33 N.L.R.B. 954 (N.L.R.B. 1941)

The Rushton Co.

National Labor Relations Board - Board DecisionsJul 31, 1941

33 N.L.R.B. 954 (N.L.R.B. 1941)

In the Matter of W. W. RUSHTON AND MRS. MARY RUSHTON, DOING BUSINESS AS THE RUSHTON COMPANY AND/OR THE ATLANTA PLAY- THINGS COMPANY and UNITED PAPER, NOVELTY AND TOY WORKERS INTERNATIONAL UNION Case No. C-1819.Decided July 31, 1.9411 Jurisdiction : toy and doll manufacturing industry. Unfair Labor Practices Interference, Restraint, and Coercion: anti-union statements; interrogation concerning union membership and activities; supervisory activity in con- nection with the formation of an unaffiliated union ; criticism of and' threats to union members; threats of shut-down Company-Dominated Unions: formation of, following organizational efforts of outside union and as a result of respondent's campaign against such union- participation by representatives of management in initiation, formation, and administration : solicitation of members ; circulation of petitions ; attendance at organizational meeting; becoming members-support: discharges and lay- offs because of membership and activity in outside labor organization . Participation of representatives of the management in the formation and administration of the first inside organization, although it, was shortly thereafter voluntarily abandoned by the employees, held responsible for the formation of the second inside organization, where there was no opportun- ity, prior to its formation, for such illegal influences to be dissipated. Discrimination: discharge motivated by employee's withdrawal from inside organization and affiliation with outside union, rather than by alleged failure to meet required production standard ; lay-offs of three employees because of union activities and refusal to support inside organization rather than because of alleged lack of work ; discharge of three employees, one of whom had previously been discriminatorily laid off, because of union activities rather than alleged slanderous statements regarding one of the respondents. Remedial Orders : disestablisbment of company-dominated union ; substantive features established in the performance of invalid contract not to be varied by order requiring its abrogation ; reinstatement of discharged employees ; back pay ordered for discharged and laid-off employees from date of dis-' crimination to date of reinstatement, omitting period from date of Inter- mediate Report to date of Decision in cases dismissed by the Trial Eaammer. Mr. Alexander E. Wilson, Jr., for the Board. McLarty & Cooper, by Mr. Robert P. McLarty, Mr. Walter G. Cooper, Jr., and Mr. Stephens Crockett, of Atlanta, Ga., for the respondents. Mr. R. H. Brazzell, of Atlanta, Ga.; Prestwood cf Hall, by Mr. Roger A. Prestwood and Mr. Warren E. Hall, of Atlanta, Ga.; and Mr. Joseph Kovner of Washington, D. C., for the Union. 33 N L. R. B , No 172 954 W. W. RUSHTON 955 Mr. A. Walton Nall, of Atlanta, Ga., for the Independent. Miss Grace McEldowney, of counsel to the Board. DECISION AND ORDER STATEMENT OF THE CA SE Upon charges and amended charges duly filed by United Paper, Novelty & Toy Workers International Union,' herein called the Union, the National Labor Relations Board, herein called the Board, by its Regional Director for the Tenth Region (Atlanta, Georgia), issued its complaint dated October 11, 1940, against W. W. Rushton and Mrs. Mary Rushton, doing business as The Rushton Company and/or The Atlanta Playthings Company, herein called the respond- ents, alleging that the respondents had engaged in and were-engag- ing in unfair labor practices affecting commerce, within the meaning of Section 8 (1), (2), and (3) and Section 2 (6) and (7) of the National Labor Relations Act, 49 Stat. 449, herein called the Act. On October 11, 1940, the complaint, together with a notice of hearing thereon, was duly served on the respondents and the Union, and also on Soft Stuffed Doll and Toy Workers Union of Atlanta, Inc., herein called the Doll Workers, and The Independent Toy Workers Union of Atlanta, herein called the Independent, labor organizations alleged in the complaint to be dominated by the respondents. On October 15, 1940, a sixth amended charge was filed by the Union, charging the respondents with additional unfair labor practices within the meaning of Section 8 (3) of the Act; and on the same day the Board served on the respondents, the Union, the Doll Workers, and the Independent, notice of a motion to amend the complaint to cover the new matter contained in the sixth amended charge. In respect to the unfair labor practices, the complaint, as amended at the hearing, alleged in substance : (1) that in August 1940 the respondents instigated, dominated, and interfered with the formation and administration of the Doll Workers and/or its successor, the Inde- pendent, and have continued to dominate and interfere with the administration of these organizations to the date of the complaint by certain specific acts, including the execution of a collective bar- gaining contract with the Independent, all of which are set out in detail in the complaint; (2) that on various dates between August ' The original charge and the first three amended charges were filed by The International Union of Playthings and Novelty Workers of America, which later changed its name to United Paper, Novelty and Toy workers International Union. 956 DECISIONS OF NATIONAL LABOR RELATIONS BOARD 29, 1940, and October 11, 1940, the respondent discharged seven named employees 2 because they had joined or assisted the Union and had engaged in other concerted activities for the purposes of collective bargaining and other mutual aid and protection; and (3) that the respondents had interfered. with, restrained, and coerced their em- ployees in the exercise of the rights guaranteed in Section 7 of the Act, not only by encouraging membership in the Doll Workers and/or the Independent and discouraging membership in the Union in con- nection with the domination and interference with the administration of the Doll Workers and/or the Independent and by the discharge of and refusal to reinstate the employees` hereinbefore referred to, but also by advising their employees to withdraw from and refuse to become affiliated with the Union, by threatening employees with lay-off or discharge or other disciplinary action if they persisted in their activities in behalf of the Union, by threatening to close the plant if the employees persisted in their activities on behalf of the Union, by promising better jobs or job protection to employees ii they would withdraw from the Union, by circulating anti-union propa- ganda among the employees, by maintaining surveillance over meet- ings and meeting places of the Union, by calling the employees together on company time and on company property to hear the attorney for the respondents in'ake remarks disparaging to the Union, and by numerous other acts specified in the complaint. On October 22, 1940, the respondents filed their answer, in which they admitted certain of the allegations' of the complaint with refer- ence to the nature, extent, and character of their business; denied that they have engaged or are now engaging in unfair labor practices; and affirmatively alleged that the discharges complained of were not discriminatory, but were lay-offs or discharges made for cause. Pursuant to notice, a hearing was held in Atlanta, Georgia, from October 28, 1940, to November 2, 1940, inclusive, before R. N. Denham, the Trial Examiner duly designated by the Chief Trial Examiner. The Board, the respondents, and the Union were represented by coun- sel and participated in the hearing. At the opening of the hearing the Independent appeared by counsel and filed a written petition for leave to intervene. The petition was granted by the Trial =Examiner. The Independent alleged in its petition that it came into existence as a spontaneous movement of the employees; that on or about September 20, 1940, more than 50 per cent of the employees of the respondents were members of the Independent, and that the contract of that date was entered into by the respondents with the Independent as the represen- 2 Mary Roberts , Donnie Belle Campbell , Frances Schultz, Sara Ponder , Elizabeth Brown, Rush Bessant , and Gordon W. Dean . During the hearing the complaint was dismissed in so far as Dean 's discharge was concerned , as appears more fully below. W. W. RUSHTON 957 tative of the respondents' employees; that the Independent is not dominated, nor is its administration interfered with, by the respond- ents; that it has received no financial support from the respondents; and that it is a labor organization separate and distinct from the Doll Workers, and is not a successor of that organization. The Doll Work- ers did not appear or attempt to participate in the hearing. A motion by the Board to amend the complaint in conformity with the notice of intention so to do, above referred to, was granted by the Trial Examiner. By this amendment it was alleged that on October 11, 1940, Gordon W. Dean was discriminatorily discharged and there- after refused reinstatement. During the course of the hearing, the respondents agreed to and did reinstate Dean to his former employ- ment, whereupon a motion by the Board to dismiss the complaint in so far as it applied to his discharge was granted. Full opportunity was afforded all parties to be heard, to examine and cross-examine witnesses, and to introduce evidence bearing on the issues. At the close of the presentation of the Board's evidence, counsel for the Board moved to amend the pleadings to conform to the proof as to names, dates, and other similar matters. This motion was granted by the Trial Examiner in his Intermediate Report. During the hearing