National Labor Relations Board v. Truitt Mfg. Company

PETITIONER:National Labor Relations Board
RESPONDENT:Truitt Mfg. Company
LOCATION:

DOCKET NO.: 486
DECIDED BY: Warren Court (1955-1956)
LOWER COURT: United States Court of Appeals for the Fourth Circuit

ARGUED: Mar 29, 1956
DECIDED: May 07, 1956

Facts of the case

Question

Audio Transcription for Oral Argument – March 29, 1956 in National Labor Relations Board v. Truitt Mfg. Company

Earl Warren:

Number 486, National Labor Relations Board versus Truitt Manufacturing Company.

Mr. Findling.

David P. Findling:

May it please the Court.

This case which the Labor Board has brought here on certiorari to the Court of Appeals for the Fourth Circuit, presents the question whether the obligation to bargain collectively in good faith under Section 8 (a) (5) and 8 (d) of the National Labor Relations Act requires an employer who claims during bargaining negotiation that he can’t afford to pay a wage increase asked by a union to furnish the union on request with pertinent information to support its claim of inability to pay.

The facts are virtually undisputed and the case arose in this context.

During wage negotiations starting in August 1953 pursuant to a wage reopening clause of the contract between Local 729 of the Ironworkers Union and the company.

The union asked for a wage increase of 10 cents (Inaudible)

The company rejected the request and offered two and a half cents, claiming in effect that it couldn’t afford to pay more.

In that connection, the company’s representatives express principally that they are already paying higher wage rates than most of their competitors in the area and that the company was already being underbid on certain jobs by some of its competitors, but the company also said that it was under capitalized, that it was operating under a financial strain, that its margin of profits in relation to cost in sales was low that it never paid any dividends, that it is just negotiated the bank loan for a new equipment and a new lot and that at least suggested that overhead was too high because of inefficient office and perhaps plant procedures.

After engaging in an unsuccessful strike for about a week in support of its wage demands and after the company had put into effect the two and a half cent increase that it has offered to the union, the union asked the company to furnish it with information as to the company’s financial situation in support of its claim that it couldn’t afford to pay more than two and a half cents.

While that request was put in different language from time to time, I think it’s fair to sum it up as the union negotiator, summed it up with the Labor Board hearing when he said — and I’m quoting now from pages 15 and 16 of the record, he said that, “The union wanted anything relating to the company’s position, any records or what have you, books, accounting sheets, cost, expenditures, whatnot, anything to back the company’s position that they’re unable to give any more money.”

The company offered to show that the wage rates that some of its competitors were paying and it also submitted some bid sheets, showing contracts that it had lost but otherwise it refused the union’s request.

It didn’t say that disclosure would be damaging to some legitimate business interest.

It didn’t claim that the union’s request was too broad or irrelevant to its claim of inability to pay nor did it suggest that the union’s request was unreasonable in any other way.

And as a matter of fact the record we suggest that some of the data was readily available.

The company simply took the position in substance and again I’m quoting from its statement of position, “That final information concerning its affairs was confidential and not pertinent to the discussion, that such information was not a subject of — a subject matter of bargaining or discussing with the union and that the union had no legal right to it.”

The union pointed out that it wasn’t claiming any legal right to bargain about the company’s financial affairs, but said the information was necessary so that the men could decide whether they were to press their demand for the 10 cent increase.

And the union also said that the company’s failure to supply the information created an insurmountable barrier to a successful conclusion of the bargaining.

The union representatives also said in substance that the men believed the company was making money and could afford to pay the 10 cents.

That it was hard for the men to see or understand the overhead and all that stuff as they put it.

That the union believed the company competed with other companies outside the immediate geographic area who were paying higher wage rates than the company, and who were nevertheless operating profitably.

And they said that if the company really wasn’t making money, the men wanted to be shown some proof of it and that they simply couldn’t take Mr. Truitt’s word for it.

The company continued at its refusal to furnish the information, however, insisting as I say that the information was none of the union’s business.

And so, there was — there was no discussion of how much information, what kind of information or what form the information should take nor was there any discussion whether it would be satisfactory for the company to go through its records and submit the data to the union or to an accountant or whether the union was insisting that an accountant can come in and go over to the company’s books and select the data that he thought was pertinent.

And so, instead of supplying the data, the company went ahead that Christmas and paid the men a bonus, a larger bonus than it had paid in several years.

And a little later on, on January 13th, it offered the union two and half cents more, conditional for 90 days.

An offer which it subsequently withdrew for which one of the union committeemen pointed out, emphasized the need for the information because if the company withdrew the — the raise after 90 days, the men naturally would want to know why.

Now on these facts, the Board found that the company had failed to satisfy the collective bargaining requirements of the Act, reaffirming the position that it has consistently taken on this matter since it had first occasioned to discuss it.

Back in 1936, in Volume 1 of the N.L.R.B. reports, the Board held that the collective bargaining obligation to deal with the union in a good faith effort to compose differences and to reach a contract if possible, required the company — required the company having faced its refusal of a wage increase on its inability to pay it, attempt on request by the union to substantiate its economic position by reasonable proof.

The Board, therefore, ordered the company to bargain collectively and on request to furnish the union and I’m quoting from this decision, “With such statistical and other information that would substantiate the company’s position of inability to pay and would enable the union to discharge its functions as the statutory representative of the employees in the appropriate unit.”

Earl Warren:

Is there any claim here that even though the company had not put its refusal to grant the increase on this particular ground that the union would have been entitled to such information?

David P. Findling:

No, Your Honor.

If the — if the company had not put its — its claim of — its refusal on inability to pay, there had been no — no obligation.

Earl Warren:

No question about that?

David P. Findling:

No question about that.

Felix Frankfurter:

May I ask this, Mr. Findling?

Can the Board’s power inquire a showing, supply of statistic as such of its authority, require that without making such a order on the basis of a party and one of good faith?

David P. Findling:

Your Honor, we’re dealing here with the definition of the obligation to bargain —

Felix Frankfurter:

I understand that.

David P. Findling:

— and I — I would think that in particular circumstances, the Board might well have power to require the submission of books —

Felix Frankfurter:

I —

David P. Findling:

— even though an employer was acting in good faith because of —

Felix Frankfurter:

So now, what I want to know is, is it the Board’s position to put a — a claim is made, they’re unable to pay that the — that the mere failure to — is there any request to a specific — didn’t they discuss their economic condition, the platform, showing of books?

David P. Findling:

The — the company offered to show the wage rates its competitors were paying, some of them and —

Felix Frankfurter:

What I want to know is the mere failure to show its book as a matter of law applying with that faith.

David P. Findling:

Well, Your Honor, that’s not involved.

