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National Labor Relations Board v. Poultrymen's Service Corporation.

September 28, 1943

NATIONAL LABOR RELATIONS BOARD
v.
POULTRYMEN'S SERVICE CORPORATION.



Appeal from National Labor Relations Board.

Author: Biggs

Before BIGGS, JONES, and DOBIE, Circuit Judges.

BIGGS, Circuit Judge.

The respondent has a mill at Toms River in Ocean County, New Jersey. From 1930 to 1940, inclusive, its employees, including executives, office employees, salesmen, mill hands and truck operators varied in number from eleven to thirty. The respondent mills, mixes, bags, retails and distributes poultry and dairy feed wholly within the State of New Jersey. None of its finished products has ever been sold outside of New Jersey. It purchases its raw materials (grains) in States other than New Jersey. In 1940, for example, the respondent bought over 533,000 bushels of grains of a value in excess of $390,000.

The respondent takes the position that it is not engaged in interstate commerce and therefore is not subject to the jurisdiction of the Board.It sells its finished products in intrastate commerce and alleges that a curtailment of its operations by reason of any unfair labor practices upon its part (which it denies have occurred) will not "affect" the flow of interstate commerce within the purview of Sections 1 and 10 of the National Labor Relations Act, 29 U.S.C.A. §§ 151 and 160. The facts of National Labor Relations Board v. Suburban Lumber Co., 3 Cir., 121 F.2d 829, 831-833, certiorari denied 314 U.S. 693, 62 S. Ct. 364, 86 L. Ed. 555, are very close to those of the case at bar, though as the respondent points out, in that case Suburban Lumber Company did deliver a very small portion of the company's finished products to points outside of New Jersey. The case is on all fours, however, with the decision of this court in National Labor Relations Board v. Kudile, 3 Cir., 130 F.2d 615, certiorari denied 317 U.S. 694, 63 S. Ct. 436, 87 L. Ed. . What we said in the Kudile case need not be repeated here. We hold, therefore, that the Board had jurisdiction of the respondent.

The Board found that the respondent violated Section 8(1) of the Act, 29 U.S.C.A. § 158(1), by interfering with the right of its employees as to organization and collective bargaining; violated Section 8(5) of the Act, 29 U.S.C.A. § 158(5), by refusing to bargain collectively with United Cannery, Agricultural, Packing and Allied Workers of America, a union affiliated with the Congress of Industrial Organizations; and violated Section 8(3) of the Act, 29 U.S.C.A. § 158(3), by refusing to reinstate a group of employees who had gone out on strike because of the respondent's allegedly illegal refusal to bargain with the union.*fn1 We shall discuss these charges and the proof offered in support of them together, since many of the facts relate to one or more of the charges.

Leonard Goldsmith, a CIO representative, began to organize the respondent's employees in September, 1940. By September 28th about twenty-five of them had joined the union. This was a large majority. On September 29th a shop committee was elected at an organization meeting and on September 30th Goldsmith wrote a letter to Harry K. Bisbee, the president of the respondent and stated that the union had been designated by a majority of the employees as their collective bargaining agent.Goldsmith's letter also included the statement that he would like to arrange for an appointment with Bisbee for the purpose of negotiating a contract to cover wages, hours, and working conditions of the employees. Goldsmith suggested Friday, October 4th as a meeting day. Bisbee replied to this letter on October 2d, stating in part, "I would like to state for your information that we have a committee representing our employees that meet with the management from time to time and up to this date no request had been made that has not been carefully considered and satisfactory arrangements made. Therefore, it would be a waste of your time as well as the writer's to arrange for an appointment." The statement of the letter that a committee of employees had met with the management from time to time to resolve grievances was not correct.Upon the receipt of Bisbee's letter, Goldsmith telephoned to him and asked again for a meeting. Bisbee refused to meet Goldsmith. When Goldsmith threatened a strike Bisbee said "Go ahead". This constituted the respondent's first refusal to bargain collectively with the union.

A strike followed immediately, which resulted in a complete walk-out at the respondent's plant. On the following day, October 4th, a meeting was held between Bisbee, the plant manager, Leet, the chairman of the board of directors, David Veeder, an attorney representing the company, and another director. The union was represented by three members of the shop committee, including Huhn, the chairman, and Collins, Gatch, and Goldsmith.A temporary written agreement was immediately executed providing for a truce to terminate on October 20th. The agreement also provided, among other things, for immediate recognition of the union grievance committee, establishment of a seniority list, promotions upon the basis of seniority and for the commencement of negotiations. The strikers returned to work within a few hours after the conclusion of the temporary agreement on October 4th. Veeder was designated by the respondent's board of directors to represent the respondent in negotiations with the union.

