National Labor Relations Board v. Sands Mfg. Co.

• Decision Date: 13 May 1938
• Docket Number: No. 7767.,7767.
• Parties: NATIONAL LABOR RELATIONS BOARD v. SANDS MFG. CO.
• Court: U.S. Court of Appeals — Sixth Circuit

96 F.2d 721 (1938)

NATIONAL LABOR RELATIONS BOARD v. SANDS MFG. CO.

No. 7767.

Circuit Court of Appeals, Sixth Circuit.

May 13, 1938.

Laurence A. Knapp, of Washington, D. C. (Charles Fahy, Robert B. Watts, Thomas I. Emerson, Laurence A. Knapp, and Joseph Rosenfarb, all of Washington, D. C., on the brief), for petitioner.

H. E. Smoyer, of Cleveland, Ohio (Stanley & Smoyer, of Cleveland, Ohio, on the brief), for respondent.

Before HICKS, SIMONS, and ALLEN, Circuit Judges.

ALLEN, Circuit Judge.

This case arises out of a petition by the National Labor Relations Board to enforce its order, and a cross-petition by respondent, praying for review of such order. The Board issued a complaint against respondent at the instance of the Mechanics Educational Society of America, a labor organization (hereinafter called the MESA), alleging that respondent had violated section 2, subdivisions (6) and (7) and section 8, subdivisions (1), (3) and (5) of the National Labor Relations Act, title 29, §§ 151 et seq., U.S.C., 29 U.S.C.A. § 151 et seq. and sections 152(6, 7), 158(1, 3, 5).

A hearing was held before the trial examiner, who decided that respondent had locked out, discharged, and refused to employ some forty-eight of its employees, and had interfered with, restrained and coerced its employees in the exercise of their rights to organize and bargain collectively, had discouraged membership in the MESA, and had thus engaged in unfair labor practices within the meaning of the statute. Because of his opinion that much of the difficulty might have been avoided by the employees themselves, the examiner recommended their reinstatement without back pay. The Board approved the examiner's findings, and decided in addition that respondent had refused to bargain collectively with MESA as the exclusive representative of its employees, in violation of subsection (5) of section 158, title 29, U.S.C., 29 U.S.C.A. § 158(5), and ordered reinstatement of the employees with back pay from September 3, 1935, to the date of offer of reinstatement.

Respondent manufactures heaters, valves and parts. The plant is small, the number of employees varying roughly from 30 to 85, according to the volume of orders. It is subdivided into departments, such as the machine shop, coil, tank heater, and assembly departments, in which the work performed varies in its nature. In the machine shop raw material and certain parts are machined and fabricated, and the stock is prepared which is assembled and processed in the other departments.

Early in 1934 practically all of the employees joined the MESA, and designated three of their number as a committee to represent them for purposes of collective bargaining. No question is raised as to the committee's authority. Respondent immediately recognized and conferred with the shop committee whenever requested to do so. The parties operated under a mutual agreement for increase in wages from May 2, 1934, until May, 1935. In the fall of 1934 the MESA agreed that respondent could hire additional workmen to fill a projected Government order, on condition that it discharge such additional men when the order had been completed. This promise was carried out by the management. Practically all of the men newly hired became members of the MESA, and respondent in no way opposed this membership. In May, 1935, the shop committee asked for a wage increase, and when this was denied, called a strike on May 21, 1935. Negotiations continued during the strike, and an oral agreement was entered into under which the strikers returned to work on June 3, 1935, but struck again on June 6th, because respondent had refused to reinstate seven of the strikers. Respondent claimed that these men were inefficient, and Potter, representative of the MESA, said that several of them might be incompetent.

Further negotiations were held, and the contract of June 15, 1935, resulted. It was drafted by the shop committee of the MESA, certain changes being made at the insistence of respondent. The contract provided for an increase of wages, for the discharge of certain employees objected to by the shop committee, and otherwise regulated the conditions of employment. The employees, including the seven whom respondent wished to discharge, then returned to work.

