Allsteel Products Manufacturing Co. (Inc.)

National Labor Relations Board - Board Decisions

Oct 17, 1939

16 N.L.R.B. 72 (N.L.R.B. 1939)

In the Matter of ALLSTEEL PRODUCTS MANUFACTURING COMPANY (INC.)
and INTERNATIONAL ASSOCIATION OF MACHINISTS, LOCAL 1308
Case No. C-10'10.-Decided October 17, 1939
Oil Field. --Servicing- and" Drillinrt'' Ega.ipment Dlaorutaeturing- Indtrst^-g=Em-'
ploptce Status: supervisory: authority to hire or discharge not an essential in
determining an employee to be-Dvidesce: past criminal record as affecting
credibility of witness-Settlement Agreement: events occurring prior to, con-
sidered where there has been further conduct exhibiting a continuity with
its conduct and attitude prior to such agreement-Interference; Restraint, and
Cocroion: expressed opposition to "outside" labor organization ; persuading em-
ployees to refrain from joining an "outside" labor organization: discrimination
in favor of company-dominated union ; assisting formation of a labor organi-
zation-Company-Dominated tdon: domination of and interference with for-
mation and administration; use of by employer as bulwark against "outside"
unionization ; encouragement of inside organization by discouragenient of 'other
labor organization ; support: provision in Section S (2) of the Act permitting
employees to confer with management during working hours without loss of
pay does not extend to conferences involving the internal affairs of the union;
participation by supervisory employees; disestablished, as agency for collective
bargaining-Discrimination: lay-off; discharges, charges of, not sustained as
to one person; presence of proper causes at time of discharge not conclusive in
determining , since issue is whether such causes in fact induced the discharge
or whether they are a justification of it in retrospect-Reinstatement Ordered:
usual order-Back Pay: awarded, to employees laid off and discharged for
period of lay-off and from date of discharge to date of offer of reinstatement ;
monies received by employees for work performed upon Federal, State, county,
municipal, or other work-relief projects to be deducted and paid over to agency
which supplied funds for said projects.
Mr. Daniel J. Leary, for the Board.
Fouls ton, Siefkin, Foulston and Morris, by Mr. Robert C. Foulston,
Mr. George B. Powers, and Mr. Carl T. Smith, of Wichita, Kans., for
the respondent.
Mr. David Kaplan, of Washington, D. C., for the I. A. M.
Mr. Wallace M. Cohen, of counsel to the Board.
DECISION
AND
ORDER
STATEMENT OF THE CASE
Upon a charge and amended charges duly filed by International
Association of Machinists, Local 1308, herein called the I. A. M.,
16 N. L. R. B., No. 12.
72
ALLSTEEL PRODUCTS DEAN UFACTURING CODIPANY (INC.) 73
the National Labor Relations Board, herein called the Board, by
the Acting Regional Director for the Seventeenth Region (Kansas
City, Missouri), issued its complaint dated July 15, 1938, against
Allsteel Products Manufacturing Company (Inc.), Wichita, Kansas,
herein called the respondent, alleging that the respondent had en-
gaged in and was engaging in unfair labor practices affecting com-
merce within the meaning of Section 8 (1), (2), and (3) of the
National Labor Relations Act, 49 Stat. 449, herein called the Act.
Copies of the complaint, accompanied by notice of hearing, were
duly. served upon the respondent, the I. A. M., and the Allsteel Em-
ployees' Federation, herein called the Federation.
In respect to the unfair labor practices, the complaint alleged in
substance that on or about November 11, 1937, and down to and
including the date of the filing of the complaint, the respondent had
dominated and interfered with the formation and administration of
the Federation and had given financial aid and other support to 'it,
in that, among other acts, the respondent (a) encouraged, allowed,
-a.nd permitted supervisory and other employees representing the
respondent to organize, promote, and encourage membership in the
,Federation on the respondent's time and property and otherwise
showed preference to the Federation; (b) caused its representatives
-to arrange and pay for Federation meeting places, (c) caused its
employees to attend Federation meetings; (d) published and posted
notices of Federation meetings; (e) caused its officers to speak at
.such meetings; (f) permitted Federation memberships to be solicited
by respondent's employees • upon its time; and, (g) reimbursed its
employees for time spent in attending Federation meetings; that
.the respondent discriminatorily discharged and failed and refused
to employ C. T. Gilleland on or about January 14, 1938, and J. Lloyd
Spalding 1 and B. Q. Mclninch on or about March 23, 1938,2 because
they joined and assisted the I. A. M.; and that by certain other acts,
,the respondent has interfered with, restrained, and coerced ite em-
ployees. in the-exercise of their rights under the Act. On July 22,
1938, the respondent. filed, an, answer admitting certain allegations
of the complaint, but denying the alleged unfair labor practices.
More particularly, the answer admitted that the respondent is engaged
,in interstate commerce and that Gilleland was discharged, but denied
that Spalding or Mclninch was discharged, alleging that Mclninch
resigned. Further affirmative allegations were set forth.
I Incorrectly designated in the complaint as H. Lloyd Spalding.
' At the hearing counsel for the Board moved to amend the complaint so as to allege that
Spalding was reinstated for the period April 7, 1938, to May 14, 1938, at which time he
was laid off , and thereafter refused reinstatement . The trial Examiner granted the motion.
No objection was raised by the respondent.
74 DECISIONS OF NATIONAL LABOR RELATIONS 'BOARD
Pursuant to notice, the hearing opened in Wichita, Kansas, on July
25, 1938, before Henry J. Kent, the Trial Examiner duly designated
by the Board. The hearing closed July 29, 1938.
The Board and the respondent were represented by counsel and par-
ticipated in the hearing. Full opportunity to be heard, to examine
and cross-examine witnesses, and to introduce evidence bearing on
the issues was afforded all parties.
At the close of the Board's case and again at the end of the hearing,
the respondent moved to dismiss the complaint, as amended, on the
ground that the Board had failed to prove its case. These motions
were denied by the Trial Examiner. His rulings are hereby affirmed.
At the close of the hearing, the Trial Examiner, at the request of the
respondent, agreed to keep open the record to receive the deposition
of Fred Dougherty. The record was closed, when the respondent
declined to take a deposition from Dougherty. During the course of
the hearing, the Trial Examiner made a number of rulings on other
motions and objections to the admission of evidence. The Board has
reviewed these rulings and finds that no prejudicial errors were com-
mitted. The rulings are hereby affirmed.
