Pennsylvania Furnace and Iron Company

National Labor Relations Board - Board Decisions

Jun 3, 1939

13 N.L.R.B. 49 (N.L.R.B. 1939)

In the Matter Of PENNSYLVANIA FURNACE AND IRON COMPANY and
LODGE No. 1328 , INTERNATIONAL ASSOCIATION OF MACHINISTS
Case No. C-452.-Decided June 3, 1939
Furnace and Boiler Manufacturing Industry-Settlement : stipulation provid-
ing for compliance with Act, including reinstatement and back pay ; stipulation
further providing for retention by respondent of certain amounts from back pay
on account of unemployment compensation benefits and possible Social Security
taxes, amounts so retained to be distributed as Board may determine-Back pay-
Social Security Taxes: ruling by Commissioner of Internal Revenue that back
pays is not "wages" within meaning of Social Security Act and is not taxable ;
Unemployment Compensation : in future to be considered as home-relief payments,
not deductible from-Order: entered on stipulation ; amounts received as unem-
ployment benefits deducted , limited to facts of this case ; no deduction on account
of Social Security taxes.
Mr. Henry Shore, for the Board.
Mr. W. Pitt Gifford, of Erie, Pa., Mr. J. H. Alexander, of Warren,
Pa., and Mr. W. S. Clark, of Warren, Pa., for the respondent.
Mr. William F. Guffey, Jr., of counsel to the Board.
DECISION
AND
ORDER
STATEMENT OF THE CASE
Upon charges and amended charges duly filed by Lodge No. 1328,
International Association of Machinists, herein called the Union, the
National Labor Relations Board, herein called the Board, by the
Regional Director for the Sixth Region (Pittsburgh, Pennsylvania),
issued its complaint dated December 23, 1937, against Pennsylvania
Furnace and Iron Company, Warren, Pennsylvania, herein called the
respondent, alleging that the respondent had engaged in and was en-
gaging in unfair labor practices affecting commerce within the mean.
ing of Section 8 (1), (3), and (5) and Section 2 (6) and (7) of the
National Labor Relations Act, 49 Stat. 449, herein called the Act. A
copy of the complaint, accompanied by a notice of hearing, was duly
served upon the respondent and upon the Union.
13 N. L. R. B., No 7.
49
50 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
With respect to the unfair labor practices, the complaint alleged
in substance, (1) that on or about June 12, 1936, and June 19, 1936,
and thereafter, the respondent refused to bargain collectively with
the Union although fully aware that the Union represented a major-
ity of the employees of the respondent in a unit appropriate for the
purpose of collective bargaining; (2) that on or about June 20, 1936,
the respondent locked out its employees and has at all times since re-
fused to reinstate 21 of said employees; (3) that-on or about July
10, 1936, the respondent discharged the 21 said employees, because of
their membership in and activity on behalf of the Union, and at
all times subsequent thereto has refused to reinstate any of the said
employees; and (4) that by virtue of the aforesaid acts and each of
them the respondent has interfered with, restrained, and coerced its
employees in the exercise of the rights guaranteed in Section 7 of. the
Act and is so interfering with, restraining, and coercing its employees.
Thereafter the respondent filed its answer, admitting the allega-
tions of the complaint with respect to its corporate existence, the
nature of its business, and the appropriateness of the bargaining
unit specified in the complaint. The answer likewise admits that the
respondent closed its plant on or about June 20, 1936, but denies that
this constituted a lock-out and further denies that the respondent has
engaged in any of the unfair labor practices alleged in the complaint.
Pursuant to notice, a hearing was held from January 4 to 6, 1938,
inclusive, at Warren, Pennsylvania, before George Bokat, the Trial
Examiner duly designated by the Board. The Board and the re-
spondent were represented by counsel and participated 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 the
parties. Thereafter, the Trial Examiner filed his Intermediate Re-
port dated February 17, 1938, in which he found that the respondent
had engaged in all of the unfair labor practices alleged in the com-
plaint. He recommended that the respondent cease and desist from
such unfair labor practices; that the respondent, upon request, bar-
gain collectively in good faith with the Union; that the respondent
offer to the employees named in the complaint immediate and full
reinstatement, without prejudice to any rights or privileges pre-
viously enjoyed by said employees; and that the respondent make
whole the said employees for any loss of pay they had suffered by
reason of the respondent's refusal to reinstate them to employment,
by payment to them of a sum of money equal to that which they
normally would have earned as wages, less net earnings, during the
period from June 20, 1936, to the date of offer of reinstatement. The
PENNSYLVANIA FURNACE AND IRON COMPANY 51
respondent filed exceptions to the Intermediate Report, and there-
upon the case was transferred to the Board in Washington, D. C.
