American Brake Shoe Co. v. National Labor Rel. Bd.

• Decision Date: 06 May 1957
• Docket Number: No. 11858.,11858.
• Citation: 244 F.2d 489
• Parties: AMERICAN BRAKE SHOE COMPANY (Ramapo Ajax Division), Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.
• Court: U.S. Court of Appeals — Seventh Circuit

244 F.2d 489 (1957)

AMERICAN BRAKE SHOE COMPANY (Ramapo Ajax Division), Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.

No. 11858.

United States Court of Appeals Seventh Circuit.

May 6, 1957.

George B. Christensen, Chicago, Ill., Fred H. Daugherty, David C. Keegan, Chicago, Ill., for petitioner, Winston, Strawn, Smith & Patterson, Chicago, Ill., of counsel.

Marcel Mallet-Prevost, Asst. General Counsel, N. L. R. B., Washington, D. C., Kenneth C. McGuiness, Gen. Counsel, Stephen Leonard, Assoc. Gen. Counsel, Norton J. Come, Alice Andrews, Attys., National Labor Relations Board, Washington, D. C., for respondent.

Before DUFFY, Chief Judge, and LINDLEY and SWAIM, Circuit Judges.

LINDLEY, Circuit Judge.

Petitioner seeks to set aside an order of the National Labor Relations Board wherein it was found to have violated §§ 8(a) (1), (3), and (5) of the National Labor Relations Act. 29 U.S.C.A. § 158. The conduct of which complaint was made was the layoff of employees resulting from the gradual tapering off of production by petitioner, looking to cessation of operations contemporaneously with the expiration of an existing collective bargaining agreement. The Board found that these actions necessarily discouraged union membership, interfered with protected employee rights within the purview of § 7 of the Act, 29 U.S.C.A. § 157, and aborted the bargaining process.

Petitioner operates several plants, including the one in question in East St. Louis, Illinois, where it is engaged in the manufacture, distribution, and sale of railroad equipment such as frogs, switches, and switch stands. It does not manufacture stock in trade, but, rather, produces items on special orders from its customers. The products are not freely interchangeable among the various railroads, but are built to order. Due to climatic conditions, most railroad repair work is done in the spring and summer months. Consequently, it is necessary that production and delivery of such equipment be strictly timed.

At this plant, some 90 people are employed, who are represented by several bargaining units, including the International Brotherhood of Electrical Workers (hereinafter referred to as I.B.E. W.), and International Association of Machinists (hereinafter referred to as the I.A.M.). I.B.E.W. represents 3 employees and I.A.M. 54. In December, 1953, petitioner had separate contracts with each union, which were to expire February 28, 1954. Petitioner had maintained contractual relations with the two unions for some 9 or 10 years.

In the years preceding 1954, the plant had been involved in two major strike situations with I.A.M., the first occurring in 1948, lasting for 6 months, and the second, in 1951, tying up operations for 4 months. In addition, in February 1953, I.A.M. conducted a 10-month strike against another of petitioner's plants located just across the river in St. Louis, Missouri. From the record it is clear that the two strikes had a decidedly adverse effect on petitioner's customer relations, as orders scheduled to be filled were strike bound in the plant, causing a delay in deliveries and a threat of permanent loss of business. Several railroad companies complained that unless assurances of prompt delivery in the future were given, they would be obliged to transfer their business to other competing manufacturers. In addition, one important customer threatened that this was petitioner's "last chance."