On November 30, 1938, the Trial Examiner filed his Intermediate
Report, copies of which were duly served upon all parties, finding
that the respondent had engaged in unfair labor practices affecting
commerce within the meaning of Section 8 (1), (2), and (3) and
Section 2 (6) . and (7) of the Act,, ,and„ recommending that the re-
spondent cease and desist therefrom and that C. T. Gilleland and J.
Lloyd Spalding be reinstated to their former positions as of the date
of discharge with compensation from that date. The Trial Exam-
iner found that the failure to reinstate B. Q. Mclninch did not con-
stitute an unfair labor practice and recommended that the complaint
as amended be dismissed as to Mclninch.
Thereafter, the respondent -filed exceptions to the Intermediate
Report and to various rulings of the Trial Examiner. Pursuant to
notice, oral argument. was had on June 6, 1939, before the Board in
Washington, D. C. The respondent and the I. A. M. were repre-
sented by counsel and participated in the argument. The Board has
considered the exceptions of the respondent to the findings, conclu-
sions, recommendations, and rulings of the Trial Examiner, but, save
for these exceptions which are consistent with the findings, conclu-
sions, and order, set forth below, finds them to be without merit.
Upon the entire record in the case, the Board makes the following :
FINDINGS of FACT
I. THE BUSINESS OF THE RESPONDENT
Allsteel Products Manufacturing Company (Inc.) is a Kansas cor-
poration engaged in the manufacture of oil field servicing and drill-
ALLSTEEL PRODUCTS MANUFACTURING COMPANY (INC.) 75
ing equipment and equipment for the laying of pipe lines. It is
the largest company of its kind in the industry and maintains its
principal place of business in Wichita, Kansas.
More than 50 per cent of the raw materials and parts used by
the respondent are obtained from sources outside the State of Kansas.
Approximately 75 per cent of respondent's 1937 production, amount-.
ing to $1,850,000, was sold outside Kansas and 20 per cent of such
products were shipped to foreign countries. The respondent nor-
mally employs about 150 people.
II. THE ORGANIZATIONS INVOLVED
International Association of Machinists, Local 1308, is a labor or-
ganization affiliated with the American Federation of Labor. It
admits to membership all, workers engaged in the machinist trade.
The Allsteel Employees' Federation is an unaffiliated labor organi-
zation admitting to membership "any employee of the [respondent]
living in Sedgwick or adjacent counties in the State_ of Kansas."
III. THE UNFAIR LABOR PRAG!rICES
A. Interference, restraint, and coercion; 'dominatio'n of and inter f er-
enoe with the formation and administration ' o f the Federation
The I. A. M. began its efforts to organize the respondent's plant
in May and June 1937. H. W. Cardwell, president of the respond-
ent, apprehensive about the possible effect of "outside interference,"
upon the respondent's business,, sought to influence employees against
membership in the I. A. M. He summoned B. Q. Mclninch, an em-
ployee, into his office on June 9, 1937. He told Mclninch that he
wanted to talk to him and asked him what he thought of a union in
the shop. Mclninch said that he had not given it much thought.
According to Mclninch, Cardwell' then said that he "didn't want any
outside influence in the plant. He said he was like Henry Ford
concerning the unions. He also said that the Union was just a rack-
eteering bunch out for your money." On the next day, Cardwell
sent for another of the respondent's employees, Cecil T. Gilleland.
According to Gilleland, Cardwell characterized him as a leader among
the men and attempted to induce him to talk to the other employees
and convince them not to join the 1. A. M. "and not to pay dues
to an organization of that kind, because they were not doing [him]
any good. He told [him] that that money went outside Wichita to
$ "Q. When you said without interference, you meant without interference frcm the
outilde?-A. (CARDWELL.) From the outside, strikes and t'iings like that.
"Q. You meant unions in particular.-A. Yes, exactly."
76 DECISIONS OF - ATIO\AL LABOR RELATIONS BOARD ' .
maintain expenses on an office held by some man that [Gilleland]
didn't even know, had never seen and probably never would see."
Cardwell did not deny or otherwise refute these statements. We'
find that the statements were made as alleged. A few days later,
Cardwell assembled the respondent's employees in the meeting hall of
the plant, expressed his antipathy to "outside" unions and made a
suggestion concerning the advisability of contracts being entered into
between the respondent and the individual employees, wherein pro-
vision would be made for outlawing strikes. The validity of such.
contracts was challenged by certain employees at the meeting.
When put to a vote the suggestion concerning individual contracts
was defeated. Cardwell did not contradict the testimony of Gille-
land and Mclninch concerning this" meeting but insists " thaty he
didn't know anything about the A. F. of L. at that time." We can-
not credit that assertion. Cardwell admitted that he "wanted the
man (sic) to sign a contract that he would not strike," that several
weeks before the meeting at which the individual contracts were
discussed he was "referring to unions as being an outside influence,"
and that he "had a feeling that we might be disturbed or somebody
might try to get our boys to do something they would not do without
influence," We find that Cardwell knew of the organizational ac-
tivity of the I. A. M. and that by his statements to Mclninch and
Gilleland he sought to discourage such activity by interference with
and coercion of the respondent's employees in contravention of the
Act.'
During the period of the respondent's expressed opposition to the
I. A. M. the respondent discharged four employees. The I. A. M. be-.
lieved the discharges to be discriminatory and filed charges under the
Act on June 19, 1937.6 Thereafter, the respondent's conduct in its
relationship with its employees was, upon the advice of its counsel,
more guarded. In July the respondent, in accordance with the sugges-
tion of a Board representative, posted a notice on its bulletin boards,
assuring its employees of its intention to comply with the Act. It%
subsequently posted a further notice that "it has come to the attention
of the management that certain labor relations discussions and activi-,
ties are being carried on at the plant during working hours by some
' At the oral argument in Washington, D. C., counsel for the respondent explained
Cardwell 's conduct as follows : "Mr. Cardwell , the president of the company , acting under
the mistaken idea that he could do business as men used to do in the oil fields , because
of the relationship which I have explained , with those men-he felt that he could talk
to them very freely, and he did make some speeches to his men about hoping that there
would be no outside influence come into the plant to disturb the equilibrium of their
institution and the good fellowship that exists."
