Wonder State Manufacturing Co.

National Labor Relations Board - Board Decisions

Mar 22, 1965

151 N.L.R.B. 904 (N.L.R.B. 1965)

904 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
(e) Notify the Regional Diector for Region 14, in writing, within 20 days from
the date of receipt of this Trial Examiner's Decision and Recommended Order, what
steps the Respondent has taken to comply herewith.20
20 If this Recommended Order is adopted by the Board , this provision shall be modified
to read* "Notify the Regional Director, in writing, within 10 days from the date of this
Order, what steps the Respondent has taken to comply herewith."
Wonder State Manufacturing Company and Lodge No. 1568, In-
ternational Association of Machinists , AFL-CIO. Case No. 26-
CA-1788. March 20, 1965
DECISION AND ORDER
On November 18, 1964, Trial Examiner George L. Powell issued
his Decision in the above-entitled proceeding, finding that the Re-
spondent had engaged in and was engaging in certain unfair labor
practices and recommending that it cease and desist therefrom and
take certain affirmative action, as set forth in the attached Trial
Examiner's Decision. Thereafter, the Respondent filed exceptions
to the Trial Examiner's Decision and a supporting brief.
Pursuant to the provisions of Section 3(b) of the National Labor
Relations Act, as amended, the National Labor Relations Board
has delegated its powers in connection with this case to a three-
member panel [Chairman McCulloch and Members Fanning and
Jenkins].
The Board has reviewed the rulings of the Trial Examiner made
at the hearing and finds that no prejudicial error was committed.
The rulings are hereby affirmed. The Board has considered the
Trial Examiner's Decision, the exceptions, brief, and the entire record
in the case, and hereby adopts the findings, conclusions, and recom-
mendations of the Trial Examiner, except as modified herein.
ORDER
Pursuant to Section 10(c) of the National Labor Relations Act,
as amended, the Board hereby adopts as its Order the Order recom-
mended by the Trial Examiner and orders that Respondent, Wonder
State Manufacturing Company, its officers, agents, successors, and
assigns, shall take the action set forth in the Trial Examiner's
Recommended Order with the following modifications :
1. Substitute the following for paragraph 1(e) :
"In any other manner interfering with, restraining, or coercing
its employees in the exercise of their right to self-organization, to
form, join, or assist the Union named above, or any other labor
151 NLRB No. 99.
WONDER STATE MANUFACTURING COMPANY 905
organization, to bargain collectively through representatives of their
own choosing, and to engage in concerted activities for the purpose
of collective bargaining or other mutual aid or protection, or to
refrain from any or all such activities."
2. Add the following paragraph as paragraph 2(c) and renumber
subsequent paragraphs accordingly :
"Notify Edgar Meredith, if presently serving in the Armed Forces
of the United States, of his right to full reinstatement upon applica-
tion in accordance with the Selective Service Act and the Universal
Military Training and Service Act of 1948, as amended, after dis-
charge from the Armed Forces."'
TRIAL EXAMINER'S DECISION
STATEMENT OF THE CASE
This is a proceeding under Section 10 (b) of the National Labor Relations Act, as
amended , 29 U.S.C. 151 el seq ., herein called the Act. The case was heard before
Trial Examiner George L. Powell at Paragould, Arkansas, on July 21, 1964, pur-
suant to a charge filed on October 3, 1963, and a complaint issued May 20, 1964.
The issues are whether the Respondent violated Section 8(a)(1) and (5) of the
Act by entering into individual employment contracts with its employees and
whether Respondent violated Section 8(a)(3) and (1) of the Act by discharging
employee Edgar Meredith for refusing to sign such an employment contract. Pre-
liminary issue to the decision is whether or not the Union represented a majority of
the employees in the designated unit.
Respondent denied the commission of the alleged unfair labor practices on the
following three grounds- (1) The individual contracts were not contemplated within
the province of the Act; (2) the individual employment contracts did not require bar-
gaining as they were covered under the management clause in the contract under
negotiation but about which an impasse had taken place; and (3) the Union did not
represent a majority of the employees and hence there could be no refusal to bargain.
In its brief, the Respondent argues three points: (1) The General Counsel failed
to prove majority status of the Union; (2) under the facts of this case the individual
contracts are not a mandatory subject of bargaining within the meaning of Section
8(a) (5) of the Act; and (3) the Union waived its position and cannot now be heard.
The parties were afforded full opportunity to introduce evidence and present
oral argument.
Upon the entire record in the case, including consideration of the briefs filed by
the parties , and from my observation of the witness , I make the following:
FINDINGS OF FACT
1. THE BUSINESS OF RESPONDENT
Respondent , Wonder State Manufacturing Company, an Arkansas corporation,
is engaged in the manufacture and sale of cotton gin equipment and supplies at
Paragould, Arkansas. During the 12 months preceding the issuance of the complaint,
Respondent manufactured, sold, and shipped from its Paragould, Arkansas, plant
finished products valued in excess of $50,000 to points located outside the State of
Arkansas. The parties admit, and I find, that at all times material herein Respondent
was an employer engaged in commerce within the meaning of Section 2 ( 6) and (7)
of the Act.
II. THE LABOR ORGANIZATION INVOLVED
Lodge No. 1568, International Association of Machinists , AFL-CIO , herein called
Charging Party or Union, is a labor organization within the meaning of Section 2(5)
of the Act.
III. THE UNFAIR LABOR PRACTICES
The facts in this case are essentially without dispute.
