Tower Paint Manufacturing

National Labor Relations Board - Board Decisions

Mar 10, 1972

195 N.L.R.B. 823 (N.L.R.B. 1972)

TOWER PAINT INVESTMENTS 823
Tower Paint Investments , Inc., d/b/a Tower Paint
Manufacturing and its wholly owned subsidiary
Tiara Wallcovering, Inc. and International Brother-
hood of Painters and Allied Trades , AFL-CIO.
Cases 12-RC-3833 and 12-CA-5134
March 10, 1972
DECISION, ORDER, AND DIRECTION OF
SECOND ELECTION
BY CHAIRMAN MILLER AND MEMBERS FANNING
AND KENNEDY
On November 11, 1971, Trial Examiner Ramey
Donovan issued the attached Decision in this con-
solidated proceeding. Thereafter, the General Counsel
filed exceptions and a supporting brief, and the Re-
spondent filed cross-exceptions and an answering brief.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the Na-
tional Labor Relations Board has delegated its au-
thority in this proceeding to a three-member panel.
The Board has considered the record and the Trial
Examiner's Decision in light of the exceptions, cross-
exceptions, and briefs and has decided to affirm the
Trial Examiner's rulings, findings, and conclusions and
to adopt his recommended Order.'
ORDER
Pursuant to Section 10(c) of the National Labor Re-
lations Act, as amended, the National Labor Relations
Board adopts as its Order the recommended Order of
the Trial Examiner and hereby orders that Respondent,
Tower Paint Investments, Inc., d/b/a Tower Paint
Manufacturing and its wholly owned subsidiary Tiara
Wallcovering, Inc., Hialeah, Florida, its officers,
agents, successors, and assigns shall take the action set
forth in the Trial Examiner's recommended Order.
It is hereby further ordered that the first election in
Case 12-RC-3833 be set aside, and that a second elec-
tion be conducted pursuant to the direction below.
[Direction of Second Election2 omitted from publica-
tion.]
' The General Counsel has excepted to certain credibility findings made
by the Trial Examiner. It is the Board's established policy not to overrule
a Trial Examiner's resolutions with respect to credibility unless the clear
preponderance of all of the relevant evidence convinces us that the resolu-
tions were incorrect. Standard Dry Wall Products, inc , 91 NLRB 544, enfd.
188 F.2d 362 (C.A. 3) We have carefully examined the record and find no
basis for reversing his findings
i In order to assure that all eligible voters may have the opportunity to
be informed of the issues in the exercise of their statutory right to vote, all
parties to the election should have access to a list of voters and their ad-
dresses which may be used to communicate with them Excelsior Underwear
Inc., 156 NLRB 1236; N.L.R.B. v Wyman-Gordon Co., 394 US. 759
Accordingly, it is hereby directed that an election eligibiliby list, containing
the names and addresses of all the eligible voters, must be filed by the
Employer with the Regional Director for Region 12 within 7 days after the
date of issuance of the Notice of Second Election by the Regional Director.
The Regional Director shall make the list available to all parties to the
election. No extension of time to file this list shall be granted by the Regional
Director except in extraordinary circumstances Failure to comply with this
requirement shall be grounds for setting aside the election whenever proper
objections are filed.
TRIAL EXAMINER'S DECISION
RAMEY DONOVAN, Trial Examiner: The charge was filed
on March 25, 1971, by International Brotherhood of Painters
and Allied Trades, AFL-CIO, herein the Union. The com-
plaint issued under date of July 9, 1971, alleging violations of
Section 8(a)(1) and (3) of the Act. As amended, the complaint
allegations encompassed the discriminatory discharge of
seven employees; the granting of a wage increase to all em-
ployees in response to the union organizational campaign;
and coercive interrogation of an employee. Respondent has
denied the commission of the alleged unfair labor practices.
The hearing was held in Miami, Florida, on August 16, 17,
and 18, 1971.
FINDINGS AND CONCLUSIONS
1. JURISDICTION
Tower Paint Investments, Inc., d/b/a Tower Paint Manu-
facturing and its wholly owned subsidiary, Tiara Wallcover-
ing, Inc., are separate Florida corporations that have the
same directors, share the, same facilities, and have a common
labor relations policy that is set by the same individuals. The
common office is located in Hialeah, Florida, where the com-
panies are engaged in the manufacture and sale of paint, wall
coverings, and related products. The above companies, Re-
spondent herein, constitute a single employer within the
meaning of the Act.'
During a representative 12-month period, Respondent had
a gross volume of business in excess of $500,000 and pur-
chased and received materials, valued in excess of $50,000,
directly from points outside Florida.
Respondent is an employer engaged in commerce within
the meaning of Sections 2(6) and (7) of the Act. The Union
is a labor organization within the meaning of Section 2(5) of
the Act.
II. THE ALLEGED UNFAIR LABOR PRACTICES
A. The Union Organizational Activity
Beginning around the latter part of February or the first of
March 1971, after some discussion between employees
Weems, Rivers and a few others, Rivers arranged an appoint-
ment with Union Representative Menendez. Rivers, Weems,
and Menendez met together on the night of March 8 or 10.
This was not at the plant. Union authorization cards were
received from Menendez on this occasion. Weems states that
he gave out cards to about six employees.' He distributed
some of these cards at the plant before work, some during the
lunch break, and one at the home of an employee. Weems
signed a card on March 10. Rivers also gave out cards, "some
. at the plant and the rest of it was done in individual
houses [homes]. Me and Weems did at night."' The employee
recipients named by Rivers in his testimony were King,
Owens, Moore, and Langford, all of whom signed cards.'
The Company sells to commercial accounts and also through its Il
retail stores in the south Flonda area
Wright, Foster, Lecine, Williams, Owens, and Moore. The latter two are
alleged discrimmatees.
Both Rivers and Weems are alleged discriminatees
° The date on the cards of Rivers and Moore is March 10.
195 NLRB No. 150
824 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Employee Diaz' testified that everybody signed a card. His
card was signed on March 10 at the plant. Diaz stated that
the employees had discussed the Union among themselves
but had not done so in front of any member of management.
He testified that those who spoke on behalf of a union "went
to great lengths to keep any such discussions a secret from
management......
Fernandez, an alleged discriminatee, signed a card on
March 12 at the plant. He testified that management did not
know that the employees were forming a union. While the
foregoing is obviously an opinion, it appears in a context
where neither this witness nor others testified to facts from
which it could be concluded that management was aware of
the union activity.
Another alleged discriminatee, Castillo, testified that Riv-
ers spoke to him about signing a card while Castillo was
working at a garage or gas station.' Castillo signed his card
on March 9. He expressed the opinion that management was
unaware of the employees' union activity because the em-
ployees tried to be secretive and "we did it in a way nobody
would find out except the employees."
Owens, an alleged discriminatee, signed a card for Rivers
on the evening of March 10 at or near Owens' home. Moore,
the seventh alleged discriminatee did not testify but Rivers
states that Moore signed a card for him on March 10. Rivers
identified the card.
There is no evidence that any supervisor spoke to any
employee about the, or, a, union, or about union activity, or
engaged in surveillance or interrogation. Prior to the dis-
charges there was one union meeting. This was on the evening
of March 23, 1971, at the union hall which was not in the
plant vicinity. About 20-23 employees of Respondent at-
tended.6
B. The Termination
Five of the foregoing employees, Fernandez, Castillo,
Owens, Moore, and Weems were terminated at the end of the
day on March 24; Diaz and Rivers were terminated when
they reported for work on March 25.