5 The circumstances relating to this charge and to its disposition are more fully set
forth, infra.
ALLSTEEL PRODUCTS MANUFACTURING COMPANY (INC.) 77
of the employees," and that "... all employees are hereby requested
to refrain from a discussion of any of these matters in the plant."
The afore-mefitioned charge was not settled by the posting of these
notices and a complaint was issued on October 25. The complaint was
withdrawn by the Regional: Director at the request of the I. A. M. as
a result of a settlement dated November 10, 1937, reinstating two em-
ployees with back pay. Immediately following the settlement, the
respondent, acting through certain of its supervisory employees, as-
sisted in the formation of an "inside" union. The purpose of this
"inside" organization, which was the Federation, was asserted by
Charles Delk, an employee active in the organization of the Federa-
tion,, to . be, and we find that it was, "to keep out outside influence.
The A. F. of L. is at our doors and we want to keep them out." e Be-
tween November 15 and 20, a petition was circulated among the em-
ployees designating the Federation the "exclusive bargaining agent"
for the signatories. On November 20 the Federation had obtained 93
members out of about 145 employees. Certain of the respondent's
supervisory employees assumed the major role in initiating the Fed-
eration. R. S. Hershberger, the works manager, and Ray Loudenback
were two of the supervisory employees who were most active in organ-
izing and forming the Federation. The respondent contends that
Loudenback was not a supervisory employee. It is true that he did
not -have authority to hire or discharge.7 However, Loudenback was
leader of the night assembly force in the machine shop. From five to
nine men worked on his crew. His orders were received from the
foreman-who.: worked on, the day shftand; occasionally, came, in, at
night or stayed over for a few hours.. The respondent claims that
the responsibility for the night crew's work rested entirely with the
day foreman. However, the men who composed Loudenback's crew
knew him as their leader and the person to whom they had to look for
direction in the foreman's absence. We find that Loudenback occupied
a supervisory position.
Loudenback admitted, and we find, that for a few days prior to the
first meeting of the Federation. and during working hours he solicited
and obtained memberships in the Federation. He also testified that a
day or so before the meeting Hershberger,- the works manager,. sum-
moned him to his office and instructed him concerning the Federation'
petition "not to mouth it around so much, if the company had anything
8 Delk opened the first meeting of the Federation on November 20 by explaining that the
purpose of the Federation was that "we didn't want the American Federation of Labor
or the C. I. O. to get in there, and it would be better for us to have a company union of
our own."
' A person's authority to hire or discharge is not. an essential in determining whether
or not that person is a supervisory employee. See Matter of Ohio Power. Company and
United Electrical, Radio f Machine Workers of America, Local No. 727, 12 N. L. R. B. 6.
78 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
to do with it they would try to make it on their own hook." Louden-
back also attributed to Hershberger a request made before the meet-
ing that Loudenback "try to see that Eagle was elected as chairman of
the (Federation) board." Loudenback did in fact nominate Eagle,
who was thereafter elected to the Federation board and then by that
group to the Federation presidency. Subsequently, when a representa-
tive of the Board sought to interview Loudenback in connection with
an investigation of charges, Hershberger instructed Loudenback' to
assert that he was not a foreman. Hershberger admitted that he told
Loudenback to say that he was not a foreman because it was Hersh-
berger's position that Loudenback was not a foreman. Loudenback's
testimony was otherwise denied by Hershberger. The respondent
urges that Loudenback is not a credible witness. It was brought out
upon cross-examination that in 1931, Loudenback, when 21 years of
age, had pleaded guilty to a charge of burglary, was sentenced to the
State reformatory for from 5 to 10 years, and after serving 10 months
and 4 days of the sentence, was discharged. Loudenback began work
for the respondent in February 1933: The company officials knew of
his record and entrusted a supervisory position to him and Cardwell
admitted that he did not doubt his credibility. The Trial Examiner,
"after careful observation of the man while on the witness stand, has
accepted his testimony as being the truth." Under the circumstances,
we do not find that Loudenback's criminal record ^ discredits his testi-
mony. On the other hand, Hershberger's testimony was conflicting
and evasive upon cross-examination and his statements are of dubious
veracity. - We find that the statements attributed' to Hershberger were
made .as alleged by Loudenback.
. On August 14, 1937, Cardwell sent ' for Gilleland, a machine-shop
employee and a sentinel (officer) and active member of the I. A. M: In
the presence of R. S..Hershberger, the works manager; Fred Dough-
erty,. the machine-shop foreman ; and a stenographer; Cardwell stated,
"I hate to have to talk to you this way, but you have been talking to
some of the new men, telling them that they have to join the union and
things like'that during business hours. That is something we can't
stand for: We wouldn't object to the boys joining the union, but we
can't stand for the boys talking, even among themselves in the plant,
We are not going to stand for that a minute. Their time is ours when
we are paying for it and want their minds strictly on their business."
Gilleland was the only employee called in by the management and
reprimanded for his union activity on company times It was several
months later that, contrary to this announced position, the works
BDespite this fact, Iiershberger denied that he. knew Gilleland was in the union or that
he was active in the union. Hershberger stated' "The reason Gilley was called in was on
account of personal liking on the part of the management for the man."
ALLSTEEL PRODUCTS MANUFACTURING COMPANY ( INC.) 79
manager, Hershberger, in the conversation alluded to above cautioned
Loudenback against being too open in his solicitation of Federation
memberships. Several witnesses testified without refutation that
Charles Delk, an employee, solicited signatures to the Federation peti-
tion in the plant during working hours and urged employees to attend
a meeting of the Federation to be held on November 20. Hershberger
admitted that he had known of much activity in behalf of the Federa-
tion on company property and during working hours and that he had
ordered no disciplinary action against those employees so engaged.
We find that the respondent permitted solicitation of memberships by
the. Federation during working hours but denied the privilege to the
I. A. M.
Hershberger was as diligent in his opposition to the I. A. M. as he
was, active in behalf of the Federation. On November 15 he sent
for B. Q.. Mclninch, a machine-shop employee and active member of
the I. A. M. The conference was called ostensibly to reprimand
Mclninch for his failure to fill out time cards; but, in the presence of
Dougherty and a stenographer who transcribed the conversation,
Hershberger came to the point : "There was another thing that I
would like to have you do, or I intend to tell you about it. I don't
ask you to do anything. We have got information of some things
you are telling the boys around over the plant that I don't think
you should continue to tell them and in order to be fair I am asking
you to stop." Mclninch replied, "That's all right. I know what
you are talking about." Hershberger rejoined, "I know it's all right.