The Board has not held that the company must necessarily show its books and the order in this case, doesn’t talk about books.

The Board says, “You got to submit reasonable proof in support of your claim of inability to pay.”

And as a matter of fact in the Jacobs case and in McLean-Arkansas case, Board decision.

McLean-Arkansas was decided three months before this case was decided and both Jacobs and McLean-Arkansas are cited in the Board’s decision in this case and McLean Arkansas, the company, was asked to submit books.

The company said, “I won’t submit books but we’ll give you a –a statement from our accountants as to our financial condition,” and the — they offered in letters and memoranda to give further information, the Board said that the company had discharged its obligation.

Felix Frankfurter:

Well, the reason I asked my question is because of the Jacobs case which reads very difficult to enable this case because the Jacobs case, there’s a theory there, a number of circumstances.

The company stood mute, they wouldn’t talk about it, refused to go on, a number of cases of that — as I say was the thought of my inquiry is whether the mere failure to open its books, if I might say for myself, I think it (Inaudible) an employer to doing so, is of my point of view that’s unwise to say, (Inaudible) which in a good sense a requirement of having them open up their books, if that’s not — I’m not the employer.

What I want to know is whether from the mere failure to open the books, a conclusion of law of that pages in the books?

David P. Findling:

No, Your Honor.

Felix Frankfurter:

Now, what else is there in this case except that?

David P. Findling:

But, Your Honor, it wasn’t the question simply of opening the books and records.

The Board found that the company had refused to give any information.

Felix Frankfurter:

Well, they gave some, didn’t they?

David P. Findling:

Yes.

David P. Findling:

But they didn’t give the information that was adequate in order to discharge the responsibility that let the union know what the basis was —

Felix Frankfurter:

And therefore (Voice Overlap) —

David P. Findling:

— for its claim of inability to pay.

Felix Frankfurter:

Therefore, the cause of argument in my mind, has the Board’s power to say really in order to make this negotiation, why so sensible and effective, you got to give me some more data.

I do not myself have to jump to the conclusion they’re lacking in bad-faith because I know employers as if they’re extraordinary, almost (Inaudible) to get them opening their books.

David P. Findling:

But Your Honor, the Board’s order doesn’t require the company to open its books?

Felix Frankfurter:

But they gave some data here, didn’t they?

David P. Findling:

Yes, Your Honor.

But the data they gave that’s the wage rates of their competitors and also bids that they had lost wasn’t the basis upon which they were placing their inability to — their claim of inability to pay.

As a matter of fact, the company admitted that itself because at the meeting on November 24, the company asked the union to defer further bargaining sessions until after Christmas because auditors had been in who had suggested that improvement in overhead might put the — the company in a better position and the company was suggesting that when those innovations were put into a effect, the company might well be able to pay.

Now, that had nothing to do —

Felix Frankfurter:

Well, I repeat —

David P. Findling:

— with the —

Felix Frankfurter:

— my question.

I’d like to know — I disagree with the court below.

I don’t mind saying that.

I’m not sure — I don’t know if you agree with Board, disagree with the Board.

What I want to know is whether the Board has power to require a further production of data without reaching the conclusion, therefore, there’s one of good faith.

David P. Findling:

Well, Your Honor —

Felix Frankfurter:

Because stupidity and obtuseness and deep feeling on the subject of our assumption need not necessarily prove bad-faith.

David P. Findling:

Well, Your Honor, if we are right in our position that it’s the employer’s responsibility, it’s his duty, part of his duty that within the meaning of Section 8 (a) (5) of the Act when he says he is unable to pay to disclose the pertinent data on which he rest that conclusion.

If we’re right about that, then it seems to me that it doesn’t matter whether the company failed to discharge that responsibility in good or bad-faith.

Anymore —

Felix Frankfurter:

I don’t know (Voice Overlap) —

David P. Findling:

Well, Your Honor, if I may, anymore than a company can defend its failure, for example, to discuss a pension plan because it in good faith things but it’s not required to do it.

It is — no — nor was it a defense under the Wagner Act for example, for an employer to refuse to put a contract in writing after terms were agreed on and that was without regard, it was good or bad-faith —

Felix Frankfurter:

(Voice Overlap) —

David P. Findling:

— and that’s our position here.

Felix Frankfurter:

— how you can say that, there’s a — you can say that a particular action or non-action proves one of good faith.

I don’t see how you can say it’s immaterial whether that’s good or bad-faith.

Felix Frankfurter:

The statute says good faith.

David P. Findling:

Well, Your Honor —

Felix Frankfurter:

Do those words mean nothing?

David P. Findling:

Of course it says good faith but there are certain things like recognition of a union, bargaining about wages, hours and conditions of employment, exchanging relevant information and so on that as a matter of — of a definition of the duty to bargain.

We think they’re encompassed within the statutory terms and as I say, if we’re right that the statutory obligation to bargain includes not only mere recognition but the duty to sit down, to deal with an open mind, to attempt to compose differences, to exchange pertinent information —

Felix Frankfurter:

All right.

David P. Findling:

— and so on, then if an employer doesn’t in some — if — if an employer fails in some respect to discharge it, it doesn’t matter whether he’s done it in good faith or bad-faith —

Felix Frankfurter:

I —

David P. Findling:

— anymore —

Felix Frankfurter:

I reject your formulation.

If I may say so.

I think what you should say is on the basis of such comment as you described, the Board may find one with good faith.

David P. Findling:

Well, Your Honor, we’re trying to pro — I was — I was —

Felix Frankfurter:

Good faith or bad-faith, the state of mind and what you’re arguing is that circumstances and conduct on the basis of which the Board may conclude there was one on good faith.

David P. Findling:

Well, Your Honor, we’re ready —

Felix Frankfurter:

Anyway, you ought to agree with that.

The statute says so.

David P. Findling:

Well, we’re ready to concede.

I’ll accept the formulation but we’re ready to concede that the company in — apparently in good faith thought that it wasn’t required —

Felix Frankfurter:

I’m not saying —

David P. Findling:

— in the —

Felix Frankfurter:

— you should concede.

David P. Findling:

— to — to submit the data.

Felix Frankfurter:

I’m not saying the company was sincere (Inaudible) and people who gave a little bit to (Inaudible) I’m not taking about that.

I’m talking about a phrase in the statute which neither you nor I can expunge out.

David P. Findling:

Well, I don’t mean to expunge it out and the Board found that the failure to submit the data was a failure, it resulted in a failure on the part of the company to discharge its responsibility to bargain in good faith.

