Southwest Distributing Co.

National Labor Relations Board - Board Decisions

Sep 29, 1977

232 N.L.R.B. 635 (N.L.R.B. 1977)

SOUTHWEST DISTRIBUTING CO.
Southwest Distributing Co., Inc. and Brewery, Soft
Drink, Industrial & Allied Workers Local Union
1111, a/w International Brotherhood of Teamsters,
Chauffeurs, Warehousemen and Helpers of Ameri-
ca. Cases 23-CA-6192 and 23-RC-4415
September 29, 1977
DECISION, ORDER, AND DIRECTION
BY CHAIRMAN FANNING AND MEMBERS
JENKINS AND MURPHY
On March 3, 1977, Administrative Law Judge
Herbert Silberman issued the attached Decision in
this proceeding. Thereafter, Respondent filed excep-
tions and a brief, and the Charging Party filed a brief
in support of the Administrative Law Judge's
Decision.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the
National Labor Relations Board has delegated its
authority in this proceeding to a three-member panel.
The Board has considered the record and the
attached Decision in light of the exceptions and
briefs and has decided to affirm the rulings, find-
ings,' and conclusions of the Administrative Law
Judge only to the extent consistent herewith.
The Administrative Law Judge found, and we
agree, that Respondent violated Section 8(a)(1) of the
Act by coercively soliciting union information and
union support from Watt, and by coercively interro-
gating Ammons in late August and again in
September. We do not agree, however, with his
findings that Respondent discriminatorily laid off
employees Ammons, Kirkland, and Davila. We
further disagree with his disposition of the challenged
ballots cast in Case 23-RC-4415.
The essential facts are as follows. On March 1,
1976, Anheuser-Busch breweries were subjected to a
nationwide strike which continued until June 7, 1976.
Respondent, a wholesale beer distributor of Anheu-
ser-Busch products, immediately suffered a substan-
tial reduction in the amount and types of beer
available to it at its various facilities, including its
Conroe, Texas, facility, the only facility involved
here. This in turn resulted in a substantial loss of
customers to its competitors. Approximately 6 weeks
after the commencement of the strike, Coors intro-
duced its beer products into Respondent's Conroe
marketing area and almost immediately captured,
and over the next 7 months retained, approximately
i Respondent contends that, because the matter was not alleged in the
complaint, it would be deprived of due process were we to adopt, as we do.
the Administrative Law Judge's finding that Manager Smith unlawfully
coerced Ammons in September 1976 and thereby violated Sec. 8(aX i) of the
Act. We find no merit in this contention. While the complaint may not have
232 NLRB No. 116
19 percent of that market, 9.3 percent of which was
at Respondent's expense. These overlapping events,
plus a preexisting price differential which favored
Respondent's competitors, including Coors, caused
Respondent to suffer serious and continuous month-
ly sales losses, which, by November 1, 1976,
amounted to 34 percent compared to a similar period
in 1975. In addition, several weeks after the conclu-
sion of the strike, Respondent, at Anheuser-Busch's
behest, began a 4-month test in its marketing areas to
determine the effect of the strike on sales. However,
because the test was designed to develop a true sales
picture, Respondent was not allowed to conduct any
price-off promotions during the test period.
Despite its efforts, which included a series of
managerial meetings beginning in May 1976 direct-
ed, inter alia, toward considerations of expense
curtailment and reductions in force, Respondent was
unable to stem the adverse economic tide. By August
1, 1976, and despite a now unlimited supply of
Anheuser-Busch products, its route salesmen were
unable to sell "what [Respondent] was putting on the
trucks . .. [and were] getting in at 1:00 or 1:30
[p.m.] and wanting to come in earlier." On August 3,
1976, Respondent's continued sales losses prompted
its president, Gray, to instruct Conroe Manager
Smith to submit recommendations "on how he could
tailor his operation." On August 10, 1976, Smith
presented a memorandum to Gray which proposed
that on or before September 1, 1976,2 (1) one of
Conroe's five package routes be eliminated, the route
salesmen be laid off, and' the route stops be
consolidated into the four remaining package routes;
and (2) Conroe's two area supervisors be demoted to
rank-and-file status and relegated to route work,
where they would displace one package route
salesman and the keg route salesman. On this same
day, Gray approved the plan and instructed Smith to
implement it "at the end of August" subject to the
approval of Respondent's board chairman, Georges,
who then was abroad.
On August 18, 8 days later, Respondent received
the Charging Party's letter requesting recognition as
representative of Respondent's six route salesmen
and its one warehouseman and thus learned, for the
first time, of the existence of its employees' union
activity. On August 19, the Board's Regional Office
mailed to Respondent a notice of representation
hearing pursuant to the Charging Party's petition for
certification in Case 23-RC-4415, which it filed on
August 16, and which listed September 7, 1976, as
alleged the incident with the specificity desired by Respondent. its language
is sufficiently broad to include the incident. Moreover, the matter was fully
litigated.
2 All parties agree that the beginning of September signals the end of the
beer season.
