The Carpenter Steel Co.

National Labor Relations Board - Board Decisions

Mar 16, 1948

76 N.L.R.B. 670 (N.L.R.B. 1948)

In the Matter of THE CARPENTER STEEL COMPANY and UNITED
STEELWORKERS Or AMERICA, CIO
Case No. 4-C-1579.-Decided March 16, 1948
Mr. John H. Garver, for the Board.
Stryker, Tams cC Horner, by Messrs. R. Paul Mitchell and Solon L.
Rhode, of Newark, N. J., for the respondent.
Mr. Andrew Kondrath, of Reading, Pa., for the CIO.
Mr. F. J. Corrigan, of Kutztown, Pa., for the Employees' Represen-
tation Committee.
DECISION
AND
ORDER
On March 28, 1947, Trial Examiner Arthur Leff issued his Inter-
mediate Report in the above-entitled proceeding, finding that the
respondent, The Carpenter Steel Company, had engaged in and was
engaging in certain unfair labor practices 1 and recommending that
it cease and desist therefrom and take certain affirmative action, as
set forth in the copy of the Intermediate Report attached hereto.
Thereafter, the respondent filed exceptions to the Intermediate Report
and a supporting brief.
The Board has reviewed the rulings of the Trial Examiner 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 findings, conclusions, and recommendations of the Trial
Examiner, with the ]modifications and additions noted below:
In finding that the respondent's conduct, detailed in the Intermedi-
ate Report, was violative of Section 8 (2) of the Act, we do not rely 2
upon the Trial Examiner's finding that although the letters issued
and the speeches made by the respondent to the employees could not
themselves be viewed as unfair labor practices, "they were relevant
Those provisions of Section 8 (1) and (2) of the National Labor Relations Act, which
the Trial Esamcner herein found were violated , aye continued in Section 8 (a) (1) and
8 (a) (2) of the Act as amended by the Labor Management Relations Act, 1947.
8 See Section 8 (c) of the Act, as amended
76 N. L. B. B., No. 104.
670
i THE CARPENTER STEEL COMPANY 671
and may be considered, as they have been here, in evaluating the Re-
spondent's motivation and conduct in sponsoring, assisting, and sup-
porting the [Employees Representation Committee]."
T LIE REMEDY
Section 10 (c) of the original National Labor Relations Act directed
the Board to order employers found to have engaged in conduct vio-
lative of the Act to cease and desist from their illegal conduct. It
also gave the Board power to order employers to take affirmative action
to remedy the unfair labor practices committed, a power limited only
by the requirement that the remedy effectuate the policies of the Act.
For 11 years, before the 1947 amendments were incorporated in the
Act by the Labor Management Relations Act, the Board found that
one particular type of affirmative action would most effectively remedy
the consequences of an employer's illegal control of an unaffiliated
labor organization, and make possible a free choice of representatives
by the employees affected. That was the complete disestablishment
of the subservient organization as a bargaining representative.3 The
Board invariably issued a disestablishment order, directing the em-
ployer to withhold all recognition in perpetuo, once it found a viola-
tion of Section 8 (2) of the Act with respect to an unaffiliated organi-
zation.4 A disestablished union could never be certified by the Board.
Such orders were approved by the courts as a valid exercise of the
Board's remedial powers under Section 10 (c).'
1 The Board did not, however, apply the full disestablishment remedy
to employer-controlled or assisted labor organizations which were
affiliated with anational or international federation. In such cases,
the employer's conduct was complained against only as a violation of
Section 8 (1) of the Act rather than of Section 8 (2). If a violation
was found, the Board, in addition to directing the cessation of the
illegal interference, merely ordered that recognition be withheld from
the employer-controlled or assisted organization until it was certified
by the Board. No certification would, of course, issue until the effects
of the employer's illegal control or assistance had been dissipated,
but thereafter it could issue to the same organization. This differ-
3 See Matter of Pennsylvania Greyhound Lines, Inc., 1 N L. R. B. 1, enforced 303 U. S.
261
1 In 1947, however, 'die Board indicated that it would not exercise its full power to of der
disestablishment in all .as involving unaffiliated labor organizations which have been
the beneficiary of employer infair labor practices, but would withhold that remedy where
the passage of time and othi: circumstances denionstiated that a less stringent order
would suffice to remove the effe(ta of the unfair labor practices that occurred See the
opinion of Chairman Herzog in Matter it Detroit Edison Company, 74 N L R B 267
° See, for example , N L. R B. v Pennsylvania Greyhound Lines, Inc., 303 U. S. 261 ;
N. L R B V. Newport News Shtipbusldsng it Drj, Dock Co., 308 U. S. 241.
672 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
ence in treatment, as between affiliated and non-affiliated organiza-
tions, was based upon the Board's belief that a labor organization
affiliated with a national or international federation that was outside
the ambit of the employer's control could not be permanently and
completely subjugated to the will of the employer. It was thought
that complete disestablishment was therefore not required to remedy
the effects of employer interference or to restore the employees' free-
dom of self-organization 6
That Congress disagreed with the distinction drawn by the Board
became apparent when the Labor Management Relations Act of 1947
was passed. In re-enacting Section 10 (c) of the National Labor Re-
lations Act, Congress qualified the Board's authority to direct affirma-
tive action by adding a proviso which required that, in deciding cases
involving unfair labor practices under Section 8 (a) (1) or 8 (a) (2),
the Board should apply the "same regulations and rules of decision
irrespective of whether or not the labor organization affected is
affiliated with a labor organization national or international in scope."
This proviso constitutes, in effect, Congressional rejection of the
Board's prior view that mere affiliation with a national federation
places a labor organization in such a different position from an or-
ganization not so affiliated as to warrant the use of different remedies
when eiuployel-assistance or_control_has been found. There is no
evidence, however, that the proviso was in en ed to abolish the dis-
establishment remedy itself; the target was discrimination in its use.
Both the statutory language and the debates concerning the amend-
ment 8 make it wholly clear that Congress added this proviso to Sec-
tion 10 (c) in order to put an end to the disparity of treatment the
Board had previously applied as between affiliated and unaffiliated
organizations. The Board may no longer concern itself with the af-
filiation of a labor organization, or the lack thereof, in framing a rem-
edy for violations of Section 8 (a) (1) and 8 (a) (2). So plain a man-
date must be carried out without reservation or purpose of evasion,
no matter how great the practical difficulties. Upon similar facts,
e For the Board 's of iginal rationale , see the testimony of the Chairman before the Senate
Committee on Labor and Public welfare on 'March 6, 1947 , and Hearings before Senate
Committee on Labor and Public welfare on S 55 and S. J. Res. 22, 80th Cong, 1st Sec.,
p 1912 (1947)
' Section 9 ( c) (2) governs the impact of this proviso upon the Board 's conduct of rep-
resentation proceedings In determining whether or not a 3uestion of representation
affecting commerce exists , the same regulations and rules of dension shall apply irrespective
of the identity of the persons filing the petition or the hnd of relief sought and in no
case shall the Board deny a labor organization a place.ni the ballot by reason of an order
with respect to such labor organization or its prek fessor not issued in conformity with
Section 10 (c)."
8 See 93 Cong Rec 4150 ( April 25, 1947), _4121 ( April 29 , 1947 ), 4411 ( April 30 , 1947),
5145 ( May 12, 1947 ). See also Sen Rgr No 105 , 80th Cong., 1st Sess, 3 , 12 (1947).
THE CARPENTER STEEL COMPANY 673
the Board will hereafter apply the same remedy to both affiliated and
unaffiliated labor organizations. Similarity of facts must be the test.
Henceforth the Board's policy will be as follows :
In all cases in which we find that an employer has dominated, or
interfered with, or contributed support to a labor organization, or has
committed any of these proscribed acts, we will find such conduct a
violation of Section 8 (a) (2) of the Act, as amended in 1947, re-
gardless of whether the organization involved is affiliated. Where we
find that an employer's unfair labor practices have been so extensive
as to constitute domination of the organization, we shall order its dis-
establishment, whether or not it be affiliated.' The Board believes
that disestablishment is still necessary as a remedy, in order effec-
tively to remove the consequences of an employer's unfair labor prac-
tices and to make possible a free choice of representatives, in those
cases, perhaps few in number, in which an employer's control of any
labor organization has extended to the point of actual domination.
But when the Board finds that an employer's unfair labor practices
were limited to interference and support and never reached the point
of domination, we shall only order that recognition be withheld until
certification, again without regard to whether or not the organization
-happens to be affiliated. Subsequent representation proceedings in
such situations will be governed, of course, by the provisions of Section
0 (c) (2).
