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Gear v. National Labor Relations Board

July 24, 1940


Petitions for Review of Orders of National Labor Relations Board.

Author: Evans

Before EVANS, MAJOR, and TREANOR, Circuit Judges.

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*fn* (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.*fn** 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 man; (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 repuration 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 subject. 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. 1978 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 and the office forces are largely made up of highly skilled specialists. In the former are many skilled mechanics and machinists, and in the latter there are many engineers and draftsmen. Men are often shifted from department to department, both in the office and in the shop.

In 1934, with the inauguration of the National Industrial Recovery Act, 48 Stat. 195, the employees in the shop became interested in organizing a union.A union to be affiliated with the American Federation of Labor was first contemplated, and a circular to this effect was passed amoung the man. About this time, a meeting was called (it is not clear by whom it was called) among the shop men. both William Barr, then superintendent, and Franklin Harper Fowler, president, spoke to the men. There is some controversy as to just what these officials said.barr testified that he told the men that the business was "in a very, very had shape," and that "every man in it would have to buckle down to his work and give every bit that he could to the management." Two other witnesses, Stout and Matoska, testified that Barr also said something to the effect that he didn't care which way the men went (in organizing) but that they should make it 100%, as he didn't want any trouble. Fowler is reported to have said, that he would never deal with outside unions. This, he denied at the hearing. There is also evidence to the effect that Fowler mentioned the possibility of forming a union without paying any dues. This was back in 1934.

In any event, the men "talked it over," and, after contacting a business agent of the American Federation of Labor, who told them that the monthly dues would be $7.50, which seemed high, as "there was not much steady work," an election was held the following day to determine the type of organization the shop would have. As a result of the election, a company representation plan was set up. It began to function sometime in April , 1934.

This representation plan did not require dues. Yearly elections of committee men were held, and this committee met twice monthly with the management to settle grievances and other problems, including hours of work, etc. This plan continued to function, although after the National Industrial Recovery Act was declared unconstitutional, interest in the plan fell off. When the National Labor Relations Act was finally upheld by the Supreme Court, April 12, 1937, the management consulted its attorneys. On May 6, 1937, Barr called a meeting of the plan's committeemen and read to them a statement which had been prepared by employer's counsel.

The statement declared that the management had been informed by its counsel that, under the Wagner Act, the representation plan was legally entitled to recognition if it was supported by a majority of the employees involved, but that certain organizational defects existed concerning which the employer could not advise its employees. It was suggested that a competent lawyer of the employees' own choosing be consulted.

Barr stated that he refused to make further comments to the men at this time concerning future organization in the shop, and that he instructed his foremen to keep their hands off and to keep out of all controversies. However, no organizing was to be allowed during working hours.

Carl Egner, a shop employee and former chairman of the representation plan committee, testified that after Barr had read the prepared statement to the committeemen, the men talked things over, and, he said:

"We found out that the only thing we could do was to seek advice from the outside as to what we could do, and we knew from the feeling, being committeemen, that the majority wanted to be independent of any outside organization. That was the feeling at the time. There had been talk all through the shop; we, like everybody else, read the papers, found out there was a lot of labor trouble in different places, and different groups get together and talk and we thought the thing to do was to be by ourselves."

Egner and three other members of the now defunct plan committee apparently took it upon themselves to take the initiative in forming a new union. Some friend or acquaintance mentioned the name of an attorney, Wham, to Egner, although another attorney had been suggested. It was learned that Wham had set up an independent union at the Chicago plant of Link Belt Company. Accordngly, Egner and four committeemen went to Wham's office, Saturday, May 8. There, after considerable discussion, it was decided to form the Independent Union. Wham drew up a constitution. Membership forms were obtained. The following Monday, Egner, six other former committeemen, and one other employee, started to campaign for members. Here again the evidence becomes somewhat confused and indefinite. However, it appears that Monday, Tuesday, and Wednesday, May 10, 11, and 12, were spent in more or less active campaigning. Egner testified that this was done under cover. A man would be approached here and there, at off moments, and asked to join. Heberlein, one of the campaigners, testified:

"There were rumors through the shop that we were organizing an Independent Union. * * * I explained that our Union (representation plan) was no good. * * * They were willing to sign."

The foremen of Employer, Rassau, Mackmann, and Schuessler, testified that they broke up gatherings whenever formed by the men as quickly as they could. These men evidently sensed what was n the air, but faithfully endeavored to keep the men at their work and to avoid partisanship in union matters.

By Wednesday or Thursday afternoon the organizers had 210 signed membership cards - a clear majority of the 280 shop employees, and also of the entire company of 355 employees. However, at this point, no solicitations ...

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