On dune 29, 1938, the parties entered into a stipulation, which
provides as follows :
It is hereby stipulated and agreed by and among Pennsylvania
Furnace and Iron Company, Lodge No. 1328, International Asso-
ciation of Machinists, and Henry Shore, Attorney, National
Labor Relations Board as follows :
1. Pennsylvania Furnace and Iron Company is a Pennsylvania
Corporation incorporated March 7, 1907, having its principal of-
fice and place of business at Warren, Pennsylvania, where it is
engaged in the manufacture of gas, floor and soldering furnaces,
gas boilers, gasoline, truck and fuel oil tanks, pumps and sheet
and steel plate to customers' specifications. In 1937, 58% of
the Company's raw products consisting of sheet and plate steel,
aluminum, welding wire, bolts, nuts, rivets, electrical controls,
electrical motors, valves and fittings, tools; and various mate-
rials necessary for sheet steel and steel plate construction were
purchased from sources from without the State of Pennsylvania
and transported to the Company's plant by railroad and motor
truck. In 1936, the gross annual sales of the Company amounted
to $514,055.57, for eleven months of the year 1937 it amounted
to $611,677.15. In 1936, 56% of the finished products of the
company were shipped by railroad and motor truck outside of
the State of Pennsylvania to all parts of the United States and
Canada. In 1937, 61% of the finished products were shipped
by railroad and motor truck outside of the State of Pennsylvania
to all parts of the United States and Canada. The Company
employs one salaried salesman and about twenty-five commis-
sion and part-time salesmen who sell in States other than the
State of Pennsylvania.
2. On the basis of the facts stipulated in paragraph, No. 1
above, and on the basis of this stipulation generally, and with the
consent of the parties hereto, which is hereby given, the National
Labor Relations Board may enter an order in this case.
3. The said Order shall provide as follows :
(1) Pennsylvania Furnace and Iron Company, its officers and
agents shall cease and desist from interfering with, restraining
or coercing, its employees in the exercise of the right to self-
organization, to form, join or assist labor organizations, to bar-
gain 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.
52 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
(2) Pennsylvania Furnace and Iron Company, its officers and
agents shall cease and desist from discouraging membership in
any labor organization, by discrimination in regard to hire or
tenure of employment or any form or condition of employment.
(3) Pennsylvania Furnace and Iron Company, its officers and
agents shall cease and desist from refusing to bargain collec-
tively with the International Association of Machinists, Lodge
No. 1328, the representative of its production and maintenance
employees, exclusive of salesmen, watchmen, clerical and super.
visory employees.
(4) Pennsylvania Furnace and Iron Company, its officers and
agents, shall take the following affirmative action in order to ef-
fectuate the policies of the National Labor Relations Act :
a. Upon request, bargain collectively in good faith with the
International Association of Machinists, Lodge No. 1328, as the
exclusive representative of its production and maintenance em-
ployees, exclusive of salesmen, watchmen, clerical and super-
visory employees, in respect to rates of pay, wages, hours of
employment and other conditions of employment.
b. Offer to Hugo Rydgren, Earl Felder, Earl McClure, Art
McCain, Fred' Shriver, Jacob Farr, Martin Jasperson, Elmer
Peterson, William T. Mohr, Jerome Paul, Roy Reynolds, William
Robson, Alfred Johnson, Stanley Wedlock, Clifford Scott, La-
Verne Jasperson, Carl Williams, Russell Bailey, Albert Ander-
son, Albert Johnson, and Fred Mack immediate and full rein-
statement, respectively, to their former positions or as near as
possible to equivalent positions, without prejudice to all rights and
privileges previously enjoyed, dismissing if necessary persons
hired in their place on or after June 20, 1936.