Respondent attributes the March 24-25 terminations to a
serious decline in its business and denies awareness of any
union activity among its employees until after it had decided
upon and selected the seven employees for termination. The
General Counsel asserts that Respondent's business had in-
creased at the time of the discharges and that on March 26
the Respondent gave a general wage increase to all employees
and officers. According to the General Counsel, Respondent's
knowledge of the union activity of the discharges is to be
inferred from the fact that the plant was relatively small in
its employee complement and from the fact that two dischar-
gees testified that the production manager, Bertram Tower,
An alleged discriminatee
e Earlier, when first questioned along the above lines as to whether the
union talk was in the presence of management people, Diaz had answered
(as his answer in Spanish was translated by the official interpreter), "In what
head does it fit that anybody will say anything about organizing a union in
front of the management," i e., no one of any intelligence would mention
in front of management the idea of organizing a union, in whose mind would
it occur to mention organizing a union in front of management
' This was a part-time job that Castillo had in addition to his regular job
with Respondent.
I There were 32 eligible employees in the bargaining unit The unit con-
sists basically of production, maintenance, warehouse, and truckdriver em-
ployees.
told them that he was terminating them for union activity.'
What precipitated the discharges, according to the General
Counsel, was a telephone call from Board Attorney Delores
Burton to Muriel Tower, president of Respondent, on the
afternoon of March 24 regarding "the representation peti-
tion" filed by the Union.
Respondent's officers are: president, Muriel Tower; her
son, David Tower, vice president; her son, Bertram Tower,
secretary-treasurer. The business was apparently established
by Martin Tower, husban d of Muriel, about 27 years ago.
Throughout the Company's history Muriel Tower has ac-
tively participated in all phases of the business. In 1961 the
Towers were divorced and the business became a partnership.
Thereafter, in 1965 a corporation was formed and Muriel
Tower was in charge of the active management of the busi-
ness. These and other moves occurred in whole or in part in
a context of two subsequent divorces of Martin Tower and of
legal action by his successive wives for financial settlements.
In 1968, the corporation entered into an agreement with
Martin Tower to acquire his stock interest in return for spe-
cified payments to him and to wife number 3. The final pay-
ment was made on March 19, 1971.
Muriel-Tower as president actively participates in the busi-
ness as chief executive officer. Bertram Tower is the manager
of Respondent's production operations. David Tower appar-
ently is in charge of the wallcoverings aspect of the business.
All the above Towers are members of the board of directors.
Two other members of the board are Bennett, the general
manager, and Daniels, sales manager, who is in charge of
retail store salesmen, the warehouse and distribution (drivers)
employees.
Over the years Respondent's production and sales have
shown yearly increases. In the summer of 1970 a further
increase in sales was projected and additional salesmen were
hired. By the end of 1970, however it was realized that the
increase in business had not materialized and that sales had
deteriorated. On December 23, 1970, the board of directors
decided to lay off five store salesmen who had been earlier
hired. Because of the holidays the terminations were not
made until January 8, 1971, at which time the employees
were terminated and given a week's pay in lieu of notice. The
week's pay in lieu of notice was also the procedure followed
in the terminations on March 24--25, 1971. In the latter part
of January 1971, the directors again met "to discuss ways and
means of increasing sales and cutting down expenses." As of
the middle of February 1971, two office girls were terminated
and a third, who resigned on February 11, was not replaced.
Although there were some personnel 'reductions agreed
upon at the December and January meetings of the board of
directors, as described above, some of the directors, Bennett
and Daniels, had advocated wider retrenchment. Bennett, for
instance, at the January meeting, had urged consideration of
personnel reductions in all departments and not simply sales
and office, and he also advocated reduction or elimination of
overtime, particularly in Bertram Tower's production depart-
ment.10 Bertram Tower argued against this position and Ben-
nett's position did not prevail at the time.
During the period from the latter part of November 1970,
through the spring of 1971, Respondent's financial position
showed a downward trend in sales and production and in
overdue accounts receivable, as well as a rise'' in accounts
Tower denies having so stated
° The employees were regularly working a 44-hour week
TOWER PAINT INVESTMENTS 825
payable that impaired the Respondent's cash position."
Kahn is a certified public accountant in a firm that has
handled Respondent's accounting for many years. Kahn
personally has served the account since 1963. He testified at
' Weekly sales reports in dollars showed (cents omitted):
Week Ending 1969 1970 Loss or Gain
11/28 $46472 41663 -5079
12/5 51866 55916 44050
12/12 54797 -52694 -2102
12/19 53366 52026 -1339
12/26 27839 29948 42109
1970 1971
1/2 36564 28984 -7580 Loss 11/28 -- 1/2 = $9941
1/9 36494 41308 44864
1/16 40322 42759 42437
1/23 44498 38037 -6460
1/30 45146 44813 - 333
2 6 033 645 21/ 5 5 37 07 84
2/13 45362 42026 -3336
2/20 46518 42429 -4089
2/27 56151 44839 -11311
3/6 48457 47562 - 895
3/13 45862 47154 41291
3/20 53496 48719 -4776 Loss 1/9 -- 3/20 = $11880
Loss 2 /13 -- 3/20 = $23116
Loss 2/13 -- 3 /6 = $19631
Loss 2/13 -- 3 /13 = $18340
Monthly sales reports showed:
January 1971 -8641
February -8011
March 46774
April -15058
May 45042
June -4639
(apparently reflecting a substantial increase
in last 11 days of month)
(cont.)
Loss 1/71 -- 2/71 = $16652
Loss 1/71 -- 3/71 = $ 9878
Loss 1/71 -- 4/71 = $15058
826 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
the hearing. Respondent's fiscal year ends July 31, but in
addition to an annual report Kahn has regularly also pre-
pared for Respondent a 6-month report. In 1971, Kahn was
at Respondent's office March 9 through 12 working on the
preparation of the 6-month report for the period ending Janu-
ary 31. He went over a draft of the report with Muriel Tower
on March 12. The report was a comparative one for 1970 and
1971. Kahn indicated to Mrs. Tower the areas of his concern,,
principally that overhead was increasing and that net income
was decreasing, with payroll and advertising expenses as the
critical areas of increased expense.
On March 22 Kahn wrote to Mrs. Tower focusing on
certain aspects of the report.".
Thus, (the letter):
Expense Category Ending Jan. 31, 1971 Ending Jan. 31, 1970 Increase
Selling $364,534 323,974 40,560
General and 107,365 88,725 18,640
Administrative
Totals 471,899 412,699 59,200
The various expenses should be reviewed by the Com-
pany with the thought of cutting down the Company's
expenses.... 13
Upon receipt of Kahn 's letter on March 23, Mrs. Tower
telephoned him on that day. Evidently she regarded her call
as urgent because Kahn was not at his office but was ill at
home. She called him at his home. They discussed the import
of the letter and it was concluded that payroll and advertising
were the two areas in which cutbacks could and should be
made. Mrs. Tower told Kahn that she was going to call a
directors' meeting the following day to take up the matter of
payroll cuts.
Daniels testified that on the afternoon of March 23, 1971,
Mrs. Tower told him that the next day at 10 a.m. there would
be an emergency meeting of the directors and that the payroll
would have to be cut. Bertram Tower testified that on March
23 his mother told him that there would be an emergency
Muriel Tower testified that the weekly sales reports were received by her
about 2 weeks after the close of a particular week . Monthly sales reports
were received about 2 weeks after the close of the month.
Production figures of paint in gallons were:
1971 1970
Jan. 33506 37674
Feb. 29727 35337
March 42767 41305
April 24802 41311
130,802 155629
Loss or Gain
-4168
-5610 Loss Jan. -- Feb. = 9778
,L1462 Loss Jan. -- March = 8316
-16509
Loss Jan. -- Apr. = 24825
'2 The formal report was not received by Mrs Tower until early April. " The report itself showed that although 6 months sales for 1971 were
However, it was the same as the draft that Kahn had shown to her on March higher than in 1970, net income had decreased from $34,464 to $28,829 and
12. the percentage of the gross volume had declined from 2 9 to 2.2.