Now, the Court of Appeals in — on proceedings to set the order aside because of proceedings to enforce has set aside the order and Chief Judge Parker, speaking for the Court, held in substance that the statutory obligation to bargain didn’t require the company and I’m quoting from the opinion, “To open up its books or bargain with respect to matters which lie within the province of management such as the financial condition of the company, its manufacturing cost, or the payment of dividends.”

“Disclosure of which, the Court said, could conceivably be used to the company’s great damage.”

Now, as I — as I think I made plain in answer to Mr. Justice Frankfurter’s question, the Board didn’t find here that the company was required to open up its books and records at such nor did it find, it doesn’t order the company to open up its books and records and the refusal, the company’s failure to bargain is not based on a failure to open up the books and records of such.

It’s based on the company’s failure to submit and I’m quoting, “Reasonable proof of its financial situation,” and the Board’s decision, including decisions cited in the — cited in the Board’s decision in this case make that plain.

You mean that there’s — of course your bargaining discussion before us is, I can’t pay anymore wages, can’t afford to.

Did that mean that he had to prove that statement, true to that statement?

David P. Findling:

Well, Your Honor, he doesn’t have to prove it, he is free.

Well, he — he’s got to — having made the statement, does he have to — does he have to show the statement was made in good faith?

David P. Findling:

Yes, Your Honor.

If he — if he says, “I’m unable to pay a wage — the wage increase you asked,” the Board’s position is that he is required, if the union asked for it, to submit some reasonable documentation of his position so that the bargaining can proceed from there with understanding, with a responsibility, with the discussion of what’s important to the issues, otherwise the union is in a position of bargaining in the dark so to speak.

It can’t — it can’t discuss the issues intelligently because it doesn’t know the basis on which the employer’s refusal was based.

And as a matter of fact, if the employer can simply sit back and say, “I can’t afford to pay but I’m unwilling to tell you why, on want basis I reached that conclusion.”

The bargaining process may be frustrated at its very beginning by a simple statement of, “I just can’t pay.”

On the other hand, if the employer comes forward with documentation, the union is in a position to know whether it should insist on its demand or receive from it.

It can discuss the problems of the employer has and I think as the Board has held and students of the subject all agree, documentation of that kind is necessary if bargaining is to proceed on a responsible, a reasonable basis.

Stanley Reed:

Well, the information to that kind would necessary be, would it not, the — not of wages that they’ve, the amount of other expenses that they had, the cost of the manufacture goods so that there would be a complete statistical survey of the business of the company?

David P. Findling:

Well, it would depend on the circumstances, Your Honor.

Stanley Reed:

And that’s what they were ordered to do, wasn’t it?

David P. Findling:

In this case?

Stanley Reed:

Yes.

David P. Findling:

They were ordered to submit reasonable proof to substantiate the —

Stanley Reed:

Was that statistical and other information as will substantiate?

David P. Findling:

Yes, Your Honor.

Stanley Reed:

But that means — and that’s exactly the same language as the Board used in the Jacobs case and as the Court of Appeals pointed out there, that means simply that the company has to come forward with reasonable data —

(Inaudible)

David P. Findling:

I’m just — I beg you’re pardon, sir.

(Inaudible)

David P. Findling:

Well, of course, its —

(Inaudible)

David P. Findling:

It depend — it would depend on the course of bargaining and so on.

Now, the Board had found, for example, in McLean-Arkansas to which I just referred that when the company said, “Well, we’ll give — we’ll give you a statement prepared by our accountant, the showing of our earnings last year,” and then also furnish a memoranda with respect to the company’s cost and prospects that that was adequate, didn’t have to show its books.

In the Montgomery Ward case several years ago, the Board — the company had made a survey of wage cost of its — wage rates of its competitors and offered to show the names of the competitors what the wage rates were but wouldn’t disclose wage rates paid details as to wage rates paid by particular competitors.

And the Board said that the company had gotten that information in confidence and it didn’t require the company to go further.

It said that they’d given reasonably adequate information and case after case makes claim.

David P. Findling:

The Board said repeatedly that no one reasonable or a burden is contemplated and that the information does not have to take any particular form.

It depends on substance and as I say if the substance of the information is given in — in some form or another so that the parties can bargain intelligently that’s enough.

And of course, and the Board has said this that, of course, how much information, what form and so on, that will depend on the cost of bargaining in each case but the company foreclosed that here.

It simply took the position that it was none of the union’s business and they never even talked about what kind of information —

Stanley Reed:

Well, I —

David P. Findling:

— should be supplied.

Stanley Reed:

I don’t know whether they have to or not but under the order to substantiate the fact that they we’re losing money and the amount of their lost, are they not — their gained would require practically statistical abstract of their books.

David P. Findling:

Well, Your Honor —

Stanley Reed:

They’re go to substantiate it.

David P. Findling:

In the Jacobs case, the order in the Jacobs case is worded exactly the same as the order in this case and the Board cited the opinion of the Court in the Jacobs case in this case.

And in that case Mr. — Circuit Judge Chase said, “We do not understand this part of the order,” That’s the language we’ve been talking about, “To do more than show its good faith in bargaining collectively,” this probably ought to require the company to do more than and show its good faith.”

To bargain collectively in compliance with the statute does not mean that an employer must produce proof to establish that he is right in his business decision as to what he can and cannot afford to do.

He is left free to decide that himself and at the end of the bargaining may agree only insofar as he’s willing in the light of all the circumstances.”

The Board’s order does not require the company to produce any specific business, books and records but information to substantiate its position in bargaining with the union.

As we interpret this, the requirement of disclosure will be met if the respondent produces whatever relevant information it has to indicate whether it can or cannot afford to comply with the union’s demand.

And in the McLean-Arkansas case, which the Board also cited in its decision in this case, the Board adopted the findings of a trial examiner which said in affect that exactly the same thing.

Now, of course the word “substantiate” and “proof” carry connotations, perhaps.

They’re a little different.

But I don’t think that there’s any question as to what the Board’s position is.

Perhaps, a word different than substantiate might be used.

But the Board’s position is exactly that set forth in Jacobs and McLean-Arkansas, the cases show it.

It’s been that — that’s been the Board’s position since — as I say, since the first had occasioned to consider this problem back in 1936.

Felix Frankfurter:

Is there anything — is there anything in this record apart from the failure to — to produce date regarding their inability to pay that isn’t apart from that before the Board in this case?

David P. Findling:

No, Your Honor.

Now, the Court of Appeals thought that disclosure of the information might result in serious damage to the company.

It’s some legitimate business interest to the company, but the company never suggested to the Board that any legitimate business interest was involved and the Board’s cases again made clear that if — if that were an issue, it be an entirely different — been entirely different case.

