North Carolina Furniture, Inc.

National Labor Relations Board - Board Decisions

Jul 10, 1958

121 N.L.R.B. 41 (N.L.R.B. 1958)

NORTH CAROLINA FURNITURE, INC. 41
union employee, several days before the election, to turn around and
talk against the union for the next 2 days; (2) the Employer, about a
month before the election and during the campaign, promised a wage
increase; and (3) the Employer established a new grievance procedure
shortly before the election. These events all occurred after the
Board's direction of election.
In its exceptions, the Employer alleges generally that the Regional
Director's investigation was inadequate, but offers no supporting evi-
dence. With respect to the Regional Director's particular findings,
there is nothing in the Employer's exceptions that in any way attacks
them. Accordingly, there is no basis for granting the hearing the
Employer seeks. As we agree with the Regional Director that the
Employer's conduct made a fair election impossible, we shall adopt
his recommendation that the election be set aside.
[The Board set aside the election.]
[Text of Direction of Second Election omitted from publication.]
North Carolina Furniture , Inc. and Local 2506, United Brother-
hood of Carpenters and Joiners of America , AFL-CIO. Case
No. 11-CA-1091. July 10, 1958
DECISION AND ORDER
On November 5, 1957, Trial Examiner A. Bruce Hunt issued his
Intermediate Report in the above-entitled proceeding, finding that
the Respondent had engaged in and was engaging in certain unfair
labor practices and recommending that it cease and desist therefrom
and take certain affirmative action, as set forth in the copy of the
Intermediate Report attached hereto. Thereafter, the Respondent
filed exceptions to the Intermediate Report.
Pursuant to the provisions of Section 3 (b) of the Act, the Board
has delegated its powers in connection with this case to a three-
member panel [Chairman Leedom and Members Bean and Jenkins].
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 the entire record in the case and
hereby adopts the findings, conclusions, and recommendations of the
Trial Examiner, with the additions and modifications noted below.
1. The Trial Examiner found that the Respondent, in violation of
Section 8 (a) (5) and (1) of the Act, did not bargain in good faith
with Local.2506, the certified representative of the Respondent's
employees, by requiring Local 2506, as a condition for signing a con-
tract, to agree to the inclusion in the contract of a provision that
121 NLRB No. 8.
-42 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
liability for, violation of the contract's no-strike clause, shall extend
to the full resources of Local 2506's parent International. We agree
-with the Trial Examiner's conclusion but find it unnecessary to deter-
mine the good or bad faith of the Respondent. We base our unfair
labor practice on the fact that the ^ provision in question was - not a
mandatory subject for collective bargaining as it did not relate to
"wages, hours, and other terms and conditions of employment" within
the meaning of Section 8 (d) of the Act. In such circumstances and
for the reasons set forth'in the recent decision of the Supreme Court
of the United States in N. L. R. B. v. Wooster Division of Borg-War-
ner Corporation,' we find that, whether or not the Respondent acted
in bad faith, its insistence on including the controversial liability
provision as a condition of agreement violated Section 8 (a) (5)
and (1) of the Act.
2. To remedy the unfair labor practices, the Trial Examiner recom-
mended, among other things, that the Respondent offer to execute a
contract containing all the provisions upon which both it and the
Local had agreed in collective-bargaining negotiations, except the
liability clause. As the parties had not reached full and complete
agreement on all the terms of the contract, we shall not adopt this
recommended remedy. In the circumstances of this case, we find
that the customary order prescribed hereinafter will effectuate the
policies of the Act.
ORDER
Upon the entire record in the 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, North Carolina
Furniture, Inc., Statesville, North Carolina,-its officers,,agents, suc-
cessors, and assigns, shall :
1. Cease and desist from :
(a) Refusing to bargain collectively with Local 2506, United
Brotherhood of Carpenters and Joiners of America, AFL-CIO, as
the exclusive certified representative of all production and main-
tenance employees at its Statesville, North Carolina, plant, including
machine setup men, the receiving clerk, truckdriver, daytime fireman,
inspectors, and repairmen; leadmen or subforemen of the lumber,
assembly, and bent ply departments; packing department employee
Heath, the lumber inspector, shipping clerk, sample maker, and
watchmen-firemen, but excluding the timekeeper, office clerical em-
ployees, professional - employees, guards, foremen of the',bent ply,
upholstery,, assembly; finishing, machine, lumberyard, and bending
departments; the maintenance leadman or subforeman, superin-
tendent, plant manager, and supervisors as defined in the Act, con-
1356 U. S. 342.
NORTH CAROLINA" FURNITURE, INC. ' 43
cerning rates of pay, wages, hours of employment, and other conditions
of employment.