c. Pay to the employees hereinafter named, in settlement for
any loss of pay they have suffered by reason of their discharge,
the sums hereinafter respectively set out after their names :
Earl Felder--------------------------------------- $419.24
Earl McClure------------------------------------- 126.06
A. J. McCain ------------------------------- 382.69
F. A. Shriver------------------------------------- 557.46
Jacob Farr---------------------------------------- 483.23
M. Jasperson-------------------------------------- 275.37
Elmer Peterson----------------------------------- . 33
W. T. Mohr--------------------------------------- 508.60
R F. Bailey--------------------------------------- 978.87
Albert Anderson----------------------------------- 1108.39
Roy Reynolds------------------------------------- 209.59
William Robson----------------------------------- 50.29
Alfred Johnson------------------------------------ 1033.95
Stanley Wedlock---------------------------------- 1238.55
PENNSYLVANIA FURNACE AND IRON COMPANY 53
Clifford Scott-------------------------------------- $147.71
L. Jasperson-------------------------------------- 1413.65
Albert Johnson------------------------------------ 66 78
Fred Mack---------------------------------------- 688.63
d. Post notices immediately in conspicuous places in its plant
stating (1) Pennsylvania Furnace and Iron Company will cease
and desist in the manner aforesaid; (2) Pennsylvania Furnace
and Iron Company's employees will not be interfered with, re-
strained or coerced in the exercise of their rights to self-organ-
ization, to bargain collectively with the representatives of their
own choosing and engage in other mutual aid or protection; (3)
Pennsylvania Furnace and Iron Company will bargain with the
International Association of Machinists, Lodge No. 1328, exclu-
sively as the representative of its production and maintenance
employees, exclusive of salesmen, watchmen, clerical and super-
visory employees; and that (4) such notices shall remain posted
for a period of thirty (30) consecutive days.
e. Notify the Regional Director for the Sixth Region within
ten (10) days from the service of this Order by a report in writ-
ing setting forth in detail the manner and form in which it has
complied with the said Order.
4. The Pennsylvania Furnace and Iron Company shall retain
from the amounts payable to the employees hereinafter named
the sums hereinafter respectively set out after their names, which
sums are equal to the sums received as unemployment compen-
sation by the said named employees :
Clifford Scott--------------------------------------- $90.00
Earl Felder---------------------------------------- 88.20
William T. Mohr----------------------------------- 90.40
William Robson------------------------------------ 92.65
Albert Johnson------------------------------------- 104.60
Martin Jasperson----------------------------------- 80.70
Roy Reynolds-------------------------------------- 59.25
Jacob Farr----------------------------------------- 31.60
Elmer Peterson------------------------------------- 85.75
Orson Earl McClure-------------------------------- 11.65
Fred Shriver--------------------------------------- 63.60
The amounts of money so retained shall be distributed by the
Pennsylvania Furnace and Iron Company in such form and
manner as the National Labor Relations Board may determine.
5. The Pennsylvania Furnace and Iron Company shall retain
1°/-o from the amounts payable to each of the employees named
in paragraph 3 (4) c hereof, on account of possible Social Secu-
rity taxes, which money so retained shall be distributed by Penn-
sylvania Furnace & Iron Company in such form and manner as
the National Labor Relations Board may determine.
187930-39-vol. 13-5
54 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
6. The Pennsylvania Furnace & Iron Company consents to
the entry of a decree by the appropriate United States Circuit.
Court of Appeals enforcing the order of the National Labor-
Relations Board in the form set out above in paragraph num-
bered 3.
7. It is expressly understood and agreed that this stipulation is-
subject to the approval of the National Labor Relations Board.
On November 19, 1938, the Board issued its order approving the
above-quoted stipulation and making it a part of the record in the-
case.
Upon the entire record in the case, the Board makes the following:-
FINDINGS OF FACT
I. THE BUSINESS OF THE RESPONDENT
The respondent, Pennsylvania Furnace and Iron Company, a
Pennsylvania corporation having its principal office and place of
business at Warren, Pennsylvania, is engaged in the manufacture of
various kinds of furnaces, gas boilers, pumps, gasoline and fuel-oil
tanks, and sheet and steel plate to customers' specifications. The raw
materials used by the respondent consist chiefly of sheet and plate
steel, aluminum, welding wire, bolts, nuts, rivets, electrical controls,
electrical motors, valves, and fittings. In 1937, 58 per cent of all such
raw materials used by the respondent were purchased and transported
from points outside the State of Pennsylvania to the respondent's,
plant at Warren, Pennsylvania. In 1936, the gross sales of the re-
spondent's finished products amounted to $514,055.57, of which ap-
proximately 56 per cent were shipped from the respondent's plant to
points outside the State of Pennsylvania. For 11 months of the year
1937 the gross sales of the respondent's finished products amounted to-
$611,677.15, of which approximately 61 per cent were shipped from
the respondent's plant to points outside the State of Pennsylvania.