And so, when the Court of Appeals thought that to require the information would — might conceivably result to damage, it was passing on an issue that hadn’t been raised before the Board or decided by the Board and that really isn’t germane to the case.

The Court of Appeals also thought that the Board’s order required the company to make a concession in violation of Section 8 (d) of the Act which provides that the duty to bargain shall not be construed to — require a concession and of course the concession was opening the books and giving information.

Felix Frankfurter:

What was the exception — what were the exceptions, the exceptions to require this company to be — examined their books on this case?

David P. Findling:

Well, the company accepted principally on the preposition that it wasn’t claiming inability to pay.

David P. Findling:

It was simply basing its claim of — of refusal to give the wage increase on competitive conditions.

Now, the trial examiner found that in fact the refusal was based on inability to pay, the Board approved that finding.

The Court of Appeals didn’t disturb it and I don’t think it’s — it’s of interest.

Here, the record totally supports it.

And in any event, even if — even if the company was putting its refusal on competitive conditions, we think that simply another way of saying in effect that it can’t afford to pay it because if I can —

Felix Frankfurter:

Are those — are those two usually exclusive competitive — competitive wages on inability to pay?

David P. Findling:

Well, we think that when the company was saying here that competitive conditions precluded its — it ran into wage increase, it was in effect saying, “We can’t pay it,” because we —

Felix Frankfurter:

They were ready to show competitive positions.

They were rendered — did you say (Inaudible)

David P. Findling:

Well, Your Honor.

No, they weren’t, we feel.

What they were willing to do was show the wage rates some of their competitors were paying those in the immediate geographic area.

And the union was saying that, “Well, you compete with companies outside the immediate geographic area also who pay higher wages and they’re also willing to — to show that they’d lost some bids.

They’d been underbid on some contracts.”

But competitive conditions include overhead.

The company made that plain itself as I said before, when it said, “If you’ll just wait until after Christmas when we put these innovations in the office and plant procedures, we may able to give you an increase besides that.”

I suppose competitive conditions wold turn also on productivity, capitalization, the company talked about that, dividend policy and so on.

Felix Frankfurter:

Is that — is that to be — does it tell us a relevant practice includes that they were going on in negotiations, their increase in the economy, it may at all.

What about — if that could pay more (Inaudible) — they were negotiating?

David P. Findling:

Yes, we concede — we concede they were negotiating but —

Felix Frankfurter:

Then if we consider they were negotiating under the question of whether they were negotiating in good faith, some confession is proven?

David P. Findling:

But — but —

Felix Frankfurter:

They weren’t just stating, just say no, we — we’re going to shut our mouth and say nothing and we (Inaudible) the fact, these are our terms, take it or leave it, was it?

David P. Findling:

No.

But Your Honor, what — what they were doing was saying, as we see it was this.

As we understand it our obligation to bargain in good faith doesn’t include any exchange of information about our financial affairs and so on.

That’s out.

It’s none of your business.

And we say that it does and we say that if we’re right about that, it doesn’t matter whether the company thought honestly that it didn’t have to exchange information or not.

It simply didn’t discharge its responsibility here.

Felix Frankfurter:

Are there — before you sit down, could you tell, I didn’t quite get it.

I inferred here since there were cases where although an employer was bargaining in good faith and yet withheld information, we wanted to lose hope but the Board could issue an order requiring them, had power to — to facilitate the honest bargaining in such a case requiring some — placing an order to the production of certain data?

Is that within their power?

David P. Findling:

I believe so, Your Honor.

I believe so.

Felix Frankfurter:

Had there been cases like that?

Would you mind, if there —

David P. Findling:

I don’t believe —

Felix Frankfurter:

— if there has been.

David P. Findling:

I think usually the Board says, “Submit reasonable proof,” and then — well, it said in so many cases that all we’re saying is that you sit down and submit reasonable proof vested in your claim of inability to pay and the Board adds, now exactly what form that’s to take, how much and so on, the details.

That’s to be worked out in the conversations, we don’t —

Felix Frankfurter:

Is that —

David P. Findling:

— and if you deal in good faith on that that’s all there is to it.

Felix Frankfurter:

All I want to know is whether they had made such an order apart from as an independent order, part of its authority.

Now, as it is to this order, are they finding a violation of a (Inaudible)

David P. Findling:

Well, Your Honor, thank you.

We haven’t fully researched that and if —

Felix Frankfurter:

Did you happen to have any data on that (Inaudible)

David P. Findling:

Certainly.

Felix Frankfurter:

(Voice Overlap) —

David P. Findling:

Gladly.

Hugo L. Black:

May I ask you one question?

David P. Findling:

Certainly, Mr. Justice.

Hugo L. Black:

Are the refusals of the company completely set out in the two letters of September 14th, September 29th?

David P. Findling:

Well —

Hugo L. Black:

Are there other — was there any —

David P. Findling:

No.

Hugo L. Black:

— refusal in writing besides that?

David P. Findling:

No refusals in writing but there’s oral, there was —

Hugo L. Black:

Yes.

David P. Findling:

That the subject came up at other meetings, there were oral conversations and so on.

Earl Warren:

Mr. Douglas.

R.D. Douglas, Jr.:

May it please the Court.

My wife the other day has said she worked on this case three years and how can you tell about it in 30 minutes and I’ve been straining it a bit just now.

I want to say first of all that down at home when a court is called on to do something and most of the judges say, “What do you want us to do?”

Before they go into the merits or whether they should do it or not.

And I want to take grievous exception to the impression that counsel has endeavored to give in good faith this bargaining to the effect that the Board after all didn’t really say, “We had to open the books.”

And I want to go through one or two things one after the other.

In the first place, what did the union ask for?

And in the record in these two letters on page 2 of the record and this started the whole thing.

The Board’s — the union said, “Respectfully request permission to have a certified public accountant examine such books, records, financial data, et cetera.”

We wrote back and said, “You can’t have that.”

And in the second letter from the union, the — the company was asked to submit full and complete information and evidence of its financial status.

It goes on down together with dividends paid in 10 years and the breakdown of its manufacturing cost.

Now, that’s what the union is asking for.

Where is that here?

R.D. Douglas, Jr.:

That is on page 6, Your Honor, of the record.

And in page two of our brief, we have picked out a few words, all of which appear either in the Board’s brief or the Board’s order or the union’s demand to show the tremendous extent of the Board’s order.

Now, on page 2 of our brief, full and complete information as to its capitalization, its sales, its cost, its manufacturing cost, its cost and price structure upon which its competitive bidding was computed, its profits, profit regard to sales and cost, dividends and financial standard.

Now, then when we refuse —

Felix Frankfurter:

Where, Mr. Douglas, is —

R.D. Douglas, Jr.:

Yes, sir.