In the instant case we have made a finding, based upon the fact re-
cited fully in the Intermediate Report 10 and therefore not repeated
here, that the respondent's unfair labor practices exceeded the bounds
of interference and support, and constituted domination of the Em-
ployees' Representation Committee, as well. Therefore, in accordance
with our policy, modified to conform with the 1947 proviso to Section
10 (c), we shall order the respondent to withdraw all recognition from
the Employees' Representation Committee as the representative of
any of its employees for the purpose of dealing with it concerning
grievances, labor disputes, wages, rates of pay, hours of employment,
or other conditions of employment, and completely to disestablish the
Employees' Representation Committee as such representative.
With respect to our further findings of interference, restraint, and
coereion, they are, as pointed out by the Trial Examiner, based en-
tirely ox, the respondent's conduct in dominating and interfering with
the administration of the Employees' Representation Committee and
in contributing financial and other support to it. Accordingly, and
for the reasons stated by the Trial Examiner, we shall not issue the
° Identical standards must also be applied to affiliated and unaffiliated local unions in
those situations in which, following disestablishment , a new labor organization appears
on the scene , and a question arises as to whether it is the "successor " of the old.
10 The Intermediate Re, ort is attached hereto.
674 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
usual broad cease and desist order used where other unfair labor prac-
tices, not directly related to the unfair labor practices found, are
reasonably to be apprehended. We shall, however, order that the
respondent cease and desist from engaging in the conduct found un-
lawful herein and from engaging in like or related conduct by other-
wise interfering with the representation of its employees through a
labor organization of their own choosing.
ORDER
Upon the entire record in the case, and pursuant to Section 10 (c)
of the National Labor Relations Act, as amended, the National Labor
Relations Board hereby orders that the respondent, The Carpenter
Steel Company, Reading, Pennsylvania, and its officers, agents, suc-
cessors, and assigns shall :
1. Cease and desist from :
(a) Dominating or interfering with the administration of Employ-
ees' Representation Committee, or the formation or administration of
any other labor organization, and from contributing support to the
Employees' Representation Committee, or to any other labor organiza-
tion, and from otherwise interfering with the representation of its em-
ployees through a labor organization of their own choosing;
(b) Recognizing Employees' Representation Committee, or any
successor thereto, as the representative of any of its employees for the
purposes of dealing with the respondent concerning grievances, labor
`disputes, wages, rates of pay, hours of employment, or other condi-
tions of employment.
2. Take the following affirmative action, which the Board finds will
effectuate the policies of the Act, as amended :
(a) Withdraw all recognition from Employees' Representation
Committee as the representative of any of its employees for the pur-
pose of dealing with the respondent concerning grievances, labor dis-
putes, wages, rates of pay, hours of employment or other conditions
of employment, and completely disestablish said organization as such
representative;
(b) Post at its plant in Reading, Pennsylvania, copies of the notice
attached to the Intermediate Report herein marked "Appendix A."
Copies of said notice, to be furnished by the Regional Director for the
Fourth Region, shall, after being duly signed by the respondent's rep-
"This notice, however, shall be, and it hereby is, amended by striking from the first
paragraph thereof the words "Recommendations of a Tural Examiner " and substituting in
lieu thereof the words "A Decision and Order ." In the event that this Order is enforced
by a decree of a Circuit Court of Appeals, there shall be inser.ed before the words "A
Decision and Order," the words "A Decree of The United States Circuit Court of Appeals
Enforcing."
THE CARPENTER STEEL COMPANY 675
resentative, be posted by the respondent immediately upon receipt
thereof, and maintained by it for sixty (60) consecutive days there-
after, in conspicuous places, including all places where notices to em-
ployees are customarily posted. Reasonable steps shall be taken by
the respondent to insure that said notices are not altered, defaced, or
covered by any other material ;
(c) Notify the Regional Director for the Fourth Region in writ-
ing, within ten (10) days from the date of this Order, what steps the
respondent has taken to comply herewith.
INTERMEDIATE REPORT
Mr John H Gai i.er, for the Board.
Stryker, Tams d h order, by Messi s. R. Panel Mitchell and Salon L. Rhode,
of Newark, N J, for the respondent
llr. Andrew Kondrath, of Reading, Pa., for the CIO.
Mr. F. J. Corrigan, of Kutztown, Pa, for Employees' Representation Committee.
STA'IEMIiNT OF THL CASH,
Upon a charge duly filed by United Steelworkers of America, C10, herein
called the CIO, the National Labor Relations Board, herein called the Board, by
its Regional Director for the Fourth Region (Philadelphia, Pennsylvania), issued
its complaint, dated November 8, 1946, against The Carpenter Steel Company,
Reading, Pennsylvania, herein called the respondent, alleging that the respondent
had engaged in and was engaging in unfair labor practices within the meaning
of Section 8 (1) and (2) and Section 2 (6) and (7) of the National Labor
Relations Act, 49 Stat 449, herein called the Act Copies of the complaint to-
gether with the notice of hearing thereon were duly served upon the respondent.
and the CIO as well as upon Employees' Representation Committee, herein
called the ERC.
With respect to the unfair labor practices, the complaint alleged in substance
that the respondent in 1933 initiated, formed, and sponsored, and at all times
since has assisted, dominated, contributed to the support of, and interfered with,
the administration of the ERC. The complaint further alleged in substance
that the respondent since about July 5, 1935, has inteifered with, restrained,
and coerced its employees in the exercise of their rights under Section 7 of the.
Act by (a) urging its employees to refrain from joining or supporting the CIO;
(b) disparaging and expressing disapproval of the CIO; (c) initiating, sponsor-
ing, and assisting the D, RC as bargaining agent; (d) dominating, restraining, in-
terfering with, and participating in employee meetings and concerted activities
for the purposes of self-organization or the improvement of working conditions ;
(e) urging its employees to support the ERC ; and (f) recognizing and dealing with
the ERC as exclusive bargaining agent in order to discourage its employees from
bargaining collectively through representatives of their own choosing.
In its verified answer, the respondent admitted the jurisdictional allegations
of the complaint but denied the commission of any unfair labor practices.
Pursuant to notice, a hearing was held at Reading, Pennsylvania, from
December 10 to 12, 1946, before the undersigned, Arthur Leff, the Trial Examiner-
duly designated by the Chief Trial Examiner. The Board and the respondent
were represented by counsel, the CIO and the ERG by representatives. Full
opportunity to be heard, to examine and cross-examine witnesses, and to intro
7 819 0 2-4 8-vol 76-L4
676 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
duce evidence bearing on the issues was afforded all parties . Near the close of
the hearing the undersigned granted a motion made by counsel for the Board to
conform all pleadings to the proof with respect to minor variances such as the
.spelling of names and dates, but not as to any substantive matter. Oral argu-
ment, in which counsel for the Board and the respondent and the representative
of the ERC participated , was had before the undersigned at the close of the
hearing. After the close of the hearing , counsel for the respondent filed a brief
with the undersigned.
Upon the entire record in the case and from his observation of the witnesses,
the undersigned makes the following :
FINDINGS OF FACT
1. THE BUSINESS OF THE RESPONDENT
The Carpenter Steel Company is a New Jersey corporation, having its prin-
cipal office and place of business at Reading, Pennsylvania, where it is engaged
in the manufacture, sale, and distribution of tool steels, stainless steels, and
special alloy steels. The respondent in the course and conduct of its business
causes raw materials used in. its manufacturing processes, valued in excess of
$1,000,000 annually, to be purchased, delivered, and transported in interstate
commerce from and through States of the United States other than the Common-
wealth of Pennsylvania to its Reading plant, and causes products manufactured,
sold, and distributed by it as a part of its business, valued in excess of $5,000,000
annually, to be supplied, delivered, and transported in interstate commerce to
and through States of the United States other than the Commonwealth of Penn-
sylvania from its Reading plant.
U. THE ORGANIZATIONS INVOLVED
United Steelworkers of America, affiliated with the Congress of Industrial
Organizations, is a labor organization admitting to membership employees of
the respondent.
Employees' Representation Committee is an unaffiliated labor organization par-
ticipated in by employees of the respondent's Reading plant.
