Foote Bros. Gear & Mach. Corp. v. National Labor R. Board

Decision Date09 December 1940
Docket Number7252.,No. 7088,7088
Citation114 F.2d 611
PartiesFOOTE BROS. GEAR & MACHINE CORPORATION v. NATIONAL LABOR RELATIONS BOARD. INDEPENDENT UNION OF GEAR WORKERS v. NATIONAL LABOR RELATIONS BOARD et al.
CourtU.S. Court of Appeals — Seventh Circuit

Grier D. Patterson and George B. Christensen, all of Chicago, Ill. (Winston, Strawn & Shaw, of Chicago, Ill., of counsel), and Benjamin Wham and Edwin W. Burch, both of Chicago, Ill., for petitioners.

Charles Fahy, Gen. Counsel, Robert B. Watts, Associate Gen. Counsel, Malcolm F. Halliday, Asst. Gen. Counsel, Laurence A. Knapp, Asst. Gen. Counsel, and Allen Heald and Marcel Mallet-Prevost, Attys., all of Washington, D. C., for National Labor Relations Board.

Before EVANS, MAJOR, and TREANOR, Circuit Judges.

Writ of Certiorari Granted December 9, 1940. See 61 S.Ct. 318, 85 L.Ed. ___.

EVANS, Circuit Judge.

The proceedings before us were instituted for the purpose of setting aside an order of the National Labor Relations Board which covered the alleged anti-union labor activities of Foote Bros. Gear and Machine Corporation (hereinafter called the Employer). Both the Employer (No. 7088) and the Independent Union of Gear Workers (No. 7252) applied to this court for an order setting aside the order of the Board.

The Board answered and at the same time through a cross bill sought enforcement of its order.

The first complaint filed against the Employer was dated December 30, 1937, and amended January 5, 1938. It charged the Employer with a refusal to bargain collectively with the United Office & Professional Workers of America, Local No. 24* (hereinafter called the "U. O. P. W.") as the exclusive collective bargaining representative of the Employer's office and clerical workers (except engineers, draftsmen, outside salesmen, and supervisory employees who were not admitted to membership in the union) although the U. O. P. W. had been designated by a majority of such employees as their representative; that the Employer had discharged three of its employees, Theodore Rakowski, Raymond Hartman, and S. Rice, because they had joined and assisted in organizing the U. O. P. W.; and that the Employer had fostered, promoted, dominated, and interfered in the formation and administration of the Independent Union, and had entered into a contract with the latter, recognizing it as the exclusive bargaining agent of all of its employees, both in its shop and office.

The second complaint, issued January 25, 1938, was based upon charges filed by the Amalgamated Union of Iron, Steel, and Tin Workers of North America, Lodge No. 2048 (hereinafter called "Amalgamated"). It alleged that the Company had discharged Adolph Matoska because of his activities in joining, and assisting in the formation and organization of the Amalgamated, and further that the Employer had engaged in concerted activities designed to discourage membership in the Amalgamated.

The Independent Union was granted leave to intervene as to matters affecting its interests, and, subsequently, the cases based upon the two complaints were consolidated for the purposes of the hearing, which was held in Chicago, commencing January 10, 1938.

The examiner filed his intermediate report on March 28, 1938, and subsequently, on August 24, 1939, the Board handed down its decision and order. The order called for the Employer to cease and desist from: (a) Dominating or interfering with the administration of the Independent or any other labor union of its employees, or contributing to the support of such union or unions; (b) encouraging or discouraging membership in any labor organization of its employees, including the Amalgamated, by discharging or refusing to reinstate employees; (c) giving effect to the collective bargaining contract entered into with the Independent Union; (d) refusing to bargain collectively with any bona fide labor organization of its employees properly designated by them as their representative; (e) in any other manner interfering with the rights of its employees in the exercise of their right to self organization.

The order also called for the Employer to take affirmative action: (a) Withdraw all recognition of the Independent as the representative of its employees for the purpose of collective bargaining; (b) pay to each person in its employ after May 28, 1937, an amount of money equal to the sum of all the dues deducted from the wages and salaries of such persons since May 28, 1937, on behalf of the Independent Union; (c) offer to Theodore Rakowski and Adolph Matoska and to each of them full and immediate reinstatement to their former or substantially equivalent positions without prejudice to their seniority or other rights with back pay, less what they have earned in the meantime; (d) post, as amended, appropriate notices.

The complaint of December 30, as amended, in so far as it alleged that the Employer engaged in unfair labor practices in refusing to bargain collectively after June 1, 1937, with the U. O. P. W. was dismissed. It was also dismissed in respect to the discharge of Raymond Hartman and S. Rice.

