The Associated General Contractors of America, Inc.

National Labor Relations Board - Board Decisions

Jun 26, 1953

105 N.L.R.B. 767 (N.L.R.B. 1953)

THE ASSOCIATED GENERAL CONTRACTORS OF AMERICA, INC. 7 67
Whether Niebergall's demotion and transfer be considered violative of Section 8 (a) (3)
and 8 (b) (2) of the Act or of Section 8 (a) (1) and 8 (b) (1) (A), it is believed that effectuation
of the policy of the Act requires that he be restored to his position as crew chief and that he
be made whole for any loss of pay suffered.ts Furthermore, it is believed that under the
circumstances revealed by this record a recommendation that Respondents jointly and
severally make whole Niebergall is warranted and appropriate. N. L. R. B. v Pinkerton's
Nail Detective Agency, 202 F. 2d 230 (C. A. 9).
As it would be inequitable to Respondent Union to permit the amount of its liability to
increase despite the possibility of its willingness to cease past discrimination, Respondent
Union may terminate its liability for further accrual of back pay by notifying Respondent
Bell in writing that it has no objection to the employment of Niebergall as crew chief, and
in that event Respondent Union shall not thereafter be liable for any back pay accruing after
5 days from the giving of such notice Absent such notification Respondent Union shall remain
jointly and severally liable with Respondent Bell for all back pay that may accrue.
[Recommendations omitted from publication.]
is The loss of pay shall be computed in accordance with the customary formula of the
National Labor Relations Board See N. L. R. B. v. Seven-Up Bottling Co., 73 S. Ct. 287;
F. W Woolworth Company, 90 NLRB 289.
CENTRAL CALIFORNIA CHAPTER, THE ASSOCIATED GEN-
ERAL CONTRACTORS OF AMERICA, INC., ASSOCIATED
HOME BUILDERS OF SAN FRANCISCO, CALIFORNIA,
INC., PENINSULA GENERAL CONTRACTORS AND
BUILDERS ASSOCIATION, INC., AND THE NORTHERN
CALIFORNIA CONFERENCE OF THE PLUMBING AND
HEATING INDUSTRY, INC., AND THEIR EMPLOYER
MEMBERS and A. C. CAMPBELL, WILLIAM W. HAHNES,
FRANK C. COOK, GEOFFREY J. HOOKER, LOUIS
GENOVESE, WALTER KUNZ, JAMES P. MURPHY,
BURRELL E. JACKSON, ROBERT E. HARGENS, JOE
ARIBOS, ELIJAH SWAYZE, DOUGLAS JOBE, AND JOHN
G. STANGUS
CENTRAL CALIFORNIA CHAPTER, THE ASSOCIATED GEN-
ERAL CONTRACTORS OF AMERICA, INC., ASSOCIATED
HOME BUILDERS OF SAN FRANCISCO, CALIFORNIA,
INC., PENINSULA GENERAL CONTRACTORS AND
BUILDERS ASSOCIATION, INC., AND THE NORTHERN
CALIFORNIA CONFERENCE OF THE PLUMBING AND
HEATING INDUSTRY, INC., AND THEIR EMPLOYER
MEMBERS and BUILDING AND CONSTRUCTION TRADES
COUNCIL OF SAN MATEO COUNTY
NORTHERN CALIFORNIA CHAPTER, THE ASSOCIATED GEN-
ERAL CONTRACTORS OF AMERICA, INC., CENTRAL
CALIFORNIA CHAPTER, THE ASSOCIATED GENERAL
CONTRACTORS OF AMERICA, INC., AND THEIR EM-
PLOYER MEMBERS: BOHANNON CONSTRUCTION CO,,
McKENZIE & CRAWFORD, E. B. STANDISH & CO., STERN
AND PRICE CONSTRUCTION CO. and BUILDING AND CON-
STRUCTION TRADES COUNCIL OF SANTA CLARA AND
SAN BENITO COUNTIES. Cases Nos. 20-CA-620, 20-CA-
621, and 20-CA-622. June 26, 1953
105 NLRB No 129
7 68 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
DECISION AND ORDER
On October 28, 1952, Trial Examiner Martin S. Bennett
issued his Intermediate Report in the above - entitled proceed-
ing, finding that the Respondents had not engaged in and were
not engaging in certain unfair labor practices alleged in the
complaint and recommending that the complaint be dismissed
in its entirety , as set forth in the copy of the Intermediate
Report attached hereto. Thereafter , the General Counsel and
each of the Trades Councils on behalf of the charging parties
filed exceptions to the Intermediate Report and supporting
briefs, and the Respondents filed a brief in support of the
findings of the Trial Examiner.
The Board has reviewed the rulings of the Trial Examiner
made at the hearing and finds that no prejudicial error was
committed. The rulings are hereby affirmed. The Board has
considered the Intermediate Report, the exceptions and briefs,
and the entire record in the case , and hereby adopts the find-
ings, conclusions , and recommendations of the Trial Exam-
iner , as modified hereinbelow.
We agree with the Trial Examiner's recommended dismissal
of the complaint , which allege 's that the various Respondents
engaged in an unlawful lockout of building and construction
trades employees in violation of Section 8 (a) (1) and ( 3) of the
Act. However , we rely only upon the factual grounds, described
in the Intermediate Report, supporting the Respondents' de-
fense of economic justification for their general suspension of
construction operations from August 2 to 13, 1951 , after the
plumbers' strike , beginning July 13, 1951, had affected certain
of their projects .' Consequently , we find it unnecessary to
pass upon the broad legal conclusions of the Trial Examiner
on issues of whether the plumbers ' strike constituted an un-
protected concerted activity and whether the nonstriking
plumbers or the nonplumber craftsmen would, absent the Re-
spondents ' valid economic defense , be entitled to the protection
of the Act.
We believe , like the Trial Examiner , that cognizance must
be taken of the peculiar conditions which prevail in the building
and construction industry , as reflected in the record, and in
particular the close interdependence and the necessary opera-
tional sequence of the different craft functions inherent in
commercial construction . As we view the controversy, the
struck and the nonstruck respondent general contractors
within the three - county area were commonly affected by the
plumbers' dispute and similarly situated by reason of their
uniform conviction that to accept or to tolerate the Plumbers'
contract demands would involve them in violations of the law
and possible penalties resulting therefrom . Failure to accede
to the Plumbers ' demands--and these contractors were re-
1See Betts Cadillac Olds, Inc., 96 NLRB 268; International Shoe Co., 93 NLRB 907; Duluth
Bottling Association , 48 NLRB 1335.
THE ASSOCIATED GENERAL CONTRACTORS OF AMERICA, INC 769
solved not to accept -- unquestionably meant the loss of their
working plumbers. Consequently, whether or not they were
struck, the general contractors could, and we find that they
did, reasonably appreciate and anticipate that without the key
plumber craft , construction operations could not continue for
long, if at all, on an economic basis. When finally the struck
projects were physically ground to a halt, the general contrac-
tors then proceeded to close down all their projects throughout
the area encompassed by the Plumbers ' contract demands.
It is significant that the general contractors in the affected
area chose to wait over 2 weeks before shutting down, in the
hope that the Plumbers ' dispute would be settled . During this
period of waiting, general contractors continued operations on
struck projects --as long and as best they could --by impro-
vising, departing from established construction procedures,
and generally adopting uneconomical practices . This experience
of the struck general contractor provided too for those who were
not struck a graphic demonstration of the operational difficul-
ties they would encounter without the effective work of the
plumbers. In these circumstances , we fail to perceive anything
objectionable in the fact that the respondent general contrac-
tors and employer associations organized themselves and
acted in concert with respect to the Plumbers ' dispute, as
indeed they reasonably would have done in resolving any seri-
ous problem of the industry which commonly affected them.
Accordingly, we shall order that the complaint be dismissed.
[The Board dismissed the complaint.]
Member, Murdock , concurring:
Insofar as the findings in the majority opinion go, I am in
agreement with them, to support the conclusion that the Re-
spondents were justified in effecting a general shutdown of
building and construction operations in three California coun-
ties. Like my colleagues , I reach the decision that the com-
plaint should be dismissed . But for this result I would rely
additionally upon what plainly appears to me a vital contrib-
uting element in the Respondents ' defense, not passed upon by
the majority.
The Plumbers ' contract was illegal . This the record clearly
shows, and the Trial Examiner found. Indisputably , the closed-
shop provision alone was sufficient to make it illegal under
the Act. And, on my part, there is much doubt that the contract
did not also violate Wage Stabilization Board regulations. In
any case, I would certainly conclude from the facts that it was
not unreasonable for the Respondents to believe the contract
was illegal on Wage Stabilization Board grounds , among others.
Thus we have a situation where such an illegal contract was
sought to be imposed by the Plumbers on all construction
projects in three counties . The projects of all the respondent
general contractors were affected . Those which did not accept
the contract were struck . True, many of the projects which
77 0 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
were shut down by the Respondents had not in fact been struck,
because there were plumbing subcontractors who succumbed
to the pressure of the Plumbers and agreedto the terms of the
contract. However, on these projects, and on those which had
been struck, the general contractors were united in a firm de-
termination not to tolerate the existence of the illegal contract
terms on their construction jobs. And reasonably so. This is
amply evidenced in all their meetings and activities before
they were finally moved to the point of closing down opera-
tions. On this record, I am convinced that the concerted action
of all the Respondents in effecting the shutdown was undertaken
in good faith, and was justified as an affirmative measure
deemed necessary by them to repulse and remove the Plumb-
ers' illegal conditions from their midst.
Chairman Herzog took no part in the consideration of the
above Decision and Order.
Intermediate Report and Recommended Order
STATEMENT OF THE CASE
This proceeding stems from various charges duly filed by certain individuals in Case No.
20-CA-620; by Building and Construction Trades Council of San Mateo County in Case No
20-CA-621, and by Building and Construction Trades Council of Santa Clara and San Benito
Counties in Case No 20-CA-622, against Central California Chapter, The Associated General
Contractors of America, Inc , Northern California Chapter, The Associated General Con-
tractors of America, Inc ; Peninsula General Contractors and Builders Association, Inc
Northern California Conference of the Plumbing and Heating Industry, Inc.; and against
49 named contractors whose names are listed in Appendix A of the complaint and also in
Appendix A, attached hereto, this latter group includes David D. Bohannon Organization,
herein called Bohannon The General Counsel of the National Labor Relations Board caused
these cases to be consolidated and issued a consolidated complaint, dated April 11, 1952,
against all Respondents The complaint alleged that they had engaged in unfair labor practices
within the meaning of Section 8 (a) (1) and (3) and Section 21;6) and (7) of the National Labor
Relations Act, 61 Stat 136, herein called the Act Copies of the charges, order consolidating
cases, consolidated complaint, and notice of hearing thereon were duly served upon the
parties
Specifically, the complaint alleged that on or about August 1, 1951, Respondent Associations,
acting in concert, had instructed and directed their employer members to shut down all
construction jobs in San Mateo, Santa Clara, and San Benito Counties at noon on August 2,
1951, and that said jobs were shut down pursuant to said instructions, thereby locking out
all employees then engaged in such construction work, during the period from August 2 to
August 13, 1951, "because said employees, or some of them, were members and active in
behalf of the Unions [ presumably the various labor organizations affiliated with the respec-
tive Building Trades Councils], or because of their concerted activities or the concerted
activities of other members of the Unions for the purpose of collective bargaining or other
mutual aid or protection " The answer of all Respondents, inter alia, denied that 11 of the
individual employers named belonged to Respondent Associations; rdenied that they had
locked out their employees, and affirmatively alleged that Respondent Associations had
recommended to their employer members that they suspend operations and that such recom-
mendation was caused by illegal concerted activities violative of the Act, as well as other
laws and regulations, by Local Unions 393 and 467 of the United Association of Journeymen
to motion by the General Counsel to dismiss against 4 of the 11 was granted during the
hearing.
THE ASSOCIATED GENERAL CONTRACTORS OF AMERICA, INC. 771
and Apprentices of the Plumbing and Pipe Fitting Industry of the United States and Canada,
herein called Locals 393 and 467.
Pursuant to notice, a hearing was held from June 9 to August 8, 1952, at San Jose, Califor-
nia, before the undersigned Trial Examiner, Martin S. Bennett, duly designated by the
Associate Chief Trial Examiner. All parties were represented by counsel who were afforded
full 'pportunity to be heard , to examine and cross -examine witnesses , and to introduce
evidence bearing on the issues. At the close of the hearing, the undersigned reserved ruling
on a motion by Respondent Bohannon to dismiss the complaint against it on the ground that
Bohannon was not engaged in commerce; this is disposed of hereinafter. At the conclusion of
the hearing , the parties were afforded an opportunity to present oral argument and to file
briefs and/or proposed findings or conclusions with the undersigned. Oral argument was
waived and thereafter, at the request of counsel for Respondents joined in by counsel for
San Mateo Building Trades, Council, the time for filing briefs was extended. Briefs have
been received from these two parties and the General Counsel,
Upon the entire record in the case and from his observation of the witnesses, the under-
signed makes the following:
FINDINGS OF FACT
I, THE BUSINESS OF THE RESPONDENTS
Northern California Chapter, The Associated General Contractors of America, herein
called Northern Chapter, AGC, is a trade association with offices in San Francisco which
represents approximately 280 general contractors, including 7 industrial respondents, who
are engaged in heavy engineering, bridge, and highway construction in the 46 northern
counties of California. Central California Chapter, The Associated General Contractors of
America, herein called Central Chapter, AGC, is a trade association with offices in San
Francisco which represents general contractors in the same geographic area, including, as
Respondents admit, 14 individual respondents, who are engaged primarily in building con-
struction. Peninsula General Contractors and Builders Association, Inc., is a trade associa-
tion with offices in San Mateo which represents approximately 170 general contractors,
including 17 individual respondents, who are operative in the area directly south of the city
of San Francisco which extends roughly from the Pacific Ocean to San Francisco Bay, and
is known as "The Peninsula." To some extent at least, the last named Association partici-
pates in joint contract negotiations with the two AGC chapters named above and several of
its members also belong to those organizations.
