Container Corp. of America

National Labor Relations Board - Board Decisions

Apr 30, 1945

61 N.L.R.B. 823 (N.L.R.B. 1945)

In the Matter of CONTAINER CORPORATION OF AMERICA and PAPER
WORKERS ORGANIZING COMMITTEE, AFFILIATED WITH THE CONGRESS
OF INDUSTRIAL ORGANIZATIONS
Case No. 11-R-73-7.-Decided April 30, 1945
Mr. James V. Donadio, of Indianapolis, Ind., for the Company.
Mr. Paul Elzea, of Indianapolis, Ind., for the P. W. O. C.
Mr. Arthur Welshhaus, of Indianapolis, Ind., for Local 456.
Mr. Donald H. Frank, of counsel to the Board.
DECISION
AND
DIRECTION OF ELECTION
STATEMENT OF THE CASE
Upon a petition duly filed by Paper Workers Organizing Com-
mittee, affiliated with the Congress of Industrial Organizations,
herein called the P. W. O. C., alleging that a question affecting com-
merce had arisen concerning the representation of employees of Con-
tainer Corporation of America, Anderson, Indiana, herein called the
Company, the National Labor Relations Board provided for an
appropriate hearing upon due notice before James A. Shaw, Trial
Examiner. Said hearing was held at Anderson, Indiana, on Decem-
ber 15, 1944. The Company, the P. W. O. C., and the International
Printing Pressmen's and Assistants' Union of North America,
A. F. L., appearing on behalf of the Anderson Corrugated Box Union,
Local 456, herein called the I. P. U. and Local 456,1 respectively,
appeared and participated. All parties were afforded full oppor-
tunity to be heard, to examine and cross-examine witnesses, and to
introduce evidence bearing on the issues. The Trial Examiner's rul-
ings made at the hearing are free from prejudicial error and are
hereby affirmed. All parties were afforded an opportunity to file
briefs with the Board.
I A representative of the I. P. U. was the only person appearing on behalf of Local 456
Nothing appears in the record to show that Local 456 or any officer or member thereof
requested his appearance.
61 N. L. R. B., No. 132.
823
824 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Upon the entire record in the case, the Board makes the following:
FINDINGS or FACT
I. THE BUSINESS OF THE COMPANY
Container Corporation of America is a Delaware corporation with
its principal offices at Chicago, Illinois. It is licensed to do business
in the State of Indiana. The Company operates 20 plants which are
located throughout the eastern, southern, and mid-western portions
of the United States and is engaged in the manufacture, sale, and dis-
tribution of paper products. We are here concerned only with its
plant at Anderson, Indiana. At this plant the Company purchased,
during the 12 months preceding the date of the hearing, raw materials
having a value in excess of $100,000, approximately 50 percent of
which was purchased from points outside the State of Indiana.
During the same 12-month period, the value of the Company's finished
products was in excess of $200,000, approximately 331/3 percent o'f
which represented shipments to points outside the State of Indiana.
The Company admits that it is engaged in commerce within the
meaning of the National Labor Relations Act, and we so find.
H. THE ORGANIZATIONS INVOLVED
Paper Workers Organizing Committee, affiliated with the Congress
of Industrial Organizations, is a labor organization admitting to mem-
bership employees of the Company.
International Printing Pressmen's and Assistants' Union of North
America and its local, Anderson Corrugated Box Workers Union,
Local 456, both affiliated with the American Federation of Labor, are
labor organizations admitting to membership employees of the
Company.
M. THE QUESTION CONCERNING REPRESENTATION
The Company has refused to grant recognition to the P. W. O. C. as
the exclusive bargaining representative of the Company's production
and maintenance employees until the P. W. O. C. has been certified by
the Board in an appropriate unit.
Pursuant to a consent election in April 1943,2 the I. P. U. was cer-
tified as the collective bargaining representative of the Company's
production and maintenance employees. In July 1943, Local 456, the
local union of the I. P. U., signed a collective bargaining contract with
the Company, to run for 1 year. Upon its expiration in July 1944, a
2 Case No. 9-R-994,
CONTAINER CORPORATION OF AMERICA 8,25
new 1-year contract was negotiated. Local 456 and the Company
were parties and signatories to the contract. Although space was
provided for signature and approval by the I. P. U., it appears that the
I. P. U. did not sign. At that time, Local 456 was, apparently, a
functioning labor organization. On August 22, the P. W. O. C. wrote
to the Company stating that its local organization represented a ma-
jority of the production and maintenance employees, and requesting
recognition, which the Company refused because of its contract with
Local 456. Facts were revealed at the hearing, however, which disc
close that Local 456 is no longer functioning as representative of the
production and maintenance employees of the Company. Since the
execution of the present contract, only three meetings of Local 456
have been called. At the last two no members of Local 456, except
the president, who called the meetings, attended. Although one of
these meetings was called, according to the usual procedure of Local
.456, in order to obtain the ratification of the contract by the member-
ship, the membership never ratified it. The contract required all
employees hired after its execution to join Local 456 within 60 days
or be discharged by the Company. No new employee, however, has
joined Local 456, and the Company has not discharged any of them.
