#### In the Matter of New York State Labor Relations Board, Appellant, against Club Transportation Corp., et al., Respondents.

Second Department,

June 22, 1949.

*537
      *William E. Grady, Jr., Philip Feldblum*and *George E. Moehringer*for appellant.

*Louis H. Shereff*and *William F. Blealcley*for respondents.

*Asher W. Schwarts*for Transport Workers Union of America, C. I. 0., Local 100, *amicus curies.*

*Per Curiam.*

On May 2,1945, Club Transportation Corp. purchased from the trustee in bankruptcy of Suburban Bus Co., Inc., all the assets of the bankrupt. On May 3, 1945, the operating personnel of Suburban (all of whom belonged to an A. F. of L. union) were discharged and were immediately offered employment at Club provided they joined the C. I. 0. union with which Club had a closed shop contract. Appellant found this to be an unfair labor practice under subdivisions 4 and 5 of section 704 of the Labor Law, in that by that conditional offer of employment Club and those acting on its behalf required the former Suburban personnel to refrain from joining or assisting .the union to which they belonged (which was the labor organization of their choosing) and discouraged membership in that union. Appellant thereupon issued the order which it seeks by this proceeding to enforce, which order required respondents to (1) cease the unfair labor practice; (2) offer employment at Club immediately to the former Suburban personnel, without relinquishment of membership in the A. F. of L. union to which they belonged and without requiring membership in the C. I. O. union with which Club had the closed shop contract; (3) make the employees whole by giving them back pay. By the order appealed from Special Term denied appellant’s application to enforce its order and vacated and set it aside.

The order should be reversed on the law and the facts, with $50 costs and disbursements, and the application to enforce appellant’s order of August 1, 1947, granted, without costs.

The closed shop contract upon which respondents relied to require membership in the C. I. O. union was not a justification for making a conditional offer of employment under subdivision *5385 of section 704 of the Labor Law, because the C. I. 0. union was not the majority representative of the appropriate bargaining unit, which unit appellant found to be the positions held by the former Suburban employees. Appellant had power in this unfair labor practice proceeding to make a determination as to what constituted the appropriate bargaining unit. *(International Ass'n. etc.*v. *National Labor Rel. Bd.,*110 F. 2d 29, affd. 311 U. S. 72; *National Labor Rel. Bd.*v. *Graham,*159 F. 2d 787.) The finding by appellant that the positions held by the former Suburban employees were the appropriate bargaining unit was justified by the facts that (1) prior to May 3, 1945, Club and Suburban, though commonly owned, were operated as separate bus systems and were maintained as separate entities for labor relations purposes; (2) the bus routes of Club and Suburban covered entirely different geographical areas, Suburban having four times as many routes as Club, four times as many miles, and twice as many employees; (3) the Club contract with the C. I. 0. union of February 26,1945, provided that there would be no interchange or transfer of employees between Club and Suburban. *(National Labor Rel. Bd.*v. *Norfolk Southern Bus Corp.,*159 F. 2d 516, certiorari denied 330 U. S. 844; Labor Law, § 707, subd. 2; *Packard Co.*v. *Labor Board,*330 U. S. 485, 491.) If at some time not definitely stated in the record there were any integration between the two bus routes, it had not taken place at the time of the conditional offer of employment, nor had the decision to integrate the two routes been made at that time. However, assuming that the positions held by the former Suburban employees did not constitute an appropriate bargaining unit, there is no proof in this record that the C. I. O. union was the representative of the majority of the employees in the overall unit, nor was the closed shop contract applicable by its terms to the overall unit. Bequirement by respondents of membership in the C. I. 0. union as a condition to employment at Club, even though not coupled with a demand of resignation from the A. F. of L. union, was sufficient to constitute the unfair labor practices of which respondents were found guilty. Appellant had power to require Club to offer employment to the former Suburban employees even though those employees had never before been employees of Club, and to direct respondents to make those employees whole by awarding them back pay. (Labor Law, § 706, subd. 3; *Phelps Dodge Corp.*v. *Labor Board,*313 U. S. 177.) The individual officers and directors of Club, as well as Club itself, were prop*539erly directed to make good the award of back pay. (Labor Law, § 701, subd. 2; *Matter of State Labor Rel. Bd.*v. *Metropolitan Life Ins. Co.,*183 Misc. 1064, affd. 269 App. Div. 934, affd. 295 N. Y. 839; *Matter of New York State Labor Rel. Bd.*v. *Hudson,*37 N. Y. S. 2d 304, affd. 267 App. Div. 763, affd. 293 N. Y. 671; *Labor Board*v. *Jones & Laughlin,*301 U. S. 1, 48-49; *Matter of N. Y. State Labor Rel. Bd.*v. *Wheeler,*177 Misc. 945, affd. 265 App. Div. 970, affd. 291 N. Y. 562.)

