Producers Produce Co.

National Labor Relations Board - Board Decisions

May 16, 1940

23 N.L.R.B. 876 (N.L.R.B. 1940)

In the Matter of PRODUCERS PRODUCE COMPANY and AMALGAMATED
MEAT CUTTERS AND BUTCHER WORKERS OF NORTH AMERICA ,, PouvTRy
AND EGG HANDLERS DIVISION , LOCAL No. 172, AFFIIIATED WITH THE
AND EGo -HANDLERS DrvrsiGw,. LooAL No. 172, AFFILIATED WITH THE
Case No. C 844.Decided May 16, 1940
Agricultural Produce Processing Industry-Interference , Restraint , and Coer-
cion: employer 's notice encouraging individual bargaining and discouraging col-
lective action as well as union organization ; employer's expression to foremen
of hostility to Union and requests that foremen report union activities of
employees ; anti-union statements to employees-Discrimination : by discharges;
allegations of, dismissed-Unit Appropriate for Collective Bargaining : production
and maintenance employees exclusive of supervisory and clerical employees ;
no controversy as to-Representatives : proof of choice : membership list com-
pared with pay roll ; no controversy as to-Collective Barga'aung : refusal to
enter.,into oral or written agreements w.ith .Union embracing terms and provisions
of understanding reached ; employer's contention that Union agreed not to seek
a binding agreement not supported by the evidence, nor may the right to a
binding agreement be waived ; observance of understanding as a statement of
policy insufficient when Union requests contract ; refusal to enter into contract
not justified by fear of loss of customers ; refusal at conclusion of unsuccessful
collective bargaining negotiations to give Union written recognition as exclusive
collective bargaining representative ; ordered, to bargain and to embody any
understanding reached in a written, signed contract upon request-Processing
Cooperative : contention that officers of cooperative have no authority to contract
with labor organization without express consent and approval of stockholders
rejected ; officers did not in fact refuse to enter into contract because they believed
they lacked authority to bind respondent ; if such authority is necessary officers
are under a duty to submit the question of executing a contract to stockholders.
Mr. Bernard L. Alpert, for the Board.
Mr. Frank C. Mann and Mr. Arthur M. Curtis, of Springfield, Mo.,
for the respondent.
Mr. Robert Burstein and Mr. N. Barr Miller, of counsel to the Board.
DECISION
AND
ORDER
STATEMENT OF THE CASE
Upon amended charges duly filed by Amalgamated Meat Cutters
and Butcher Workers of North America, Poultry and Egg Handlers
Division, Local No. 172, affiliated with the American Federation of
23 N. L. R B., No. 93
876
PRODUCERS PRODUCE COMPANY 877
Labor, herein called the Union, the National Labor Relations Board,
herein called the Board, by Ernest C. Dunbar, Acting Regional Di-
rector for the Seventeenth Region (Kansas City, Missouri), issued
its complaint dated July 5, 1938, against Producers Produce Com-
pany, herein called the respondent, alleging that the respondent had
engaged in and was engaging in unfair labor practices affecting com-
merce, within the meaning of Section 8 (1), (3), and (5) and Section
2 (6) and (7) of the National Labor Relations Act, 49 Stat. 449,
herein called the Act. Copies of the complaint, accompanied by notice
of hearing, were duly served upon the respondent and upon the Union.
In respect to the unfair labor practices, the complaint alleged in
substance (1) that the respondent on about July 26, 1937, and at
various times thereafter, by refusing to negotiate in good faith with
the Union and by refusing to sign a contract agreed upon by repre-
sentatives of the Union and of the respondent, refused to recognize the
Union and to bargain collectively with it as the exclusive representa-
tive-of the respondent's employees in an. appropriate bargaining unit
composed of all the employees, exclusive of supervisory and clerical
employees and salesmen; (2) that the respondent on,June 22 and on-
July 1, 1937, respectively, discharged and thereafter `refused to rein-
state Fred Brixey and Bud Thurman for the reason that they had
attempted to initiate a labor organization in 1934 and 1936 and had
assisted in the formation of the Union; (3) and that the respondent
by the afore-mentioned acts and refusals to act, and by statements
derogatory to the Union and to unions generally has interfered with,
restrained, and coerced its employees in the exercise of the rights
guaranteed in Section 7 of the Act.
Thereafter, the respondent filed its answer, which admitted that its
business was interstate in character, that the unit for collective bar-
gaining as set forth in the complaint was appropriate, and that on
August 11, 1937, and at all times thereafter the Union was the exclu-
sive bargaining representative of all the employees in such unit, but
denied that it had engaged in or was engaging in the alleged unfair
labor practices. In addition the answer averred that the respondent
and the Union were unable, after numerous conferences, to arrive at a
full and complete agreement on all matters under negotiation; that it
was therefore understood and' agreed' that a formal written contract
would not be entered into, but that such matters as were verbally
agreed upon would be carried out by both parties; and that the re-
spondent has at all times thereafter fully complied with the terms and
conditions of such verbal agreement.
Pursuant to notice, a hearing was held in Springfield, Missouri, on
July 14, 15, 16, and 18, 1938, before Hugh C. McCarthy, the Trial
Examiner duly designated by the Board. The Board and the respond-
ent were represented by counsel and participated in the hearing. Full
878 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
opportunity to be heard, to examine and cross-examine witnesses, and
to produce evidence bearing upon the issues was afforded to all parties.
At the 'close of the hearing, counsel for the Board moved that the
complaint be conformed to the proof adduced. The motion was
granted by the Trial Examiner. We have reviewed this ruling and all
the other rulings made by the Trial Examiner on motions and on
objections to the admission of evidence and find that no prejudicial
errors were committed. The rulings are hereby affirmed.
Pursuant to the Trial Examiner's suggestion at the hearing, the
respondent, on August 2, 1938, filed a brief relating to the construc-
tion of the Missouri statute governing agricultural cooperative asso-
ciations.
On August 20, 1938, the Trial Examiner filed his Intermediate Re-
port in which he found that the respondent had engaged in and was
engaging in unfair labor practices within the meaning of Section 8 (1)
and (5) of the Act but not within the meaning of Section 8 (3) of the
Act. On August 26, 1938, the respondent filed exceptions to the Inter-
mediate Report. The parties, although accorded an opportunity for
oral argument before the Board, made no request therefor. The'Board
has considered the exceptions to the Intermediate Report and, in so far
as they are inconsistent with the findings, conclusions, and order below,
finds them to be without merit.
Upon the entire record in the case, the Board makes the following:
FINDINGS OF FACT
1. THE BUSINESS OF THE RESPONDENT
The respondent is a corporation organized under the Missouri laws
relating to the incorporation of agricultural or mercantile cooperative
associations, and has its office and place of business in Springfield,
Missouri. It is engaged in the business of buying, processing, and
selling eggs, poultry, wool, and hides. In the conduct of such business
the respondent operates under marketing contracts with approximately
80 farmers' exchanges and 40 contract merchants whereby the latter
agree to sell to the respondent products purchased from the members
of the Missouri Farmers' Association, herein called the Association, in
the southwestern part of Missouri., The yearly profits of the respond-
ent, over and above an 8-per cent interest dividend paid to its stock-
holders, are distributed to the farmers' exchanges and contract mer-
chants who in turn distribute them to the members of the Association
on a patronage basis. The respondent has approximately 680 stock-
'The Missouri Farmers' Association Is a State-wide incorporated association, the mem-
bers of which are also stockholders of various independent exchanges , one of them being
the respondent , organized for the purpose of marketing the products of the members of
the Association
PRODUCERS PRODUCE COMPANY 879
holders, most of whom are individual farmers and the remainder
farmers' exchanges.
All products handled by the respondent are purchased within the
State of Missouri. During 1936 and 1937, the respondent sold and
shipped about 75 per cent of such products, totaling in value $3,566,540
-and $3,253,900, respectively, to States other than the State of Missouri
including Alabama, Arkansas, California, Connecticut, Florida,
Georgia, Illinois, Indiana, Kentucky, Louisiana, Maine, Massachusetts,
Mississippi, New Jersey, New York, North Carolina, Pennsylvania,
Tennessee, and Wisconsin.
II. THE ORGANIZATION INVOLVED
Amalgamated Meat Cutters and Butcher Workers of North America,
Poultry and Egg Handlers Division, Local No. 172, affiliated with the
American Federation of Labor, is a labor organization admitting to
membership the production and maintenance employees of the respond-
ent.
III. THU UNFAIR LABOR PRACTICES
A. Background of the unfair labor practices
Attempts to organize the respondent's plant were made early in 1934
and late in 1936, but they proved fruitless. - Organizational activity
was revived early in 1937 when a few employees began to discuss the
necessity of a union in the plant. On July 6, 1937, a group of the
respondent's employees met in Springfield and were addressed by J. R.
Andrews, the secretary-treasurer of the Central Labor Union, and a
voluntary organizer for the American Federation of Labor, who out-
lined the procedure for securing a charter. The Union received its
charter on July 15 and by August 11 had succeeded in enrolling as
members a majority of the respondent's employees.
B. Interference, restraint, and coercion
On about February 1, 1937, the respondent was presented with a
petition for an increase in wages signed by 74 of its employees. Two
or three days later, A. L. Farnham, the respondent's manager, sum-
moned to his office Fred Brixey, an employee of the receiving depart-
ment who had suggested the petition and had been active in talking to
other employees about organization. Brixey testified that Farnham
first questioned him about the petition and then said : "It isn't so much
the petition I want to talk to you about, it is about unionism." Brixey
further testified :
He said "have you ever heard any union talk around here?" I
said, "Yes, sir, I have and I have done some." He said, "When
was the first union talk you ever heard?" I said, "about 1934
880 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
there was quite a bit of union talk." . . . He said, "Well, when
was the last you heard?" I said, "In the fall of 1936 myself and
another gentleman, with others, tried to get in touch with Rube
Wood to hold a meeting. We didn't get in touch with him." He
kind of laughed and said, "Well, Fred, you are truthful about it.
I knew about it at the time . . . We don't need a union down
here, don't aim to have one. We don't want you or any of the boys
agitating them ... We don't want any more petitions."
Farnham denied in part the statements attributed to him by Brixey.
His denial is not persuasive. Early in the hearing Farnham remem-
bered talking with Brixey about the petition but could not recall
whether he told Brixey that he really wanted to learn about union
activity in the plant and did not remember "just what we did talk
about that day." Later in the hearing, however, Farnham admitted
asking Brixey "if there was any union activity in the plant" but denied
making any statement to the effect that Brixey was an agitator and
that there would be no union in the plant. We believe that Farnham
expressed himself substantially as testified by Brixey, and we so- find.
At about the same time Farnham also called to his office Tom Bird,
another employee, and said to him: "Tom, I have a paper here that
I understand you passed around among the employees. I would
rather not have any more papers passed around . . . I will put up
a notice, so that one and all, I believe, will understand . : ."
On February 6 Farnham posted a notice on th6 bulletin board in the
plant stating that the respondent was compelled to deny a raise of
wages for financial reasons and concluding as follows :
In closing, please let me urge any of you who are not satisfied
to come in my office at any time, either by yourself or bring a
group in with you. We will sit down and talk over the problem
and try and work the problems out to everybody's satisfaction. I
want you to do this instead of grumbling and kicking with the
other employees who are satisfied with their work. Let's not
have any. more petitions. I believe we can discuss these things
among ourselves to a better advantage and more results will be
obtained rather than circulating a petition.
