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During the course of these negotiations, one of our employees, Gus Pfahl, who was a member of the shop committee, warned me several times that it was going to be very costly to the company if we did not succeed in reaching an agreement with the union, because the company would have to defend itself against Labor Board action which they would bring against us.

At the meeting of April 21, 1938, the union, not the company, declared that negotiations were at an end because the company had not made offers of an agreement that was acceptable to the union.

Within a few weeks we were served with a complaint from the Labor Board charging us with discriminatory discharge of six men including Seifert, the milling-machine hand whose discharge had been approved by the union. The other men included a temporary employee, several incompetent workmen, and several men who had been laid off because of lack of work suitable for them. It was obvious that these charges were brought against us in an effort to coerce the company into making terms with the union. I was again warned by the same employee that it would be cheaper for the company to go to the union and make terms because additional charges would be brought against us when the present case was disposed of.

In June the Labor Board called for an informal hearing on the case and we attended this hearing presided over by a field examiner of the Labor Board-that is another one of those informal hearings. Some of the complaining witnesses were in attendance and both sides of the case were expressed. The Board's examiner attempted to pass judgment on the technicalities of blue-print reading and to justify the spoilage of work for which Seifert had been discharged, and to pass upon the relative competence of other complaining witnesses and men whom he had not even seen who were employed since their discharge. His utter ignorance of technical details and manufacturing methods made his attempt to justify the charges appear rather ridiculous and it is too bad that some unbiased observer could not be present at these informal meetings or some record kept of what goes on in them. It is my belief that the many settlements of cases claimed by the Labor Board is due to the employer's realization in these informal hearings of how little chance he has to get fair treatment and his desire to avoid the ghastly expense of defending himself in a formal hearing, knowing all the time that the decision is going to be against him.

The original charges were amended several times to include charges of violating most of the other provisions of the Wagner Act, and the case came to a hearing on September 19, 1938, and continued every day except for Christian, Hebrew, and bank holidays until and including October 22. I had to be in constant attendance at this trial, and many other employees were kept waiting to be called for days on end. I spent my nights gathering records requested by Trial Examiner Segal, Labor Board Attorney Ornstein, and Union Attorney Rubenstein. The loss of all of my time and the time of other employees of the company caused loss and damage to the company which is hard to estimate, but it is safe to say that it resulted in a substantial increase in unemployment over what would have been the case if we had been let alone.

I might repeat that the direct cost of this case, this performance, was in excess of $12,000. The indirect cost I would estimate would be at least that in addition, probably well in excess of that.

During this hearing over 2,500 pages of testimony were recorded, for which we had to pay at the rate of 45 cents per page for a transcript on which to base our appeal from the decision that the Labor Board had already made up its mind to render. This cost us approximately $1,150 alone.

I understand that the Board paid 7 or 8 cents a page for a copy of this same transcript, and the union has access to the Board's copies. The CHAIRMAN. Haven't you access to the Board's copy?

Mr. HILL. That is what I have been told, I have no proof of that. The CHAIRMAN. Haven't you access to the Board's copy?

Mr. HILL. I understand that we do not have. Our attorneys told us that it would be necessary to have a transcript in order to prepare an appeal.

The CHAIRMAN. The union has access to the official copy and you don't have access?

Mr. HILL. That is what I have been told by our attorneys, that is my understanding of it; I have no proof of it.

The CHAIRMAN. Are you sure that that is right?

Mr. HILL. Well, I am quite sure that it is right.

The CHAIRMAN. How would the union have access to a copy? Would the Board furnish the union with a copy?

Mr. HILL. The union attorney and the board attorney conducted the case together, they sat at the same table and conducted their case, made up their case, made up their questions to ask the witnesses, together.

The CHAIRMAN. Did your attorney sit at the same table?

Mr. HILL. Oh, no; we were at a separate table.

The CHAIRMAN. The matter of the copy of the record, that is the thing I am interested in here.

Mr. HILL. I only have the statement of our attorneys that it was necessary, that it would be necessary, for us to purchase a copy of this record at a rate of 45 cents per page.

The CHAIRMAN. I have heard that before, of course, that has come out right along, but the other statement

Mr. HILL (interposing). And their statement in addition to that that the Board paid, I have forgotten the exact amount, but it seems to me it was 7 or 8 cents a page, and that the union had access to the Board's copy-and I believe their statement.

The CHAIRMAN. You don't know for sure whether a copy might not be available to your attorneys if they wanted to use the same copy? Mr. HILL. I don't know of my own knowledge, I only have their statement to that effect.