Associated Home Builders of San Francisco, California, Inc., is a trade association which
maintains its offices at San Francisco and represents general contractors, including, as
Respondents admit, 8 industrial respondents, who are primarily engaged in home construc-
tion in and about the city of San Francisco, Northern California Conference of the Plumbing
and Heating Industry, Inc., herein called the Northern California Conference, is a trade
association which maintains its office at Sacramento, California, and which represents
plumbing, heating, piping, and air-conditioning subcontractors active in Northern California,
Its membership actually consists of approximately 15 plumbing and heating trade associa-
tions, with the individual subcontractor maintaining membership in 1 of the 15 groups. All
of these associations advise and represent their members in labor relations. There is no
direct relationship between the Conference and the two AGC Chapters, although they have,
commencing in 1950, negotiated jointly for their members with labor organizations in areas
of mutual interest.
The 49 individually named contractors are general contractors of varying size. Seven of
the group belong only to the Associated General Contractors of Santa Clara County, which is
not a respondent herein. The last named Association is signatory to at least one of the
general labor contracts negotiated by Central and Northern Chapters of AGC.
During the calendar year ending December 31, 1950, the employer members of the above-
named Associations, including the members of the nonrespondent Associated General Con-
tractors of Santa Clara County, engaged in and sold construction worth in excess of $ 20,000,000
Of this, more than 5 percent represented construction by some of the employer members for
customers located outside the State of California The undersigned finds that the Respondent
Associations and the 49 individual employers named in Appendix A are engaged in com-
merce within the meaning of the Act N. L. R, B. v Denver Building & Construction Trades
772 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Council, 341 U, S. 675, and Joliet Contractors Association v N. L. R. B., 193 F. 2d 833
(C. A. 7). _
II. THE LABOR ORGANIZATIONS INVOLVED
Building and Construction Trades Council of San Mateo County; Building and Construction
Trades Council of Santa Clara and San Benito Counties; and Local Unions 393 and 467, United
Association of Journeymen and Apprentices of the Plumbing and Pipe Fitting Industry of the
United States and Canada, are labor organizations admitting to membership employees of the
individual Respondents.
Ill. THE UNFAIR LABOR PRACTICES
A, Introduction
1. Prefatory statement ; the issue
After a lengthy hearing, with the issues vigorously presented by the General Counsel and
ably defended on a number of grounds by Respondents, the issues involved boil down to one.
Plumbers Local Unions 393 and 467 jointly sought to obtain the signatures of the plumbing
subcontractors in three counties to a labor contract during June and July of 1951. In some
instances they succeeded and in others they did not. They then struck, during mid-July 1951,
a number of the plumbing subcontractors who had refused to sign. As a result, a number of
the general contractors in the area, who were then employing the struck subcontractors,
closed their operations on or about August 2, 1951; in addition some general contractors
whose subcontractors had signed or agreed to comply with the Plumbers contract, also
closed down their operations. All these construction projects resumed on or about August
13 after several mediation meetings conducted by a Federal conciliator.
The position of the General Counsel is that Respondent Associations, acting in concert,
instructed all their employer members to halt operations on August 2; that a number of the
employer members did so and remained shut down until August 13; that this was a lockout
and that this lockout, in the language of the complaint, was carried out "because said em-
ployees, or some of them, were members and active in behalf of the Unions, or because of
their concerted activities or the concerted activities of other members of the Unions for the
purpose of collective bargaining or other mutual aid or protection." The employees affected
were both employees working directly for the general contractors as well as employees
working for the various subcontractors. It must be borne in mind, however, that the em-
ployer Respondents herein are the general contractors for ti' se various construction
projects and that the plumbing subcontractors involved have neither been named as re-
spondents nor represented herein.
• Respondents defended these allegations and advanced a number of defenses pursuant to
which they claimed that the conduct by Plumbers was unlawful and unprotected and that as
a result no unfair labor practices had been committed. To treat with all of these contentions
in detail would result in an unnecessarily lengthy report. Moreover, inasmuch as the under-
signed is convinced and hereinafter finds that, on a preponderance of the evidence, Respond-
ents must prevail on several grounds, it is deemed unnecessary to go into all of the ramifi-
cations of Respondents' various defenses.
2. Bargaining history
In June 1947 some of the parties involved herein entered into two collective -bargaining
agreements . The Northern California District Council of the United Association of Journey-
men and Apprentices of the Plumbing and Pipe Fitting Industry of the United States and
Canada, herein called Plumbers Council, was then the bargaining representative of a group
of 18 Plumbers Locals, including Locals 393 and 467. It entered into a contract with Re-
spondents Central and Northern California chapters of the AGC covering industrial and
2In so finding, it may be noted that the undersigned entertains some doubts that the evidence
presented in this record by the General Counsel is adequate to support a finding that all of
the individual Respondents are engaged in commerce, whether by affiliation with a trade
association or otherwise. See Jewish Bakery Association, 100 NLRB 1245 However, inasmuch
as the substantive issues are hereinafter resolved in favor of the Respondents, it is deemed
unnecessary to devote further treatment to this problem.
THE ASSOCIATED GENERAL CONTRACTORS OF AMERICA, INC. 773
utility pipe work in 46 counties of Northern California. A similar agreement was entered
into by Plumbers Council in behalf of 15 Plumbers Locals, including Locals 393 and 467,
with Respondent Northern California Conference; this agreement applied to plumbing,
heating, air-conditioning, and utilities pipe work in the same geographical area as the
agreement with the 2 AGC chapters.
The two AGC chapters and the Conference decided to negotiate jointly with the Plumbers
Council In 1950, upon the expiration of the previous agreement. On the completion of nego-
tiations, the Conference and Plumbers Council executed an agreement dated July 28, 1950,
and expiring June 30, 1951. However, the negotiated agreements, on the insistence of the
Plumbers Council, contained language establishing a welfare plan and restricting the appli-
cation of the agreement solely to those contractors "regularly engaged" in the field, and
the AGC chapters refused to sign their agreement covering industrial pipe work on the
ground that they were required to negotiate for all their members and could not exclude
any of them from the coverage of the agreement. As a result, the AGC members regularly
engaged in this type of construction associated themselves together as the "Northern Cali-
fornia and Central California Negotiating Committee Representing Employers and Individual
Employers Who Are Regularly Engaged in Industrial and Utilities Pipe Work in Northern
California and Central California." This group signed the agreement on or about July 28,
1950.
Sometime later, Plumbers Locals 393 and 467 of the cities of San Jose and San Mateo,
respectively, the two locals involved directly herein, became dissatisfied with their repre-
sentation by Plumbers Council and, early in 1951, canceled the authority of said organization
to bargain for them. Almost concomitantly therewith, two local plumbers' associations, which
had belonged to and had been represented by the Northern California Conference, withdrew the
authority of the latter to represent them in collective bargaining. These organizations were
the Associated Plumbing Contractors of San Mateo County, Inc., and the Associated Plumbing
Contractors of Santa Clara County, Inc. Negotiations then commenced between the 2 Plumbers
Locals and the 2 county plumbers associations, directed toward a single contract covering
the area in which they were jointly Interested, namely, San Mateo, Santa Clara, and San
Benito Counties.3
B, The 1951 contract
1. Its genesis and content
The crux of this case is the contract which the aforementioned four groups entered into in
1951. It bears the date of July 1, 1951, and an expiration date of June 30, 1952, with provi-
sions for year-to-year renewal, absent a 60-day notice prior to the annual renewal date;
it is apparently still in effect. The agreement was actually entered into on a date somewhat
earlier than the one it bears; this action took place apparently in the early part of June 1951,
prior to June 22, with the intent that the contract take effect on July 1, 1951, upon the ex-
piration of the 1950 contracts negotiated on the wider geographical basis between the re-
spective trade and labor associations, described hereinabove.
Article 3 of this contract provides as follows:
UNION RECOGNITION
A. That the INDIVIDUAL EMPLOYERS hereby recognize the UNION as the sole and
exclusive collective bargaining representative of all employees of the INDIVIDUAL
EMPLOYERS signatory hereto, over whom the UNION has jurisdiction.
B. That during the terms [sicl-of this Agreement , and during the performance by the
INDIVIDUAL EMPLOYERS of any work or contract to which this Agreement relates, all
employees covered hereby shall be and remain members in good standing of their UNION
on whose behalf this Agreement is executed.
That this language imposes union-security requirements beyond those permitted by the
Act and, in fact, constitutes a closed-shop provision is readily apparent and requires no
31t may be noted that the business manager of the Associated Plumbing Contractors of
San Mateo County since 1948 has been one Albert Randall who previously thereto occupied the
position of business manager with Local 467. The latter post has since 1948 been occupied by
one Robert Wertz who, together with Randall, played a prominent role in these negotiations
on the local level. The business manager for Local 393 in San Jose is Dan McDonald.
774 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
discussio,i. In fact the General Counsel conceded that "The contract admittedly did contain
a provision which was violative of the Act...." 4 Each of the Locals also prepared, on its
own letterhead , a form letter bearing the date June 22 and addressed to "Plumbing and Pipe
Fitting Contractors of Santa Clara and San Benito and San Mateo Counties." 6
This form letter announced that a new contract had recently been negotiated covering the
plumbing and pipefitting industry in the 3 counties ; that this contract provided for a wage
increase of 1212 cents per hour (from $2.6212 to $2.75), effective July 1, 1951; and that this
increase was permissible under the regulations in the Wage Stabilization Board . The letter
also announced other changes in fringe benefits , including a new free zone of 10 miles
effective July 1, as contrasted to the previously existing free zone of 25 miles beyond which
travel charges were to be paid by the employer; 6 paid holidays; and establishment of an
employer-supported welfare fund. Provision was made for deferment of the holiday and
welfare fund provisions pending approval by the Wage Stabilization Board . It may be noted
that the contract also contained language requiring all plumbing , heating, and piping foremen,
as well as general foremen, to be members of the two Plumbers Locals. Although the matter
was largely ignored at the hearing , Respondents advert to it in their brief and it is , of course,
settled that such a demand, as well as a strike in support thereof, is violative of the Act.
American Newspaper Publishers Association v. N. L. R. B., 193 F. 2d 782 (C. A. 7), and
Graphic Arts League , 87 NLRB 1215
Another form letter was simultaneously prepared on the letterheads of the respective
Locals and also bore the date of June 22. This letter, addressed to the two Locals jointly,
was to be signed by the respective plumbing contractors in the area and stated:
This will acknowledge receipt of the new contract relative to wages and working
conditions negotiated for the Counties of Santa Clara, San Benito and San Mateo, to be
effective July 1, 1951, as well as your letter pertaining thereto.
This letter may be considered by you as acknowledgment of the receipt of the above
mentioned documents and acceptance of the terms thereof.
As will appear , these three documents were circularized and distributed together by both
Locals as a joint venture during the period immediately following their preparation. The
record does not disclose what took place in all cases where plumbing contractors were
contacted. However there is more than substantial evidence of what took place in certain
cases so as to reflect the objective of the two Plumbers Locals and this is set forth below.
2. Distribution of the contract and demands for its signature
It is the contention of the General Counsel that , despite the patent illegality of the contract,
Locals 393 and 467 did not strive to obtain the signatures of plumbing subcontractors to this
agreement , or their written promises to abide thereby , but that they devoted themselves
primarily to obtaining the consent of this group to pay the increased wage rate of $2.75.
While it is correct that this was one of the conditions of employment establissied by the
contract , to accept this contention would necessitate disregarding the preponderance of the
evidence which supports Respondents' contrary contention that the two Plumbers Locals
were primarily attempting to obtain adoption of their agreement , including the illegal closed
shop and a higher wage rate, and that they were not striving solely or even primarily to
obtain the higher wage rate . The undersigned so finds.
Turning to the evidence relating to the distribution of this contract , the record discloses
the following. According to Business Representative Dan McDonald of Local 393, copies of
the contract, the explanatory letter of June 22, and the form dated June 22 on which the
contractor was to signify his acceptance of the agreement , were mailed to all contractors
doing business in the three counties . He later modified this by testifying that copies for
members of the Associate Plumbers of Santa Clara County were not mailed but were left
at the office of the secretary of the group. Business Representative Wertz of Local 467 testi-
fied that copies of the three documents were mailed to all contractors doing business in his
territory, namely, San Mateo County. The files of both organizations contain a large number
of forms indicating acceptance of the contract by members as well as nonmembers of the
4His contention that certain concerted activity of the two Locals which took place was not
directed to the obtaining of signatures to this contract is treated hereinafter.
6San Benito County apparently has neither a Plumbers T.ocal nor a plumbers trade asso-
ciation . All plumbing work therein is done pursuant to conditions existing in Santa Clara
County and under the aegis of the Santa Clara organizations
THE ASSOCIATED GENERAL CONTRACTORS OF AMERICA, INC. 775
two county plumbers associations. It is clear, and the undersigned finds, that the distribution
of these documents, like the conduct of the negotiations leading up to the execution of the
contract, was a joint venture by the two Plumbers Locals.