Felix Frankfurter:

— (Inaudible) where the order of the Board is on page — am I right about that, page 64 and 65 of the brief?

R.D. Douglas, Jr.:

Yes, sir.

Felix Frankfurter:

Is that where the (Inaudible) first were made?

R.D. Douglas, Jr.:

No, Mr. Justice, we have —

Felix Frankfurter:

Where is the (Inaudible) — where you get capitalization, et cetera, and all that, where is that?

R.D. Douglas, Jr.:

We have selected those words from the Board’s brief which I will read in just a moment, if Your Honor please.

That is —

Felix Frankfurter:

That’s in — in the order?

R.D. Douglas, Jr.:

No, sir, no, sir.

What I’m arguing, sir, that if you send us back and say comply with the Board’s order that it’s necessary to know what the Board is going to require.

The Board has simply said, “Furnish whatever you got as we’ll substantiate” incidentally, it doesn’t say which might substantiate, which will substantiate, and we don’t know whether we’re being asked to prove it conclusively or not.

If such evidence as will substantiate it, it looks like we either prove it, or we are in bad-faith.

But now then, the complaint was the next thing.

Now, the complaint is not in the record but we we’re charged in the Board’s complaint with having failed to give — the complaint used some of the information that union’s letter had used.

Now, then on page 82 of the record, we find a very interesting summation of what the union wants and this was elicited, the second paragraph of page 82, this came from the Board’s principal witness, the union organizer.

He says, “Now, right there you have got the phraseology there.

Let me answer it this way and see if it gives you want you want.”

He was answering my question.

“If it took the complete records, profits, dividends, manufacturing cost or what have you, anything — relating to the company’s inability to grant more money then I think it should have been made available to the accountant that was to examine the books.”

Now, if Your Honors please, he is asking for just about everything there.

Now then, is the Board asking us to give the union, what the union wanted, and I refer to the Board’s brief in this case before this Court on page 22 and 23 and 24.

I think it’s important to read these, Your Honors, to see what the Board wants in its brief because this is what they’re going to say to us if you send us back subject to that.

On page 22 of the Board’s brief, whether the business reasons stated by the company where bona fide might well depend on what a financial report would disclose as its profit in regard to sales and cost, its capitalization, it’s cost and price structure upon which this competitive bidding was computed.

Now, the Board, not in its order but in its argument says, “You got to have that to learn the bona fides of our position.”

At the top of page 23 of the Board’s brief, “According to the company as a prerequisite to fulfilment of its bargaining obligation was required to grant the union’s request for full and complete information and evidence of the company’s financial status to substantiate its claim.”

And yet the Board comes here and says, “We haven’t told him to open books.

Just give him whatever is necessary to substantiate.”

If we go back subject to the Board’s order, we will open the entire books.

Finally, on page 24 —

Earl Warren:

Well, what did the Board ordered them to do?

Where is that?

R.D. Douglas, Jr.:

That, Your Honor, is on page 64 of the record or page 65, Your Honor.

Earl Warren:

All right.

Now, where is the particularly objectionable language in the order that shows that they require more than — than you believe they should?

R.D. Douglas, Jr.:

Well, I’m reading between the lines, Your Honor, on page 65 (b) —

Earl Warren:

Well, let’s take the language that —

R.D. Douglas, Jr.:

Yes, sir.

Earl Warren:

— they referred to, not between the lines.

R.D. Douglas, Jr.:

Yes, sir.

Upon request — I’m reading from the second paragraph of page 65.

Upon request, furnish Shopman’s Local 729 and National Association and so forth with such statistical and other information as will substantiate the respondent’s position of its economic inability to pay the requested wage increase and will enable Shopman’s Local so forth to discharge its functions as statutory representative.

Now, it’s true, Mr. Chief Justice, that the Board just says, “Furnish such statistical and financial information as will substantiate your position.”

And I’m bringing all these in from the Board’s brief to show you what the Board means.

Now, I say this that if the Board intended just a bad showing of what would substantiate it, why do they argue in their brief and use the magic words, capitalization, price structure, manufacturing cost.

Indecently, Mr. Justice Frankfurter, Judge Parker asked us in the court below, why are you afraid to show this information.

And I was interested in your comments and he went on to say, “Does not the average corporation set this information out in its reports to stockholders.”

And before I can answer, Judge Dobie says, “No, sir.”

He says, “They give a little bit of profit and loss and a statement as to assets and liabilities, but the breakdown of its manufacturing cost,” he said, “That is a priceless secret guarded by every employer.”

And I don’t know of any employer that wants to tell anybody about a complete breakdown of its manufacturing cost and yet that’s what the union asked for in its letters.

That’s what they demanded at the Board hearing and the breakdown of the manufacturing cost is part of the language used by the Board in its brief.

Felix Frankfurter:

Excuse me, Mr. Douglas.

If you take that — if the position of the Truitt Company is they can’t afford (Inaudible)

R.D. Douglas, Jr.:

Yes, sir.

Felix Frankfurter:

They can’t afford it.

What is your position to the Court in the requirement of that defense?

Is it enough for you to say, we can’t afford it and period, and give no basis justifying that if on your alternative, either just say, “We can’t afford it no more,” and opening up everything?

R.D. Douglas, Jr.:

No, Mr. Justice.

I don’t think — I think there’s third ground in there.

In the first place, in the Jacobs case which is the principal one cited by the Board as I understand the facts and I’ve read the Board decision and the Board’s findings, management just refused as to do anything.

They said, “Can we talk about wages?”

“No, we can’t afford it.”

“What about paid holidays?”

“What about pensions?”

“We can’t afford it.”

Now I’m satisfied in my mind that that was a refusal to bargain.

I do not say that the Court was correct in saying, “You got to open your books.”

But I do not think that management in — what is it — the language a sincere desire to reach an agreement.

Felix Frankfurter:

Now, what did you do beyond to say, “We can’t afford it really?”

R.D. Douglas, Jr.:

Well, sir, we started off by talking about competition.

We said, “You got our wage rates and we made a special point.”

This bargaining lasted over a good many weeks.

I was present at every one of the sessions.

We went to about six of our competitors and asked them if they would let us in good faith disclose their comparative records.

Five of them said, “All right,” the six said, “No, sir.

We’ll tell you but you can’t tell anybody.”

So, we went back to the union and we said, “Take a welder in our shop.

A welder makes a dollar 85.

At the XYZ Company, a dollar 83, at another a dollar 65.”

So, we show the comparative rates.

The union said, “That’s not enough.

We still believe you can give the raise.”

This sir, was before the — the demand and incidentally, before they made any demands for our records, they went on strike.