TOWER PAINT INVESTMENTS 827
meeting of the directors the next day and that they would
have to let people go to stay in business. Bennett testified to
substantially the same effect and Mrs. Tower testified that she
notified her two sons, and Daniels and Bennett, on March 23,
that the directors would have an emergency meeting the next
day and that they would have to cut back on payroll.
According to Mrs. Tower and the three other directors,
above, who testified," the directors met in the plant office at
10 a.m. on March 24 until about 11:30 a.m. Mrs. Tower
presided and made it clear that payroll cuts would have to be
made then and now. She referred to prior discussions along
such lines at previous meetings but emphasized that her ac-
countant's letter (Kahn's letter, above) verified what they all
had been aware of, but on which they had not acted. There
was no dissent and some of the directors, e.g., Bennett, ex-
pressed the view that his prior advocacy of retrenchment was
now fully vindicated. It was decided that each department
head should select those of his employees that he could dis-
pose of without impairment of department work. There was
no departmental or overall numerical quota prescribed. Dan-
iels, at the meeting; named the following employees for termi-
nation in his department: Diaz, Castillo, and Rivers. Bertram
Tower named Fernandez, Weems, and Owens. David Tower
named Moore from his wall covering department. Mrs.
Tower named Candy Huml, an office employee."
It was decided at the March 24 directors' meeting that the
terminations should be made immediately since the entire
matter of cutbacks had already been too long delayed. Ben-
nett states that it was felt that immediate action would also
foreclose any department head from changing his mind and
that, by not giving advance notice to employees of their layoff,
emotional outbursts by such persons would be avoided."
After the meeting , Mrs. Tower dictated the minutes of the
meetings to Wiley, her secretary, and also instructed Wiley
to prepare checks for the employees selected for termination.
Wiley testified that she prepared the checks before noon on
that day, March 24, and also typed the minutes." Mrs. Tower
testified that Bertram Tower was selected to make the actual
terminations of the employees selected. She characterized the
task for which Bertram was chosen as "an ugly job ... and
if there was going to be any problems with the men I thought
Bertram could handle the thing best.... ..
On the afternoon of March 24, about 1:40 p.m., according
to Mrs. Tower, a person identifying herself as Miss Barton
from the National Labor Relations Board telephoned her at
the plant. Since Delores Barton, an attorney in the Miami,
Florida office of the Board, did not testify, the only version
we have of the conversation is that of Mrs. Tower. According
to Mrs. Tower, Barton told her something about the National
Labor Relations Board, about a union, about union activity,
and advised her to secure a labor attorney to represent her.
Precisely what was said is not clear. Mrs. Tower states that
she stated to Barton that she suspected that Barton was
another wife of Mrs. Tower's former husband and that she
was trying to make trouble for Mrs. Tower.1e The call was
" David Tower was not called as a witness.
" Although terminated, Huml is not an alleged discriminatee since she
evidently had no connection with union activity.
" Respondent 's regular payroll closed on a Thursday at 5 p.m. and em-
ployees are paid on Friday. The dates of Thursday and Friday in the fourth
week of March 1971, would be March 25 and 26, respectively.
" Wiley was office manager and was in charge of payroll and also ac-
counting with respect to office procedure. She served as Mrs. Tower's secre-
tary regarding confidential matters including minutes of board of directors'
meetings.
" Martin Tower apparently had married a fourth time. Mrs. Tower tes-
tified that she had had trouble with wives No. 2 and No. 3, and suspected
that Barton was or was connected with wife No. 4.
further complicated by the fact, according to Mrs. Tower,
that there was a great deal of noise going on during the
conversation.
In any event, despite the unclear version of the contents of
the call above described, Mrs. Tower apparently understood
that the Company was involved with the National Labor
Relations Board, a labor union, and with union activity. She
spoke to her son, David Tower, after the call and he advised
her to contact a labor attorney. She states that she did so.
That evening, after a sales meeting , Mrs. Tower told Sales
Manager Daniels about the call." We do not know how Mrs.
Tower described the call to Daniels but he testified that he did
not believe her because he had never heard of anything such
as she described. Bertram Tower testified that on the after-
noon of March 24, his mother told him something about a
telephone call she had received and this was the first that he
had heard about the Union. He further testified, "unfortu-
nately, I am not very knowledgeable about unions or what
goes on, and I really did not know what it was all about, and
I did not know what the NLRB was, so I really did not put
too much stock in it."
That evening, March 24, at 5 p.m. quitting time, Bertram
Tower began terminating employees. He approached and
spoke to them individually. Tower gave Moore his check and
states that he told him that due to economic conditions he
was being laid off. Moore said nothing.20 Tower then spoke
to Owens as he was going out the door. He told him the same
thing as he told Moore and, according to Tower, Owens
thanked him for keeping him as long as he did. Owens tes-
tified that the only thing said by Tower was, "There's been
some union activities, so here is a week's pay and a week's
severance pay." The next man Tower spoke to was Weems.
Tower states that he said the same thing to Weems as to the
others, namely, that he was being laid off for economic rea-
sons. According to Tower, Weems said, "Why me?", and
Tower repeated that it was for economic reasons . Weems'
version is that Tower said, "I don't need you anymore."
Weems said, "What happened?" Tower replied, "you know
what happened." Weems: "Why me, Doc." Tower, "That is
my decision." Tower then saw Fernandez and told him what
he had told the others. Tower does not remember that Fer-
nandez said anything. Fernandez states that when Tower
gave him his check, Fernandez said, "What is this?" and
Tower said, "You know why."
On his way home from the plant, Bertram Tower cus-
tomarily passed a particular gas station where Castillo
worked part time. After leaving, the plant after 5 p.m. on
March 24, Tower passed the station and saw Castillo there. 21
Since he had Castillo's check with him, he stopped and gave
Castillo the check, telling him he was laid off for economic
reasons. According to Tower, Castillo simply said that he
understood. Castillo testified that Tower said, "Here is your
check and you know why."
Diaz had apparently left the plant on March 24 around 5
p.m. before he could be approached by Bertram Tower. Diaz
states that, on the 24th, when he went to his car after leaving,
Fernandez waved his check at him and told him of the dis-
charge of Fernandez and others.22 In addition to Diaz, Rivers
19 Daniels had formerly been a president of a local union in Cincinnati
and had formerly been a member of the Teamsters Union and the Bartenders
Union for a number of years.
° Moore did not testify at the hearing.
Castillo had not reported for work at the plant on March 24. When he
went to his doctor he was told, however, that he could work that afternoon,
according to Castillo. Castillo then went to work at his second job, at the
gas station.
" Fernandez also indicated to Diaz that Tower had a check and envelope
for Diaz.
828 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
also had not received his terminal check on March 24 because
Rivers had gone home from the plant at about 2 p.m.
On March 25 at 7:30 a.m., Bertram Tower was waiting at
the door of the plant. He first saw Diaz as the latter was
coming in. Tower states that he handed Diaz his checks and
told him that he was being laid' off for economic reasons.
Tower recalls that Diaz wanted to go inside the plant and was
allowed to do so. On direct examination Diaz testified that as
Tower gave him the envelope with the check, Tower said,
"Do you know [and] I [Diaz] said, Yes, I know." About 20
lines later counsel asked the witness:
Q. Going back over the events of that morning, what,
if anything, did Bert Tower tell you when he gave you
the envelope ...
A. ... he gave me the envelope and he said, `You
know', and I said, `I know', and I knew because Miguel
Fernandez had told he had seen my envelope [on the
24th] but he [Tower] had not had time to give it to me
[on the 24th]. He gave [it to] me on the 25th in the
morning, that is it.
In short, when Tower gave Diaz his check on March 25 he
said, you know, or, do you know, and Diaz said, yes, I know
of my layoff (having been previously told by Fernandez). A
few lines later, however, counsel asked:
Q. What did he say to you in English as he gave you
the envelope?23
A. He said, `You know, you know, you know why',
and I. got the copies.