906 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
A. Background
On August 30, 1962, a majority of the employees of Respondent in a unit of "all
production and maintenance employees, including working leadmen, employed by
the Employer at its Paragould, Arkansas, plant, excluding office clerical employees,
professional employees, engineering department employees, watchmen, guards and
supervisors as defined in the Act" selected International Association of Machinists,
AFL-CIO, as their representative for the purposes of collective bargaining with the
Respondent, in a secret ballot election conducted under the supervision of the
Regional Director for Region 26 of the Board, herein called Regional Director.
On September 10, 1962, the Regional Director issued a certification of representa-
tive certifying the Union as the exclusive collective-bargaining representative of the
employees in the unit.
On January 28, 1963, the Regional Director issued a Supplemental Decision and
Order Amending Certification of Representative, whereby the certification referred
to was amended by substituting "Lodge No. 1568, International Association of
Machinists, AFI-CIO," for "International Association of Machinists, AFL-CIO."
On May 28, 1964, the Board issued a Decision and Order against the Respondent
in a case brought by the same Charging Party, 147 NLRB 179, in which it found, in
agreement with Trial Examiner Lee J. Best, that since the certification on Septem-
ber 10, 1962, Respondent had violated Section 8 (a) (5) and (1) of the Act by refusing
to bargain ". . . in good faith concerning a contract covering the employees in the
appropriate [same] unit." The Board also found, in agreement with the Trial
Examiner, that Respondent had violated Section 8(a)(5) and (1) of the Act by
unilaterally, and without consulting the Union, discontinuing payment of the
customary Christmas bonus in 1962.1 In order to remedy these unfair labor prac-
tices the Board ordered Respondent, inter alia, to cease and desist from refusing to
bargain with the Union and, upon request, to bargain collectively with the Union
over wages, hours, and all other terms and conditions of employment pertaining to
employees within the appropriate (same) unit represented by the Union; and at the
request of either party, if an understanding is reached, embody such understanding in
a signed agreement.
B. The question of majority
As noted above, the Board on May 28, 1964, issued an order requiring Respondent
to bargain with this Union in the identified unit. The hearing in that case was held
on August 7 and 8, 1963.
The General Counsel introduced into evidence General Counsel's Exhibit No. 4
which is a letter to the Charging Party from Respondent dated January 18, 1964.
The letter indicates that as of January 18, 1964, the parties were still negotiating.
It says, inter alia,
We have your proposal of January 16 for a two year contract. We have' given
a great deal of consideration to it and in a spirit of trying to reach an agreement,
immediately, and without the necessity of any further meetings, my client has
authorized me to make the following offer to you.
We will go along with your proposal for the first two years. No increase on
signing of the contract and 50 one year after signing. Then to carry out this
same pattern for the balance of a four year contract there would be no increase
after 24 months and a 5¢ increase after 36 months.
All other agreements that we have reduced to writing and either signed or
initialed during our various contract meetings on December 18, 1963, and prior
thereto, down to the date of January 15, 1963 will remain as written and become
'However the Board, unlike the Trial Examiner, decided that it would not effectuate
the policies of the Act to require Respondent to pay the 1962 bonus on the ground
that " . . In December 1962, the Respondent was facing serious losses brought about
by sharp price reductions to meet the competition of a rival Company which was
organized in November with a staff recruited in part from the Respondent's key personnel
and work force. Thus, a net loss loomed in December at the time of the year when the
Respondent came to a decision that business conditions did not warrant a bonus . . . .
It appears that the Respondent in any event would have omitted the Christmas bonus in
December 1962 because of the serious decline in business and sharply decreasing earn-
ings resulting from the emergence of a rival company . . . .
WONDER STATE MANUFACTURING COMPANY 907
part of the final agreement. I am particularly talking about those contract
proposals that we agreed to on January 16, 1963 and again agreed to on
December 18, 1963.
Having in this offer moved from a five year contract to a four year contract,
we now have moved on each and every major issue during these many negotia-
tions and have receded from our original position, in keeping with your sug-
gestions, requests and demands on each and every one of them.
We trust that this new proposal will be acceptable to you, your International
and Local Committee and the rank and file membership and we stand ready to
sign a contract based on the foregoing offer.
In reference to the matter of recall and layoff, I have advised the company,
on all day by day operating problems, that they are to follow the tentative agree-
ments that we have reached with the Union. In this connection we are follow-
ing the seniority provision as agreed upon between your organization and
Wonder State. You will recall that in several of the meetings I had mentioned
to you that this should be our method of operating on any problem as it arises.
Since you had no comments to the contrary, we followed the tentative contract.
I cannot think of a fairer method of operation than to follow that which we
agreed to as the best method of operation.
In reference to your suggestion on vacations, it is our counter-offer that we
follow the vacation plans as agreed upon both in January and December of 1963.
Very truly yours,
(S) V. Lee McMahon
V. LEE MCMAHON
The parties were still negotiating on March 13, 1964, as noted by a letter of that date
to the Union (General Counsel's Exhibit No. 8).
Respondent's exhibits likewise show that the parties never had a contract. Respond-
ent introduced into evidence, as Exhibit No. 6(a), an understanding of the parties
dated December 18, 1963. The proposed contract referred to by this exhibit sets
forth, in essence, inter alia, that Respondent recognized the Charging Party, as a
result of the Board election of August 30, 1962, as the sole and exclusive bargaining
agent for the same unit as involved in this case. Exhibit No. 6(a), itself, is set out
later under the heading "The Union's Waiver."
