Before SWAN, FRANK and MEDINA, Circuit Judges.
The Company is engaged in the manufacture, sale and distribution of candy lozenges and related products. Some of the products of the Company are sold in bulk and some are wrapped in individual consumer packages. In its plant the Company employs two classes of employees, male production workers and female wrappers. The Company experiences slack and busy seasons in the normal course of its operations. The busy season, attributable in large measure to St. Valentine's Day, begins in late summer or early fall and lasts until February. Production for the Valentine season consists principally of candy hearts sold in bulk, which require no wrapping. The normal work day and work week for the production employees during that period is consumed largely by the production of Valentine hearts in bulk. Thus, if the wrappers are to have any work to do there must be some overtime work by the production employees. The Company's policy of many years' standing has been to require such overtime work by production employees during the busy season, and such requirement is a part of each employee's contract of hire. The Company operates within a limited manufacturing space, and with a limited amount of expensive machinery. In November and December 1949, the Company employed approximately 70 female wrappers and 30 male production employees.
During the fall of 1949 a majority of the Company's employees designated "65" The Wholesale, Retail and Warehouse Workers Union of New York and New Jersey, hereinafter called the Union, as their bargaining representative. On November 14 and 15, 1949, the Union, represented by its area director, Mrs. Esther Letz, and two organizers, met with the Company's president, Mrs. Irene Pecheur, and its attorney, Alfred J. L'Heureux. The Union stated that it had been chosen as bargaining representative by a majority of the employees and wished to discuss a collective bargaining contract. After the Company's representatives stated that they wanted to be certain of the Union's majority status, Mrs. Letz informed them that as the Union had not complied with the filing requirements of Section 9 of the Act, it could not petition the Board for an election. She suggested that an election be held under the supervision of a priest and the Company accepted the suggestion.
The election was held on the following day and of the 101 votes cast 93 were for the Union and 8 against it. Immediately after the results of the election were ascertained the Company and the Union executed an agreement in which the Company recognized the Union as the sole collective bargaining agent of all the employees, with exceptions not here material, and agreed to meet and discuss the terms of a collective bargaining agreement.
The Company and the Union again met on November 22, 1949, and the Union submitted a form contract, which contained no wage demands. Mrs. Pecheur expressed the desire to consult a labor relations expert before committing the Company to an agreement, and the parties agreed to meet again a week later. On November 28, 1949, Mrs. Pecheur consulted one Leopold L. Balleisen, an industrial relations consultant. Balleisen questioned her as to why she had consented to an election when the Union was not in compliance with the Act and could not have secured a Board election. Mrs. Pecheur responded that she did not care that the Union was not in compliance so long as the employees wanted it, and stated that she was willing to bargain with it. Balleisen informed her that the Union was "known as one of the most pro-communistic unions in the country and very militant." Mrs. Pecheur was, according to Balleisen, "taken a little back" by this statement, but nevertheless said that "that would make no difference to her, so that she could get someone to advise her as to getting the proper contract under which she could live, that would make no difference."
The next day, November 29, 1949, Mrs. Pecheur and L'Heureux again met with Mrs. Letz and other Union representatives for what proved to be the last bargaining conference between the parties. Mrs. Pecheur resisted further negotiations on a contract on the ground that she could do nothing until the Company's financial statement was available. The Union pressed for agreement on other provisions of the contract, such as grievance and arbitration procedure, but Mrs. Pecheur protested that the most important contract item was "money," and she could discuss nothing until she had received her financial statement. The Union assured her that its wage demands would not be excessive. The meeting broke up with no agreement having been reached on any of the issues.
Meanwhile, because of a belief that the Company was utilizing overtime production to accumulate inventory in preparation for a strike, substantial employee opposition developed against overtime work. On Monday, November 28, 1949, the shop committee met and, without the knowledge of the Union leaders, decided to discontinue overtime production work.*fn1 The following day, November 29, 1949, the shop committee chairman, one Maximino Badillo, informed the production foreman, one Anthony Charles Bartulis, of the committee's decision. Later that day, after conferring with Mrs. Pecheur, Bartulis told Badillo that there would be no overtime work that night. Accordingly, almost all of the production workers ceased their day's operations at 4:30 p.m., the regular quitting time.However, five or six men remained to work overtime, cleaning the machines. Foreman Bartulis testified that these were non-union employees, a fact that had come out in the course of a conversation with them that afternoon. On the following day, November 30, 1949, Bartulis again informed Badillo that the men need not work overtime, and only the few nonunion men remained to work after the 4:30 quitting hour.