This latter version is, in effect, that Tower said, "you know
why you are being laid off" and evidently Diaz said, "yes, I
know why." There is more than a minor difference in these
versions quite aside from the more basic conflict between
Tower's and Diaz' versions.
Tower next intercepted. Rivers on March 25 as the latter
was coming to work.Aecording to Tower he told him that he
was being laid off for economic reasons and handed him his
checks. Rivers states that Tower said, "I have something for
you" and when Tower handed him the check, Rivers said,
"what is this?" Tower replied, "You know what it is, union
activity." Rivers then departed.
Another aspect of the March 24-25 terminations that re-
quires description is the basis on which seven employees were
selected for layoff. The general mandate for the reduction as
laid down by Mrs. Tower at the March 24 directors' meeting
was that each department or division head24 select those em-
ployees that they could get,by without. No number was set.
Moore was selected from the wall covering department by
David Tower and with the active concurrence of Mrs. Tower.
Moore was the lowest man in point of service in his depart-
ment. Mrs. Tower testified that she had many complaints
from customers about receiving the, wrong wall paper and
about other errors by Moore. Moore did not testify and the
General Counsel simply introduced evidence that Moore had
signed a union card.
Huml was selected from the office section because of her
poor attendance record and because it was concluded that the
office could get along without her. She is not an alleged
discriminatee.
Daniels selected three employees from his warehouse and
shipping department," Rivers, Castillo, and Diaz.
Rivers worked for Respondent from December 1968 to
March 24, 1971. He testified that he drove a small truck from
the plant to Miami Beach making deliveries and "occasion-
2' As far as appears Tower's entire conversation with Diaz had been in
English
As we have seen , the department or division heads were also directors
Drivers were in the shipping department
ally" drove a large yellow truck. Daniels testified that in a
small company flexibility was essential. He states that Rivers
was limited to the small truck and the yellow truck was
basically in the same category. The big trucks were, according
to Daniels, the big blue ones, big delivery trucks that held
thousands of gallons of paint and had lift gates; they delivered
stock to Respondent's stores. Daniels states that Rivers could
not handle the big trucks and did not want to drive them. He
said that he had another man ,^yho could handle both the large
and the small trucks.26
Castillo worked for Respondent from February 1971 to
March 24, 1971. He testified that in the warehouse he stacked
cans of paint, scrubbed the floor, threw out the trash, but his
principal duty was to drive a large distribution truck" to the
Company's retail stores." Daniels testified that he selected
Castillo for layoff because Castillo was limited to driving the
big trucks and that he could not use him on the small truck.
Daniels states that the men who drive the small trucks call
on customers and have to speak good English. According to
Daniels, Castillo spoke very little English." A second reason
why he selected Castillo was the fact, according to Daniels,
that Castillo had a second job in a service station30 and Dan-
iels felt that if a man had two jobs he should be let go in
preference to those who did not. Castillo was offered reem-
ployment in July 1971, but declined because he had a better
job.
Diaz worked for the Company from November 1965, to
March 24, 1971. He worked in the warehouse in the sundries
section. Alfonso also worked in that section and both men did
the same work. Daniels states that both men were good work-
ers but he selected Diaz for layoff for the following reasons:
Diaz' wife was employed and Alfonso's was not; Alfonso
worked on Saturdays stockpiling wallpaper in the Company's
stores and Diaz had not been willing to do this;" Diaz was
better educated and could speak better English than Alfonso
and for this reason Daniels believed that Diaz would have less
trouble in securing other employment.
Owens had worked for the Company for about 4 months
and he was terminated on March 24, 1971. While employed,
he had worked in the production department that was headed
by Bertram Tower. Owens' work consisted of canning paint
and related operations. His wage was $1.85 per hour. Tower
states that Owens had the least service of anyone in the
department and he did not know how to operate all the
machines. Tower believed that cuts could be made in the
2i No rebuttal of this testimony was offered Respondent recalled Rivers
in May 1971 when another driver was injured in an accident and Rivers was
so employed at the time of the hearing
17 In the course of its case showing a decline in business, as previously
described, Respondent had also offered testimony from its witnesses that its
trucks were going out half empty During the course of cross-examining
Castillo, Respondent asked
Q. Isn't it a-fact that the trucks were going out half full in March and
February 19719
A It could be.
s Castillo states that he had also delivered large barrels of paint to some
outside companies
" With the exception of his name and address and a brief sentence,
Castillo testified in Spanish In the course of his testimony in Spanish he was
asked
Q You don't speak in English, do you, Mr Castillo9
A (In Spanish) A little bit
Q You were not able to get all your job instructions and do your job
relying on your English alone, were you)
A (In Spanish) Yes, but not alone
'° The second job is admitted
U Diaz testified that Alfonso was an older man than he and also had a
larger family to support and that Alfonso worked on Saturdays in the retail
stores
TOWER PAINT INVESTMENTS 829
department and he selected Owens as one of those who could
be dispensed with. Owens was not replaced.
Fernandez had been employed by the Company from Janu-
ary 1965, to March 24, 1971. His job was placing labels on
the cans and he did this by hand and by machine. Fernandez
worked by himself in a mezzanine-like location above the
main plant floor. Bertram Tower states that he selected Fer-
nandez for termination because he believed that the labelling
job of Fernandez was in reality only a half day job and did
not require the full time of one man. Fernandez had no
experience in any other plant operations. Since Fernandez'
termination his work has been performed by various other
employees as well as by Bertram Tower on occasion. No
replacement has been hired. Tower testified that the work
formerly performed by Fernandez has not taken anyone, who
has since performed the work, a full work day. Tower also
states that on occasion Fernandez was lying on a table up at
his work place or would wander into the warehouse area
where he had no business being.
Another factor in Fernandez' selection, according to
Tower, was due to the results of a polygraph examination
taken by Fernandez. To understand this reference some back-
ground information is required. In the early part of 1971, no
later than February, the Company was receiving reports of
thefts of its paint and the use of company labels on the black
market. The Wackenhut organization was engaged in con-
nection with the problem and Levine, area manager of Wack-
enhut, administered polygraph tests to various employees.
One of those tested was Fernandez. A report from Wacken-
hut to Respondent showed the result of a Fernandez exami-
nation on March 2, 1971. The questions in the examination
were directed to the subject's relationship to theft and use of
paint, labels, or other materials or his knowledge of others
engaged in such conduct. Levine in his report expressed the
opinion that Fernandez' answers to four of the five questions
were untruthful and that deception had been indicated by the
answers. The report stated: "When confronted with the above
deceptions, the subject offered no comment." Fernandez tes-
tified that when the examiner, Levine, had told him of what
the test showed, Fernandez offered no explanation."
The third man in his department that Bertram Tower se-
lected for termination was Weems. The latter had been em-
ployed by the Company from April 1963 to March 24, 1971.
He performed color matching work for the last 4 or 5 years
of his employment. Up to about March 1970 there had been
three employees in the color matching operation. At that time
one of the employees in the color matching operation. At that
time one of the employees left and the Company decided not
to replace him. This left Semash and Weems. Semash had had
about 30 years' experience in color matching and related
work. Experience-wise and ability-wise Bertram Tower tes-
tified that, on a comparative basis, he regarded Semash as the
teacher and Weems as the pupil, Albeit Weems was a satisfac-
tory employee.
Around January 1971, Tower testified that a policy was
instituted to discourage and cut down on small orders for
special colors in paint. The Company ceased putting up
quarts for retail sale and if some customer wanted a quart or
so in special color, a 3-day waiting period was imposed, plus
a relatively high price. It was also found that many special
colors could be made up in the retail stores rather than at the
plant. This was done by equipping the stores with paint shak-
" Diaz, previously discussed, had refused to take a polygraph examin-
tion. This was shortly prior to March 10, 1971. Diaz had also gotten into
a rather loud argument with Bertram Tower over his refusal to take the test
Diaz had one of the keys to the warehouse and after his refusal to take the
test he had been obliged to surrender his warehouse key
ers and formula charts. All this reduced the amount of work
in their color matching department. Tower states that when
it was decided in March that there had to be cutbacks in
personnel, he concluded that he could do without Weems and
he laid him off.