the Trial Examiner ruled on a number of other- motions and on objections to ,the admission of evidence. The Board has reviewed all the rulings of the Trial Examiner and finds that no prejudicial errors were com- mitted. The rulings are hereby affirmed. Subsequent to the hearing a brief was submitted to the Trial Examiner by counsel for the respondents. The Trial Examiner thereafter filed his Intermediate Report, dated February 5, 1941, copies of which were duly served upon the parties. He found that the respondents had` engaged in and were engaging in unfair labor practices affecting commerce, within the meaning of Sec- tion 8 (1), (2), and (3) and Section 2 (6) and (7) of the Act, and recommended that the respondents cease and desist therefrom and take certain affirmative action designed to effectuate the policies of the Act. The Trial Examiner further found that the respondents had not en- gaged in unfair labor_ practices affecting commerce, within the mean- ing of Section 8 (3) of the Act, by discharging four of the seven employees named in the complaint, and recommended that the com- plaint be dismissed in so far as it alleged the discriminatory discharge of such employees-3 Exceptions to the Intermediate Report were filed by the respondents, the Union, and the Independent; and briefs were filed by the respondents and the Union. Upon request of the respondents a hearing was duly held before the Board in Washington, D. C., on May 1, 1941, for the purpose of 41 Mary Roberts. Elizabeth Brown, Rush Bessant , and Sara Ponder. 9 58 DECISIONS OF NATIONAL LABOR RELATIONS BOARD oral argument. The respondents and the Union were represented by counsel and participated in the argument . The Board has con- sidered the exceptions to the Intermediate Report and briefs; and insofar as the exceptions are inconsistent with the findings, con- clusions, and order set forth below , finds them to be without merit. Upon the entire record in the case, the Board makes the following : FINDINGS OF FACT I. THE BUSINESS OF THE RESPONDENTS W. W. Rushton and Mrs. Mary Rushton constitute a partnership doing business at Atlanta , Georgia, as The Rushton Company and/or The Atlanta Playthings Company. The business of the partnership is generally carried on under the name of The Rushton Company, and consists of the manufacture and sale of soft stuffed toys and dolls. The title, The Atlanta Playthings Company, is used for trade name purposes only. As raw materials the respondents use various ;types of fabric , cotton for stuffing, and special parts, such as eyes, faces, voices, doll shoes and socks, as well as dress buttons , tags , elastic, and other similar materials . During the fiscal year ending April 30, 1940, purchases of raw materials amounted to $261,528.89 . Of these, 21.7 per cent were made within the State of Georgia , and 78.3 per cent represented materials purchased from points in other States. During the same period , products of the market value of $546,990.35 were sold , approximately 95 per cent being transported to points outside the State of Georgia . The respondents ordinarily employ between 250 and 300 persons ,in the operation of their plant. II. THE ORGANIZATIONS INVOLVED Jfnited Paper, Novelty and Toy Workers International Union is a labor organization affiliated with the Congress of Industrial Or- ganizations. It admits to membership the production and main- tenance employees of the respondents. The Independent Toy Workers Union of Atlanta is an unaffiliated labor organization admitting to membership only, persons who are employed by or have been promised employment with the respond- ents or their successors. Soft Stuffed Doll and Toy Workers Union of Atlanta, Inc., is a labor organization which admits to membership only employees of the respondents. It was organized as a non-profit organization under the laws of the State of Georgia, but has never functioned as a cor- poration or otherwise except to elect officers and collect initiation fees. Although it has been abandoned by resolution of its incor- porators and members, it has never been officially dissolved, nor has its corporate existence lapsed from non-use. W. W. RUSHTON 959 III. THE UNFAIR LABOR PRACTICES A. Interference, restraint, and coercion In the conduct of the business of the respondents, W. W. Rushton attends to the financial matters, while his wife and partner, Mrs. Mary Rushton, an artist and designer, devotes her time to super- vising the production operations and developing new itt nls for manu- facture. She maintains a desk or table in the plant, in addition to the room occupied by her in the main office . In June or July 1940, the Union began an organizational campaign among the respondents' employees. By early Augus. these activities had come to the atten- tion of the respondents and at least some of the foreladies. On or about August 6, Mrs. Rushton called Elizabeth Brown, the pattern marker, who is generally regarded as the key employee in the cutting department,' into her office and inquired whether Brown had heard anything about the Union. Brown replied that she had, but that she, had talked to no one about it. Mrs. Rushton then told her that the business could not be kept up on a union basis, and that if one came in, she would probably have to close the plant. The following day union circulars were received through the mail by practically all the employees of the respondents ; and the next morning Frances Moore , the plant superintendent, went to Brown's table, where she bitterly berated the Union, pounded the table, and stated that Mrs. Rushton had told her that they would close the plant if a union came into it. This tirade, interspersed w;th some pro- fanity, continued at some length, and concluded with the statement that if a union were to come into the plant, all the employees would be out of work. Although Brown had previously assured Mrs. Rush- ton that under no circumstances would she join the Union, on August 12, 1940, she signed an application for membership in it and imme- diately set out to solicit other memberships. Thereafter her evenings were largely devoted to union work. These activities were quickly brought to the attention of respondents, who on the day following her application for membership in the Union called Brown to the office and severely criticized her for soliciting union memberships. In this connection, they accused her of intimidating some of the Negro, .workers. In spite of Mrs. Rushton's testimony that on this occasion Mr. Rushton told Brown that he did not want to influel,ce her in any 4 The respondents contend that Brown was a supervisory employee, the head of the cutting department. Brown testified that she was not a forelady, but admitted that she gave out work in her department , and that new employees were sometimes brought to her for instruc- tions . It appears , however, that the respondents at no time based their objections to Brown's union activities on the necessity for the maintenance of a neutral attitude on the- part of , supervisory employees; but rather that they directed their animosity toward her because of her active assistance to the Union. 960 DECISIONS OF NATIONAL LABOR RELATIONS BOARD way in regard to joining a union, but wanted her to be fair in her methods and try to promote the Union on its merit=, we think it clear that his remarks were intended to discourage her union activities. On the morning of August 15, Sara White, Belle Warr, and Maude Gann,,' three of the respondents' employees, began the circulation of petitions which recited that the signers desired to orgsn:ze an inde- pendent inside union. These petitions were circulated throughout the plant during business hours, not only with the knowledge of Moore and various supervisors but with their open and aggressive assistance. Brown refused to sign. That evening about 100 of the employees gathered at White's home to take the first steps toward the organi- zation of what later became the Doll Workers, described more fully below. The following Monday, August 19, Mrs. Rushton, who had al- ways been on friendly and somewhat intimate terms with Brown, adopted a curt and critical attitude toward her. She came to Brown's table to examine the pattern markers she was using, and in the course of the conversation at that time, according to Brown, said, "I am going to check your markers and if I can find a mistake there are two things that I can fire you for, and one is for making mistakes, and the other is for talking union on this job in the shop." Mrs. Rushton testified that she could not remember any such conversation, and that any change in her attitude was caused not by Brown's union membership, but by the fact that she was not doing her work. In view of the surrounding circumstances, and in the absence of any convincing evidence that Brown's work was less efficient than there- tofore, we cannot credit Mrs. Rushton's explanation. Similar statements by the respondents were testified to by Rush Bessant, the machinery maintenance man in the plant. In late July or early August, Bessant commented to Mrs. Rushton about the con- duct of Moore in opposing the Union when talking to the employees under her, and warned Mrs. Rushton that such conduct was im- proper. At that time Bessant was not a member of the Union. Mrs. Rushton freely discussed her opposition to the Union with Bessant, stating that she did not want to have the Union come into the plant, that she could not'pay the union scale of wages, and that on the basis of the past friendly relations of the respondents with Bessant, she wanted him to "stick with" her. On August 12, 1940, Bessant joined the Union, and on September 4. 