The only request that the Company comply with the contract was made
by an I. P. U. official. Shop stewards, appointed by Local 456, had
the duty of collecting union dues. Although all stewards refused to
collect dues by the end of August, the president of Local 456 made no
attempt to remove any steward or to appoint others. There likewise
has been no attempt by Local 456 since August to collect dues by any
other means. Since the resignation of the shop stewards, no employ-
ees have been designated to present grievances to the Company. All
the officials of Local 456 have resigned, and no new ones have been
elected. Monthly payments by Local 456 have not been sent to the
I. P. U. since September 1, nor has there been any communication by
it to the Company since August 22. No attempt was made at the hear-
ing to show that Local 456 has any present membership. We note,
furthermore, that no representative of Local 456 appeared at the
hearing,3 and that a Company official testified at the hearing that
Local 456 had ceased to exist. The facts set forth above indicate
clearly that Local 456 has for some time ceased to function as a repre-
sentative of the employees of the Company. The Company and the
I. P. U. contend, nevertheless, that the contract is a bar to a present
determination of representatives.
The issue is whether the purposes and policies of the Act will best
be effectuated by directing an immediate election, or by requiring the
Company's employees to forego the selection of a bargaining repre-
sentative until the terminal date of the contract is at hand. Here,
3 See footnote 1, supra.
826 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
as in all representation proceedings where a current collective bar-
gaining contract is urged as a bar to an election, we decide that issue
by weighing two basic interests of employees and society which the
Act was designed to foster and protect, namely, the interest in stability
of industrial relations achieved and maintained through collective
bargaining, and the sometimes conflicting interest in employees' full
freedom to choose their bargaining representatives 4 Normally, a
current agreement between an employer and a labor organization
acting as the exclusive bargaining representative of employees in an
appropriate unit is both means and proof of the achievement of that
stability which is an objective of the statute,5 for such an agreement
identifies the employees' recognized bargaining representative, settles
questions pertaining to wages, hours, and working conditions, and
betokens the successful operation of the collective bargaining process."
Because this is so, and because we believe that the practice of collective
bargaining is, in general, best encouraged by leaving undisturbed the.
tri-partite relationships 7 defined in trade agreements, we ordinarily
hold that no redetermination of bargaining representtaives should be
made until the approaching expiration of a collective bargaining con-
tract urged in bar, if the term of said contract is reasonable. In
such cases , the employees' freedom of choice is subordinated for the
time being, in the interest of stability. But where it appears that the
contract either in its form or provisions, or in its operation, does not
serve to stabilize industrial relations in the manner contemplated by
the statute, the Board holds that it presents no obstacle to the em-
ployees' present exercise of their right to choose a bargaining repre-
sentative s The instant case in our opinion clearly falls within the
' Matter of Trailer Company of America, 51 N. L. R. B. 1106; Eighth Annual Report,
page 45; Ninth Annual Report, page 25.
° It is the Board's present practice to presume , for the purposes of representation pro-
ceedings , that any such contract which may be urged as a bar to an election, if it became
effective before the question concerning representation arose, is "valid" under the Act in
the sense that its negotiation was not attended by unfair labor practices. See Matter of
Detroit Michigan Stove Company, 51 N. L. R. B. 347.
We also assume , to the extent material , the validity of such contracts under general
legal principles , although it is not our province to define or enforce the legal rights and
obligations of the parties under the contract . See J. I. Case Co. v. N. L. R. B., 321 U. S.
332, affirming 134 F. (2d) 70 (C. C. A. 7), enforcing as modified 42 N. L. R. B. 85; Na-
tional Licorice Co. v. N. L. It. B., 309 U. S. 350, aff 'g as mod. 104 F. ( 2d) 655 (C. C. A. 2),
,enforcing as modified 7 N. L. R B. 537 ; Matter of George E. Carroll, d/b/a Carrolts
Transfer Company, 56 N. L. R. B 935.
° "We think that Congress , * * * incorporating in the new legislation the collective
bargaining requirement of the earlier statutes included as part of it, the signed agreement
long recognized under the earlier acts as the final step in the bargaining process." H. J.