An additional factor in Weems' selection for layoff, accord-
ing to Tower, was a polygraph examination that Weems had
taken. This was also true in the case of Fernandez, supra,
according to Tower. It also appears that Rivers, supra, had
taken a polygraph examination but with an unclear result.
Diaz, supra, had refused to take the polygraph examination
and had engaged in rather loud language with Tower in front
of other employees regarding that matter. Weems took a
polygraph examination on February 19, 1971; Fernandez on
March 2; Rivers on-March 3.33
Weems was apparently given a polygraph examination be-
cause on February 19, 1971, he took a company truck out of
the yard. Weems testified that he did this because he needed
the truck to start his own car which was apparently some-
place away from company premises. He testified that he
asked Clarke for permission to do this and received permis-
sion and he described Clarke as the store manager. Clarke is
in charge of the Company's retail store at the plant. He
denied being asked about the truck by Weems or that he gave
permission. He states that he has nothing to do with the
trucks or their use." In any event, on February 19, Weems
was given a polygraph examination by Levine, Wackenhut's
area manager. Four of the questions to Weems dealt with the
taking of the truck and whether there was merchandise
thereon and whether he had disposed of the merchandise. In
his report to the Company," Levine stated that the polygraph
showed that Weems "was engaging in deception to questions
1, 2, 3, and 4." There were also seven other questions on the
examination dealing with stealing merchandise from the
Company and the switching of labels. Levine reported that
the polygraph showed deception on questions 1, 2, 5, 6, and
7. Levine's report also stated that "when confronted with the
above deceptions, the subject offered no comment." In his
testimony at the instant hearing, Weems affirmed that Levine,
after the examinations, had told him that his answers in-
dicated deception and that Weems offered no comment. On
Rivers' examination, Levine had reported that the graphs
were erratic and that no opinion could be rendered. He
recommended a reexamination at a later date.
Regarding Weems' layoff on March 24, 1971, as aforede-
scribed, a subsequent event must be referred to. In June or
July 1971, Semash, the widely experienced color matcher,
died. Respondent did not recall Weems. Tower states that
while he considered Weems to be a capable employee,
Weems, in his 5 years doing color matching with Semash, had
been, in effect, an assistant to Semash. Tower states that, in
his opinion, Weems did not have the qualities,or the ability
to assume the responsibility for the entire color matching
operation. An outsider was hired for the job. During the
transitional period the color matching was being performed
by employee Cooper and with occasional help from Tower
himself" Tower testified that Cooper is a better color
" Other employees were also given these examinations
35 On May 21, 1971, the Board conducted an election at the plant. The
Union challenged Clarke as a supervisor not qualified to vote. In a decision
of July 29, 1971, the Regional Director ruled that Clarke was not a super-
visor and overruled the challenge to his ballot
Bertram Tower was handling these matters for the Company
" Tower testified that in the past he had taken a course in color matching
and that he has performed that type of work
830 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
matcher than Weems and that he has been with the Company
longer than Weems."
Having described the terminations on March 24 and 25, we
now turn to the wage increase matter. The minutes of the
directors' meeting on March 24, 1971, signed by all the direc-
tors, after referring to the termination of employees and their
names, stated: "It was also resolved to give the employees an
increase in their salaries and some of them did not receive
[had not received] an increase for a year. The only way we
could accomplish this is by eliminating all employees not
absolutely essential."
The indication is that when the employees received their
paychecks on payday, Friday, March 26, their checks re-
flected the pay increase." This would mean that the pay
increase, decided upon on March 24, was retroactive."
A puzzling aspect of the wage increase is that no one
present at the directors' meeting on March 24 testified to any
discussion about a wage increase at that meeting. Daniels,
who would have no reason to testify falsely on such a matter,
states unequivocally that a pay raise was not mentioned at the
meeting and that he knew nothing about an increase for
himself and the employees until he received his paycheck at
a subsequent date .4' The Examiner credits the testimony of
Daniels. Yet the minutes of the March 24 meeting, dictated
by Mrs. Tower, and signed by all the directors, including
Daniels, expressly mentions the decision to grant a pay in-
crease."
The Examiner is of the opinion that Mrs. Tower is the
dominant element in Respondent's basic policies. She was
probably the controlling stockholder after Martin Tower's
" The Regional Director's decision, supra, dealing with objections and
challenged ballots indicates that Cooper spends about half of his time testing
paint regarding its viscosity, weight, brushing qualities, hiding power and so
forth and the balance of his time where needed in production. When color
matching work, which is part of Respondent's production process, was
required, evidently Cooper, with his background in paint chemistry, was
able to step into the breach without difficulty.
" Officers as well as employees received a raise at the same time.
Respondent's counsel asked Wiley, the office manager who was in
charge of payroll:
Q. Have you also-reviewed your payroll records to determine the
total amount comprising the wage increases the week of March 25,
1971 [wage increases for the week of March 25]?
A. Yes.
Q. What is the total amount?
A. $284.
The witness was comparing the above figure with the total amount paid
for the week ending March 18, which included the last payment to
Martin Tower for his stock interest in the Company. Thus, Wiley
testified that "for the week ending March 18" the amount was $1055.58
and that it was "paid" that week and that she was not saying that it was
paid for that work at some later time. Presumably, therefore, the com-
parative figure of $284, above, for the week of March 25, was paid on
payday, March 26. Bertram Tower testified that he received a pay
increase but stated that he could not remember whether it was reflected
in his March 26 paycheck. Daniels testified that he was first aware of
the pay increase when he received his check about 2 weeks after the
March 24 directors' meeting. In any event, whether retroactive or not,
it is clear that after the decision to terminate seven employees on March
24, Respondent on March 25 granted a general pay increase.
40 Bertram Tower's testimony on the point is very limited. He stated that
he did not recall any mention of a retroactive pay increase. He was not asked
and did not state that a pay increase was mentioned.
" The General Counsel apparently misread the minutes of the March 24
meeting . Referring to the minutes he asked Mrs. Tower:
Q. I don't see anything in here about a pay raise which was given the
next day. Was that discussed at that meeting?
A. No.
Mrs. Tower evidently did not remember what she had placed in the
minutes and, in our opinion, her answer reflects the true facts on this
matter.
interest was acquired.42 We believe that Mrs. Tower decided
to give a wage increase subsequent to the March 24 meeting.
She dictated the minutes of the meeting and included therein
the decision to grant a pay increase. In view of our conviction
that Daniels testified truthfully that the pay increase was not
mentioned at the meeting, he, and possibly other directors,
probably signed the minutes dictated by Mrs. Tower after the
meeting as a pro forma matter without scrutiny of the con-
tents.43
The evidence which we have previously set forth, relating
to the choice of seven particular employees for termination,
does not, in our opinion, establish that the selection was
discriminatory. In our view, the failure to offer Semash's job
as color matcher to the laid-off Weems, at the time when
Semash died in June or July 1971, was the aspect of the
alleged discriminations that was most suspicious. However,
we perceive no basis for rejecting Bertram Tower's testimony
that, although Weems had been, in effect, a good assistant
color matcher under the highly qualified Semash, Tower did
not consider Weems qualified to assume responsibility for the
entire color matching operation. The fact that Weems had
performed color matching with Semash for 5 years is not
dispositive. There is no valid basis in the evidence for the
Examiner to substitute his judgment for that of Tower and to
say that Weems did possess the qualities to assume responsi-
bility for the entire color matching operation. There are in all
lines of human activity people who have been able assistants,
and people who have worked ably side by side with some
highly qualified individual, but who have never attained the
next rung even when the opening arose.