,(b) In any like or related manner interfering with, restraining,
or coercing its employees in the exercise of the right to self-organi-
zation, to form labor organizations, to join or assist Local 2506, United
Brotherhood of Carpenters and Joiners of America, AFL-CIO, or
any other labor organization, to bargain collectively through repre-
sentatives of their own choosing, or to engage in other concerted
activities for the purpose of collective bargaining or other mutual
aid or protection, or to refrain from any or all such activities, except
to the extent that such right may be affected by an agreement re-
quiring membership in a labor organization as a condition of employ-
ment, as authorized in Section 8 (a) (3) of the Act.
2. Take the following affirmative action which the Board finds will
effectuate the policies of the Act :
(a) Upon request, bargain collectively with Local 2506, United
Brotherhood of Carpenters. and Joiners of America, AFL-CIO, as
the exclusive representative of all employees in the certified unit
described above, concerning rates of pay, wages, hours of employment,
and other conditions of employment, and if an understanding is
reached, embody such understanding in a signed agreement.
(b) Post at its plant at Statesville, North Carolina, copies of the
notice attached hereto marked "Appendix." z Copies of said notice,
to be. furnished by the Regional Director for the Eleventh Region,
shall, after being duly signed by the Respondent's representative, be
posted by the Respondent immediately upon receipt thereof and main-
tained by it for a period of sixty (60) consecutive days thereafter in
,conspicuous places, including all places where notices to employees
are customarily posted. Reasonable steps shall be taken by the Re-
spondent to insure that said notices are not altered, defaced, or covered
by any other material.
(c) Notify the Regional Director for the Eleventh Region in writ-
ing, within ten (10) days from the date of this Order, as to what
steps the Respondent has taken to comply herewith.
2 In the event that this Order is enforced by a decree of a United States Court of Ap-
peals, 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."
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, bargain collectively with Local 2506,
United Brotherhood of Carpenters and Joiners of America, AFL-
44 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
CIO, as the exclusive representative of all our employees in the
certified bargaining unit described below with respect to rates
of pay, wages, hours of employment, and other conditions of em-
ployment and, if an understanding is reached, embody such
understanding in a signed agreement. The bargaining unit is :
All production and maintenance employees at our States-
ville, North Carolina, plant, including machine setup men,
the receiving clerk, truckdriver, daytime fireman, inspectors,
and repairmen; leadmen or subforemen of the lumber, as-
sembly, and bent ply departments; packing department em-
ployee Heath, the lumber inspector, shipping clerk, sample
maker, and watchmen-firemen, but excluding the timekeeper,
office clerical employees, professional employees, guards,
foremen of the bent ply, upholstery, assembly, finishing,
machine, lumberyard, and bending departments; the main-
tenance leadman or subforeman, superintendent, plant man-
ager, and supervisors as defined in the Act.
WE WILL NOT by refusing to bargain or in any like or related
manner interfere with, restrain, or coerce our employees in the
exercise of the right to self-organization, to form labor organi-
zations, to join or assist Local 2506, United Brotherhood of Car-
penters and Joiners of America, AFL-CIO, or any other labor
organization, to bargain collectively through representatives of
their own choosing, or to engage in other concerted activities for
the purpose of collective bargaining or other mutual aid or pro-
tection, 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.
NORTH CAROLINA FURNITURE, INC.,
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.
INTERMEDIATE REPORT AND RECOMMENDED ORDER
STATEMENT OF THE CASE
Charges having been duly filed , a complaint and notice of hearing thereon having
been served by the General Counsel, and an answer having been filed by North
Carolina Furniture, Inc., *herein called the Respondent, a hearing involving allega-
tions of unfa;r labor practices in violation of the National'Labor Relations Act, 61
Stat. 136, herein called the Act, was held upon due notice at Statesville, North
Carolina, on July 23, 1957, before the duly designated Trial Examiner. The allega-
tions of the complaint , denied by the answer , in substance are that since on or
about August 14, 1956, the Respondent has refused to bargain collectively with
NORTH CAROLINA FURNITURE, INC. 45
Local 2506 , United Brotherhood of Carpenters and Joiners of America, AFL-CIO,
herein called the Local, as the exclusive representative of its employees in an
appropriate unit, although a majority of said employees had designated the Local
as their representative for such purposes , in violation of Section 8 (a) (5) and (1)
of the Act . The General Counsel and the Respondent were represented by counsel,
and the Local by certain representatives , and all were afforded full opportunity to
be heard , to examine and cross -examine witnesses , to introduce ,evidence pertinent
to the issues , to argue orally upon the record , and to file briefs and proposed findings
and conclusions . Briefs were received from the General Counsel and the
Respondent.