1940, when the local was organized, he became its financial secre- 6 Although Warr was subsequently made a forelady , and there is some testimony in the record that Gann was regarded as an assistant forelady, we believe it is unnecessary for us to determine their supervisory status. The fact that some supervisory employees signed the petitions and asked other employees to join the independent union is admitted by the respondent. W. W. RUSHTON- 961 tary and a member of the grievance committee. On August 15, 1940, when the petitions for the Independent heretofore referred to were being circulated, Bessant's signature was solicited by two of the male employees, one of whom worked in a supervisory capacity over col- ored workers in the cutting department. Bessant refused to sign. On August 19, the same day on which Brown was threatened by Mrs. Rushton, Bessant was first reprimanded by Mrs. Rushton and later was called into Mr. Rushton's office. He testified that when he en- tered the office, Rushton told him to sit down, and after calling atten- tion to the fact that Bessant had worked in the plant for a long time, that Rushton had been "a good master" to him, and had done various favors for him, including lending him money when his baby was born, made the statement, "From now on, I am not going to be so good to you, you better walk the chalk line from now on, I am draw- ing the line, an`d you better not get over it-just because you belong to the Union don't think you have any more rights than I do; I have talked to my attorney, and I have my rights, and he says that I can fire you if I want to . . . I like you and your work, but from now on, you better watch your step." This ended the conference, and as Bes- sant started to leave the room, Rushton told -him, "Get the hell out of here before I really lose my temper." Rushton admitted this conversation in part, but denied having made any reference to a labor organization. He explained his re- marks by saying that he had just discovered that Bessant had put one of the spreaders in a room in the plant to sober up when he came to work drunk; and that he (Rushton) took the occasion to speak to Bessant of various shortcomings over a period of several years. He admitted that Bessant's membership in the Union might have influenced him in his remarks, but only because he realized that Bessant had lied to him about a month earlier in saying he had heard of no attempts to unionize the factory. We credit Bessant's testi- mony regarding the conversation, and as in the case of Brown, be- lieve that the respondents' critical attitude was the result of Bessant's affiliation with the Union and his refusal to sign the petition for an independent union. On August 13, 1940, Mabel Barfield, an employee who joined the Union 4 days later, was called to Mrs. Rushton's office and asked what she knew about the Union and whether she knew who had joined. When Barfield denied having any knowledge on the subject, the con- versation was terminated. On August 15, Barfield had a further con- versation with Mrs. Rushton, chiefly concerning the wages being paid some of the employees in Barfield's department and the slowing up of production in that department. During the course of the conversa- tion the subject of the Union arose. According to Barfield, she asked 962 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Mrs. Rushton whether she thought some of the employees had already joined the Union; whereupon Mrs. Rushton replied that she did, and named several of them, including Brown and Bessant; and in this connection told Barfield that Brown and Bessant were the "instiga- tors" of the Union, that Mrs. Moore had "cussed out" Brown, and that as a result, Brown and Bessant had 'proceeded to get a crowd to join the Union. In the course of this conversation Mrs. Rushton agreed to increase Barfield's wage rate from 32 cents per hour to 35 cents per hour and to give the same increase to all the other women doing the same type of work. Mrs. Rushton stated that she did not remember this conversation with Barfield, although she admitted talking to her about wage rates. She denied, moreover, that she knew at that time which employees had joined the Union. We concur with the Trial Examiner, who had the opportunity of observing the demeanor of the witnesses on the stand, in crediting the testimony of Barfield in this instance, as well as the testimony of Brown and Bessant in regard to the matters related above. The record discloses many other similar incidents of coercive and intimidating conduct on the part of the respondents, Moore, and vari- ous foreladies, some of which are related in the discussions of the other issues hereinafter dealt with. We believe and find, as did the Trial Examiner, that by the foregoing acts, including inquiries about union membership and activities, anti-union statements by the respondents and the plant, superintendent, warnings that the plant would close if a union came in, supervisory activity in connection with the formation of an unaffiliated union, and criticism of and threats to union mem- bers, the respondents interfered with, restrained, and coerced their employees in the exercise of the rights guaranteed in Section 7 of the Act. B. Domination of and interference with Soft Stuffed, Doll and Toy Workers Union of Atlanta, Inc., and The Independent Toy Workers Union of Atlanta By the middle of August 1940, the organizational efforts of the Union in the respondents' plant had become a topic of general comment among both employees and supervisors, and a subject of concern to the re- spondents. Shortly thereafter the first of the "independent" unions came into existence. _ The exact circumstances surrounding the inception of the Doll Workers are not clearly reflected in the record, and there is substan- tial conflict in the testimony of those who claim to have initiated the organization. In view of the subsequent happenings, however, both the conflict in testimony and the lack of clarity as to the beginning of W. W. RUSHTON 963 the movement become immaterial in arriving at a conclusion on the fundamental issue involved. According to the record the organization of an independent inside union was first mentioned on August 14 while Gann, mentioned above, was visiting at the home of White, one df the respondents' old em- ployees. At the suggestion of her husband, White telephoned that evening to a member of the law firm to which the present counsel for the Independent belongs, and was advised concerning the pro- cedure for 'setting up an independent union. The next morning White and Gann called on Mrs. Rushton in her office before work to discuss the possibility of forming an inside union. Clovie Sikes, the forelady of the department in which Gann worked, and Barfield, to whose testimony we have already referred, were also present. One of the group asked Mrs. Rushton in effect whether they could not keep the C. I. O. out of the plant by forming a company union. Mrs. Rushton's reply was that she could not advise them on that. White explained that she had telephoned a lawyer the evening before and had been advised by him that they could organize an inde- pendent union. As soon as this conversation was finished, one of the group had the office stenographer type a number of copies of a short petition to be signed by the employees, stating, in effect, that the signers desired to become members of an independent labor union. This petition was openly circulated among the employees by both foreladies and ordinary employees during working hours throughout the day. Moore, the superintendent, and other supervisors went about the plant urging the employees to sign the petition, checking up on those who had not signed it, and reminding theln'to do so before they left. As soon as these activities came to the attention of Mr. and Mrs. Rushton, a notice was posted forbidding solicitation on the respon- dent's premises of membership in any union. Later the foreladies were instructed to have nothing to do with any labor organization. This action came too late, however, to offset the effect of the super- visory participation in the formation of the Doll Workers. That evening, a meeting of about 100 of the employees was held in the front yard of White's home. It was attended indiscriminately by foreladies and others, including Moore, who did not actually enter the yard but sat in her automobile outside. The meeting was first addressed by James Adams, an employee,s who proposed the organ- 9 Adams, the most active male member oY the Doll workers, was generally looked upon as one of the favored employees of the respondents . Ile did general utility work throughout the respondents ' plant, but spent much time in the office, occasionally drove Mrs . Rushton's car on her vacation trips , taking his own vacation while doing so, and because of this intimacy was morely closely identified with the management than with the employees as Ia group. 