Nolan, P. J.

(dissenting). Appellant has found, on sufficient evidence, that when respondents offered employment to the discharged employees of Suburban Bus Co., Inc., they discouraged membership in a labor union, to which such discharged employees belonged, by requiring them, as a condition of employment by Club Transportation Corp. to join another labor union — Transport Workers Union of America. That finding is conclusive. (Labor Law, § 707.) Such discrimination in regard to hire, or condition of employment, would, ordinarily, constitute an unfair labor practice. (Labor Law, § 704, subds. 4, 5.) On the undisputed facts, however, it did not constitute an unfair practice in this instance. The Labor Law provides (§ 704, subd. 5) that *“*nothing in this article shall preclude an employer from making an agreement with a labor organization requiring as a condition of employment membership therein, if such labor organization is the representative of employees as provided in section seven hundred five.” Concededly, at the time when respondents offered employment to the former Suburban employees, Club Transportation Corp. had a closed shop agreement with the Transport Workers Union which was then in effect, and which provided that during the life of the agreement no operating employee should be employed by Club Transportation Corp. unless such employee should be a member, or should within one month after such hiring become a member in good standing of the Transport Workers Union. Concededly, when that agreement was made, Transport Workers Union was the representative of employees of Club Transportation Corp., having been designated for the purpose of collective bargaining by a majority of employees in the only unit appropriate for such purposes which existed within the ranks of Club Transportation Corporation’s operating employees, and having been certified as the representative of such employees for such purposes by appellant. The same condition existed at the time of the conditional offer of employment. The statute obviously means that discrimination, such as practiced by respondents, shall not be *540an unfair labor practice if, prior thereto, the employer has made a valid closed shop agreement with a labor organization which properly represents his employees. Appellant apparently concedes that the agreement entered into between Club Transportation Corp. and Transport Workers Union would be sufficient to justify such discrimination if the contracting union were the representative of the majority of employees in the bargaining unit to which the discharged employees of Suburban belonged, and if the contract were applicable to such employees. The statute does not require, to justify such discrimination, that a closed shop agreement be made with a labor organization which will, during the life of the agreement, be satisfactory, for the purpose of collective bargaining to prospective employees. Neither does it require the contracting labor organization, as a condition of enforcing its closed shop agreement, to continue, during the life of the agreement, to be satisfactory as a representative for the purposes of collective bargaining to a majority of an expanded unit, composed of new and old employees. (Cf. *Triboro Coach Corp.*v. *Labor Rel. Bd.,*286 N. Y. 314.) The closed shop contract, by its express terms, was applicable to the discharged employees of Suburban, considered as prospective employees of Club Transportation Corp., just as it was applicable to every other person offered employment or employed as an operating employee, during its term, by the contracting employer.

The order appealed from should be affirmed.

Carswell, Johnston and Mac Crate, JJ., concur in *Per Curiam*opinion; Nolan, P. J., dissents and votes to affirm, with memorandum, in which Adel, J., concurs.

Order reversed on the law and the facts, with $50 costs and disbursements, and the application granted, without costs.