III. THE UNFAIR LABOR PRACTICES
A. Introduction; the Employees' Representation Plan; its structure and origin
Prior to 1933 the respondent, so far as the record discloses, had no dealings
with any collective bargaining representative for the employees at its Reading
plant' In the summer of 1933, soon after the enactment of the National Indus-
trial Recovery Act,' there was installed at the respondent's Reading plant an
Employees' Representation Plan, and it was pursuant to that plan that the
ERC was created. The Plan itself was published in the form of a printed
booklet, the cover design of which was such as to indicate its issuance by the
respondent. The record discloses, and it is found, that 2000 copies of this
1 At its Reading plant, the respondent employs approximately 1,800 production and
maintenance employees and 400 administrative employees The respondent also operates a
plant at Kenilworth, New Jersey, where the production and maintenance employees have
been represented by the CIO since 1941 The Kenilworth plant is not involved in this
proceeding.
2 The National Industrial Recovery Act (U S C Title 15, Sec 701) went into effect on
June 16. 1933. Section 7 (a) thereof secured to employees the right to self-organization
and to collective bargaining through representatives of their own choosing.
THE CARPENTER STEEL COMPANY 677
booklet were printed in July 1933, and that the printing costs were billed to
and paid by the respondent 8
In structure, the Plan as published was in substantial respect typical of the
joint conference schemes which, as the Board's experience with many similar
situations has demonstrated, were widely sponsored by employers during the
period immediately following the enactment of the National Industrial Recovery
Act. The Plan called for a joint general committee, composed in equal numbers
of employee-elected and management-appointed representatives. This committee
was to meet once a month. It also provided for two sub-committees, also com-
posed of an equal number of employee and management representatives: a Com-
mittee on Production and Working Conditions, which was to consider questions
pertaining to wages, hours, and general working conditions, and a Committee on
Safety, Sanitation, Health, and General Service, which was to consider subjects
of the general character described by its title. Under the Plan the employee
representatives were to be nominated and elected annually by secret elections
conducted by the employees themselves "with only such assistance from manage-
ment as may be required." The employees were to be divided for voting pur-
poses into a number of divisions or units, each of which was entitled to one
representative . All employees with 60 days' employment service, solely by
virtue of such employment, were automatically entitled to participate in the
nomination and election of representatives in their respective units. Not all
employees, however, were eligible to serve as elected representatives. Eligibility
was restricted to non-supervisory employees, more than 21 years of age, who were
American citizens and who had been continuously in the respondent's employ for
more than a year prior to nomination. Although elected a representative, an
employee's status as such was subject to automatic termination upon the severance
of his employment or upon his transfer from one voting unit to another or to
a supervisory position All minutes of committee meetings were required to be
submitted to the respondent's vice president for approval before being typed,
distributed, and posted on the bulletin boards Elected representatives were to be
paid by the respondent for time necessarily lost through attendance at regular
or special meetings or conferences jointly approved, at rates commensurate
with their average earnings.
In addition, the Plan set out a detailed procedure for the adjustment of
grievances. A grievance was first to be submitted by an employee through his
This finding is based upon a stipulation in the record "that if a representative of
the Miller Printing Company were called as a witness he would testify that the records
of big company indicate that under date of July 1, 1933, The Carpenter Steel Company was
billed for $47 00 for 2,000 copies of the Employees' Representation Plan booklet, and
that such bill was paid ." In its brief, the respondent argues that this does not constitute
"evidence that the Company paid such bill," and that "it is entirely possible that the
printing concern would automatically bill the Company when it had no prior dealings with
the ERC and could have no information about it except that it was connected in some way
with The Carpenter Steel Company." This argument is neither justified by the record nor
in keeping with the clear intent and spirit of the stipulation The respondent made no
claim at the hearing that it did not pay this bill, nor, indeed, does it assert such a claim in
its brief. What is more, the record shows that the stipulation was accompanied by the
following colloquy :
Mr GAitvea (Board's counsel). I take it you are entering into that stipulation
as a result of having checked your own company files, is that right?
Mr MITCHELL (respondent's counsel) That is correct.
Obviously, had the respondent's records not disclosed its payment of the bill, a check
of the respondent's records would not have afforded a basis for the stipulation that the
bill was paid The only reasonable inference to be drawn from all the circumstances
is that the bill was paid by the party to whom it was directed.
678 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
foreman to the superintendent. If no adjustment was reached the employee
could then submit it to his unit representative Upon failure of the latter to
make a satisfactory adjustment, first with the employees' superintendent and
then with the Supervisor of Labor Service, it could be referred to the full Com-
mittee. And if the Committee failed to arrive at a basis for adjustment, it
could be appealed in successive stages to the vice president in charge of produc-
tion, to the Management Manufacturing Committee, to the president of the
Company, and, ultimately, to the State Department of Labor and Industry or
to the Secretary of Labor of the United States.
Except for the election of reps esentatives and the submission of grievances to,
them, the employees themselves were to have no participation in the operation
of the Plan. There was no provision for meetings of employees. Nor was there
any for employee dues. The Plan contemplated that the elected representatives
were to look to the employer rather than to the employees for remuneration for
their services. Under the provisions of the Plan, amendments thereto could be-
effected only upon a two-thirds vote of the Joint Committee.
Uncontradicted evidence in the record reflects, and it is found, that the em-
ployees generally were afforded no opportunity either prior or subsequent to
the installation of the Plan to pass, by vote or otherwise, on the question of, its
acceptance, rejection or alteration ; or to determine whether they desired a com-
mittee form of representation. Warren Medlar, now chairman of the ERC and
a member of that committee almost continuously since 1934, testified, and it is
found, that the only election held in 1933 was for committee representatives;
that "we [the employees] were notified in some way that we had a right to vote
for a representative to represent us in our union", and that ballot boxes were
brought around to the various departments during working hours so that em-
ployees might cast ballots for union representatives Douglas Beggs, now the
respondent's director of personnel but employed in a non-supervisory capacity
in 1933, testified that he had heard nothing about the Plan until one of his fellow
employees brought a ballot box to his station of work and asked him to vote
for a representative. Medlar and Beggs were the only witnesses employed
in a non-supervisory capacity in 1933 who were called upon to testify. Except to
the extent noted, neither was able to cast any light on the origin of the Plan.
The testimony of two other witnesses, J. Heber Parker and Francis Conway,
both of whom were employed in a managerial capacity when the Plan was
instituted, is, however, partially illuminating on that subject.
Parker, now the respondent's president, was in 1933 one of its vice-presidents
and then as now a member of its Board of Directors. Although the specific job
of handling labor relations was assigned in 1933 to Vice-President E. J. Poole, Sr,
since deceased, Parker was then a member • of the respondent's -top ' ranking
Management Committee.' Parker admitted upon cross-examination that at the
time of the first election he knew "in a general way" that a representative arrange-
ment was to be created. The subject had first come to his attention, he testified,
at a meeting of either the Board of Directors or the Manufacturing Committee.
I imagine [Parker testified further] it came up in connection with the-
general matter of instituting some type of collective bargaining relations
with employees and getting to know them better as a group and possibly to-
keep in step with the general evolution of these matters which had to do with
collective bargaining as it was then known.
4 The function of this committee , as its name implies , was to manage the plant . It was=
composed of the two vice presidents with the president an ex -officio member.
THE CARPENTER STEEL COMPANY 679
Parker, although conceding that questions such as the establishment of collective
bargaining relations with the employees were of sufficient importance to have come
to his attention as a member of the Manufacturing Committee, stated that he had
no recollection as to whether the employees had requested or indicated a desire
for collective representation before the Plan was put in effect. Beyond what has
been set out above, Parker disclaimed any knowledge as to how the Plan'
originated or what was said at the meeting referred to in his testimony.
Francis Conway, since retired on a pension from the respondent, was in 1933
superintendent of the wire mill department employing 500 persons and a member
of the staff of E. J. Poole, Sr , the then vice president in charge of plant operations.
Conway testified that some time prior to the election, Poole told him in substance
that:
The men had to be-well like an organization-to be so they could be heard
and their rights and so forth, but then there would have to be representatives
from each department because you can't talk to three or four hundred men,
but you can talk to representatives that they would pick, maybe 2 or 3 or 4,
and talk to them. Then they would in turn carry it back to the men.'
Significantly, the respondent and the ERC made no attempt to explain the
origin of the Plan, and refrained throughout the hearing from calling or ques-
tioning witnesses on this aspect of the case And, while not affirming, none of the
respondent's managerial employees who testified eApressly denied that the re-
spondent was responsible for the creation of the Plan. Nor did the respondent
or ERC come forward with any evidence tending in any way to indicate that em-
ployees, apart from participating in the first election of representatives, played
any part in the installation of the Plan and the formation of the ERC.