450122-42-vol 33--62 964 DECISIONS OF NATIONAL LABOR RELATIONS BOARD ization of an independent union, and later by A. Walton Nall, the present counsel for the Independent, who explained the various ways in which such an organization could be formed. It was decided to incorporate an independent union, the Doll Workers, and Nall was instructed to take the necessary steps to do so. It was also agreed that membership in the Doll Workers would involve an entrance charge of $1 and monthly dues of 25 cents. Adams took charge of the money of the Doll Workers, and at the organizational meeting held, at the Chamber of Commerce oii August 19 or 20, was elected president. By this time, 191 employees had become members and had paid their $1 entrance fee. All but $12 of this money was ex- pended on organizational costs. On August 19, the Union filed charges with the Board, alleging the organization by the respondents of a company-dominated union. When this charge was brought to Nall's attention, he investigated and learned that supervisory employees had taken an active part in bring- ing about the organization of the Doll Workers. He then con- ferred with the Regional Director of the Board, and thereafter ad- vised Adams that under the circumstances the Doll Workers was vulnerable to attack as having been organized in violation of the pro- visions of the Act. He further advised the immediate dissolution of the new union and suggested that the members allow a period of time to go by before renewing their efforts to organize an inde- pendent union. Pursuant to these suggestions, a special meeting was held on August 23, 1940, at the Chamber of Commerce hall. Approximately 190 persons attended. Nall explained to those present that there might be some question about the legality of the Doll Workers be- cause of certain circumstances in .connection with its organization, and advised that it be dissolved. He further told them that in his opinion no effort should be made to organize a new independent union until a sufficient period of time had gone by to allow the move- ment for an independent union again to come to the surface natu- rally. On that statement by Nall, a motion was made and unani- mously adopted to dissolve and abandon the Doll Workers. Follow- ing this motion, there was some discussion concerning the organiza- tion of a new union. One of the men, who has since become a leader in the Independent, inquired whether it would be possible to organ- ize a new union without delay. Nall told him that it could be done but advised against it. Regardless of Nall's advice, a motion was made and unanimously carried to organize a new union, the Inde- pendent. Nail was again requested to assist, and proceeded to pre- pare bylaws by adapting those of the old corporation, and otherwise guided the proceedings of the meeting. Adams was nominated for W. W. RUSHTON 965 the office of president, but declined the nomination; whereupon new officers, none of whom had been officers of the old union, were elected and are. still serving in their respective capacities.' No steps were taken to effect,a legal dissolution of the Doll Workers other than the vote of the membership that it be abandoned. On August 26, Adams, as president of the Doll Workers and on advice of Nall, wrote the Regional Director of the Board, advising him of the abandonment and dissolution of that organization. Under the laws of the State of Georgia, a corporation is automati- cally dissolved after failing to exercise its corporate functions for a period of 2 years. In this instance, less than 6 months of the 2-year period having elapsed at the time of the hearing, the Doll Workers was still in existence as a corporation under the laws of the State of Georgia. Foreladies and other supervisory employees of the respondents were admitted to membership in and were allowed to participate actively in the, affairs of the Doll Workers. Under the bylaws of the Inde- pendent such employees are not eligible to membership ; and the record fails to disclose any incident since August 23, 1940, where the respondents or any of their foreladies, superintendents, or other supervisory employees have attempted to take any part in the admin- istration of the Independent. Between the organization of the Independent on August 23, 1940, and September 12, 1940, Nall had several telephone conversations with Robert P. McLarty and Walter G. Cooper, 'Jr., the attorneys for the respondents, concerning the status of the Independent. On September 12 he addressed a letter to the respondents, asking them to enter into negotiations with the Independent for a signed contract. This letter was accompanied by an affidavit of the Independent's secretary, certifying that 206 of the respondents' approximately 270 employees were then members in good standing of the Independent. Notwithstanding the affidavit, McLarty insisted upon proof of repre- sentation being made by submission of the signatures of the member employees. Within 2 or 3 days, lists containing approximately 190 signatures and reciting that the signers were applying for inember- ship in the Independent were presented to the respondents' attorneys and checked against the pay roll. After some rechecking the signa- tures were all identified, and-the Independent was thereupon recog- nized as the representative of the respondents' employees. Negotiations for a contract were then opened between Nall, on behalf of the Independent.7 and McLarty and Cooper for the respondents Until he came into the picture as counsel for the Independent, Nall was a stranger to both the respondents and their attorneys. There is no evidence of collusion in arriving at any of the provisions of the contract. 966 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Neither the respondents nor any of the employees ever participated in these negotiations. A form of contract providing for arbitration of grievances, a closed shop, and certain insurance protection of the employees was submitted by Nall. McLarty, after conferring with the respondents, submitted a counterproposal from which the closed shop and arbitration provisions were omitted. Subsequent nego- tiations produced an agreement to which both parties subscribed. In it substantial concessions were made to the Independent, chief of which were: (1) an agreement by the respondents to apply for and endeavor to obtain group insurance for the benefit of its employees, whereby they would receive a monthly benefit of $40 for any in- capacitating illness or accident not arising in line of duty and not covered by the usual compensation payments, one-half of the cost of this insurance to be borne by the company and the other half by the employees subscribing to it; (2) designation of Labor Day, Thanksgiving Day, and the Fourth of July as holidays with pay; (3) a provision that after October 24, 1940, when the minimum wage payable under the Fair Labor Standards Act would be 30 cents per hour, the minimum wage in the plant would be 311/2 cents per hour: The wage provision represented a 5-per cent increase. in the hourly rate, which exactly absorbed the loss of 2 hours of working time that would likewise become effective on October 24, 1940. Almost immediately after the contract was signed, the 5-per cent increase was applied to all wages. No grievance procedure was provided except that Any employee of The Company may present his or her griev- ances to The Company either individually or through the presi- dent of The Union [the Independent], or any authorized com- mittee of The Union. After approval by the Independent, the contract was signed by all parties on September 20, 1940, and has since been amended to include, as a part of the insurance feature, a substantial death benefit for the participating employees, in connection with which the company likewise is to pay half the premium. The interference of the respondent's supervisory employees in the organization of the Doll Workers is not seriously contested; nor can it be doubted that the formation of such an organization was a natural result of the respondents' campaign against the Union .$ The 8 See Matter of Texas Mining and Smelting Company and International Union of Mine, Mall t Smelter Workers , Local No 412, 13 N. L R B. 1163 , enf'd N. L . R B V. Texas Mining and Smelting Co, 117 F ( 2d) 86 (C C A 5), in which we said: " Success of the respond- ent's campaign against the Union entailed one of two results, each destructive of the em- ployees ' rights ; either that the organizational efforts of the employees be crushed, or as actually occurred , that such efforts be diverted into channels more acceptable to the re- W. W. RUSHTON 967 overwhelming majority membership of the organization was clearly obtained through the activities of the respondents' superintendent and other supervisory employees. When the petitions were being circulated, employees were repeatedly admonished that the new in- side union was being formed for Mr. and Mrs. Rushton. Through ,the acts of the supervisory personnel the enthusiasm of the mem- bership of the Doll Workers was inspired, and the momentum of this enthusiasm was still exercising itself with full force on the occasion of the August 23 meeting, when with the organization less than a week old, its members were told that it must be abandoned. They followed the advice of their counsel on that score; but the same momentum caused them, a few moments later, to override his further advice and to create the Independent to supplant the organ- ization that they had just abandoned. Such an abandonment was not a purge of the illegal influence that had brought the first organ- ization into existence. There was no opportunity for them to be dissipated. There was not even a breathing spell between the two organizations. The force that influenced the employees to affiliate with the Doll Workers was carried over and similarly influenced -them in their affiliation with the Independent." Subsequently, as will appear, the respondents lent encouragement to the Independent by discriminatorily discharging and laying off several of the most active members of the Union. From the foregoing we find that the respondents dominated and interfered with the formation and administration of the Doll Work- ers, dominated and interfered with the formation of the Independent, and contributed support to both organizations ; and that they thereby interfered with, restrained, and coerced their employees ni the exercise of the rights guaranteed in Section 7 of the Act. We further find that the contract of September 20, 1940, with the Independent is an agreement made with an .organization not freely chosen by the em- ployees of the respondents as their representative for