635
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
the hearing date. On August 20, Smith conducted a
meeting attended by all but one of the Conroe
employees wherein he compared the terms of
Respondent's collective-bargaining agreement cover-
ing its Houston, Texas, facility employees with the
benefits and conditions presently enjoyed by the
employees at Conroe. Smith concluded his remarks
by asking the employees "to be sure to think hard
about it and to make sure you make the right
decision." Five days later, Smith saw Ammons
driving down the highway, followed him for several
miles until Ammons stopped at an inn, and in
Ammons' words "asked me if I had been thinking.
And I said, yes, sir. I've heard the Union's side of the
story and I've heard ... the Company's side of the
story, and I'm still thinking. And we started talking
about something else."
Meanwhile, on August 24, Board Chairman
Georges returned home and was informed of the
petition and of the retrenchment program Gray had
proposed, which he then approved. On September 1,
1976, Smith implemented the precise retrenchment
plan that he had recommended and Gray had
approved on August 10 and, on the basis of seniority,
laid off Ammons, Kirkland, and Davila and demoted
to route salesmen the two area supervisors3 who
thereafter did not exercise any supervisory functions.
Prior to this layoff, Respondent never had laid off
employees at its Conroe facility at the conclusion of
the beer season. Ammons' layoff, however, was of
short duration for, as the most senior of the laid-off
employees, he was recalled on September 20, 1976, to
fill the position vacated by a route salesman who had
quit.
On October 20, 1976, pursuant to a Stipulation for
Certification Upon Consent Election, an election was
conducted in a unit composed of route salesmen and
warehousemen which resulted in three votes for, and
one against, the Charging Party, and four challenged
ballots. The ballots cast by the two former area
supervisors were challenged by the Charging Party
on the ground that they were supervisors on the date
of the election, and the Board agent conducting the
election challenged the ballots cast by Kirkland and
Davila because their names did not appear on the
eligibility list.
Smith readily admitted that, after learning of the
forthcoming election, he "hoped" that the demoted
area supervisors would vote against the Union, and
that he thought Kirkland and Davila would vote for
the Union and that Ammons' vote was "on the
fence."
I According to the testimony of these employees, when laid off, Kirkland
was told that he "would be [recalled in] either Apnl or March"; Davila was
told that he "probably" would be recalled "between Apnl and March of
1977"; Ammons was told that he was laid off "indefinitely":; Maze, one of
The Administrative Law Judge concluded from the
foregoing facts that Respondent was aware of its
employees' organizational activity before it had
reached an effective "termination decision" because
Gray's August 10 decision to execute the recom-
mended layoff plan was not "finalized" until it was
approved by Georges on August 24, 6 days after
Respondent had acquired knowledge of such activi-
ty. Thus, the Administrative Law Judge rejected
Respondent's economic defense; speculated that
Respondent not only gerrymandered the unit by
replacing employees who Smith "probably assumed"
were union adherents with those he "hoped" were
antiunion, but then also deliberately effectuated the
layoff prior to September 7, the date set for the
hearing in Case 23-RC-4415 at which time voting
eligibility would be determined, in order to have a
voting list to its liking; and concluded that the layoff
was unlawful "even if Respondent merely accelerat-
ed the date of an otherwise lawful reduction in its
work force."
We do not agree. The record amply supports
Respondent's contention that as a result of the
Anheuser-Busch strike and the almost simultaneous
introduction of Coors' products into its distributing
area it suffered substantial reductions in the sale of
its products. These losses in sales continued after the
Anheuser-Busch strike ended and after the reduction
in the number of employees at the Conroe facility.
Further, it is clear that, throughout the period prior
to the layoff, Respondent was concerned about the
impact of the Anheuser-Busch strike and the intro-
duction of Coors' products in its area, and was
discussing what personnel changes would be required
to meet the sales decline which its Conroe facility
was experiencing.
Likewise, we do not agree with the Administrative
Law Judge that the record supports the conclusion
that the plan was put into effect for the purpose of
gerrymandering the unit in which the election would
be held. The record clearly shows the layoffs were
implemented in strict conformity with the terms of a
plan agreed upon by Smith and Gray prior to any
knowledge by Respondent of any union activity, that
the layoff followed strict seniority, and that Ammons
was recalled in accordance with seniority. In addi-
tion, the record is void of any probative evidence
indicating that Respondent varied or accelerated its
layoff plan as a result of having received notice that
the representation petition had been filed. We cannot
find, on this record, that the effective decisional date
was advanced, as the Administrative Law Judge
the two demoted supervisors, was told that he would be reinstated to a
supervisory position "if business would pick up." The record is silent with
regard to the other demoted supervisor, and Respondent avers that recall is
dependent on its economic recovery.
636
SOUTHWEST DISTRIBUTING CO.
found, to the time Respondent "finalized" its layoff
plan, nor that it "finalized" its plan because of
antiunion considerations, nor that the unlawful
conduct in which it engaged when it was aware of
such union activity either supplies the requisite factor
of unlawful motivation for the layoff or invalidates
Respondent's economic defense.
We shall, therefore, dismiss the complaint to the
extent that it alleges the layoff was discriminatory
under Section 8(a)(3) of the Act.