Heinz Company v. N. L. It. B., 311 U. S. 514 . See also House Report No. 1147, 74th Cong.,
1st Sess., p . 20 (1935).
7 E. g., among employer , employees, and representative.
8 See for example Matter of Eicor, Inc, 46 N. L. R B. 1035 (oral contract) ; Matter of
Chicago Curled Haw Company, 56 N. L. R. B. 1674, Matter of Memphis Furniture Mfg. Co.,
51 N. L. R. B. 1447 ( where the contract if given effect as a bar would foreclose for an
unreasonable time the employees' opportunity to change representatives) ; Matter of The
CONTAINER CORPORATION OF AMERICA 827
category of cases where the collective bargaining agreement fails to
fulfill its statutory function . The labor organization which negoti-
ated the contract is defunct . The contract is not being administered
on behalf of the employees ; 9 it cannot be interpreted and enforced
through the application of its grievance procedure , or altered to meet
changing circumstances by the process of collective bargaining.- To
treat the instrument in these circumstances as a bar to an immediate
determination of representatives would in no real sense stabilize in-
dustrial relations , but would , rather, negate the purposes of the Act.
We find, for the foregoing reasons, that the contract in question
is not a bar to this proceeding ." We do not, of course , ipso facto set
aside the contract , or necessarily affect whatever legal rights may have
survived the destruction of the union which negotiated and signed it.
A statement of the Trial Examiner , introduced at the hearing,
indicates that the P. W. 0. C. represents a substantial number of
employees in the unit hereinafter found appropriate .12
Duplex Printing Press Company , 53 N. L. it. B. 503, Matter of Corn Products Refining
Company, 56 N. L. it. B 1140 ( contracts lacked substantive provisions fixing terms and
conditions of employment ) ; Matter of Central Greyhound Lines, Inc., 55 N. L. it. B. 504,
and 56 N. L . it. B 1378 ( recognition and closed -shop clauses consistently disregarded in
practice ) ; Matter of Sinclair Rubber, Inc., 57 N. L. it. B . 800 (complement of employees
greatly expanded since execution of contract ) ; Matter of Packard Motor Car Company,
47 N. L it. B. 932 , Matter of Briggs Indiana Corporation , 49 N. L . R. B. 920 ( contracts
otherwise repugnant to statutory policy ) ; Matter of Brenizer Trucking Company, 44 N. L.
it. B. 810, Matter of National Lead Company , 45 N. L . it. B. 182, cf . Matter of Brightwater
Paper Company, 54 N. L. it. B. 1102 ( dispute as to which of two labor organizations was
the legal successor to the Union which negotiated the contract).
9 There is nothing in the record to indicate that officials of the I. P. U. have undertaken
to handle grievances of the Company 's employees or otherwise assume the representative
functions of Local 456 . Even If the I. P. U. had done so, the case would apparently
present a situation comparable to that in Matter of Olive t Myers Manufacturing Company,
59 N. L it. B. 650 , where, as here , the Local which signed the contract had ceased
to function , and the International had appeared in the proceeding and contended that the
contract was a bar. Moreover, in that case the International was a party to the contract.
10 The collecive bargaining process does not stop with the execution of a contract; the
duty to bargain continues . See Sands Mfg. Co. v. N. L. R. B., 306 U. S. 332. affirming
96 F (2d ) 721 (C . C. A. 6), setting aside 1 N. L. it. B. 546; Rapid Roller Co. v. N. L. R. B.,
126 F . ( 2d) 452 (C. C. A. 7 ), affirming 33 N. L. it. B. 557.
u Matter of Memo Leather Goods Company , 52 N. L. it. B. 625 ; Matter of The Red Wing
Company, Inc., 51 N. L. It . B. 1402; Matter of Morrison Steel Products , Inc., 50 N. L. it. B.
72; Matter of Gelatin Products Company, 49 N. L. it. B . 173; Matter of Olive cf Myers
Manufacturing Company ( supra ) ; Matter of Precision Casting Co., Inc., 48 N. L. it. B.
835 ; Matter of Sunshine Mining Company, 48 N. L. it. B. 301 ; Matter of California Central
Fibre Corporation, 44 N. L . it. B. 1226 ; Matter of National Battery Company , 28 N. L. it. B.