Upon the entire record in the case and from my observation of the witnesses, I
make the following:
FINDINGS OF FACT
1. THE BUSINESS OF THE RESPONDENT
The Respondent, a North Carolina corporation , has its principal office and place
of business at Statesville , North Carolina , where it is engaged in the manufacture
and sale of wooden furniture , mainly chairs and benches . During 1956, the
Respondent purchased raw materials , supplies, and equipment valued in excess of
$100,000 which were shipped to its Statesville plant directly from points outside
North Carolina . During the same year , the Respondent shipped finished products
valued in excess of $ 100,000 directly to points outside North Carolina . There is no
dispute, and I find, that the Respondent is engaged in commerce within the meaning
of the Act. '
II. THE LABOR ORGANIZATION INVOLVED
Local 2506, United Brotherhood of Carpenters and Joiners of America , AFL-CIO,
is a labor organization admitting to membership employees of the Respondent.
M. THE UNFAIR LABOR PRACTICES '
A. The appropriate unit; the Local 's majority status
On June 15, 1956 , following appropriate representation proceedings including an
election, the Regional Director for the Board 's Eleventh Region certified the Local
as the exclusive representative of the Respondent 's employees in the following
appropriate bargaining unit:
All production and maintenance employees at the Statesville plant , including
machine setup men , the receiving clerk , truckdriver, daytime fireman , inspectors, and
repairmen ; leadmen or subforemen of the lumber , assembly , and bent ply depart-
ments ; packing department employee Heath , the lumber inspector , shipping clerk,
sample maker and watchmen -firemen, but excluding the timekeeper , office clerical
employees , professional employees , guards, foremen of the bent ply , upholstery,
assembly, finishing , machine, lumberyard , and bending departments ; the maintenance
leadman or subforeman, superintendent, plant manager, and supervisors as defined
in the Act.
Accordingly, I find that the aforesaid - unit constitutes a unit appropriate for the
purposes of collective bargaining within the meaning of Section 9 (b) of the Act.
I find further that on June 15, 1956 , and at all times thereafter , the Local was the
duly designated representative of a majority of the employees in the appropriate
unit and , pursuant to Section 9 (a) of the Act , was the exclusive representative of
all the employees in such unit for the purposes of collective bargaining in respect to
rates of pay , wages, hours of employment , and other conditions of employment.
B. The refusal to bargain collectively
1. The facts
The issues here arise from two proposals which the Respondent made to the
Local in their negotiations, namely, ( 1) that the Local 's parent body, United
Brotherhood of Carpenters and Joiners of America , AFL-CIO, herein called the
International , be a coparty to any collective labor agreement which might be
executed , and (2 ) that any such agreement provide that liability for a violation of
the no-strike provision "shall extend to the full resources of the International." The
events will be recited.
On or about July 12 , 1956 , following its certification , the Local demanded that
the Respondent bargain collectively and submitted a proposed contract . On July
24, negotiations were begun . The Respondent 's principal spokesman at the
46 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
bargaining sessions was Eugene B. Halward , its secretary , and the Local 's principal
spokesman was K . R. Knopf, an international representative of the International.
While the record does not disclose complete details of the various bargaining,
sessions, it appears that at the first one the Local's proposed contract was discussed.
Thereafter, on August 14, the Respondent mailed to Knopf its initial proposals.
Although the Local, and not the International, had been certified as the employees'
exclusive representative, the Respondent's proposed contract provided that the
Local and the International be coparties thereto. The proposed contract provided
further:
XV. NO STRIKES OR LOCKOUTS
During the term of this Agreement 'the Company shall not engage in any
lockout of employees, but this provision shall, not be construed as limiting or
impairing the right of the Company to cease or to reduce its operations on
account of business necessities. If the Company either directly or indirectly
violates any provision of this paragraph, the Union shall have such rights and
recourse as the law may provide , including liability for any and all injuries
or damage which may result from such violation. It is understood that the-
liability here provided for shall extend to the Company's full resources.