Once more, let me say let's all be boosters for our company.
Nobody likes a knocker. If we can't-be boosters, .let's resign and
get a job with a company where we can be boosters. Also, let's
not have any agitators in our plant. We can't do the best work
unless we all work together for the good of our company ...
Farnham testified that he did not associate the petition for a raise or
the notice denying such petition with union activity. Earl Pool, the
respondent's assistant manager, similarly testified that the petition
did not in any way suggest to him organizational activity on the part
PRODUCERS PRODUCE COMPANY 881
of the employees, although he was less emphatic in his denial that the
notice on the bulletin board had reference to unions. He testified that
the phrase "Let's not have any agitators in our plant" might have
reference' to "dissatisfaction among the employees about their wages
or things like that," and that "it didn't necessarily mean agitating on
account of the union, according to [his] estimation." It is significant,
however, that Farnham used a similar expression regarding "agita-
tion" in the-plant in his conversation with Brixey when he told Brixey
that "we don't need a union down here, don't aim to have one." While
the petition for a raise was admittedly distinct from union activity as
such, although some employees were "talking union" at. that time, we
are convinced that by the notice Farnham intended to convey to the
employees his disapproval of unions and to admonish then against
union organization in the plant.
Even if the notice was not designed expressly to discourage union
organization in the plant, the notice was nevertheless in violation of
the rights guaranteed to the employees under the Act. Section 7 of
the Act not only guarantees to the•employees the right to organize into
labor organizations but also "to engage in concerted activities, for the
purpose of collective bargaining or other mutual aid or protection."
It is clear that the respondent's notice was directed against concerted
activity on the part of its employees for the purpose of bettering their
working conditions. There is no indication in the notice that the
respondent objected to the petition for a raise on the ground that it
may have been circulated during working hours. The respondent's
sole objection is to the concerted action taken by the employees in
presenting their request. In this notice the respondent attempts to
dictate to the employees the manner in which they should take up
grievances, namely that they should come to the respondent directly
instead of "grumbling and kicking with the other employees who are
satisfied with their work." However, such collective "grumbling
and kicking" on the part of employees over unsatisfactory wages and
working conditions is the essence of concerted activity guaranteed by
the Act and is indispensable to the, obtaining of some measure of
equality in collective bargaining. Furthermore, it is in this manner
that unions frequently have their inception. To prevent the em-
ployees from acting in concert in an effort to obtain higher wages or
better working conditions is to place an obstacle at the outset to their
self-organization.
We find that by Farnham's statement to Brixey and by this notice
the respondent attempted to hinder and impede self-organization and
concerted activity on the part of its employees, and has interfered
with, restrained, and coerced them in the exercise of the rights
guaranteed in Section 7 of the Act.
882 DECISIONS OF NATIONAL, LABOR RELATIONS BOARD
Several incidents which occurred after the posting of the notice
of February 6 further serve to illustrate the respondent's hostility
toward union organization at its plant.
At the meetings of the respondent's safety committee in April and
May 1937, Farnham again tried to find out about union activity in
the plant and to learn the names of the employees engaged therein.
The safety committee was composed for the most part of foremen
and officers of the respondent and met every month to discuss methods
of preventing accidents.
Shortly before the hearing, Arthur Kiser, who was at that time
in charge of the lower feeding station and had attended the April
and May meetings of th3 committee, furnished the Board's attorney
with a signed statement containing a summary of the events which
took place at these two meetings. The statement recites that at the
April meeting Farnham told those present : "If you have anybody who
walls to belong to a union, or who is agitating a union, I want to
kno«, so that we can arrange for them to work at a place where they
have a union." The statement further recites that at the May meet-
ing Farnham said that, according to his attorney, he could not dis-
charge an employee for joining a union, but "he'd like to know if
lie had any in the plant so [he would] know [what] to do"; that
Farnham then asked several people at the meeting what they knew
about a union and was told by Reed : "I've got two men who have
told me that we've got to have a union"; and that Farnham stopped
him from saying anything further and retained him after the meeting
adjourned. Paul Beam and Duane Smith, two employees who were
present when Kiser made the statement to the Board's attorney, testi-
tied that such statement was read to Kiser before he signed it and that
it represented a correct report of what Kiser told the Board's attorney.
At the hearing Kiser repudiated in part his statement. With
respect to the April meeting Kiser testified :
There was some talk of labor trouble over the country and some-
thing was said about it might move into our plant. 'Farnham
said if we had any employees that wanted to belong to a union
that he would like to know it so he could arrange so they could
belong to a union.
When questioned by the Board's attorney whether Farnham did
not in fact say, as recited in Kiser's statement, that he wished to
know the names of the employees desirous of belonging to a union
"so that we can arrange for them to work at a place where they, have
a union," Kiser replied that he "could not be exact what [Farnham]
said at that time." In regard to the meeting in May, Kiser testified
that Farnham stated he had been informed by his attorney that
PRODUCERS PRODUCE COMPANY 883
according to the Wagner Act the respondent could not interfere with
the union movement in the plant; that Farnham then asked several
of those present what they knew about unions in the plant and was
told by Reed, an organizer of the Missouri Farmers' Association in the
respondent's employ, that he knew of two men who believed in the
necessity of having a union in the plant; and that Farnham stopped
Reed before he finished his remark and retained him after all the
others had left.
Farnham testified that at a meeting which he "thought" took place
in May he asked the foremen, one by one, if they knew "of any union
activity of any kind going on in the plant" and received a negative
reply in each case; and that he then told them :
... If any union should start or if any folks should start
agitating a union or working for a union, we must not take any
part in that at all; that under the Wagner Act the employees
have right to organize themselves into a union if they see fit
and we must not offer any objections to their forming a union.
Farnham denied making the statement either at the May meeting or
at any other meeting that he wished to know which employees talked
about a union so that he would secure work for them where they could
belong to a union, but he admitted asking the foremen to inform him
"if they heard anything about a union being started." Farnham
offered no explanation of why he was so anxious to learn about the
union activity in the plant and the employees engaging in such, activ-
ity. Such curiosity seems inconsistent with his alleged instructions
to the foremen not to interfere with the organization of the employees
and we do not credit the testimony that such instructions were given.
Whether Farnham told the foremen, as set forth in Kiser's state-
ment, that he wished to know the names of those who were engaging
in union activity "so that we can arrange for them to work at a place
where they have a union" or whether he told them that it was, as
testified by Kiser, "so he could arrange so they could belong to a
union ," it is clear that Farnham did not intend his words to be taken
by the foremen at their face value, that he contemplated actively
assisting the employees in their organization. The instructions to
the foremen to report union activities of employees were not given in
connection with any rule against such activities on the respondent's
premises and hence obviously had no legitimate purpose. Moreover,
in view of Farnham's animus toward concerted activity by the em-
ployees. found above, we find that at these meetings Farnham in-
tended to and did reveal to the foremen the respondent's disapproval
of unions and union organization. We find that by the instructions,
considered together with the accompanying statement, the respondent
884 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
interfered with, restrained, and coerced its employees in the exercise
of the rights guaranteed in Section 7 of the Act.2
Late in July 1937 Farnham approached Harry Crow, one of the
employees, and talked with him about the Union which, as noted
above, had been organized earlier in that month. Crow testified :
He said he thought I hadn't ought to join the union, I ought-
to have come to him and speak to him about it. He said I was
an old man in the plant. He thought maybe my joining would
induce somebody else to join. I ought to have been loyal to the
company and to him, talk to him about it first.
Farnham denied telling Crow that he should have consulted him
before he joined the Union. According to his testimony he talked to
Crow about the labor situation and, in the course of conversation,
told Crow that the employees had a right to organize themselves into
-a union and he had a right to become a member if he saw fit. The
record does not disclose any reason for discrediting Crow' s testimony.
In-view of Farnham's hostility toward organization of the employees,
as found above, we find that Farnham expressed himself as testified
by Crow.
Margaret Gordy, an employee of the warehouse, testified that during
the lunch hour on about August 1, 1937, Charlie Mace, her foreman,
told her and two other girls who were sitting together that the Union
"wouldn't do [them] any good," and that they would have work in
the winter if, they did not join the Union. Gordy further testified that
Mace, pointing to two employees who were passing, said that "there
were two girls if they didn't watch out would get laid off . . . because
they were union members." Mace denied having engaged in any such
conversation with Gordy. Gordy's testimony, however, is supported
by the testimony of Velma Clark, another employee. We see no
reason to disbelieve the testimony of Gordy and Clark. There is reason,
however, for believing that Mace might have made the statements at-
tributed to him. It is hardly likely that he was'not influenced by
Farnham's disapproval of union organization as expressed by him
at the meetings of the safety committee. Under these circumstances
we cannot accept Mace's bare denial, and we find that he, in fact,
made the statements as testified by Gordy and Clark.
We find that the respondent, by the aforesaid statements of Farn-
ham to Crow, and Mace to Gordy and Clark, has interfered with,
restrained, and coerced its employees in the exercise of their rights to
2That the record does not disclose whether the foremen made any reports does not
negate the finding stated in the text Matter of Okey Hosiery Company, Incorporated,
and R H Thneting, Receiver, and American Federation of TTosiery Workers, North Caro-
lina District (CIO), 22 N L R B 792
PRODUCERS PRODUCE COMPANY 885
self-organization, to form, join, and assist labor organizations, to
bargain collectively through representatives of their own choosing,
and to engage in concerted activities for the purposes of collective
bargaining and other mutual aid and protection as guaranteed in
Section 7 of the Act.
C. The refusal to bargain collectively
1. The appropriate unit
The complaint alleges and the answer admits that all of the em-
ployees of the respondent, exclusive of supervisory and clerical em-
ployees and salesmen, constitute a unit appropriate for the purposes
of collective bargaining. At the hearing it was stipulated by counsel
for the Board and counsel for the respondent that all the production
and' maintenance employees, except supervisory and clerical employees,
constitute an appropriate unit. Counsel for the respondent stated
that the respondent did not employ any salesmen.
Under the usual rule, supervisory and clerical employees are ex-
cluded from the unit of production and maintenance workers in the
absence of any evidence with respect to their inclusion. We find that
the production and maintenance employees of the respondent, except-
ing supervisory and clerical employees, at all times herein material,
constituted and that they now constitute a unit which is appropriate
for the purpose of collective bargaining, and that such unit insures
to the employees the full benefit of their right to self-organization
and to collective bargaining, and otherwise effectuates the policies
of the Act.
2. Representation by the Union of the majority in the appropriate unit
At a conference between representatives of the respondent and of
the Union held on August 11, 1937, the union membership lists were
checked against the respondent's pay rolls and showed that 113 of
the 207 employees on such pay rolls were members of the Union. The
respondent, in its answer and at the hearing, admitted that on August
11 and at all times thereafter the Union represented a majority and
was the exclusive bargaining representative of the employees in the
appropriate unit.
We find that on August 11, 1937, and at all times thereafter, the
Union 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, or other conditions of employment.
283034-41-vol. 23-57
886 DECISIONS OF NATIONAL LABOR RELATIONS BOARD '
3. The refusal to bargain collectively
a. Chronology of events
On July 28, 1937, negotiations were begun between the respondent
and the Union with regard to an agreement covering the matter of
wages, hours, and working conditions. At the conference held that
day, J. R. Andrews, the secretary-treasurer of the Central Labor
Union and an organizer for. the American Federation of Labor, sub-
mitted on behalf of the Union a proposed contract as a basis for
negotiation. Farnham questioned the claim of the Union that it
represented a majority of the respondent's employees and demanded
proof thereof. It was agreed that the Union would present such
proof at the next conference. The contract was not discussed.