I think in good faith maybe the union should have asked for the records first but they pulled an unsuccessful strike.

Then they were not satisfied, so we kept talking about competition they said, “Oh, you can get any contracts you want.”

So, we opened our books to the extent of pulling out, you know when you — when you bid on a contract and some other body — somebody else gets it, its customary at least in our region for the company awarding the contract to send a little card to all bidders and tell who got it and what the price was.

So, we picked out a number of contracts, good contracts we’d love to have and we showed who got them and we showed to the union we were underbid by these companies that did get them and we showed to the union that those were the companies that were paying less labor cost.

So, we said we think — now I told the union, “I don’t think you’ve got any legal right to this information but we want to convince you that we’re in good faith.”

And again, we comeback to that language in the Globe Cotton Mills case, a sincere desire to persuade the other fellow to accept your position.

Felix Frankfurter:

How long did these negotiations had — persuasions in those negotiations?

R.D. Douglas, Jr.:

We had two sessions, Your Honor, about four hours each when we — the union demanded 15 cents at first then we came back with an offer of two and a half.

We had three sessions and then we had a strike, then we had one short session during the strike, then when the strikers came back, we continued it and then they wrote the letters and we had three more sessions after the letters and then —

Felix Frankfurter:

They found how many hours to do something?

They need six, seven sessions to go.

R.D. Douglas, Jr.:

Oh, about –-

Felix Frankfurter:

About four?

R.D. Douglas, Jr.:

— about four — about four hours a session, Your Honor.

We started —

Felix Frankfurter:

Twenty hours — certainly 20 hours?

R.D. Douglas, Jr.:

Yes, sir.

We started two —

Felix Frankfurter:

What’s going on under 20 hours of talk?

R.D. Douglas, Jr.:

There was an awful a lot of talk —

Felix Frankfurter:

Well, just characterize it, what did the — did you talk about the wage —

R.D. Douglas, Jr.:

Well —

Felix Frankfurter:

— (Voice Overlap) had or did you talk about other things?

R.D. Douglas, Jr.:

No, sir.

We talked this with just on wage reopening.

You see we already had a contract.

This was nothing but wages.

This was wage reopening clause, we weren’t supposed talk about anything else.

And we tried the (Inaudible) to the line and not get off on anything else.

They started talking about the fact that price isn’t going up so much.

We said, “Yes, our prices have gone up too.”

And we talked about these competitors and they said, “Yes.

But you’re just talking about local.”

They said, “You are not near up to the standard in Detroit, Dayton, up in there.”

And I said, “No, sir.

We are not.”

Nobody is.

Nobody in North Carolina pay similar wages that I know of in Texas or anything else to the — that area up there.”

So, they said, “You’re in competition with them.”

We said once in awhile we bid on a Tennessee Valley Authority job against — theoretically against the whole country and we are in competition with them but 90% of our competition is right here with Carolina Steel, (Inaudible) Virginia Bridge and so forth.

Now, those —

Felix Frankfurter:

Those figures — those figures were put on the table as to the —

R.D. Douglas, Jr.:

Yes, sir.

Felix Frankfurter:

— the ratio — the ratio of —

R.D. Douglas, Jr.:

Yes, sir.

Felix Frankfurter:

— your competitive bidding.

R.D. Douglas, Jr.:

We — we went — we went down a number of our jobs, a welder, a riveter, painter, and so forth and showed what we were paying and what the others were.

Felix Frankfurter:

How did — how did the negotiation break off?

R.D. Douglas, Jr.:

When it — break off except that we signed a contract.

The union says, “Well, if we can’t get it, we can’t get it.”

Of course the Board has said, “That it doesn’t cut any ice to say that you got a contract anyway.

The union might got — have got a better contract.”

But we agreed and we signed the contract with the two and a half cents and a short while later we offered another two and a half.

So, as a result of this bargaining the union got five cents an hour raise and we’ve had two —

Felix Frankfurter:

Was this before the — before this expectant — the expectant economist that you spoke of?

R.D. Douglas, Jr.:

Well, sir, we — we asked for a little stalling time to see if we could effect some economist and we found out we could not.

Nevertheless, about three months after that, we offered a two and a half cent raise.

The union said, “We won’t say no, we’re not agreeing but we’re not telling you not to give it to us.”

So, we did give it to them.

But if — the Court please, this — this comes down to this basic fact as to whether and some of you put your fingers on it whether per se we should by refusing this be charged with refusal to bargain.

The question asked, I believe, by Mr. Justice Frankfurter, “Can the Board order?”

Look at the books or if you want to cut it down and it — can the Board offer the furnishing of any statistical information about the company.

In absence of a finding of an unfair practice, I say no.

I don’t know anything in the Board’s law itself nor Taft-Hartley where the Board can order the company to do anything other than a finding that good faith requires it.

Now then, as we see, I believe, this Court, Mr. Chief Justice Vinson, I believe it was, wrote the decision, the American Insurance Company case, there was a — a key point there, that’s cited in our brief.

This Court said, “That no individual refusal per se can automatically be bad-faith,” the statute itself says, “No company shall be required to grant a concession.”

Now, they say that after all there are lots of other concessions.

You’ve got to grant the concession of giving new wage data.

That is a tool of bargaining.

The Courts have used that language.

If the union has bargained with me as to wages, they’re entitled to have the wage data.

How can you bargain it if we don’t know what we are talking about?

They are entitled to know the seniority list.

They’re entitled to know something about time studies if we threw that into the — the makeup of the contract.

But we say and the court below said, “That information about our company’s financial status, first of all, it’s not an issue, it’s not bargainable.

And second, that the company — that the union has no right to that.”

R.D. Douglas, Jr.:

Now, I want to mention just a little bit about the effect of this.

At one time Mr. Truitt, the elderly president of our company said, “Why don’t we go on and give them the books.”

And his boys, the vice president said, “Dad, they won’t understand.”

They said, for example, “We are budgeting some $20,000 or $30,000 a year for advertising.”

One thing they do down there, they sponsor some basketball games down at state college and our good basketball in that area, Truitt Manufacturing Company pays for the broadcast with a commercial every now and then between free-throws.

Now, the union has said, “Why in the world are you wasting money on that?”

Now, if Your Honor please and this applies to all the big companies in the United States, incidentally, a whole a bunch of them in the last two weeks had been writing to me and saying, “For God sakes, work on that case.”

I don’t know why they waited until now, but a lot of them had been rather — really excited about it lately.

Now, then —

Felix Frankfurter:

Can you — then you — you’d been working on it for three years?

R.D. Douglas, Jr.:

Well, at least they knew it since Judge Parker wrote the decision.