purposes of collective bargaining with the respondents,'and constitutes an illegal interference with the rights guaranteed employees in Section 7 of the Act. spondent . Both consequences were reasonably within the respondent 's contemplation when it resorted to unfair labor practices designed to destroy the Union ." See also Matter or Jac Feinberg Hosiery Mills , Inc. and American Federation of Hosiery Workers, North Caro- lina District , 19 N L. R B 667 6 See N. L. R B. v. Rath Packing Company, 115 F. (2d) 217 (C C. A. 8), enf'g Matter of Rath Packing Company and United Packing House Workers Local Industrial Union No 600, 14 N L. R B. 805; "If they [the employees ] have been drawn into an association dominated by the employer, their freedom from such association must be restored in order to enable them to exercise the full freedom of association guaranteed them by the Act See also Westinghouse Electric & Mfg. Co. v. N L R B , 312 U S. 660 968 DECISIONS OF NATIONAL LABOR RELATIONS BOARD C. The lay-offs and discharges Mary Roberts was first employed by the respondents in July 1938, and continued in that employment until shortly after October 24, 1938. In 1939 she worked 1 day. On July 13, 1940, she was recalled to work as a machine operator and continued at this employment until October 8, 1940, when she was discharged. The respondents. contend that the reason for her discharge was her failuic to attain a minimum standard of production The respondents maintain for comparative purposes a piece-work schedule or "code" based upon what .they conceive to be normal pro- duction on each job. On the basis of this schedule the employees are expected to earn approximately the salaries paid them. Experience- shows, however, that they rarely, if ever, produce the amount allo- cated to them under the code. A survey of the production and earn- ings records of the 15 employees working at jobs similar to that of Roberts, reveals that none of them, over a period of months, pro- duced enough on this basis to equal the money paid them at the hourly rate. The records offered in evidence also indicate that Roberts` production was the lowest in the group, but she testified that she had been told that other employees in the same department, including one. Ida Brown, had still lower production records. The respondents, were unable to produce Brown's record when called oi, to do :so, al- though the records of all other employees were availab'e and those of all the employees in Roberts' group were produced. Frances Bostick, Roberts' forelady, admitted that Roberts, had been doing well until a few weeks before she left the respondents" employ, but that then it "seemed like she was coming down instead of going up." An examination of Roberts' production sheet shows. no marked falling off -until the week of October 4; and for that week there was no entry whatever for work done on Thursday. No satis- factory explanation for its absence was advanced by the respondents. It was during this week, as will appear hereafter, that- Roberts joined the Union. If the record for that week is left out of consideration, Roberts' average rate of production during the time of her employ- ment was only slightly less than that of several of the other employ- ees" in the group. Roberts had previously been a member both of the Doll Workers and of the Independent. Her husband, an employee of General Motors at its Chevrolet plant in Atlanta, belonged to the C. I. O. In the latter part of September he was having some difficulty in his employment which necessitated representations being made on his behalf by the C. I. O. grievance committee. Roberts, fearing that her membership in the Independent at the respondents' plant might embarrass her husband, offered to turn in her card to the president W. W. RUSHTON 969 of the Independent on September 23, 1940. After some days her resignation from the' Independent- was accepted, and at that time she advised Bostick, her forelady, who is also' her aunt, that she had resigned from the Independent. On Friday, October 4, 1940, Roberts, joined the Union. She worked the following Monday, but on Tuesday morning, October 8, was told by Bostick that on instruc- tions from Mrs. Rushton to lay off the girls who were low in pro- duction, it would be necessary to let her go.10 At that time Bostick asked Roberts whether • she desired to take the matter up with Mrs. Rushton or to have her (Bostick) take it up for her. Roberts de- clined both these suggestions, punched her time card, and has not since been employed by the respondents. The Trial Examiner found, in spite of Bostick's denial, that she knew of Roberts' resignation from the Independent; but further found that neither the respondents nor any of their supervisory em- ployees knew of Roberts' union membership, and on this basis found that her lay-off was not because of her union affiliation or activities. It appears, however, that Roberts was openly congratulated on join- ing by other members at the plant on October 7, the day before her discharge. We cannot doubt that this came to the attention of Bostick, whose uneasiness over her niece's union activities is shown by her own testimony. Thus on being asked whether Roberts had told her that she was withdrawing from the Independent, she said, "No, she did not," but added : She came to my house to see me about it, and my husband wouldn't let me talk to her, and he says, "she came here to get you in trouble." Her own uncle said that 11 In view of the equivocal nature of the evidence that Roberts' low production was the reason for her discharge, and the affirmative showing that her withdrawal from the Independent and affiliation with the Union were known to and a matter of concern to the fore- lady who was responsible for the discharge, we are convinced that Roberts' union activity rather than her failure to meet the respond- ents' production standards was-the real reason for her discharge. We find that the respondents by discharging Roberts discriminated in regard to her hire and tenure of employment, thereby discouraging membership in it labor organization and interfering with, restrain- 10 There is no indication in the testimony of Mrs Rushton or Bostick that Mrs Rushton had given any such orders , and no other employees were laid off at that time Bostick- testified that she laid Roberts off, and that when she told Mrs Rushton of her intention, Mrs. Rushton told her to go ahead if Roberts "couldn 't make her time " ll This testimony tends to corroborate the testimony of Roberts ' step-father that about a week before Roberts ' discharge Bostick 's husband - told him that Roberts was "fixing to join. the C . I, 0 " and that "if she did that it would mean his wife 's job, or if the C I 0 won, it would mean his wife 's job, and that he didn 't think that she was doing fair about it," 970 DECISIONS OF NATIONAL LABOR RELATIONS BOARD ing, and coercing their employees in the exercise of the rights guar- anteed in Section 7 of the Act. Donnie Belle Campbell, Frances Schultz, and Sara Ponder were laid off by Moore on August 29, 1940, with the announc.ment that the lay-off was due to lack of work. There was no criticism or either the quality or quantity of production of any of these three employees. The respondents offered no records to show a decline in the opera- tions of the plant at the time of the lay-off, and some testimony by the employees indicates that there was at that time in process of manufacture a substantial quantity of work in the form of dolls and toys which would shortly reach the departments in which the lay-offs were made. A schedule of employment by departments for the months of August, September, and October 1940 is ir. evidence and discloses that over-all employment in the plant steadily increased during the period covered. Rushton testified that these were months of peak production. In early August, 274 persons were employed. With the exception of 1 week when there was no change in the total, this number increased weekly until October 4, when ii reached the peak of 298 persons, and then gradually declined at the rate of from ,two to four persons per week during the remaining period shown on the schedule. Campbell was employed in the finishing department, either putting in eyes, putting on noses, or dressing the dolls for final shipment. This department shows a consistent increase, in personnel beginning the week following her lay-off. Schultz and Ponder were in the stuffing department. Although the schedule shows 53 persons employed in that department at the time of the August 29 lay-off, and Moore testified that no one was ever-hired to take the place of either Campbell, Schultz, or Ponder, on the following week 52 persons were employed, and thereafter the staff was increased to 56. It did not fall below 55 during the remainder of the period shown on the sched- ule. These employment figures, taken from the respondents' own records, fail to support the contention that these employees were laid off because of lack of work, and require a further examination of the circumstances in order to determine the true reasons for the lay-offs. Since there had been no criticism of the work of any of these em- ployees, and since the respondents' records not only do not reflect a shortage of work but definitely reflect an increase in employment immediately following the lay-offs in question, increased weight must be given to the circumstances tending to indicate that these lay-offs were inspired by the antipathy of the respondents to the union sym- pathies of the employees so laid off. The opposition of both Mr. and Mrs. Rushton to un&on affiliations by their employees has already been shown in connection with their conversations with Bessant and Brown. The opposition of Moore W. W. RUSHTON 