Negotiations did in fact take place. But on October 7th Veeder prepared and distributed to the stockholders a notice of a special meeting of stockholders to be held on October 18th. The notice is long and its contents need not be repeated here. It set before the stockholders four possible courses. One of these was the recognition of the union; the second and third proposals provided for a dissolution of the corporation. The fourth posed the question, "Shall we refuse to recognize the Union and call upon the law to protect us, and resume business on whatever reduced scale we may find necessary?" The notice also stated, "It may be that our period of usefulness is over. War preparedness is being taken advantage of by some labor agitators to create unrest. Labor trouble may be a serious factor in the future. If our company is dissolved now, what assets we have will be available for distribution among the stockholders." The Board found the "tone and content" of this notice to be obviously anti-union. This conclusion is justified. Three of the four proposals indicate that Veeder was contemplating a course of conduct which did not include negotiation of a contract with the union, despite the fact that the temporary written agreement signed by the respondent expressly provided that "The Company agrees to commence negotiations on a contract between the Company and the Union covering wages, hours, and working conditions on Monday, October 7, 1940, and such negotiations [are] t proceed without delay." The respondent, therefore, putting the very best light upon its conduct, was of a divided mind. It would negotiate with the union or it would not negotiate with the union but would dissolve. Viewing the facts in a less favorable light, one might reach he conclusion that the respondent did not intend to negotiate with the union and made the temporary agreement solely in order to relieve itself of a difficult position and get its employees back to work.

On October 4th, Goldsmith had submitted proposals for a permanent agreement. These were examined by Veeder who told Goldsmith that the demands for wage increases were too high and that the company's profits and financial structure could not possibly justify any such wages as were demanded in the proposal. It appears that Goldsmith then said to him, "We are not unreasonable. We don't expect you to pay more than your earnings and financial structure would permit." Veeder then said to Goldsmith, "If that is the case we ought not to have any difficulty in getting together * * * ". Veeder offered to have a statement of the respondent's earnings prepared for the union's information. This statement was sent to Goldsmith with a letter dated October 11th in which Veeder made the following statement, "I am finding it most difficult to draft any counter-proposal which will in any substantial measure meet your demands and which we will at the same time have a reasonable chance of having accepted by the stockholders of this Company." On October 14th Veeder did submit a counterproposal which made no provision for an increase in wages, but which did provide for a union shop and certain other rights.

The union representatives contended that "this was not collective bargaining", that the board of directors had power to act in respect to the union's demands and that the letter to the stockholders indicated that the respondent was not acting in good faith. The Board found as a fact that the company's attorney, Ewart, took the position that the respondent did not have to bargain with the union because it was not engaged in interstate commerce. According to Goldsmith "the conference broke up when Judge Veeder informed us that there were no wage increases in the wind at all".

As we have stated, Veeder had submitted to the union on behalf of the respondent counterproposals which among other things provided for a union shop, seniority rights and union grievance machinery, but none the less when the stockholders met they adopted a resolution, apprarently prepared by Veeder, in which the stockholders "unconditionally rejected" the proposals for a union shop, seniority security, consultation with union representatives on discharges, and other proposals. The resolution also provided, "Be it further resolved that it is the sense of this meeting of stockholders that a fair and living wage should be paid to its employees consistent with its earnings and financial structure, and the Board of Directors be and they are hereby instructed to work out a fair and equitable arrangement with such of its men as may return to work by Monday morning next at 8 A.M." The resolution also provided that the officers should be instructed to make every reasonable effort to keep the mill in operation but that if every effort made to that end should prove unavailing that the company should dissolve forthwith.

The stockholders' resolution does not refuse in express words to bargain with the union, but the refusal to grant a union shop, seniority and job security provisions, coupled with the threat of dissolution of the company and the instruction to officers to "work out", i. e., to negotiate an arrangement with such men as returned to work on the following Monday, would seem to us to justify a conclusion that the respondent did not intend to negotiate further with the union. Since recognition of the union is an essential of collective bargaining, refusal to acknowledge the union vitiated the sincerity of any negotiations by the company. National Labor Relations Board v. Griswold Mfg. Co., 3 Cir., 106 F.2d 713, 715; McQuay-Norris Mfg. Co. v. National Labor Relations Board, 7 Cir., 116 F.2d 748, 751. It is probably the case as Veeder stated that he would have been able to have mitigated the effect of the rejection by the stockholders of some of the provisions which the union desired, but while bargaining in a labor dispute can and must be conducted at arm's length, it must be conducted in good faith. National Labor Relations Board v. George P. Pilling & Son Co., 3 Cir., 119 F.2d 32, 37. We think there is definite evidence in the conduct of the respondent's bargaining representatives that the real purpose of the stockholders' resolution was to discourage the respondent's employees with the efforts of the union on their behalf and to enable the officers of the company to negotiate a contract with an association comprised of its own employees and not affiliated with an outside union.

Strong support is given to this view by the actions, on the morning after the stockholders' meeting, of Page, a stockholder of the respondent, and Hecht, one of the respondent's contract truckers and the brother of one of its directors. These two men went into the plant on Monday and informed the employees that the respondent would not deal with the CIO. They both indicated the belief that the employees would be best served by a company union. The shop committee felt some doubt as to whether or not Page and Hecht possessed authority to represent the respondent. Page thereupon talked to Leet, the plant manager, who indicated according to Page's testimony, that he was willing that Page might be put in a position "whereby the boys would deal with the company".*fn2 Thereafter Veeder gave a copy of the stockholders' resolution to Huhn, chairman of the shop committee, and stated according to Huhn's testimony that he, Veeder, "could not act outside of the scope of this resolution". Huhn also testified that at this meeting he told Veeder that he would consult the men and inform him, Veeder, whether the employees would form a company union or "stay with the CIO". A meeting of the employees was held later that same day. Huhn believed (according to his testimony both Page and Leet had told him so) that ...


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