It is my firm belief that the Labor Board deliberately dragged out its examination of witnesses to penalize the company. All through the hearing, Trial Examiner Segal exhibited a most obvious and shameless bias against the company. This is clearly shown in the transcript of the testimony, but his attitude of antagonism was more plainly visible in his manner during the hearing.

About half way through the hearing, I had a conversation with Trial Examiner Segal during a recess. I asked him if it were not possible to shorten the testimony through the elimination of some of the inconsequential and irrelevant questions being asked by the Board's attorney. I pointed out that the cost to the company of this hearing was already far in excess of any just penalty that might be inflicted on the

company for supposed violation of the law. Segal replied, "If the company cannot stand the expense, I would suggest that you deal with the union. You know you can always make a deal with the union." I replied, "Do you mean that if we make suitable concessions to the union that they can guarantee us against further prosecution by the Labor Board? That sounds like blackmail to me.' Segal replied, "Well, you can always make a deal with the union."

In accordance with our expectations and the warnings we had been given, additional charges were filed within a month after the end of the hearing. This charged us with discriminatory discharge of two employees, one of whom had been discharged for incompetence in March almost 10 months before the charges were filed, and the other in August. An informal hearing was scheduled for early in January 1939 but, when the time for this hearing came, the Labor Board called up our counsel and told him that it was to be postponed. We objected to further postponement and we asked for a definite date for the preliminary hearing. The Labor Board refused to set any definite date or to make any excuse for the postponement. We pointed out to them that it was very difficult for us to get testimony and evidence when no particular records had been made regarding his discharge because at that time we did not anticipate any accusations being made against us. The only answer we could get out of the Labor Board was that they wanted to wait until the formal decision had been rendered on the first hearing.

A few weeks later we received a copy of trial examiner Segal's decision and recommendation to the Labor Board. Our attorney, Mr. Walter Chalaire, of the firm of Scandrett, Tuttle and Chalaire, who has had considerable experience with the Labor Board, stated that he had never seen any Labor Board intermediate report to equal this one for downright biased and unscrupulous disregard of evidence. This decision gave the union everything that it asked for, reinstatement of four employees with back pay, back pay only for one employee who had gotten another job and had stated that he would not accept reinstatement. In Segal's report all of the evidence which had been introduced in defense of the company had either been disregarded or had been used against us. For example, the report starts off by saying, "The antiunion attitude of the company is clearly shown by Hill's own testimony as to what took place when the union presented its contract. Hill testified that upon presentation of the contract he said, 'What's this? Are there any complaints around here?'" Just how such testimony "clearly shows the antiunion attitude of the company" is beyond my understanding.

The CHAIRMAN. Mr. Hill, we have to stop there. We will stand in recess until 2 o'clock.

May I say this about our reconvening, that this committee has a bill that it is sponsoring in the unfinished business before the Senate, and we may not be able to continue right straight through this afternoon, but we will do our best and I will try to do my best to be here at 2 o'clock.

(Whereupon at 12 noon a recess was taken until 2 p. m. of the same



(The hearing reconvened at 2 o'clock.)

The CHAIRMAN. The committee will be in order.

Mr. Hill, will you proceed, please?

Mr. HILL. Yes; Senator.

All through the decision Segal refers to defense witnesses as "unreliable," "obviously untruthful," "intrinsically doubtful," "highly exaggerated," "impossible to believe," et cetera (I could go on through a list of about 50 terms that he uses, some of them many times. This

is the intermediate report of Trial Examiner Segal, that I am referring to), and to union witnesses as men of high character, integrity, and skill. Another example of Segal's attitude is his reference to the testimony of one witness that Hill "had been heard to say" that he would never sign a contract. Segal says that, although Hill denies this, the fact that the company did not sign a contract shows that Hill probably did make such a statement.

Examiner Segal's intermediate report contains an amazing number of misstatements all damaging to the company, and not one misstatement damaging to the Board's case. In other words, the misstatements in the report are invariably on one side of the case. No reasonable person reading the report could help but conclude that the so-called finder of the facts was extremely biased against the defendant. Early this year we were informed that there is a third Labor Board case for discriminatory discharge pending against us, and Mrs. Herrick informally proposes to our attorneys that if the company will make offers acceptable to the union, all cases against us will be dropped. I referred to that in the first paragraph of my statement.

Since the union declared negotiations at an end last April, it has never approached us to reopen negotiations. Their system is to slug us with Labor Board cases until we acknowledge defeat and come to them on our knees.