That is the reason we are asking you to come up here. We want
you to get in the harness. First we want the operation number and
time on the cards and then we want you to cooperate with us
and get in the harness." In view of Hershberger's antagonism to
"outside" unions, we find that his allusion to the "things you are
telling" was a reference to Mclninch's I. A. M. activity. The advice
that Mclninch "cooperate" and get in the "harness" was an attempt
by Hershberger to induce Mclninch to join in the Federation move-
ment espoused by Hershberger, as shown herein. The employer's
privilege to prevent solicitation on the company's property during
working hours does not extend to a situation such as exists here
wherein the respondent has accorded to the "inside" union a prefer-
ence in this respect. By demonstrating a preference for the Federa-
tion through its representative, Hershberger, the respondent has
interfered with and contributed support to a labor organization in
violation of the Act.
That the Federation organizers considered that their actions were
sanctioned by the respondent is evidenced by the testimony of H. E.
Anderson, an employee and vice president of the Federation, who
claimed that "Eagle [president of the Federation] explained to us at
80 DECISIONS OF NATION AL LABOR RELATIONS BOARD
'different times that we were all right with Mr. Cardwell." Although
.this is hearsay as to the respondent, we credit it because it is cor-
roborated by Hershberger's part in elevating Eagle to the Federation
presidency.
The Federation's constitutional requirement limiting membership
to the respondent's employees vests in the respondent control over
-the 'Federation by controlling the tenure of employment of the Fed-
eration officers. In fact, the Federation functioned, if at all, solely
.as a .creature.. of management and an employer barrier to effective
organization. The Federation was led by Charles A. Eagle, an em
ployee who was elevated to the presidency of the Union through the
intercession of Hershberger. Admittedly, Eagle thereafter "re-
.peatedly" consulted Cardwell and Hershberger about the internal
affairs of the Federation. On at least two occasions, fellow officers
charged Eagle with employer bias and on one such occasion, in
April 1938, Eagle and other members of the Federation board met
with Cardwell in his office, Eagle testified, "to keep down unrest in
the plant" and "smooth over a union difficulty" resulting from the
suspicion that Eagle was in some way connected with management."
At this meeting,Cardwell undertook to advise the Federation officers
against writing their Congressmen 10 in an effort to obtain an election
in the plant. No record, was made of this or other. conferences be-
tween the Federation and management. The employees were com-
pensated at their usual wage rate for. time spent at the April
meeting and at a prior meeting in November. The provision in
Section 8 (2) of the Act permitting employees to confer with man-
agement during working hours without loss of pay does not extend
to conferences involving the internal affairs of the union as was the
case here. The conduct of the management in attending conferences
involving the internal affairs of the Federation constituted an un-
warranted interference with matters solely the concern of its -em-
ployees, and such conduct is proscribed by the Act. To permit the
respondent to remunerate employees for time spent at conferences
with management involving the internal affairs of a union is to ignore
the obvious purpose of the proviso as set forth in the Report of the
Senate Committee on Education and Labor relative to the passage of
the Act. With reference to the proviso it was there stated : "To
deny absolutely by law the right of employees to confer with man-
9According to Hershberger, Cardwell also told Eagle that "It looked to him (Cardwell)
like' if the other men were dissatisfied with him as president he should be satisfied to step
down and help them elect another president."
10 Both the I. A. M. and the Federation late in 1937 and in 1938, filed petitions with the
'Board for an election in the respondent 's plant . The I . A. M., however, had filed a charge
alleging that the Federation was company dominated . Under the circumstances , the Board
withheld action on the unions' petitions, pending disposition of the instant case.
ALLSTEEL PRODUCTS MANUFACTURING COMPANY ( INC.) 81
-age. meat during working hours without loss of time or pay would
,interrupt the very negotiations which it is the object of this bill to
promote." 11 Manifestly; the object of the bill was not to promote
interference by employer with the affairs of a union of the employees.
Hence, it could . not have been intended that. employees were to be
paid under such circumstances. We find that the compensation re-
ceived by the Federation officers while in attendance at meetings
involving the internal affairs of the Federation was a contribution of
financial'.and other support in violation of the Act.
In addition to participating in the internal affairs of the Federa-
tion, the respondent unmistakably evinced its preference for the
Federation. The solicitation of memberships by the I. A. M. on com-
pany time and premises was vigorously discouraged by the respond-
ent; but, as we have seen, supervisory officials lent their support to
the organization of the Federation and tacitly countenanced and en-
couraged solicitation in its behalf. The written demand of the Fed-
eration for recognition was permitted to remain on the respondent's
bulletin board for months, although there is no evidence that the
Federation requested permission to. use the, bulletin board. The
I. A. M. also, demanded .recogn.itioll, .but ,its demand. was not posted
and there is no evidence that the privilege of using the bulletin board
was accorded the I. A. M. When the respondent met with the Fed-
eration, no transcript of the proceedings appeared to have been made;
but conferences between I. A. M. members and any representative of
management were always attended by a stenographer and completely
transcribed .12
By the activity of its, supervisory employees in behalf of the Fed-
eration and in opposition to the I. A. M., by the preferential treat-
ment which the respondent accorded the Federation and denied the
I. A. M., and by its participation in the internal affairs of the Fed-
eration and its payments to Federation officers, the respondent has
dominated and interfered with the formation and administration of,
and has contributed financial and other support to, the Federation,
and has thereby, and by the other acts and conduct set forth above,
interfered with, restrained, and coerced its employees in the exercise
of the rights guaranteed in Section 7 of the Act.13
11 Sen. Rep. No . 5T3, 74th Cong., 1st Sess.
1' Cardwell explained that he did not have a stenographer present at a meeting between
the management and the Federation "because I knew I wasn't going to say anything about
any union activities."
13 At the oral argument counsel for the respondent stated "I 'think, in fairness to the
Board . that I should say , on this particular feature as far as the action with the company
'and employees association is concerned , that the evidence in this case, in my judgment,
would warrant the finding of the examiner ; there was evidence on both sides ; the evidence
was disputed, but I think the examiner would have the authority under the evldenc3 to
say that there was such interference ; there was some preference ; and whether or not
some things done by the company which might be construed as unfair labor . practices-I
don't mean the company itself ; I mean the strawbosses and folks of that kind."