There is also direct evidence of what took place between the two locals and certain of the
plumbing subcontractors in the area. Thus, copies of the contract and the accompanying
explanatory letter of June 22 were sent or brought to Paul Rauch, a heating and piping
contractor doing business as E. J. Rauch in San Jose. Business Representative Dan McDonald
of Local 393 visited Rauch, as the latter testified, just prior to July 1 and announced that
Rauch "was the last job to sign up" and that "he would like to have me sign up." Rauch
either then or shortly thereafter signed the form dated June 22 wherein he agreed to accept
the terms of the contract. There is no question but that this conduct by McDonald was directed
to obtaining a signatory to the entire contract and not just a promise to pay a higher wage
rate. As a result, this firm was not subjected to a plumbers strike later that month as
were others whose cases are discussed below.
James A. Nelson Co. is a mechanical contractor engaged in plumbing subcontracting which
is a member of a trade association, Heating, Piping, and Air Conditioning Contractors
Association of Northern California, which in turn is a member of the Northern California
Conference; the latter has traditionally represented the Nelson Company in collective
bargaining. Several days prior to July 13, Emil Nattkemper, a partner of the firm, received
a copy of the July 1 contract in the mail, together with the form explanatory letter. On July
13, Business Manager Wertz of Local 467 telephoned Nattkemper, referred to the agreement,
and asked, as Nattkemper testified, "if I was going to sign the agreement and pay the wage
scale and other incidentals mentioned in the agreement." After some discussion, in which
Nattkemper pointed out that the contract had not been negotiated by the Northern California
Conference, Wertz asked "if we were going to sign the agreement" and added that "unless
the contract was signed we probably would not have any men on Monday morning (July 16]."
Nattkemper persisted in his refusal and, true to Wertz' prediction, the plumbers did not
appear on July 16 at a job in San Mateo County being subcontracted by Nelson Company
for Respondent Howard J. White, a general contractor.
Wertz testified that he had left the agreement at the Nelson Company, that Nattkemper had
refused to go along with it, and that he, Wertz , had claimed that the wage rate was not
unreasonable. He admitted that he had informed the Nelson Company plumbers at noon on a
particular date, apparently July 16, that Nelson would not pay the increase in wages, and that
the men forthwith walked off the job; he denied that he had instructed them to strike. The
undersigned finds that Wertz attempted to force the Nelson Company to sign and comply with
all provisions of this labor contract.
Scott Company of San Francisco is a mechanical contractor which belongs to the Heating,
Piping, and Air Conditioning Contractors Association of Northern California. This firm was
employed as a subcontractor on a number of projects in San Mateo County, at the time
material herein, for at least four of the individual Respondents, including Williams & Bur-
rows, Inc.; Barrett & Hilp; Peter Sorenson; and Howard J. White, Inc. It was also subcon-
tractor on two jobs for general contractors, not named as respondents herein, but who are
members of Central AGC.6 All of its plumbers engaged in a work stoppage on their respec-
tive projects on or about July 14. According to Wertz, he had two telephone talks with an
official of this concern in mid-July and asked "why he had not paid the wages under the new
agreement." The officer protested that he had not seen the agreement; Wertz forthwith mailed
him a copy and telephoned him again 2 days later. He was informed that the company would
not go along with the agreement. This was apparently just prior to July 14, for, as stated,
the plumbers did not appear for work on that date. Here too, the undersigned finds that
Wertz was attempting to obtain agreement to the entire contract and not solely its wage
provisions.
Harold Turner is manager of Anderson & Rowe, Inc., of San Francisco, which also is a
member of Heating, Piping, and Air Conditioning Contractors Association of San Francisco,
and has always been represented by the Northern California Conference as bargaining agent.
This firm was subcontractor on projects for at least two of the individual Respondents
herein, Stern & Price Construction Co. in Santa Clara County, and Peter Sorenson. Turner
was a clear and forthright witness whose testimony has been credited in full.
6 The General Counsel contends that Respondent Associations are responsible for losses in-
curred by all employees allegedly locked out pursuant to the direction of Respondent Associ-
ations, irrespective of whether their respective employers , be they general contractors or
subcontractors , have been named as respondents.
291555 0 - 54 - 50
776 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
According to Turner, he was visited at his office on July 11 by McDonald and Wertz of the
two Plumbers Locals and they presented Turner, who had not seen them previously on this
matter, with a copy of the contract, together with the covering explanatory letter dated June
22. McDonald asked Turner to sign the agreement and Turner protested that the agreement
provided for benefits in excess of those permitted under the 10 percent formula of the Wage
Stabilization Board. Wertz, according to Turner, "jumped up and told me that we would not
have any men if we did not sign it." Turner testified that the union representatives wanted
him to sign the entire contract and "they did not pick out any specific item." Turner pro-
duced at the meeting a letter to his employees dated July 9, promising to pay any additional
benefits provided in a negotiated contract in the area, when approved by the Wage Stabiliza-
tion Board. This commitment did not satisfy the union representatives. During the course of
the meeting, McDonald informed Turner that the payment, under the new 10-mile free zone
provision of the agreement, would amount to approximately $2 per day for men on the Stern
& Price job. The meeting ended on the understanding that Turner would discuss the matter
with firm member Otto Anderson, who was then out of town. On the following day, Wertz
telephoned Turner for an answer and Turner informed him that Anderson had not yet returned
to the city.
On Friday, July 13, all of the Anderson & Rowe plumbers left their respective jobs. That
this was not an activity on the part of the men distinct from any union direction, as the
General Counsel contends, is amply demonstrated by the credited and uncontroverted testi-
mony of Oscar C. Holmes, chief engineer and assistant general manager for Peter Sorenson
Company, on whose project, the Menlo-Atherton High School, Anderson was performing
heating and ventilating work. Holmes testified that on July 13, at 1:30 p.m., Wertz "in my
presence told the plumbers and steam fitters on the job to put their tools away and go home";
this group included plumbers from both Anderson & Rowe and from Scott Company, which
was subcontracting the plumbing on the job. Wertz also stated at the time that Anderson &
Rowe and the Scott Company "did not go along with the agreement that they wanted them to
go along with." When one of the workmen asked if this was a strike, Wertz replied that "he
didn't like to call it that, that these two companies just wouldn't go along with them, and that
they were just stopping all work on their projects." The men forthwith left the job. That this
was a union -inspired and -directed work stoppage , is too clear to require any further
discussion.
On or about July 16 or 17, Turner telephoned Wertz and asked why the Union had removed
his plumbers from the job, in view of Turner's commitment to pay all benefits retroactively.
Wertz replied that Anderson & Rowe "would have to put ...[themselves ] in the same
position as the ... master plumbers in the county who had signed up with the local unions."
On July 18 Turner telephoned McDonald and asked him why his plumbers had been removed
from the job in Santa Clara County. McDonald replied that it was "because you have not
signed the thing." In view of the refusal of the unions to accept Turner's agreement to pay
all benefits retroactively, and more particularly in view of the direct evidence presented
above , it is clear and the undersigned finds that the two Plumbers Locals were intent upon
obtaining the signature of Anderson & Rowe to this contract and assent to all of its provi-
sions.
McDonald testified that he had only asked Turner to pay the negotiated wage increase; that
Turner refused ; and that " I told him that unless the increase in wages was paid to those men
that I would have difficulty holding those men on the job." He denied that he had insisted that
Anderson & Rowe sign the contract. Wertz , however, testified that he had a number of
conversations with Turner, both on the telephone and in person. The personal meeting, as
he testified , was in conjunction with McDonald . At this meeting they allegedly asked Turner
to pay the $2.75 wage rate and he refused. They then asked him, according to Wertz, "Why
he did not want to sign it"; Turner allegedly claimed that the contract was illegal because
it had been negotiated with the wrong employer group. Wertz admitted telephoning Turner
on the following day and again on the second day, at which time Turner refused to pay the
increase . He also admitted asking Turner why he did not want to sign, but added, in his
testimony , that he did not care whether the agreement was signed or not and that he was
interested solely in the payment of the wage increase.
The undersigned does not credit this testimony by the union representatives . While it is
obvious that they were interested in payment of the wage increase, it is also clear in this
instance, as in other instances to be set forth , that the union representatives were following
a consistent course of conduct and were unwilling to divorce the wage increase from outright
acceptance of this illegal contract with the bargaining representative of their choice. And,
as will also appear, this specific ground of illegality, the closed shop, was brought to their
attention on other occasions.
THE ASSOCIATED GENERAL CONTRACTORS OF AMERICA, INC. 777
Broadway Plumbing Company is a plumbing contractor in San Francisco which is a mem-
ber of the San Francisco Master Plumbing Association, which in turn belongs to the Northern
California Conference; the latter organization has in the past represented Broadway Plumb-
ing Company in the negotiation of labor agreements. At the time material herein, this
concern, according to one of its partners, Lawrence Nurisso, was a plumbing subcontractor
for two of the respondent general contractors named herein, Herman Christjanson and
Henry Doelger Builders.
According to Nurisso, the proposed contract was brought into the office during his absence,
apparently by Wertz. On the morning of July 17, 1951, Wertz telephoned Nurisso and asked
him, as the latter testified, "if he had seen the proposed agreement and if he had signed
the agreement and I told him that I had not; and that I had no intention of doing so." To this
Wertz replied that "he did not think that plumbers would care to work for us then under
these conditions." On cross-examination, Nurisso insisted that there was no mention by
Wertz in this discussion of the higher wage rate. According to Wertz, he delivered the
agreement to the Broadway shop and thereafter telephoned Nurisso who informed him that
the firm would not agree to the increased wage rate. Here, too, the fact that Wertz delivered
the contract is significant. This was considerably more than an attempt to procure a wage
increase for employees and was of a pattern with the mailing of the agreements to various
subcontractors and the delivery of them to others. The undersigned credits Nurisso's version
of this conversation with Wertz.
The foregoing is buttressed by the circumstances surrounding the departure of the Broad-
way employees from their jobs on July 17. As appears in the credited testimony of Harold
Waters, foreman on the Doelger project and also a member of Local 467, Wertz appeared at
the project at noon on July 17, this being shortly after his conversation with Nurisso, and
informed Waters and 5 or 6 plumbers then working on the project "that the Broadway
plumbing and ... some other shops ... did not go along with the agreement and that we
should go home, because good union men don't work ... that we should take a fishing trip."
On cross-examination Waters gave substantially the same version, namely, that Wertz
"told us that the agreement had not been signed by our shop; that good union men would
not stay on the job, that they would go home, that he was not forcing us off the job ... it
would be a good idea to go fishing ..." The men, including Waters, forthwith left the job.
None of the plumbers who were present and who were named by Waters in his testimony
were called as witnesses herein. Wertz testified that he recalled visiting the men on the job
but did not recall what he had told them. Nevertheless, he denied that he had instructed them
to walk off the job or go on strike. His testimony is not accepted herein and it is further
found that the employees of this plumbing subcontractor, as did the employees of other
concerns, went on strike at the behest of their union representative in support of the contract
demanded by their Union.?
There was testimony by Wertz concerning several other concerns to which this contract
had been submitted; representatives of these firms did not testify herein. Thus, Wertz
informed a representative of the San Francisco Plumbing and Sheet Metal Company on an
undisclosed date prior to August 11 that "I would not dispatch anyone to work for them until
there was an agreement signed...." According to Wertz, he was concerned about the
responsibility of the firm and wished "to have our people protected."
Wertz also presented the contract late in June or early in July to one Nettles of the plumb-
ing firm of Hassdorf & Nettles, and allegedly informed Nettles that he did not expect the
firm to pay some items contained in the agreement until they had been approved by the Wage
Stabilization Board, but that he did expect the firm to pay the wage increase forthwith;
Nettles later refused to do so. Wertz also, early in July, presented the contract to one
Henderson of the plumbing firm of O'Mara & Stewart, and allegedly told him that he did
not expect payment of all benefits forthwith but that he did expect payment of the wage
increase at that time. Significantly, in none of these three instances, with respect to which
the record contains only the testimony of Wertz, did he state that Local 467 was not inter-
ested in the union-security provisions of the contract, and of course the presentation of the
7For a strike need not have a direct strike call A signal understood by the initiated is
sufficient. See Great Atlantic & Pacific Tea Co., 81 NLRB 1502, and Roane Anderson Co., 82
NLRB 696 Nor would it be of avail herein to the General Counsel if the record lacked direct
evidence of a specific instruction to union members to cease work, in view of the statements
made to the various employers of plumbers by the union representatives that the men would
not work. Moreover, as the record demonstrates, the return of the plumbers to this very job
on August 16 took place only after permission was granted by Wertz. See H. M. Newman Co.,
85 NLRB 725, enfd 187 F. 2d 488 (C A 2)
778 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
agreement in its entirety would demonstrate the contrary. The undersigned accordingly
finds that in these instances the two Locals were at the very least attempting to obtain sig-
natures to, or agreement to abide by the provisions of, this agreement, subject to Wertz'
oral explanation in aspects not material herein.
Considerable evidence was presented concernmgtworemaining contractors, J. W. McClena-
han Co., with offices in San Francisco and San Mateo, which was doing business in 1951
under the name of "Macnsons Contracting Engineers," and Bechtel Company; the latter is a
general contractor which employed plumbers directly on certain operations and subcon-
tracted others. Turning first to the McClenahan Co., its owner is one James W. McClenahan,
who played a prominent role in the matters leading up to this proceeding; at this point, the
undersigned will treat solely with the issues as they affected his own firm which belonged to
the Master Plumbers Association of San Francisco, which was, in turn, a member of the
Northern California Conference. The firm had traditionally been represented by the Con-
ference in labor negotiations conducted on the wider geographical basis discussed above.
It was at that time subcontracting a large number of jobs, including work for Respondents
Henry Doelger Builders; Barrett & Hilp; and Carl N. Swenson Co., Inc., all of these projects
apparently in San Mateo County.
