Lead Opinion
1. In Corning Glass Works v. N.L.R.B., 2 Cir.,
2. The master refused to hear evidence as to, or to pass upon, the propriety of deductions because of the alleged wilful or neglectful failure of certain employees to accept employment from other employers. In so refusing, he was correct, as it was plain from our order of reference and the record that that issue was not properly before him.
3. The company contends that, if that is true, that issue should now be referred to the Board for hearing and decision. The Board contends that this request comes too late. The peculiar state of the record becomes important:
(a) The Board’s order was entered, after a hearing, on September 22, 1939. During the hearing before the Board, the company did not raise the present issue as to potential earnings from other employers. That issue is, therefore, not open so far as it relates to such potential earnings up to the date of the close of the Board’s hearing. The question here is whether it is also foreclosed for the subsequent period.
(b) On September 27,1939, the company petitioned this court to review and set aside the Board’s order; the Board, by cross-petition, asked its enforcement.
(c) On or about January 5, 1940, the company moved this court for leave to adduce additional evidence as to matters occurring after the Board’s hearing; the alleged matters related to actual employment obtained by some of the employees and to offers by the company to reinstate others. The Board answered that these were mat
(d) On the petition to review and the cross-petition to enforce the Board’s order, the company’s brief was filed July 12, 1940; the Board’s brief on August 22, 1940; and the company’s reply brief on October 30, 1940. Oral argument was heard November 7, 1940.
On April 4, 1941, this court filed an opinion holding that with certain modifications, the Board’s order should be enforced. See 2 Cir.,
Up to this point, the company had said nothing as to potential earnings from potential employment by other employers. The issue as to such potential earnings for the period before the close of the Board’s hearing was, as we have said, foreclosed. The Board insists that for any subsequent period it is now also foreclosed, because the company had not raised that issue in its petition or motion or briefs thus far filed with this court. With that argument, we do not agree for these reasons:
In Phelps Dodge Corporation v. N.L.R.B., 2 Cir., July 11, 1940,
In. N. L. R. B. v. Yale & Towne Mfg. Co., 2 Cir., August 16, 1940,
But, as soon appeared, we took that action because of the exceptional facts in that case: In N. L. R. B. v. Acme Air Appliance Co., 2 Cir., February 3, 1941,
The company in the instant case, when writing its briefs and arguing orally, had good reason, therefore, to believe that the defense of potential earnings from other employers could not properly be raised in a court hearing on petitions to review or enforce a Board’s order. Consequently, the company appropriately did not present that
(e) On April 21, 1941, the company tendered to this court a proposed form of decree, which provided for a deduction from the back pay of each of the discharged employees such “amounts as he would have earned during such period had he accepted such other work as an employee of * * * any other employer, as he was fitted to do, and as was reasonably available to him.” That provision went back too far in time, as it covered the period before the close of the Board’s hearing. But it was otherwise properly worded under our earlier decision in Phelps Dodge (which the company cited in an accompanying memo) and squarely included the issue of potential earnings which we are now considering. It was not in line with our earlier decision in the Acme Air Appliance case.
(f) Without opinion, this court (in line with its decision in the Acme Air Appliance case) rejected this provision and, on April 29, 1941, entered an enforcement decree calling for deduction of “net earnings.”
(g) On April 28, 1941, the Supreme Court had filed its opinion in Phelps Dodge Corporation v. National Labor Relations Board, supra, in which it said that the deductibility of amounts which employees unjustifiably refused to earn in desirable new employment was a matter which should be referred to and decided by the Board and which should not be determined in contempt proceedings.
It may well be that this court had not read that opinion when, the day before, its enforcing decree was entered. Had that opinion then been carefully considered, the decree should have contained the provision sought by the company, coupled with a further provision that that issue be referred to the Board.