82 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
The respondent has excepted to that portion of the Trial Exam-
iner's Report "which relates to or considers anything occurring before
November 10, 1937, the same being res adjudicata, having been set-
tled and finally determined in a settlement with the National Labor
Relations Board and the Union and made a part of the record; the
Board and the Union being estopped from raising any matters oc-
curring prior to said Nov. 10, 1937."' While it is true that Board
representatives participated in the-negotiations leading to the settle-
ment on November 10, 1937, of the charges filed by the I. A. M., the
settlement was solely between the respondent, the I. A. M., and the
employees involved. The Regional Director, upon the request of the
I. A. M., permitted a withdrawal of the charges. We will refrain
from considering events occurring prior to an agreement or settle-
ment only if a respondent has not engaged in further conduct exhibit-
ing a continuity with its conduct and attitude prior to such agree-
ment or settlement.14 It is readily apparent that the respondent's
acts of interference, restraint, and coercion prior to November 10,
1937, have given impetus to -the unfair practices occurring after that
date. Thus, the respondent's hostility toward "outside" unions was
a direct invitation to its staff to oppose such organizations. The suc-
ceeding events were but further manifestations of the continuing
hostility.10
Upon all the evidence we find that .the respondent's contention is
without merit and that the events preceding the settlement of Novem-
ber 10, 1937, are to be regarded as a part of the course of conduct
continuing after that date.
B. The discharges.
In the complaint withdrawn on November 10, 1937, the names of
Cecil T. Gilleland and J. Lloyd Spalding figured prominently.
Gilleland was alleged in that complaint to have heard certain anti-
union statements made by Cardwell and Spalding was alleged to
have been discriminatorily discharged. The settlement among other
things provided for the reinstatement of Spalding with pay. The
respondent, apparently believing that its conduct prior to November
10, 1937, was exonerated by the settlement,16 focused its attention
upon the task of ridding itself of those employees it deemed responsi-
ble for its previous difficulties.
J. Lloyd Spalding was employed as a machinist by the respondent
on March 15, 1935, prior to which time he had had about 17 years
of experience in the machinist trade. In May 1937, he joined the
14 Matter of Hope Webbing Company and Textile Workers Organizing Committee of the
U. I. 0., Local No. 14, 14 N. L. R. B. 55.
16 See Section "B."
20 Supra.
ALLSTEEL PRODUCTS MANUFACTURING COMPANY (INC.) 83
I. A. At, became an officer (conductor) in the local, and was active in
organizational work.. On October 12, 1937, he was discharged.: From
November 11, 1937, when he was reinstated pursuant to the settlement,
Spalding worked continuously until March 23, 1938, when he was
laid off . He was recalled on April 7 and laid off again on May 14,
1938. He desires to return to work.
Cecil T. Gilleland began work for the respondent on February 19,
1937, as a machinist at 50 cents per hour. After working 3 months
he requested a raise and was given an increase of 5 cents per hour.
A month later he received a further increase of 5 cents per hour as
the result of a general wage raise in the plant. He joined the I. A. M.
in May 1937 , became an officer (sentinel ) in the local, and was active
in organizational work . On January 10, 1938 , Gilleland 's pay was
reduced to 50 cents per hour, and he was shifted to a different ma-
chine. On January 14, 1938, Gilleland was discharged . He applied
for reinstatement but has not been recalled. He desires to return
to" work.
On January 1, 1937 , the respondent introduced into its plant a bonus
system which was in effect a profit-sharing plan based upon depart-
mental output. Each employee received a share of his department's
bonus. This system ceased on August 9, 1937 , when the respondent
entered into a contract with George S. May & Company for the in-
stallation of a time-study system, herein referred to as the May
system.17 Mechanical engineers with machine -shop experience were
sent from the May Company to the respondent 's plant to make the
first time studies and train certain of the respondent 's employees to
be time=study 'men . The May system became operative in the ma-
chine shop on October 1, 1937 . By equalling the time study the
operator could earn as much as a 371/2-per cent bonus in addition, to
his hourly , pay which he received regardless of his time -study rate.
When an operation presented difficulties which could not be antici-
pated in fixing the time necessary to .perform the operation in ac-
cordance with the time study, time allowances could be obtained from
the time-study man if, as Hershberger stated it , the operator "can sell
the time-study man on it." These allowances also required the ap-
proval of the foreman . Approximately 5,000 time studies had been
taken prior to the hearing. The respondent discontinued the May
system on July 1, 1938, because the system was, according to Hersh-
berger , "not wholly applicable to our type of business" and, accord-
ing to Cardwell , "not fair to the men or to the company."
On November 11, 1937, the day after his reinstatement with back
pay in partial settlement 'of the Board case , Spalding returned to
work. He was assigned to a different but less difficult machine than
that on which he had worked prior to his discharge . On November 12
1' The May system was installed at a cost of $13,700.
•
84 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
he was called before Cardwell who proceeded to criticize his work.
In the presence of Hershberger and Dougherty, the foreman, Card-
well compared Spalding's efficiency with that of the man operating
the same machine on the opposite shift, which was the night shift..
Cardwell asked Spalding if he was going to "cooperate" with manage-
ment. Spalding assured Cardwell :that he was.going to "cooperate"
and that he had told the respondent's attorneys that he would do so.
Cardwell replied, "Well, the attorneys are not in this any more.
They are all washed up." This conference, as well as all other con-
ferences between management and I. A. M. members, was attended by
a stenographer and transcribed.
On December 7, 1937, Hershberger and Dougherty called Spalding
before them and accused him of inefficiency in that his efficiency
ratings based upon the time study compared unfavorably with those
of the men on the opposite shift, the night shift. ' Spalding was told'
that if he did not improve, his wages would be reduced.
On February 10, 1938, Dougherty and Hershberger engaged Spal:
ding in, another protracted conference . • Spalding protested the. fact
that he was being kept from his work without payment for the time
spent with representatives of the management.