It is conceivable, of course, as the respondent argues in its brief, that the idea
of instituting a committee form of representation may first have been suggested
by some employees Although the absence of any evidence to that effect may
suggest otherwise, that is a possibility which on the state of this record may not
be rejected altogether But the record is sufficiently clear that the respondent,
if it did not initiate, at least actively participated in promoting and assisting in
the installation of the Plan and the formation of the ERC thereunder. Thus the
testimony of Parker and Conway clearly reflects that the respondent's top man-
agement officials considered and approved the installation of the Plan before it
was announced to employees generally. The very form and structure of the
Plan, with its detailed and specific provisions, among others, for joint committees,
meetings, submission of minutes to management and gi ievance procedure, sup-
ply convincing internal evidence that the Plan must have been dratted after
consultation with the respondent and with its participation. Added proof of the
respondent's sponsorship and support of the ERC in its formative stage is pro-
vided by the respondent's acquiescence in the use of its time and property for the
first election of representatives as well as in its publication of the printed
booklets of the Plan.
Considered cumulatively, these facts are persuasive, and especially so when
evaluated in context with the respondent's relationship to and support of the
ERC following its formation, as will be described below. At the very least they
6 That, substantially, was the extent of Conway's testimony touching on the origin of
the Plan. Conway professed an inability to remember, and, other than indicated, could not
nr would not supply any additional details. Although called by the Board, Conway proved
to be a hostile witness who by his demeanor and over -all testimony made it evident that
he was suppressing facts within his knowledge.
680 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
made it incumbent upon the respondent to come forward with proof to rebut the
only reasonable inference flowing therefrom. This the respondent has not
done. If in fact the Plan had been promoted by employees alone and without par-
ticipation of the respondent, it is unreasonable to believe that some such proof
would not have been forthcoming. The record evidence is reasonably susceptible
of but one conclusion : that the respondent actively sponsored, gave support and
encouragement to, and assisted and participated in the establishment of the
Plan and the formation of the ERC thereunder. It is so found.
B. The operation of the ERC since the enactment of the Act
1. In general
Ever since its original formation in 1933 and except for a period of approxi-
mately 5 months following the filing of a CIO representation petition in 1944
(of which, more later), the ERC has continued to function and to be recognized
by the respondent as the exclusive bargaining agency for the respondent's
employees. Although the original Plan has never been formally revised, certain
modifications have been made in practice over the course of years Thus since
at least 1934 no employee representatives have been selected to serve on the
general committee. Since the passage of the Act, this committee, known as the
ERC, has been composed solely of employee representatives However, the two
sub-committees, for which the Plan also provides, continued to function as joint
committees with an equal number of employer and employee representatives until
about 1940, when they were abolished. There have also been some minor modifi-
cations made with respect to other procedures set out in the original Plan, notably
the procedural steps followed in the processing of grievances But, save for the
elimination of the joint committees, the ERC in basic respects continues to
function and to be organized under the 1933 Plan.
The Plan is still regarded as constituting the organic body of law governing
the administration of the ERC. To this day the printed provisions of the Plan
are admittedly regarded by the ERC as representing its "by-laws " The ERC
has no other constitution or rules defining its organization or governing its
internal or external operations. Newly elected employee representatives are
furnished with copies of the printed booklet of the Plan at the first ERC meeting
which they attend And when procedural questions arise at ERC meetings,
reference is made to this booklet to determine the controlling principle. The
respondent, too, the record reflects, looks upon the Plan as the basic and binding
instrument defining the government of the ERC. Although the respondent at
times has accepted decisions of the ERC affecting the operation of the Plan,
made without prior consultation with it,6 it has not hesitated, when it has deemed
it of sufficient importance, to inject as a condition to continued dealing with the
ERC the requirement that the ERC comply strictly with the provisions of the
Plan relating to the internal administration of the ERC. This is borne out by
the Wayne Palm incident, narrated below
As already noted, the Plan provides that an elected ERC representative loses
his status, as such, not only upon severance of his employment, but upon his
transfer from one voting unit to another. About a year prior to the Wayne Palm
incident, the ERC voted at one of its meetings to amend this provision so as to
6 Thus about 2 years ago, the ERC voted to eliminate the office workers ' voting unit.
Although the respondent was not consulted in advance concerning this change , it raised
no objection.
THE CARPENTER STEEL COMPANY 681
vest in the ERC discretion to determine in each case whether a transferred
representative should nevertheless retain his status on the committee for the
balance of his term. This amendment was not reduced to writing and it is not
clear from the record whether it came to the respondent's notice; if it did, the-
respondent raised no objection to it at the time.?
In January 1946, at the eve of a general strike called by the CIO in the steel,
industry, a special ERC meeting was called by management for the purpose of
submitting to the ERC a proposal for a general wage increase. Shortly prior
to the meeting, Wayne Palm, an elected representative, had been transferred to,
a new job outside the voting unit for which he was the representative.' When the
meeting convened at the usual meeting place on the respondent's premises, Palm
was among those present. At the time appointed for the meeting, Personnel
Director Beggs telephoned ERC Chairman Medlar to inquire whether all the-
committeemen had assembled and were ready to meet with management 's repre-
sentatives . Medlar advised Beggs that all committeemen had arrived , "even Mr.
Palm." Shortly thereafter Medlar received another telephone call , this time
from Paul Greenawald , the respondent 's vice president , general superintendent„
and principal officer in charge of labor relations In response to Greenawald's
inquiry as to whether Palm was still present at the meeting, Medlar replied that
he was. Greenawald advised Medlar, as appears from the latter's undisputed
testimony, "that he [Greenawald] didn't feel as though he should confront the
Committee with any business whatsoever with a stranger sitting in with members
of the Committee." Greenawald then told Medlar that it was his "place to ask
Wayne to leave." In reply Medlar promised that he would do what he could do
about it and call Greenawald back later. There followed further discussion
among the committeemen, a vote was taken on the question of whether Palm
should be permitted to continue as a committeeman, and it was determined to-
exclude him When Greenawald was advised that Palm had left the meeting,
he agreed to meet with the Committee forthwith At the next regular meeting
of the ERC, it was voted to revoke the amendment concerning transferred
committeemen which had been passed the preceding year.
2. The conduct of ERC elections
Since the formation of the ERC, primary and final elections for ERC repre-
sentatives have been held annually in the month of June.° In the early years of
the ERC, the elections were conducted by representatives carrying ballot boxes-
to the employees at their stations of work during working hours. In more recent
years, the elections have been held in the basement of the dispensary located,
on company property. The elections are arranged to fall on pay day. Although
it is the respondent's usual practice to issue pay checks in the departments where
'This vote was taken after one of the representatives , Joseph Smith , had been trans-
ferred out of his unit In the case of Smith, however , the ERC determined to hold a new
election in his unit after employees in his department had objected to his continuance as-
a committeeman , and Smith was not permitted to finish his term.
8 The record reflects that Palm was a leader among the CIO adherents in the plant. No,
claim was made nor evidence adduced, however , to indicate that his transfer was motivated
by this consideration. It appears that others on the committee at that time were also-
CIO supporters
O At the primary election each employee has the opportunity to write on a blank ballot
the name of the man he desires to have as a representative of his unit From the names-
thus written the two receiving the highest votes become candidates in the final election.
The candidate receiving the most votes in the final election becomes the representative,
while the loser becomes his alternate , all as provided for in the Plan.
682 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
the men are employed, on election days, in order to facilitate the conduct of the
elections, the checks are distributed by the respondent in the dispensary basement
where the elections are conducted. The elections are held during regular working
hours, and voters are permitted to leave their stations of work in order to vote,
without deduction for time lost. Further to facilitate the conduct of the elections,
the respondent furnishes the ERC in advance of the elections, with "kick off
sheets" containing the names of eligible voters, so that #heir names may be
checked off as they appear to vote.'0 The conduct of the elections is supervised
by the incumbent representatives who are paid at their regular rates by the
respondent if they are scheduled to work during the time the elections are being
conducted, and if not, they are paid by the ERC After the elections, the ballots
are tallied by the ERC representatives. The election results are then typed
and duplicated by the respondent, and are posted
3 ERC meetings on company time, payment to representatives
Since the inception of the ERC, and save for the 5-month period in 1944-45
already adverted to, the ERC has met regularly on the first 1Vlonday of each
.month, always on company property These are the only meetings held." It
has been the practice, at least since 1934, to convene these meetings at 8 a. m.,
with only employee representatives present. At the morning session of the
meeting, the employee representatives deliberate among themselves on current
matters of interest. This session is not necessarily confined to a consideration
of matters to be discussed with management. Whatever internal business the
ERC may have, such as the election of officers, or the consideration of financial
reports, is transacted at the morning session In the afternoon, after committee-
men have concluded their discussion among themselves of pending grievances and
general business, management representatives are called into the meeting room
.and conferences are held with them.