On August 5, 1937, the union representatives presented an affidavit
that 122 of the respondent's employees had joined the Union. The
respondent's representatives refused to accept the affidavit as proof
of the majority. It was finally agreed to check the Union's member-
ship lists against the respondent's pay rolls. This was done at the
conference on August 11, 1937. The respondent conceded that the
Union represented a majority of its employees and indicated its will-
ingness to proceed with the negotiations. After some discussion, the
contract which had previously been presented by Andrews was found
to be inapplicable to the business of the respondent, because it cov-
ered meat cutters and butchers rather than'employees engaged in the
poultry-and egg business.
On' August 13, 1937, William Brasher, an employee of the respond-
ent and the president of the Union, handed Farnham another pro-
posed contract which was discussed paragraph by paragraph at the
conference held on August 20, 1937.3 The respondent agreed to some
of the provisions, offered slight modifications to others, and rejected
still others. . The, respondent suggested that the word "only" should
be stricken from the provision that "the Company agreed to bargain
collectively, only with representatives of the Union . . ." and
that "it will not bargain collectively with any other agency or indi-
vidual"; agreed not to discriminate against its employees because
of membership in the Union; accepted, with a slight change in word-
ing, the provision relating to holidays and compensation at the rate
of time and one-fourth for work on such holidays; rejected the pro-
vision that employees should be laid off and rehired on the basis
of seniority,, offering as a counterproposal a modified seniority clause
8 There is a confusion in the testimony as to which of two proposed contracts was pre.
sented to Farnham. The two forms are, however, identical except that one of them pur-
ports to make the contract effective for a period of 1 year, and the other for a period of
6 months.
PRODUCERS PRODUCE COMPANY 887=
pursuant to which efficiency and ability as well as seniority would be
considered; refused to accept the provision for a 48-hour week, insist-
ing on a 54-hour week; agreed to guarantee any employee ordered
to report to work at least 2 hours' work or 2 hours ' pay; rejected
the provision for a 10-cent increase in pay ; accepted the provision
guaranteeing the regular hourly wage rate to employees engaged in
piece work; refused to accept the arbitration provision for an arbi-
tration board to consist of two members chosen" by the Union,' two
by the respondent, and a fifth member to be chosen by-the other four,
suggesting in lieu thereof a provision whereby its directors would
act as arbitrators; offered no objection to the provision for the
duration of the contract.
With respect to the result of this discussion, Farnham testified :
"We got the impression from these [union] representatives that they
personally were in-favor of the changes suggested at that meeting.
It looked. like we were pretty close to an agreement." In answer, to
the question by the respondent's attorney whether a tentative agree-
ment had been reached on the entire contract, "subject, of course, to
the union's approval of its members and your approval of your
board and your stockholders," Farnham replied : "That is correct."
Later, in reply to the question of the Board 's counsel whether he. told
the union committee that any contract would have to be submitted to
the stockholders for final approval, Farnham replied : "I think so."
Near the close of the hearing, however, Farnham testified he told
the union committee "that before the Producers Produce Company
could definitely agree to any contract, that it would first be necessary
to take the matter up with our exchanges and the board of directors
for their approval. This seemed to be agreeable to the Union because
they- said they would also have to get the consent of their membership
to any contract before they could enter into it." The record indi-
cates that in testifying to the latter statement Farnham was referring
to the notes of the minutes taken at that conference.' Brasher
denied that anything was said at this conference about the necessity
of the approval of the contract by the respondent's stockholders.'
Since Farnham's earlier testimony lacks, certainty, and since in his
later testimony his recollection was refreshed by the minutes of the
meeting, and in the light of subsequent events , we conclude that he, in
fact, stated that the contract would have to be submitted to "the
managers of the farmers exchanges" rather than to "the stockholders."
On August 24, 1937, Brasher informed Farnham that the Union
had rejected the changes in the contract proposed by the respondent,
* In response to the question whether Farnham would be willing to say that the
minutes showed that the contract would have to be submitted to the stockholders, Farn-
ham replied : "No, sir, I told him we would have to submit it to the managers of the
farmers exchanges "
888 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
particularly those in the seniority and arbitration provisions.
Brasher submitted to Farnham another contract which was substan-
tially the same as the former one and demanded that the respondent
take action on it, stating that the Union would meet again the follow-
ing Monday, August 30, 1937, at which time it would decide what
course to pursue in the event of a rejection of the contract. Farnham
remonstrated that the time given the respondent in which to reply
was insufficient . He testified :
I told him we had discussed the situation all along, that it
would be necessary . . . to go back, take the matter up with
the interested farmers in our territory. I told him when he
came in and gave us this week's notice that it would be impos-
sible for us to let him know in one week's time. It wasn't giving
us enough time to get word out, call a meeting and get the inter-
ested people in so that they could give it consideration.
At the conference on the following day, Andrews also insisted that
the respondent act on the proposed contract. Farnham stated that
an answer by the following Monday was impossible but agreed to
call a meeting and to submit the contract. There appears to be a
confusion in the testimony as to whether Farnham referred to a
meeting of the "stockholders" of the respondent or of the "managers
of farmers ' exchanges" and "interested farmers." It is clear from
the record, however, that the representatives of the Union were insist-
ing that the contract be submitted to whatever group had authority
to approve the contract. It is equally plain that the management of
the respondent agreed that the meeting to be called would be one
which could authorize the acceptance or rejection of the contract
proposed by the Union.
On August 26, 1937, the management of the respondent issued a
call for a meeting to be held on September 2, 1937. The letter sent
out by the respondent calling the meeting and the events which
transpired at the meeting disclose that the respondent did not call
a meeting of its stockholders and that the meeting of September 2,
1937, was not a stockholders' meeting. Stockholders, as such, were
not notified of a meeting . The letters announcing the meeting were
addressed to the "Managers of Farmers Exchanges." Farnham
described the meeting as one "for the interested parties, members of
M. F. A., the exchanges, their directors and country representatives."
Farnham personally excluded from the meeting Otto Muggelburg,
one of the respondent's stockholders, on the ground that he had been
active in organizing a union at the M. F. A. Milling Company.
The letters announcing the meeting stated that it was called "to
consider demands made on the Producers Produce Company by labor
unions." The letters pointed out that the meeting was "one of the
PRODUCERS PRODUCE COMPANY 889
most important meetings ever held in Springfield pertaining to the
M. F. A. or its agencies" and stated :
At this meeting we want to discuss thoroughly and frankly
with you the contract which the labor union has presented to us.
We want to get your ideas as to whether their demands should
be met or not. Each Farmers Exchange and its patrons are
interested in the welfare of the Association and the Producers
Produce Company. Before taking any steps which might have a
bearing upon the success of the Association, your exchange, or
this plant, we wanted to call you Managers in and discuss the
matter with you as thoroughly as possible.
As to the purpose of the meeting, Farnham testified that at the August
25, 1937, conference he insisted that it was necessary to take up the
matter with the interested farmers in the territory, and that the ex-
change managers would have to be consulted because "the business of
[the respondent] comes through the farmers' exchanges. He wanted
to feel out the sentiment of the exchange managers and their directors
as to how they would feel about our entering into a contract of that
kind." On the basis of the above evidence, we conclude that when
Farnham told the union representatives at the August 25 conference
that he would call a meeting to submit the contract for approval, he
was referring to a meeting of the respondent's patrons rather than its
stockholders.
The meeting was held on September 2, 1937, as scheduled. It was
attended by 200 or 250 people composed of exchange managers and
directors and members of the Missouri Farmers' Association. The
majority of those present were also stockholders of the respondent .5
Andrews, on behalf of the Union, requested that a union representa-
tive be permitted to appear at the meeting to explain the contract.
Permission was refused.
The meeting was opposed to the contract. However, C. E. Lane,
president of the respondent, made a speech in favor of a 5-cent raise
for all the employees. The meeting adopted a statement of policy
which had been prepared by William Hirth, the president of the Mis-
souri Farmers' Association, at the meeting of the respondent's board
of directors held that morning. The statement, which bears the head-
ing "STATEMENT ADOPTED BY THE BOARD MEMBERS, STOCKHOLDERS, AND
MANAGERS OF THE M. F. A. OF SOUTHWEST MISSOURI THIS AFTERNOON,"
begins by announcing that "the Directors and Stockholders of the
Producers Produce Company are in full sympathy with the general
objectives of organized labor as developed in recent years by the
American Federation of Labor . . ." The statement goes on to state
the unsatisfactory financial condition of the farmers in southwestern
But a majority of the stockholders were not present at the meeting
890 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
.Missouri, the low returns on their products, the losses incurred by such
farmers in depression years, and the increased losses which would
result from any increase in the operating costs of the respondent. It
then calls attention to a recent statement of William Green, the presi-
dent of the American Federation of Labor, that "he did not believe that
the farm cooperatives should be asked to unionize until the economic
condition of farmers improved sufficiently to enable them to assume
this added burden"; and expresses the hope that "in this hour when
our country is menaced by certain so-called labor leaders whose policies
are as dangerous to the workers as they are unfair to industry, we trust
that the Federation leaders of Springfield will be guided by Mr.
Green's wise counsel," promising, however, that "if in the next year
or two the economic condition of our farmers should improve suffi-
ciently . . . we will be glad to give consideration to this, and thus we
hope that nothing will be done to prejudice the friendly feeling we now
'have for the American Federation of Labor." The statement
continues :
For the foregoing reasons we feel compelled to reject the con-
tract submitted by the local union leaders and which we were told
must be accepted or rejected in its entirety; however, not because
we can afford it, but to demonstrate that our attitude to our em-
ployees is deeply friendly, we hereby agree that the minimum
wage shall be raised 5¢ per hour, and we trust that the said
employees will realize that this is our maximum concession in
this matter.
The statement concludes as follows :
The above report which was submitted by the Directors of the
Producers Produce Company was unanimously adopted by the
several hundred stockholders, board members and Exchange man-
agers who were in attendance, and who represented overwhelm-
ingly the M. F. A. membership in southwest Missouri.
The meeting also adopted a resolution which was drawn up by a
committee of five managers of exchanges with the collaboration, of
Farnham. The resolution stated that "the managers of the Farmers
Exchanges and as such the representatives of the farmers financially
interested in the Producers Produce Company, are most strongly op-
posed to the management of the Producers Produce Company entering
into the labor contract submitted to it" by the Union, and that they
are opposed to the "management of the Producers Produce Company
entering into any labor contract with any organization of employees"
which would, among other things, (1) require the respondent to rein-
state any employees laid off because of a reduction in business until
such time `as in the judgment of the management the services of such
employees are needed; (2) interfere with the exercise of the manage-
PRODUCERS PRODUCE COMPANY 891
ment's judgment in transferring employees from one department to
-another; (3) prevent the management from considering the merit and
ability of the employees as well as their length of service in lay-offs;
(4) not leave the final decision of any dispute between the manage-
ment and employees with the respondent's board of directors; and
(5) limit the number of working hours to 48 per week.