Spalding was laid off on March 23, 1938, although persons with less
seniority were retained . He was rehired on April 7, 1938, and again
laid off on May 14, 1938. Employees with less seniority were retained
by the respondent . The respondent claims that Spalding has not
applied for reinstatement . Spalding , however , testified that he spoke
to Dougherty about reemployment on May 31, 1938 , and was told that
if he "could find anything else [he] would advise him ' to take it." On
June 30, 1938, according to Spalding , Dougherty told him "It will be
a long time before I call you back." Dougherty was not called upon
to testify . We find that Spalding applied for reinstatement.
Spalding had never been criticized in his 'vork prior to his union
activity in the spring of 1937 . Thereafter his work was carefully
checked as is borne out by Cardwell 's testimony :
Q. Why was it you told Spalding on May 2, 1938, that he was
under closer scrutiny ? What did you mean by that?
A. (CARDWRLL). We 'had had trouble with him, and
naturally
Q. (Interrupted .) You mean in the fall?
A. Yes, sir..
Q. So you put him under closer scrutiny?
A. Naturally we would watch him closer.
Q. For what?
A. To see if his work was satisfactory or not. He promised
to do good work when he came back there and we wanted to find
out whether he was going to do it or not.
ALLSTEEL PRODUCTS 1IANUFACTURING COMPANY ( INC.) 85
The respondent insists that Spalding's lay-off on May 14, 1937, was
only temporary. However, in view of the fact that newer employees
were retained and that Dougherty informed Spalding that he ought
to take employment elsewhere if he could find it, it is apparent that
the respondent had no intention of rehiring Spalding. Especially
does this appear in the respondent's refusal to continue Spalding's
group insurance as provided for in the group-insurance policy where
an employee's lay-off is temporary. In a letter to the respondent,
'dated June 30, 1938, Spalding stated that he was "temporarily out of
service." At the hearing, he explained that, in making this state-
ment, he was only inviting a reply which would clarify his status.
We find that the respondent laid off Spalding on March 23, 1938, and
discharged him on May 14, 1938.
On November 13, 1937, Gilleland received a letter from Cardwell
setting forth his "production record" purporting to show a loss to the
respondent of approximately 18 per cent of his salary paid him since
he was first employed by the respondent. This record was not a com-
parative efficiency record based upon the time-study system but was
a purported measurement of production in terms of wages.18 The
letter informed Gilleland that due to his inefficiency his employment
was terminated as of November 27, 1937. The respondent stated, how-
ever, that if Gilleland's work showed improvement, it would consider
the matter of his employment thereafter. The respondent, Cardwell
admitted, did not find it necessary to write any other employee a letter
such as he wrote Gilleland at this time.
Gilleland was summoned to Cardwell's office on November 16, 1937.
In the presence of Hershberger and Dougherty, Cardwell admonished
'Gilleland for his inefficiency in that he had taken three cuts on a
piece when only one cut was necessary. Gilleland had complained
that the improper cut was the fault of the machine on which he was
working which was so constructed as "to bore a taper on an inside
job" and he showed this machine fault to Dougherty, his foreman.
A representative of the manufacturer was sent for and the machine
was inspected. Gilleland stated that the inspector's test showed the
machine would not "bore a taper on an outside cut." Cardwell testi-
fied'that the inspection showed'that the machine was working perfectly
and that other operators were turning out accurate work on it. Such
operators were not called upon by the respondent to testify at the
hearing. Dougherty, the machine-shop foreman and the person most
likely to have been familiar with the operating quality of the ma-
chines, failed to testify. Under the circumstances, we find, as alleged
by Gilleland, that the machine did not operate properly. Cardwell
" The respondent 's method of computing the alleged loss shows a duplication of items.
86 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
also showed Gilleland records purporting to prove that his efficiency
compared unfavorably with that of the man, operating the same ma-
chine on the opposite shift, the night shift. Gilleland denied at that
time that he was inefficient.
The respondent by letter of November 26, 1937, extended Gilleland's
period of probation to December 11, 1937. In the meantime, on De-
cember 7, 'Hershberger and Dougherty called Gilleland into confer-
ence , exhibited time-study records tending to show that although there
had been some improvement in his work, his efficiency compared un-,
favorably with men who were being paid less money, and informed
him that he was off probation but still subject to discharge upon 2
weeks' notice. Gilleland complained that "it didn't make a man feel
happy to get two letters such as I have" and that the foreman was not,
helping him to understand why he was not measuring up to standard.
That the letters and conferences were weighing heavily upon. Gille-
land's mind is amply proved not only by Gilleland's testimony but also
by the transcripts of conferences with representatives of management.
On January 5, 1938, Hershberger, again called Gilleland into con-,
ference and told Gilleland that his work reports showed that on the
day before he took too much time on a certain operation. Gilleland
explained to him that the excess time was due to the fact that it was
necessary "to chuck off center" 19 on the piece on which he was working,
and that it took additional time to set the machine for the operation.
Hershberger asked Gilleland why he had not called for an allowance.
card as instructed. Gilleland replied:that he had.not attempted to
obtain a time allowance, because "I have made requests for them any
number of times and haven't gotten them." 20 Gilleland's position
concerning time allowances is borne out by the. record. Hershberger-
admitted that to obtain an allowance, the operator must "sell the
time-study men on it" and get the approval of his foreman, Dougherty.
Dougherty's antagonism to Gilleland is manifested in the conferences
alluded to above. Under the circumstances, we believe the delay on
January 4, 1938, was because of difficulties in operation as described
by Gilleland rather than because of- his inefficiency as asserted by
the respondent.
Cardwell wrote to Gilleland on January 10, 1938, informing him
that the company had "concluded" that he was unable "to perform
the work required on his present Gisholt turret lathe" and assigning
him to a simpler machine, an engine lathe, at a reduction in pay from
60 cents to 50 cents per hour. Gilleland had had very little experi-
ence with the engine lathe but started work on it on January 11. By
letter of January 14, Cardwell notified Gilleland that "for the reason
19 This apparently signifies the special operation done on the piece.
20 When Gilleland made this representation to Hershberger, Hershberger did not deny it.
ALLSTEEL PRODUCTS MANUFACTURING COMPANY (INC.) 87
that it seems to be impossible for [him] to do the work assigned to
[him]," his services were to be terminated immediately.. ;The re-
spondent's promise to Gilleland that he would receive 14 days' notice
before the respondent would terminate his employment was ignored.
