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National Labor Relations Board v. Condenser Corp.

March 25, 1942


Appeal from the National Labor Relations Board.

Author: Goodrich

Before BIGGS, MARIS, CLARK, JONES, and GOODRICH, Circuit Judges.

GOODRICH, Circuit Judge.

In this proceeding by the Labor Board against the above named parties, the Cornell-Dubilier Electric Corporation (referred to hereafter as Cornell) disclaims liability on the ground that it is not an employer within the meaning of § 2(2) of the Labor Relations Act, 29 U.S.C.A. § 152(2). It argues, therefore, that it is not responsible for the unfair labor practices charged. The relationship of Cornell to the other corporate respondent, the Condenser Corporation, and the former's interest in the latter, cannot fairly be described, as the respondents seek to characterize it, as that of a customer in the manufacturer's product. Condenser, a New York corporation, does the manufacturing. Cornell, a Delaware corporation, purchases materials and sells them at cost to Condenser. The manufactured goods are acquired by Cornell from Condenser at the latter's cost and are then sold by Cornell. In February, 1937, the two corporations became affiliated through common ownership of their stock. Since August 28, 1937 Condenser has been a wholly owned subsidiary of Cornell.

When the hearings in this proceeding were instituted in February, 1937, Condenser was the sole respondent; Cornell was not brought in and the Brotherhood*fn1 did not intervene, until June. The Board has limited its consideration of the evidence to that adduced subsequent to the joinder of Cornell and the Brotherhood so far as these parties are concerned. With respect to the discriminatory discharges of employees proved at the first hearing the Board's order is limited to Condenser.

Under these circumstances we believe the relationship of these two corporations is such that an order pursuant to the provisions of the statute is proper against both, in view of the careful limitation which the Board has made with regard to the discharges. This is in no sense a penalty against the parties for an arrangement which is deemed by them to be in the interests of efficiency. It simply rests on the premise that where in fact the production and distribution of merchandise is one enterprise, that enterprise, as a whole, is responsible for compliance with the Labor Relations Act regardless of the corporate arrangements of the parties among themselves. What is important for our purpose is the degree of control over the labor relations in issue exercised by the company charged as a respondent. Press Co., Inc., v. National Labor Relations Board, 1940, 73 App.D.C. 103, 118 F.2d 937. Regardless of what Cornell says concerning its connection with Condenser's employees it appears that "together, respondents act as employers of those employees * * * and together actively deal with labor relations of those employees". National Labor Relations Board v. Pennsylvania Greyhound Lines, Inc., 1938, 303 U.S. 261, 263, 58 S. Ct. 571, 572, 82 L. Ed. 831, 115 A.L.R. 307. Evidence of this is abundant. Some is manifest from our discussion, later in this opinion, of various aspects of union activity and employer interference. It will suffice at this time to point out that Cornell's officers were very active in dominating the original local union, Independent, and again, in bringing negotiations with that group's successor, Brotherhood, to a culmination. It is noteworthy, too, that the reinstatement of some of the men first discharged was arranged with Cornell's president, Mr. Blake. This and similar evidence is controlling in our disposition of the question of Cornell's status as an employer. As has been said, " * * * the problem is not to be approached from the standpoint of vicarious liability." Consolidated Edison Co. of New York, Inc., v. National Labor Relations Board, 2 Cir., 1938, 95 F.2d 390, 394, modified on another point, and affirmed, 1938, 305 U.S. 197, 59 S. Ct. Ct. 206, 83 L. Ed. 126.*fn2 It is rather a matter of determining which of two, or whether both, respondents control, in the capacity of employer, the labor relations of a given group of workers. National Labor Relations Board v. Lund, 8 Cir., 1939, 103 F.2d 815, 819.

Furthermore, the finding of fact that respondent, Cornell, as an employer within the meaning of § 2(2) of the Labor Act, has committed certain unfair labor practices, is a finding which, like other findings of fact, is for the Board to make and for us merely to review from the standpoint of supporting substantial evidence. Bethlehem Steel Co. v. National Labor Relations Board, 1941, 74 App.D.C. 52, 120 F.2d 641. We find such evidence in the record before us.

Respondent Interference with Employee Organization

The Board has found that the respondents have been guilty of unfair labor practices by interfering with employees in the formation of a labor organization. This is in violation of employees' rights, guaranteed by the statute, to conduct their organization and collective bargaining through representatives of their own choice.

The Board's conclusions on this part of the case seem to us abundantly clear and to say that they are supported by substantial evidence is a cautious understatement. Some of the pertinent facts with regard to employer interference appear in the discussion, later in this opinion, concerning discharges of individual employees. The beginning of the series of events leading to the discharges and culminating in the Board's order is as follows: One of the principal actors in the present drama is Mr. Frank Diana, a citizen of South Plainfield, New Jersey. Mr. Diana, acting on behalf of the South Plainfield Chamber of Commerce, was instrumental in inducing the respondents to come to South Plainfield. He played an important part also in the securing of a reduction of the tax assessment on the site occupied by the plant and was likewise active in helping to procure employment there for local people. After the discharge of Hughes (described below) it was not long before Diana was found engaged in matters pertaining to labor affairs. It was through his intervention, as appears below, that some of the discharged men were reinstated. At the meeting with these men the day before their return to work there was discussed the possibility of forming an organization which would deal with the workers' grievances without getting them discharged. It is a matter of dispute whether the original suggestion came from Diana or the men. In any event, at the interview the following morning with Cornell's president, Blake, the latter said he had no objection when Diana said the "boys wanted to have an organization there, and were going to organize the workers in the plant." It is significant that by this time, the organization of United had already culminated in the issuance of a charter by the United Electrical and Radio Workers of America, the election of the officers of the local and a request by United to negotiate with the employer.