During the term of this Agreement there shall be no strike, walkout, slow
down, work stoppage, nor picketing, nor any other concerted action of any
nature which has as its purpose or effect the interruption of or interference-
with the Company's production. If the Union, either directly or indirectly,,
authorizes , promotes , supports or condones any violation of any provision of
this paragraph, the Company shall have such rights and recourse as the law
may provide and the Union shall be subject to such liability as the law may
provide, including liability for any and all injury or damage which may result
from such violation. • It is understood that the liability here provided for shall
not be confined to the resources of the Local Union but shall extend to the full
resources of the International Union, that is, the United Brotherhood of
Carpenters and Joiners of America.
As will appear , disagreement upon inclusion of the last sentence of the above-
quoted provision prevented execution of a contract.
On August 17 the second bargaining session , was held. The Respondent's pro
posals were' discussed, but it does not appear that particular attention was paid to
section XV. This is so because there were a number of other unresolved issue&
to which more attention was given. On August 30, at the third bargaining session,
the Respondent offered another proposed contract . It contained provisions like
those set out above. According to the uncontradicted testimony of Halward, sec-
tion XV was not discussed in detail and an employee named Annas, who was a
member of the Local's bargaining committee, said that the second paragraph thereof
was acceptable . Halward testified further that , upon occasions during the bargaining
sessions when mention was made of that paragraph , he asserted that it embodied the
only "request" made by the Respondent throughout the proposed contract and that
the resources of the Local were inadequate to compensate the Respondent in the
event'of damage resulting from a violation. According to Halward, no one on
the bargaining committee disputed his statement concerning the Local's resources.
On November 7 the fourth bargaining session was. held and the Local submitted
another proposed contract.' In contrast with the last sentence of section XV in the
Respondent's proposed contract, the Local proposed: "It is understood that the
liability here provided for shall be confined to the resources of the Local Union."
On November 23 the fifth bargaining session was held. Six matters remained in,
issue: checkoff, wages, piecework-rates in the, upholstery, department, the last sen-
tence of the no-strike provision , an arbitration provision, and certain aspects of
employee insurance.
On December 5 the Respondent mailed to Knopf its third proposed contract which,
embodied provisions upon which there had been agreement along with the Respond-
'Although the introductory paragraph of this document names the Local , and not the
International, as the contracting labor organization, the attesting portion is identical with,
the corresponding portion of the Respondent's proposed contracts and reads, with respect
to the contracting labor organization, as follows : "UNITED BROTHERHOOD OF CAR-
PENTERS AND JOINERS OF AMERICA and its chartered LOCAL NO. 2506 BY ------
------------------------- " Under the circumstances recited herein, I find that the
variance of the attesting portion.of, the Local's proposed contract from the introductory
paragraph may not be construed as showing approval by'the Local and the International
that the latter be a coparty to the contract.
r
NORTH CAROLINA FURNITURE, INC. 47
ent's position on other matters. On the subject of wages, upon which the negotiators
had been at odds over the Respondent's proposal that it would "pay employees not
less than the rates of pay which they now receive," the Respondent offered to add
that either party could open the agreement once during its term for the purpose of
bargaining on wage rates. On the subjects of the International as a coparty to the
agreement and the last sentence of the no-strike provision, the Respondent adhered
to its earlier proposals recited above.
On February 7, 1957, the sixth bargaining session was held. The no-strike
provision was not discussed in detail because of the importance of other issues,
and it appears that the Respondent made a proposal about piece rates in the up-
holstery department which' eliminated that subject as an issue .2 On February 26
and April 2,_ the seventh and eighth bargaining sessions were held. At the latter,
the Respondent said that it intended to grant merit wage increases in accord with
its existing practices, and there was discussion of an arbitration provision. It was
noted that wages, a checkoff, and the last sentence of the no-strike provision remained-
in issue. An employee named Teaster, a member of the Local's bargaining com-
mittee, said that he would have accepted the Respondent's no-strike proposal if
there had been agreement upon a general wage increase.