During the second or third week of June, McClenahan was visited in his office by Business
Representative McDonald of Local 393 who presented him with 2 copies of the recently
negotiated contract between the 2 Plumbers Locals and the 2 county plumbing associations
which, as found above, contained unlawful union-security provisions. McDonald left the
contract for McClenahan's perusal, stating merely that it was the agreement which had been
negotiated for the 3-county area . On or about July 3, Business Agent Wertz of Local 467
called at McClenahan's office. He, too, presented McClenahan with a copy of the contract,
together with a copy of the form indicating acceptance of the agreement which had been
prepared for the contractors' signatures. Wertz asked McClenahan to sign the form and
referred to some of the differences between this agreement and the recently expired agree-
ment, whereupon McClenahan pointed out that the agreement was unlawful as it provided
for a closed shop. He refused to sign the form acceptance, stating that the Conference was
his bargaining representative and that he could not sign an individual agreement. It may be
noted that McClenahan was at the time on the labor negotiating committee of the Conference,
which had been desirous since the spring of 1951 of negotiating an agreement on a Con-
ference-wide basis with the various plumbers locals, as had been done in previous years.
On July 7 or 8, Wertz telephoned McClenahan and asked if he would sign the agreement.
McClenahan reiterated his position that the Conference was his bargaining agent. On July
13, Wertz again visited McClenahan and demanded to know whether he "was going to go
along with the contract." After McClenahan stated that this was a matter for the Conference,
Wertz replied that he did not "give a damn" about the Conference, that there was a new
contract in the area, and that he expected the plumbing subcontractors to live up to its terms.
Wertz added that McClenahan's "refusal to go along with the Union's demands left them only
one other alternative ... in view of the fact that I would not agree to the terms of the Union's
demands he would be forced to remove the men from the job." McClenahan did not retreat
from his position. On Monday, July 16, some of McClenahan's plumbers failed to report for
work, although a number did work on July 16 and 17 during that workweek. Thereafter, the
number of plumbers reporting for work gradually decreased, with those who did work re-
porting for merely 1 or 2 days, although there was work for them. Five of the plumbers who
customarily worked in the shop did report there on July 16, but refused to work, informing
McClenahan that the Union would fire them if they did.
Wertz testified that he brought the agreement to McClenahan early in July, probably July
3; presented it to him; and was informed by the latter that he could not sign it. Wertz al-
legedly informed McClenahan that he was not asking him to sign it but was asking him solely
to pay the new wage rate. McClenahan allegedly agreed to consider the proposal, but later
refused to pay the wage increase, stating that it was not permitted under the regulations of
the Wage Stabilization Board.
McClenahan was a clear and impressive witness whose recollection was good. Not only did
his testimony comport with that of other credited witnesses relative to their contacts, but
the record elsewhere corroborates McClanahan. Thus, at a later meeting on July 31, to be
discussed below, McClenahan again raised the illegal closed shop. Furthermore, much of
Wertz' testimony lacked clarity and was devoted to generalities. Under all the circumstances,
and in view of the foregoing considerations, the undersigned credits McClenahan herein.
Bechtel Corporation is a member of the Northern Chapter, AGC, and was at the time
material herein engaged in construction as a general contractor at two locations in Santa
Clara County. One of these jobs was defense construction for the Food Machinery Corporation
THE ASSOCIATED GENERAL CONTRACTORS OF AMERICA, INC. 779
in San Jose, on which the piping was subcontracted. The other job was in Santa Clara for the
Fiberglass Company; the plumbing was subcontracted but Bechtel was doing the piping
directly. John O'Connell is vice president and director of industrial relations for Bechtel.
He is also a director and chairman of the labor committee of the Northern Chapter, AGC,
as well as chairman of the industrial pipe committee which negotiated jointly for the two
AGC chapters. Here, too, the discussion will be restricted at this stage of the report pri-
marily to the situation as it confronted O'Connell as a Bechtel official
Shortly after June 22, 1951, the new contract and the accompanying explanatory letter were
received in the mail by O'Connell. Some days later, O'Connell was telephoned by Business
Representative McDonald of Local 393 who informed him, as O'Connell testified, that "he
had sent me a copy of a letter and an agreement , with some new wages in it, and that they
hadn't been put into effect ." O'Connell replied that his firm was represented by the
industrial piping committee and that he was willing to meet with McDonald; that when an
agreement was negotiated it would be put into effect ; and that the proffered agreement had
not been properly negotiated. O'Connell proposed a meeting of, in essence , the same parties
who had negotiated the 1950 contracts.
McDonald replied that the submitted agreement was the agreement in effect in the area
"and we would sign it and pay the wages or we wouldn 't have any men." During this discus-
sion, O 'Connell pointed out "the dosed -shop clause in the agreement which ... was in
violation of the Taft-Hartley Law and told him that we couldn't sign any agreement with
a closed shop of that fashion in it." O'Connell also claimed that other provisions of the
agreement were violative of other laws and regulations.
Not long afterwards the plumbers working an the Santa Clara job , the Fiberglass Company
project, left the job; these included men who worked for Bechtel directly %as well as those
who were employed by the subcontractor, Peters. O'Connell telephoned McDonald on July
19 and questioned him concerning the removal of the plumbers and pipefitters . According
to O'Connell , he informed McDonald that he could not sign the agreement , whereupon
McDonald replied that "be was very sorry but unless we signed it we just wouldn't have
any men." O'Connell again protested that the agreement was illegal inasmuch as it con-
tained a closed shop. McDonald replied that this made no difference and that the "other
contractors around here are signing it. That's the way it is. You will have to sign it or else."
O'Connell demanded that McDonald negotiate with the two AGC chapters and the Conference,
as in the past. and that he return the men to the job. McDonald refused.
On July 30, O'Connell met with McDonald at the office of Food Machinery Company and
certain discussions were held in an effort to settle the work stoppage and to prevent one on
the Food Machinery job; this meeting is discussed in more detail hereinafter. The two men
arrived at a tentative agreement to settle the work stoppage. However this agreement fell
through, and on July 31, in a telephone conversation with O'Connell. McDonald informed
him that "You will either have to sign the agreement and work under the conditions or
we are not going to give you any men." The undersigned accordingly finds that McDonald
insisted upon the signature of this agreement prior to the stoppage and persisted therein
even after said stoppage.a
3. The strike
It is apparent from the foregoing discussion, and the undersigned finds, that Plumbers
Locals 393 and 467 were attempting to quickly obtain the signatures of unwilling plumbing
contractors to this newly negotiated labor agreement. Representatives of the two Locals
visited these contractors, presented them with copies of the agreement and demanded that
they be signed. There were threats that failure to sign would result in the loss of their
plumbers and pipefitters and the threats were quickly followed by the loss of these men
during mid-July of 1951, from July 13 to 17. Accordingly, the undersigned finds that this
was a strike by the employees of the plumbing contractors and that this strike was insti-
gated, authorized, or ratified by the two locals. See H. M. Newman Co., supra. It is further
found that this was a strike to procure signatures to a labor contract which included an
illegal closed shop, that the strike was therefore a strike for an illegal objective, and
that it was therefore not a protected concerted activity. See Mackay Radio and Telegraph
Co., Inc., 96 NLRB 740.
sThe foregoing findings are based upon the credited testimony of O'Connell, who, like
McClenahan, was a clear, impressive, and forthright witness. McDonald's testimony that he
never "insisted" that Bechtel Company sign the contract is not accepted.
780 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Nor would it be of any avail to the General Counsel that one of the objectives of the strike
was the wage increase called for by the contract. The simple answer is that the two Locals,
as found, jointly wanted the contract signed and applied and that a most significant aspect
of the contract was unlawful See N. L. R. B. v. Wine, Liquor & Distillery Workers Union,
Local 1, AFL, 178 F. 2d 584 (C. A. 2), and United Brotherhood of Carpenters and Joiners
of America , et aL, 81 NLRB 802, enfd. 184 F. 2d 60 (C. A. 10).9
At this point , it may be noted that Respondents herein moved that the present case be
cwisolidated with Case No. 20-CB-210 , wherein Plumbers Locals 393 and 467 were named
as respondents in charges filed by the Northern California Conference on July 30, 1951;
this motion was denied by the undersigned on the ground that the General Counsel had re-
fused to issue a complaint in that proceeding , and that said decision was one committed
solely to his discretion. See Section 3 (d) of the Act . That charge alleged, inter alia, that
Plumbers Locals 393 and 467 , commencing on July 10 , 1951 , had (1) refused to bargain
collectively with the Northern California Conference , and (2) demanded by strike and threats
of strike that individual contractors represented by the Conference sign an agreement con-
taining illegal union -security provisions.
A settlement agreement was executed by the two Plumbers Locals and the General Coun-
sel on January 10, 1952, which stated that it did not constitute an admission that the Re-
spondent named therein, Locals 393 and 467, had violated the Act. The settlement agree-
ment provided for the posting of a notice to the members of Locals 393 and 467 by said
Locals ( 1) that they would not threaten strike action, direct employees to strike, or ratify
strike action to require the "Employer " to violate Section 8 (a) (3); (2 ) that they would
not in any other manner cause the "Employer " to discriminate against employees in viola-
tion of Section 8 (a) (3); and (3) that they would on request bargain collectively with the
Northern California Conference.
The charging party therein, the Northern California Conference, refused to consent to the
settlement agreement and as a result it was executed solely by representatives of the
General Counsel and Business Representatives McDonald and Wertz of the two Locals.
Accordingly , on February 27, 1952, the Regional Director notified the Northern California
Conference that he was refusing to issue a complaint in Case No . 20-CB-210 , "pursuant
to the settlement agreement executed by the Respondent Union"; the complaint in the instant
proceeding issued thereafter on April 11 , 1952. This, in essence, is the factual history of
the CB proceeding.
it is further to be noted that , in arriving at the preceding conclusions in the instant case
with respect to the nature and purpose of the strike by Plumbers Locals 393 and 467, the
undersigned has in no way relied upon the history of the CB case or the settlement stipula-
tion. That stipulation related solely to the CB proceeding , the independent merits of which
are not before the undersigned.
C. The shutdown on August 2
1. Contentions
The complaint alleges that from August 2 to 13, 1951, Respondents, associations and
contractors, locked out all employees of the contractors and subcontractors working on the
construction projects of the Respondent Contractors, because said employees or some of
them were members of and active in behalf of the two Building and Construction Trades
Councils, or because of their concerted activities or the concerted activities of other mem-
bers of the Building and Construction Trades Councils. It may be noted that the two Plumbers
Locals did not set up picket lines at the projects from which men were withdrawn, that
there was in fact no picketing, and that all other employees on these projects, whether
working for the general contractors or subcontractors, continued to work after the start
of the strike. Also present herein is the issue relating to certain general contractors who
closed down operations on or about August 2, despite the fact that the Locals had not with-
drawn their men from these projects.
9Significant herein, in the view of the undersigned, is the fact that the so-called union- shop
proviso to Section 8 (a) (3) of the Act was amended in 1947 so as to outlaw union-security
agreements making union membership a condition of employment at any time prior to the 30th
day following the beginning of such employment. The Senate sponsors of this amendment de-
clared that its purpose was to abolish hiring practices prevalent in the "Maritime industry and
to a large extent in the construction industry " S. Rep No. 105, 80th Cong 1st Sess, page 6.
See also 93 Cong. Rec. 3836.
THE ASSOCIATED GENERAL CONTRACTORS OF AMERICA, INC. 781
Respondents' contentions are numerous, including the claims that the general contractors
had found it increasingly difficult, if not impossible, to operate without a key craft, namely,
plumbers; that they found themselves in a financial squeeze; that there was fear of lia-
bility being incurred by the general contractors if there were violations of Wage Stabili-
zation Board regulations and the Taft-Hartley Act by their subcontractors; and that the
general contractors were opposed on principle to continuing projects on which their sub-
contractors were operating illegally.
That there was a temporary shutdown on or about August 2 is clear and unquestioned
and there is no doubt, as the General Counsel contends, that the trigger mechanism which
led directly to the shutdown was a wire of August 1 from each of the Respondent Asso-
ciations save the Northern California Conference to its members which read as follows:
PLUMBERS LOCAL UNIONS NO. 393 AND 467 ARE CONTINUING STRIKE ACTION
AGAINST HEATING, PLUMBING AND INDUSTRIAL PIPE WORK CONTRACTORS IN
SAN MATEO SANTA CLARA AND SAN BENITO COUNTIES IN SUPPORT OF DEMANDS
IN VIOLATION OF WAGE STABILIZATION ORDERS AND TAFT-HARTLEY ACT.
COMPLIANCE WITH THESE ILLEGAL DEMANDS WILL SUBJECT ALL GENERAL
CONTRACTORS AND BUILDERS OPERATING IN THESE COUNTIES TO POSSIBLE
LOSSES AND HEAVY LEGAL PENALTIES„ THE BOARD OF DIRECTORS OF YOUR
ASSOCIATION HAS DETERMINED THAT FOR THEIR OWN PROTECTION ALL ASSO-
CIATION MEMBERS SHOULD SUSPEND ALL OPERATIONS IN SAN MATEO, SANTA
CLARA AND SAN BENITO COUNTIES, EFFECTIVE NOON AUGUST 2, 1951 UNTIL
THESE ILLEGAL CONDITIONS HAVE BEEN ELIMINATED. WE WILL KEEP YOU
ADVISED OF FURTHER DEVELOPMENTS.
Accordingly, the undersigned will at this point set forth the chronological events leading up
to the sending of these wires by the four Respondent Associations. One of the key issues here-
in is the motivation of these four Respondent Associations and their members in deciding to
temporarily close down operations on August 2. This is obviously very much germane to the
8 (a) (3) allegations of the complaint, for, absent a discriminatory motivation . there can be
no finding of an 8 (a) (3) violation under the facts present herein. This is, of course, in-
dependent of the Section 8 (a) (1) allegations which are also treated hereinafter. The under-
signed will set forth and consider the situation as it confronted the various Respondent general
contractors, as well as their trade association advisers. The evidence does not demonstrate
what took place at each project of each Respondent; there is, however, evidence to establish
the picture at a substantial number of projects.