(h) On May 12, 1941, the company moved this court to resettle its enforcing decree of April 29, 1941. It asked for the inclusion in the decree of a provision remanding the proceedings to the Board, with directions to hold a hearing to determine which of the discharged men “the petitioner shall be required to make whole * * * if any, and the amount due each of them for such reimbursement.” In an accompanying memo, it said that it sought to have this issue determined in a formal hearing before the Board, rather than in connection with a contempt proceeding.
The Board now asserts that, by this motion of May 12, 1941, the company had abandoned the issue as to potential earnings from other employers which it had raised on April 21, 1941. We do not agree. The company may have been hesitant again to press that issue with which this court on April 29 (less than three weeks earlier) had refused to deal, despite the Supreme Court’s Phelps Dodge decision filed on April 28. To be sure, the provision tendered by the company on April 21, had not asked for a reference of that issue to the Board. But the company may reasonably have concluded that, if that were this court’s sole objection to the provision which the company then tendered, this court would have accepted that provision with a modification necessary to send it to the Board. It is unfair to say that, in the circumstances, the company, by its motion of May 12, abandoned the issue which it had pressed on April 29. Cf. In re Barnett, 2 Cir.,
However that may be, this court, without opinion, on May 16, 1941, denied the company’s motion of May 12, 1941.
(i) On October 28, 1941, the Board, alleging violation of our enforcement decree of April 29, 1941, asked this court to hold the company in contempt. The company then, on November 18, 1941, asked that, in our order of reference to the special master, we provide that he should consider to what extent the employees had wilfully
Our order of' January 6, 1942, referring the matter to the master, omitted that requested provision; and correctly so, as, under the Supreme Court’s Phelps Dodge decision, that was an issue to be referred to the Board and not to a master. But we might well, at that time, have referred it to the Board.
4. The result of our order of reference was that the master, properly, rejected evidence bearing on the issue of potential employment by other employers. But the consequence is that the company has not had an opportunity to be heard thereon to any extent whatever. We conclude that, under the Supreme Court decision in Phelps Dodge, that matter should long ago have been referred to the Board for decision and hearing.
5. It is suggested that that conclusion is erroneous because the company failed to seek certiorari from the decree of April 29, 1941. We reject that suggestion. Cf. Simmons Co. v. Grier Bros. Co.,
6. It is also suggested that that decree was correct because the company, on April 21, 1941, should have made a showing that there was reasonable ground for believing that the company would be able to prove that their employment by other employers was available. Having due regard to the unique record in this case, we cannot agree. It is unique for several reasons:
The procedure was then unsettled and confusing. Our decision in Acme Air Appliance indicated that such an issue should be considered in contempt proceedings. The propriety of deductions from back pay because of such potential employment was not finally decided until the Supreme Court decided the Phelps Dodge case. The regrettable delay in referring this issue to the Board was apparently due to confusion resulting from the recency of that decision at the time when our enforcement order was entered. In the unusual circumstances, we cannot say that the company was dilatory or inadequately precise in pressing the issue as to potential employment for the period after the close of the Board’s hearing. Nor can we say that the long delay, since the major labor dispute involved in this case arose in 1937, is in any considerable part ascribable to the company.
7. However, our decision here — to send this matter to the Board at this late date— should not be regarded in any way as a controlling precedent in other cases for these reasons:
It is true that, in proper circumstances, the continuing nature of a back-pay order may call for adjustment because of new facts which have occurred after the conclusion of the Board’s hearing which led to the entry by the Board of such an order.
However, as the doctrine of the Phelps Dodge case is now known to everyone, we shall, in other cases, require a prompt and clear showing of probable evidence, bcar
Moreover, it is obviously awkward to split the issue of “equivalent employment,” sending to the Board so much of it as relates to potential employment by other employers and sending to a master so much of it as relates to actual or potential employment by the respondent-employer. In future cases, where the issue of potential employment with other employers is raised, we shall need to consider whether such awkwardness should not be avoided by referring to the Board the entire issue of “equivalent employment” (although the Board is apparently reluctant to hear such issues when they go beyond the requirements of the Phelps Dodge decision).