Accordingly, because the layoffs were not unlaw-
fully motivated, and since on both the eligibility and
election dates Kirkland and Davila did not have a
reasonably foreseeable expectancy of recall, we shall
sustain the challenges to their ballots. Similarly, since
former Area Supervisors Maze and Fisher are
properly included in the unit, and because the record
shows that their demotions are permanent until such
indefinite time as Respondent's business improves so
as to warrant their return to supervisory status, we
find that they have no reasonably foreseeable
likelihood of returning to their supervisory positions,
and we overrule the challenges to their ballots.
Accordingly, we remand Case 23-RC-4415 to the
Regional Director for Region 23 and direct him to
open and count the ballots cast by Maze and Fisher
and to issue a revised tally of ballots.
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor
Relations Board hereby orders that the Respondent,
Southwest Distributing Co., Inc., Conroe, Texas, its
officers, agents, successors, and assigns, shall:
1. Cease and desist from:
(a) Unlawfully questioning employees about their
union activities or the union activities of other
employees.
(b) In any like or related manner interfering with,
restraining, or coercing its employees in the exercise
of the rights guaranteed in Section 7 of the Act.
2. Take the following affirmative action which is
deemed necessary to effectuate the policies of the
Act:
(a) Post at its place of business at Conroe, Texas,
copies of the attached notice marked "Appendix." 4
Copies of said notice, on forms provided by the
Regional Director for Region 23, after being duly
signed by Respondent's representative, shall be
posted by it immediately upon receipt thereof, and
be maintained by it for 60 consecutive days thereaf-
ter, in conspicuous places, including all places where
notices to employees are customarily posted. Reason-
able steps shall be taken by Respondent to insure
that said notices are not altered, defaced, or covered
by any other material.
(b) Notify the Regional Director for Region 23, in
writing, within 20 days from the date of this Order,
what steps the Respondent has taken to comply
herewith.
IT IS FURTHER ORDERED that the complaint herein
be, and it hereby is, dismissed insofar as it alleges
violations not found herein.
DIRECTION
It is hereby directed that within 10 days from the
date of this Decision, Order, and Direction, the
Regional Director for Region 23 shall open and
count the ballots cast by Fred Maze and Ron Fisher
and thereafter prepare and cause to be served on the
parties a revised tally of ballots.
4 In the event that this Order is enforced by a Judgment of a United
States Court of Appeals. the words in the notice reading "Posted by Order
of the National Labor Relations Board" shall read "Posted Pursuant to a
Judgment of the United States Court of Appeals Enforcing an Order of the
National Labor Relations Board."
APPENDIX
NOTICE To EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
WE WILL NOT unlawfully question employees
about their union activities or the union activities
of other employees.
WE WILL NOT in any like or related manner
interfere with, restrain, or coerce our 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 other
concerted activities for the purpose of collective
bargaining or other mutual aid or protection, or
to refrain from any and all such activities.
SOUTHWEST
DISTRIBUTION CO., INC.
DECISION AND REPORT AND
RECOMMENDATIONS WITH RESPECT TO
CHALLENGED BALLOTS
STATEMENT OF THE CASE
HERBERT SILBERMAN, Administrative Law Judge: These
consolidated proceedings were heard in Conroe, Texas, on
December 13 and 14, 1976. Following the close of the
hearing, briefs were filed with the Administrative Law
Judge on behalf of General Counsel, the Employer, and the
Union.
637
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
The Pleadings
The complaint in Case 23-CA-6192, dated October 4,
1976, as amended at the hearing, alleges that Respondent,
Southwest Distributing Co., Inc., herein called the Employ-
er or the Company, has engaged in and is engaging in
unfair labor practices within the meaning of Section 8(a)(l)
and (3) of the National Labor Relations Act, as amended.
Based upon a charge filed on September 1, 1976, by
Brewery, Soft Drink, Industrial & Allied Workers Local
Union 11 I11, a/w International Brotherhood of Teamsters,
Chauffeurs, Warehousemen and Helpers of America,
herein referred to as the Union, the complaint, in
substance, alleges that the Company unlawfully discharged
its employees, James W. Ammons, Phillip Z. Davila, and
Donald Lee Kirkland, on August 31, 1976,1 because of
their membership in or activities on behalf of the Union;
and, by reason thereof and other conduct set forth in the
complaint, the Company has interfered with, restrained,
and coerced its employees in the exercise of the rights
guaranteed in Section 7 of the Act. The Respondent duly
filed an answer generally denying that it has engaged in the
alleged unfair labor practices.
With respect to the representation proceeding, Case 23-
RC-4415; a petition for Certification of Representative
was filed by the Union on August 16, 1976, and on
September 7, 1976, the parties entered into a Stipulation for
Certification Upon Consent Election, which was approved
by the Regional Director. Pursuant thereto an election was
conducted on October 20,2 in a unit composed of all route
salesmen and warehousemen employed by the Company at
its facility located at 2615 Industrial Lane, Conroe, Texas,
excluding all other employees: part-time employees, office
clerical employees, outside salesmen, guards, watchmen,
and supervisors as defined in the Act. The tally of ballots
shows that of approximately six eligible voters, three votes
were cast for Petitioner, one vote was cast against
Petitioner, and four ballots were challenged. An investiga-
tion of the challenged ballots was conducted by the
Regional Director. His report, issued on November 4,
shows that the ballots of Phillip Z. Davila and Donald L.