2. Effect of the work stoppage upon the general contractors
In this section the undersigned will set forth the picture as it existed among those general
contractors whose plumbing subcontractors had been struck by the two Plumbers Locals. The
situation on other jobs where the plumbing subcontractors had not been struck will be described
in a later section.
Respondent Stern & Price Construction Company is a general contractor which belongs to
the Peninsula General Contractors and Builders Association Inc. It was actively engaged in
large scale tract contraction at the time material herein, involving several hundred homes in
Santa Clara County Its plumbing was subcontracted by Anderson and Rowe whose plumbers
had struck, as hereinabove found, and had last worked on July 12. The testimony of its account-
ant and office manager, Thomas Johansen, as well as that of partner Alfred J. Stern, which the
undersigned credits in full, amply demonstrates that the loss of plumbers gradually stifled and
rendered impossible the continuation of this firm's assembly line method of operations. It is
clear that plumbers played a vitalpartinthe construction of these as well as all other housing
Involved in this proceeding ; their services were vital to all stages of construction operations,
commencing with the installation of the initial rough plumbing, including sewer and gas lines,
and finally, at the conclusion of the construction operation, in the installation of the final trim
including toilet and kitchen fixtures.
By July 31 Stern & Price had reached the stage where it could not proceed for lack of
plumbing, and It closed down all operations on August 2. The General Counsel apparently con-
tends that Stem & Price , as well as the other general contractors involved , could have worked
around the plumbing and then inserted it ata later date. Firstly, the record demonstrates that
Stern & Price as well as the other general contractors did precisely this to the limited extent
feasible after the walkout of their plumbers. Secondly, the undersigned does not believe that
the Act requires an employer to operate his business in an uneconomic fashion in order to suit
the convenience of his employees or their representatives, even were it feasible to do so. The
782 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
fact is, to take an example, that a bathroom fixture is installed before the tile is laid around
it; under the view of the General Counsel, a general contractor would be required to lay his
tile and then rip up portions of it at a later date in order to install his plumbing fixtures after
the labor difficulties with plumbers were over. The logic of this the undersigned is unable to
accept.
Moreover, this begs the basic premise which is that an employer is not required to continue
to sink his operating capital into a construction project when it is apparent that it may well be
a long time, if ever, before he is able to extricate it. Accordingly, the undersigned finds no
merit to this position of the General Counsel. It is further found that as of July 31 the opera-
tions of this employer were at a stage where it was well-nigh impossible to continue on any
basis, let alone a sound basis, and that, assuming that this employer was able to continue a
portion of its operations on an expensive and impractical basis for a limited time, he was not
in a position to do so because he still was unable to complete the homes without the services of
plumbers.
It may also be noted that, insofar as the record indicates, the various employees affected
by this work stoppage and shutdown were all members of the various labor organizations
affiliated with the two Building Trades Councils. Obviously, it would be in utter disregard of
the practical realities of industrial life to claim, as did the General. Counsel, that these em-
ployers could have attempted to obtain plumbers from other locals of the Plumbers Interna-
tional; this would equally apply of course, although the claim was not expressly advanced by
the General Counsel, to the possibility of introducing nonunion plumbers to the project.
Respondent Peninsula Home Builders is a general contractor which belongs to the Peninsula
General Contractors and Builders Association it, too, temporarily closed down operations on
August 2, 1951. According to the uncontroverted and credited testimony of its secretary-
treasurer , Halyard Nelson, four jobs were under construction in San Mateo County. The plumb-
ing subcontractor on all these was J. W. McClenahan and Co. The undersigned has previously
described how, commencing on July 16, at least some of the plumbers working for the latter
firm went on strike; according to Nelson, all his jobs were affected by this work stoppage.
Thus on 1 project which involved 7 homes, plumbers were needed to install underground
plumbing; although this underground plumbing had already been installed on the other 5,
plumbers were needed at a later date on other stages of the construction. Here too, the under-
signed Is unable to accept the logic of the General Counsel that this contractor should be
required to pour funds into a project which it would be unable to complete; other aspects of
the financial picture including the ramifications and significance of construction financing by
the contractors are treated hereinafter.
.On another project involving 38 homes, 4 required installation of the rough plumbing and
all required plumbers for later stages of plumbing. On a third project involving 34 homes, 18
foundations had been poured and the rough plumbing was in on only 3. On its fourth project
involving 40 homes, 29 were complete, but of the remaining 11, 3 required underground
plumbing and 8 were held up for lack of water and gas pipes.
Nelson testified that his firm endeavored to work around the required plumbing, all at
considerable expense , wherever possible , following the loss of its plumbers . And, of course,
the foregoing factual picture amply demonstrates the problems that confronted this employer
in terms of bogged-down construction Here too, as in the cases that follow, is an example of
the individual respondent general contractor being effectively tied down by the loss of a key
craft, to
Alf Carstens is secretary-treasurer of San Mateo Investment Co., which, although not named
as a respondent , is a member of the Peninsula General Contractors and Builders Association,
Inc., which is a Respondent and to which the General Counsel attributes liability herein. This
firm had 9 homes under construction in San Mateo County on which the plumbing was sub-
contracted to J. W. McClenahan and Company; as a result, it lost its plumbers on July 16 and
ultimately closed down on August 2.
Of the 9 homes, 3 were complete prior to the shutdown of operations by this firm on August
2. On 4, the services of plumbers were required in order to install piping. According to
Carstens, this firm as of August 2 was doing relatively little work, inasmuch as operations
had been tied up by the lack of plumbers. Here too, although it appears that about 2 days of
roofing work could have been performed on 2 of the houses after August 2, the general con-
ii The interrelationship of the various crafts engaged in building construction, with one
craft working with or immediately following another and yet carefully preserving jurisdictional
lines, is too well known to require any discussion on the point.
THE ASSOCIATED GENERAL CONTRACTORS OF AMERICA, INC. 783
tractor was in the same position as the other contractors described above, namely, with
operations suspended and being unable to continue with any degree of certainty that they might
be completed.
Oscar Holmes is chief engineer and assistant general manager of Respondent Peter Sorenson
Company, which belongs to the Northern California Chapter of AGC. It was engaged in con-
struction of a large high school project involving 12 buildings as well as a sewage treatment
plant, both located in San Mateo County; these operations were closed down on August 2.
On the high school project, the plumbing was subcontracted to Scott Company, and the
heating and ventilating was subcontracted to Anderson and Rowe. As heretofore found,
Business Agent Wertz of Plumbers Local 467 effectively removed the members of his
local who were working for these two subcontractors on July 13. Here too, save for one
completed building, the others all required various amounts of plumbing work, in some
cases of a major nature and in others in a lesser degree. This contractor encountered
much operational difficulty after July 13 and became unable to proceed with certain aspects
of the work. The testimony of Holmes demonstrates that it was impractical if not impossible
for this employer to perform many aspects of the work until the plumbing work had first
been done.
On its other project, the plumbing was subcontracted by one A. J. Peters. This contractor
had apparently signed up with the two Plumbers Locals and, accordingly, his phmibers did not
go on strike. The position of this Respondent with respect to its shutdown of this job on
August 2 involves other considerations which are hereinafter discussed. It may also be
noted that a third project involved defense work at a naval air field; it appears that the
plumbers were not affected there and that the job was not closed down by this general
contractor, apparently in consideration of its being a defense project.
As heretofore set forth, John O'Connell is director of industrial relations for Bechtel
Company. This concern, in July 1951, was engaged in a construction project in Santa Clara
County for Fiberglass Company. The plumbers engaged in industrial piping, who worked
directly for Bechtel, struck the job, as did those engaged in industrial plumbing who worked
for the plumbing subcontractor, Peters. According to O'Connell, there was, as of July 31,
no work for the other crafts to perform on the project, progress having been held up by the
loss of the plumbers.
Respondent Henry Doelger Builders is a member of Respondent Associated Home Builders
of San Francisco, Inc. This concern was engaged at the time material herein on a very large
scale construction project involving a large apartment development and 150 single homes
located just outside the city limits of San Francisco in San Mateo County. The plumbing
subcontractor on the apartment development was J. W. McClenahan and Company; the
plumbing subcontractor on the homes was the Broadway Plumbing Company. As heretofore
set forth the plumbers working for these two concerns struck in mid-July; the entire project
was thereafter closed down on August 3. The record demonstrates that after the disappear-
ance of the plumbers the various crafts were shifted about and utilized in areas where plumb-
ing work was not immediately or urgently required.
There is also evidence that both this Respondent and the nonplumbing subcontractors were
running out of work, although there is some evidence to show that two of the crafts engaged
in work on the homes, namely brick and concrete masons, could have continued. Here too,
there is present the same situation that confronted the other general contractors, namely,
their inability to complete the project without the services of plumbers. And here too there
was most impressive evidence of the importance of the completion of various stages of
construction in order for the general contractor to receive progress payments under his
construction loans.
In sum, an almost identical situation confronted all the aforenamed general contractors.
Their operations had been or were in the process of being ground to a halt by the loss of
one of the key crafts. Each was suffering financial losses of different types due to this
condition. It is also clear that to have continued operations wherever possible would have
obligated these general contractors to make further payments to the other subcontractors
engaged therein and that, despite these payments, the respective general contractors in
turn would have been unable to receive payments on their construction loans due to construc-
tion not having arrived at certain prescribed stages.
It was against this background that the various general contractors and their trade associa-
tions as well as the plumbing subcontractors met, obtained the advice of counsel, and evalu-
ated their status The details of these meetings appear below
784 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
3. Activities of the Respondents after the Plumbers' strike
On July 17, a number of the plumbing subcontractors who were members of one of the
associations which belonged to the Northern California Conference met in San Francisco.
This meeting was attended by some members of the AGC Chapters who, it appears, employed
plumbers directly. They proceeded to evaluate the situation in which they found themselves
and they asked Thomas E. Stanton, Jr., to explain the legal position of the members of the
Conference.i^, Stanton informed the assemblage on this occasion that the 2 Plumbers Locals
had the duty to negotiate with the historical bargaining representative and that portions of
the agreement being circulated by these 2 labor organizations were illegal. It was decided
at this meeting to bring the situation to the attention of various general contractors whose
jobs would inevitably be affected by the loss of plumbers.
On the morning of July 20, a meeting was held at the office of Respondent Association,
Peninsula General Contractors and Building Association. This meeting was also attended
by some general contractors who belonged to the two AGC Chapters and to the Associated
Home Builders of San Francisco. The general problem was discussed, including specifically
the difficulty in continuing operations without plumbers and the fact that the plumbing sub-
contractors were being confronted with a demand for an illegal closed shop. That afternoon
Northern California AGC met in San Francisco and Mr. Stanton reported to them on the
illegality of the contract being circulated by the two Plumbers Locals. 12
On July 21, a meeting took place at the offices of the Central Chapter AGC in San Francisco.
It was attended by members of the Northern Chapter AGC, Peninsula General Contractors
and Builders Association, and the Associated Home Builders of San Francisco. Stanton was
present and expressed the view that the proposed plumbing contract was violative of the
regulations of the Wage Stabilization Board and concern was expressed over the possibility
that the general contractors might be held responsible for these violations by their sub-
contractors. Mention was made of the possibility of the general contractors being bound by
these contracts in the event it was found necessary to take over certain portions of their
jobs from plumbing subcontractors.
The 4 Associations decided on this occasion that their members should be brought up to
date on the problem confronting them and, as of that date, a memo was prepared and mailed
to the entire membership of these 4 Associations. The text of the letter appears below and
reflects the contents of the copies sent to the members of the Peninsula General Contractors
and Builders Association located in San Mateo; the text of the others was substantially the
same.
July 21, 1951
IMPORTANT---NOTICE OF SPECIAL MEETING
Plumbers Local Unions Nos. 393 and 467 have taken strike action against the Northern
California Conference of the Plumbing and Heating Industry and plumbing contractors
iiMr. Stanton is associated with Gardiner Johnson and this firm represents all Respondents
herein As will appear, they were consulted for legal advice by various of the affected
employers and associations. It would seem that a not insubstantial portion of their practice
centers in the construction industry on behalf of management.
12 It may at this point be noted that Mr. Stanton, who figured prominently in the legal
advice given to the various Respondents, and who largely represented them herein, did not
testify, although at one stage of the hearing he attempted to On that occasion, co-counsel
Gardiner Johnson appeared at the hearing for the specific purpose of interrogating Stanton
concerning his role in the matters involved herein. The General Counsel and the charging
parties objected to such testimony by Stanton, under oath, on the ground that it would violate
the Canons of Ethics of the American Bar Association After much argument and citation of
authority the undersigned overruled the objection, citing Hotaling v. Hotalutg, 187 Cal. 695;
People v. Hamburg, 24 F. 2d 298; French v. Hall 119 U. S. 152; and 58 American Juris-
prudence 152. The hearing then recessed for the day At a later stage of the hearing, Stanton
announced on the record that inasmuch as his legal ethics had been challenged he had decided
not to take the stand herein and he did not do so; nor did any other counsel attempt to obtain
his testimony.
It is obvious that his testimony could have been quite pertinent on the vital issue of motiva-
tion of the various Respondents and conceivably might have strengthened or weakened the
position of the General Counsel herein. In any event, the findings herein are predicated upon
other testimony as to the advice given by Stanton
THE ASSOCIATED GENERAL CONTRACTORS OF AMERICA, INC. 785
represented by that Conference who operate in Santa Clara, San Mateo and San Benito
counties.