That Gilleland and Spalding Were the recipients of unusual atten-
tion from the management is proved. Such attention was not de-
voted to any other employees, except Mclninch, another I. A. M.
member. Management's excess caution flowed from the fact that
these men had been mentioned. in the withdrawn complaint and were
active I. A. M. members. It was their I. A. M. membership that
marked them and eventually led to a termination of their employ-
ment. The demotion of Gilleland and the lay-off of Spalding were
preludes to their ultimate discharge.
The respondent contends that the lay-offs were due to the fact that
"there was not work for . . . Spalding to do," but pleaded affirma-
tively that both Gilleland and Spalding were discharged for ineffic-
iency. As to the work to be done in the shop, the respondent had no
records to show that there was not work to be done by Spalding. On
the contrary, the record discloses that other employees did work on
Spalding's machine. Nor does the evidence warrant a finding that
Spalding and Gilleland were inefficient. The system under which
their efficiency was judged was admittedly unfair 21 and hence offered
no adequate criterion for determining efficiency. The evidence, how-
ever, does not establish that the respondent was aware of the unfair-
ness of the system prior to the discharge of these men. Accordingly
we make no finding as to that. While the respondent may' reasonably
have believed these men to be inefficient, and even if, contrary to our
finding, Gilleland and Spalding were inefficient, as alleged, this rec-
ord convinces us that the respondent was not primarily concerned
with their efficiency but was seeking justification for its intention to
lay off Spalding and discharge Spalding and Gilleland. 22 The re-
spondent excepts to the Trial Examiner's failure to find that 36 men,
of whom only the 3 involved in this proceeding were members of
n The May system was discarded because of the unfairness of its bonus features , Cardwell
testified :
"It might be possible that when a time study was taken it was taken on a man who was
less efficient and then the man who did those parts the next time was an extremely
fast man, or he might be just a little better , and get a large bonus , even though he wasn't
the most efficient man in the plant. That was the controlling factor of our discontinuing
the system , because it was not fair to the men or to the Company."
" While proof of the presence of proper causes at the time of discharge may have rele-
vancy and circumstantial bearing in explaining what otherwise might appear as a dis-
criminatory discharge , such proof is not conclusive . The issue is whether such causes in
fact induced the discharge or whether they are but a justification of it in retrospect.
Matter of Kelly-Springfield Tire Company and United Rubber Workers of America, Local
No. 26, et al. , 6 N. L. R . B. 325 , enforced in The Kelly-Springfield Tire Company v. National
Labor Relations Board , 97 F. (2d ) 1007 (C. C. A. 4th, 1938 ). See also Matter of Lucken-
baeh Steamship Company , Inc., etc., 12 N. L . R. B. 1333.
247383-40-vol. 16-7
88 DECISIONS OF NATIONAL LABOR RELATIONS, BOARD
the I. A. M.,23 were laid off during the months of May and June
1938. While the disparity in the number of union and non-union
employees laid off tends to negative the inference of discrimination,
it is not controlling, and under the circumstances here disclosed does
not overcome the evidence that Spalding and Gilleland were discrim-
inated against by the respondent because of their I. A. M. member-
ship and activity.
To summarize, the respondent's admitted hostility to the I. A. M.,
its behavior in allotting special attention to the men who were men-
tioned in the first complaint, its manifestation of antagonism to
Gilleland and Spalding by calling them to task immediately upon
withdrawal of the first complaint, its conduct in calling them into
frequent conferences which a stenographer transcribed, its warning
letters addressed to Gilleland, and the respondent's admission that
it watched Spalding "closer" because it "had had trouble with him"
when the first charges were filed coupled with the retention of newer
employees when Spalding was laid off, persuade us to conclude that
the reason for the demotion of Gilleland, the lay-off of Spalding, and
their discharge was their I. A. M. membership and activity.
We find that the respondent, by demoting and discharging Cecil
T. Gilleland and by laying off and discharging J. Lloyd Spalding,
discriminated in regard to their hire and tenure of employment,
thereby discouraging membership 'in the I. A. M. and interfering
with, restraining, and coercing its employees in the exercise of the
rights guaranteed by Section 7 of the Act.
The Trial Examiner recommended that the case of B. Q. Mclninch
be dismissed. The I. A. M. filed no exceptions to the Trial Exam-
iner's Report. The evidence is conclusive that Mclninch resigned
his position despite the urgings of Hershberger that he remain with
the respondent. Accordingly, the allegations of the complaint, in
so far as they allege that the respondent discharged and refused to
reinstate Mclninch, will be dismissed.
IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE
The activities of the respondent set forth in Section III above, oc-
curring in connection with the operations of the respondent described
in Section I above, have a close, intimate, and substantial relation to
trade, traffic, and commerce among the several States, and tend to
lead to labor disputes burdening and obstructing commerce and the
free flow of commerce.
23 The respondent is in error in stating that Gilleland was one of the men laid off in
May or June 1938 since, as we have found , he was discharged on January 14. 1938.
ALLSTEEL PRODUCTS MANUFACTURING COMPANY (INC.) g9
V. THE REMEDY
Having found that the respondent has engaged in unfair labor
practices , we will order it to cease and desist therefrom and to take
certain affirmative action designed to effectuate the policies of the
Act and to restore as nearly as possible the condition which existed
prior to the commission of the unfair labor practices.
We have found that the respondent has dominated and interfered'
with the Allsteel Employees ' Federation and has contributed financial
and other support to it. In order to effectuate the policies of the Act
and free the employees of the respondent from such domination and
interference , and the effects thereof, which constitute a continuing
obstacle to the exercise by the employees of the rights guaranteed
them by the Act, we will order the respondent to withdraw all recog-
nition from the Federation as representative of the respondent's em-
ployees for the purpose of dealing with the respondent concerning
grievances , labor disputes , wages, rates of pay, hours of employment,
and conditions of work, and to disestablish it as such representative.
Since-we - have found that the respondent demoted and discharged
Cecil T. Gilleland and laid off and discharged J. Lloyd Spalding be-
cause of their membership in and activity on behalf of the I . A. M., we
will order the respondent to offer Cecil T. Gilleland and J. Lloyd-Spald-
ing immediate and full reinstatement to positions held by them on
January 10, 1938, and March 23, 1938 , being the dates of their demo-
tion and lay-off respectively , without prejudice to their seniority and
other rights and privileges , and to make them whole for any loss of-pay
they have suffered by reason of Gilleland's demotion , Spalding's lay-off,
and their discharge by payment to them of a , sum equal to the amount
which they normally would have earne'd' as wages from January 10,
1938, in the case of Gilleland, and from March 23, 1938, to April 7,
1938, oaul ; from May 14 , 1938, in the case of Spalding , to the date of the
offer of reinstatement , less their net earnings 24 during said periods.