On April 3 Halward wrote to Knopf, saying that he understood that "the Union"
agreed to a continuation of merit increases, that it no longer requested a general,
wage increase and an arbitration provision, and that only two issues remained,,
namely, a checkoff and financial liability for strikes "called or caused or supported
by the union ." Halward set forth the Respondent's reasons for refusing to agree
to a checkoff, which need not be recited. He said also , inter alia , that the Respond-
ent would no longer demand that the International be a coparty to the contract-
since it had not been certified as the representative of the employees, but that the
Respondent would insist upon inclusion of the no-strike provision with liability of
the International because (1) the Local had no assets, (2) the provision would,
be meaningless without liability of the International, and (3) the International,
having organized the employees, having benefited by collection of dues, and having
had a representative, ,Knopf, present. at the bargaining sessions, was a part of "the
present [bargaining] situation." 3
On April 12 Knopf wrote to Halward, saying that "the Union" would drop its
requests for a general wage increase, a checkoff, and arbitration if the Respondent
would (1) agree to a wage-reopening provision and (2) drop its insistence upon
the last sentence of the no-strike provision which reads:
It is understood that the liability here provided for shall not be confined to the
resources of the Local Union but shall extend to the full resources of the
International Union, that is, the United Brotherhood of Carpenters and Joiners,
of America.
On April 17 the ninth and final bargaining session was held. It did not result-
in an agreement . On April 23 Halward wrote to Knopf, referring to Knopf's letter-
of April 12 and to the April 17 session, and saying that the Respondent sometime
previously had agreed to a wage reopening provision and that it would adhere to.
that agreement, but reiterating its reasons for insisting upon inclusion of the single
sentence covenant quoted above.
As noted, the Respondent no longer asked that the International be described-
as a coparty to the contract or that it sign it. According to the Respondent, the
g About 2 weeks before February 7, the Local filed its initial charge alleging that the
Respondent had engaged in unfair labor practices by "unilateral action affecting the con-
ditions of employment among his [sic] employees" and by failing "to bargain in good,
faith " Halward testified without contradiction that on February 7 Knopf said that the.
charge would be withdrawn if the Respondent would sign a contract. It is unclear from
Halward's testimony, however, just what contractual provisions. Knopf had in mind.
In any event, the Respondent rejected the proposal.
8 Another exchange of correspondence occurred at this time. On April 3 Knopf wrote to,
Halward, saying that at the February 26 bargaining session a request had been made
that the Respondent submit data showing the job and wage rate of each employee and
that such was necessary for intelligent bargaining on the subject of wages, and renewing
the request On the next day Halward responded, saying that at the April 2 session he
had supplied certain data which he thought had' sufficed, but that he would compile
the additional data requested. Halward also reiterated the statement in his letter of
the preceding day that Knopf had withdrawn the request for a general wage increase and
he commented that the reintroduction of the issue unduly handicapped efforts to reach,
an agreement.
48 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Local's execution of a contract with the quoted covenant would have resulted in
a question of law and the Respondent was "willing to take our risk that there would
be liability of International funds...... The Respondent's elaboration of this
point is set forth under Conclusions below.
On May 6 Knopf wrote to Halward, enclosing a letter of April 16 to Knopf from
M. A. Hutcheson, general president of the International, which contains the follow-
ing paragraph:
Furthermore, no contract can contain any provision whereby the Interna-
tional is subject through law to redress through any action taken by Local
Union or District Council inasmuch as the International has no control over
these subordinate bodies in a large number of instances.
Knopf proposed to Halward that a contract embodying provisions upon which there
had been agreement be executed and that all other subjects in issue, specifically
including the Respondent's insistence upon the quoted covenant, be withdrawn. The
Respondent refused, and thus its insistence upon that sentence prevented consum-
mation of a contract and gives rise to the legal question for discussion below.
2. Conclusions
As we have seen , on August 14, 1956, soon after the commencement of bargain-
ing negotiations, the Respondent proposed that (1) the International, which had
not been certified as the representative of the employees, be a coparty to a collective
labor agreement along with the Local, and (2) the no-strike provision of the
agreement contain a covenant that
the liability here provided for shall not be confined to the resources of the
Local Union but shall extend to the full resources of the International Union,
that is, the United Brotherhood of Carpenters and Joiners of America.
As we have seen too, the Respondent adhered to this position until April 3 when it
dropped its demand that the International be a coparty to an agreement but con-
tinued its insistence upon the quoted covenant .4 Although all other provisions of
an agreement were settled, no agreement was executed because of that insistence.
The question is whether, under these circumstances, the Respondent refused to
bargain collectively in violation of the Act.
