Before MOORE and FRIENDLY, Circuit Judges, and DIMOCK, District Judge.
DIMOCK, D.J.: By an order issued June 19, 1963 the National Labor Relations Board found that Oneonta Dress Co., Inc., Edmeston Dress Co., Inc., Sherwood Fashions, Inc. (hereinafter "Oneonta," "Edmeston" and "Sherwood," respectively, and "the petitioners," collectively) and Clodomiro Isolino, doing business as Ravena Sportswear (hereinafter "Ravena") had violated Sections 8(a)(1) and 8(a)(3) of the National Labor Relations Act, 29 U.S.C. §§ 158(a)(1) and (3) (1958). The cases are before this court on petitions of Oneonta, Edmeston and Sherwood to review and set aside the Board order and of the Board to enforce its order against Isolino.
The cited subsections respectively brand it as an unfair labor practice for an employer to interfere with the right of employees to organization and, "by discrimination in regard to hire or tenure of employment or any term or condition of employment to encourage or discourage membership in any labor organization."
The Board found that the termination of Ravena's finishing department was motivated by the anti-union animus and hence violated subsections 8(a)(3) and (1). It also found that statements to and interrogation of employees and the discharge of two employees violated subsections 8(a)(1) and (3). It further found that Isolino and the petitioners constituted a single employer responsible for all of the unfair labor practices. The Board entered a cease and desist order and directed that certain affirmative action be taken including the reestablishment of the finishing department and the reinstatement of employees.
Except insofar as they relate to the closing of the finishing department, the Board's findings are supported by substantial evidence on the whole record. Accordingly, to that extent, the enforcement of the order will be granted. We view differently, however, the Board's treatment of the termination issue. Our consideration of it follows.
Sherwood is a manufacturer of dresses in New York City; it designs, produces and sells women's clothes. Oneonta is a contractor, producing dresses exclusively for Sherwood, at Oneonta, New York. Edmeston, a wholly owned subsidiary of Oneonta, located at Edmtil its plant was closed in December, 1961. John St. George, treasurer of Sherwood, has charge of its labor relations and its subcontracts among other matters. St. George, a 25% shareholder of Sherwood, is president and a 50% shareholder of Oneonta and is generally in charge of Oneonta's functions including labor relations. Lillian Creighton owns the plant in which Oneonta, as lessee, operates. In St. George's absence, she manages Oneonta's operations. In addition, Mrs. Creighton "trouble shoots" for Sherwood, training employees and supervising and inspecting quality and production of garments at Sherwood's subcontractors.
Clodomiro Isolino, who came to the United States from Argentina in 1959, entered into a tentative arrangement to purchase the Edmeston plant in the fall of 1961. He made a down payment of $1,000 borrowed from an Amsterdam, New York, bank and commenced operations there. Shortly thereafter, however, a defective sewer required the closing of the Edmeston plant and the sale was rescinded. With St. George, Isolino negotiated for the acquisition of the facilities of Cousant, Inc., a blouse-manufacturing firm in Ravena, New York, which had ceased operations earlier in 1961. Negotiations between St. George, Isolino, Mrs. Evelyn Levy, owner of Cousant, and a representative of the New York Business Development Corporation, which held a mortgage on the Cousant plant, resulted in the lease of all of Cousant's property to Edmeston and Edmeston's assignment of its lease to Isolino. Edmeston paid the January, 1962 rent and remained liable as a signatory of the lease.
Mrs. Levy, Mrs. Creighton, St. George and Isolino assembled a work force, composed of former employees of Cousant, and Isolino began operations under the style "Ravena Sportswear" on January 22, 1962. Ravena acted as a subcontractor, producing dresses exclusively for Oneonta. A week after the plant opened, Sherwood, at its expense, arranged to have Ravena's employees covered by group accident and life insurance. Isolino invested an additional $3,000 in Ravena. Except for that, Ravena's operations have been supported wholly by advances, made by Oneonta, which in turn had received them from Sherwood. This, however, is common practice among manufacturers, contractors and subcontractors in the garment industry.
The operations begun by Ravena on January 22, 1963 consisted of the sewing or assembly of garments and involved employment of 40 to 50 women. On February 6, 1962, Ravena opened a finishing department. Finishing involves the trimming, belting, and pressing of garments. Twelve women were employed in these activities.
Until Cousant, Inc. closed down, its employees had been represented by the International Ladies Garment Workers Union. Shortly after the opening of the Ravena finishing department, that union began activities to organize the plant. A number of employees, including ten in the finishing department, signed cards for the union.
On February 14, the finishing department was discontinued. There was testimony that Mrs. Creighton, in notifying a supervisor to inform the finishing department employees, made a comment to the effect that, "They are one hundred per cent for the union. To hell with them. I am going to let them go."
On the strength of this the Board concluded that it was Mrs. Creighton who decided on the shut down. Isolino was not permitted to give answers to questions which would have given information as to whether or not he had given the order for the discontinuance of the finishing department and whether or not he had done so for purely economic reasons.Passing the question of the propriety of the finding that the closing was to discourage union membership with the testimony of Mrs. Creighton's declaration standing unchallenged, it was error to make this finding on a record where the Trial Examiner had refused to admit testimony which might challenge that declaration.
With respect to Isolino's participation, the record discloses that when he was under direct examination the following took place:
"Q. Now, did there come a time, as you observed these things you have testified to, that you came to a decision as to whether or not you were going to continue operating the Finishing Department?
Trial Examiner: I will ...