In December 1953, I.A.M. notified petitioner and, thereafter, the Federal Mediation Service and the Illinois State Department of Labor, as required by Section 8(d) of the Act, that it was desirous of terminating the current agreement upon its expiration and offered to negotiate a renewal contract in conformity with suggested changes which accompanied the notice. At the first bargaining session, promptly arranged by petitioner for January 5, 1954, the changes advocated were discussed. They were quite extensive in character. Thus, among other demands, I.A.M. sought a 40 cents an hour wage increase, a union shop, dues checkoff, adoption of the Union's welfare plan, additional overtime pay, and double time for holidays. Some of these matters had been in issue in the prior strikes. At this meeting, petitioner, aside from offering to consider the checkoff provision, offered to renew the existing contract. However, at that time, Mr. Clohesy, petitioner's personnel manager and principal negotiator, stated emphatically that the previous strikes had so affected customer relations that it was imperative that negotiations be concluded as speedily as possible in order that the company might safely schedule operations in the plant. He added that no work could be scheduled on any orders which could not be completed by the time the contract was to expire, unless a new agreement could be negotiated. At the next meeting, on January 19th, I.A.M. reduced its wage increase demand to 25 cents an hour and withdrew its double time request. Petitioner adhered to its original position and suggested that its proposals be submitted to the Union's members. At the conclusion, Mr. Clohesy reported to the company's president that it looked doubtful whether the parties would reach a new agreement by the expiration date.

During the latter part of January, petitioner reviewed its pending orders and began to assign to others of its plants orders which could not be delivered from East St. Louis by the time the current contract ended. Due to this transfer of orders to other points, by February 1st, the East St. Louis plant began to run short of work and petitioner began to lay off employees.

At a meeting on February 8th, which was attended by a conciliator, I.A.M. dropped its demand for a union shop as well as the welfare fund issue. After reviewing the positions of the parties, the conciliator informed petitioner's representatives that the only real issue in dispute between the parties seemed to be that relating to wages and that if the company had an offer to make, the opportune time had arrived to submit its proposal. However, the employer refused so to act unless I.A.M. would give assurance that a contract would be signed, if an agreement was reached. Mr. Hamilton, I.A.M.'s representative, agreed. Mr. Clohesy thereupon offered a 4½ cent raise across the board, which the union said would be satisfactory to the production workers but not to the journeymen machinists, as it would leave them relatively lower in the area wage scale generally established by I.A.M., and thus place the union at a disadvantage when bargaining at other places of employment within the area. Nevertheless, Hamilton agreed to submit petitioner's offer to the employees. Once again, petitioner reiterated its position that it did not want to be caught with unfilled orders in the shop as it had been on past occasions, and that, as a result, it was unwilling to commence work it could not complete.

On February 18th, the members of I. A.M. voted to accept petitioner's offer of a 4½ cent raise across the board. However, when Hamilton learned on February 25th that the plant was to be shut down, he informed petitioner that the employees had voted to accept its proposals but that the Union had refused to approve the contract. On February 26th, petitioner laid off all its employees for the announced reason that, as the parties had not arrived at a new contract, production could not continue without assurance of uninterrupted operation. On the day of the shutdown, the employer sought to obtain a signed statement from three of the four members of I.A. M.'s negotiating committee of a no strike assurance, but the committee refused to reduce such an assurance to writing although they stated that the employees would continue to work. A mere oral assurance was unsatisfactory to the company.

At a meeting on March 3rd, the I.A. M. members voted to rescind their action of February 18th whereby they had agreed to accept petitioner's offer, and directed that the company be notified that its offer was acceptable as to production workers, but that negotiations should continue as to the rate for journeymen. Nevertheless, because of the possibility of work interruptions, the company refused to resume scheduling work, but repeated its original offer. Finally, on March 26th, a contract was signed. In the negotiations with I.B. E.W., pursuant to the union's demand for different contract terms, petitioner informed I.B.E.W. as it had I.A.M., that it desired merely a renewal of the present contract, and that, if an agreement with I.A.M. was not reached by the time of expiration of the contract period, it would be forced to close its plant.

It is the contention of the Board that, by announcing that the plant would not continue in operation, because of the possibility of interrupted production, by tapering off the work load of the plant and by the subsequent layoffs, petitioner interfered with the rights guaranteed to the employees under Section 7 of the Act, namely, the right to bargain collectively and to engage in other concerted activity. In addition, it is urged that this course of conduct constituted discriminatory treatment within the meaning of Section 8(a) (3), and represented a refusal to bargain in good faith in violation of Section 8(a) (5).

Before discussing the crucial problems before us, it is necessary to dispose of a problem sensitive in its nature. The trial examiner found that petitioner did not adopt its position for the purpose of exerting economic...