on the cent and a half per pound basis
19 It will be recalled that the Union had been out on strike at this time for about
2 months and the Nelsons had taken over In this context, in a bargaining session the
Union asked Respondent if it could make an offer It could and did. $1 15 an hour. In
my opinion it was made and meant as a negative response to the Union and was so
understood at the time
17 The following evidence was adduced from Respondent's annual reports:
1960 1959 1958 1957 1956
Number of patrons_______________________ 173 145 184 201 242
Operating cost per cwt. of milk handled,
cents________________________________ 53 89 51.75 45 38 44 66 39 55
Labor and management cost per pound of
cheese produced, cents_________________ 1 69 1.76 1 51 1 54 1.62
MARATHON-CLARK COOPERATIVE DAIRY ASSOCIATION 899
It is this aspect of the case that both complicates and throws light on what oc-
curred. As I see it, Mathews was determined to produce cheese by contract. But
first he had to persuade a sufficient number of the board members to agree with
him. Even though he may not have had the necessary support for this at the outset
of the negotiations, apparently there was no objection at that time to his making this
purpose clear to the Union , if for no other reason than as a matter of bargaining
strategy. After all, the Union was asking for various increased benefits. As time
lengthened and the bargaining continued it obviously became apparent that the union
was completely on the defensive having made it clear that it had no intention whatever
to enter into a contract arrangement itself and apparently having nothing to counter
"the baleful ballad of Respondent's economic plight."
At this point, recognizing the Union's weak bargaining position, a faction of the
board, out of regard for the welfare of the employees or out of apprehension of a
strike or of a change of the status quo, was willing to settle for the old contract.
But Mathews, sensing success for his objective particularly with a strike vote having
been taken on May 1, was fortified in his original position and undoubtedly ac-
centuated his efforts to sway the entire board to his views. Since it was obvious
that if Respondent made no concessions the employees would strike, Mathews
made preparations accordingly. It is these preparations, including certain state-
ments attributed to Mathews about them, that the General Counsel would rely on
to show that Respondent's purpose was to provoke the strike and that this was to
be accomplished by "stalling tactics" in the negotiations.
I have already pointed to the inconsistency in this connection with the two
occasions that the Union was asked to withhold strike action. Notwithstanding
that Mathews may have described strategy to his fellow board members as "pro-
longing the negotiations to the point where the Union would go on strike" and
may have indicated that such a course of action would "get rid of the Union," I am
unable to find bad faith here. There is nothing in the evidence, certainly before
the strike began,18 to show any position by Respondent other than the one it took
in the very first meeting-i.e., that its purpose was to have its cheese made on a
contract basis. Having found that this purpose was a bona fide economic aim
and was offered to the Union, I cannot find that by adhering to it until the employees
went out in protest thereof the Respondent was guilty of a violation of Section
8(a) (5) of the Act.19 Nor is my conclusion changed by the knowledge and ex-
pectation on the part of Respondent that this position on its part would result in
a strike. In this light, the negotiations and arrangement with the Nelsons cast no
adverse reflections on Respondent.
There is one remaining matter to be commented upon. That involves the
repeated claims by Respondent that it needed time to elicit more facts to enable
it to know what position it could take regarding the negotiations. The General
Counsel points to this as indicative of Respondent's stalling tactics engaged in to
provoke the strike. But the perplexing thing about this is that Respondent continued
to make the same claims after the strike occurred. I think the explanation involves
a combination of things. I believe that in part, Respondent's pleas for more time
(certainly before the strike occurred) stemmed from the need of both factions of
the Board for more time to persuade the other to its way of thinking. To some
extent also I believe that there was a genuine feeling on the part of some of the
board members that they needed more information than they had. And last but
not least, I cannot avoid the impression that some of Respondent's actions here
stemmed from a mistaken idea of what the law required of it.
Having found that Respondent did not refuse to bargain in violation of Section
8(a) (5) of the Act, it follows of course that when the employees went on strike
because of the failure to get an agreement this strike was economic and was not an
unfair labor practice strike.20 It also follows that Respondent did not discriminate
against the employees in violation of Section 8(a) (3) of the Act when their demand
for reinstatement was not complied with. I so find.