Kirkland were challenged by the Board agent because their
names did not appear on the eligibility list, that the
complaint in Case 23-CA-6192 alleges that these two
individuals had been unlawfully discharged, and that the
ballots of Ronald Fisher and Fred Maze were challenged
by the Union on the ground that they were supervisors on
the date of the election. The Regional Director found that
the challenges were sufficient in number to affect the
results of the election, that substantial and material factual
issues have been raised by the challenges which are directly
related to issues involved in Case 23-CA-6192, and that a
hearing should be conducted to resolve those issues. He
therefore directed that a hearing with respect to the
challenged ballots be held and be consolidated with the
unfair labor practice hearing in Case 23-CA-6192 and
that, thereafter, Case 23-RC-4415 be transferred to and
continued before the Board in Washington, D.C.
I James W. Ammons was reinstated to his former position on September
28, 1976.
Upon the entire record in the cases and from my
observation of witnesses and their demeanor, I make the
following:
FINDINGS OF FACT
1. THE BUSINESS OF THE COMPANY
The Company, a Texas corporation, is engaged in the
sale and distribution of beer at wholesale. The facility
involved in this proceeding is located at Conroe, Texas. In
the course and conduct of its business the Company
annually purchases and receives at its warehouse in the
State of Texas goods valued in excess of $50,000 which are
shipped to it through channels of interstate commerce
directly from points outside the State of Texas. The
Company admits, and I find, that it is an employer within
the meaning of Section 2(2) engaged in commerce within
the meaning of Section 2(6) and (7) of the Act.
II. THE LABOR ORGANIZATION INVOLVED
The Union is a labor organization within the meaning of
Section 2(5) of the Act.
III. THE UNFAIR LABOR PRACTICES
A. Background
The Company is a wholesale distributor of Anheuser-
Busch beers under the brand names of Budweiser and
Michelob. It began operations in May 1961 when it
acquired a distributing facility located in Houston, Texas,
from Anheuser-Busch. Subsequently, it opened much
smaller distributing facilities in the Texas towns of
Rosenberg and, in 1965, Conroe. Prior to September 1, the
Company operated 28 routes from its Houston facility and
employed approximately 69 driver-salesmen, helpers, and
warehousemen. These employees are represented by the
Union with whom the Employer has a collective-bargain-
ing agreement. Albert John Foster, president of the Union,
testified that the Union's relations with the Company at
Houston have been "very pleasant."
At Conroe, prior to September 1, the Company operated
five package routes and one keg route and employed six
driver-salesmen, one manager, two area supervisors, a
warehousemen, and an office clerk. The area supervisors
were Ronald Fisher and Fred Maze, who were supervisors
within the definition of the Act. The supervisors were paid
salaries plus allowances for certain expenses. The five
package route driver-salesmen were paid a base salary of
$58.50 per week plus a commission of 18 cents per case of
beer that they delivered and the keg routeman was paid
$170 per week plus 50 cents for each keg of beer that he
delivered.
B. The Organizational Drive
In July Alvin Harrison, a package route salesman,
contacted Union President Albert Foster and informed
Foster that the Company's Conroe employees were
2 All dates refer to the year 1976 unless otherwise indicated.
638
SOUTHWEST DISTRIBUTING CO.
interested in union representation. A meeting was held on
August 13 which was attended by the keg routeman, Phillip
Davila, and by four package route salesmen, Alvin
Harrison, Donald Kirkland, James Ammons, and Danny
Kelly. On or before that day union authorization cards
were signed by Harrison, Davila, Kirkland, and Ammons.
On August 16 the Union filed a Petition for Certification of
Representative with the Board. The following were then
working in the job classifications covered by the petition:
Harrison, Davila, Kirkland, Ammons, Kelly, John Slott,
and Walter Watt. On the same day the Union wrote a letter
to the Company, which was received by the Company on
August 18, requesting recognition as representative of the
driver-salesmen, helpers, and warehousemen employed at
its Conroe facility.3
Alvin Harrison was the principal contact between the
Conroe employees and the Union. However, Harrison
voluntarily quit his job about September 28 and thereafter
the Union's principal contacts were with James Ammons
and Donald Kirkland.
On August 19, the Acting Regional Director of the Board
mailed a notice of representation hearing to the Company
and the Union, setting September 7, 1976, as the date for
the hearing. On the hearing date a Stipulation for
Certification Upon Consent Election was executed.
On August 20 Manager Dan Smith held a meeting
attended by all the Conroe employees except the office
clerk. Smith stated that he had received a copy of the
Union's representation petition. He then proceeded to
compare the wages and benefits which were being paid to
the Conroe employees with those provided for under the
collective-bargaining contract covering the Company's
Houston employees and also with those of local competi-
tors. Among other things that Smith said was that, if the
Union's organizational campaign should be successful,
then (by comparison with the terms of the Houston
collective-bargaining agreement) the employees would
receive 3 weeks' vacation after 10 years instead of after 5
years; on the other hand, the employees would gain one
holiday per year; the Houston route salesmen, in a case of
a reduction of force, would be able to bump the Conroe
route salesmen; the area supervisors would no longer be
able to assist the route salesmen during promotional sales
campaigns; the insurance package under the Houston
union contract was not as good as the insurance package
the employees at Conroe then had; and they would be
required to attend monthly union meetings and to pay
union dues and an initiation fee. Smith also said that the
employees did not have to vote for the Union even if they
had signed authorization cards.