On November 30, 1949, Mrs. Pecheur informed Badillo that unless overtime were resumed it would be necessary to lay off thirty of the wrappers, explaining again that overtime was customary with the Company during that season of the year and that failure of the production workers to work overtime would inevitably result in a lack of work for the wrappers. Badillo replied that the shop committee was to meet again that night to consider the overtime question and he would inform Mrs. Pecheur of the decision the next morning.
That night the shop committee decided to continue its opposition to overtime and the next morning, December 1, 1949, Badillo so informed Mrs. Pecheur. Thereafter, Mrs. Pecheur, after consulting Balleisen, posted a notice discontinuing overtime, at the same time telling Badillo that she would have to lay off thirty wrappers.
Late that afternoon, Mrs. Pecheur in a telephone conversation with Mrs. Letz told her of the impending layoff caused by the cessation of overtime work. Mrs. Letz requested Mrs. Pecheur not to go through with the layoff plans since the shop committee's action was without Union sanction. She further stated that she was to meet with the shop committee that night and was confident that she could persuade it to reverse itself. Later that night the shop committee met with Mrs. Letz and agreed to resume overtime work. It instructed Mrs. Letz to notify Mrs. Pecheur of its decision.
The next morning, December 2, 1949, Mrs. Letz sought to convey the shop committee's decision to resume overtime work to Mrs. Pecheur, but was unable to reach her. Shortly before noon that day the Company laid off thirty wrappers in order of seniority. This was done by means of a notice clearly indicating that the necessity for the layoff arose from the refusal of the production employees to work overtime. Immediately following the posting of the foregoing notice the remainder of the employees walked out of the plant on strike.
A day or two after the strike began, the Union took steps to settle it.Mrs. Letz, who had been unable to notify Mrs. Pecheur of the shop committee's decision to resume overtime work, telephoned L'Heureux and gave him the information. L'Heureux, however, informed Mrs. Letz that the Company had retained a labor relations consultant and disclaimed any connection with the matter. On Monday, December 5, 1949, the Union's president sent the following telegram to Mrs. Pecheur:
"I am prepared personally to conduct negotiations with you looking toward the immediate resumption of operations. I am confident such a conference could quickly resolve all issues. Continuation of the dispute is of advantage to neither side. Won't you kindly respond by calling my private wire Oregon 3-5332 such discussion."
Upon receipt of this telegram Mrs. Pecheur consulted Balleisen and suggested that he communicate with the Union. Balleisen, who had previously counselled that it would be more politic for him to remain in the background, again demurred, stating that "it would be best that the union not know that I was in the picture, if [Mrs. Pecheur] wanted the people back to work." He then drafted a reply to the Union's telegram, which was mailed on December 7, 1949, over Mrs. Pecheur's signature. This letter, after reviewing events up to that point and accusing the Union of bad faith and trickery, dealt with the Union's request for a meeting as follows:
"You state that you are anxious to settle this matter.In view of all that has transpired to date and the fact that our faith in your union and its promises are badly shaken, we must have concrete proof of your good intentions in the future. Therefore, the following are the ways in which this matter can be settled.
"1. All the pickets and strike activities must cease and your union must agree in a letter to us, signed by you, that there will be no picketing, striking, slowdown or other change in the manner and quality of our production, until February 1, 1950. The reason for this date is that we will not have our accountants statements as to the final position of the company for the year 1949 available to us much before that time. We must have such information before we can bargain with you intelligently.
"2. If you carry out number '1' faithfully we will agree to confer with you after February 1st, 1950, but with the understanding that we are not committed to agree in advance to any of the clauses contained in your contract and with the further understanding that we are not obligated to accept any of your conditions.
"3. We will rehire employees as we need them during this period of truce purely on the basis of the needs of the company and who we think are of most benefit to us regardless of seniority in job.
"Until you are ready to meet our terms as stated above, we do not agree to confer with you or anyone else from your union. Any moral obligation we had to bargain with you in good faith no longer holds because of the ...