The Local Unions have signed an agreement with the Associated Plumbing Contractors
of Santa Clara, Inc., and Associated Plumbing Contractors of San Mateo County, Inc.,
which provides for a 121 cents per hour wage increase, a 71 cents welfare plan, six
paid holidays and a 10-mile free zone for travel allowance in place of the existing 25-mile
free zone. The cost items of this agreement are far in excess of the ten per cent formula
permitted under Wage Stabilization regulations and will create serious inflationary
pressures upon all members of the construction industry in the Northern California
area. The agreement has other vicious features since it contains provisions which violate
the Taft-Hartley Act and the anti-trust laws.
This illegal agreement was not negotiated through the normal and historically recog-
nized processes of collective bargaining in the plumbing industry. For the past 5 years
the plumbing contractors have been operating under an area agreement between the
Northern California Conference of the Plumbing and Heating Industry and the Northern
California District Council of the United Association. The Conference, as the historically
recognized collective bargaining representative of the plumbing contractors, has notified
Local Unions 393 and 467 that it is ready and willing to negotiate with them an agree-
ment which will be in keeping with the Wage Stabilization requirements and other
applicable statutes, but the Unions have refused to meet with the Conference. They
have demanded that plumbing contractors in Santa Clara, San Mateo and San Benito
Counties abide by the illegal agreement negotiated with the local associations and have
refused to furnish men until their demands have been met.
The strike action and illegal demands of the Plumbers Unions in these counties will
vitally affect every general contractor and home builder operating in the area. Because
of the responsibility which the general contractor and builder customarily assumes
for the operations of his subcontractor, payments by the subcontractor in violation of
Wage Stabilization regulations might involve the general contractor in losses due to the
heavy penalties which can be imposed under these regulations. These penalties include
the disallowance of wage payments in full for income tax purposes whenever any portion
of such payments are in excess of the permissible limits and possible similar dis-
allowances under contracts for Federal work.
Your Board of Directors considers it of vital importance to the entire construction
industry in Northern California that all general contractors and home builders whole-
heartedly support the plumbing contractors in resisting the Unions' demands. Failure
to give such support will involve the entire industry in violations of the Wage Stabiliza-
tion program and . the Taft-Hartley Act and will create intolerable conditions for the
performance of construction work. Penalties assessed administratively for violations
of the Wage Stabilization program take effect months after the operations giving rise
to the penalties have been concluded and ata time when the contractor is not in a position
to protect himself against loss. Performance of plumbing work under a contract which
is violative of the Taft-Hartley Act can involve the entire job in work stoppages and
continual harassment. For these reasons immediate affirmative action should be taken
by all members of the industry to eliminate these uncertainties and illegal conditions.
You are urged to take every available step to support the plumbing contractors in
their resistance to the excessive and illegal demands of the Unions, (sic) Because of
the illegal provisions of the agreement which has been negotiated by the Unions with the
Associated Plumbing Contractors of Santa Clara and San Mateo Counties, such contract
should not be recognized and request by plumbing contractors for reimbursement
for payments based on such contract should be carefully scrutinized. Your plumbing
subcontractor should be cautioned against the illegal nature of these payments. Your
own work should be scheduled in such as (sic) way as not to cover up or otherwise
interfere with plumbing work which has been suspended as the result of strike action
taken by the Unions and you should give careful consideration as to whether your entire
operations can proceed in the face of these intolerable conditions.
If any direct strike action is taken against you or your job, or if you have any question
with regard to this matter, please get in touch with this office at once.
The situation is so grave in view of many jobs shut down throughout Santa Clara and
San Mateo Counties that your President deems it necessary to call a special meeting
to be held at 8 o'clock Tuesday night, July 24, at our Association Building, 1950 El
Camino Real, San Mateo. It is extremely important that you attend.
On the evening of July 24, a meeting was held at the offices of the Peninsula group and
was attended by plumbing subcontractors as well as general contractors affected by the
786 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
problem; these included members of the four associations which had sent out the memorandum.
There is much testimony in the record concerning what took place at this meeting. The
General Counsel stressed the fact that Business Agents Wertz and McDonald of the two
Plumbers Locals appeared at the meeting but were denied admittance , the preponderance
of the evidence demonstrates that the contractors deemed this to be a management meeting
and not a bargaining session which was the fact. The undersigned deems it unnecessary to
dwell upon this aspect of the case for it does not dispose of the issues herein one way or
the other.
Various of the contractors and subcontractors who were present expressed their views on
the strike . There was discussion of the background of negotiations in previous years, as
well as the economic squeeze on the general contractors whose jobs had been struck. Sig-
nificantly , several of those present stressed the fact that the disputed contract provided
for an illegal closed shop.19 It was ultimately decided to appoint a strategy committee of
members of the Peninsula group which was to consult further with counsel concerning
the legal aspects of the situation.
Efforts to dispose of and treat with this crisis took a significant turn in another quarter on
July 30 . It will be recalled that John O 'Connell was director of industrial relations for Bechtel
Company; chairman of the industrial pipe committee ; and chairman of the labor committee for
the Northern Chapter, AGC. As described , the two AGC Chapters and the Northern California
Conference had bargained jointly in 1950 with the Northern California District Council of
Plumbers . At the time material herein, Bechtel was also general contractor on a large con-
struction project for the Food Machinery and Chemical Corporation of San Jose in Santa Clara
County. The plumbing subcontractor was one 0. C . McDonald Company of San Jose , which had
promptly signed the unlawful contract circulated in the area by the 2 Plumbers Locals. This
plumbing subcontractor had 5 contracts with Bechtel for construction on this Food Machinery
project ; of these at least 2 were cost -plus contracts.
At a meeting held late in July between E. V. McDonald of the O . C. McDonald Company and
O'Connell , attended by several others, O'Connell ascertained that the McDonald Company had
signed the new plumbers agreement . O'Connell then expressed the fear that , by allowing the
subcontractor to continue on this project, Bechtel might incur liability for any violations of the
law by this concern . McDonald replied thathe had no choice but to work under those conditions
as the alternative was to be deprived of his men . The situation continued in this fashion until
the morning of July 30 when a meeting was held at the suggestion of a representative of the
Food Machinery Company, it appears that this firm was concerned that their construction
program might be affected . Present was this representative , Beeson, Dan McDonald of Local
393, O'Connell , and one Virtue, a general organizer for the Plumbers International.
O'Connell announced that the plumbing subcontractor had cost-plus contracts on the job;
that Bechtel expected this subcontractor to live up to the provisions thereof; that Bechtel had
advised this subcontractor that it did not recognize the new plumbers agreement ; that Bechtel
wanted the Plumbers Union to negotiate with it; that if the plumbing subcontractor paid in
excess of the established recognized rate he would not be reimbursed by Bechtel ; that the new
plumbers agreement was illegal ; and that Bechtel would not permit any of its subcontractors
to work under an illegal agreement . O'Conmell pointed out that he had authority to negotiate
for all the industrial piping contractors.
At this point O'Connell, McDonald , and Virtue adjourned to another room and, after some
discussion , O'Connell agreed, in behalf of the industrial piping contractors who belonged to the
two AGC Chapters , to pay the new wage rate of $ 2.75 "on the basis that we continue to nego-
tiate the rest of the agreement ." McDonald agreed to return the men to work on the following
morning and then meet to negotiate the balance of the agreement; it was also agreed that
McDonald would contact Business Agent Wertz of Local 467.14
i3Presumably both the General Counsel and Respondents are aware of the numerous unfair
labor practice proceedings before the Board involving the imposition of closed-shop conditions
in the building construction industry.
14 The foregoing findings are based upon the credited testimony of O'Connell who has been
credited here as elsewhere . McDonald testified that he agreed on this occasion to meet with
O'Connell and the contractors for discussion purposes but not to negotiate an agreement.
Virtue, as a rebuttal witness for the General Counsel, did not recall all that took place; he
testified that the 2 parties agreed to meet but that he, Virtue , stated that they would not meet
to negotiate an agreement inasmuch as the 2 Plumbers Locals already had one O'Connell's
testimony has been credited here as elsewhere; moreover , it is corroborated by events on
July 31 and by certain telegrams sent on August 1 which appear below
THE ASSOCIATED GENERAL CONTRACTORS OF AMERICA, INC. 787
It may be noted that the foregoing serves further to rebut the contention of the General
Counsel that the two Plumbers Locals were not adamant in desiring to obtain signatures to
their closed-shop contract; for although there was testimony that the two Plumbers Locals
were interested solely in obtaining the new wage rate of $2.75, they still presented the fore-
going testimony to the effect that even after O'Connell agreed to pay the $2.75 rate McDonald
and Virtue insisted that they had a contract in effect and would negotiate no other.
That afternoon a luncheon meeting was held in San Francisco which was attended by the
boards of directors of the two AGC Chapters. Also present were Stanton and various other
contractors as well as J. W. McClenahan of J. W. McClenahan Company, and Robert Diedrich,
executive secretary of the Northern California Conference; Diedrich is the only full-time
paid employee of the Conference and is not in a policy making capacity. McClenahan, who
arrived late at the meeting, explained to the assemblage the history of the dispute ; that the
contract being circulated by the Plumbers Locals was illegal , according to legal advice; and
that the plumbing subcontractors were being compelled to yield to these illegal demands. He
stated that the Conference was seeking help from the two AGC chapters. A motion was passed
that the two AGC chapters would assist the conference in its predicament , although it also
appears that McClenahan did not ask for a shutdown of operations.
At this point, McClenahan was called out of the meeting in order to receive a telephone call
from O'Connell. The latter reported the results of his meeting that morning with McDonald
and Virtue; that it had been agreed to return the men to work at the rate of $2.75; and that
the negotiating committee would meet to negotiate the balance of the contract . McClenahan
reported this conversation to the group and the meeting, it appears , ended on this temporarily
happy note.
McClenahan accordingly directed the men to report to work on the following morning,
July 31, at the $2.75 wage rate; he also notified other contractors of the strike settlement. i+
McClenahan then telephoned Business Representative McDonald and asked him to assemble
the negotiating committee pursuant to the advice he had received from O'Connell . He informed
McDonald that other contractors had been notified of the settlement and that other jobs were
resuming work. McDonald replied that he would very shortly appear at McClenahan's office
and that Wertz would accompany him. At 10:30 that morning, the two business agents appeared
at McClenahan's office. He promptly brought up the subject of the negotiations and Wertz
stated that he, Wertz, had not made any "deal" of the type McClenahan described. McClenahan
reminded McDonald of the latter's agreement with O'Connell; Wertz again spoke up, stating
that he had not been a party to this arrangement and that he would not negotiate with the
Northern California Conference. McClenahan asked McDonald to explain the situation and
the latter replied that it "could have been but Bob [Wertz] didn't want to go along with it."
McClenahan immediately placed a telephone call to O'Connell, who was in Los Angeles,
and asked McDonald to speak with O'Connell. According to McClenahan, McDonald admitted
to O'Connell over the telephone that McClenahan had "placed men back to work and other
shops had placed men back to work, but Wertz wouldn't go along with the arrangement." As
heretofore found, McDonald informed O'Connell in this telephone conversation that he and
Wertz were in this arrangement together; that they would not negotiate with the employer
groups; and that "You will either have to sign the agreement and work under the conditions
or we are not going to get any men."
Wertz then noticed that plumbers were working in the shop and was advised by McClenahan
that they had returned to work pursuant to the understanding between O'Connell and McDonald.
Wertz then stated that "There has been no agreement reached with me and those men have to
come off the job." A long discussion of the contract provisions ensued. Among other things,
McClenahan pointed out that it contained a closed shop, that it was illegal, and that the contract
was therefore objectionable. McDonald replied, "Maybe it is and maybe it isn't." The meeting
ended with Wertz announcing that he intended to remove the men. On the following day,
August 1, the men reported for work but walked off their respective jobs at different times
during the day.' On the same day, July 31, the strategy committee of the Peninsula group
held a meeting and recommended that all members of the industry be notified that the contract
being circulated by the two Plumbers Locals was illegal, and that the general contractors
might be assessed with liability thereunder.
is Inasmuch as McClenahan's plumbers had struck, it must be presumed that they contacted
their business agent, Wertz, or the latter's associate, prior to returning to work.
i6 The foregoing findings are based upon the credited testimony of McClenahan and, in part,
on that of O'Connell As elsewhere, McClenahan's testimony was clear and impressive
McDonald did not recall any meeting with Wertz and McClenahan in the latter's office on
this occasion. Wertz recalled a portion of the incident and partly corroborated McClenahan's
version; his recollection of the meeting was obviously not complete.
788 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
On August 1, telegrams of a somewhat parallel nature were exchanged , apparently by
coincidence. President Sweeney of the Northern California Conference wired Plumbers
Local 467 that "confirming the verbal agreement reached" the negotiating committee of the
Northern California Conference would meet with the negotiating committee of the two Locals
in San Francisco on August 2 for the purpose of negotiating an agreement ; a confirmation was
requested. That afternoon a wire was sent by Business Representative McDonald of Local 393
to O'Connell stating that "as per our verbal agreement" representatives of the 2 Locals
would meet with representatives of employers whose work was affected in the 2 counties
"to discuss their problems," on August 2 in San Mateo. O'Connell and McClenahan jointly
replied on August 2 to McDonald's wire as follows:
RE YOUR TELEGRAM TO JOHN O'CONNELL OF AUGUST 1, 1951, YOUR LOCALS
STRIKE ACTION AGAINST OUR MEMBERS AND FLAGRANT DISREGARD FOR YOUR
PREVIOUS COMMITTMENTS CONCERNING NEGOTIATIONS WITH NORTHERN
CALIFORNIA CONFERENCE OF PLUMBING AND HEATING INDUSTRY AND INDUS-
TRIAL PIPEWORK CONTRACTORS HAS FORCED A GENERAL SUSPENSION OF CON-
STRUCTION OPERATIONS IN SAN MATEO, SANTA CLARA AND SAN BENITO COUNTIES
PENDING ELIMINATION OF ILLEGAL CONDITIONS WHICH LOCALS 467 AND 393 ARE
ATTEMPTING TO FORCE ON THE ENTIRE CONSTRUCTION INDUSTRY AND THE
CONSUMING PUBLIC. THE CONFERENCE AND THE INDUSTRIAL PIPEWORKCONTRAC-
TORS ARE PREPARED TO MEET WITH REPRESENTATIVES OF LOCALS 467 AND 393
AT ANY TIME AT THE OFFICE OF THE FEDERAL CONCILIATOR TO NEGOTIATE A
LEGAL AGREEMENT WITH THOSE LOCALS. MEANWHILE LOCALS 467 AND 393
WILL BE HELD RESPONSIBLE FOR ALL DAMAGES RESULTING FROM THEIR STRIKE
ACTION AND ILLEGAL DEMANDS.