Notwithstanding the above Board Order and the above statement of recognition,
the Respondent at the hearing attempted to introduce evidence that the Charging
Party did not represent any of the employees in the unit. This was objected to by
General Counsel. I sustained the objection on the ground that I was bound by the
recent Board determination, and in addition that it was untimely for Respondent to
attempt to raise the issue in this proceeding. Thereafter Respondent was permitted
to make an offer of proof for its proposition.
After reviewing my rulings in this matter, and in view of the above facts, I find
that the Charging Party is the sole and exclusive bargaining agent in the unit defined
above. Between the date (May 28, 1964) of the above Order of the Board requiring
Respondent to bargain with the Charging Party over the same unit and the date of
the hearing in this matter before me (July 21, 1964), the Respondent has not bar-
gained in good faith to an impasse or to a contract. Until Respondent has complied
with this Board Order, under the circumstances of this case, no question concerning
representation of the employees can be entertained. Otherwise, a deliberate refusal
to bargain in good faith by a Respondent could cause a defection in the Union's
membership and the subsequent loss of majority could be used as a defense to future
bargaining. Thus Respondent would benefit from its wrong.
C. The question of the individual contracts
Respondent argues in its brief that under the facts of this case the substance of the
individual contracts is not a mandatory subject of bargaining.2 I do not agree.
2 Sections of the Act which apply to bargaining are as follows:
Sec. 8 (a) It shall be an unfair labor practice for an employer-
s s s x x x s
(5) to refuse to bargain collectively with the representatives of his employees,
subject to the provisions of section 9(a)
t k i * t i t
Sac. 9. (a) Representatives designated or selected for the purposes of collective
bargaining by the majority of the employees in a unit appropriate for such purposes,
908 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
On or shortly prior to November 15, 1962, the following officers and managers of
Respondent left the employ of Respondent to go to a competing concern called Delta,
Inc.: President Begley left on November 5, 1962, followed thereafter by Sales
Manager Davis, Vice President of Sales Dohogne, Vice President of Manufacturing
and Engineering Ferguson, and Shop Foreman Shatley. No rank-and-file employees
left Respondent at that time.3 Cameron testified that he himself had been contacted
to leave Respondent to go to Delta but did not go .4
On November 17, 1962, Chairman of the Board of Directors Gatz made a speech
to an assembled gathering of some 35 of Respondent's employees out of a total com-
plement of 55 at that time. Also on the weekend following November 15, 1962, some
loyal personnel of Respondent called, according to the testimony of Cameron, "the
salesmen, the distributors, and all of our sources of supply, which had also been con-
tacted. We were calling them to see if they had the exact story and where they stood
on the situation."
Based upon the above reasons, Respondent (some 9 months later, from August 30,
through the first week of September 1963) began having each of its managerial and
supervising employees (those not in the unit involved) sign individual contracts.5
Four months thereafter, beginning in January 1964, Respondent began having the
contract signed by employees in the unit. All employees had signed these contracts,
except Edgar Meredith, at the time of the hearing. Because of the importance of the
provisions of the individual contract to the decision in this case, the "employment
contract" given to employee Edgar Meredith for execution by him is set forth as
follows :
EMPLOYMENT CONTRACT
This contract of employment entered into by Wonder State Manufacturing
Company of Paragould , Inc., hereinafter referred to as Employer and Edgar
Meredith , hereinafter referred to as Employee,
WITNESSETH:
Whereas, the Employer is engaged in the manufacturing business , being a
business that involves extended periods of training and great expense incurred
in the training of the employees and trade secrets in connection with the methods
and processes of designing , manufacturing and selling its products; and
shall be the exclusive representatives of all the employees in such unit for the
purposes of collective bargaining in respect to rates of pay, wages, hours of em-
ployment, or other conditions of employment:..
• * R * k R 4
SEC. 8. (d) For the purposes of this section, to bargain collectively is the per-
formance of the mutual obligation of the employer and the representative of the
employees to meet at reasonable times and confer in good faith with respect to,
wages, hours, and other terms and conditions of employment, or the negotiation of
an agreement, or any question arising thereunder, and the execution of a written
contract incorporating any agreement reached if requested by either party, but such
obligation does not compel either party to agree to a proposal or require the making
of a concession:. . .
'Vice President Cameron testified on cross-examination for Respondent as follows:
Q. (By Mr. Wise [counsel for the General Counsel].) Do you recall approximately
how many employees other than supervisory or managerial employees left in this
initial mass exodus"
A. None in the initial ; that is with the exception of one shop foreman, which'
I would assume you had also put in this category.
Later in the same examination he testified that the supervisory or managerial employees
who left to go with Delta, Inc , were "the president, the sales manager, the vice president
of sales, the shop foreman, the vice president of manufacturing and engineering "
`Respondent filed a complaint in equity on or about December 20, 1962, against Shatley,
Ferguson, Davis, Begley, and Delta, Inc, the competitor, alleging, in essence, that they
had conspired to take Respondent's trade secrets and processes over to Delta, Inc , in
order to compete unfairly with Respondent and to divert Respondent's business to Delta,
Inc. The prayer for relief included a request for an accounting and for a permanent
injunction. This case was pending at the time of the hearing before me in the instant
matter.
6I made a finding at the hearing that there was nothing in the record to show that
the individual contract was designed as an antiunion device. After a review of the
record I am of the same opinion.