The respondent employs one salaried salesman and about 25 commis-
sion and part-time salesmen who sell the respondent's products in,
States other than Pennsylvania.
We find that the above-described operations of the respondent con-
stitute a continuous flow of trade, traffic, and commerce among the-
several States.
The question of Social Security taxes and unemployment compensation
The stipulation, set out above, provides that the respondent shall
retain from the amounts otherwise payable to the 11 individuals named_
in paragraph 4 thereof certain sums of money equal to the sums re--
Ik r LI +4 A
PENNSYLVANIA FURNACE AND IRON COMPANY 55
ceived by said individuals as unemployment compensation; and that
the respondent shall retain 1 per cent (1%) from the amounts payable
to each of the employees named in paragraph 3 (4)c of the stipulation
on account of possible Social Security taxes. The stipulation further
provides that the amounts so retained shall be distributed by the
respondent in such manner and form as the Board may determine.
At the time the Board approved the stipulation, it was of the
opinion that the proper fiscal agency of the State should be reim-
bursed for monies paid to discharged employees as unemployment
compensation in cases where such employees were later awarded
back pay pursuant to an order of the Board. The Board, therefore,
recommended that the respondent pay over to the Pennsylvania Un-
employment Compensation Fund a sum of money equal to that
which the respondent had retained pursuant to Section 4 of the stipu-
lation. This recommendation was made after the Board had reached
an agreement with the Division of Unemployment Compensation,
Department of Labor and Industry, of the State of Pennsylvania
that the monies so repaid should be credited to the accounts of the
respective employees, thus restoring the wage credits of said em-
ployees to the status which existed prior to the payment of benefits
to the said employees, and that said wage credits shall be used for
the purpose of computing the benefit rights of said employees which
may have accrued in the past or which may accrue in the future.
Pursuant to said recommendation of the Board, the respondent
paid over said sums of money to the Pennsylvania Unemployment
Compensation Fund. Upon further consideration, however, the
Board has determined that unemployment compensation benefits are
similar in purpose and effect to home-relief payments and should be
treated by the Board in the same manner as home-relief payments.,
In future cases involving this question no deductions from back pay
will be made on account of unemployment compensation benefits.
However, inasmuch as the respondent, acting pursuant to recom-
mendations of the Board, has already paid over to the Pennsylvania
Unemployment Compensation Fund the monies retained in accord-
ance with paragraph 4 of the stipulation, we shall make our order
in this case consistent with the respondent's conduct.
In a recent ruling,2 the Commissioner of Internal Revenue ruled
that back pay awarded to employees pursuant to an order of the
National Labor Relations Board is not "wages" within the meaning
of the Social Security Act and is not taxable under Titles VIII and
IX of the Social Security Act. In view of the Commissioner's ruling
1 See Matter of Vegetable Oil Products Company, Inc., a Corporation and Soap and"
Edible Ott Workers Union, Local No. 18409, 5 N. L R. B. 52.
2 1939 Int. Rev. Bull. No. 14, at p. 10, S. S. T. 359.
56 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
we shall order the respondent to pay over to the individuals named
in paragraph 3 (4) c of the stipulation the monies which the re-
spondent retained on account of possible Social Security taxes from
the sums payable to said individuals.
ORDER
Upon the basis of the above findings of fact, the above stipulation,
and the entire record in the case, and pursuant to Section 10 (c) of
the National Labor Relations Act, the National Labor Relations
Board hereby orders that the respondent, Pennsylvania Furnace and
Iron Company, Warren, Pennsylvania, its officers and agents shall :
1. Cease and desist from :
(a) Interfering with, restraining or coercing its employees in
the exercise of the right to self-organization, to form, join, or assist
labor organizations, to bargain collectively through representatives
of their own choosing, and to engage in concerted activities for the
purpose of collective bargaining and other mutual aid or protection;
(b) Discouraging membership in any labor organization by dis-
crimination in regard to hire or tenure of employment or any form
or condition of employment;
(c) Refusing to bargain collectively with the International Asso-
ciation of Machinists, Lodge No. 1328, the representative of its pro-
duction and maintenance employees, exclusive of salesmen, watchmen,
clerical and supervisory employees.