As there is no evidence that Smith in his talk to the
employees on August 20 misrepresented the terms of the
collective-bargaining agreement covering the Company's
Houston employees, I find no violation of the Act by
reason of the comparisons Smith made between the terms
of that agreement and the benefits which the Conroe
employees then had.
1 Jack Gray, the Company's president, testified that he first learned of
the union activity at the Conroe facility when he received a copy of the
representation petition filed by the Union.
About August 25 Manager Smith followed James
Ammons to a place known as Bill's Drive Inn. When
Ammons got out of his truck Smith motioned for Ammons
to come to where he was sitting in his car. Ammons
testified without contradiction that Smith "asked me if I
had been thinking. And I said, yes, sir. I've heard the
Union's side of the story and I've heard ... the
Company's side of the story, and I'm still thinking. And we
started talking about something else."
Ammons further testified that on August 31 he was laid
off. Thereafter, towards the end of September, he was
asked to visit Smith. According to Ammons, when he met
with Smith the latter informed him that "Harrison had quit
and left them in a real bind, and that he needed me up
there. But Houston had informed him that they thought
they could make it without, and he [Smith] knew better.
And he said that he would have to get in touch with Mr.
Gray and find out if I would be O.K. to come back, and he
would get in touch with me Monday. And he went on to
say, I sure hope you been thinking about this union thing
coming up. And he said, I have been employed with this
Company a long time, and I feel like that if you don't come
to our side, that my job is in real jeopardy. And I told him I
had been off a month and had a lot of time to think about
it, and that I was kind of leaning toward the company's
way."
The complaint alleges that the above-described encoun-
ters between Dan Smith and James Ammons constitute
unlawful interrogation. I agree. In each instance the
purpose of Smith's initial remark to Ammons was to elicit
from Ammons an expression as to whether or not Ammons
intended to support the Union. At the first encounter
Ammons avoided a direct reply by stating that he was "still
thinking." At the second encounter, however, Smith
pressed Ammons harder for a declaration of intention first
by informing Ammons that Smith had to obtain approval
of Company President Gray before Smith could recall
Ammons to work and then by informing Ammons that "if
you don't come to our side, that my job is in real
jeopardy." This time Ammons' response was less uncertain
and he advised Smith that he was "kind of leaning toward
the company's way." The Act is intended to guarantee
employees the right to engage in organizational activities
free of fears of reprisals. For a supervisor to press an
employee to declare whether or not he was going to
support a union, particularly where the wrong answer
might jeopardize the possibility that the employee would be
recalled to work from layoff, constitutes an unlawful
instrusion upon employees' organizational rights. 4
Walter Watt testified that about August 30, while he was
working in the warehouse, Smith engaged him in a
conversation and asked if Watt thought "anyone could be
persuaded to our side. .... I told him that I didn't think
so, because he had a bunch of young fellows and they
wanted to better themselves. He said, 'Oh, s-,' and he
walked off." In agreement with General Counsel I find that
for Manager Smith to question warehouseman Watt as to
whether other employees could be persuaded to support
4 National Business Forms, 176 NLRB 859, 863 (1969), affd. 425 F.2d
1082 (C.A. 6. 1970).
639
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
the Company's position was to infringe unlawfully upon
the privacy which the statute seeks to accord employees in
deciding whether or not to support a union and implicitly
solicited a declaration from Watt as to his attitude toward
the Union. I find such conduct constituted a violation of
Section 8(a)(1).5
C. The Layoffs
On August 31 as James Ammons, Donald Kirkland, and
Phillip Davila returned from their routes each was
informed that he was being laid off for an indeterminate
period of time because the Company's sales were bad.
These three had the least seniority with the Company. In
order to accomplish the layoff the Company eliminated
one package route, distributing the stops on that route
among the other four routes, and demoted Area Supervi-
sors Fred Maze and Ron Fisher to fill the jobs made vacant
by the layoffs. Maze, who had been working for the
Company for approximately 10 years, was continued at his
same salary, but Fisher was taken off salary and paid on
the same basis and at the same rate as the other routemen.
The evidence establishes that since their demotion Maze
and Fisher have not exercised supervisory authority.
James Ammons was recalled to work on September 28
after Alvin Harrison voluntarily quit his employ.
General Counsel's theory is that a motivating consider-
ation for the layoffs was to remove three suspected union
supporters from the bargaining unit and substitute for
them two supervisors who the Company believed would
not aid the organizational campaign and would not vote
for the Union in an election. The Company's position is
that the personnel charges were dictated solely by reasons
of economic necessity.
Jack Gray, the Company's president, testified that in
1976 two overlapping events occurred which had a drastic
adverse impact upon the Company's business. From
March I to June 7 there was a strike at the Anheuser-Busch
breweries which seriously reduced the products available
for distribution and, to aggravate the sales decline, during
the strike period Coors Beer was introducted into the
Company's market areas. Distribution of Coors Beer began
in the Conroe area on April 15 and in the Houston area in
May. Company sales have not yet recovered from these
twin blows and, according to Jack Gray, there is no
expectancy that the Company's Conroe work force will
expand in the near future.