WONDER STATE MANUFACTURING COMPANY 909
Whereas, for the proper protection of the business of the company, it is
absolutely necessary and essential that all matters connected with and arising out
of or pertaining to the Employer 's business and the Employer 's methods , and the
names of the Employer's customers be kept secret; and
Whereas, the Employer, after expending great amounts of money and time in
training new employees should be protected against said employees being pirated
away by competitors of the Employer; and
Whereas, the Employee executing this contract desires to enter into employ
of said company or is presently employed by said company and desires to con-
tinue in said employment; and
Whereas, great loss and damage will be suffered and sustained by the Employer
if, during the term of this contract or for a period following the termination of
this contract equal in length to the period of employment of said Employee, but
in any event not to exceed one year, the said Employee should for himself, or
in behalf of or in conjunction with any other person , firm, partnership or corpo-
ration, engage in employment or business in competition with the Employer in an
area within 100 miles of Paragould , Arkansas.
Now THEREFORE , the parties hereto, for and in consideration of the promises
and mutual covenants and agreements herein contained , and by them respectively
kept and performed , covenant and agree as follows:
The Employer agrees to employ and does by these presents employ Edgar
Meredith in present capacity as Machine Shop Worker and to serve thereafter
in the capacity designated by the Employer at the present compensation of $1.50
per hr. with time and a half for all over 40 hrs., which compensation shall be
adjusted hereafter as is deemed proper by the Employer or required by law.
The said Employee covenants and agrees that he will , at all times , faithfully
and industriously perform all duties of the company which may be required of
him and that he will devote his entire time and attention to such duties.
Said Employee expressly covenants and agrees , which covenant and agreement
is of the essence of this contract , that at no time during the term of this agree-
ment or after the termination of this agreement , for a period equal to the time
the Employee is employed by the employer , but in any event not to exceed one
year following the termination of employment , regardless of whether such
termination is voluntary or involuntary , will he, for himself or in behalf of any
other person or corporation , directly or indirectly engage in competition with
the Employer or serve any person , firm or corporation in competition with the
Employer during said period within an area of 100 miles of Paragould , Arkansas,
and that he will not disclose to any person , fiim or corporation any of the secrets,
methods , processes or customer lists used by the Employer in and about its
business.
Said Employee agrees that , in the event he has served the Employer in the
contacting of customers or potential customers during his employment, he will
not, during his employment or for the period of limitation hereinabove stated,
solicit said customers or contact said customers in the entire cotton producing
area of the United States for any person or corporation , selling any product or
service in competition with the Employer.
IN WITNESS WHEREOF, We have hereunto set our hands this ----------
day of ----------- ------ 1963.
WONDER STATE MANUFACTURING COMPANY
OF PARAGOULD, INC.,
By ---------------------------------------
----------------------------------------
Emp loyee
Respondent argues in its brief that requiring employees to agree not to divulge
trade secrets and precluding them from accepting employment with a competitor after
separation from Respondent 's employ is not a subject over which the Employer must
bargain under the facts of this case . In its brief Respondent characterizes this employ-
ment contract as a mere agreement not to divulge secrets and not to accept employ-
ment with a competitor . I disagree with this characterization and find that the
agreement goes much further than that and that it is an individual contract which
affects the wages, hours , and working conditions of the employees . For example, in
the fourth "whereas" clause of the agreement the employee had to sign the contract in
order to continue working. His hourly wage was set out and he was required to
promise to devote his entire time and attention to all company duties required of him.
910 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Such a clause would leave little about which his collective -bargaining agent could
bargain with his employer Because of this finding it is unnecessary to discuss the
possibility that the area of the 100-mile radius (within which the employee agreed
not to work for competitors ) might be considered so harsh a penalty for a rank-and-
file employee as to seriously affect his rights to freely engage in collective bargaining
with his employer with a representative of his own choosing
D. The Union 's waiver
The third point Respondent argued in its brief is that the Union waived its position
and cannot now be heard . Respondent argued that the Union was well aware of the
problem facing Respondent and that all through the bargaining sessions it had been
made aware of this problem and hence the individual contracts could not have come
as a complete surprise to them. It was also pointed out that the Union actually
knew of the individual contracts in the latter part of January 1964 . In his letter of
January 18 , 1964, McMahon , counsel for Respondent , wrote the Union that if it
desired to discuss the contracts he, McMahon , would be happy to discuss the same.
However, the Union never contacted Respondent or McMahon with respect to the
matter. Respondent also maintained in its brief that inasmuch as it and the Union
had agreed on many contract clauses in their collective -bargaining meetings including
a "Management Rights clause ," it had put into effect all of the agreed -upon provisions
of the contract without objection by the Union . Based on these facts Respondent
contends that the Charging Party had waived its right to object to the individual
contracts . First, as to the facts, Respondent 's sole witness , Cameron , did not estab-
lish the fact that the parties had agreed to put into effect any agreed -upon contract
clauses. Thus there was not a "Management Rights clause " in effect by agreement
of the parties . He testified that the union bargaining representatives had been told
that Respondent was operating under provisions of the proposed contract which had
been agreed to Of course if they were operating under any agreed-upon term of the
contract this fact or facts would become self-evident and a "telling" would be unneces-
sary. It is important to note that at no time in this case was there a complete contract
nor even an agreement between the parties to operate under specific contract clauses
in which the parties were in agreement . Cameron's testimony on this phase of the
case is as follows-
Mr. MCMAHON [Respondent 's counsel]: Our contract provides under the
management clause that we have the right to change the working conditions as
an exclusive management prerogative . We also have agreed to a waiver of
bargaining.
TRIAL EXAMINER: I see, but you had no previous contract?
Mr. MCMAHON : This is our first contract , and our position is that-for
instance, we had a layoff and the union talked to us about the layoff. We said
we were following the contract clause of seniority , and there are letters in evi-
dence which show that the union knew and we told them that we were following
the tentative agreements as we reached them. It is our position
TRIAL EXAMINER . All right. You may answer the question.