Employer is a Delaware corporation licensed to do business in the state of Illinois, and also in Minnesota and Texas. It maintains a plant in Minneapolis and one in Chicago. The proceedings here concern only the latter. It was incorporated, December 2, 1935. Prior to December, 1932, its business and properties were owned by Foote Brothers Gear and Machine Company, an Illinois corporation. It went into receivership in December, 1932, and was subsequently reorganized. Since March 13, 1936, when the reorganization was consummated, it has been the Company against which the complaints, here involved, were issued.

Employer is engaged in the manufacture of gears, speed reducers, machinery, and other special products, produced chiefly to customers' specifications. For the fiscal year ending October 31, 1937, its sales of finished products amounted to approximately $2,004,000, of which about $1,900,000 was shipped to customers outside of the State of Illinois. During this period, it purchased approximately $950,000 worth of raw materials for use in its regular course of manufacture, of which about $500,000 worth was purchased outside the State of Illinois. The Act is, we think, clearly applicable to the Company and its employees. Section 10(a), National Labor Relations Act, 49 Stat. 453, 29 U.S.C.A. § 160(a); National Labor Relations Board v. Jones & Laughlin Steel Co., 301 U.S. 1, 57 S.Ct. 615, 81 L.Ed. 893, 108 A.L.R. 1352; Santa Cruz Fruit Packing Co. v. National Labor Relations Board, 303 U.S. 453, 58 S.Ct. 656, 82 L.Ed. 954; National Labor Relations Board v. Fainblatt, 306 U.S. 601, 59 S.Ct. 668, 83 L.Ed. 1014.

The issues raised here are: (1) Did the Employer indulge in unfair labor practice by dominating and interfering with the formation of the Independent Union within the meaning of Section 8(1), (2) of the Act? (2) Did it discriminate against the Amalgamated by the discharge of Adolph Matoska for union activities within the meaning of Section 8(3) of the Act? (3) Did the Employer unlawfully discharge Theodore Rakowski for union activities within the meaning of Section 8(3) of the Act? 29 U.S.C.A. § 158(1-3).

The Board based its order upon findings to the effect that (1) the Employer's policy before May, 1937, was anti-union, and this policy was impressed upon its employees; (2) the Independent Union was formed with Employer's aid to forestall the attempts of the S. T. B. A. and the Amalgamated to organize the men; (3) the Independent was deliberately recognized as the exclusive bargaining agent of the office and clerical employees of Employer because of the efforts of the S. T. B. A. to secure an exclusive bargaining contract with the Employer. At the time of recognition, the Independent had no members in the office; (4) Rakowski was discharged because of his "dangerous activities" on behalf of the S. T. B. A.; (5) Matoska was discharged because of his leadership in the Amalgamated, and his "dangerous activities" in its behalf. Both Rakowski and Matoska, the Board alleges, were outspoken in their contempt for the Independent as a bona fide labor organization, and were eliminated before they could do further damage to the reputation of the Independent.

Petitioners deny there is substantial evidence to support these findings, and assert that the evidence clearly shows that the management pursued throughout the entire period, "a hands off" policy toward the organizational activity of all groups, including the S. T. B. A., the Amalgamated, and the Independent, and at all times entertained and evidenced a neutral attitude to their employees with regard to controversial union subjects. They further insist that the Independent is not Employer-dominated, but that, instead it was of voluntary origin. It was freely selected by an overwhelming majority of the employees as their bargaining agent and was recognized as such by the Employer because of the provisions of the National Labor Relations Act which dictated their action. They also assert that Rakowski and Matoska were both laid off, for just causes.

Bearing in mind the limited jurisdiction of this court in reviewing the evidence (Consolidated Edison Co. v. National Labor Relations Board, 305 U.S. 197, 229, 59 S.Ct. 206, 83 L.Ed. 126; National Labor Relations Board v. Columbian Enameling and Stamping Company, 306 U.S. 292, 300, 59 S.Ct. 501, 83 L.Ed. 660; M. H. Ritzwoller Company v. National Labor Relations Board, 7 Cir., May 8, 1940, 114 F.2d 432; Fort Wayne Corrugated Paper Company v. National Labor Relations Board, 7 Cir., 111 F.2d 869, we search the record to determine whether the necessary quantum of supporting evidence can be found to sustain the Board's findings.

On May 1, 1937, 355 persons were employed at the Chicago plant, of which 280 worked in the shop and 75 in the office. Both the shop...

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