By the middle of July respondent had filled the orders accumulated during the strikes, and after conference, the men in its tank heater department, with the exception of the foreman, were laid off, and the plant was operated on a schedule of three days a week. Respondent wished to increase the force in the machine shop in order to prepare stock, and to employ for that purpose new men experienced in machine shop work, instead of transferring old men from other departments, claiming that the contract of June 15th entitled it to this method of operation. At this time a number of the machine shop employees were members of the International Association of Machinists affiliated with the American Federation of Labor. The shop committee contended that under the contract no new men could be hired for the machine shop so long as old men in other departments of the plant were not employed.

Additional conferences were held on the subject, in which the views of the employer and the employees were diametrically opposed, both as to the meaning of the contract, and as to whether respondent should hire new men for the machine shop. The discussions were held at frequent intervals until August 19, 1935, when the shop committee was asked by the management to consult with the men and report whether they desired that the working force in the machine shop should be increased by new men while other departments were temporarily shut down, or that the whole plant should be temporarily shut down. The committee stated that it preferred that the plant be shut down. Respondent closed its factory on August 21st. Shortly thereafter it negotiated an agreement with the International Association of Machinists, and sought experienced machinists through the Cuyahoga County relief organization. On September 3d the respondent opened its machine shop, invited a number of its former machine shop employees all members of the International Association of Machinists to return to work, but filled other places in the machine shop with new men instead of calling old men from other departments of the plant. Forty-eight men, all members of the MESA were not recalled. Respondent offered individual contracts to four of the old MESA men whom it wished to employ as foremen. To two of them the offer was made upon the condition that they join the International Association of Machinists.

Upon these facts the Board found that the respondent had refused to bargain collectively with the representative of its old employees; that the old employees were locked out, discharged and refused employment because they were members of the MESA; that by failing to recall its employees who were members of the MESA and by requiring that certain of them join the International Association of Machinists as a condition of employment, respondent discriminated against its employees in regard to tenure of employment and thereby discouraged membership in the MESA, and that by all of these acts respondent interfered with, restrained and coerced its employees in the exercise of the rights guaranteed under the statute.

The findings of the Board as to the facts, if supported by evidence, are conclusive. The court may not, by substituting its own conclusions, reverse the Board's findings unless the evidence affords no reasonable basis for them. Agwilines, Inc., v. National Labor Relations Board, 5 Cir., 87 F.2d 146, 151. The contention here is that the Board refused to make certain findings supported by the evidence, and that its conclusions either are based on no evidence, or are contrary to the Board's own findings of fact. The facts for the most part are not in dispute, and the principal question is whether the Board's findings, taken together with the admitted facts, compel a different conclusion.

Refusal to Bargain Collectively

The Board found that respondent had refused to bargain collectively with the representatives of its old employees.¹ This finding is based on the fact that Potter, state chairman of the MESA, and a former employee of respondent, on September 4th, over the telephone, asked for a meeting with respondent, which the management refused. The shop committee (the MESA committee of the plant) never communicated with respondent after this time, but picketed the plant immediately. The finding is also based upon respondent's negotiations with the other union affiliated with the American Federation of Labor and the replacement of members of the MESA with new men and offer of individual contracts to four of the old employees after the layoff of August 21st. The last element in this finding may be briefly dealt with. The National Labor Relations Act does not prevent the employer from hiring individuals on whatever terms he may by unilateral action determine (National Labor Relations Board v. Jones & Laughlin Steel Corporation, 301 U.S. 1, 45, 57 S.Ct. 615, 628, 81 L.Ed. 893, 108 A.L.R. 1352), and the offer of individual contracts to the four old employees was not illegal.

The legal effect of the refusal to meet with Potter, of the replacement of the old men with new men, and of the negotiations with a different union, depends upon whether the MESA and the employees had violated their contract prior to August 21st, thereby entitling respondent to abrogate the contract so that the old men were no longer its employees. The Board stated that although it believed that an honest difference of opinion existed on the construction of the contract, it did not alter the case if the shop committee was considered to have violated the agreement. We disagree with this view. While the statute creates new and important rights for labor, it does not abrogate the correlative...