826. We do not subscribe ' to the thesis of the dissenting opinion as to the basis of decision
in these'cases or those cited in footnote 8 (supra).
ss The Trial Examiner reported that the P . W. O. C. submitted 73 authorization cards,
61 of which bore signatures of persons appearing on the Company's pay roll of September
17, 1944 , which contained the names of 163 employees in the appropriate unit. Due to
the absence of a statement by a Field Examiner , the Regional Director , after the hearing,
submitted an additional statement reporting , for the purpose of disclosing representation,
that the P. W. O. C . submitted a petition bearing the signatures of 98 persons in the
appropriate unit, and appearing on the Company 's pay roll of November 9, 1944. We
hereby order that the statement of the Regional Director be incorporated in the record.
The I . P. U. made no showing of membership , relying on its contention that the contract
between the Company and Local 456 is a bar.
828 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
We find that a question affecting commerce has-arisen concerning
the representation of employees of the Company, within the meaning
of Section 9 (c) and Section 2 (6) and (7) of the Act.
IV. THE APPROPRIATE UNIT
At the hearing, the parties stipulated and agreed that the appro-
priate unit consists of all production and maintenance employees of
the Company in its Anderson plant except for office clerical em-
ployees,13 guards, watchmen, and foremen. On the evidence offered
in the record, we are of the opinion that the unit as stipulated by the
parties is appropriate.
We find that all production and maintenance employees of the Com-
pany in its, Anderson, Indiana, plant, but excluding office clerical
employees, guards, watchmen, and foremen, and all other supervisory
employees with authority to hire, promote, discharge, discipline, or
otherwise effect changes in the status of employees, or effectively
recommend such action, constitute a unit appropriate for the purposes
of collective bargaining within the meaning of Section 9 (b) of
the Act.
V. THE DETERMINATION OF REPRESENTATIVES
We shall direct that the question concerning representation which
has arisen be resolved by an election by secret ballot among the em-
ployees in the appropriate unit who were employed during the pay-roll
period immediately preceding the date of the Direction of Election
herein, subject to the limitations and additions set forth in the Direc-
tion. Inasmuch as the I. P. U. expressed no desire to participate in
an election, we shall grant permission to the I. P. U. to have its name
removed from the ballot if it so desires, by notifying the Regional
Director for the Eleventh Region to that effect within ten (10) days
from the date of this Direction of Election 14
DIRECTION OF ELECTION
By virtue of and pursuant to the power vested in the National Labor
Relations Board by Section 9 (c) of the National Labor Relations
Act, and pursuant to Article III, Section 9, of National Labor Rela-
is The parties construe the term "office clerical employees " to include the four clerks
employed in the plant itself, who are concerned solely with clerical duties, and who earn
the same salary and work the same hours as the other clerical employees ; these wages and
hours are unlike those of the other plant workers
14 The P. W. O . C. requested at the hearing that it appear on the ballot as the P W. O. C -
C. I. O. The request is hereby granted. The I. P.'U. stated at the hearing that if It
decided to participate in the election it would appear as the "Anderson Corrugated Box
Workers' Union Number 456, affiliated with the International Printing Pressmen 's and As-
sistants ' Union of North America, A F. of L. " In view of our findings in Section III,
supra, concerning the present status of Local 456 , and in order better to reflect the existing
situation , we shall afford a place on the ballot to the I P U.
CONTAINER CORPORATION OF AMERICA 829
tions Board Rules and Regulations-Series 3, as amended, it is
hereby
DIRECTED that, as part of the investigation to ascertain representa-
tives for the purposes of collective bargaining with Container Corpo-
ration of America, Anderson, Indiana, an election by secret ballot
shall be conducted as early as possible, but not later than thirty (30)
days from the date of this Direction, under the direction and supervi-
sion of the Regional Director for the Eleventh Region, acting in this
matter as agent for the National Labor Relations Board, and subject
to Article III, Sections 10 and 11, of said Rules and Regulations,
among the employees in the unit found appropriate in Section IV,
above, who were employed during the pay-roll period immediately
preceding the date of this Direction, including employees who did
not work during said pay-roll period because they were ill or on vaca-
tion or temporarily laid off, and including employees in the armed
forces of the United States who present themselves in person at the
polls, but excluding any who have since quit or been discharged for
cause and have not been rehired or reinstated prior to the date of the
election, to determine whether they desire to be represented by
P. W. 0. C.-C. I. 0., or by the International Printing Pressmen's and
Assistants' Union of North America, A. F. L., for the purposes of
collective bargaining, or by neither.