Weems' polygraph examintion was quite clearly adverse on
the matter of his integrity or honesty.44 It is not a question of
whether polygraph examintions are good or bad methods of
testing or whether the Trial Examiner would accord weight
to such tests. The fact is that the Respondent quite apparently
believed that such examinations were of some value. It had
previously used Wackenhut to administer such tests to new
employees in the plant. Again, in February 1971, it used
Wackenhut and the polygraph in an effort to cope with appar-
ent thefts and misappropriation of its property. Such services
obviously cost money. We cannot believe that Respondent,
therefore, did not give some consideration, albeit not control-
ling force, to examination results that were adverse to par-
ticular employees, at least when the matter of selection of
employees for layoff or termination arose.45
Regarding Respondent's knowledge of union activity and
of particular individual employee participation therein, the
General Counsel relies on the fact that the plant, in size and
complement, is relatively small and the fact that some em-
ployees signed, individually, a union card while in the plant.
we have earlier described the union activity and the card
signing.
" Whether her sons had a stock interest is not clear. The only definitive
evidence on stockholding is that Daniels, although a director, is not a
stockholder.
41 It is possible but not easy to believe that, if Daniels was aware of the
full contents of the minutes that he signed, that he would have testified so
unequivocally that the pay increase had not been mentioned at the meeting
and that he had been completely unaware of any pay increase until it
subsequently appeared in the paychecks.
44 Resp. Exh. 3(c).
" While the department heads had selected the employees for termina-
tions on March 24, the selections were made openly at the directors' meet-
ing. The directors were also the department heads and they discussed at the
meeting the selections since in this small company the department heads
had at least general knowledge of all departments and all personnel.
TOWER PAINT INVESTMENTS 831
The small plant theory, above, is, in our opinion, simply a
claim that circumstantial evidence warrants a finding of com-
pany knowledge. We are of the opinion that the circumstan-
tial evidence in this case does not warrant or support such a
finding . Great circumspection and secrecy was characteristic
of the union activity. And there is no indication of company
awareness demonstrated either by interrogation, surveillance,
or any statement referring in any way to union activity. While
no single factor or its absence is determinative, we are unable
to conclude that Respondent was aware of general or in-
dividual union activity.
III. CONCLUSIONS
A. The Terminations
Viewed overall and various aspects, this case is not devoid
of elements of suspicion. Critical matters relating to dates and
times when decisions were made were peculiarly within the
control of Respondent's witnesses since they involved inter-
nal matters of business reports , accounting actions , and inter-
nal management communications and decision . As in all such
situations there is a possibility of manipulated presentation."
We therefore have endeavored to scrutinize that the evidence
with great care. But having done so, it is our opinion that the
evidence in the case supports Respondent's defense that the
terminations were not discriminatory and that the General
Counsel has not sustained the burden of proof.
We have set forth the data relating to Respondent's busi-
ness during the relevant periods. We do not repeat it here. In
our opinion, the business shows a downward trend. The re-
ports available to Respondent when it decided on the termi-
nations support its action. The spurt in sales in the latter part
of March and the overall plus in March sales do not overcome
the trend. The General Counsel has suggested that although
weekly sales reports available to Respondent on March 24
may not have been too good, Respondent's experience in its
own business would have indicated that ultimate March
figures would have been on the plus side. Whether Respond-
ent possessed this prescience is arguable but the preceding
trend was down and, if prescience is invoked, then it must be
deemed to include the foresight to also know or to suspect
that April sales would be disastrously low (-$15,058) and
quite aside from the downward trend from January 9 to
March 20, which showed an $11,880 loss.
The accountant's report to Mrs. Tower also supports Re-
spondent's economic defense. Admittedly a question arose in
our mind why Mrs. Tower was only galvanized into action
when she received the accountant's letter on March 23. She
had the same information on March 12. She was not asked
and did not explain why she did not act on March 12 or
shortly thereafter. It is not implausible that in a verbal discus-
sion with the accountant on March 12 the full import of the
figures did not sink in. In any event, the accountant evidently
believed that it was necessary to write to Mrs. Tower to focus
her attention on an aspect of his report that he deemed cru-
cial, namely the increase in expenses, particularly payroll and
advertising. The written message, focusing sharply on limited
areas , apparently affected Mrs. Tower more than had the
previous discussion.
The Examiner preceives no valid basis for not crediting the
uncontroverted testimony of Respondent's witnesses as to the
March 23 notice of a directors' meeting on March 24 at 10
a.m. or as to what occurred on March 24 regarding a decision
to terminate seven named employees. The evidence is that the
decision to terminate the seven preceded any telephone call
from the Board agent . The General Counsel 's contention that
the decision to terminate was made after the Board agent
notified Mrs. Tower of the union claim is not supported by
the evidence.
We next consider the testimony of discharges that Bertram
Tower, in handing them their terminal paychecks, told them,
in words and in substance, that they were being discharged
because of union activity. Owens and Rivers so testified.
Other dischargees assert that Tower in discharging them did
not forthrightly give them any explanation but made such
cryptic remarks as, "you know why," or, "you know what
happened." Tower's version is, in substance, that he told all
seven men that they were being laid off for business or eco-
nomic reasons.
While Tower testified that he was not knowledgeable about
unions or what the National Labor Relations Board was, we
find it difficult to believe that in 1971, in a cosmopolitan area
such as Miami -Hialeah , a production manager, albeit rela-
tively young, would tell any employee that he was being
discharged because of union activity. If Tower was so unso-
phisticated and therefore presumably told two employees that
they were discharged for union activity because that was the
real reason, we fail to see why he would not have said the
same thing to the other five, since they all, as both parties
assert, were being discharged for the same reason. Why
would he use plain and explicit language in telling Rivers and
Owens why they were discharged and use cryptic phrases
like, "you know why," with basically Spanish-speaking em-
ployees such as Castillo, Fernandez, and Diaz who were less
likely to grasp any nuances of English phrases."
It is apparent that the General Counsel's theory of the case
is that Respondent engaged in a devious course of conduct
involving pretextous use of business reports, financial reports,
internal management manipulations , and so forth , in order to
rid itself of union adherents. Presumably, therefore, some
subtlety is attributed to Respondent. Why therefore would
Mrs. Tower, the chief management protagonist, have ex-
pressly chosen her son, Bertram Tower, the production
manager, to make the the discharges, the culmination of the
machinations, if he was so unsophisticated as to tell em-
ployees that they were discharged for union activity. She
undoubtedly knew her son both as his superior officer in the
corporation and as a mother. It is difficult to believe that the
final act was left in inept hands or that some understanding
was not reached as to the reason to be assigned for the termi-
nations or that Tower himself was not aware of what was
going on and of the pitfalls to be avoided.
The Examiner is unable to credit the General Counsel's
witnesses as to what Tower told them when he discharged
them. We believe that he said to all substantially the same
thing and that it was, in substance, for business or economic
reasons that they were being discharged.
It is our opinion that the complaint allegation regarding
Diaz, Owens, Moore, Fernandez, Weems, Castillo, and Riv-
ers has not been sustained by a preponderance of the evidence
on the record as a whole. We recommend dismissal of the
8(a)(3) allegation.
The General Counsel amended the complaint to allege that
an incident on August 13, 1971, involved a violation of Sec-
tion 8(a)(1) of the Act.
" The Examiner viewed the March 24 minutes pay increase mention as
disturbing and thought - provoking since, in our opinion, the pay increase was
not mentioned at the directors' meeting. We have considered whether this " Quite evidently any employer who tells employees that they are dis-
instance was symptomatic and possibly indicative or whether it was isolated charged for union activity is not a subtle person who hides in recondite
in its possible implications . phrases.