Committeemen are paid not only for the time devoted by them in meeting with
the company representatives, but also for time spent in meeting among them-
selves. Prior to October 1945, employee representatives who were scheduled to
work during the day shift were paid by the respondent, the others by the ERC "
Since October 1945, all employee representatives, whatever their normal shift
hours, have been scheduled to work on the day shift on the monthly meeting days,
but solely for the purpose of attending the meeting, and for their attendance
have been paid the amounts they normally would have earned that day had
they worked on their regular jobs. According to the present practice, if during
the work day on which the meeting is held a representative works on his regular
shift in addition to attending the meeting, he is compensated additionally by the
.respondent for such time at the usual overtime rates.
Time spent on other ERC activities is also paid for by the respondent. Thus the,
record shows that on one occasion the chairman of the ERC and another repre-
10 These lists Cover the non-supervisory production and maintenance employees. Prior
to the last election, office workers also voted, but in 1945, the ERC decided to eliminate
the office workers' unit This change was voted upon by the EEC without prior consulta-
tion with the respondent, and the respondent offered no objection after it was informed
of the decision of the ERC
" The record makes reference to a single meeting off company property , held to discuss
wage rates paid in other plants. But this was a special meeting of only part of the com-
mittee attended by only 7 or 8 of the 19 committeemen who normally comprise the ERC.
19 This, at least , was the practice for some years prior to 1945 . The record does not
Indicate what the practice of payment was in the first 5 years of the ERC's existence,
-when, as will later be shown, the ERC had no source of funds whatever. ,
THE CARPENTER STEEL COMPANY 683
sentative took a 4-day trip to other steel plants, the purpose of which, in the words,
of Chairman Medlar, "was in regards to securing information for our own benefit
and to compare conditions and wages with other plants." The committeemen
were paid by the respondent for all time lost from work as well as for all expenses
of this trip.
The ERC has Dever provided for membership of employees in its organization,
nor have general employee meetings ever been held. Employees are formally
apprised of the ERC activities and its dealings with management through the
minutes of meetings which are posted on the company bulletin boards. As
provided in the Plan, the minutes are subject to management approval before
posting Minutes, after being prepared by the ERC secretary, are in practice
submitted for approval fist to the respondent's personnel director and
then to its vice president in charge of operations. After the minutes are ap-
proved, they are stenciled by a secretary in the respondent's labor service
bureau (who is paid by the company), duplicated on the company's mimeo-
graphing machine, and posted on the company's bulletin boards."
4. Use of company facilities
The ERC has never had an office or secretarial services of its own, and, except
for printed election ballots, has never purchased any stationery or supplies.
Its only physical property consists of a filing cabinet furnished by the respondent
and maintained on company property. Such limited and incidental secretarial
services and supplies as the ERC from time to time has required have been
furnished by the respondent.
5. Source of ERC funds
Since the ERC collects no dues, it has never obtained any financial support
directly from employees. Prior to July 1938, the ERC had no revenue or funds
whatsoever. In July 1938, candy machines were installed on the respondent's
premises, and arrangements were made to pay half the commissions derived
front this source (known as the canteen fund) to the ERC and the other half
to the company-sponsored Athletic Association. This arrangement was initially
proposed by Cooper Weaver, the respondent's Supervisor of Safety, Health and
Welfare. after he had been approached by the vending company The following
year, also at the suggestion of Weaver, a similar arrangement was effected with
respect to a milk vending concession, except that the ERG was allowed the full
commission from this source. In 1942 the ERC found itself running short of
funds, with an election approaching When the ERC directed the respondent's
attention to the fact that it would not have sufficient money to pay representa-
tives for time devoted to the conduct of the election, the respondent acceded to
the ERC request that it be permitted thereafter to retain the entire commissions
from the canteen fund instead of sharing it with the Athletic Association as there-
tofore Since then the ERG has collected the full commissions from the can-
teen fund. These together with the milk fund commissions have in recent years
averaged in excess of $1,000 annually. The ERC has never had any other source
of income.
In 1945, the ERC again found itself confronted with the need of building
up a depleted treasury in order that certain of its committeemen might be paid
13 There is evidence, however, that management has never declined to approve the ERC
minutes as originally drafted.
684 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
for time lost in attendance at meetings The problem was presented to man-
agement and a loan of $5,000 was first suggested by the ERC. The $5,000 loan
was not granted, but the respondent did accept an alternative suggestion of the
ERC that those committeemen who normally worked on the late afternoon and
night shifts be technically assigned to the day shift on monthly meeting days so
that they, as well as the day shift committeemen, might be compensated directly
by the respondent for time devoted at meetings, thus relieving the ERC of this
,financial burden.
0. Nature and extent of collective bargaining
The ERC does not now have a contract with the respondent, and never has
had. Nor has it ever made any attempt to negotiate a comprehensive trade
agreement with the respondent covering wages, hours, and working conditions.
It has confined its bargaining mainly to the presentation and discussion of griev-
ances. These grievances have covered a broad range and have involved among
other things the establishment of safer working conditions, the improvement
of sanitary facilities, and the correction of individual and group wage and in-
centive pay inequities. But although requests for increased rates have at times
been submitted, the respondent has never conducted negotiations with the ERC
-on general wage rates. The policy of the respondent in that regard has been
to fix its rates, not through collective bargaining with the ERC, but unilaterally
,on the basis of the industrial pattern established by the large organized steel
=companies. Whenever a general wage increase has occurred in the steel indus-
try, it has been the respondent's practice voluntarily to grant an identical in-
crease to its employees. At the hearing, the respondent adduced considerable
evidence to show that its, employees' wage rates were equal to rates paid by the
basic steel companies and equal to or better than rates paid by other companies
in the Reading area. The record establishes, however, that this standard was
achieved as a result of the respondent's policy noted above rather than through
'the processes of collective bargaining.
,C. The 1944 representation election; withdrawal and subsequent resumption of
recognition of ERC
1. The election proceedings
In response to a CIO demand for recognition made on or about September
30, 1944, the respondent advised the CIO that it would require the CIO to estab-
lish its majority status, and that it would accept no method of proof other than
-a secret ballot election. On October 11, 1944, after the CIO had filed a repre-
sentation petition with the Board, the respondent and the CIO executed a con-
sent election agreement. To this agreement the ERC was not a party. Although
notified of the representation proceeding, the ERC elected not to participate
in the election and filed a waiver agreeing not to intervene in the proceeding. In
.the election held on November 3, 1944, with the CIO the only union on the ballot,
.the CIO was defeated by a vote of 1 .196 to 596. Thereafter the CIO filed objec-
tions to the conduct of the election, but these objections were withdrawn after an
-investigation by Board's agents.
2. The respondent's pre-election letters and speeches
During the month intervening between the CIO recognition demand and the
election, the respondent mailed to its employees five circular letters relating to the
THE CARPENTER STEEL COMPANY 685
election, signed by E J Poole, Jr., then the respondent's vice president in charge
of operations. On the day preceding the election, the respondent posted through-
out its plant notices announcing that operations on each shift would be shut down
for a period of one-half hour when E. J. Poole, Jr. would address the employees
concerning the election. The notice stated that the employees on the respective
shifts were "invited" to be present at the time and place appointed for the address.
In all, six speeches were scheduled.14 Poole, however, delivered only two of them,
on the day shift. The speeches on the remaining shifts were canceled, after
Poole was informed by the War Production Board that the CIO had protested
the speeches on company time and had threatened to "pull the plant" if Poole
delivered any further talks to the men.