There is no dispute that a contractual provision prohibiting strikes is "an
obligatory subject of collective bargaining" as that phrase is used in Wooster
Division of Borg-Warner Corporation, 113 NLRB 1288, 1294,8 and thus an employer,
if acting in good faith, may insist upon it. Here the Respondent and the Local
reached agreement upon such a provision, but they did not agree upon the convenant
which might have imposed liability upon the International in the event of a breach
of the provision by the Local.6 The General Counsel, citing certain cases,7 asserts
that the Respondent violated the Act by (1) bargaining in bad faith and (2) insisting,
to the point of impasse, upon inclusion of a convenant which was outside the area
of compulsory bargaining. According to the, General Counsel, the Respondent
properly could advance the covenant in bargaining with the desire for agreement by
mutual consent, but could not insist upon it as the price of a contract. Inherent in
the General 'Counsel's contention that the convenant is outside the statutory area
of compulsory bargaining is the additional contention that it is immaterial whether
the Respondent acted in good faith in insisting upon the convenant. This is so
because it is Board law that good faith is the test only when the bargaining issue
is wages, hours, or other conditions of employment. Cf. Darlington Veneer, supra;
N. L. R. B. v. Dalton Telephone Company, 187 F. 2d 811 (C. A. 5).8 On the
* As noted, on November 7 the Local proposed that the covenant read : ". . . the liabil-
ity here provided for shall be confined to the resources of the Local Union."
6 An obligatory subject is one which is embraced within the phrase "rates of pay, wages,
hours of employment, or other conditions of employment," as used in Section 9 (a) of
the Act.
6 Partly upon the basis of Square D Co. v. Electrical Workers, 123 F. Supp. 776, the
General Counsel asserts that the covenant is of "dubious legality."
'lnter alma, N. L. R. B. v. Darlington Veneer Company, Inc., 236 F. 2d 85 (C. A. 4),
enfg. 113 NLRB 1101; N. L. R. B. v. Taormina Company, 207 F. 2d 251 (C. A. 5), enfg.
94 NLRB 884; N. L. R. B. v. Wooster Division; of Borg-Warner Corporation, 236 F. 2d
898 (C. A 6), cert. granted 353 U. S. 907 [356 U. S. 342, May 5, 1958].
8 The validity of the Board's position is now pending before the Supreme Court of the
United States in N. L. R. B. v. Wooster Division of Borg-Warner Corporation, supra.
NORTH CAROLINA FURNITURE, INC. 49
other hand, the Respondent, citing certain cases,9 asserts that the issues turn entirely
upon its good faith in bargaining, that it acted in good faith throughout the
negotiations, and that its conduct was "entirely reasonable."
In considering the question' whether the Respondent acted in good faith, it should
be noted that insofar as appears the Local never has been under a contractual rela-
tionship with an employer and thus has not been shown to have engaged in strike
activity contrary to contract.10 The Respondent never has been under such a
relationship with a labor organization. Thus, the Respondent merely assumed that
the Local might become irresponsible by breaching a no-strike provision. Accord-
ing to the Respondent's witness, Halward, during bargaining sessions he told the
Local's representatives that the no-strike provision as proposed by the Respondent
was the Respondent's "only request," the other portions of the contract being conces-
sions by the Respondent, and that the provision needed "substance" because, in
the event of a strike in violation of the contract with resulting damage to the
Respondent, the resources of the Local were "not substantial enough . to
substantiate" the no-strike provision. It thus appears that the Respondent's two
proposals, namely, that the International be a coparty to the contract and that the
resources of the International be pledged as security for performance of the no-
strike provision, were in fact directed to a single end, i. e., a pledge of those resources.
On April 3, as the negotiators neared a resolution of various issues, the
Respondent withdrew its demand of 7 months' standing that the International be
a coparty to the contract. According to the Respondent, as soon as this proposal
"did emerge as something important, we [the Respondent] readily and quickly said
[to the Local], `you are right. You are entitled to a contract in the name of the
certified agent.' . This belated withdrawal by the Respondent was in recogni-
tion of the law. The Local had won the status of exclusive representative of the
employees, and that status, having been acquired by statute, is not within the
statutory area of compulsory bargaining. Cf. Taormina Co., supra.11 Neverthe-
less, the Respondent still attempted to achieve its basic objective by having the
Local agree to the quoted covenant concerning a pledge of the International's
resources. As the Respondent expressed its aim:
We only ask that you [the Local] do say here that the funds of the International
shall be responsible. Now, if you can't bind those funds, then, of course, your
saying it here and signing it won't be of legal effect, but we will take our
chances that it is of legal effect. We will take our chances that you are so
closely tied in with them [the International] that we will be able to go at
them. If we are wrong about that, legally, then we are still getting nothing.