8. The company, in its offer of proof before the master, asserted that there were opportunities for other employment beginning not earlier than January, 1940. The amounts found due by the master up to January, 1940, must, therefore, be forthwith paid, with interest, and without further deductions.
For the period beginning January, 1940, we shall enter a conditional order for the amounts found due by the master, with interest. But from the amount due any employee under the conditional order, there shall be deducted such amount, if any, as the Board may find should have been earned in the employ of persons other than the company.
9. The Board, in passing on the amounts, if any, which should thus have been earned, will, of course, be governed by the Phelps Dodge decision [
The report of the special master is confirmed subject only to the conditions described in this opinion. The master’s statement of expenses, disbursements and his bill for services are approved. The case is remanded to the Board for the limited purposes above noted.
Notes
This was more than a month after the company’s brief in the instant case was filed. It was some two months before its reply brief was filed. But the Board was at that time contending, in tbe Acme Air Appliance case, that this court bad erred in the Yale & Towne case; and, not long after, we held that our action in the Yale & Towne case was highly exceptional.
Because it included matters occurring after the close of the Board’s hearing which, in the Acme Air Appliance case, we had said should be postponed for consideration in a compliance proceeding.
The Board answered this motion, saying that there should be no such reference to the Board as the company sought in its motion, the issues therein referred to being, said the Board, matters to be considered in a contempt proceeding. It went on to say: “In such a proceeding, the Board and the employer are in an adversary relation. If the Board proceeded to make findings of compliance, there is nothing in the statute which would entitle such findings to greater weight than the statements of any other litigant. The Board has no power to determine what constitutes compliance with the decree of this court.”
There is nothing of record showing that the following delays were ascribable to the company:
(a) From January 25, 1938, when the Board issued its complaint, until September 22, 1939, when the Board’s order was entered.
(b) From September 27, 1939, when the company’s petition to review that order was filed here, until April 4, 1941, when this court’s opinion was filed.
(c) From October 28, 1941, when the Board filed its contempt petition, until January 6, 1942, when this court referred the issues to the Master.
Similar need for adjustment, because of changed circumstances, may arise in connection with an injunction decree (United States v. Swift & Co.,
See
See the Board’s position quoted above in note 3.
Dissenting Opinion
(dissenting in part).
I think the master’s report should be accepted in its entirety, and that no equities have been shown justifying remand- to the Board for further delay in these already overlong proceedings. This is a labor dispute which came to a head in the spring and summer of 1937. The Board’s decision was two years later. Our own enforcement decision was nearly two years after that (April 4, 1941). Though our order was entered April 29, 1941, petitioner has been dilatory in complying with it; even the required notices were not posted until November 29, 1941, after contempt proceedings were instituted. Petitioner today still owes its discharged employees a large sum for back pay — about $27,000, as the master found. Of this, the amount now ordered held back is only a small part, and is obviously but a fraction of petitioner’s expenses in carrying on this long and fruitless litigation. Its petition for review really sought a relitigation of issues of
The limitations of the remand and the burden which the petitioner will have in meeting its terms demonstrate, I believe, that this decision is basically an attempt to be overscrupulous, to lean over backwards, in granting official review of even what has been only most barely claimed. The attack on the administrative agencies, which has now shifted from the legislative policy itself to the more successful front of extensive judicial review, has tended to paralyze both agencies and courts and to stop them from taking forthright and prompt steps to enforce the laws committed to their keeping. Unfortunately, no one is at hand to press the public need of speedy enforcement of these laws, if enforcement is to be worthy of the name at all. The loss, and even danger, to the public interest of this course has been brought home to all by the crisis of war, wherein an entirely new administrative setup and a new board have been found necessary in order to achieve peaceful and productive, labor relations with that celerity which was denied the old board.