It is found at this point that, as set forth above, O'Connell and McDonald actually did compose
their differences on July 30 in the manner testified to by O'Connell. In view of the circum-
stances set forth above, and on the entire record, the undersigned believes that Wertz refused
to go along with this settlement arrangement and that, as a result, McDonald was constrained
to follow Wertz' position.
Thus, on August 1, negotiations had broken down and the two Plumbers Locals were adamant
in their demand that the plumbing subcontractors and contractors employing plumbers sign
their unlawful contract. On that dace, the office of Gardiner Johnson, Respondents' counsel
herein, advised the secretaries of the four general contractors associations, which are
Respondents herein, that, in order to protect themselves, they should follow a certain course
of conduct. All adopted this advice which was to send the following wire on August 1 to all
members of the 4 associations, namely, the 2 AGC chapters, the Associated Home Builders
of San Francisco, and the Peninsula Builders Group:
PLUMBERS LOCAL UNIONS NO. 393 AND 467 ARE CONTINUING STRIKE ACTION
AGAINST HEATING; PLUMBING AND INDUSTRIAL PIPE WORK CONTRACTORS IN
SAN MATEO SANTA CLARA AND SAN BENITO COUNTIES IN SUPPORT OF DEMANDS
IN VIOLATION OF WAGE STABILIZATION ORDERS AND TAFT-HARTLEY ACT. COM-
PLIANCE WITH THESE ILLEGAL DEMANDS WILL SUBJECT ALL GENERAL CON-
TRACTORS AND BUILDERS OPERATING IN THESE COUNTIES TO POSSIBLE LOSSES
AND HEAVY LEGAL PENALTIES. THE BOARD OF DIRECTORS OF YOUR ASSOCIATION
HAS DETERMINED THAT FOR THEIR OWN PROTECTION ALL ASSOCIATION MEMBERS
SHOULD SUSPEND ALL OPERATIONS IN SAN MATEO, SANTA CLARA AND SAN BENITO
COUNTIES, EFFECTIVE NOON AUGUST 2, 1951 UNTIL THESE ILLEGAL CONDITIONS
HAVE BEEN ELIMINATED. WE WILL KEEP YOU ADVISED OF FURTHER DEVELOP-
MENTS
As set forth , a number of the general contractors closed down operations and a great many
did not. The shutdowns took place onAugust2 and 3 . Efforts were made to mediate the dispute
by a Federal conciliator and three meetings were held , apparently on August 6, 7, and 9. It
is deemed unnecessary to go into all the details of these meetings which, as will appear, ended
on a note of uncertainty.
One significant point is that McClenahan at the meeting of August 6 protested that the
plumbers' contract had an illegal closed shop . At this point , and for the first time, Wertz
produced an amendment to the contract , which was dated August 1. This replaced the unlawful
union-security language with other language which is carefully worded and is apparently not
THE ASSOCIATED GENERAL CONTRACTORS OF AMERICA, INC. 789
in conflict with the union-security requirements of the Act. The General Counsel sought to
show that this change was negotiated on or about August 1, the date it bears. It must be borne
in mind, however, that as of the afternoon of July 31, when McClenahan protested to McDonald
and Wertz concerning the illegal closed-shop provisions, the amendment had not been made;
it is reasonable to infer that Wertz or McDonald would have spoken up on that occasion had
such an amendment been under contemplation.
The testimony by the various witnesses for the General Counsel concerning this amendment
was of a uniformly unimpressive nature. McDonald testified that the amendment was signed
on August 1 or earlier; he did not recall whether all the contractors received copies of this
modification. He later testified that the modification was not mailed to the various contractors.
Wertz testified that the modification was made before August 1, but that it might have been
done thereafter. He claimed that he delivered the modification to the various subcontractors
shortly after August 1; elsewhere his testimony indicates that such personal delivery was not
made. Significantly, the minutes of his Local for August 1, 1951, carry the notation "By
motion negotiating committee was instructed to change union security clause in agreement."
Wertz admitted that this was probably the first action by his union with respect to this modi-
fication. Similarly Albert Randall, executive secretary of the San Mateo Plumbing Contractors
group, testified that the change was made after Wertz had brought it to his attention by a
telephone call and that a meeting was then held of the four groups interested in and signatory
to the original agreement.
In view of the foregoing, the undersigned does not believe that the modification to the
agreement was made on August 1. It is further believed that the change was made several
days later and was dated back to August 1. But in any event, and this the undersigned deems
to be controlling herein, at no time prior to the conciliation meetings commencing on August 6
were the general contractors or the trade associations, or for that matter any of the Respond-
ents, advised by the two Plumbers Locals or by anyone else that the closed-shop or other
unlawful provisions of the contract had been abandoned. It is expressly found that on August 1,
when the decision to close down operations was made by the Respondent Associations, and
then, to some extent, carried out, the various Respondents had no knowledge that the contract
demands in support of which the two Plumbers Locals had struck had in any way been modified
or that any modification was contemplated. It is further found that no attempts were made to
advise the various Respondents in this matter.
While the Northern California Conference and AGC representatives again urged, at these
conciliation meetings, that the union representatives negotiate an agreement with them, the
latter refused to do so. The record does not permit an exact resolution of the facts surrounding
settlement of the work stoppage. However, it does show that the conference members sent
the two Locals letters that they would comply with the agreement reached between the union
negotiation committee and the Northern California Conference, apparently somewhat of a
euphemism, on August 9, to pay the new wage rate retroactively to July 2, 1951, and that no
other fringe benefits would be paid until approved by the Wage Stabilization Board. The jobs
then reopened and all crafts returned to work.
D. Contentions, analysis, and conclusions
(1) Turning first to the Section 8 (a) (1) allegation of the complaint, it is basic that if the
charging parties are to achieve protection under the Act they can derive such protection
solely from a protected concerted activity within the meaning of Section 7 of the Act. This
presents squarely the fact that the concerted activity by the two Plumbers Locals was for a
closed shop, an objective which the Board has expressly found to be illegal. Mackay Radio &
Telegraph Co., 96 NLRB 740. In fact, the Board found in that proceeding that a strike which
was only in part prosecuted for such an objective was unprotected, even though the employer
in that case had failed to assert the illegality as a basis for denying reinstatement to strikers.
The Board characterized those activities as acts which neither the employer nor the Board
could condone because they were acts "which in themselves constituted from their inception
a violation of the very Federal law under which relief was being sought." See also N. L. R B.
v. Indiana Desk Co., 149 F. 2d 987 (C. A. 7), and Medford Building & Construction Trades
Council, 96 NLRB 165.17
Moreover, the concerted activity by the two Plumbers Locals was for another unlawful
objective in that the contract provided that "All plumbing, heating and piping foremen and
17 There is no issue of condonation in the present case, inasmuch as the illegal conduct was
raised by the Respondents, prior to the shutdown, in their meetings with representatives of
the Unions as well as in their charge in the CB case.
790 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
general foremen shall be members of the UNION having jurisdiction." See American News-
paper Publishers Association v N. L. R. B., 193 F 2d 782 (C. A. 7), and Graphic Arts League,
87 NLRB 1215. Hence, the undersigned finds that the concerted activity by the two Plumbers
Locals was an unlawful one and that members of these Locals, insofar as they may have lost
employment because of the shutdowns, derive no protection from the Act. This poses the
issue , stressed in its brief by the San Mateo Building Trades Council, of whether the lockout
was unlawful insofar as it related to crafts other than plumbers.
Still restricting the discussion at this point to the alleged Section 8 (a) (1) violation, the
undersigned is at a loss to see just how these other crafts derive protection herein from
Section 7. The only strike or concerted activity in the picture was the unlawful one by the
plumbers. There were no picket Imes, and the other crafts continued to work, there being
in fact no labor difficulty of any nature involving them. Considerable thought has been given
to the problem, but the undersigned is unable to ascertain just how working men who are
working at their customary positions free from any labor dispute of any nature involving
their own positions and also taking no position with respect to any other dispute, are engaged
in a concerted activity.
The General Counsel has contended that a great many men who had no connection with the
illegal activities of the plumbers were thrown out of work. But, as will appear in more detail
in the discussion of the alleged Section 8 (a) (3) violation, a chain of events was set in action
by this unlawful activity of the plumbers and therefore the responsibility, factual if not legal,
would appear to rest squarely onthelattergroup rather than Respondents. These other crafts,
insofar as the record demonstrates, were all unionized and the workmen on these jobs were
members of the respective labor organizations affiliated with the two Building Trades
Councils. They had bargained peacefully with the various Respondents and, as the General
Counsel points out, there was no labor difficulty involving them. But on the other hand, it
is this very fact which establishes that they were not engaged in a concerted activity at the
time material herein; nor were they engaged in organizational or union activity of any
other nature.
There is also this further factor, namely, to what extent did the unlawful activity of the
plumbers permeate the legal status of the other crafts. Stated otherwise, it would appear
that if the other crafts are to derive protection from Section 8 (a) (1) of the Act they can
derive such protection only from the concerted activities of the plumbers. And as those
activities were unlawful, it would appear that there is simply no protection to be found under
these circumstances. Accordingly, the undersigned finds that the various Respondents have
not engaged in conduct violative of Section 8 (a) (1) of the Act and that, if a remedy does
exist, this can be solely under Section 8 (a) (3). This is treated with hereinafter.
(2) There are various matters to be considered under the Section 8 (a) (3) allegation of
the complaint. Here, too, the undersigned is of the belief and finds that the General Counsel,
on a preponderance of the evidence, cannot prevail either on factual or legal grounds. Much
has been made by the General Counsel of the fact that the other crafts affiliated with the
two Building Trades Councils were entirely divorced from this dispute. And such was the
fact. The record demonstrates that these other crafts were thoroughly organized and it is
clear that they and the Respondents had enjoyed amicable relationships for many years,
largely unmarked by any labor strife.
If the General Counsel is to prevail, it must be found that the activities of these Respond-
ents were reasonably intended to discourage membership in the respective labor organizations,
or, at the very least, that they would reasonably tend to have that effect. Under the facts
present herein , the undersigned is of the belief that the conduct by the various Respondents
could reasonably have had no effect on membership in the various labor organizations or on
the union activities of their members. The plumbers' dispute with the various contractors
in fact took the other crafts largely by surprise and that labor dispute was entirely divorced
from any issues relating to the union membership or activity of the other crafts See
N. L. R. B. v Webb Construction Co , 196 F 2d 702 (C. A. 8), and N. L, R. B. v J. L Case
Co , 198 F 2d 919 (C. A. 8) Moreover, even assuming that this conduct by Respondents tended
to discourage union activities , it follows necessarily that it tended to discourage only unlawful
activities like those carried on by the two Plumbers Locals, as a result there could be no
violation of the Act by Respondents, under this posture
(3) Considering at this point the factual picture involving the Section 8 (a) (3) allegation,
the undersigned is likewise of the belief that, on a preponderance of the credible evidence,
the issue must be resolved adversely to the General Counsel. As stated by the Board,
"Nothing in the Act ... requires that an employer continue to operate his plant despite
the prospect of recurrent work stoppages which would make further operations uneconomic ...
THE ASSOCIATED GENERAL CONTRACTORS OF AMERICA, INC. 791
And an employer may lawfully discontinue or reduce his operations for any reason whatso-
ever ... provided only that the employer's action is not motivated by purpose to interfere
with and defeat its employees' union activities. The record reveals an employer who has
recognized and made contracts with the Union since 1942...." International Shoe Co.,
93 NLRB 907. The foregoing makes it clear that motivation is very much the crux of the
Section 8 (a) (3) allegation herein. In order to prevail, the General Counsel must establish
on a preponderance of the evidence that the Respondents herein were motivated by a purpose
to discourage the union activity of the employees who belonged to these various labor or-
ganizations. The record will not support such a conclusion.
(4) The General Counsel's case is predicated on the existence of an overall conspiracy
with discriminatory motivation . But, in addition to the illegal union activities of the plumbers
and the total lack of any union activities by the other crafts at the time material herein,
there is the added item that many of the purported conspirators simply did not close down
operations . Thus , testimony was presented concerning four firms named as Respondents
herein, which is detailed below. As will appear, it is difficult to ascertain just how they in
any manner violated the Act. Moreover, if some of the purported conspirators are innocent
of wrongdoing, this detracts substantially, if not conclusively, from the inference with
respect to motivation which the General Counsel would have the undersigned draw with
respect to the others.
Carrico & Gautier is a general contractor which in August 1951 was engaged in two
construction projects. The plumbing on these jobs was subcontracted and had been completed
prior to July. Although this firm apparently received the wire of August 1, it did not close
down operations on August 2 or at any later date.