A. [CAMERON] The question was whether this had been discussed
TRIAL EXAMINER : Whether you could put into effect agreed upon contract
clauses?
The WITNESS [CAMERON]: Yes , sir, this had been discussed at the contract
negotiating sessions.
TRIAL EXAMINER : Did anybody agree to it')
The WITNESS : This I couldn 't say, whether it was agreed to or not, except
they [union bargaining representatives] had been told that we were operating
under the various-certainly, as to the agreement of the thing , at all of these
sessions that had been previously agreed to.6
Secondly , as I read the law, mandatory bargaining with a statutory representative
of the employees cannot be considered waived merely by failure on the part of the
statutory representative to take a position with respect to any actions by the
aRespondent ' s Exhibit No 6(a ), dated December 18, 1963 , refereed to earlier, is an
understanding that all noneconomic issues and contract language were agreed to as were
all economic issues other than (a) contract duration , ( b) wages, and (c ) checkoff It
was also agreed that the entire agreement was "subject to approval and ratification of
the Local Union Membership ." Thus it is clear there wai no contract and no agicement
to put into effect clauses agreed to by the parties up to that time
WONDER STATE MANUFACTURING COMPANY 911
Employer. It is a statutory duty on the part of the Employer to bargain with the
statutory representative of the employees on all mandatory bargaining issues. This
is not a permissive thing between the parties but is a duty imposed on them in the
public interest. The Employer is not free during the time when it should be bargain-
ing with this statutory representative to bargain with anyone other than the statutory
representative. For example, an Employer cannot give the statutory representative an
opportunity to discuss a point raised by him and then, at the "failure" of the statutory
representative to comment, bargain individually with the employee or with some other
agent of the employee over that matter. During the period within which it is required
to bargain with the statutory representative of its employees, the employer main-
tains the status quo of its operation, subject only to bargaining with the statutory
representative over changes in wages, hours, and working conditions of its employ-
ees. There is no question in this case but what the Employer needed the loyalty of
its employees-as do all employers even without the imminent danger to its business,
as was seen in this case. But it has been wisely said that loyalty must be earned-it
cannot be bought nor can it be contracted for
Thirdly, Respondent argued that all through the bargaining sessions the Union was
aware of the problem of the shifting personnel and hence the individual contracts
could not have come as a complete surprise to them. The facts, however, show that
Respondent never advised the Union during the course of negotiations that such con-
tracts were going to be instituted with employees in the bargaining unit. Respondent's
Witness Cameron, on cross-examination, had this to say:
Q. During the course of your negotiations, or the negotiations of Wonder
State with the union, was the union ever advised that Wonder State was going to
institute such contracts?
A. Not that I recall, no, sir.
Q. Were they ever advised that you contemplated instituting such contracts?
A. Not that I recall.
Cameron testified that the problem presented by the shift of personnel to Delta was
discussed at the bargaining sessions with the Union as background to support
Respondent's demand for a longer contract.7
Finally, the Union's Grand Lodge representative, in a letter dated January 16,
1964, to Respondent's Counsel McMahon, protested against the individual contracts
saying:
It is further my understanding that the Company [Respondent] is negotiating
with each individual and requesting that he sign a contract with the company
pertaining to his employment and ect [sic]. Please be advised that we will use
whatever steps that are necessary to correct this practice. We sincerely trust
that this matter will be straightened out without further litigation if not we will
do whatever is necessary to protect the employees who are involved. [See
General Counsel's Exhibit No. 3.]
In view of all these facts I find the Union at no time waived any of its rights, and the
position of Respondent, based on a theory of waiver, lacks merit.
Concluding Findings
It is well settled that if a clause of a contract settles a term or condition of employ-
ment it is within the phrase "wages, hours , and other terms and conditions of employ-
ment," and "it regulates the relations between the employer and the employees" and
is therefore within the scope of mandatory bargaining in which an employer
is obligated to deal only with the exclusive bargaining agent of its employees.
N.L.R.B. v. Wooster Division of Borg-Warner Corporation , 356 U.S. 342 , 350. In
this area , an employer is not permitted to deal with its employees rather than with
7 Cameron testified as follows:
TRIAL EXAMINER : What was it with respect to?
The WITNESS [ Cameron]. As I said , before in a number of cases, it was being
offered as background information as to the situation that we found ourselves in
and why we were desirous of a longer contract. We honestly felt that it would take
a longer period of time , the fact that we could show-
TRIAL EXAMINER : You Introduced it, then, in order to support your claim for a
longer contract?
The WITNESS • Yes, sir
912 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
their statutory representative. In this case, by dealing directly with its employees
over a subject of mandatory bargaining with their statutory representative, the
Respondent has violated Section 8(a) (5) of the Act.8 As this action also interfered
with, restrained, and coerced its employees in the exercise of the rights guaranteed in
Section 7 of the Act, I find that Respondent also has violated Section 8 (a) (1) of the
Act.
E. The 8(a)(3)
The complaint alleged that Respondent discharged employee Edgar Meredith on
March 17, 1964, for refusing to sign the individual employment contract referred
to above.
Again the facts are not in dispute. Meredith had been an employee of Respondent
from July 1960 to June 1961, and then resumed employment in July 1962, until
his discharge on March 17, 1964. About 15 minutes after he reported for work
on March 16, 1964, his foreman, Doyle Bailey, gave him two copies of the "Employ-
ment Contract," identified above, to study, take home, sign, and return. Respond-
ent's Vice President Dohogne 9 would then sign one of the copies and return it to
Meredith. On the following day Bailey asked Meredith if he had signed the papers.