But now the union comes along and says, “Why do you spend all that for advertising?”

Now, granted sir, granted that we open the books and the books disclose that advertising budget and the — the union, I don’t see very well frankly how you can disclose that without getting into an argument on that because let’s say, the CPA, whoever it is come backs and says, “My Lord, they’re spending $30,000 a year for advertising.”

And to a sweeper in our plant or riveter or helper, that’s an awful lot of money and they can’t understand it.

Now, are we going to open the books and then start blissfully on after bargaining or will we not get in a quarrel and how we can help it?

I don’t know.

When they start telling us, “You’re spending too much money for advertising.”

My wife asked me, “How much money we made last month,” I’m not going to tell her I bought a Supreme Court Digest.

You think one time up there and you got to buy a Supreme Court Digest, of course, she doesn’t understand that I need it.

[Laughter] That — that’s a little foolish maybe, Your Honors, but that — that is the kind of thing that can be grossly misunderstood by people not in the business end.

Now, down in the McLean Lumber case, in — in Arkansas, the company offered to furnish some information to a disinterested third party.

I don’t believe in that because that third party has either got to be a steelman, who understands our business and is undoubtedly a competitor or a CPA who puts at the end of his report, this was made according to accepted accounting practices, but he doesn’t know anything about accepted steel company practices.

So, we don’t think that we or should be required to open our books to any third party.

Hugo L. Black:

Mr. Douglas —

R.D. Douglas, Jr.:

So —

Hugo L. Black:

— may I ask, your time —

R.D. Douglas, Jr.:

Yes, sir.

Hugo L. Black:

— your time is short and I’m not going to delay you.

R.D. Douglas, Jr.:

That’s all right, sir.

Hugo L. Black:

But I simply want to ask, if you made any — you stated any different grounds for your refusal other than those stated in the two letters on page 7 and page 2?

R.D. Douglas, Jr.:

No, sir.

We — we never — actually counsel was mistaken.

This thing never came up about any further discussion.

The union wrote the two letters and we answered and there was no further discussion on — on these books at all.

Hugo L. Black:

These are the only grounds you ever gave for your refusal?

R.D. Douglas, Jr.:

Yes, sir.

I thought at that time, Your Honor, there was a good deal of Board law, it’s all that has split and the Board had said, “If you say, we’ll go broke.

You’ve got to open the books.”

The — the Board has never said if you plead competition, you have to open your books.

And consequently, throughout the bargaining, I tried my best to hold it on the competition grounds because there was no law about that.

But we got off, appealed and I — I fear that — actually, I like to tell you this, it’s not in the record but it’s hypothetical.

We had a bargaining session between the time the Board had ordered us to give the information and the Circuit Court said, “We didn’t have to.”

Now, with the law in that status where as far as our — our concern, it might be that we’re going to have to open the books if we use economic matters, and I believe Mr. Justice Harlan, I believe you said, if the company puts it on any other basis.

If they don’t put on economics, they haven’t got to open the books and I understood counsel to say, “No.”

That the Board’s order says, “You open the books only if you plead economics.”

Now, how you can argue on wages without getting the file of economics?

I don’t know.

We tried it once.

We came back at a conclusion of this contract and started talking wages and with the Board’s order before me, if you talk economics you got to open your books or that’s the way I interpreted the — the order.

We spend about six hours in the most awful bargaining you’ve ever seen and I say to you that if this order is sustained, it will not help the bargain, it will ruin bargaining because here’s an employer who for reasons of his own does not want to disclose his financial data to everybody.

What’s he going to do?

The Board says, “If you talk economics open come your books.

You got to give some kind of reasons other than economics.”

I’m satisfied that the director, regional director down at home would certainly charge us with refusal to bargain if we just said no.

“Oh, why?”

“Oh, why not?”

“No.”

So, what did we do in this time?

We had to say, “First of all, you’ve been paid too much already.”

And they said, “That’s no good reason.”

R.D. Douglas, Jr.:

I said, “I’ll think of another.”

We think everyday there are people coming applying at our shop for work at our rate, at our wages, that indicates plenty of people walked jobs with us at our present wages.

That indicates you’re being paid enough.

I called up the employment office.

I went back to the union and said they got another reason.

There are plenty of people waiting on the list there to come down here at our pay.

That’s not a good reason.

And we had the worst session with me trying carefully to skirt any economics because the Board says, “If you get into economics, open come your books.”

And trying to think up non-economic reasons on wages is frustrating to say the least.

Hugo L. Black:

May I ask you just one more question?

R.D. Douglas, Jr.:

Yes, sir.

Hugo L. Black:

You say this assert the only grounds that you used on objecting to producing any record?

Now, after the order, did you assert any additional ground?

R.D. Douglas, Jr.:

For refusing to —

Hugo L. Black:

To the Board.

Did you present to them the question if it’s too broad and didn’t know exactly what it was or that’d be too expensive, anything of that kind?

R.D. Douglas, Jr.:

No, sir.

As a matter of fact by the time the Board order came through, we had settled our differences with the union.

We were happy, working fine and I thought that the Board order would — I didn’t know what it would be if they tell us to open the books now when we’ve settled the contract.

It might be —

Felix Frankfurter:

Is this merely — does this merely a retrospective construction here, a retrospective situation, it were?

R.D. Douglas, Jr.:

It — it is, sir, except, I think, if this Court were to send this order back and sustain and order us to follow the Board’s order.

It might mean nothing to us.

We’re a small time outfit down there.

We’re getting on fine with the union.

We’re operating under a contract right now.

But all over the United States for harassment proceedings as Judge Parker said, “A union could use the management’s fear to open their books as a club to force management into giving an unjustified wage increase.”

What is it mean anyway, if — if the Court please, what is going to be the answer?

Let’s say first of all, we open the books and let say the record shows we were lying, that we’ve been making profit until it’s running out our ears and we’ve got plenty of money in the bank and we have pleaded inability to pay.

There is no law in the world that I know of it, if the Court please, that says, “Truitt Company, you have got to give the pay raise.”

R.D. Douglas, Jr.:

No law says that.

Felix Frankfurter:

Mr. Douglas, you’re now operating under a selective agreement?

R.D. Douglas, Jr.:

Yes, sir.

Felix Frankfurter:

How far?

How long is that running?

(Voice Overlap)?

R.D. Douglas, Jr.:

We’ve got a two year agreement, I think — we finished it.

No, sir, I believe we run out, next February.

Felix Frankfurter:

February, 1957.

R.D. Douglas, Jr.:

Yes, sir.

Felix Frankfurter:

Well, this can’t hardly come into play right now, can’t it?

R.D. Douglas, Jr.:

No, sir, except in the future.