2. Take the following affirmative action in order to effectuate the
policies of the National Labor Relations Act:
(a) Upon request, bargain collectively in good faith with the
International Association of Machinists, Lodge No. 1328, as the ex-
clusive representative of its production and maintenance employees,
exclusive of salesmen, watchmen, clerical and supervisory employees,
in respect to rates of pay, wages, hours of employment and other
conditions of employment;
(b) Offer to Hugo Rydgren, Earl Felder, Earl McClure, Art
McCain, Fred Shriver, Jacob Farr, Martin Jasperson, Elmer Peter-
son, William T. Mohr, Jerome Paul, Roy Reynolds, William Robson,
Alfred Johnson, Stanley Wedlock, Clifford Scott, LaVerne Jasper-
son, Carl Williams, Russell Bailey, Albert Anderson, Albert John-
son, and Fred Mack immediate and full reinstatement, respectively,
to their former positions or as near as possible to equivalent positions,
without prejudice to all rights and privileges previously enjoyed,
dismissing if necessary persons hired in their place on or after June
20, 1936;
PENNSYLVANIA FURNACE AND IRON COMPANY 57
(c) Pay to the employees hereinafter named, in settlement for any
loss of pay they have suffered by reason of their discharge, the sums
hereinafter respectively set out after their names :
Earl Felder-------------------------------------------- $419.24
Earl McClure------------------------------------------ 126.06
A. J. McCain------------------------------------------- 382.69
F. A. Shriver------------------------------------------ 557.46
Jacob Farr--------------------------------------------- 483.23
M. Jasperson------------------------------------------- 275.37
Elmer Peterson----------------------------------------- . 33
W. T. Mohr ------------------ -------------------------- 508.60
R. F. Bailey------------------------------------------- 978.87
Albert Anderson---------------------------------------- 1108.39
Roy Reynolds------------------------------------------ 209.59
William Robson---------------------------------------- 50.29
Alfred Johnson----------------------------------------- 1033. 95
Stanley Wedlock---------------------------------------- 1238.55
Clifford Scott------------------------------------------- 147.71
L. Jasperson------------------------------------------- 1413.65
Albert Johnson----------------------------------------- 66.78
Fred Mack--------------------------------------------- 688.63
(d) Immediately post notices in conspicuous places in its plant
and maintain such notices for a period of thirty (30) consecutive
days, stating (1) that it will cease and desist in the manner afore-
said; (2) that its employees will not be interfered with, restrained
or coerced in the exercise of their rights to self-organization, to bar-
gain collectively with the representatives of their own choosing and to
engage in other mutual aid or protection; and (3) that it will bargain
with the International Association of Machinists, Lodge No. 1328,
exclusively as the representative of its production and maintenance
employees, exclusive of salesmen, watchmen, clerical and supervisory
employees ;
(e) Deduct from the amounts otherwise payable to the employees
hereinafter named the sums hereinafter respectively set out after
their names, which sums are equal to the sums received as unemploy-
ment compensation by said individuals, and pay over the sums so
deducted to the Pennsylvania Unemployment Compensation Fund :
Clifford Scott----------=-------------------------- ---- $90.00
Earl Felder--------------------------------------------- 88.20
William T . Mohr---------------------------------------- 90.40
William Robson----------------------------------------- 92 65
Albert Johnson------------------------------------------ 104 80
Martin Jasperson---------------------------------------- 80.70
Roy Reynolds------------------------------------------- 59.25
Jacob Farr---------------------------------------------- 31.60
Elmer Peterson------------------------------------------ 85 75
Orson Earl McClure ------------------------------------- 11.65
Fred Shriver-------------------------------------------- 63.60
58 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
(f) Pay over to the individuals named in paragraph 2 (c) of this
Order, any monies which the respondent retained on account of pos-
sible Social Security taxes from the sums payable to said employees
in accordance with said paragraph 2 (c);
(g) Notify the Regional Director for the Sixth Region within
ten (10) days from the service of this Order by report in writing
setting forth in detail the manner and form in which it has com-
plied with the said Order.
MR. WILLIAM M. LEi5ERSON took no part in the consideration of
the above Decision and Order.