071 to the Union was even more open and bitter. This same opposition was also reflected in a modified form in the foreladies directly over Campbell, Schultz, and Ponder. All these representatives of the employers had made more or less of an issue of union membership, either directly, as did Moore. or indirectly as did the others through their frank espousal of the Cause of the inside union. It was estab- lished that at least 191, or approximately 70 per cent, of the eligible employees of the respondents were members of the Independent. The membership strength of the Union was not disclosed, but it is-obvious that the Union's members constituted* a much smaller proportion of the employees than did the members of the Independe7it. Neverthe- less, when the time came for a lay-off allegedly due to "shortage of work," the existence of which is belied by the record, all who were laid off were members of the Union. There is no evidence that any Independent members were dispensed with when this alleged work shortage developed on August 29. This, standing alone, may not conclusively show that Campbell, Schultz, and Ponder were laid off because of their union membership or activities, but when supported by the other evidence contained in the record of the hostility on the part of the respondents and their supervisory employees toward union membership and their knowledge that these persons were at least sympathizers with the Union, is convincing evidence that the lay-off s were primarily occasioned by an intention and desire to discriminate against= the affected employees because of their union atliliations or sympathies. Campbell was an old employee of the respondents, having worked for them from time to time for the past 15 years. At one time she was forelady in the eyes department. In March 1938 her baby was born, and from that time through 1938 and 1939 she did not work. She returned in February 1940 and worked for a short time, when she was laid off; and she was not recalled again until July, when she worked 5 days. On August 9 she returned and lost no time until her lay-off on August 29. On August 15, 1940, she signed the petition for the inside union at the request of Gann. On August 16, having spent a week in-the nose department, she was told that she was to be laid off and immediately complained to Moore, the superintendent, calling attention to the fact that she had been promised permanent employ- ment when she started work the last time. This was at the height of the campaign to organize the inside union. When she spoke to Moore about the lay-off, Moore in turn spoke to her forelady, and then re- turned to Campbell and said, "Now, listen, Donnie Belle, you are stick- ing by us and I am sticking by you, and you come in in the morning, and Mrs. Sykes can use you on the eyes again." Campbell returned as instructed and worked the following 9 working days, spending part of the time in the eyes department and part in the dressing depart- '972 DECISIONS OF NATIONAL LABOR RELATIONS BOARD ment. She attended the August 23rd meeting when the Doll Workers was disbanded and the Independent organized. Upon returning to her home that evening, she signed an application for membership in the Union. What, if anything, had transpired at the meeting to bring 'about this action is not disclosed in the record. However, during the evening Gann, the same person who had induced her to sign the peti- tion on August 15, called at her home and inquired whether she was going to stay with the Independent group. She did not tell Gann that she had just signed a union card, but did tell her she had no intention of going along further with the Independent. Later in the evening Adams and Bickers, who had been elected president of the In- =dependent earlier in the evening, also called at Campbell's home and asked her whether she intended to continue her allegiance to the Independent. Her reply was noncommittal. From the foregoing, in the light of Moore's open hostility to union membership and the fact that the contention that Campbell's lay-off was due to lack of work must fall when viewed in the light of respond- ents' own records, we find, as did the Trial Examiner, that Campbell's lay-off of August 29, 1940, by Moore was discriminatory and' was the result of Campbell's failure and refusal to support the Independent. -Campbell was again recalled to work on October 4,1940, and worked 1 or 2 days, after which she quit of her own accord and for her own con- venience. Since it has been found that employment in the department in which Campbell was employed during her last period of employ- ment was progressively increased each week between August 29 and 'October 4, 1940, we further find that the discriminatory refusal to retain Campbell on the respondents' pay roll continued at all times between August 29, 1940, and her return to work on October 4, 1940. The lay-offs of Schultz and Ponder fall in the same category as that of Campbell and, as has been noted, took place on the same day. 'These women were employed as "closers," whose duty it was to sew up the bodies of the dolls or toys after they had been stuffed with cotton. There is some testimony to indicate that on the day of the lay-offs there was a temporary lag or lull in the quantity of stuffed dolls waiting to 'be closed, but as stated above, there is also substantial testimony, which is supported by the record of increasing employment, that progres- sively more material was being put in process and on its way to the stuffers, closers, and finishers. What has heretofore been said with reference to Campbell and the motivating factors that led to her dis- charge applies with equal force to Schultz and Ponder. Schultz had refused to sign the August 15 petition when it was brought to her by Warr, and had likewise ignored the recommendation of Shaw, her forelady,.that she join the new organization. On the afternoon of August 15 she made her application for membership in the Union. W. W. RUSHTON 973 Ponder, likewise, had refused to sign the petition for the inside union, after having been solicited- to do so by Thelma McEver, an employee, and by Warr, Gann, and White, and had joined the Union on the same afternoon that Schultz joined. Schultz, Ponder, and Lona Latham, who worked together in one group, all refused not only to sign the petition, but to discuss it with Mattie Thames, who acted as assistant forelady in the department. After this refusal, according to Ponder, Moore "nagged me consid- erably about the Union." Ponder made no secret of her affiliation with the Union and talked with practically everyone with whom she came in contact about it. There is no substantial evidence as to the extent of Schultz's activity on behalf of the Union beyond her associ- ation with Ponder and her refusal to subscribe to the Independent. That Moore identified Ponder and Schultz with the union activity is reflected in her conduct immediately preceding her announcement to these two employees that they were to be laid off. , The work im- mediately available to Ponder, Schultz, and Latham was beginning to run out. Ponder asked Shaw, the forelady, for more work. Shaw stated that whatever other work was available was to go to the other group of closers, all of whom were members of the Independent. Ponder remonstrated that these other people had work ahead, whereas her group was about out of work. Shaw did not reply, but went -downstairs and very shortly thereafter came back with Moore. Moore approached the group in which Ponder was sitting and stated, "This damn talking about this Union is going to be stopped." She then required them to rearrange their work tables so that they would not all be together, directing that two of them sit together while one sat alone. . Ponder and Schultz arranged their tables together, and shortly after they had done so, Moore returned, and with some profanity pulled Schultz's table about 10 feet from the,one occupied by Ponder. She then walked over to the group of Independent operators on the other side of the room, and said something to them which neither Ponder nor Schultz could hear but which caused the operators to whom she was talking to stand up and clap their hands; after which Moore returned to Ponder and Schultz and told them that they were laid off because there was no more work for them. This accumulation of incidents, viewed against the background .of increasing employment in the respondents' plant, leads to the conclusion that Schultz and Ponder were laid off on August 29 not because of lack of work, but because of their identification with the activities of the Union and their refusal to support the Independent .12 12 This situation may well fall within the observation of Mr. Justice Douglas in N. L. R. B. v Link Belt Co , 311 U. S. 584, in which he states : "Here no one fact is conclusive. But the whole congeries of facts before the Board supports its findings." 