After going through one trial before the Labor Board and seeing how the unsupported word of any employee is accepted as evidence and proof of unfair labor practices and seeing how witnesses state their opinions and quote overheard remarks from other employees as evidence of the company's unfair policy, I decided that we would set forth the policy of the company in writing for every individual employee and also to express in writing the employment agreement between the company and the employee. One of the terms of this agreement is that the employee must report immediately any act or statement which in his opinion constitutes a violation of the Wagner Act. A copy of the memorandum which I addressed to all employees and a copy of this employment agreement will be furnished to the committee upon request.

The CHAIRMAN. You may put that in the record, if you wish. (The documents referred to above are as follows:)

DECEMBER 6, 1938.

In an endeavor to prevent the possibility of future misunderstandings between the company and its employees, I desire at this time to discontinue the use of informal verbal employment agreements and substitute therefor individual written agreements executed by the company and each employee.

Although this may seem like a needless formality to many of you, it is a fact, as you all undoubtedly know, that employer and employee relationships have been considerably complicated during the past few years by Federal and State laws

creating possibly considerable confusion in the minds of many of us as to the respective obligations of the company and the employee. Verbal arrangements, even though reiterated from time to time, are subject to misinterpretation and are very often forgotten. It is my opinion, therefore, that the adoption of the practice of executing written agreements which clearly recite the obligations of the company and the employees will obviate misunderstandings and prove advantageous to both parties.

Attached hereto is a copy of the proposed agreement and it is requested that you read this over carefully and, if agreeable, sign both copies and return to me for signature by the company, whereupon one copy will be returned to you for your own records.

If you have any questions or wish to discuss the agreement before signing it, I will be glad to talk with you individually or you can talk to any other officer or branch manager of the company.

I want to explain to you that the agreement covering your employment is between you and the company and not with any individual officer or manager of the company. Your employer is Air Associates, Inc., which is a corporation existing under the laws of the State of New York. It is also licensed to do business in the States of Illinois, Missouri, Texas, and California. The assets and property of the company are owned by its stockholders, who have elected a board of directors to represent them and to manage these assets so as to afford them a return on their investment. The board of directors in turn have appointed certain individuals as officers of the company and have also employed them to operate the business and to employ others to assist them. The officers of the company are in charge of the operations of the business and are subject to the orders and approval of their acts by the board of directors. The employment of the officers is covered by agreements similar to other employees.

The officers of Air Associates, Inc., are as follows: President, F. Leroy Hill; executive vice president, H. I. Crow; vice president, Ray Acre; secretary-treasurer, G. S. Kleverstrom.

While the appointment and employment of officers can only be done by the board of directors, the employment of all other persons is under the control of the president. He may authorize others to assist him in this respect, subject, however, to his approval and confirmation. Any expression of company policy as to general terms and conditions of employment, or any special individual or collective employment agreements, must be approved by the president to constitute an expression or agreement by the company.

It is, of course, the policy of the company to abide by the letter and the spirit of the laws of the United States of America and the respective States in which the company operates, including specifically the National Labor Relations Act and the Fair Labor Standards Act of 1938. The attached employment agreement specifically covers the company's obligations under the aforementioned acts. Every employee is considered to be a representative of the company. Under the provisions of the acts aforementioned the company becomes responsible for the acts and statements of its representatives. In this connection I considered it just and proper to insert a clause in the agreement which requires you to uphold the policy of the company in its endeavor to comply with Federal and State laws You will note that the attached employment agreement provides for its execu tion by your representative in case you do not wish to do so yourself. For instance, if you are a member of a labor organization which has been authorized to negotiate employment agreements for you, you can have such authorized union or its representatives execute this agreement for you.

I want to emphasize that the company itself cannot be concerned with therk personal affairs of any of its employees nor does it authorize any action on the ti part of any person or persons which is intended to interfere with the personal affairs of any employee or group of employees. "Personal affairs" include det Membership or nonmembership in any labor organization; religious and politica opinions, beliefs, and affiliations; social activities and affiliations; persona relationships.

This does not mean that you may not have close personal relationships with it other employees including its officers. It does mean, however, that such mattering are outside of the business of the company and do not concern it.


It is a condition of your employment that the work which you perform for th company shall be, in the opinion of its president, satisfactory to the company" dari Determination of what constitutes satisfactory services shall rest solely with the co president of the company or with persons designated by him and subject to hi approval.


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