George C. Renz Construction Company is a general contractor which at the time material
herein was engaged in construction of a school and laundry. Although this firm received
the wire of August 1, uncontroverted evidence shows that construction on the school was
temporarily shut down for unrelated reasons. Plumbers were not working on the school at
the time and, due to the failure to receive lumber for framing operations, school construction
was closed down until August 24. The employees of this concern were, however, transferred
to other operations.
Allan McIntyre & Son is a general contractor which, at the time material herein, had two
private residences under construction. On one, construction was at a halt on August 2 because
the contractor was waiting for the painting subcontractor to appear and perform his job. On
the other, the tilesetters worked for one-half day after receipt of the wire until they com-
pleted their job. This house, too, was then ready for the same painting subcontractor to
appear and commence painting. Construction was not terminated or suspended on either job.
Conway & Culligan is a general contractor which at the time material herein was building
1 gasoline service station for its own use and 1 dwelling for an employee. It had shortly
before completed a large housing development. Its plumbing was subcontracted by the San
Francisco Plumbing Company, whose operations had been affected by the strike. Work on the
service station was substantially tied up on August 1 due to a dispute with the plumbing
subcontractor concerning improperly installed piping; the general contractor desired that
certain piping be rearranged by the plumbing subcontractor. On the dwelling, at the end of
July, the general contractor was waiting for plumbers to install the plumbing trim. This
firm laid off its employees on receipt of the August 1 wire, but it is apparent that it was
about to close down operations at that time in any event due to the plumbers, strike
In view of the foregoing, the undersigned finds that these four cases are sui generis and of
a different pattern than the other cases. It is further found that these four Respondents did
not close down operations for the reason alleged by the complaint.
(5) Turning to the situation that confronted those projects where the plumbers were on
strike, it is obvious that Respondent Northern California Conference was placed in the position
where its members, the plumbing subcontractors, were unable to complete their jobs. And
had these plumbing subcontractors signed the agreement demanded by the two Plumbers
Locals they would have violated the Act. Moreover, the plumbers' representatives refused to
negotiate with the Conference for another agreement of a legal nature. That these matters
were brought to the attention of the general contractors and their four trade associations
appears to have been a most logical step under the circumstances. As stated, the inter-
relationship of all the crafts engaged on construction is apparent and these jobs could not
have been completed without performance of the plumbing work. Moreover, as found, the
realities of industrial life rendered it impossible for this plumbing work to be performed
by anyone other than members of these two Plumbers Locals.
291555 0 - 54 - 51
7 92 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
This then poses the problem that confronted the general contractors and their trade as -
sociations . Although not required to continue their operations in an uneconomical if not
impossible situation, they chose to do so. Nevertheless, the record demonstrates that these
construction operations in almost every case were gradually brought to a halt at the end of
July or at least to the point where they could not proceed further with any degree of prac-
ticality. These contractors were also in the position of having to make regular payments to
their subcontractors for services as rendered. But at the same time they were unable to
obtain payments on their construction financing; the record demonstrates that these pay-
ments are made only when certain prescribed stages of construction or completion of
construction are reached . Clearly , construction cannot be completed before all the plumbing
is in and in these instances it was not.
The Board has stated that an employer is not required to continue operations if strike
action has made efficient operations impossible. Betts Cadillac Olds, Inc., 96 NLRB 268.
In the latter case it was stated that the employer has "the right to protect himself by rea-
sonable measures from harmful economic or operative consequences of a strike." Such was
precisely the case here. See also Henry I. Siegel Co., 52 NLRB 810; Duluth Bottling As-
sociation, 48 NLRB 1335; American Creosoting Co., 46 NLRB 240; Hobbs Wall & Co.,
30 NLRB 1027; and Link Belt Co., 26 NLRB 227. Against this background of their operations
being ground to a halt, the trade associations to which these contractors belonged advised
their members that the plumbers' strike was violative of the Act as well as Wage Stabilization
Board regulations. The fear was expressed that to permit these conditions to prevail on
their jobs might render the general contractors subject to legal penalties. They then adopted
the advice of their trade associations to close down until the illegal aspects of the strike
were removed.
This preponderates, in the view of the undersigned, in favor of a finding that this group
of Respondents closed down operations not because of antiunion considerations, but rather to
avoid business disruption, to avoid tying up further money in bogged down construction
projects, and to avoid legal penalties arising from the existence of illegal contracts on
these projects. in so finding, weight must be given to the amicable relationship that existed
between these various Respondents and all the labor organizations throughout the years.
In fact, Respondents were desirous of continuing this relationship with all the unions involved.
The undersigned so finds. See United Mine Workers (Consolidation Coal Co.), 100 NLRB 392.
(6) There remains the problem relating to those construction jobs where the plumbers had
not gone on strike and the plumbing subcontractors had signed or accepted the illegal Plumbers,
contract. Here, too, a number of varying factors were present in the picture as it affected
the respective general contractors. Some of these will be set forth below.
The record demonstrates that the general contractors in the area were advised that the
plumbing subcontractors who had signed the Plumbers, contract were operating under a
contract which was violative of the Act and also violative of Wage Stabilization Board reg-
ulations. This advice was clearly correct on at least two grounds insofar as it related to the
Act. A probe into Wage Stabilization Board regulations at this point, as they affect various
aspects of the contract, in order to evaluate the advice given the general contractors and
their trade associations by their counsel, would in great measure lengthen an already long
report. Suffice it to say that the question is a close one, it appearing that some aspects
of the contract were not violative of control regulations and that other aspects thereof may
well have been. For example, the contract required that travel time be paid for travel beyond
a 10-mile zone, whereas under the former agreement payments commenced beyond the
25-mile zone. This is particularly significant inasmuch as the wage increase provided for
in the contract exhausted the amount which could be paid under general wage regulation 6.
The point is that the issue was definitely a close one and this serves to demonstrate that the
legal advice given by counsel for Respondents was justified and entirely reasonable under the
circumstances.
Nor need one dwell on the liability under the law of agency and contracts of the general
contractor for unlawful conditions created by his subcontractor. It is noteworthy, however,
that on construction to which the Government is a contracting party, under the Davis-Bacon
Act, the general contractor is in several instances responsible for the misfeasance or
nonfeasance of the subcontractor. See 49 Stat. 1011, as amended 54 Stat. 399. A similar
situation exists with respect to violations of the 8-hour law applicable to all public con-
struction. See 27 Stat. 340, as amended 37 Stat. 726; 37 Stat, 137, as amended 54 Stat. 884,
37 Stat. 1192.
There is in the picture the attitude of Bechtel Company which, as a matter of policy,
would traditionally not permit any subcontractor in its employ to operate under an illegal
THE ASSOCIATED GENERAL CONTRACTORS OF AMERICA, INC. 193
agreement. It accordingly refused to permit such conditions to continue on its Food Machinery
job, which it closed down on August 3. In fact, all Bechtel contracts contained a clause
that the subcontractor was to comply with all Federal laws and particularly those "relating
to wages, hours, and working conditions...." Moreover, some of the Bechtel contracts with
this subcontractor were cost-plus contracts, which meant that additional cost factors would
be created for Bechtel by the creation of these new working conditions.
A similar situation confronted Sorenson Co. on a sewage job which they were constructing
for a local sanitary district. The plumbing subcontractor on this project had signed the
unlawful Plumbers, agreement. Moreover, the contract between Sorenson and the sanitary
district provided that subcontractors were not recognized as such and that their employees
would be considered employees of the general contractor . Significantly , it was further
provided that the general contractor was to indemnify the sanitary district for all claims
arising out of law violations by his employees.
There were a number of situations where, as in the prior cases , the general contractors
were uniformly advised in bulletins from their respective trades associations, dated July
21, that the operations of the plumbing subcontractors were illegal. This was also stated at
a meeting of general contractors held on July 24 at the office of the Peninsula group and was
restated in the August 1 wire.
The situation then confronting these general contractors was as follows: Their testimony
was that they had received legal advice of penalties they would incur if their plumbing sub-
contractors were permitted to continue to operate under their admittedly illegal contracts.
Some of the general contractors were in sympathy with the principles of the Act and others
favored support of the Wage Stabilization program. As stated. the advice received by them
concerning stabilization policy was given on a close question; on this record, the undersigned
believes and finds that it was given in good faith.
The general contractors decided in good faith, pursuant to the recommendations of the
August 1 wire from their trade associations, to suspend all operations pending the elimination
of illegal conditions and this they did. Under these circumstances, having determined to
halt illegal conditions on their plumbing work, it would appear to have been a most logical
step to close all operations until matters cleared up. Significantly , operations were resumed
after the conciliation meetings held from August 6 to 9 at which it was first learned that the
unlawful closed-shop conditions had been removed. And, although the General Counsel contends
that these shutdowns were carried out in an effort to compel the two locals to bargain with
the traditional bargaining representatives, the Northern Conference and the two AGC Chapters.
it is to be noted that work was resumed without any such agreement on the part of the two
locals , despite the fact that a somewhat ambiguous letter was submitted to the locals by
various plumbing subcontractors.
At this point, it may be noted that the undersigned is uncertain just how the General Counsel
purposes to assess liability on seven individual Respondents, Bridges Construction Co.,
Copple Construction Co., Kalshed & Co., Norman A. Lamb, Oscar W. Meyer, Neilson &
Neilson, and J. C. Row, who belonged to the nonrespondent Associated General Contractors
of Santa Clara County. The record does not show with any degree of clarity what led these
firms to close operations. There was hearsay evidence that they were closed, but there was
no direct evidence concerning the plumbing situation on those jobs or the status of construction.
A similar situation exists with respect to still others of the individually named Respondents.
In, any event, on all the foregoing considerations, the effect of the strike on struck jobs
where plumbing subcontractors had not signed, the fact that some of the Respondents did not
close down at all , and the genuine fear of legal liability by those general contractors whose
plumbing subcontractors were operating under the illegal contract , with the entire situation
permeated by the unlawful Plumbers, strike, the undersigned concludes that the General
Counsel has failed to sustain the burden of proof that all of the Respondents shut down
operatiois because their employees were members of or active in behalf of the various
building trades councils or because of their concerted activities.
The preponderance of the credible evidence will not support a finding of discriminatory
motivation herein. In fact this record warrants the finding that the various Respondents
exercised sound business judgment in closing down as they did. See N. L. R. B. v. Potlatch
Forests, Inc., 189 F. 2d 82 (C. A. 9). The crux of this proceeding is that under the economic
considerations present in the picture the various Respondents were warranted in taking the
action they did and that this was done with the absence of the discriminatory motivation
which is so vital to the case of the General Counsel.
794 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
In this respect it may be noted that the complaint refers solely to concerted and union
activities on the part of the employees involved herein. However, the only concerted activity
in the picture, as stated, was illegal and there is no evidence of any union activities on the
part of the other affected crafts. However, on the assumption that the complaint does state
a pertinent cause of action, the absence of discriminatory motivation and the existence of
legitimate economic considerations, for closing down operations, are on a preponderance of
the evidence dispositive of the issue. International Shoe Co., supra and Betts Cadillac Olds,
Inc., supra. It is accordingly recommended that the complaint be dismissed in its entirety.
Upon the basis of the foregoing findings of fact, and upon the entire record in the case, the
undersigned makes the following:
CONCLUSIONS OF LAW
1. The operations of all Respondents affect commerce within the meaning of Section 2 (6)
and (7) of the Act.
2. Building and Construction Trades Council of San Mateo County ; Building and Construction
Trades Council of Santa Clara and San Benito Counties; and Local Unions 393 and 467,
United Association of Journeymen and Apprentices of the Plumbing and Pipe Fitting Industry
of the United States and Canada, are labor organizations within the meaning of Section 2 (5)
of the Act.
3. Respondents have not engaged in unfair labor practices within the meaning of Section
8 (a) (1) and (3) of the Act.
[Recommendations omitted from publication.)
APPENDIX A
O. E. Anderson Glendale Village, Inc. Neilsen & Neilsen
Arthur Brothers Gould Construction Company Wm. J. Nicholson Co.
Guy F. Atkinson Company Max Hensen & Son Charles Pedersen
Barrett & Hilp Harris & Fjeldheim, Inc. Peninsula Home Builders
Batton & Company Hedahl-Martin Co. Wm. Radtke & Son
Bechtel Corporation Lew Jones Construction Co. Morrison Reese
David D. Bohannon Organization W. R. Kalshed &Co. George C. Renz Construction Co.
Bridges Construction Co. Jorman A. Lamb J. C. Row
California Construction Co. M & K Corporation Peter Sorensen
Carrico & Gautier Robert McCarthy Co. E. B. Standish & Co.
Herman Christjanson Allen McIntire & Son Stern & Price Const. Co.
Conway & Culligan McKenzie & Crawford Stoneson Bros.
Copple Construction Co. A. W. McKinney Carl N. Swenson Co., Inc.
Frank G. Corker A. F. Mattock & Co. M. J. Terranova
Richard DeLucchi & Co. Oscar W. Meyer Howard J. White, Inc.
Henry Doelger Builders Moore & Roberts, Inc. Williams & Burrows, Inc.
F. & O. Corp.
VACUUM COOLING COMPANY and BOXMAKERS UNION
LOCAL NO.. 2721, UNITED BROTHERHOOD OF CARPEN-
TERS AND JOINERS OF AMERICA, AFL, and INTER-
NATIONAL BROTHERHOOD OF TEAMSTERS, CHAUF-
FEURS, WAREHOUSEMEN AND HELPERS OF AMERICA,
LOCAL UNION NO. 898, AFL, Petitioner
VACUUM COOLING COMPANY and UNITED FRESH FRUIT
AND VEGETABLE WORKERS, LOCAL INDUSTRIAL UNION
NO. 78, C. I. 0., Petitioner . Cases Nos. 21-RC-2939 and 21-
RC-2969. June 26, 1953
105 NLRB No. 121.