Since all the letters and the speech (which was read) dealt with the same
subject they will be considered here together. In them, Poole advised the em-
ployees of the bargaining demand, the conferences conducted with Board agents
leading to the consent election agreement, and the procedure which would be fol-
lowed in the conduct of the ballot; stressed the importance to the employees of
the forthcoming election ; and urged all employees to participate in the election
so that a full vote might be had. In addition, Poole went on to discuss the issues
of the election as he saw them. He posed the principal issue as one in which
the employees would have to decide whether the "union can get you a better, a
fairer, a cleaner deal than I have given you." He pointed out that the respondent
had dealt fairly with the employees in the past on the basis of a "friendly, our-
word-is-as-good-as-our-bond relationship" ; assured the employees that they needed
neither the protection of the CIO nor a contract in dealing with management ;
emphasized, that, as a result of the company's policy to pay rates as good or better
than that in the steel industry generally, the employees enjoyed wages and benefits
which compared favorably with those in CIO-organized plants; and promised to
meet any general wage increase or other benefits that might in the future be
granted in the steel industry. Poole's letters and speech, while revealing that
the respondent was opposed in principle to the organization of its employees by
the CIO and preferred the defeat of the CIO at the coming election, nevertheless
made it clear that the respondent would accept the employees' choice, even if it
were for the CIO, without engaging in economic reprisals of any kind. Thus,
Poole emphasized that "the future of this Company and the future of your job will
not be affected by this election," and that whatever the outcome of the election
"the Company is going to stay in business, making, selling, and delivering good
steel to customers who don't care whether it is made by union or nonunion men."
Significantly, Poole, in the letters and speech made no reference to the ERC,
and his references to the benefits enjoyed by the employees indicated throughout
that these were voluntarily bestowed by management, rather than the result of
collective bargaining. Poole referred to the fact that in the past management
had "sought to establish a close personal relationship between management and
employees, which would encourage employees to bring their problems to us, either
individually or collectively, with the knowledge that we would do our best to
solve them." He asked the employees to remember that "if the union should
win the election it would be the exclusive representative of all of you" and that
it would then be questionable whether he then "would be able to discuss your
problems-and mine-personally, as we have in the past, or whether I'd have to
deal with all of you only through the union."
14 The plant , located on a river, has 2 divisions , on the east shore and on the west shore.
The notices announced separate speeches on each shore during each of the 3 shifts.
686 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
3 The suspension and subsequent resumption of bargaining relations with the ERC
When the CIO committee called upon the respondent to demand recognition,
it also requested that the respondent permit it , pending the election , to present
grievances on behalf of its members . This request was rejected by the re-
spondent , but the respondent did agree not to meet with the ERC during the
pre-election period . Following this agreement the respondent notified the ERC
that due to the pending election the ERC would no longer be recognized as
a bargaining agency. The ERC was , moreover, instructed not to hold further
meetings.
In compliance with these instructions , the ERC, after its regular monthly
meeting on September 4, 1944 , held no further meeting until February 5, 1945,
approximately 3 months after the election . Not only were dealings between
the ERC and the respondent suspended during that period , but the ERC ceased
to function as an organization altogether 1' The reason for this is revealed in
part at least by the following testimony of ERC Chairman Medlar:
Q. (By Mr. Graver ) Of course you knew that your regular meetings
were held on working days customarily?
A That is right.
Q. Of course you knew that you couldn ' t hold another meeting until you
had the approval of the Company.
A. That is right.
Recognition of the ERC was resumed under the following circumstances : On
January 9 , 1945 , the respondent , without prior consultation with the ERC,
forwarded a "Form 10" application to the War Labor Board for a shift dif-
ferential and enlarged vacation plan. The application elicited an inquiry from
the processing agency concerning the absence of union joinder and the current
status of the ERC. The respondent was asked to state whether or not it had
determined to disestablish recognition of the ERC as a bargaining agency and
to supply the facts upon which that determination was based. On Januaiy 22,
1945 , the respondent replied that it still recognized the ERC and that it had
not intended to discontinue its bargaining relationship with the ERC unless
the CIO won the election . At about the same time Medlar was called in and
asked to sign the Forin 10 application , which was refiled after he had done so.
At that time Medlar inquired of Poole "whether it was all right to again hold
meetings as an ERC Committee ." He was told that it was . Medlar then asked
Poole ( as appears from his undisputed testimony) :
Would it be necessary to hold another election or go back with the same
group of committeemen that are now acting as representatives ; and the
answer from Mr. Poole was that the same group have the right to go buck
and meet as a Representation Committee.
Thus respondent reinstated the ERC as bargaining agent without requesting,
as it had when the CIO demanded recognition, proof of majority designation.
The ERC has since continued to be recognized by the respondent as the exclusive
bargaining agent for the employees
15 At the hearing, the respondent sought to explain the failure of the ERC to hold meet-
ings during the 3-month period which followed the election upon the ground that E J.
Poole, Jr., who customarily represented management at ERC meetings, was ill at the time.
But the record shows that Poole had been ill on previous occasions during regular nesting
clays , yet this had not prevented the ERC from meeting and transacting business More-
over, Poole's illness does not explain why the ERC could not meet to conduct its own
business, or why its representatives could not deal with management's representatives at
a lower level as they had done in the past.
THE CARPENTER STEEL COMPANY
Concluding findings
I
687
As has been found above, the ERC was imposed upon the employees as a
bargaining agent in 1933, and has ever since been continued as such, without
Opportunity having been afforded the employees to accept or re sect the Employees'
Representation Platt, pursuant to which it was created ; or to decide whether a
majority of them desired the committee form of representation provided by the
ERC. As has also been found above, the Plan was instituted and the ERC
formed thereunder in 1933 with the sponsorship, support, encouragement, and
participation of the respondent It is true, as the respondent asserts, that the
respondent's conduct prior to the effective date of the Act was not violative of
any law and may not be considered as constituting unfair labor practices. But
the pre-Act history of the ERC and the respondent's relationship to it are never-
theless relevant for the purpose of evaluating the character of the ERC and
the respondent's dealings with it after the passage of the Act 1' Particularly
is this true where, as here, the respondent after the effective date of the Act
never disassociated itself from the organization which it helped to form, but,
on the contrary, continued to aid, maintain and support it.
In substance. as in name and origin, the Employees' Representation Plan,
which created the ERG and which, generally speaking, still governs its operations,
is essentially indistinguishable from employee representation plans which flour-
ished in the pre-Act era as a substitute for collective bargaining and the dis-
,establishment of which have uniformly been ordered by the Board and approved
by the Courts.17 To be sure, one of the more objectionable features of the Plan,
the joint general committee, was eliminated prior to the enactment of the Act.
But the working sub-committees, the Committee on Production and Working
Conditions and the Committee on Safety, Sanitation, Health and General Service,
continued to operate as joint committees for some years thereafter. And while
these, too, were eventually abolished, the organic structure of the ERC has
remained such as to assure the respondent control over its functions and to
impair seriously its capacity to act as a bona fide employee representative.
Thus, employees may not choose whether they shall be represented by the ERC.
An employee's right to participate in ERC elections of employee representatives
stems solely from his employment and not from any act of of Nation with the ERC.
Apart from his right to vote annually for his unit representative, an employee has
no right to participate in the affairs of the ERC No provision is made for meet-
ings of the employees, either as a body or by departments, with the representatives
or otherwise, in order that the employees may benefit from collective discussion
or collectively instruct their representatives as to their desires. The employees
are formally advised of proceedings of the ERC only through minutes which are
posted on company bulletin boards and are subject to the respondent's control in
that they must first be approved by a management officer Effective insulation
against outside influence is provided by the requirement that representatives be
employees with at least a year's prior service. Although the respondent in
'ON L R B v Pennsylvania Greyhound Lines, Inc, 303 U. S 261, 268-270; N L. R. B.
v. Newport News Shipbuilding & Dry Dock Co , 308 U S 241
17 E g, N. L R B v. Pennsyl mania Greyhound Lines Inc, et al, 303 U S 261; N. L R B.
v. Pacific Greyhound Lines Inc, 303 U S 272, N L R B v Newport News Shipbuilding
f Dry Dock Co, 308 U. S. 241; Bethlehem Steel Co. v. N. L R B., 120 F (2d) 641 (App
D C ) , N L R B v Baldwin Locomotive Works, 128 F (2d) 39 (C C A 3) ; Wilson
& Co v. N L R B., 156 F. (2d) 577 (C. C. A. 10).
688 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
practice has not and under the Plan may not interfere with the employees ' selec-
tion of their unit representatives , it nevertheless retains ultimate control over
the composition of the ERC through its reserved power to unseat any elected
representative by severing his employment or transferring him to another de-
partment of the plant The mere existence of such power , whether exercised or
not, places the respondent in a dominant position over the ERC Apart from con-
stituting a specific instance of the respondent 's interference with the admin-
istration of: the EI.C, the Wayne Palm incident narrated above illustrates how
that power may be exercised That incident also suggests , although it does not
illustrate , an additional reason why an organization with the structure of the
ERG is powerless before an employer' s refusal to bargain save on his own terms.