Meredith asked him if he had to sign, to which Bailey replied that that was his
"understanding." Meredith told Bailey that he did not like the part that if he were
discharged or laid off he could not work for a competitor within 100 miles of
Paragould, Arkansas. He told Bailey that he would sign an agreement that he
wouldn't quit the Respondent and go to work for a competitor. Bailey then took
him to the office to talk to Dohogne. The credited testimony of Meredith with
respect to his conversation in the office of Dohogne is as follows:
Q. Tell us about this conversation in Mr. Dohogne's office.
A. Well, I told him Mr. Bailey had sent me in there to talk to him about the
contract and asked him did I have to sign it to work there, and he said, "You do."
I told him the same thing I told Mr. Bailey, that I didn't like the part where
if I was discharged or laid off that I couldn't work for a competitor within a
hundred miles of Paragould; that I didn't think it was any of their business where
I would work. He said, "Well, if you want-," I told him I would sign an
agreement not to quit the company to go to work for any competitor, and he
said, "All of the rest of the men have signed it. Why should I make you an
exception."
So, I told him I would not sign that contract. He said, "Well, you will have
to quit."
I told him I would not quit. He said, "If you won't sign the contract, you
can't work here without signing the contract. You will have to quit." I told
him I would not quit. If I left there, I would be fired.
Q. What, if anything, happened after that?
A. He stepped to the door, stepped over to Mr. Cameron's office, and had
Mr. Floyd Cameron come into his office.
Q. And then Mr. Cameron was in the same office with you and Mr. Dohogne?
A. From then on, yes, sir.
Q. Tell us about the conversation, whatever happened in the office between
you and Mr. Cameron and Mr. Dohogne.
A. When Mr. Cameron came in, Mr. Dohogne said, "Floyd, Edgar refuses to
sign the contract, and the technicality has come up whether he is quitting or
whether I am firing him." I said, "I am definitely not quitting," and Mr.
Cameron turned to me and said, "Well, Edgar, the rest of the men have signed
it. Why won't you sign it." I told him that I didn't like the part about if I
was discharged or laid off and not being able to work for a competitor within
a hunderd miles. He turned to Mr. Dohogne and said, "Well, Urban, I don't
see that we have any alternative."
B Respondent ' s position that the economics of the situation warranted the execution of
the individual contracts, even assuming without deciding that the Employer went no
farther than necessary in restricting other employment of the employee as to time and
area , is without merit . A violation of the Act cannot be excused on the ground of pri-
vate inconvenience or economic and business exigencies . N.L R B. v. F McKenzie Davison,
et at, d/b/a Arlington Asphalt Company , 318 F. 2d 550, 558, 559; (CA. 4) (11fay 1963)
and cases cited therein particulaily in footnote 17.
9 Dohogne had left Respondent ' s employ for Delta, Inc ., on November 15, 1962, but
had returned.
WONDER STATE MANUFACTURING COMPANY 913
Q. After this, what, if anything, happened, Mr. Meredith?
A. Mr. Dohogne opened his desk drawer and pulled out a pad of pink slips
and put two carbon papers in them and began to fill them out and looked up to
me and said , "I want those two contracts back that Mr. Bailey gave you." He
said , "You didn't sign them. They don't belong to you." He said, "I want
them back." I said , "I don't have them with me." He said, "Well, you've got
a day's pay coming. You can get your pay when you bring in the contracts." I
said, "Okay." So, he went ahead and filled out these slips and called Mr.
Bailey in, who was standing at the door, and had him to sign it and looked at
me and said , "That's all."
Q. What did you do then?
A. I asked him if I didn't get a copy of the slip he had filled out, and he
asked me what I wanted with it. I told him, to show to the employment office
why I was discharged, and he said he would take care of my claim when it
came into his office. I said, "Okay," and I walked outside his office to the
outer office, and I turned around and he had come out behind me and had the
slips in his hand. I asked him if I couldn't have the third copy. I said, "You
made three copies. It looks like I should have one of them. What are you going
to do with the third one." He said , "You might want to light a cigarette withit.,,
Q. Then, what, if anything, did you do, Mr. Meredith?
A. I said, "Okay," and walked out of the office, got my tool box, went to
the truck and come home.
Section 8(a)(3) of the Act makes it an unfair labor practice for an employer
"by discrimination in regard to hire or tenure of employment or any term or con-
dition of employment to encourage or discourage membership in any labor organiza-
tion." I find by requiring Meredith to sign an individual contract, or quit, the
Respondent violated Section 8(a)(3) of the Act. It is obvious that such a require-
ment would discourage membership in a labor organization as there would be little
reason for one to have a statutory bargaining representative to bargain for him
when he had to bargain individually in any event. I also find this action to violate
Section 8(a) (1) of the Act for the reasons stated above under the finding of violation
of Section 8(a)(5) and (1) of the Act.
IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE
I find that the activities of the Respondent, set forth in section III hereof, occurring
in connection with the operations of Respondent described in section I, above, have
a close, intimate, and substantial relationship to trade, traffic, and commerce among
the several States and tend to lead to labor disputes burdening and obstructing com-
merce and the free flow of commerce.
V. THE REMEDY
Having found that Respondent has engaged in unfair labor practices in violation
of Section 8(a)(1), (3), and (5) of the Act, I shall recommend that it cease and
desist therefrom and take certain affirmative action designed to effectuate the policies
of the Act.