Statistics prepared by the Company show that for its
Conroe operation the percentage comparison of sales for
the first 10 months in 1976 with the same months in 1975 is
as follows:
Month Budweiser Michelob Keg Beer
Jan.
Feb.
Mar.
Apr.
May
June
July
Aug.
Sept.
Oct.
+15.8
+22.3
-27.9
+21.4 6/
-57.2
-47.0
-23.8
-29 .2
-29.4
-39.7
Total: -25.9
+107.5
+ 89.9
+ 38.1
-35.6
-51.9
-29.3
-39 .3
-45.8
-32.1
-50.8
+ 7.9
+10.4
+11.2
- 5.5
-23.5
- 3.2
-21.6
-12.0
- 5.0
-28.5
-19.5 - 9.4
President Gray testified that in May he held a meeting
with the managers of the Company's three operations at
which there was discussion of the effect of the strike upon
the Company's business and the managers were advised
that they should begin thinking about ways of cutting
expenses, including reductions of personnel.
Gray further testified that about 3 weeks after the end of
the brewery strike, in late June or early July, the Anheuser-
Busch management informed the Company that the
Company had been selected to conduct a test in its market
area to determine the effect of the strike upon sales, and in
support of this test Anheuser-Busch would supply the
Company with all the beer it required. According to Gray,
"as a result of that decision on the part of the brewery and
us becoming this test market, we said, well, we're going to
give it all we got, you know. We're going to see if we can
turn this thing around. So we then approached it in that
light, to give it all we had and see." Gray explained that,
because the market test was intended to develop a true
picture of sales, price-off promotions were forbidden. It
was not until after the sales results for the months of
August through October had been accumulated that
Anheuser-Busch again permitted the Company to stimu-
late sales with a price-off promotion. This was done in
November.7
On August 3 Gray held a meeting with his managers.
Although as of that date the Company had devoted only I
month to its market test, Gray instructed Dan Smith, the
Conroe manager, to submit in writing his recommenda-
tions "on how he could tailor his operation." Gray
suggested that Smith would have to eliminate the two area
supervisors because the Company cannot afford their
overhead. He instructed Smith to "think about relegating
them back to routes, and then see what you can do in the
elimination of a route and still give the best service we
possibly can under the circumstances." 8 Gray did not
I Fairview Hospital, 174 NLRB 924, 926 (1969), enfd. 75 LRRM 2839, 64
LC 1 11,298 (C.A. 7, 1970); Clark Printing Company, Inc., 146 NLRB 121,
122 (1964).
R The improvement for Budweiser beer in the month of April is
accounted for by the fact that inventory which had been accumulated in
anticipation of the stnke was distnbuted in that month.
I In March and June 1975 there had been sales promotions. These
promotions, in part, account for the drop in 1976 sales as compared to 1975
sales for the 2 months. The Company did not submit any figures to show the
effect of the November sales promotion or the companson of sales for
November 1976 with November 1975.
8 Smith's version of what occurred differs as to detail from Gray's
version. According to Smith, "Mr. Gray called me in his office on August
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SOUTHWEST DISTRIBUTING CO.
testify that similar instructions had been given to the
managers of the Houston and the Rosenberg operations.
The next week Smith delivered the following handwritten
memorandum to Gray:
Interoffice memo
AUG. 10-1976
Jack Gray
As we discussed in our meeting in your office 8-3-
76, in order for me to reduce my operating expenses
and to organize my operation to be in line with my
reduced volume, I recommend the following changes to
be made effective on or before 9-1-76.
I. Elimination of package route #5 (my last route
added) and consolidate this area with my remaining
four package routes.
2. Reduction of my keg route as a four day per
week route to a two day route to be pulled by
supervisor Fred Maze-thus eliminating another em-
ployee.
3. In view of my reduced sales volume I do not
need two sales supervisors plus myself. Therefore I
recommend assigning supervisor Fisher (my junior
supervisor) back to a package route from which he was
promoted. This would eliminate another employee.
In my opinion we can still offer adequate service to
my area and certainly cut back on operating expenses
by these moves.
DAN C. SMITH
Although the memorandum contains no projections (1)
as to how much money would be saved by the recommen-
dations (and Jack Gray testified that since it was imple-
mented on September I no computation as to the savings,
if any, have been made), (2) as to the reduction in labor
costs as a percentage of sales, (3) as to the reduction in
labor costs as a percentage of overhead, (4) as to the total
savings as a percentage of sales and as a percentage of
overhead, (5) how the plan would affect the Company's
potential for increasing its sales,9 or (6) how the Company
will "still give the best service we possibly can" despite the
elimination of a route, and although Respondent intended
to give the Anheuser-Busch test, which still had 2 more
months to run, "all we've got," Gray authorized Smith to
implement his proposed plan as of the end of August. Gray
testified that the end of August was selected for implement-
ing the personnel reduction at Conroe because a seasonal
drop in business occurs at that time and it was not until
August 24 that he was able to obtain the approval of the
plan from Basil Georges, the Company's chairman of the
board.