832 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
After his termination in March 1971, supra, Rivers was
reemployed in May 1971 when one of the drivers became
injured in an accident. He was still employed at the time of
the hearing. On August 13, 1971, after Respondent had been
served with the complaint and notice of hearing (August 13
was 3 days before the hearing) Rivers' supervisor, Daniels,
told him that two company attorneys wished to speak to him
in the company conference room. Rivers entered the room
and was alone with attorneys Radford and Merrill. It was
about midday and the incident lasted 6-10 minutes.
Rivers states that one attorney, who the Examiner finds
was Radford, spoke to him. According to Rivers, he was told
that he did not have to answer the questions. He was then
asked what Bertram Tower said to him when he gave Rivers
his check at the time of his termination in March.48 Rivers
states that he replied that he "could not remember." Rivers
states that he was then asked if he knew "anything about the
union , how long had I joined the Union, something like that.
I told him I could not remember."
Radford testified that he introduced himself and Merrill as
company attorneys. Radford testified that he had prepared
beforehand and had before him, a longhand outline of what
he was to cover at the interview. He states that he followed
this outline to the letter." Radford asserts that he referred to
the fact that the hearing was scheduled for Monday, August
16. He told Rivers that he wished to discuss some facts that
might be brought out at the hearing. He states that he advised
Rivers that his answers were voluntary and that there would
be no repercussions. Radford then asked what Tower had
said to Rivers when he laid him off. Rivers said he could not
recall. Then Rivers was asked whether he had made known
to anyone in the Company that he had participated in the
union movement. Rivers said he could not recall. He was
asked if he had told any supervisor of his union activity.
Rivers said he could not recall.
Radford and Merrill impressed the Examiner as attorneys
who were alert and knowledgeable in the field of labor law.
Radford's testimony that he had prepared a written outline
of what was to be covered in interviewing Rivers and that he
had the' outline with him in the room and followed it, is
credited. Rivers had been named in the complaint as a dis-
criminatee. As a competent attorney, Radford would be
aware that the probability was great that Rivers would be and
was a General Counsel witness. Indeed, Rivers had told his
supervisor that he had received a subpoena to testify. Under
such circumstances, Radford would be careful in interview-
ing Rivers not to overstep the limits of permissible interroga-
tion since the interview would be in all likelihood reported to
the General Counsel by Rivers. For this reason, we find it
credible that Radford was as careful as he claims to have been
in, conducting the' interview a few days before the hearing.
The Examiner credits Radford's description of the interview
and finds no violation of Section 8(a)(1) of the Act. Rivers'
recollection of what was allegedly asked about the Union is
unclear and not convincing since a question about how long
ago he had joined the Union would serve little purpose. In-
deed, even on Rivers' version of the entire matter we would
be doubtful that a'violation could be found. In our view, the
interview was not coercive in context or tone and the omis-
sion of assurance of no reprisals, as claimed by Rivers, in
itself, in this instance, would not, per se, stamp the incident
as illegal.
" Rivers was aware of the impending hearing, having received a subpena
to testify from the General Counsel
" Radford had the outline with him at the hearing and he used it as a
witness. The General Counsel was allowed to read the outline
B. The Wage Increases
We have previously described how on March 25, 1971,
after deciding to terminate seven employees and terminating
them, Respondent immediately instituted a general pay in-
crease for all personnel. As indicated, we were convinced that
the pay increase was not mentioned or discussed at the direc-
tors' meeting of March 24. When we now consider Mrs.
Tower's testimony explaining the reasons for the wage in-
crease, it is evident that the decision to give an increase was
hers.
She testified that in 1971 she had been unable to raise prices
because, unlike in prior years, the competing companies had
not raised their prices. During the period, however, she states
that "everybody" had been asking her to increase wages but
she had not done so because of her inability to increase prices
and because she was having difficulty paying her bills due to
lagging or defaulting accounts receivable. We have also seen
that, from the latter part of 1970, Respondent's business had
been in a downward trend and this poor business picture was
the reason for the March 24 terminations. Evidence, previ-
ously described, was also to the effect that Respondent's ac-
countant had warned Mrs. Tower that her payroll expenses
were too high and should be reduced. This was a proximate
cause of the March 24 terminations.
According to Mrs. Tower, she decided to give the pay
increase when she did, because she, the Company, had made
the last payment to Martin Tower of $223.50 on March 19,
1971, and she therefore was happy to be relieved of this
burden and felt able to grant a general pay increase. Respond-
ent introduced evidence that the total amount of the wage
increases for the week of March 25 was $284.5° Apparently
this figure is to be deemed offset by the fact that the $223.50
weekly payment to Martin Tower had ceased. Although, for
some reason, Mrs. Tower, in her testimony explaining the, pay,
increase, did not mention the payroll saving brought about by
the severance of seven employees, it can be assumed that this
did result in a net saving.
Mrs. Tower testified that around the time of her last pay-
ment to Martin Tower she mentioned to Bertram Tower that
"maybe we will be able to give a little bit of a pay increase."
Bertram Tower testified that from January' to March 1971;
pay raises had not been given. He was asked:
Q. Why not?
A. Things were bad, and from where. From where was
the money to come, I mean.
Tower testified that he had talked to Mrs. Tower about raises.
Q. What was'discussed as to the availability of funds
for employees ' raises?
A. Well, actually there was nothing available at the
time we talked about' it.,
We talked about this at the tail end of 1970.
The witness also said that he was aware that the last payment
to his father was in March 1971 and there was some possibil-
ity of doing "something with that money" and that he had
talked to Mrs. Tower about raises prior to March 25, 1971.
In our opinion, if there was any talk about a raise, it was
extremely vague and had not reached any decisional stage;
even if it occurred in 1971, about which the Examiner enter-
tains some doubt, it was, we are convinced, prior to the
accountant's letter of March 22. That letter triggered Mrs.
Tower's order to the directors that cuts must be made; and
quite significantly no one even mentioned a pay increase at
the March 24 directors ' meeting.
50 This would amount to over $14,000 per year.
TOWER PAINT INVESTMENTS 833
Respondent in its brief states that "the reason for granting
a wage increase, while certainly unusual, can readily be un-
derstood .. . final payment to Martin Tower was indeed
cause for celebration."
The Examiner regards the reason advanced for the wage
increase on March 25 as not only unusual but unconvincing.
Mrs. Tower was a mature businesswoman of 27 years' experi-
ence. Her agreement with her former husband was entered
into in February 1968. It was a 3-year agreement that in-
cluded a payment of $223.50 per week to Martin Tower in the
third and last year of the agreement. Pursuant to the terms
of the agreement, the last payment was made on March 19,
1971. Mrs. Tower had know for 3 years that this would occur
in March 1971. On March 19 she was clearly not overcome
by such euphoria that she granted a general pay increase. She
,had paid off an account just as from time to time she had no
doubt paid off long term accounts payable for machinery and
equipment or possibly a mortgage. Her accountant had un-
doubtedly made deductions periodically from income tax re-
turns to reflect the expense incurred by the payments to
Martin Tower. March 25 was not the date when the Com-
pany received an unexpected windfall in the way of a huge
contract for its products. Whatever euphoria Mrs. Tower
may have felt on March 19 when the last payment to Martin
Tower was made surely did not lead this experienced corpo-
rate president to take the highly "unusual" step of giving a
general increase on March 25 at a time of great financial
difficulty for the Company.
There was no tidal wave of business circumstances that
precipitated this wage increase on March 25. Amid falling
production and sales, the remaining employees, who had not
been terminated with seven of their fellows on March 24,
were probably so grateful to be still employed that they surely
were not storming the gates for a wage increase. But most
importantly, both Respondent and the evidence support the
fact that from the latter part of 1970 and up to and through
March 25, 1971, business was bad. Five employees had been
terminated in January 1971. Several directors advocated fur-
ther reductions at that time because of the state of the busi-
ness. Mrs. Tower, while apparently aware of the situation,
put off making further reductions at the time. But, on March
23, convinced by financial reports and by her accountant that
the business was in a critical state, she arranged to deliver a
virtual ultimation on March 24 to her directors and depart-
ment heads. Payroll had been pointed out as one of the criti-
cal areas and at Mrs. Tower's insistence virtually 20 percent
of the unit employees were terminated on March 24.51
In our opinion, the matter of a general pay increase was not
mentioned at the March 24 directors' meeting by Mrs. Tower
for two reasons. First, the Examiner is not persuaded that as
an experienced businesswoman Mrs. Tower herself contem-
plated a pay increase at that time. The need to cut payroll
expenses was pervading, as Respondent itself has argued.