MR. GERARD D. REILLY, dissenting :
In view of the fact that there is nothing either in this record or in
the findings of the majority which negate the contention that the
collective agreement now in effect between this Company and the
Pressmen's Union (hereinafter referred to as the A. F. L.) is a valid
contract, I am at a loss to find any legal basis for authorizing these
employees to change bargaining representatives before the end of the
contract term. In making this observation, I am, of course, aware
of various decisions of the Board in which we have ordered elections
long before the expiration date of a so-called contract. I have always
thought, however, that our justification rested upon the theory that
these were not valid contracts and, hence, not a bar to a present rede-
termination of the bargaining representative 15
11 Although the Board has rarely elaborated upon its reasoning in representation proceed-
ings, an analysis of our decisions indicates that these cases fall into four general categories :
(1) Where the apparent authority of the bargaining representative was put in issue
prior to the execution of the contract by the employees, Matter of Van Iderstine Com-
pany, 55 N. L R B 1339, or another related representative , Matter of Eicor, Inc., 46
N. L. R. B. 1035
(2) Where a subsequent schism in the contracting organization had created a rea-
sonable doubt as to the identity of the bargaining agent Matter of Brenizer Trucking
Company, 44 N. L R B. 810
(3) Where the bargaining agent exceeded the scope of his implied authority by
negotiating an agreement of unreasonably lengthy term Matter of Trailer Company
639678-45-vol. 61-54
830 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
It is clear from the National Labor Relations Act that Congress
expressly recognized that an agreement between the collective repre-
sentative of a majority of the employees and an employer could possess
legal validity since, in defining the permissible extent of the closed
shop in Section 8 (3), Congress imposed only two additional condi-
tions upon the law of contracts-one, that the labor organization could
not be "established, maintained, or assisted" by any unfair labor prac-
tice and, second, that the collective bargaining representative had to
be one which conformed with the standards of Section 9 (a) -that is,
designated by the majority in the appropriate bargaining unit.
Since this contract contained a provision which made it a condition
of employment that new employees join the A. F. L., i. e., the signatory
labor organization, the only question which we would have to decide,
if this were a complaint case, is whether or not it conformed to the
proviso in Section 8 (3). There is no evidence in the record to indicate
that the A. F. L. was either illegally assisted or that it did not possess
a majority at the time the contract was executed in July. The theory
of the petitioner is rather that during the time of the hearing, several
months later, the contracting organization no longer had any members
among the employees, and -the officers and stewards of the local had
resigned.
Granted that, in the absence of these local union officers, it would
be difficult, if not impossible, to administer the grievance, provisions
of the contract, I still cannot find any legal theory for setting aside the
contract, since it is obvious that the principals to the contract, viz :-
the employees,-are the ones responsible for liquidating their bargain-
ing agent. I do not question that they have a right to revoke the
authority of their agent, but such revocation can apply only prospec-
tively and cannot be used to invalidate any lawful obligations under-
taken by such agent during the period in which its representative
capacity was not questioned.
As I see it, the flaw in the majority opinion is that it assimilates
a case of this sort to other cases in which it has been held that a col-
lective agreement was not a bar to an immediate election. In those
cases , however, the agreements pleaded in bar failed to meet the tests
of either Section 8 (3) or were not valid contracts under general legal
principles. The absence of litigation in representation cases should
of America, 51 N. L . R. B. 1106; Matter of Brewster Ideal Chocolate Company, 49
N. L. R. B. 366; Matter of Mathieson Alkali Works, 55 N. L. R. B. 1100; Matter of
Chicago Curled Hair Company , 56 N. L. R. B. 1674.
(4) Where a showing was made that only a handful of employees still belonged to
the bargaining organization and no evidence or presumption of law ( as in the instant
case ) was present to indicate thatSa majority adhered to the bargaining agent on the
date of the execution of the agreement.
CONTAINER CORPORATION OF AMERICA 831
not blind us to the possibility that our certifications may be frustrated
if they are repugnant to enforceable contracts 16
19 The view has occasionally been advanced that, in holding a contract not to be a bar to a
redetermination of representatives, the Board is not passing upon the validity of the con-
tract and , hence, the contracting union is still free to enforce its contract in a State court.
Such a theory cannot be supported . The effect of a new certification imposes upon an em-
ployer a legal obligation to bargain exclusively with the certified union and , hence, by the
same token to refrain from any further relationship with the contracting union. Hence
whenever our order is valid, the "supreme law clause" of the Federal constitution would
prevent an employer from being placed in the dilemma of being subject to a conflicting
decree by a State court . A certification , however, which is repugnant to a binding contract
would be inadequate to sustain an unfair labor practice order under Section 8 ( 5) (semble)
See Triboro Coach Corp . v. New York State Labor Relations Board, 286 N. Y. 314, 36 N. E.
(2d) 315.