Gray testified that in implementing the plan seniority
was followed because that is the fairest method for
the 3rd and after the meeting. .. he told me to come up within seven days
to have my recommendation as to what we should do. And then I wrote it
out and gave it to him."
9 The evidence is that the two area supervisors whose jobs were
eliminated spent approximately three-fourths of their time promoting the
sale of the Company's products.
1' Gray testified that with respect to its Houston operation the number of
effecting layoffs. Thus the three junior employees were laid
off and the two area supervisors, who had greater seniority,
were demoted. Subsequently, when one of the retained
employees, Alvin Harrison, quit his employment Ammons
was recalled.°0
D. Conclusions
The essential facts are not in conflict. Respondent offers
a superficially reasonable explanation for the August 31
layoffs, namely, that they were effected in order to offset a
sharp decline in business volume. Purportedly the action
taken would result in savings by the elimination of one
truck route and by a reduction in payroll and related
expenses. On the other hand, uncontradicted evidence
adduced by General Counsel points to other reasons for
the layoffs. Although in Houston the Company has had
amicable relations with the Union, nevertheless, it was
opposed to the organization of its Conroe employees.
Conroe Manager Dan Smith understood company opposi-
tion to be very strong as is reflected by his comment to
James Ammons that "I have been employed with this
company a long time, and I feel like that if you don't come
to our side, that my job is in real jeopardy." Smith testified
that he "wanted to win the election." He did not stand idly
by to let his wish develop by itself but took forthright
action directed towards achieving his goal. On August 20
he held a meeting with his employees in which he sought to
dissuade them from supporting the Union. Thereafter, on
August 25 he spoke to Ammons privately about the
subject. On August 30 he questioned warehouseman Watt
as to the union attitudes of the employees and expressed
his bitter disappointment when he learned from Watt that
the drivers favored the Union."
As of prior to September I there were seven employees in
the bargaining unit requested by the Union, namely, the six
drivers and the warehouseman. Based upon his conversa-
tion with Watt, Smith probably assumed that of the seven
only Watt might vote for the Company. However, this
unfavorable situation could be reversed by terminating
three drivers and demoting Maze and Fisher, whose votes
Smith believed would be against the Union, so that the
count would then be three to three.
The timing of the layoffs tends to support such
speculation. The Company received the Union's demand
for recognition on August 18; it probably received the
representation petition about the same time; and only I or
2 days later it received the Board's notice setting the
representation hearing for September 7. If a plan to reverse
what was thought to be an unfavorable position was
conceived it was imperative to put it into effect quickly
before the payroll period for voting eligibility should be
fixed. (The Stipulation for Certification Upon Consent
Election fixed eligibility as the payroll period ending
routes was reduced from 28 to 25 and there was a reduction of 4 helpers
from the 69 employees in the unit.
I Manager Dan Smith testified that he was of the opinion that Maze and
Fisher would vote against the Union, that the Company "didn't have
Kirkland's and Davila's vote," and only after he spoke with Ammons
towards the end of September about the latter returning to work did he form
an opinion that Ammons' vote was on the fence.
641
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
September 5, 1976. Thus, the layoffs and demotions were
effected in the nick of time.)
The Company's explanation for taking the action it did
when it did is weak. (The alleged violation of Sec. 8(a)(3) is
established even if Respondent merely accelerated the date
of an otherwise lawful reduction in its work force.) First,
although Gray testified that August 31 was selected
because there is a seasonal drop in sales after Labor Day,
his testimony does not indicate how deep such fall in
business normally is. In the 15 years that the Company has
been in the beer distributing business it had not previously
laid off employees at Labor Day. Thus, it would seem that
in the year 1976, August 31 was a no better time to effect a
layoff than some weeks later. Had the Company waited a
few weeks it would have had an opportunity to assess
whether there would be a sales decline following Labor
Day. Second, from about July I through October the
Company was engaged in a market test to ascertain the
effect of the brewery strike and was striving to improve
sales without "price-off' promotions. It is not logical that,
in the midst of this test period when it was seeking to do its
utmost to improve sales, it would cut personnel which
necessarily meant a reduction in customer service and also
the elimination of its area supervisors who normally spent
about three-fourths of their time in sales activities. Third,
prior to the personnel changes no projection was made as
to what savings would accrue therefrom and between
September 1 and the date of the hearing the Company had
not calculated the savings. Four, Maze testified that, about
a week before his demotion on August 31, Manager Dan
Smith assured him that he would be reinstated as area
supervisor "if business would pick up," and in the
meantime he was continued in the job of keg routeman at
the same salary he had been receiving as area supervisor.
This suggests that the Company did not plan to keep Maze
on a route indefinitely.12
Upon consideration of all the evidence I find that
Ammons, Kirkland, and Davila were laid off on August 31
not for the reason asserted by Respondent, but in order to
prevent the Union from gaining the support of a majority
of the Company's bargaining unit employees at its Conroe
facility, and by such layoffs Respondent has violated
Section 8(a)(l) and (3) of the Act.
IV. THE REPRESENTATION PROCEEDING
I have found that Respondent on August 31 unlawfully
discharged employees Phillip Z. Davila and Donald L.
Kirkland in violation of Section 8(a)(l) and (3) of the Act.