For, lacking the capacity to show that a majority of the employees in an appro-
priate unit had designated the organization ( as distinguished from individual
departmental representatives ) as their bargaining agent, it can be in no position
legally to compel the employer to bargain with it.
An organization such as the ERC, contrived to function entirely upon the em-
ployer's property and having no dues or other independent means of support,
must necessarily depend for its existence upon the aid , support, and continued fa-
vor of the employer . All this the respondent has generously provided the ERC.
Thus, the respondent has assisted the ERC in the conduct of its annual elections,
not only by granting it the use of company time and property for that purpose, but
by furnishing eligibility lists, by arranging on election days to issue pay checks at
the polling place, by directly compensating at least some of the committeemen for
time devoted by them in the conduct of the elections , and by typing and duplicat-
ing the election results. It has further assisted and supported the administra-
tion of ERC by furnishing the free use of meeting places on company property
and by supplying , when needed , secretarial services , stationery and supplies. It
has subsidized the activities of ERC committeemen by paying them not merely for
time lost from their work in meetings with management , but for time spent in the
administration of ERC affairs at meetings of their own . And to the extent that
the respondent has not directly contributed support to the ERC, it has provided
the sole means possessed by the ERG to finance its activities , by authorizing the
ERG to collect the commissions from the vending concessions maintained on its
property and subject to its control.
The support , financial and otherwise , such as that which the respondent has
afforded the ERC, in itself falls clearly within the proscription of Section 8 (2)
of the Act. There is no merit to the argument of the respondent that the com-
pensation allowed committeemen for time devoted to ERC meetings is justified
by established trade union customs and is authorized by the proviso to Section
8 (2) of the Act ." The proviso , by its terms , restricts allowable payments to
instances in which conferences are held with management during working hours
of the employee conferees . It affords no justification for paying ERC committee-
men for time spent by them at their general meetings , at least for such portions
thereof at which management representatives are not present . Nor can it apply
to those committeemen who are compensated by the respondent though the
meetings which they attend are held outside their regular working hours. The
existence of an arrangement to have such committeemen technically assigned
to the day shift on regular meeting days does not alter the situation . Indeed,
the fact that that arrangement was effected because ERC funds derived from
the vending concessions were insufficient to cover payment to such representa-
is See Matter of Wyman-Gordon Company, 62 N. L R B , 561, 567.
THE CARPENTER STEEL COMPANY 689
tives, serves to fortify the conclusion that the underlying and primary purpose
for paying committeemen on meeting days is to provide financial support for
ERC activities.
Equally without sound basis is the respondent 's argument that the vending
commissions which it allows the ERC to receive cannot be considered employer
support because the commissions emanate not from the respondent but from,
money expended by employees themselves in making purchases . While the
commissions are paid to the ERC directly and are not handled by the respondent
at any stage , the fact remains that the respondent controls the source of the
commissions , which it is empowered to shut off at any time , by virtue of the
licence, express or implied , which it grants the concessionaries to use its property.
The respondent 's action in arranging for the transfer to the ERC of the Athletic
Association's share in the canteen fund, to enable the ERC to meet current ex-
penses, demonstrates both the respondent ' s control over these funds and the
existence of an understanding between the ERC and the respondent that the
latter, as contemplated in the Plan , is to provide full financial support for ERC
activities.
Nor may the support accorded the ERC be viewed as insubstantial, as the
respondent also urges. Illegality of employer support of a labor organization is
not measured in terms of its cost to the employer , but in terms of its effect upon
the recipient organization and the employees Here, the respondent has be-
stowed upon the ERC all the support which it has required for its maintenance.
Organized as it is, the ERC is entirely reliant upon the respondent ' s continued
support, without which it cannot function . The respondent 's speculative argu-
ment that the ERC could live as an independent organization even if its present
means of support were withdrawn, by instituting a system of membership and
dues collection and otherwise altering its structure, is wholly unpersuasive. The
ERC must be judged on the basis of its present structure which rests on employer
support , not on the conjectional basis of what it might be like if reformed into a
different type of organization bottomed upon employee support. Even if it were
assumed , as the respondent contends , that the ERC is empowered solely through,
action of the employees or their representatives to alter its structure, such
action could not, in view of its past history, rehabilitate the ERC and establish
it as a genuine collective bargaining agent within the meaning of the Act.
If further proof were required of the respondent 's dominant position over the
ERC, it is convincingly supplied by the events associated with the 1944 representa-
tion proceeding With the withdrawal of recognition of the ERC and the in-
structions given it to hold no further meetings, the ERC not only ceased dealing,
with the respondent , it became wholly extinct and organizationally ceased func-
tioning altogether . And it did not resume to function until the respondent chose
to revive it, and, in granting approval for further meetings , advised the ERC
that the old representatives might continue to serve These events disclosed
the respondent 's proprietary attitude toward the ERC, and revealed that the
ERC understood that it functioned solely by sufferance of the respondent But
more than that, the respondent 's resumption of exclusive recognition of the ERC-
without requiring proof of majority status, as it had when the CIO demanded
recognition , conclusively demonstrates that the ERC , rather than a bargaining
agency freely chosen by the employees , is an employer -selected representative
imposed upon the employees by the respondent The resumption of ERC recogni-
tion under these circumstances, following as it did the respondent 's pre-election
letters and speeches in which it emphasized that it was unnecessary for its:
employees to have a union to secure benefits from management , could not but_
690 DECISIONS OF NATIONAL LABOR RELATIONS BOATID
serve to impress upon the employees that the ERC was an institution bound to
the respondent and sponsored by it as a substitute for a bona fide bargaining
agency , as in fact it was.
On the facts set forth above, it is found that the respondent's whole course
of conduct in relation to the respondent htis been such as to curb its employees
freedom of choice in the selection of bargaining agents. The fact that the ERC
has functioned as a representative of the employees and has been instrumental
in securing certain benefits does not, as contended by the respondent, cleanse it
of its illegal taint. Nor, contrary to the respondent's assertion, is it material
that the respondent may have acted in relationship to the ERC with good motives,
or that the respondent's operations during the existence of the ERC were free
from industrial strife The effects of the respondent 's unlawful acts, and its
domination, interefrence with, and support of the ERC are not thus nullified.19
The undersigned finds upon the entire record, that the respondent has, since
July 5, 1935, dominated and interfered with the administration of the ERC, and
has contributed financial and other support thereto, and has thereby interfered
with, restrained, and coerced its employees in the exercise of the rights guaranteed
in Section 7 of the Act.
II
The separate allegations of interference, restraint, and coercion set out in tine
complaint are in the main merely incidental to the respondent's domination and
interference with the ERC and its assistance and support of that organization
Since that general subject has been fully considered above and findings made
with respect thereto, it is deemed unnecessary to consider these allegations sep-
arately There are, however, two specific allegations which stand on a some-
what different footing, for these alone relate primarily to alleged unfair labor
practices directed specifically against the charging union.
The complaint alleges that the respondent at "all times since July 5, 1935,
urged and persuaded its employees to refrain from assisting, becoming members
of, or remaining members of the [CIO]" and that it "disparaged and expressed
disapproval of the [CIO] " Save for the letters issued and speeches made by
the respondent immediately prior to 1944 consent election, no proof was adduced
by Board's counsel in support of these allegations. The letters and speech re-
veal, to be sure, that the respondent was opposed to the selection by its em-
ployees of the CIO and preferred to have the employees vote against it. To that
extent, they are relevant and may be considered, as they have been here, in
-evaluating the respondent's motivation and conduct in sponsoring, assisting, and
supporting the ERC. But the letters and speech themselves cannot be viewed
as unfair labor practices. The statements contained therein are couched in
language of reasonable persuasion, devoid of threats, vilification of the CIO,
or warnings, express or implied, that selection of the CIO would result in eco-
nomic detriment to the employees. On the contrary, the letters and speech un-
equivocally assure the employees that they will not be prejudiced in their ten-
ure of employment or their working conditions should they select the CIO. Nor
are the surrounding circumstances such as to give the statements, temperate on
their face, coercive effect. The respondent's position that the letters and speech
are privileged as an exercise of its right of free speech and do not constitute unfair
19 N. L R B . v. Newport News Shipbuilding d Dry Dock Company, 308 U. S 241, 251.
THE CARPENTER STEEL COMPANY 691
labor practices is found to be fully supported 20 It will accordingly be recom-
mended that these allegations of the complaint be dismissed.
IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE
The undersigned finds that the activities of the respondent set forth in Section
III, above , occurring in connection with its operations described in Section I,
above , have a close , intimate , and substantial relation to trade, traffic, and com-
merce among the several States, and tend to lead to labor disputes burdening
and obstructing commerce and the free flow of commerce.
V THE REMEDY
Having found that the respondent has engaged in unfair labor practices, the
undersigned will recommend that it cease and desist therefrom and take certain
affirmative action which the undersigned finds necessary to effectuate the policies
of the Act.
It has been found that the respondent has dominated and interfered with the
administration of the ERC and has contributed financial and other support
thereto. The effects and consequence of the respondent's domination, interfer-
ence with and support of the ERC, as well as its continued recognition of the
ERC as the bargaining representative for its employees, constitute a continuing
obstacle to the free exercise by its employees of their right to self-organization
and to bargain collectively through representatives of their own choosing. Mere
restraint of the respondent's acts of interference with and support of the ERC
would not operate to recreate the freedom of choice guaranteed by the Act which
the respondent's employees have been denied. Because of the respondent's ille-
gal conduct with regard to the ERC, the ERC is incapable of serving the respond-
ent's employees as a genuine collective bargaining agency Moreover, the con-
tinued recognition of the ERC would be obstructive to the free exercise by the
employees of the rights guaranteed to them by the Act. Accordingly, the under-
signed will recommend that the respondent withdraw all recognition from the
ERC, as the representative of any of its employees for the purpose of dealing
with it concerning grievances, labor disputes, wages, rates of pay, hours of
employment, or other conditions of employment, and completely disestablish the
ERC as such representative.
The findings of interference, restraint, and coercion which have been made
above are based entirely upon and derive from the respondent's course of con-
duct in dominating and interfering with the administration of the ERC and in
contributing financial and other support to it. Except for such unlawful conduct
flowing out of the respondent's relations to the ERC, the record does not disclose
that the respondent engaged in any other unfair labor practice; nor is the under-
signed persuaded from the record of this case, that a danger exists that the
respondent in the future may commit other unfair labor practices proscribed
20 At the hearing , Board ' s counsel argued that independently of the content of the speech,
the respondent 's conduct in addressing employees on company time constituted a violation
of Section 8 (1), on the "compulsory audience" theory. However, in view of the fact that
the specific allegations in the complaint under consideration relate only to the character
of the respondent 's statements , not its conduct, and for the reasons indicated in Chairman
Herzog 's opinion in Matter of Fisher Governor Company, 71 N L. R. B. 1291 , the under-
signed does not pass upon that question.
781902-48-vol. 76-45
692 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
by the Act which are not directly related in kind to the unfair labor practices
which it has been found to have committed in the past. Under the circumstances,
it will not be recommended that the Board issue the usual broad cease and desist
order used where the commission of such other unfair labor practices is reason-
ably apprehended It will, however, be recommended that the respondent cease
and desist from engaging in the conduct found unlawful herein and from en-
gaging in like or related conduct by otherwise interfering with the representa-
tion of its employees through a labor organization of their own choosing.
Upon the basis of the above findings of fact and upon the entire record of
the case, the undersigned makes the following :
CoNcLusIoNs or LAW
1. United Steelworkers of America, affiliated with the Congress of Industrial
Organizations, and Employees, Representation Committee are labor organizations
within the meaning of Section 2 (5) of the Act.
2. By dominating and interfering with the administration of Employees, Repre-
sentation Committee and by contributing financial and other support thereto,
the respondent has engaged in and is engaging in unfair labor practices, within
the meaning of Section 8 (2) of the Act.
3 By said acts, the respondent has interfered with, restrained, and coerced its
employees in the exercise of the rights guaranteed in Section 7 of the Act, and
has thereby engaged in and is engaging in unfair labor practices, within the
meaning of Section 8 (1) of the Act.
4. The aforesaid unfair labor practices are unfair labor practices affecting
commerce, within the meaning of Section 2 (6) and (7) of the Act
5. The respondent has not engaged in unfair labor practices directed against
United Steelworkers of America, C10, by disparaging and expressing disapproval
of, or by urging and persuading its employees to refrain from assisting, or be-
coming or remaining members of that labor organization as alleged in the com-
plaint.
RECOMMENDATIONS
Upon the basis of the foregoing findings of fact and conclusions of law, the
undersigned recommends that the respondent, The Carpenter Steel Company,
Reading, Pennsylvania, and its officers, agents, successors, and assigns, shall:
1. Cease and desist from :
(a) Dominating or interfering with the administration of the ERC, or with
the formation or administration of any other labor organization, or from con-
tributing support to the ERC, or to any other labor organization, and from other-
wise interfering with the representation of its employees through a labor or-
ganization of their own choosing ;
(b) Recognizing the Employees, Representation Committee or any successor as
the representative of any of its employees for the purpose of dealing with the
respondent concerning grievances, labor disputes, wages, rates of pay, hours of
employment, or other conditions of employment
2 Take the following affirmative action which the undersigned finds will
effectuate the policies of the Act :
(a) Withdraw all recognition from and completely disestablish Employees'
Representation Committee as the representative of any of its employees for
the purpose of dealing with the respondent concerning grievances, labor disputes,
wages, rates of pay, hours of employment, or other conditions of employment ;
THE CARPENTER STEEL COMPANY 693
(b) Post at its plant in Reading, Pennsylvania, copies of the notice attached
to the Intermediate Report herein, marked "Appendix A." Copies of said notice,
to be furnished by the Regional Director for the Fourth Region, shall, after being
duly signed by the respondent's representative, be posted by the respondent im-
mediately upon receipt thereof and maintained by it for sixty (60) consecutive
days thereafter in conspicuous places including all places where notices to em-
ployees are customarily posted. Reasonable steps shall be taken by the re-
spondent to insure that said notices are not altered, defaced, or covered by any
other material ;
(c) File with the Regional Director for the Fourth Region on or before ten (10)
days from the date of the receipt of this Intermediate Report a report in writing
setting forth in detail the manner and form in which the respondent has com-
plied with the foregoing recommendations.
It is further recommended that unless on or before ten (10) days from the
receipt of this Intermediate Report, the respondent notifies said Regional Direc-
tor in writing that it will comply with the foregoing recommendations, the Na-
tional Labor Relations Board issue an order requiring the respondent to take
the action aforesaid.
As provided in Section 203 39 of the Rules and Regulations of the National
Labor Relations Board, Series 4, effective September 11, 1946, any party or
counsel for the Board may, within fifteen (15) days from the date of service of
the order transferring the case to the Board, pursuant to Section 203 38 of said
Rules and Regulations, file with the Board, Rochambeau Building, Washington 25,
D. C., an original and four copies of a statement in writing setting forth such
exceptions to the Intermediate Report or to any other part of the record or
proceeding (including rulings upon all motions or objections) as he relies upon,
together with the original and four copies of a brief in support thereof, and any
party or counsel for the Board may within the same period, file an original and
four copies of a brief in support of the Intermediate Report. Immediately upon
the filing of such statement of exceptions and/or briefs, the party or counsel for
the Board filing the same shall seive a copy thereof upon each of the other
parties and shall file a copy with the Regional Director. Proof of service on the
other parties of all papers filed with the Board shall be promptly made as re-
quired by Section 203.65. As further provided in said Section 203.39, should
any party desire permission to argue orally before the Board, request therefor
must be made in writing to the Board within ten (10) days from the date of
service of the order transferring the case to the Board.
ARTHUR LEFF,
Trial Examiner.
Dated March 28, 1947.
APPENDIX A
NOTICE To ALL EMPLOYEES
Pursuant to the recommendations of a Trial Examiner of the National Labor
Relations Board, and in order to effectuate the policies of the National Labor
Relations Act, we hereby notify our employees that:
WE HEREBY DISESTABLISH EMPLOYEES' REPRESENTATION COMMITTEE as the
representative of any of our employees for the purpose of dealing with us con-
cerning grievances, labor disputes, wages, rates of pay, hours of employment,
or other conditions of employment, and we will not recognize it or any
successor thereto for any of the above purposes.
694 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
WE WILL NOT dominate or interfere with the formation or administration
of any labor organization or contribute financial or other support to it.
WE WIL NOT otherwise interfere with the representation by our employees
through a labor organization of their own choosing.
THE CARPENTER STEEL COMPANY,
Employer.
Dated-------------------------- By ------------------------------------
(Representative ) ( Title)
This notice must remain posted for 60 days from the date hereof, and must
not be altered, defaced , or covered by any other material.