While the terminations obviously cut expenses, it was quite
apparently Respondent's objective to maximize the cutting of
expenses. A general pay increase diluted the cuts made and
prevented maximum savings and Mrs. Tower was neither
under obligation nor commitment to give a pay increase at
that time. The saving resulting from not having to pay Martin
Tower a weekly salary was also diluted by the pay increase
and, as pointed out, Mrs.Tower was not in a state of ecstatic
51 The standard proclaimed by Mrs Tower was for each department head
to eliminate as many employees as possible without impairing essential
operations. In short, the objective was to maximize savings in payroll costs
No numerical quota was set and presumably there would have been no
objection if nine employees rather than seven could have been found to be
expendable.
oblivion because of this nondramatic circumstance. Second,
the pay increase was not mentioned at the -March 24 direc-
tors' meeting because it was almost wholly inconsistent with
the entire theme of the meeting. It would be difficult for
department heads, who had been told of the parlous state of
the business, and who had therefore made employee cuts in
their departments in order to achieve a definitive reduction in
payroll expense, to comprehend a general pay increase at the
same time as being an exercise of normal business judgment.
Having rejected the "unusual ,, reason advanced by Re-
spondent for the pay increase on March 25, the Examiner has
arrived at a reasonable, and in our opinion, a convincing
inference as to why the pay increase was given at that time.
Mrs. Tower, in our opinion, gave the increase on March 25
without consultation and not as an exercise of either her own
normal business judgment nor as an emotional reaction relat-
ing to her March 19 payment to Martin Tower. She gave the
increase after she had learned on March 24 from the Board
agent that the Union was seeking to establish itself in her
plant. Apparently she reasoned that the Union either had
already approached the employees or would approach them
and that a general pay increase would do much to insure
employee loyalty and dissipate any actual or potential interest
in a union. The investment in a pay increase, despite poor
business conditions, was evidently regarded as a good one if
it served to forestall the incursion of the Union and the proba-
ble demands for higher wages and other benefits that would
follow a successful union campaign.
Respondent argues that "the Company took no credit for
the increases" and did not attempt to use them to interfere
with organizational rights of employees. If this means that
the Company did not say in so many words, the Company is
giving you this increase so that you will forget about the
Union and realize that you do not need a union in order to
gain pay increases, we agree. But-such explication or such
diagraming is not essential for the achievement of the objec-
tive. Obviously the employees knew that the Company gave
them the increases. The timing of the increase during the
organizational period could not fail to impress even the most
obtuse that the Company was giving the increase and that this
occurred before the Union obtained bargaining rights, there-
fore, why was a union necessary. The fact that increases were
given to management people. as well as rank-and-file em-
ployees does not alter the conclusion. If anything it empha-
sizes the inconsistency of the increase with the business situa-
tion and makes clear that the entire increase episode was not
the result of normal business judgment. Indeed, if we ac-
cepted Respondent's explanation for the increase as being
devoid of ulterior motivation, we would doubt that Respond-
ent had regarded its business decline as seriously as it other-
wise claims.
We find that the general wage increase of March 25 was an
act of interference with the rights of employees under Section
7 of the Act and as such was a violation of Section 8(a)(1) of
the Act. Since the possibility or the probability of a Board
election is a normal consequence of union organizational ac-
tivity in a plant and, since, in our opinion, the wage increase
was directed against the organizational effort and its potential
aftermath, an election, we find that the increase interfered
with the subsequently held election on May 21, 1971. The
increase and its effect on employees was not revoked or dis-
sipated between March and May.
834 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
CONCLUSIONS OF LAW
Respondent has violated Section 8(a)(1) of the Act by
granting a general pay increase on March 25, 1971.
Respondent has not otherwise violated the Act.52
THE REMEDY
Having found that Respondent has violated the Act, it will
be recommended that it be advised to cease and desist from
such conduct . Nothing herein shall be deemed to restrain
Respondent from granting pay increases in the normal course
of business for normal and legitimate reasons. It will be fur-
ther recommended that Objection 2 to the election be sus-
tained and the election set aside.
RECOMMENDED ORDER53
Respondent , Tower Paint Investments , Inc., d/b/a Tower
Paint Manufacturing and its wholly owned subsidiary Tiara
Wallcovering , Inc.,, its officers, agents, successors , and as-
signs, , shall:
1. Cease and desist from:
(a) Deciding upon and granting pay increases to employees
for the purpose of interfering with the rights of employees as
guaranteed by Section 7 of the Act.
(b) In any like or related manner interfering with em-
ployees in the exercise of their rights as guaranteed by Section
7 of the Act.
2. Take the following affirmative action to effecxuate the
policies of the Act:
(a) Post at its plant in Hialeah, Florida , copies of the at-
tached notice marked "Appendix ." 54 Copies of said notice, on
" In this consolidated hearing, Objections 1 and 2 to the election were
in effect the same as the allegations of the complaint . Objection 1 alleged
the discriminatory discharge of the seven 8(a)(3)'s. Objection 2 alleged the
granting of the pay increase.
" In the event no exceptions are filed as provided by Section 102.46 of
the Rules and Regulations of the National Labor Relations Board, the
findings, conclusions , and recommended Order herein shall, as provided in
Section 102 .48 of the Rules and Regulations , be adopted by the Board and
become its findings, conclusions , and Order, and all objections thereto shall
be deemed waived for all purposes
50 In the event that the Board's Order is enforced by a Judgment of a
United States Court of Appeals , the words in the notice reading "Posted by
Order of the National Labor Relations Board " shall be changed to read
"Posted Pursuant to a Judgment of the United States Court of Appeals
enforcing an Order of the National Labor Relations Board "
forms provided by the Regional Director , Region 12, after
being- signed by Respondent's representative , shall be posted
by Respondent immediately upon receipt thereof and be
maintained by it for 60 consecutive days thereafter, in con-
spicuous places, including all places where notices to em-
ployees are customarily posted . Reasonable steps shall be
taken by Respondent to insure that said notices are not al-
tered, defaced, or covered by other material.
(b) Notify the Regional Director , Region 12 , in writing,
within 20 days from the receipt of this Decision , what steps
have been taken to comply herewith."
" In the event that this recommended Order is adopted by the Board
after exceptions have been filed, this provision shall be modified to read.
"Notify the Regional Director for Region 12, in writing , within 20 days from
the date of this Order, what steps the Respondent has taken to comply
herewith "
APPENDIX
NOTICE To EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
WE WILL NOT decide upon and grant pay increases to
employees for the purpose of interfering with the rights
of employees as guaranteed by Section 7 of the Act.
WE WILL NOT in any like or related manner interfere
with, restrain, or coerce employees in the exercise of
their rights to join and to support a union or to refrain
from such activities.
TOWER PAINT
INVESTMENTS, INC.,
D/B/A TOWER
PAINT MANUFACTURING
AND ITS WHOLLY OWNED
SUBSIDIARY TIARA
WALLCOVERING, INC.
(Employer)
Dated By
(Representative) (Title)
This is an official notice and must not be defaced by any-
one.
This notice must remain posted for 60 consecutive days
from the date of posting and must not be altered , defaced, or
covered by any other material . Any questions concerning this
notice or compliance with its provisions may be directed to
the Board's Office, Room 826, Federal Office Building, 51 S.
W. First Avenue, Miami , Florida 33130, Telephone 305-
350-5391.