In the same afternoon after the close of the meeting, Hirth called
together the employees in the plant and informed them of the re-
jection of the contract and of the 5-cent increase which had been
"voted" and which would be put into effect immediately. On the fol-
lowing day, September 3, 1937, Farnham and Hirth met with the union
committee and discussed the results of the meeting of the day before.
The Union raised certain matters which it felt should be adjusted,
.including the length of hours, sufficient lighting, and other working
conditions. The representatives of the respondent agreed to meet
with the Union and discuss working conditions at any time. Pursuant
to the suggestion of J. J. Connors, an organizer of the International
Union, Farnham gave the union committee a letter addressed to
Brasher as the president of the Union, and signed by Farnham. The
-letter stated that, in confirmation of the conversation at the meeting,
the respondent will be happy to meet with the union committee at
any time and discuss working conditions; assured the Union of the
respondent's intention to correct immediately the working conditions
discussed at the meeting, to deal fairly at all times with its employees,
and not to tolerate discrimination by the foremen against the Union
and its members; and concluded as follows:
While we realize that we will not be able at all times to agree
with you, we will be glad to sit down and try and work out these
conditions in a fair manner and try and reach a friendly agree-
ment with you on all matters under discussion.
,Andrews testified that the union committee merely agreed to submit
the letter to the union members, but did not agree to cease negotiating
a binding agreement in consideration of the letter. Farnham did
not assert that it was agreed to terminate negotiations for a contract.
According to him, Connors made the statement that he would be satis-
fied if the Union received such a letter, and remarked to the other union
representatives : "Boys, it looks like' I have done you about all the good
1 could do." We accept Andrews' testimony that it was agreed merely
to submit the letter to the union members.
On November 1, 1937, the Union filed its original charge in this
case, and on about November 3, 1937, House, the Board's Field Ex-
aminer, informed Farnham that the respondent had been charged
with a. refusal to negotiate with the Union. House was assured that
the respondent would be glad to discuss a contract with the Union at
892 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
any time. On November 8, 1937, Brasher handed Farnham another
proposed contract, which was similar to the one submitted previously,
except that in lieu of a provision for a 10-cent increase it provided in
effect for a general application of the 5-cent increase which had been
granted on September 2, 1937. This contract was discussed in detail
at a conference held on November 18, 1937. The respondent again
refused to agree to the seniority and arbitration provisions. Andrews
suggested that the respondent submit its own contract by way of a
counterproposal and was told that the respondent's attorney was out
of town and would draft a contract as soon as he returned. Several
days later, Farnham handed Brasher a contract. It provided that
the employees would work 54 hours a week, that ability and effi-
ciency as well as seniority would be considered in lay-offs, that the
existing wage scale would continue during the term of the contract,
and that the final decision of any dispute would lie with the respond-
ent's board of directors. The remaining provisions were the same as
those contained in the contract proposed by the Union theretofore.
The respondent's contract was taken up at the conference of Decem-
ber 17, 1937. The union representatives found the seniority and arbi-
tration clauses unacceptable. Farnham declared that under the reso-
lution adopted at the meeting of September 2, 1937, he had no
authority to enter into a contract with different provisions. At An-
drews' request, it was agreed that the union committee would meet
with the respondent's board of directors on January 17, 1938.
At the meeting with the directors, the representatives of the Union
stated that hitherto they had been unsuccessful in arriving at-any
agreement with the management and that they had requested this
meeting in the hope that something might be worked out. Some of
the directors: expressed the "sentiment" of the farmers in their re-
spective communities, and, as testified by Farnham, "there was quite
a discussion pro and con as to contracts and what we could sign and
what kind of contract we could not sign." Finally, after the futility
of further discussion became evident, it was suggested that two com-
mittees be appointed to carry on negotiations and attempt to reach
an agreement satisfactory to both parties. Farnham, Lane, and Ed
Steury, a director and vice president of the respondent, were ap-
pointed to constitute the respondent's committee, and Brasher, Duane
Smith, and Claude Hawley, the Union's committee. Farnham read
the resolution of the meeting of September 2, 1937, and either he or
one of the directors stated that any agreement which might be reached
would have to comply with the terms of that resolution. It was then
stated by representatives of the respondent that such agreement
would have to be submitted to the "stockholders" or to "our people."
It was not clear from the record which of these two terms was used.
PRODUCERS PRODUCE COMPANY 893
According to Brasher's testimony, Lane stated that the board of di-
rectors had no, right to sign the contract but that it would have to
be passed upon by the stockholders. Andrews, in giving an account
of the meeting, first testified that it was agreed "whatever agreement
was worked out should be submitted to thei stockholders of the com-
pany," and then that he was almost sure Farnham used the phrase
"our people." Andrews explained that he used the term "stockhold-
ers" in his testimony because he "supposed that is who they were
representing, the stockholders."
We conclude that the respondent told the representatives of the
Union at the January 17, 1938, conference that the contract would
have to be, submitted to the patrons of the respondent for their ap-
proval. This conclusion is borne out by the fact that Farnham
stated at the conference that the authority of the management was
limited by the terms of the resolution adopted at the meeting of
September 2, 1937, which was attended, not by stockholders, as such,
but by managers and directors of farmers' exchanges and by inter-
ested farmers, all of whom carried on business with the respondent.
It-is-further corroborated by what occurred following the conference
of January 17, 1938. On the day following that conference, there was
a regular annual meeting of the stockholders of the respondent. The
contract, which had been under consideration at the conference of
January 17, was not submitted to the stockholders nor did the man-
agement ask the stockholders to take any action with respect to
negotiating any contract between the respondent and the Union. As
far as the minutes of the meeting show, it was not even mentioned.
It is significant, moreover, as we shall point out below, that the
stockholders, at this meeting, considered plans for operating a whole-
sale grocery outlined by Farnham and passed a motion that "the
directors use their discretion in establishing a wholesale grocery
business."
On February 7, 1938, the committees of the Union and of the re-
spondent met. They agreed on all matters except seniority and
arbitration. The union committee finally agreed to incorporate in
the contract the seniority clause advocated by the respondent and to
leave out an arbitration provision altogether. A form of contract
with the provisions agreed upon was then prepared and submitted
by the union committee. The contract thus agreed upon was, with
the exception of the elimination of the arbitration clause, practically
identical with the contract which had been submitted by the
respondent.
The committee negotiating on behalf of the Union insisted that
the contract be signed at once since both committees agreed upon it.
But Farnham stated that the execution of such a contract was a
matter of policy which would have to be referred to "our members
894 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
because there would have been a regular uprising of farmers if we
had taken anything of this kind up without their O. K. on it first."
Farnham further testified that he made it plain that all the manage-'
ment committee had power to do was to meet with the union com-
mittee and attempt to "work out something which we felt we had a
chance to sell to our members, that we thought there was any chance
that would work." According to Farnham "the understanding be-
tween the two committees was that we were to call in the farmers'
group and pass on this new contract that had been submitted to us."
According to Lane, the understanding was that the contract would
be submitted to "our members and stockholders." Hawley, a member
of -the union committee, testified that it was understood that any
agreement reached by the two committees. would have to be approved
by the members of the Union and by the "stockholders of the M. F. A.
or the Producers Produce Company" before a contract could be
executed.
On the basis of all the testimony, we conclude that the respondent's
representatives told the union representatives that the proposed con-
tract would be submitted by the management for approval to the
farmers' group, which Farnham defined as composed of "stock-
holders, M. F. A. members, directors of these farmers' exchanges
from whom we get out eggs and poultry," and we further conclude
that the union representatives were given to understand that the con-
sent of this group was necessary in order to empower the manage-
ment of the respondent to execute the contract. These conclusions
are corroborated by the events which followed the conference of
February 7.
Within a few days after February 7, Lane and Farnham communi-
cated with various farmers, stockholders, exchange managers and
directors, and M. F. A. members with whom the respondent carried
on its business. They discovered, according to their testimony, that
the overwhelming sentiment of these groups, most of which were
patrons of the respondent, was against entering into any binding
agreement but that these groups would consent to a "tentative agree-
ment or oral understanding" with the Union. When Brasher noti-
fied Farnham that the members of the Union on February 14, 1938,
had approved the contract, Farnham suggested the possibility of post-
poning submission of the contract to "the farmers" for approval.
He further suggested that the respondent and the Union operate
under it as an oral understanding until "the farmers became familiar
with the laws and the labor situation." Farnham further told him
that "the farmers out in the territory, due to the fact that they didn't
understand the situation, were not acquainted with the laws, . . . were
very much against us entering into any agreement right at the present
time." Brasher replied that in view of the action taken by the Union
PRODUCERS PRODUCE COMPANY - . " 896
he had no authority to agree to such a proposal and, as testified by.
Farnham, insisted that the respondent call a meeting of the "farmers".
and submit the contract to them.
Farnham reported to Lane the result of the meeting with Brasher.,
On February 20, 1938, Lane called Brasher to his office and made a.
similar suggestion, that if Brasher were willing to postpone entering
into a contract Lane "would guarantee that the company would live
under this contract, see that the contract was carried out in full,
section by section." Lane stated that he had been communicating,
with the farmers and was afraid that they would not approve the con-
tract. He also pointed out to Brasher the fact that the respondent's
competitors in Springfield were not being required to sign contracts,
but were operating under oral understandings with labor organiza-
tions in their plants, and urged a "gentlemen's agreement" between
the respondent and the Union. Brasher also told Lane that he had
no authority to postpone entering into the contract but offered to,
call a special meeting of the union members and have Lane tell them
of his proposal, explaining that "one of the worst things . . was
that there was so much nagging in the plant," that "the non-union
folk were nagging at the union people ; that they hadn't accomplished
anything; that they were not getting any results out of being union
folks." Lane in turn suggested that he talk to the employees in the
plant. Brasher agreed.'
The respondent contends that the union representatives agreed to
postpone entering into a binding agreement with the respondent and
to carry out the terms and provisions agreed upon by the two nego-
tiating committees as an oral understanding on condition that Lane
make the talk to the employees. Brasher denied that the union rep-
resentatives made any such agreement. According to his testimony,
he told Lane that he would submit the question of postponement to
the union members if Lane spoke to the employees. Lane at first
testified that Brasher said : "Mr. Lane, if you will make a talk to all
of the employees . . . we can go along on this oral contract." How-
ever, when asked whether Brasher qualified his "agreement" in any
way, Lane replied : "I don't remember that he did." In answer to
the further question whether Brasher said that "he would be willing
to go along if it was agreeable to his members" or whether he said
the union members "would go along with us for a while," Lane re-
plied: "I think that is what he said." On cross-examination, Lane
denied being told by Brasher that the latter could not agree to an
oral contract for the members of the Union, and asserted that "if he
had I would never have made the talk to. the workers." In• view of
the fact that the proposed contract had been submitted to the union
members on February 14, 1938, and the members had instructed their
representatives to "carry it back [to the respondent] for signature,"
896 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
and the further fact that subsequently on March 18, 1938, the union
representatives made a final demand for a signed contract on the in-
struction of the members of the Union, and upon consideration of the
entire record, we accept Brasher's testimony that he did not agree to
postpone entering into the contract but that he merely told Lane
that he would submit the question to the members.