But we want that much. We want that chance in court against those funds
for violation, if it occurs, on your part.
Thus, the Respondent, unable to require that a third party, the International,
become' a coparty to the contract and pledge its resources as security for per-
formance of another's obligation, nevertheless insisted that the Local purport and
attempt to pledge those resources contrary to the direction of the third party. The
Respondent thereby sought to acquire by indirection that which it could not acquire
directly. It did so in bad faith. The Respondent asserts, in substance, that its
conduct was founded in a belief that the Local is financially irresponsible and in
an assumption that the Local might add contractual irresponsibility to financial
irresponsibility by breaching the no-strike provision of the contract. But the Act
does not restrict employees' choices of representatives to financially responsible
organizations. Moreover, a basic principle of the Act is that collective bargaining
will foster responsible, stable unionism. Insofar as I am aware, lack of financial
resources on the part of a labor organization has never constituted a valid defense
for an employer's refusal to enter into a written contract, the terms of which were
not in dispute. Cf. Jasper Blackburn Products Corporation, 21 NLRB 1240; Scripto
Manufacturing Company, 36 NLRB 411; and cases cited in the dissenting opinion
° N. L R B v Ame, ican National Insurance Co , 343 U. S 395 ; Allis-Chalmers Manu-
facturing Company v. N. L R. B., 213 F. 2d 374 (C. A. 7) ; N. L R. B. v I. B. S. Mfg. Co.,
210 F. 2d 634 (C. A. 5) ; N. L. R. B. V. Wooster Division of Borg-Warner Corporation,
supra.
10 The Local was established in September 1955 in Hickory, North Carolina, about 25
miles west of Statesville where the Respondent is located, but the record does not disclose
the Local's relationship with any other employer.
11 A similar point is now pending before the Supreme Court of the United States in
Borg-Warner, supra.
487926-59-vol. 121 5
50 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
in I. B. S. Manufacturing Company, supra.12 If it were such a defense, it would be
applicable equally to a refusal even to meet with employees' exclusive representatives
since a contract merely embodies the understanding of the parties. It is in the light
of these principles that the Respondent's conduct must be evaluated. I conclude that
the Respondent's professed teal: of contractual and financial irresponsibility by the
Local, when carried to the point of constituting the basis for a refusal to consummate
an agreement , is contrary to the policies and objectives of the Act and signifies an
intent to avoid an agreement. Moreover, when the Respondent withdrew its in-
sistence that the International be a coparty to the contract because it believed
that its position was legally indefensible, good faith dictated that the Respondent
not seek to acquire its objective indirectly and that it also withdraw its insistence
that the Local do something which the Local could not properly and authoritatively
do.13 This is so because the insistence in each instance was part and parcel of
the same end, that is, the price of a contract to be a pledge of the resources of the
International as security for performance of the no-strike covenant.14
In view of this determination, I believe that it is unnecessary to consider the
second contention of the General Counsel, namely, that the covenant upon which
the Respondent insisted is outside the statutory area of compulsory bargaining. I
find that the Respondent has violated Section 8 (a) (5) and (1) of the Act.
IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE
The activities of the Respondent set forth in section III, above, occurring in
connection with the operations of the Respondent described in section I, above,
have a close, intimate, and substantial relation to trade, traffic, and commerce
among the several States, and tend to lead to labor disputes burdening and obstruct-
ing commerce and the free flow of commerce.
V. THE REMEDY
Having found that the Respondent has engaged in certain unfair labor practices,'I
shall recommend that it cease and desist therefrom and that it take certain affirma-,
tive action designed to effectuate the policies of the Act. I have found that the
Local represented a majority of the employees in an appropriate unit and that
the Respondent refused to bargain collectively with it. Accordingly, I shall recom-
mend that the Respondent, upon request, bargain collectively with the Local as the
exclusive representative of the employees in the appropriate unit . In addition,
since the Respondent and the Local agreed upon all provisions of a contract other
than the covenant upon which the Respondent invalidly insisted, I shall recom-
mend further, in accord with the contention of the General Counsel, that the
Respondent offer to the Local to execute a contract containing all provisions upon
which they agreed.