But for their unlawful discharges they would have been
employed by Respondent during the payroll period ending
September 5, 1976, the payroll period for eligibility as set
forth in the Stipulation for Certification Upon Consent
Election, and would have been eligible to vote in the
12 In its brief Respondent argues: "The union activities of the terminated
employees could not be a factor in Respondent's decision because their
organizational attempts did not start until after the termination decision was
made." This assertion is contrary to the evidence. Company President Gray
testified that the proposal to terminate the three employees was "finalized"
when it was approved by the chairman of the board on August 24, which
was after the Company had received the Union's request for recognition.
The August 10 memorandum from Conroe Manager Smith recommended a
layoff as of September I or earlier. However, the memorandum gave no
election. Accordingly, I recommend that the challenges to
the ballots of Davila and Kirkland be overruled. I further
find that Ronald Fisher and Fred Maze, who were
supervisors within the meaning of the Act on August 31,
were demoted to the nonsupervisory positions left vacant
by reason of the unlawful discharges of employees Davila,
Kirkland, and James Ammons. As the eligibility of Maze
and Fisher to vote in the election depended upon their
transfer to jobs which would not have been vacant but for
the Employer's unlawful discharge of the incumbents, I
recommend that the challenges to the ballots of Maze and
Fisher be sustained. Accordingly, I recommend that the
ballots of Phillip Z. Davila and Donald L. Kirkland be
opened and that such further proceedings be taken in the
matter as shall be appropriate and required under the rules
and regulations of the National Labor Relations Board.
V. THE EFFECT OF THE UNFAIR LABOR PRACTICES
UPON COMMERCE
The activities of the Company set forth in section III,
above, occurring in connection with its operations de-
scribed in section 1, above, have a close, intimate, and
substantial relationship to trade, traffic, and commerce
among the several States and tend to lead to labor disputes
burdening and obstructing commerce and the free flow of
commerce.
VI. THE REMEDY
Having found that Respondent has engaged in unfair
labor practices, I shall recommend that it cease and desist
therefrom and that it take certain affirmative action
designed to effectuate the policies of the Act.
Having found that Respondent unlawfully terminated
James Ammons, Phillip Davila, and Donald Kirkland on
August 31, 1976, I shall recommend that Respondent offer
Davila and Kirkland (Ammons was reinstated on Septem-
ber 28, 1976) immediate and full reinstatement to their
former jobs or, if those jobs no longer exist, to substantially
equivalent positions, without prejudice to their seniority
and other rights and privileges, and make Ammons,
Davila, and Kirkland whole for any loss of earnings each
may have suffered by reason of the discrimination against
him by payment to him of a sum of money equal to that
which he normally would have earned from August 31, the
aforesaid date of his termination, to the date of Respon-
dent's offer of reinstatement, less the employee's net
earnings during such period. The backpay provided for
herein shall be computed on the basis of calendar quarters,
in accordance with the method prescribed in F. W.
Woolworth Company, 90 NLRB 289 (1950). Interest at the
rate of 6 percent per annum shall be added to such
reason for the selection of that date and before implementation it required
approval which was not forthcoming until after August 24.
Respondent argues further: "In fact, the most likely inference that can be
drawn from this record is that the employees turned to the Union after it
became apparent that a reduction in force would occur." This may be true.
But it is irrelevant. The issue is whether a motivating reason for the layoff on
August 31 was to cripple the Union's organizational drive and not whether
the Company, absent any unlawful purpose, would have effected a
reduction of its work force on some later date.
642
SOUTHWEST DISTRIBUTING CO.
backpay and shall be computed in the manner set forth in
Isis Plumbing & Heating Co., 138 NLRB 716 (1962).
Respondent's unlawful activities, including the discrimi-
natory terminations of employees Ammons, Davila, and
Kirkland, go to the very heart of the Act and indicate a
purpose to defeat self-organization of its employees. The
unfair labor practices committed by Respondent are
potentially related to other unfair labor practices proscrib-
ed by the Act, and the danger of their commission in the
future is to be anticipated from Respondent's conduct in
the past. The preventive purposes of the Act will be
thwarted unless the recommended Order herein is coexten-
sive with the threat. Accordingly, in order to make effective
the interdependent guarantees of Section 7 and thus
effectuate the policies of the Act, an Order requiring
Respondent to cease and desist from in any manner
infringing upon the rights of employees guaranteed in the
Act is deemed necessary. N.LR.B. v. Express Publishing
Company, 312 U.S. 426 (1941); N.LR.B. v. Entwistle
Manufacturing Company, 120 F.2d 532 (C.A. 4, 1941).
Upon the basis of the foregoing findings of fact and upon
the entire record in the case, I make the following:
CONCLUSIONS OF LAW
1. By discriminatorily terminating the employment of
James Ammons, Phillip Davila, and Donald L. Kirkland
on August 31, 1976, thereby discouraging membership in
the Union, Respondent has engaged in and is engaging in
unfair labor practices within the meaning of Section 8(a)(3)
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, Respondent has engaged in and is
engaging in unfair labor practices within the meaning of
Section 8(aX 1) of the Act.
3. The aforesaid unfair labor practices are unfair labor
practices affecting commerce within the meaning of
Section 2(6) and (7) of the Act.
[Recommended Order omitted from publication.]
643