On February 21, 1938, Lane delivered a speech to the employees
in the plant. Calling their attention to the past negotiations, Lane
said that "a committee has been negotiating for some time, trying to
work out a plan, or a condition, by which the Union and the Pro-
ducers Produce Company could carry on; and an agreement has been
reached (an understanding, better say, has been reached)" between
the committees of the respondent and of the Union; and that he
was hopeful "that we can work from here on together as one family
without any discord or without one party nagging another." He
continued :
Now, the agreement that has been reached is almost identical
with the one that we have ,been working under now for the paste
few weeks . . . By this agreement between the Producers
Produce Company and the Union . . . we hope that we can
all benefit ; we hope it will make you all feel better.
... It is to every individual to answer for themselves
whether or not they want to belong to the Union. We haven't
a word in the world to say-against the Union activities. If it is
your desire to become a member, that is your business absolutely.
I've thought many times that with such a farm organization as
we have in this section I could hardly understand why every
farmer who is living in this particular section, from which this
institution draws its products, could hesitate to become a mem-
ber; but, nevertheless, they have their own choice as to whether
they become members of the M. F. A. or whether they don't.
That's one privilege the American people have, and I hope the
day will never come when they won't have it; because, after all,
that's a privilege by which we should all be proud.
... And, now, just please don't, while you are on duty, nag
each other because there might be an individual who belongs to
the Union or because there might be some individual that hadn't
yet decided to join it.
I want to say again to you that I hope good will come of this
understanding, which I am sure each committee understands
PRODUCERS PRODUCE COMPANY 897
and which I have promised that the Producers Produce Com-
pany would carry out to the letter, and I mean that; I hope it
will make us feel better toward each other .. .
On the following day, Brasher told Farnham that he thought
Lane's speech was satisfactory but that he did not know what the
response on the part of the union members would be and would not
be able to give him an answer until the next meeting of the Union.
On February 28, 1938, the Union met to discuss whether the respond-
ent should be permitted to postpone the signing of the contract and
in the meantime to operate according to the terms and provisions
the negotiating committees had agreed upon. The meeting was op-
posed to this proposition and voted unanimously that the contract
again be presented to the respondent for signature. Brasher com-
municated to Farnham the Union's decision. Farnham promised to
take the matter up with the respondent's executive board.°
On March 18, 1938, a committee of the Union, consisting of
Brasher, Hawley, and Paul Beam, met with Farnham and Pool.
Hawley, who acted as spokesman for the union committee, repeated
that the Union had rejected the plan of operating under an oral
"arrangement" or understanding and asked Farnham if he would
sign any sort of a contract embodying the previous negotiations.
Farnham refused on the ground that, according to his understand-
ing, it was agreed to operate under the "oral arrangement," 7 and
that the unsatisfactory financial condition of the respondent made
him unwilling to bind the respondent to fixed wage rates. Hawley
then asked him if he would sign a contract leaving out any reference
to wages. Farnham replied that he had no authority to sign any-
thing. Hawley testified that he finally requested him merely to sign
a letter recognizing the Union as the exclusive bargaining agency
and that Farnham refused, saying that he "wouldn't sign any-
thing." Hawley's testimony is substantiated by that of Paul Beam.
Farnham did not deny that Hawley requested him and that he re-
fused to sign a letter recognizing the Union as the exclusive bargain-
ing agency. At first he testified that he thought he was asked to
sign such a letter but replied that he "didn't have authority at that
time to do it." He later testified that he could not recall whether
he was asked to sign such a letter or not, that he could not "be posi-
tive of it either way." We find the testimony of Hawley and Beam
to be true, that Farnham was asked and refused to sign a letter
recognizing the Union as the exclusive bargaining agency.
G The executive board of the respondent consists of 5 members selected from the board
of directors , and meets monthly to receive reports of the management.
° Farnham admitted , however, that Brasher did not at any time tell him that he "would
go along under this oral understanding without a signed contract."
898 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
b. Conclusions
The record establishes that on February 7, 1938, the negotiating
committees representing the Union and the board of directors of
the respondent agreed upon the provisions to be embodied in a con-
tract between the Union and the respondent. Within a few days,
thereafter, the provisions were approved by the Union and the
union representatives were authorized to execute such a contract on
behalf of the Union. Brasher, president of the Union, then re-
quested the respondent to sign a contract embracing the provisions
agreed upon on February 7. The respondent's officers proposed to
defer entering into a contract, but offered to abide by the terms of
the understanding reached. The Union rejected the proposal for
delay, and orr, March 18, 1938, made a final demand that the re-
spondent execute the contract. When Farnham objected on the
ground that the respondent could not obligate itself to pay a definite
scale of wages for an extended period of time because of unsettled
business conditions, Hawley, a union representative, asked him if he
would sign a contract omitting all wage provisions, but including
the other terms agreed upon. Farnham not only refused to sign a
contract, but also denied the Union a letter recognizing it as the
exclusive bargaining representative of its employees. He offered
a again to "live under" the terms and provisions previously agreed
upon.
The respondent contends that pursuant to the statute under which
the respondent is incorporated, the officers of the respondent had
no authority to enter into a contract with the Union, but that author-
ity therefor was vested solely in the stockholders; and that the pro-
posed contract of February 7, 1938, was not presented to the
stockholders because the officers, having "felt the pulse" of the
stockholders, were of the opinion that the contract would not be
approved.
The statute under which the respondent is incorporated first pro-
vides that "every such association shall be managed by a board of
not less than 5 directors" and then states:
Notwithstanding the foregoing provision for the manage-
ment of the general affairs of each such association by its board
of directors, the control of the policies of such association is
hereby reserved to and conferred upon their respective stock-
holders, who shall by direct vote govern the policies of such
associations, including their policies with reference to the de-
claring of dividends, the setting aside of reserve funds; the
method of distributing profits, the amendment of articles of
association, the increasing and diminishing of capital stock, and
other general policies . . .
PRODUCERS PRODUCE COMPANY _ 899
It is argued by the respondent that in the case of corporations or-
ganized under such statute the authority to act on general policies
or matters "which in ordinary private corporations require the
action of the board of directors as distinguished from the authority
vested in its officers" must "come from the stockholders and is not
vested in the board of directors," and that entering into the contract
with the Union involved a "general policy" within the contemplation
of the statute requiring the approval of the stockholders.
In our opinion, there was nothing in the proposed contract which
,would require the action of the stockholders.8 The record shows
that the power to regulate the wages, hours, and conditions of em-
ployment of the respondent's employees had been delegated to
Farnham, the respondent's manager,, and that prior to the demand
for a collective agreement, Farnham has always exercised such power
without consulting the stockholders. The terms and provisions
agreed to on February 7, 1938, outside of recognition of the Union
as the bargaining agent of the employees, contemplated nothing more
than the regulation of wages, hours, and conditions of employment,
matters which Farnham had been regulating for many years and
which were clearly within the scope of his authority .11 Nor do we
find any significance in the circumstance that Farnham had thereto-
fore never bound the respondent to fixed wages for a definite period
of time as provided in the proposed contract. The fact that a col-
lective agreement is for a period of 1 year is hardly so unusual as
to be beyond the authority of the general manager and to require
the approval of the stockholders.10 Moreover, assuming that a pro-
vision in the proposed contract binding the respondent to certain
wage rates for a definite period of time is a matter of "general
s Under the respondent 's constitution and bylaws , the board of directors is empowered
to "exercise full supervision and control over the affairs of this Company where such
supervision and control has not been limited by the action of the shareholders ," to adopt
policies and methods for the marketing of products received by the respondent, to enter
into marketing contracts , to make loans, to prorate profits among the agencies under con-
tract with the respondent , to authorize the signing of any contract or other instrument
binding upon the respondent , and "in addition to hiring its regular Manager and fixing his
salary, employ such other persons as it finds necessary, fix their compensation and pre-
scribe duties ." The constitution and bylaws prescribe it to be the duty of the manager
"to have general oversight and control over the business of the Company , subject, how-
ever, to the action of the Board of Directors."
*The general manager of a corporation may make contracts which are in the course of
the ordinary business of the company and within the scope of his express , implied, or
apparent powers 2 Fletcher , Cyclopedia of the Law of Private Corporations, Sec. 671.
10 It is generally held that in the absence of an express limitation a manager of a cor-
poration has the authority to make a contract proper under the circumstances . Manross
v. Oil Co., 88 Kan. 23T; Ceeder v. Lumber Co., 86 Mich. 541 ; Pink v. Metropolitan Milk
Co., 129 Minn 353; Allen Gravel Co . v. Nam, 129 Miss . 809; Pick v. Dexter S. P . & P. Co.,
164 N. Y. 127 ; 2 Fletcher , op. cit. supra, Sec. 677. In the Manross case the Court stated :
"The weight of authority seems to hold that as a rule the general manager of a corpora-
tion may make it contract of employment for one year which is binding on the corporation,
upon the theory that a contract for such time is not unusual or extraordinary." We
take notice of the fact that contracts with unions are often made for yearly periods.
900 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
policy" requiring the approval of the stockholders, such "general
policy" was inapplicable in the instant case since the Union offered
to omit the wage provisions. Furthermore, the officers of the re-
spondent, although in consultation with counsel, at no time during
the negotiations suggested that the period of time for which the
proposed contract was to run raised in their minds any doubt as to
their authority to enter into a contract with the Union ; and we
are satisfied that they entertained no belief that they lacked author-
ity on that account. This, indeed, was virtually admitted by the
respondent when, in response to the question by the Trial Examiner,
counsel for the respondent agreed that his position was that whether
the respondent "should sign a contract with a labor organization is a
matter of general policy, therefore the stockholders should be
consulted."
For the reason stated above, we find no merit in the contention
that the respondent's officers had no authority to enter into any
contract with the Union without the approval of the respondent's
stockholders. In addition, the record also establishes that the re-
spondent's officers never, in fact, declined to enter into a contract
with the Union because of a belief that they needed the approval
of the stockholders.
When the regular annual meeting of the stockholders was held on
January 18, 1938, the question of a contract with the Union was not
even considered, although this was more than five months after the
Union and the respondent had begun to negotiate a contract and
two months after the respondent had notice of the filing of a charge
of refusal to bargain. The respondent attempts to justify the failure
to submit the question to the stockholders at their meeting on Jan-
uary 18, 1938, on the ground that there was as yet no contract upon
which a complete understanding had been reached as to terms. The
argument is on its face without merit and, in the light of the record.
is completely disingenuous. Assuming that the respondent's officers
had believed that the entering into a contract with a labor union
involved a question of "general policy" requiring stockholders' ap-
proval, certainly they could not have thought that the approval
needed was anything more than a decision by the stockholders as to
whether the officers or someone else was to represent the respondent
in the collective bargaining mandatory under the National Labor
Relations Act. Patently the officers could not have believed that the
statute required, or even contemplated, that the stockholders should
be consulted as to the details of any contract with a labor union, or
that such details should be submitted to them for ratification. In-
deed, the record clearly shows that the officers never entertained any
such notion. As we have stated above, the stockholders were asked
PRODUCERS PRODUCE COMPANY 901
at the meeting of January 18, 1938, to authorize the operation of a
wholesale grocery. It is revealing that it was not considered neces-
sary to present to the stockholders a detailed plan even though, ap-
parently, the step was deemed to involve a matter of general policy.
On-`'the., contrary, Farnham merely "outlined the possibilities of the
wholesale grocery," and the stockholders considered this a sufficient
basis for authorizing the directors to "use their discretion in estab-
lishing" a wholesale grocery.