974 DECISIONS OF NATIONAL LABOR RELATIONS BOARD There is no evidence that the lay-offs were intended to be discharges or that the respondents did not contemplate recalling Schultz and Ponder at a.later date. It was the custom of the respondents to lay off employees and rehire them as business conditions required, and the fact that Schultz was later recalled to work indicates that Moore's lay-off of these two employees was prompted by a desire to discipline them for their union activities rather than permanently to dispense with their services. Schultz was recalled to work on September 23, 1940. For reasons hereinafter discussed, Ponder was never recalled. We find, as did the Trial Examiner, that the respondents by the lay-off of Schultz and Ponder discriminated in regard to their hire and tenure of employment, thereby discouraging membership in the Union and interfering with, restraining, and coercing the employees in the exercise of the rights guaranteed in Section 7 of the Act. The discharges of Elizabeth Brown and Rush Bessant and the respondents' refusal to recall Sara Ponder may be considered together. Brown and Bessant were admittedly the outstandingly active expo- nents of the Union among the respondents' employees. They were recognized as such by the respondents, and as has been heretofore pointed out, fell into disfavor with the respondents on that account.13 As found above, Ponder's union activities were also known to the respondents, and had led to her discriminatory lay-off on August 29, 1940. It is against this background of the respondents' bitter oppo- sition to the Union, already expressed in acts directed against these three employees, that we must consider the circumstances surrounding their discharges. On the afternoon of Saturday, September 7, 1940, Brown, Bessant, and Ponder called at the home of J. T: Reese, a former superintendent of the respondents' factory who was at the time independently en- gaged in business in Atlanta. The reason for the call was to obtain whatever information Reese could give them about another em- ployee against whom they had some grievance. In the course of the visit the three employees explained that they were members of the Union, discussed conditions at the respondents' plant, and expressed the wish that Reese could be back in charge of the plant. There was also some conversation concerning Mrs, Rushton and James. Adams. The testimony regarding this part of the conversation is conflicting, but according to Reese's version, remarks were made by the em- ployees implying improper relations between Mrs. Rushton and Adams, with particular reference to a trip to Florida. At the hear- ing Brown, Bessant, and Ponder denied having made the slanderous statements ascribed to them by Reese, although they admitted having repeated certain gossip about Mrs. Rushton. 3 B See Section III'A, supra. W. W. RUSHTON 975 After the group left his home, Reese telephoned Mr. Rushton, and later in the evening called on him to report what had been said during the visit. Rushton immediately attempted to take counsel with his attorney, but found that McLarty was out of the city. When Mc- Larty returned on the follo«ing Tuesday, he and Rushton called on Reese at his place of business, where Reese repeated what he had already told Rushton. McLarty reduced the statement to writing, and on the following day had Reese sign and swear to it. As soon as Rushton received word from McLarty,that the statement was in affidavit form, he called first Brown and then Bessant into his office, charged them with having made slanderous remarks concerning Mrs. Rushton, and discharged them. Both Brown and Bessant testi- fied, and we find that they denied having slandered Mrs. Rushton.14 Ponder was not working at the time of the discharges, and Rushton did not notify her of the action he was taking; but according to his testimony, she was discharged on the same day so far as he was concerned. Immediately following the discharges, Rushton called all the em- ployees together and explained that he had discharged Brown and Bessant because of their slanderous charges against Mrs. Rushton and that he wanted all the employees to know that he would not tolerate such conduct. During his remarks, McLarty came in, accompanied by Curtis and Witcher, representatives of the Conciliation Service of the United States Department of Labor.1a Curtis, who was present at Rushton's request, addressed the employees on their rights under the law and advised them to get in touch with him if they felt that they 'gere being intimidated or coerced by anyone. McLarty also addressed the group on the subject of the financial situation of the respondents, and during the course of his remarks stated that the employees had the right to join any labor organization they might choose. The Trial Examiner made no attempt in his Intermediate Report to resolve the conflict of testimony regarding what was actually said by the three employees during their conference with Reese, but found that the discharges were made by Rushton on the basis of his belief in the truthfulness of Reese's affidavit. Admittedly there would' be no violation of the. Act if the discharges were made solely on the ground of an honest belief that the employees concerned had slandered Mrs. Rushton. It is therefore important for us to determine the good faith of the respondents' contention that such was the case. A 14 Rushton ' s own testimony corroborates Bessant's to the effect that the latter denied the charges . General testimony of both respondents contradicts that of Brown, but we find, as Brown testified, that she "attempted" to deny the charges to Mrs Rushton , stating in effect that the charges were untruthful. rs Rushton testified that he had called the employees together for two purposes , to make his announcement and for Curtis' speech„ and that he had "timed,it that way" purposely. 976 DECISIONS OF NATIONAL LABOR RELATIONS BOARD consideration of the contents of Reese's affidavit by no means es- tablishes the fact that the alleged slanderous statements were the sole cause of Rushton's desire to get rid of the three employees. As a matter of fact, no slanderous statement is therein directly ascribed to Ponder; yet Rushton testified that he considered her "in the same class with Mr. Bessant and Mrs. Brown." On the other hand, a large part of the affidavit relates to a discussion of conditions in the plant, during which Brown stated that the plant was in a turmoil, that they (Brown, Bessant, and Ponder) were "C. I. O. workers," that there was also another organization, and that the union members were going to strike. In view of the respondents' previous attitude to- ward the Union, it can scarcely be doubted that Rushton would be adversely affected by this phase of the report. His subsequent actions as well as the respondents' earlier expressions of loss of sympathy with Brown and Bessant because of their union activities, support the inference that these considerations motivated the discharges. Rushton allowed 4 days to elapse between the time of Reese's report to him and the discharges, in order to secure an affidavit for his pro- tection in the event that he should be charged with discrimination against the employees, but made no attempt during this time to in- vestigate the truth of the charges against them. Since they were old employees, with whom he and Mrs. Rushton had formerly been on friendly terms, his statement that he had complete confidence in Reese appears'an inadequate explanation of his failure to inquire into con- duct on their part which, according to his own testimony, reached his attention for the first time through Reese's report. The union activities of the three employees, on the other hand, although con- firmed by Reese's statements, were already known to him, and required no further investigation. We can only conclude that the allegedly slanderous statements in Reese's affidavit were used by Rushton as a pretext to conceal his real reason for dicharging these three em- ployees. The occurrence of speeches about union activities immedi- ately following the discharges tends to confirm this conclusion. On the basis of the above facts and on the entire record in the case, we find that the respondents by discharging Brown, Bessant, and Ponder discriminated in regard to their hire and tenure of em- ployment, thereby discouraging membership in the Union and inter- fering with, restraining, and coercing the employees in the exercise of the rights guaranteed in Section 7 of the Act. Iv. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The activities of the respondents set forth in Section III above, occurring in connection with their operations described in Section I W. W. RUSHTON 977 above, have a close, intimate, and substantial relation to trade, traffic, and commerce among the several States, and tend to lead to labor disputes burdening and obstructing commerce and the free flow of commerce. V. THE REMEDY Having found that the respondents have engaged in certain unfair labor practices, we shall order them to cease and desist therefrom and to take certain affirmative action which we find will effectuate the policies of the Act and restore as nearly as possible the conditions. which existed prior to the commission of the unfair labor practices. We have found that the respondents have dominated and interfered with the formation and administration of the Doll Workers and the formation of its successor, the Independent, and contributed support to them. In order to effectuate the policies of the Act and free the, employees of the respondents from the effects of such unfair labor practices, which constitute a continuing obstacle to the exercise by employees of the rights guaranteed them in the Act, we shall order- the respondents to refuse to recognize the Doll Workers 16 and too withdraw all recognition from and completely disestablish the Inde- pendent as the representative of the respondents' employees for the purposes of collective bargaining. Since the contract of September 20, 1940, embodies recognition of the Independent and represents the' fruits of the respondents' unfair labor practices, we shall order the respondents to cease and desist from giving effect to this or any other agreement with the Independent. Nothing in this Decision and Order, however, shall be taken to require the respondents to vary those wage, hour, and other substantive features of its relations with the employees themselves, which the respondents may have established in performance of the invalid contract as extended, renewed, modified, supplemented, or superseded. We have found that