It was against this background that with the permission of Blake, Diana used the plant telephone and conference room to arrange to meet with representatives selected by the employees of each department. It is clear, and the Board found, that within a few days after the return to work of some of the discharged checkers, Diana conferred with what he called the "Committee of 23". This was the group selected by the workers when Diana telephoned their superiors that he was organizing it with Mr. Blake's permission. Although the record is far from clear concerning the exact date and chronological sequence of the events that followed, this is what happened. The committee met with Diana at least one more time before a mass meeting, arranged by Diana, was held at the Park Theatre in South Plainfield. At this meeting temporary officers of Independent were elected. On February 1, with, according to Diana's testimony, Blake's permission, the former toured Condenser's plant and addressed 6 or 7 groups of employees concerning the advantages of the Independent. Again the source of ultimate authority is somewhat in doubt, but at any rate, a number of the supervisors and foremen issued orders that the workers stop production and gather around Diana. As his various talks were concluded he and different workers distributed to the listeners membership cards in the Independent. Testimony is abundant that at the time, some of the distributors cautioned the workers to "sign or else." In one instance, when an employee expressed a desire not to sign because of greater faith in the United, one of Condenser's assistant foremen remarked, "Oh, you're one of them."*fn3 This aspect of the case is more fully developed in connection with our detailed discussion of the various discharges.

Following this membership campaign the newly elected officers met several times with Diana who, though perhaps informally, served as chairman of the meetings and conducted most of the actual business for the group. Again this took place in Condenser's conference room and again, as to some of those attending, during working hours. The latter were allowed to leave their places in advance of quitting time so that they could be present. At the request of the workers Diana called on Mr. Beyer, Cornell's secretary and treasurer, and presented, as the Independent's spokesman, their grievances. At one meeting around February 2 or 3, both Beyer and Cornell's president, Blake, were present to here the committee's request for a 10% wage increase. This request was subsequently replaced by a flat 5 cent an hour increase. In this form it was presented to Blake for the first time between February 4 and 6; a compromise three cent raise was approved the next day and went into effect on February 15.Prior to the latter date Condenser posted a notice of the agreement, referring to it as having been made with the representatives of the majority of the workers. While the Board found that majority representation was not the fact we think this not controlling one way or the other; if the organization is company dominated in violation of the Act, the fact that a majority have joined is immaterial. And it is clear from the evidence outlined above that there is more than substantial evidence to support the Board's finding that the Condenser Workers Independent Union was established at respondent's instigation and with their aid. It may be borne in mind, in this connection, that Blake had in the meantime had no decisive conference with United's representative; that the February 11, 1937 issue of the plant paper carried several items, including editorials, praising the Independent and attacking the CIO, with which United was affiliated, and that United Workers were being discharged. At this point, somewhere around February 16, the company sponsored Independent group "dissolved" and was replaced by the Brotherhood.

In such a situation it is now settled as a matter of law that there must be a definite, clear line of cleavage between the two organizations in order for the latter to be free from the taint of employer domination found to be prevalent in the former. Roebling Employees Ass'n, Inc., v. National Labor Relations Board, 3 Cir., 1941, 120 F.2d 289, and cases cited therein. This alone would be sufficient, for the establishment of the line of fracture is, under the decisions, an affirmative obligation resting upon the employer.

But in addition to the lack of such an affirmative disinheritance of the company fostered Independent, we have here evidence of at least cultivation and encouragement, by respondents, of its successor, Brotherhood. It is no doubt true that there was no formal transfer, as there would be under some statute for the merger of one corporation into another or the consolidation of two into a third. But traces of company sponsorship are unmistakable. The group at the helm of the company sponsored Independent appears in a leading role in the Brotherhood. In the matter of the transfer, Diana who had been pictured in the plant paper as high in the good graces of the company, emerges as a dominant and busy figure. There was a dismissal of company employees at an hour earlier than ordinary quitting time on the day of the first Brotherhood mass meeting. In at least one instance a forewoman openly expressed the reason for the early dismissal as being the management's desire that employees attend the meeting. Some of Condenser's supervisors and forewomen were active in urging the workers to sign the Brotherhood cards. Additional basis for a conclusion of company encouragement of Brotherhood is revealed in the history of the negotiations between them. The Board found that the Brotherhood did not have within its membership the requisite majority of workers until after the election meeting of February 18. And that the contract between union and employer was signed the very next day - a contract with provisions for check-off and a closed shop. Respondents claim that the Brotherhood exhibited majority ...

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