The obvious fact is that the respondent was never concerned with
any lack of authorization by its stockholders to enter into a contract
with the Union. On September 2, 1937, the respondent summoned
the representatives of the Farmers Exchanges rather than the stock-
holders to act on the contract proposed by the Union. At the hearing
Farnham declared that "the sentiment of the managers of the ex-
changes" was the important thing at that time and explained :
Here is the idea why we should take the matter back to the
farmers exchanges . The Producers Produce Company depended
upon the Farmers Exchanges and their M. F. A members for
support. If the contract was distasteful to our customers they
would immediately break their contract . . . The cooperative
has to take into consideration their members and maintain con-
fidence between the various branches.
At the conference between the respondent and the Union on August
25, 1937, Farnham in no way indicated that the meeting which he
agreed to call on September 2, 1937, would only be a preliminary
step and that further meetings of the stockholders would be neces-
sary before the contract could be entered into. Moreover, at the
hearing Lane admitted that he considered the resolution adopted by
the meeting on September 2, 1937, as a delegation of power to the re-
spondent's board of directors to bargain with the Union on the
terms set forth in such resolution; and, at the meeting between the
Union and the board of directors, on January 17, 1938, it was stated
that any agreement which might be reached would have to comply
with the same resolution. On February 7, 1938, when the com-
mittees of the Union and the respondent reached an agreement on
the terms of the contract, there was no question of submitting such
contracts to the stockholders qua stockholders, but rather, according
to Farnham's own testimony, to the "farmers' group" which Farn-
ham defined to mean "stockholders, M. F. A. members, directors of
farmers exchanges." Finally, the testimony of the respondent's
manager, Farnham, reveals that one of the respondent's principal
reasons for not integrating the understanding in a signed contract
was the fact that the respondent's competitors in Springfield were
not being required to sign contracts but were working under oral
283034-41-vol. 23-58
902 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
agreements or arrangements with the unions in. their plant. Lane
told Brasher that "the fact that the farmers knew about this oral
understanding between some of our other competitors and the union
made it difficult to go to our farmers and demand that they sign a
contract." Thus, we are convinced that the respondent's real con-
cern was its fear that its patrons would "break their contract" and
cease to do business with the respondent if the respondent executed
a contract with the Union and not any lack of authority by the
management or board of•directors.to execute, a binding agreement.
We have considered in detail the contention that the respondent's
officers could not and/or believed that they could not enter into a
contract with the Union until authorized to do so by the respond-
ent's stockholders. While we have found that contention to be with-
out merit, it is further clear that, assuming that it was necessary
and/or that it was believed to be necessary to submit the question of
entering into a contract with the Union to the stockholders as the
sole repositories of the authority to approve such a contract, it was
the duty on the part of the respondent's officers under the Act,wto do
so. Manifestly, 'a labor organization is entitled to have its demand
considered by those in authority. Otherwise, its right to bargain
collectively is meaningless. As we have stated on another occasion,
"the respondent may designate whomever it desires to represent it
for purposes of collective bargaining, whether it be certain of its
executives, its plant manager, or other persons, but such representa-
tives must be available for collective bargaining . . . (The respond-
ent) can not shackle the collective bargaining procedure with diffi-
culties arising out of its own organizational set-up and thereby ren-
der ineffectual the collective bargaining provisions of the Act." 11
In its exceptions to the Intermediate Report the respondent ad-
vanced the further contentions that the Trial Examiner should have
found that on September 3, 1937, the Union agreed not to demand
a signed contract if the manager of the respondent furnished the
Union with a letter recognizing it as the bargaining agency of the
respondent's employees; that on February 7, 1938, the committees
of the respondent and of the Union reached an agreement., which
"they were willing to recommend to their respective members and
stockholders"; that on February 20, 1938, it was agreed not to sub-
mit the proposed contract "to respondent's stockholders until such
time as the respondent's officers had reason to believe their stock-
holders would approve the same" and to consider the proposed con-
tract "as a verbal agreement and understanding between the parties
with reference to [its] subject-matter"; that no request had since
"Matter of P Lorillard Co. and Local Union No. 201, Tobacco Workers International
Union, 16 N. L R . B. 703.
PRODUCERS PRODUCE COMPANY 903
that date been made by the Union to submit the contract to the re-
spondent's stockholders; and that the respondent has at all times
."lived up to and observed the oral understanding and agreement."
As we have seen, negotiations between the respondent and the
Union covering the matter of wages, hours, and working conditions
-were begun on July 28, 1937, and on September 2, 1937, the respond-
ent called a meeting of the managers of the farmers' exchanges who
rejected the contract proposed by the Union. It was upon being
informed- of such rejection that the union committee on September
3, 1937,, suggested that the respondent embody in a letter certain
•matters which had been discussed on that day. The letter of Sep-
-tember 3, 1937, merely announced the respondent's intention to deal
fairly with its employees and to meet with the Union to discuss
working conditions. It did not, as contended by the respondent,
recognize the Union as the bargaining agent of the employees.
Moreover, while the letter was written at the request of the union
committee, the union committee did not agree to abandon the
demand for a signed agreement in exchange for the letter, but merely
consented to submit such letter to the union members. By filing
charges about 2 months thereafter and by the negotiations which
followed, the Union made it plain that it was not content with the
,letter as a substitute for a contract.
It is equally clear that Brasher did not on February 20, 1938, agree
to postpone entering into the contract in consideration of Lane's
speech to the employees but, as found above, merely consented to
present to the union members Lane's proposal. On February 28,
after Lane had made his speech in which he stated that an "under-
standing" had been reached but said nothing about the eventuality
of a binding contract, the Union rejected the proposal to postpone
entering into a contract, and the respondent was promptly so ad-
vised. At that time Farnham promised to take the matter up with
the respondent's executive board, but there is nothing in the record
to indicate that he ever did so. Again on March 18 the union
representatives insisted that, Farnham sign a contract embodying
the terms and provisions agreed upon during the previous negotia-
tions. Farnham refused.
The record clearly shows that there was never any agreement by
the Union to abandon its demand for the execution of a contract,
that there was no basis for any alleged belief by the respondent that
such an agreement had been made, and that, in fact, no such belief
was ever entertained by the respondent. Moreover, even if the
Union had agreed on September 3, 1937, to accept the letter of the
respondent in lieu of a signed agreement, or had agreed on February
20, 1938, to postpone its demand in consideration of Lane's speech,
904 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
the Union was not precluded from making subsequent demands for
the execution of a binding contract embracing the terms and pro-
visions of the understanding reached by the negotiating committees.
It may not validly be contended that the right of collective bar-
gaining may be bargained away at the insistence of an employer.
The right of employees to bargain collectively is a right guaranteed
by the Act in furtherance of a valid public policy, and it is contrary
to such policy for an employer to enter into a transaction whereby
the right to bargain collectively is stipulated away or renounced
by employees or their representatives.12
Without merit also is the contention that the Union had not,
since February 20, 1938, requested that the proposed contract be
submitted to the respondent's stockholders. In the first place, the
contention rests upon the premise, which we have found to be fal-
lacious, that the officers of the respondent had no authority to
execute the contract without submitting it to the stockholders. In
the second place, the contention is contrary to the record. On or
soon after February 28, 1938, the union representatives notified the
respondent that the Union had rejected the proposal to postpone
execution of the contract, and on March 18, 1938, the Union made
a final demand upon the respondent for the execution of the con-
tract. Implicit in both of these incidents was the request that the
proposed contract be submitted to whatever persons, stockholders
or others, whose approval was necessary to its execution by the
respondent. Indeed, that the respondent so understood is clear from
Farnham's statement on the first of these occasions that he would
take the matter up with the executive board.
We shall next consider the further contention made by the respond-
ent that by observing the terms and provisions of the oral under-
standing with the Union it has satisfied the requirements of the Act.
When Lane spoke to the employees on February 21 he stated that
the Union had been negotiating for some time "a plan or a condi-
tion," that an "understanding" had been reached by the committee
representing the Union and the respondent, and that he had prom-
ised that the respondent would "carry out to the letter" such "under-
standing." He made no mention whatever of a binding agreement.
To Brasher he referred to his proposal as a "gentlemen's agreement."
Similarly, Farnham stated that it was the hope of the management
that after "working under a verbal agreement" for a period of time
the farmers "would be willing to allow us to enter into an agreement
of some kind" with the Union. He proposed to a union representa-
u See Matter of Killefer Manufacturtnq Corporation and Steel Workers Organizing Com-
neittee, 22 N. L R B 484 Cf National Lecaice Company v National Labor Rela-
tions Board, 60 S Ct 569
PRODUCERS PRODUCE COMPANY 905
tive that, until such change in settlement occurred, the parties operate
under the agreed terms and provisions as an oral understanding,
since the farmers in the territory on which the respondent depended
for his business were opposed to "any agreement" with the Union.
At the final conference on March 18, after refusing to sign any-
thing, Farnham again proposed that the Union and the respondent
continue under an "oral arrangement."
The proposal by Lane and Farnham was no more than an offer
by the respondent to observe the terms and provisions agreed upon
on February 7, as a matter of business policy so long as the respond-
ent regarded it convenient to do so, but not to make any kind of
an agreement-oral or written-which would contractually bind it
to observe those terms and provisions. In short, the respondent's
position was that it was willing orally to represent the understand-
ing reached as expressing its policy concerning the wages, hours,
working conditions, and grievance procedure which would prevail
until the respondent chose to alter them; and that beyond this state-
ment of policy the respondent would not go.
The duty to -bargain collectively, 'which the Act imposes upon
employers, has as its objective the establishment of such a con-
tractual relationship to the end that employment relations may be
stabilized and obstruction to the free flow of commerce thus pre-
vented.13 As contemplated by the Act, collective bargaining does
not connote merely discussion designed to clarify employer policy,
but is a procedure looking toward the making of a collective agree-
ment by the employer with the accredited representative of its
employees concerning wages, hours, and other conditions of employ-
ment. The duty is not limited to recognition of the employees'
representatives qua representatives or to a meeting and discussion of
terms with them. The duty encompasses an obligation to enter into
discussion and negotiation with an open and fair mind and with a
sincere purpose to find a basis of agreement concerning the issues
13 See N L R B. v Highland Park Manufacturing Company , 110 F ( 2d) 632 (C C A
4), decided March 11 , 1940 , enf'g Matter of Highland Park Manufacturing Company and-
Textile Workers Organizing Committee, 12 N I, R B 1238 , in which the Court said :
that Congress contemplated that collective bargaining should be pursued with
the end and aim of arriving at trade agreements . . . does not admit of doubt. House
Repoi t No. 1147, 74th Congress, 1st Sess , p. 20, says : "As has frequently been stated,
collective bargaining is not an end in itself; It is a means to an end, and that end
is the making of collective agreements stabilizing employment relations for a period
of time, with results advantageous both to the worker and the employer" Senate
Report No. 573, 74th Congress, 1st Sess , p. 13, says • "The object of collective bar-
gaining is the making of agreements that will stabilize business conditions and fix
fair standards of working conditions "
See also Mattel of Pittsburgh Metallurqical Company, Inc, and Local 12,077 Gas and
By-Products Coke and Chemical Workers Union , District 50, U. M. W A , 20 N L. R. B ,
1077; Matter of Westinghouse Electric & Manufacturing Company and United Electrical
Radio and Machine Workers of America, 22 N. L R. B. 147
906 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
presented, and to make contractually binding the understanding,
upon the terms that are reached?' In this case such an under-
standing was reached on February 7, 1938 by the committees repre-
senting the respondent and the Union as to all terms and provisions
under negotiation; and indeed when Farnham objected on March 18,
1938, to executing a contract embodying the terms and provisions
agreed upon, on the ground that business conditions were so un-
certain that the respondent could not obligate itself to pay a definite
wage scale for any extended period of time, the union representatives
offered to omit the wage provisions.