Respondent having discharged Edgar Meredith because of his refusal to sign the
individual contract when he had a statutory bargaining representative, I recommend
that Respondent offer him immediate and full reinstatement to his former or sub-
stantially equivalent position, without prejudice to his seniority or other rights and
privileges of employment, and make him whole for any loss of pay suffered by
reason of the discrimination against him, by the payment of a sum of money equal
to the amount he would normally have earned as wages from the date on which
his employment was terminated by Respondent to the date on which Respondent
shall offer him proper reinstatement as herein provided, less his interim net earn-
ings,10 to be computed on a quarterly basis in the manner set forth in F. W. Wool-
worth Company, 90 NLRB 289. Interest on backpay shall be computed in the
manner set forth in Isis Plumbing & Heating Co., Inc., 138 NLRB 716.
It is also recommended that the Respondent be ordered to make available to
the Board, upon request, payroll and other records to facilitate checking the amount
of earnings due.
10 See Crossett Lumber Company, 8 NLRB 440, 496.
783-133-66-vol. 151-59
914 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Having found that Respondent, commencing in January 1964 and continuing
thereafter, has refused to bargain collectively with the certified collective-bargaining
representative of its employees in the unit found to be appropriate in Wonder State
Manufacturing Company, 147 NLRB 179, by entering into individual employment
contracts with its employees in the said unit, thereby engaging in unfair labor
practices within the meaning of Section 8(a) (5) of the Act, it will be recommended
that it cease and desist therefrom and, upon request, shall bargain collectively, as
defined in Section 8(d) of the Act, with Lodge No. 1568, International Association
of Machinists, AFL-CIO, as the exclusive representative of employees within the
appropriate unit, and at the request of either party, if an understanding is reached,
embody such understanding in a signed agreement.
Upon the basis of the foregoing findings of fact, and upon the entire record in
the case, I make the following:
CONCLUSIONS OF LAW
1. Wonder State Manufacturing Company is an employer within the meaning
of Section 2(2) and is -engaged in commerce within the meaning of Section 2(6)
and (7) of the Act.
2. Lodge No 1568, International Association of Machinists, AFL-CIO, is a
labor organization within the meaning of Section 2(5) of the Act.
3. All production and maintenance employees, including working leadmen,
employed by the Employer at its Paragould, Arkansas, plant excluding office clerical
employees, professional employees, engineering department employees, watchmen,
guards, and suprvisors as defined in the Act, constitute a unit appropriate for the
purposes of collective bargaining within the meaning of Section 9(b) of the Act.
4. Lodge No. 1568, International Association of Machinists, AFL-CIO, is, and
has at all times material to this case been and now is, the duly certified and exclusive
representative of Respondent's employees in the appropriate unit for the purposes
of collective bargaining within the meaning of Section 9(a) of the Act.
5. By entering into individual employment contracts with its employees in the
appropriate unit in and after January 1964, the Respondent has engaged in and is
engaging in unfair labor practices by refusing to bargain collectively within the
meaning of Section 8(a)(5) of the Act
6. By discharging employee Edgar Meredith because he refused to sign an indi-
vidual contract on March 17, 1964, the Respondent has engaged in unfair labor
practices within the meaning of Section 8(a)(3) of the Act.
7. By engaging in the actions set forth in sections 5 and 6 above, the Respondent
has interfered with, restrained, and coerced its employees in the exercise of the rights
guaranteed in Section 7 of the Act in violation of Section 8(a) (1) of the Act.
8. The aforesaid unfair labor practices are unfair labor practices affecting com-
merce within the meaning of Section 2(6) and (7) of the Act.
RECOMMENDED ORDER
Upon the foregoing findings of fact, conclusions of law, and the entire record
in the case , and pursuant to Section 10(c) of the National Labor Relations Act, as
amended, I recommend that the Respondent , Wonder State Manufacturing Company,
its officers , agents, successors , and assigns , shall:
1. Cease and desist from
(a) Discouraging membership in said International Association of Machinists,
AFL-CIO, or in any other labor organization of its employees, by discharging,
laying off, or refusing to reinstate any of its employees because of their concerted or
union activities , or in any other manner discriminating in regard to their hire or
tenure of employment or any term or condition of employment.
(b) Refusing to bargain collectively with Lodge No. 1568, International Associa-
tion of Machinists , AFL-CIO, as the certified bargaining representative of its
employees in the unit herein found to be appropriate for the purpose of collective
bargaining.
(c) Entering into individual employment contracts , embodying wages, hours, and
terms and conditions of employment , with its employees in the appropriate unit, and
giving effect to those already entered into
(d) Discharging employees in the appropriate unit for failing to sign said indi-
vidual employment contracts.
(e) In any like or related manner interfering with, restraining , or coercing its
employees in the exercise of their right to self-organization , to form , join, or assist
the Union named above , or any other labor organization, to bargain collectively
WONDER STATE MANUFACTURING COMPANY 915
through representatives of their own choosing , and to engage in concerted activities
for the purpose of collective bargaining or other mutual Lid or protection, or to
refrain from any or all such activities.
2. Take the following affirmative action designed to effectuate the policies of the
Act:
(a) Upon request , bargain collectively with Lodge No. 1568, International Associa-
tion of Machinists , AFL-CIO, concerning wages, hours , and all other terms and
conditions of employment pertaining to employees within the appropriate unit
represented by the Union ; and at the request of either party , if an understanding
is reached , embody such understanding in a signed agreement.
(b) Offer to Edgar Meredith immediate and full reinstatement to his former or
substantially equivalent position without prejudice to his seniority or other rights
and privileges previously enjoyed.