Upon the basis of the foregoing findings of fact and upon the entire-
record in the proceeding , the Board makes the following:
24 By "net earnings " is meant earnings less expenses, such as for transportation, room,
and bard , incurred by an employee in connection with obtaining work and working else-
where than . for the respondent , which would not have been incurred but. for, his unlawful
discharge and the consequent necessity of his seeking employment elsewhere . See Matter
of Crossett Lumber Company and United Brotherhood of Carpenters and Joiners of Amer-
ica, Lumber and Sawn ill Workers Union, Local 2.590, 8 N . L. R. B. 440 . Monies received
for work performed upon Federal , State, county, municipal , or other work-relief projects
are not considered as earnings , but as provided below in the Order , shall be deducted from
the sum due the employee , and the amount thereof shall be paid over to the appropriate
fiscal agency of the Federal , State, county , municipal , or other government or governments
which supplied the funds for said work -relief projects.
90 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
CONCLUSIONS OF LAW
1. The International Association of Machinists, Local 1308, and the
Allsteel Employees' Federation are labor organizations within the
meaning of Section 2 (5) of the Act.,
2. By interfering with, restraining, and coercing its employees in the
exercise of the rights guaranteed in Section 7 of the Act, the respondent
has engaged in and is engaging in unfair labor practices within the
meaning of Section 8 (1) of the Act.
3. By dominating and interfering with the formation and adminis-
tration of, and by contributing financial and other support to the All-
steel Employees' Federation, the respondent has engaged in and is
engaging in unfair labor practices within the meaning of section 8 (2)
of the Act.
4. By discriminating in regard to the hire and tenure and terms and
conditions of employment of Cecil T. Gilleland and J. Lloyd Spalding
and thereby discouraging membership in the I. A. M., the respondent
has engaged in and is engaging in unfair labor practices within the
meaning of Section 8 (3) of the Act.
5. The aforesaid unfair labor practices are unfair labor practices
affecting commerce within the meaning of Section 2 (6) and (7) of
the Act.
6. The respondent has not discouraged membership in the Interna-
tional Association of Machinists, Local 1308, by discriminating in
regard to the hire or tenure of employment of B. Q. Mclninch, within
the meaning of Section 8 (3) of the Act.
ORDER
Upon the basis of the foregoing findings of fact and conclusions of
law, and pursuant to Section 10 (c) of the National Labor Relations
Act, the National Labor Relations Board hereby orders that the re-
spondent, Allsteel Products Manufacturing Company (Inc.), and its
officers, agents, successors, and assigns, shall :
1. Cease and desist from :
(a) Dominating or interfering with the administration of the All-
steel Employees' Federation, or the formation or administration of any
other labor organization of its employees, and contributing financial or
other support to the Allsteel Employees' Federation, or to any other
labor organization of its employees ;
(b) Recognizing the Allsteel Employees' Federation as the repre-
sentative of any of the employees for the purpose of dealing with the
respondent concerning grievances, labor disputes, wages, rates of pay,
hours of employment, or conditions of work;
ALLSTEEL PRODUCTS MANUFACTURING COMPANY ( INC.) 91
(c) Discouraging membership in the International Association of
Machinists, Local 1308, or any other labor organization of its employees;
by demoting, discharging, laying off, or refusing to reinstate any of its
employees, or in any other manner discriminating in regard to their
hire or tenure of employment or any term or condition of their employ-
ment ;
(d) In any other manner interfering with, restraining, or coercing
its employees in the exercise of their rights to self-organization, to
form, join, or assist labor organizations, to bargain collectively through
representatives of their own choosing, and to engage in concerted activi-
ties for the purpose of collective bargaining or other mutual aid or
protection, as guaranteed in Section 7 of the National Labor Rela-
tions Act.
2. Take the following affirmative action which the Board finds will
effectuate the policies of the Act :
(a) Withdraw all recognition from the Allsteel Employees' Federa-
tion as the representative of any, of its employees for the purpose of
dealing with the respondent concerning grievances, labor disputes,
wages, rates of pay, hours of employment, or conditions of work, and
completely disestablish the Allsteel Employees' Federation as such
representative;
(b) Offer to Cecil T. Gilleland and J. Lloyd Spalding immediate
and full reinstatement to the positions held by them on January 10,.
1938, and March 23, 1938, respectively, without prejudice to their
seniority and other rights and privileges;
(c) Make whole Cecil T. Gilleland and J. Lloyd Spalding for any
loss of pay they have suffered by reason of Gilleland's demotion,
Spalding's lay-off, and their discharge by payment to each of them of
a sum of money equal to that which he would have earned-as-wages,
from January 10, 1938, in the case of Gilleland, and from March 23,
1938, to April 7, 1938, and from May 14, 1938, in the case of Spalding,
to the date of the offer of reinstatement, less his net earnings,25 if any,
during said periods; deducting, however, from the amount otherwise
due him, monies receives by him during said period for work per-
formed upon Federal, State, county, municipal, or other work-relief
projects, and pay over the amount so deducted to the appropriate
fiscal agency of the Federal, State, county, municipal, or other gov-
ernment or governments which supplied the funds for said work-
relief projects;
(d) Immediately post notices in conspicuous places throughout its
plant, and maintain such notices for a period of sixty (60) consecu-
tive days, stating that the respondent will cease and desist in the
25 See footnote 24, supra.
192 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
manner set forth in paragraphs 1 (a), (b), (c), and (d) and that it
will take the affirmative action set forth in paragraphs 2 (a)., (b),
and (c). of this Order;
(e) Notify the Regional Director for the Seventeenth Region in
writing within ten (10) days from'the date of this Order what. steps
the respondent has taken to comply herewith.
ANDJT.-IS .FTJRTHER ',oRDERED, that the complaint, in so far as it alleges,
with regard to B. Q. Mclninch, that the respondent has engaged in
and is engaging in unfair labor practices, within the meaning of
Section 8 (3) of the Act, be, and it hereby is, dismissed.