A statement of policy, such as we have found the respondent
offered the Union, lacks the elements of a binding collective agree-
ment since the terms and provisions announced therein are effective
only at the pleasure of the employer. Moreover, such a unilateral-
declaration plainly fails to subserve the function of a collective
agreement sought by the Union :" It denied the Union the status
of it contracting party accepting responsibility for and seeking to
secure peaceful adjustment of disputes which might arise as to the
understanding between the parties or changes desired in such under-
14 Westinghouse Electric d Manufacturing Company and United Electrical , Radio and
Machine Workers of America, 22 N. L. R. B . 147, and cases collected in notes 12, 13,
and 14 therein
In N L- R. B v. Highland Park Manufacturing Co., C. C. A. 4, decided March 11, 1940,
enf'g Matter of Highland Park Manufacturing Company and Textile Workers Organizing
Committee, 12 N. L. R B. 1238, the Court said :
. . . "The requirement to bargain collectively is not satisfied by mere discussion
of grievances with employees ' representatives It contemplates the making of agree-
ments between employer and employee which will serve as a working basis for the
carrying on of the relationship . The net , it is'true ,- does not require that the parties
agree; but it does require that they neeotiate in good faith with the view of reaching
an agreement if possible ; and mere discussion with the representatives of employees,
with a fixed resolve on the part of the employer not to enter into any agreement with
them. even as to matters as to which there is no disagreement , does not satisfy its
provisions.. . .
In Consolidated Edison Company of New York, Inc., et al. v. National Labor Relations
Board, et al., 305 U. S. 197, 236, the United States Supreme Court said :
"The Act contemplates the making of contracts with labor organizations. That is
the manifest objective in providing for collective bargaining."
In National Labor Relations Board v. The Sands Manufacturing Company, 59 S. Ct. 508,
513-14, that Court said :
"The legislative history of the Act goes far to indicate that the purpose of the
statute was to compel employers to bargain collectively with their employees to khe
end that employment contracts binding on both parties should be made."
In Globe Cotton Mills v. National Labor,Relatiohs'•Board, 103 F. (2d) 91 (C. C. A. 5,
1989), the Court stated:
11. . . there is a duty on both sides . . . to enter into discussion with an open
and fair mind, and a sincere purpose to find a basis of agreement touching wages and
hours and conditions of labor, and if found to embody it in a contract as specific as
possible which shall stand out as a mutual guarantee of conduct, and as a guide for
the adjustment of grievances."
15Matter of Westinghouse Electric d Manufacturing Company and United Electrical,
Radio and Machine Workers of America, 22 N L R B 147, and cases cited therein.
PRODUCERS PRODUCE COMPANY 907
standing .18 The statement of policy, announcing., terms and condi-
tions of employment, terminable at the will of the respondent without
notice to or negotiation with the representatives of its employees,
was in nowise calculated to achieve the stability of relations be-
tween employer and employee sought' to be furthered by the Act 17
On the contrary it continued in existence the very situation which
Congress on the basis of the history of labor, relations, regarded as
undesirable because it tended to induce employees to, resort to strikes
and other methods of industrial warfare rather than to turn to the
procedure of collective bargaining 18 ,
We do not understand that the respondent contends that it was
justified in refusing to enter into a binding contract with the Union
because of an apprehension, that since the farmers did not approve
of such action they would cease to do business with- the respondent.
In, any case, the respondent's obligation under the Act to embody its
understanding in a binding agreement with the Union, upon request,
is not a duty which may be avoided on the ground that it would result
in the loss of customers.19 To hold otherwise would' be to ' assume
1e In National Labor Relations Board v. Sands Manufacturing Company; 306 U. S. 332,
342, the Supreme Court said :
The legislative history of -the Act goes far to indicate that the purpose of the
statute was to compel employers to bargain collectively with their employees to the
end that employment contracts binding on both parties should be made . . . we
assume that the Act imposes upon the employer the further obligation to meet and
bargain with his employees ' representatives respecting proposed changes of an exist-
ing contract and also to discuss with them its true interpretation , if there is any
doubt as to its meaning.
17 Matter of Pittsburgh Metallurgical Company, Inc. and Local 12,077 Gas and By -Products
CokesaiidhiChemical Workers Union, District' 50' UMWA, 20 N. L . R. B. 1077 '; Matter of
Westinghouse Electric d Manufacturing Company and United Electrical, Radio and
Machine Workers of America, 22 N. L. R. B. 147, and cases cited in notes 35 and 36
therein.
10 See cases cited in footnote 17, supra . In Matter of Harnisch feger Corp and Amal
Ass'n of Iron, Steel d Tin Workers of N. Amer., Lodge 1114, 9 N. L. R. B. 676 , 684, we
said • "An essential purpose of collective bargaining is to stabilize labor relations so that
workers may deal as business equals with their employers as to their terms and condi-
tions of employment . If the employer is at all times to be free to change such terms
and conditions unilaterally , collective bargaining will have failed to achieve one of its
fundamental aims."
10 Cf Fort Wayne Corrugated Paper Company v. N. L. R B., C. C. A. 7, decided March
28. 1940 , enf'g Matter of Fort Wayne Corrugated Paper Company and Local No. 182, Int'l
Brotherhood of Pulp, Sulphite, and Paper Mill Workers , 14 N. L. R B. 1 (customers'
withdrawal of business from respondent because of union activities of respondent's
employee does not justify discharge of said employee ) ; Matter of Arcade-Sunshine Co.,
Inc. and Laundry Workers, Cleaners and Dyers Union, 12 N. L. R B 259, 264-5, (circula-
tion by employer of petition whereby employees agreed not to strike may not be justified
on the ground it was intended to assure customers that the service of the employer would
not be interrupted).
See also the following cases holding that an employer may not condition collective
bargaining upon the union 's obtaining contracts with the employer 's competitors , Matter
of Samuel Youlin, Murray H. Rosenberg , and Murray Youlin, doing business as I. Youlin
and Company and International Ladies Garment Workers Union, 0 1. 0, 22 N L. R B
879; Matter of George P. Pilling it Son Co. and Dental, Surgical and Allied Workers
Local Industrial Union No 119, affiliated with the C . I. 0, 16 N. L. R. B . 650 at pp.
11-12 ; Matter of American Range Lines, Inc and Maiine Engineers' Beneficial Ass'n,
908 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
authority to pass upon the wisdom of the application in a particular
case of the public policy embodied in the Act of securing stability
in the relationship between employers and employees by collective
agreements which Congress deemed essential to prevent obstructions
to commerce. Moreover, it is inconsistent with public policy to hold
that public duties may be set at naught because of alleged private
inconvenience claimed to exist by reason of the actions or threatened
actions of third persons.-'0
The facts recited above show that the, respondent not only offered
no more than a statement of policy in place of a binding agreement,
but that the respondent refused to integrate its understanding with
the Union in a written and signed agreement. The duty to bargain
collectively encompasses not only the duty to make contractually bind-
ing the terms of the understanding reached, but also the duty to reduce
that obligation to the form of a permanent signed memorial if re-
quested to do so by the employees' representatives. 21 Moreover, the
13 N. L. R. B. 139, 146-7; Matter of Harry Schwartz Yarn Co, Inc and T W. O. C.,
12 N L. R. B 1139, 1158; Matter of Harbor Boat Building Company and Ship Carpenters -
Local Union No. 1335, 1 N. L. R. B. 339, 355; and the following cases holding 'that 'an
employer may not refuse to enter into a binding agreement with properly designated
representatives because of apprehension of a boycott by a rival union, Matter of Westing-
house Electric & Manufacturing Company and United Electrical , Radio and Machine
Workers of America, 22 N. L R. B 147 , or a strike by a rival union at another plant
of the employer , Jacob Hunkele and Local No. J10 United Laundry Workers Union, 7 N. L.
R. B. 1276, 1286-7 , or because of uncertain business conditions , Matter of Pittsburgh
Metallurgical Company , Inc., and Local 12,077 Gas and By-Products Coke and Chemical
Workers Union, District 50, U. M. W. A., 20 N. L. R B 1077. See also Matter of
Phelps-Dodge Corp and International Assn. of Machinists , Local 223, 15 N. L . R. B. 732,
738-9, holding that an employer is not excused from bargaining collectively by an
apprehension that negotiations with several appropriate craft units would consume an
undue amount of the management 's time; and Matter of Simmons Co. and Steel Workers
Oiganizing Committee, 6 N. L. R. B. 208, 211-12, holding apprehension that an election
of representatives would curtail production and result in a boycott of the employer by
a rival union is not a ground for refusing to direct an election.
20 See cases cited in footnote 19, supra See also the following cases holding that appre-
hension of strike by a labor organization does not excuse discriminatory discharge of
members of rival labor organization , Matter of Star Publishing Company and Seattle
Newspaper Guild, Local No. 82, 4 N. L. R B. 498, 505, enf'd in N. L. R. B v. Star Pub-
lishing Co ., 97 F. (2d ) 465 (C. C. A. 9, 1938) ; Matter of Trawler Mans Stella , Inc. and
American Communications Ass'n (C 1. 0.), 12 N. L R. B. 415, 422-3 ; Matter, of,,Cape
Cod Trawling Corp. and American Communications Ass'n, affiliated with the C I. 0,
23 N. L R B 208; nor justify other interference with rights of employees guaranteed
in Section 7 of the Act, Matter of Electric Vacuum Cleaner Co., Inc. and United Electrical
h Radio Workers of America, Local 720, 18 N. L R B 591 , at p. 24; nor does appre-
hension of boycott by labor organization justify such interference, West Oregon Lumber
Co. and Lumber and Sawmill Workers, Local No. 3, I W A, 20 N. L R. B 1, at p 26
°'Matter of Westinqhouse Electric & Manufacturing Company and United Electrical,
Radio and Machine Workers of America, 22 N. L. R. B 147, and cases cited in note 23
therein
The majority of the Circuit Courts of Appeal which have passed upon this question
have so held : Art Metals Construction Company v N. L. R B , C C A 2, decided February
26, 1940 , mod'g as to other issues and enf'g Matter of Art Metal Construction Co. and
Int Ass'n. of Machinists, Local 1.;59, 12 N L. R. B 1307; N. L R. B v Highland 'Park
Manufacturing Company, 110 F. (2d) 632 (C C A 4), enf'g Matter of Highland Park
Manufacturing Co and Textile Workers Organiz,nq Committee, 12 N L R B 1238;
PRODUCERS PRODUCE COMPANY 909
circumstances of the instant case entirely warranted the Union's
insistance upon a signed agreement and they establish that the re-
spondent's refusal thereof was not in good faith.22 From February
to August 1937 the management of the respondent had demonstrated
on numerous occasions its hostility to the Union.23 On September 3,
1937, during the course of its negotiations, it had failed to give the
Union recognition in writing as the exclusive bargaining representa-
tive of all its employees. Time and again the Union was informed by
the respondent that its patrons were hostile to collective bargaining
with labor organizations; and throughout the negotiations there was
indicated to the Union the respondent's subservience to the desires of
those patrons. Under the circumstances, the Union was entitled to
doubt that the respondent would observe the terms and provisions of
the understanding reached by the parties in the absence of a perma-
nent memorial thereof signed by the parties; and good faith required
that the respondent sign the agreement reached as evidence of intent
to' carry it out.