Felix Frankfurter:

Yes.

I’m talking about —

R.D. Douglas, Jr.:

Yes, sir.

Felix Frankfurter:

Is it merely — when this collective agreement turns out and he have new wage negotiations, that comes into play —

R.D. Douglas, Jr.:

Yes, sir.

Felix Frankfurter:

— provided the same — the same economic situation.

R.D. Douglas, Jr.:

If — if we have to get in economics and the question again is and I — I think this is the end of thing —

Stanley Reed:

Do you have to post a notice of that?

R.D. Douglas, Jr.:

Sir?

Stanley Reed:

If you lose this, you’d have to post a notice?

R.D. Douglas, Jr.:

Yes, sir.

We would have to post it.

That’s part of the Board’s penalty to post a notice saying —

Stanley Reed:

You — you’re willing.

R.D. Douglas, Jr.:

— “We’ve been bad and we’re going to be good from now on.”

And in fact the Board in good faith, the Board after its order, called my attention to the fact that the contract had been settled and it was a moot question and agreed they would drop the whole thing if we would post a notice.

But we in good faith said, “We don’t think the law requires us to open these books.”

And the people I represent says, “We will go to the highest court in the land.”

R.D. Douglas, Jr.:

Folks say that all the time.”

I’ll go to the highest court in the land,” but we’re here.

We’ll go before we open the books because we don’t think we are suppose to and we’ll not post a notice.

So the Board says, “All right, if you won’t post a notice then we’ll just have to go to the Circuit Court and get an order of enforcement.”

Now, one final thought, the — the extreme to which this goes, the Board order itself, I’m getting back on the track of the specific language, it says, “As will substantiate.”

Now, what does that mean?

Substantiate usually means to prove to somebody’s satisfaction.

And we’ve got to prove to the Board’s satisfaction.

Counsel has said that we didn’t plead harm.

If the Court says that you’ve got to plead that it’ll hurt you before you open your books, then every management in the country is going to plead harm and you got to open the books to let the Board decide whether it’s harmful and whether you should have opened them in the first place.

So, you never get anywhere.

Is the Board going to say, if we plead inability to pay and we open the books and the books prove that we’re correct, is the Board going to say, “Now the union, if you strike in the face of that, you’re in bad-faith?”

You know the answer.

The Board is going to say, “No, the union’s got a right to strike anytime they want.”

Felix Frankfurter:

But suppose — Mr. Douglas, suppose instead of opening what you call, “Open these books.”

You bring in a statement and say, “Give some basic if the (Inaudible) namely, evaluation of your plant in order to have for the year across the production the income, showing that it had made only X% profit and loss as to that.”

Could you do that without any congruent consequences?

R.D. Douglas, Jr.:

I think we could, Your Honor, except that — let — let’s say that the — that the monthly operating statement we give them is for the last month.

Let’s say we had a real good month, last month —

Felix Frankfurter:

You’ve taken — take a sufficiently long period.

Take over — don’t take the high or low month to think a sufficient date (Voice Overlap) —

R.D. Douglas, Jr.:

All right.

Felix Frankfurter:

— (Voice Overlap) period.

R.D. Douglas, Jr.:

Let’s — let’s say we had a good year and the Board — the Board says, “Give them your operating statement for one year.”

Now, then the union sees, we made $50,000 profit, we’ll say, last year.

The union says, “We’re going to have our share of that.”

We say, “Oh, no.

The two years before that, we operated at a loss, our machineries in bad shape, we have got to —

Felix Frankfurter:

Well, let me reshape my question Mr. Douglas.

Suppose — when you say you — you can’t afford it.

R.D. Douglas, Jr.:

And incidentally, sir —

Felix Frankfurter:

(Voice Overlap)

R.D. Douglas, Jr.:

— I don’t see any difference between can’t afford it and we have —

Felix Frankfurter:

I — I’m —

R.D. Douglas, Jr.:

— competition.

Felix Frankfurter:

I didn’t mean to make it — you can’t afford it.

I’m assuming you make that in perfect good faith.

I’m assuming that — that you can make some — some show of bargain, I mean, maintaining — maintain that position.

And now, I’m further assuming that you have evaluated the company.

The fair way of showing that is to take a plea (Inaudible) that you can get far with this, that it wouldn’t delimit one year, one month.

If you do that without any of these words, consequences, it may not satisfy the Board, that’s my next point.

You will then — the question then arises whether they say, “Oh, well, we want to know the detail.”

We want to know what we think you — you — if you had a brother-in-law, the vice president from whom you bought (Inaudible)

You buy (Inaudible) at excessive rates, as I understand it.

R.D. Douglas, Jr.:

Yes sir.

Felix Frankfurter:

(Inaudible)

R.D. Douglas, Jr.:

I’m (Voice Overlap) —

Felix Frankfurter:

But suppose you do — give them some basic figures like that.

Do you see a fair — a fair — as it were a balance sheet on the basis you discussed this and so on.

The Board might say or the examiner might find that a plead is made.

The union might say, “No.

We want more.

We want — we want a breakdown.

Much more, we want to find out about the expenses (Inaudible)”

Wasn’t that supposed?

R.D. Douglas, Jr.:

Yes, sir.

Felix Frankfurter:

All the way.

That’s another question but couldn’t you — short of what he’s called, opening the books, give some — you’ve got this showing that when you say you can’t afford it, you can’t afford it?

R.D. Douglas, Jr.:

I think, sir, that we could and I think we would and in the Board’s brief they talked about this Studebaker case.

Remember, Studebaker said, “We be — they’ve got to cut pay or go out of business,” and from the bargaining strategy they said, the company did, “We better show the union our books,” and the success of that strategy prove because the union, seeing Studebaker’s books did accept the pay cut.

R.D. Douglas, Jr.:

Now, I’m perfectly willing to all these writers on this subject, I — I’ve never written about bargaining.

I — I make my living in it, and all these writers who say, “It’s a wonderful thing to give the union information.”

Sure it is in certain strategic points and we may very well as Mr. Truitt said one time, “Let’s give them the books.”

But we don’t think the Government ought to order us to give the books and that we may very well —

Felix Frankfurter:

You say books and I say some — some evidence to sustain other — other than your ipse dixit that you can’t afford it.

R.D. Douglas, Jr.:

Well, let me say this, sir.

It’s not in the record.

Outside of the company office one afternoon after one of these sessions, I’ve said to the organizer, “Would you be satisfied if we told you, we haven’t paid any dividends and showed you the last month’s profit loss,” and he says, “No.

You can doctor those all you want.

We want our CPA to go in the books.”

And that’s what the letter said, to lay it before an accountant.

Thank you.