(c) Make whole Edgar Meredith for any loss of pay he may have suffered by
reason of Respondent 's discrimination against him in accordance with the recom-
mendation set forth in the section entitled "The Remedy."
(d) Preserve and, upon request , make available to the Board or its agents, for
examination and copying , all payroll records , social security payment records, time-
cards , personnel records and reports, and all other records necessary to analyze the
backpay due and the rights of employment under the terms of the Recommended
Order herein.
(e) Post at its place of business in Paragould , Arkansas , copies of the attached
notice marked "Appendix." 11 Copies of said notice, to be furnished by the Regional
Director for Region 26, shall, after being duly signed by the Respondent , be posted
by it immediately upon receipt thereof and maintained for 60 consecutive days
thereafter in conspicuous places including all places where notices to employees
are customarily posted Reasonable steps shall be taken by Respondent to insure
that such notices are not altered , defaced, or covered by any other material.
(f) Notify the Regional Director for Region 26, in writing , within 20 days from
the date of the receipt of this report , what steps the Respondent has taken to comply
with the foregoing Recommended Order.
It is further recommended that unless within 20 days from the date of the receipt
of this Trial Examiner 's Decision , the Respondent shall notify the said Regional
Director , in writing , that it will comply with the foregoing Recommended Order,i2
the National Labor Relations Board issue an order requiring Respondent to take
the aforesaid action.
11 In the event that this Recommended Order he adopted by the Board , the words "a
Decision and Order" shall be substituted for the words "the Recommended Order of a
Trial Examiner " in the notice In the further event that the Board 's Order be enforced
by a decree of a United States Court of Appeals, the words "a Deciee of the United
States Court of Appeals , Enforcing an Order" shall be substituted for the words "a
Decision and Order."
"In the event that this Recommended Order be adopted by the Board, this provision
shall be modified to read "Notify said Regional Director , in witting , within 10 days from
the date of this Order, what steps the Respondent has taken to comply therewith "
APPENDIX
NOTICE TO ALL EMPLOYEES
Pursuant to the Recommended Order of a Trial Examiner of the National Labor
Relations Board, and in order to effectuate the policies of the National Labor Rela-
tions Act , as amended , we hereby notify our employees that:
WE WILL, upon request, bargain collectively with Lodge No 1568 , Inter-
national Association of Machinists , AFL-CIO, as the certified representative
of our employees in the appropriate unit, with respect to wages, hours, and
other terms and conditions of employment.
WE WILL offer to Edgar Meredith immediate and full reinstatement to his
former or substantially equivalent position, without prejudice to seniority and
other rights and privileges , and make him whole for any loss of salary or pay
suffered as a result of the discrimination against him.
WE WILL NOT discourage membership in or activities on behalf of Lodge No.
1568, International Association of Machinists , AFL-CIO, or any other labor
organization , by discharging any of our employees or in any other manner
discriminating against our employees in regard to their hire or tenure of employ-
ment or any term or condition of employment.
916 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
WE WILL NOT enter into nor give effect to individual employment contracts
with employees in the appropriate unit composed of:
All production and maintenance employees , including working leadmen,
employed by the Employer at its Paragould , Arkansas , plant, excluding
office clerical employees , professional employees , engineering department
employees , watchmen , guards, and supervisors as defined in the Act.
WE WILL NOT in any other manner interfere with , restrain , or coerce our
employees in the exercise of the right of self-organization , to form labor
organizations , to join or assist Lodge No. 1568, International Association of
Machinists , AFL-CIO, or any other labor organization , to bargain collectively
through representatives of their own choosing , and to engage in any other con-
certed activities for the purposes of collective bargaining or mutual aid or
protection , or to refrain from any and all such activities.
WONDER STATE MANUFACTURING COMPANY
Employer.
Dated------------------- By-------------------------------------------
(Representative ) ( Title)
NOTE-We will notify the above-named employee if presently serving in the Armed
Forces of the United States of his right to full reinstatement upon application in
accordance with the Selective Service Act and the Universal Military Training and
Service Act of 1948, as amended, after discharge from the Armed Forces.
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.
Employees may communicate directly with the Board 's Regional Office, 746 Fed-
eral Office Building, 167 North Main Street , Memphis, Tennessee , Telephone No.
534-3161 , if they have any question concerning this notice or compliance with its
provisions.
Neuhoff Bros ., Packers, Inc. and United Packinghouse , Food and
Allied Workers of America , AFL-CIO. Case No. 16-CA-2073.
March 22, 1965
DECISION AND ORDER
On December 29, 1964, Trial Examiner Arthur E. Reyman issued
his Decision in the above-entitled proceeding, finding that Respond-
ent had engaged in and was engaging in certain unfair labor prac-
tices and recommending that it cease and desist therefrom and
take certain affirmative action, as set forth in the attached Trial
Examiner's Decision. The Trial Examiner also found that Re-
spondent had not engaged in certain other unfair labor practices
and recommended that these allegations of the complaint be dis-
missed. Thereafter, the General Counsel and Respondent filed
exceptions to the Trial Examiner's Decision and supporting briefs.'
1 By an order dated January 19, 1965 , the Board extended the time for filing of excep-
tions until January 27 , 1965 , and for the filing of briefs until February 2, 1965. Re-
spondent filed its exceptions within the specified period , and on February 1, 1965, filed
its brief . In its brief, however , Respondent "restated" its exceptions . We shall disregard
any matters contained in the "restated" exceptions which were not contained in the
exceptions which were timely filed.
151 NLRB No. 103.