We have pointed out that there was implicit in the respondent's
refusal to embody in a binding agreement the understanding reached
with the representatives of its employees a refusal to recognize such
representatives as exclusive bargaining agent for the purpose of
contracting on behalf of the employees. On March 18, 1938, the
denial was made explicit and unmistakable by Farnham's refusal
even to sign a letter stating that the respondent recognized the Union
as exclusive bargaining agent. True, at all times since August 11,
1937, the respondent has admitted that the Union has been chosen by
a majority of the employees as bargaining agent. However, the
Union, having failed to achieve the normal result of collective bar-
gaining-a contract-was entitled to a clearer assurance of acceptance
as the exclusive bargaining agent than a mere verbal admission that
it had been designated by a majority. Under the circumstances, the
respondent's refusal to sign a statement acknowledging the Union
as the exclusive representative of the employees for the purposes
H. J. Heinz Company v N L R B , 110 F ( 2d) 843 , (C C A 6), ent'g Matter of
H. J. Heinz Co. and Cannery and Pickle Workers, Local Union No. 325, 10 N. L R. B. 963;
N. L R B v Sunshine Mininq Company , 110 F. ( 2d) 780 (C C. A 9), mod'g and enf'g
Matter of Sunshine Mining Company and Interndtuonal Union of Mine, Mill and Smelter
Workers, 7 N. L R. B 1252 . Contra : Inland Steel Co v . N. L R. B ., 109 F. (2d) 9
(C C. A 7) ; but see Fait Wayne Corrugated Paper Company v N L R B, 111 F. (2d)
869 (C. C. A 7), enf 'g Matter of Fort Wayne Corrugated Paper Company and Local
No. 182, Int'l Brotherhood of Pulp , Sulphite and Paper Mill Workers , 14 N L R B. 1
^ Cf Fort Wayne Corrugated Paper Company v N L R B, 111 F (2d) 869 (C. C.
A. 7), enf 'g Matter of Fort Wayne Corrugated Paper Company and Local No. 182, Int'l
Brotherhood of Pulp , Sulphite and Paper Mill Workers , 14 N. L R B. 1; N. L. It. B V
Highland Park Manufacturing Company , 110 F ( 2d) 032 (C C A 4), enf'g Matter of
Highland Park il!annfaeturinq Co and Teztrle Workers Organizing Committee , 12 N L R R.
1238.
z, See Section III , B, slip) a
910 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
of collective bargaining was tantamount to a refusal of formal recog-
nition as such representative. The respondent's action was clearly
expressive of continued hostility to the self-organization of its em-
ployees and an unwillingness to grant to the Union even a modicum
of the status and prestige to which it was entitled. 24 It is clear
that the respondent, while willing to discuss terms and conditions of
employment with the Union, was unwilling to and refused to grant
it the recognition which in itself is. of paramount importance'" in,se-
curilig collective bargaining and plainly required by the Act.26
We find that 'the respondent by refusing to enter into any bind-
ing agreement embodying the terms and provisions of the under-
standing reached on February 7, 1938; by refusing, on March 18,
1938, to enter into a signed written agreement with the Union em-
bodying any such understanding; and by refusing on March 18, 1938,
to sign a statement recognizing the Union as the exclusive bargaining
agency of the respondent's employees has refused to bargain collec-
tively with the Union as the representative of its employees in the ap-
propriate unit with respect to rates of pay, wages, hours of employ-
ment, and.-other conditions of employment. We,also find that by.such
refusal the respondent has interfered with, restrained, and coerced its
employees in the exercise of the rights, guaranteed in Section 7 of the
Act.
D. The alleged discrimination
The complaint alleged that the respondent had discriminated in
regard to the hire and tenure of employment of Fred Brixey ; and
Bud Thurman. We find that the evidence does not sustain the
allegations of the complaint in this respect, and we concur in the
Trial Examiner's recommendation that they be dismissed. Since the
Union has not taken any exceptions to the Intermediate Report, we
will not discuss the alleged discrimination in detail.
We find that the respondent has not discriminated against Fred
Brixey and Bud Thurman in regard. to.hire or tenure of employment.
a Cf Fort Wayne Corrugated Paper Company v. N. R L B., 111 F. (2,1) 869 (C. C..
A. 7), enforcing Matter of Fort Wayne Corrugated Paper Company and Local No. 182,
International Brotherhood ' of Pulp, Sulphite and Paper Mill Workers , 14 N. L. R B. 1.
Indeed, the respondent's conduct in this respect goes far to indicate that the respondent
at no time negotiated , and certainly after February 7, 1938 , did not negotiate in good
faith ; and - utterly discredits the claim that the respondent was motivated by any concern
as to lack of corporate authority.
25 The United States Supreme Court has repeatedly emphasized the "pivotal factor"
of recognition N. L. R B. v. Pennsylvania Greyhound Lines, Inc, 303 U. S. 261, 266-268
(1938 ) ; Texas & N. C. R. Co. v. Brotherhood of Railway d S. S Clerks, 281 U. S. 548
(1930) ; Virginian By. Co v. System Federation No. 40. 300 U S 515.
26 Matter of Griswold Mfg. Co. and ,Amalgamated Ass'n of Iron, Steel & Tin Workers
of N. A , 6 N L R B 298, enf 'd in N. L. R B. v . The Griswold Mfg Co, 106 F. (2d)
713 (C. C. A. 3) ; Matter of Piqua Munising Wood Products Co. and Federal Labor Union
Local 18787, 7 N L R B 782, enf'd in N. L. R. B . v. Piqua Munising Wood Products Go.,
109 F. (2d) 552 (C C A 6) ; Matter of McQuay -Norris Manufacturing Company
and United Automobile Workers of America, Local No 286, 21 N . L. R. B 709.
PRODUCERS PRODUCE COMPANY 911
IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE
The activities of the respondent set forth in Section III B and C
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 'obstructing commerce
and the free flow of commerce.
THE REMEDY
It is essential in order to effectuate the purposes and policies of
the Act that the respondent be ordered to cease and desist from
certain activities and practices in which we have found it to have
engaged, and in aid of such order and as a means of removing and
avoiding the consequences of such activities and practices, that the
respondent be directed to take certain affirmative action, more par-
ticularly described below.
We have found that the respondent has interfered with, restrained,
and =coerced' its employees dn' the exercise of the rights • which the
Act has secured to them. It is plain that the respondent must cease
and desist from such practices, and we shall so order.
We have also found that the respondent has refused to bargain
collectively with the Union as the representative of the respondent's
-employees. In order to effectuate the policies of the Act, it is neces-
sary to order, and we, therefore, shall order the respondent to cease
and desist from its said refusal , to bargain collectively with the
Union as such representative, and, if any understanding is reached,
upon request to embody such understanding in a written signed
agreement.
Upon the basis of the foregoing findings of fact and upon the
,entire record in the case, the Board makes the following :
CONCLUSIONS OF LAW
1. Amalgamated Meat Cutters and Butcher Workers of North
America, Poultry and Egg Handlers Division, Local No. 172, affili-
ated with the American Federation of Labor, is a labor organization,
within the meaning of Section 2 (5) of the Act.
2. The respondent, by interfering with, restraining, and coercing
,its employees in the exercise of the rights guaranteed in Section 7
of the Act, has engaged in and is engaging in unfair labor practices,
within the meaning of Section 8 (1) of the Act.
3. All production and maintenance employees of the respondent,
-except supervisory and clerical employees, at all times herein
material, constituted and they now constitute a unit appropriate for
912 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
the purposes of collective bargaining, within the meaning of Section
9 (b) of the Act.
4. Amalgamated Meat Cutters and Butcher Workers of North
America, Poultry and Egg Handlers Division, Local No. 172, affiliated
with the American Federation of Labor, was on August 11, 1937, and
at all times thereafter, has been, the exclusive representative of all em-
ployees in such unit for the purposes of collective bargaining, within
the meaning of Section 9 (a) of the Act.
5. The respondent, by refusing to bargain collectively with Amal-
gamated Meat Cutters and Butcher Workers of North America,
Poultry and Egg Handlers Division, Local No. 172, affiliated with
the American Federation of Labor, as the exclusive representative
of the employees in the aforesaid unit, has engaged in and is engag-
ing in unfair labor practices, within the meaning of Section 8 (5) of
the Act.
6. The aforesaid unfair labor practices are unfair labor practices
affecting commerce, within the meaning of Section 2 (6) and (7) of
the Act.
7. The respondent, by discharging Fred Brixey and Bud Thur-
man, has not engaged in an unfair labor practice within the mean-
ing of Section 8 (3) of the Act.
ORDER
Upon the basis of the above findings of fact and conclusions of
law, and pursuant to Section 10 (c) of the National Labor Relations
Act, the National Labor Relations Board hereby orders that the re-
spondent , Producers Produce Company , its officers, agents, successors.
and assigns shall :
1. Cease and desist :
(a) From refusing to bargain collectively with Amalgamated Meat
Cutters and Butcher Workers of North America, Poultry and Egg
Handlers Division , Local No. 172, affiliated with the American Fed-
eration of Labor , as the exclusive representative of all the
production and maintenance employees of the respondent , except
supervisory and clerical employees;
(b) From in any other manner interfering with , restraining, or
coercing its employees in the -exercise of their rights to self-organi-
zation , to form , join, or assist labor organizations , to bargain col-
lectively through representatives of their own choosing, and to
engage in concerted activities for the purposes of collective bargain-
ing and other mutual aid and protection , as guaranteed in Section 7
of the National Labor Relations Act.
2. Take the following affirmative action, which the Board finds
will effectuate the policies of the Act :
PRODUCERS PRODUCE COMPANY 913
(a) Upon request, bargain collectively with Amalgamated Meat
Cutters and Butcher Workers of North America, Poultry and Egg
Handlers Division, Local No. 172, affiliated with the American Fed-
eration of Labor, as the exclusive representative of all its production
and maintenance employees, except supervisory and clerical em-
ployees, in respect to rates of pay, wages, hours of employment, and
other conditions of employment; and, if an understanding is reached
on any of such matters, embody said understanding in a written
signed agreement, if requested to do so by Amalgamated Meat Cut-
ters and Butcher Workers of North America, Poultry and Egg
Handlers Division, Local No. 172, affiliated with the American
Federation of Labor;
(b) Post immediately in conspicuous places throughout its plant,
and maintain for a period of at least sixty (60) consecutive days
from the date of posting, notices to its employees stating: (1) that
the respondent will not engage in the conduct from which it is
ordered to cease and desist in paragraphs 1 (a) and (b) above, and
(2) that the respondent will take.the affirmative action set forth
in paragraph 2 (a) above;
(c) Notify the Regional Director for the Seventeenth Region in
writing within ten (10) days from the date of this Order what
steps the respondent has taken to comply herewith.
AND IT IS FURTHER ORDERID that the complaint be, and it hereby
is, dismissed in so far as it alleges that the respondent has engaged
in unfair labor practices within the meaning of Section 8 (3) of the
Act by discriminating in regard to the hire or tenure of employment
of Fred Brixey and Bud Thurman.
MR. WILLIAM M. LEISERSON took no part in the consideration of
the above Decision and Order.