18 After the strike had been in progress over 2 months Respondent made its already
,commented-upon "offer" of $1 15 per hour
In this connection the testimony of Bergman, one of the board members who would
have accepted the old contract, is significant As already indicated, he testified that the
way that Mathews told them they would "prolong the negotiations and stall until the
employees did go on strike" was "by not accepting the [old] contract"
20 The General Counsel further contends that the strike in addition to having been caused
by the alleged refusal to bargain, was also caused by the alleged discriminatory discharge
of two employees Apart from the fact that no such allegation is contained in the com-
plaint as will be seen below the evidence fails to support the General Counsel's contention.
900 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
The Alleged Discrimination Against Loughead and Underwood
When the union officials, Yessa and Chamberlain , learned of Respondent's re-
jection of the old contract on the night of June 16, they immediately got some picket
signs and drove from Wausau to Abbotsford arriving about midnight. Because of
the lateness of the hour they did not get in touch with the employees but they
did put up the signs at the plant at that time. When they went to eat at 5 o'clock in
the morning they took the signs down and did not (according to Yessa's testimony)
again display them until sometime past 7 a.m. after two of the union employees
(Underwood and Loughead) had gone into the plant and came out 2i
About 5:30 Plant Manager Burke arrived at the plant. By this time the two
union officials had returned. Burke said, "It looks like the boys won't be here
today." According to Yessa, he did not give Burke "a definite answer" but told him
to draw his own conclusion. About a half hour later the two Nelson men and
their wives arrived and went into the plant. Shortly thereafter three other young
men arrived who were part-time employees and did not belong to the Union. They
also went into the plant. Next to arrive was Lyle Underwood, a union employee.
According to his testimony, when he arrived Yessa and Chamberlain were standing
in front of the factory. There were no picket signs out-nor did he see any any-
where. The union officials informed him of the board's rejection of the old contract
the night before and told him "there was somebody else in the plant working and
to go in and see what the deal was."
Inside the plant, according to Underwood's further testimony, he saw Burke
and Nelson working on a separator. He said to them, "It looks like we don't
work." Burke replied, "I guess that's right," and added that "they had decided
to try it this way for a while." Underwood asked, "Can I pick up my personal
belongings?" Burke said, "Yes, sure, go ahead." After getting his belongings
Underwood went to the office. At this point William Loughead, another union
employee, came into the office too.22 According to Underwood's testimony, in the
office Burke told them, "I've been instructed to ask you to turn in your keys."
Underwood said, "Here's mine. Does this mean that we're laid off?" Burke
answered, "Not necessarily. You can go to work for yourself, if you want to." 23
When the General Counsel asked Loughead why he went on strike, Loughead
answered, "Because I figured that they hadn't used us right by not trying to bargain
with us." When asked if there was any other reason, Loughead knew of none.
Considering the strike vote of May 1; the Union's letter of June 7 threatening
a strike if an agreement was not reached; the two postponements of the strike; the
statement by Yessa to the board on the night of June 16 that because of its rejection
of the old contract it would "have to suffer the consequences"; Yessa's directions to
Underwood "to go in and see what the deal was"; and Burke's remark to the two
employees that they could go to work for themselves if they wanted to; I find that
they were not discharged or discriminated against in violation of Section 8(a)(3)
of the Act.
Upon the above findings of fact, and upon the entire record in the case, I make
the following:
CONCLUSIONS OF LAW
1. The Respondent is engaged in commerce within the meaning of Section 2(6)
and (7) of the Act.
2. The Union is a labor organization within the meaning of Section 2(5) of the Act.
3. The Respondent has not engaged in unfair labor practices as alleged in the
complaint.
RECOMMENDATION
Having concluded that Respondent has not engaged in unfair labor practices as
alleged herein, I recommend that the complaint be dismissed in its entirety.
21 There is some conflict as to whether the signs were on display earlier than this latter
time. I see no need to resolve this conflict as the evidence is clear that if the signs were
not officially posted at any of the times relevant herein, they were reposing in the back
seat of Yessa's automobile which was parked directly in front of the plant and were
clearly visible to anyone nearby. I so find.
22 Loughead had arrived at the plant some minutes after Underwood Like the latter,
be testified that he saw Yessa and Chamberlain outside the plant but did not see any
picket signs anywhere.
23Loughead's testimony was that Burke said, "Not necessarily, you can go out and bar-
gain with the Board of Directors by yourselves, but not with the Union " This comment
was denied by Burke. I credit Underwood