the respondents laid off Donnie Belle Camp- bell, Frances Schultz, and Sara Ponder on August 29, 1940; discharged Elizabeth Brown, Rush Bessant, and Sara Ponder on September 11, 1940; and discharged Mary Roberts on October 8, 1940; because of their union membership and activity and because they withdrew from or refused to join the labor organizations enjoying the favor of the respondents. We have further found that Campbell was reinstated by the respondents on October 4, 1940, and subsequently quit her job of. her own accord, and that Schultz was reinstated on September 23S 1940. Accordingly, we shall order the respondents to make whole these two employees for any loss of pay they may have suffered by 16 Although it has not been recognized by the respondents, the Doll workers is sell in legal' existence ( See Section III B , 8upra.) 978 DECISIONS OF NATIONAL LABOR' RELATIONS BOARD reason of the respondents ' discrimination against -them, by payment to each of them of a sum of money equal to the amount which she would normally have earned as wages from the date of her lay-off to the date of her reinstatement less her net earnings 11 during such period. In regard to Roberts , Brown, Bessant, and Ponder, we shall, in accordance with our usual custoln, order the respondents to offer each of them reinstatement without prejudice to his seniority and other rights and privileges . Further to effectuate the policies of the Act we should normally order back pay from the time of the dis- crimination against them to the ' time of the respondents ' offer of reinstatement . In view of the Trial Examiner 's recommendations, however, the respondents could not have been expected to reinstate them after the respondents had received the Intermediate Report.18 They should not, therefore , be required to pay them back pay from that time until the issuance of this Decision . Accordingly, we shall order the respondents to make whole Roberts , Brown, Bessant, and Ponder for any loss of pay they may have suffered by reason of the respondents ' discrimination against them, by payment to each of them of a sum of money equal to the amount which he would normally have earned as wages from the date of such discrimination 11 until the date of the Intermediate Report, and from the date of this Decision and Order until the offer of reinstatement , less net earnings 20 during these periods. Upon the basis of the above findings of fact and upon the entire record in the case, the Board makes the following : CONCLUSIONS OF LAW 1. United Paper, Novelty & Toy Workers International Union, Soft Stuffed Doll and Toy Workers Union of Atlanta. Inc., and The In- dependent Toy Workers Union of Atlanta are labor organizations within the meaning of Section 2 (5) of the Act. 11 By "net earnings" is meant earnings less expenses, such as for transportation, room, and board , incurred by an employee in connection with obtaining work and working else- where than for the respondent , which would not have been incurred but for his unlawful discharge and the consequent necessity of his seeking employment elsewhere See Matter of Crossett Lumber Company and United Brotherhood of Carpenters and Joiners of America, Lumber and Sawmill Workers Union, Local 2590, 8 N L R B. 440 . Monies received for work perfoimed upon Federal , State , county , municipal , or other work-relief projects shall be considered as earnings See Republic Steel Corporation v. N. L R B, $11 U. S. 7. is Matter of E R. Haffelfinger Company , Inc. and United Wallpaper Crafts of North America, Local No 6, 1 N. L R . B. 760 ; Matter of Kentucky Firebrick Company and United Brick and Clay Workers of America , Local No. 510, 3 N. L. R. B. 455, enf'd N. L. R. B. v. Kentucky Firebrick Co., 99 F. ( 2d) 89 (C C A. 6) ; Matter of Fad Motor Company, a cor- poration and United Automobile Worker8 of America, Local No 560, C I 0, 29 N L R B 873 10 Ponder's back pay will begin with the date of her lay- off, and that of Roberts , Brown, and Bessant with the dates of their iespective discharges 30 See footnote 17, supra. W. W. RUSHTON 979 2. By interfering with, restraining, and coercing their employees in the exercise of the rights guaranteed in Section 7 of the Act, the re- spondents have engaged in and are engaging in unfair labor practices, .within the meaning of Section 8 (1) of the Act. 3. By dominating and interfering with the formation and admin- istration of Soft Stuffed Doll and Toy Workers Union of Atlanta, Inc., and contributing support thereto, the respondents have engaged in and are engaging in unfair labor practices within the meaning of Section 8 (2) of the Act. 4. By dominating and interfering with the formation of The In- dependent Toy Workers of Atlanta, and contributing support thereto, the respondents have engaged in and are engaging in unfair labor prac- tices within the meaning of Section 8 (2) of the Act. 5. By discriminating in regard to the hire and tenure of employ- ment of Mary Roberts, Donnie Belle Campbell, Frances Schultz, Sara Ponder, Elizabeth Brown, and Rush Bessant; thereby discouraging membership in United Paper, Novelty and Toy Workers International Union, the respondents have engaged in and are engaging in unfair labor practices within the meaning of Section 8 (3) of the Act. 6. The aforesaid unfair labor practices are unfair labor practices affecting commerce, within the meaning of Section 2 (6) and (7) of the Act. ORDER Upon the basis of the above findings of fact and conclusion's of law, and pursuant to Section 10 (c) of the National Labor Relations Act, the National Labor Relations Board hereby orders that the respondents, W. W. Rushton and Mrs. Mary Rushton, doing business as The Rush- ton Company and/or The Atlanta Playthings Company, and their agents, successors, and assigns, shall: 1. Cease and desist from : (a) Discouraging membership in United Paper, Novelty and Toy Workers International Union or any other labor organization of their employees by discharging, laying off, or refusing to reinstate any of their employees, or in any other manner discriminating in re- gard to their-hire or tenure of employment or any term or condition of employment; (b) Dominating or interfering with the administration of Soft Stuffed Doll and Toy Workers Union of Atlanta, Inc., and/or The Independent Toy Workers Union of Atlanta, or the formation or ad- ministration of any other labor organization of their employees, and from contributing support thereto; (c) Giving effect to their contract of September 20, 1940, with The Independent Toy Workers Union of Atlanta, or to any extension, re- 450122-42-vol 33-63 4 980 DECISIONS OF NATIONAL LABOR RELATIONS BOARD newal, modification, or supplement thereof, or to any superseding contract with said organization which may now be in force; (d) In any other manner interfering with, restraining, or coercing their employees in the exercise of the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, or to engage in concerted activi- ties for the -purposes of collective bargaining and other mutual aid or protection as guaranteed in Section 7 of the National Labor Relations Act. 2. Take the following affirmative action, which the Board finds will effectuate the policies of the Act : , (a) Make whole Frances Schultz and Donnie Belle Campbell for any loss of pay they may have suffered by reason of the respondents' dis- criminatory acts, by the payment to each of them of a sum of money equal to the amount which she would normally have earned as wages from August 29, 1940, to September 23, 1940, and October 4, 1940, respectively, less her net earnings 21 during such period; (b) Offer to Mary Roberts, Elizabeth, Brown, Rush Bessant, and Sara Ponder, immediate and full reinstatement to their former or sub- stantially equivalent positions without prejudice to their seniority and other rights and privileges; (c) Make whole Mary Roberts, Elizabeth Brown, Rush Bessant, and Sara Ponder for any loss of pay that they may have suffered by reason of the discrimination against them, by the payment to each of them of a sum of money equal to the amount which he would normally have earned as wages from the date of the respondents' discrimination against him to the date of the Intermediate Report, and from the date of this Order to the date of the respondents' offer of reinstatement, less his net earnings 22 during such periods; (d) Refuse to recognize Soft Stuffed Doll and Toy Workers Union of Atlanta, Inc., and withdraw all recognition from The Independent Toy Workers Union of Atlanta, as the representative of their em- ployees for the purpose of dealing with the respondents concerning grievances, labor disputes, wages, rates of pay, hours of employment, or other conditions of employment, and completely, disestablish the Independent as such representative; (e) Immediately post in conspicuous places throughout their plant in Atlanta, Georgia, and maintain for a period of sixty (60) consecu- tive days from the date of posting, notices to their employees stating : (1) that the respondents will not engage in the conduct from which they are ordered to cease and desist in paragraph 1 (a), (b), (c), and zi See footnote 17, supra. 22 See footnote 17, supra. W. W. RUSHTON 981 (d) of this Order; (2) that the respondents will take the affirmative action set forth in paragraphs 2 (a), (b), (c), and (d) of this Order; and (3) that the respondents' employees are free to become or remain members of United Paper, Novelty and Toy Workers International Union, and that the respondents will not discriminate against any employee because of membership or activity in that organization; (f) Notify the Regional Director of the Tenth Region in writing within (10) days from the date of this Order what steps the re- spondents have taken to comply herewith.