Upon the basis of the above findings of fact and the entire record in the case,
I make the following: -
12 The majority opinion in I. B S Manufacturing Company is not authority to the con-
trary. There the Trial Examiner found, 96 NLRB 1263, 1269, 1307, that the employer
had not insisted upon a performance bond as a condition precedent to bargaining, a find-
Ing which the Board rejected but which the court of appeals reinstated
13 If, as a consequence of an opinion of the Supreme Court of the United States in Borg-
Wainer, supra, footnote 7, it should appear at a later date that the Respondent could
have insisted lawfully, to the point of impasse, that the International become 'a coparty to
the contract, the fact remains that the Respondent believed the contrary. It is in that
posture that its good faith must be tested.
14 I must reject as without merit the Respondent's contention that the International is
inseparably " tied in" with the negotiations . The fact that the International organizeed,
or assisted in the organization of, the employees and the fact that a portion of collected
dues goes to the International are normal aspects of the Local's relationship to the Inter-
national The fact that the Local was assisted in the negotiations by a"representative of
the International is another usual circumstance in the field of collective bargaining. It
was present in the Taormina Co case where, as here, the Local was powerless to obtain
the parent organization 's participation as it coparty to a contract These`facts,^as well as
some control of the Local by the International under the latter's constitution and laws,
are irrelevant to the bargaining issue between the Respondent and the Local, i. e , financial
liability of the International for any strike activity by the Local contrary to contract,
not just it strike winch might be called by the International on a wide geographical basis
and in which the Local might join in breach of contract
TRUCK DRIVERS AND HELPERS LOCAL UNION NO. 515 51
CONCLUSIONS OF LAW -
1. The,Local is a labor organization within the meaning of Section 2 (5) of
the Act.
2 All production and maintenance employees at the Respondent's Statesville
plant, including- -machine setup men, the receiving clerk, truckdriver, daytime
fireman, inspectors, and repairmen; leadmen or subforemen of the lumber, assembly,
and bent ply departments; packing department employee Heath, the lumber in-
spector, shipping clerk, sample maker, and watchmen-firemen, but excluding the-
timekeeper, office clerical employees, professional employees, guards, foremen of
the bent ply, upholstery, assembly, finishing, machine, lumberyard, and bending
departments; the maintenance leadman or subforeman, superintendent, plant man-
ager, and supervisors as defined in the Act, constitute a unit appropriate for the
purposes of collective bargaining within the meaning of Section 9 (b) of the Act.
3. The Local, on June 15, 1956, was, and at all times thereafter has been, the
exclusive representative of all employees in such unit for the purposes of collective
bargaining within the meaning of Section 9 (a) of the Act.
4. By refusing to bargain collectively with the Local as the exclusive representa-
tive of its employees in an appropriate unit, the Respondent has engaged in and is en-
gaging in unfair labor practices within the meaning of Section 8 (a) (5) of the Act.
5. By interfering with, restraining, and coercing its employees in the exercise of
the rights guaranteed in Section 7 of the Act,, the Respondent has engaged in and is
engaging in unfair labor practices within the meaning of Section 8 (a) (1) of the Act.
6. The aforesaid unfair labor practices affect commerce within the meaning of
Section 2 (6) and (7) of the Act.
[Recommendations omitted from publication.]
'Truck Drivers and Helpers Local Union No . 515, International
Brotherhood of Teamsters , Chauffeurs , Warehousemen !& Help-
ers of America I [Chattanooga Warehouse & 'Cold Storage
Company] and Harold M. Humphreys
Truck Drivers and Helpers Local Union No . 515, International
Brotherhood of Teamsters, Chauffeurs , Warehousemen & Help-
ers of America and Baggett Transportation Company. Cases
Nos. 10-CC-315 and 10-CC-316. July 11, 1958
DECISION AND ORDER
On October 8,-1957, Trial Examiner Albert P. Wheatley issued his
Intermediate Report in the above-entitled consolidated proceeding,
finding that the Respondent had engaged in and was-,engaging in cer-
tain unfair-labor practices and recommending that 'it cease and desist
therefrom and take certain affirmative action, as set forth in the copy
of the Intermediate Report attached hereto. Thereafter the Re-
spondent filed exceptions to the Intermediate Report together with
a supporting brief.
Pursuant to the provisions of Section 3 (b) of the Act, -the Board
-has delegated its powers in connection with this case to a three-member
panel [Chairman Leedom and Members Bean and Jenkins]. - - -
The Board has -reviewed the rulings made by the Trial Examiner
at the hearing and finds that. no prejudicial error was committed.
The Board having been notified by the AFL-CIO that it deems the Teamsters ' certificate
of affiliation revoked- by convention action , the identification of this Union is hereby amended.
121 NLRB No. 15. •