It is well settled that on contempt proceedings the original order is not subject to attack, Oriel v. Russell,
First, as to delay, it is indisputable that nothing remotely approaching a factual showing of the claimed willfullness was ever offered prior to the master’s hearing in February of this year; also that no explicit request for a remand to the Board— the course so definitely required under the Phelps Dodge decision — was made, as to the matter now in issue, before the limited alternative suggestion to that effect contained in the “Exceptions” to the master’s report, filed June 17, 1942, on the hearing of the pending motion. Moreover, there was not even a suggestion of this issue until petitioner on April 21, 1941, after our enforcement decision, presented a counter-order to that offered by the Board and supported it with a memorandum. Before that time petitioner had stressed only the two issues which, indeed, it has continuous
Had petitioner seriously contemplated pressing the issue of willfullness, its indicated course was naturally to move for a hearing before the Board, on the basis of the Phelps Dodge decision, and with a showing by affidavits, or otherwise, of some facts indicating a reasonable basis for the claim. True, petitioner did now ask for a Board hearing, but only upon the same two issues — its own offers of re-employment and actual earnings- — -which it has always stressed with extensive supporting data. Gone was any citation to the Phelps Dodge case either in our court or in the Supreme Court. Gone also was any reference of any kind to the willfullness issue. In fact the new proposed counter-order itself contained the Board’s provision for making whole the employee by payment of the amounts he would normally have earned, “less his net earnings during said period,” and left to the Board merely the finding of the amount thus due. Naturally, the Board was correct in saying that these issues, under our precedents, were to be settled in contempt proceedings. Natural ly, too, we rejected the counter-order (May 16, 1941). We could have done nothing else without repudiating our well-settled decisions which, so far as we know, are in accord with the Supreme Court’s views. See N. L. R. B. v. Acme Air Appliance Co., 2 Cir.,
The only other reference to the matter, prior to the master’s hearing in February, 1942, was in petitioner’s long answer of November 14, 1941, to the petition to adjudge it in contempt of this court. In twenty-six typewritten pages, with eight pages of exhibits, it again set forth extensive details bearing on its two main claims. The'sole reference to the present matter was at the end where prayer was made that the case be referred to a special master, to determine six questions of fact, of which the fourth was “To what extent have the fourteen men, or any of them, willfully failed or neglected to accept reasonably available employment since August 20, 1937?” I think the afterthought and makeweight character of this claim is clearly manifest.
There seems to be some thought that these statements of petitioner should be viewed somewhat as generalized pleading claims, as, say, general allegations of negligence, and that our court has in some fashion misled petitioner in not picking them up and taking action upon them as a trial court might under the suggested circumstances. This is an unreal analogy. Here we have a proceeding in an appellate court for the reopening of a final judgment and for a remand for further trial to a tribunal which has long since finished its task of adjudication. And going beyond all merely procedural analogies, the vital questions are, first, What did petitioner really hope to prove and feel justified in actually fighting for, and, second, What did the Board and the discharged employees and this court have reason to think petitioner was really striving for, and what actions should we properly have taken in the light of our belief? Actually we did take the only correct course on the basis of what petitioner had then shown us, and I confess, therefore, to not a little surprise and regret at the implication of some sort
But, if we overlook all this, does petitioner, even now, make a showing of deductions which ought fairly to be made by the Board, not in the adjudication of private rights, but in its public capacity of giving effect to the objectives of the Act, for “not so much the minimization of damages as the healthy policy of promoting production and employment” ? Phelps Dodge Corp. v. N. L. R. B., supra [
It is said that this case should not be taken as a precedent with respect to future delayed claims for remand to the Board. I fervently hope this is so, for I do not believe we are doing our own duty in effectuating the policies of the Labor Act by putting a premium on such dilatory proceedings as we have before us here. But I fear that we cannot ourselves limit the effect of what we do, and that others will cite us as holding that the most formal and indirect of legal claims is enough, without actual factual support, and whenever or however made, to take a case back to the Board, years after the event, for a trial of the Phelps Dodge issue. • I wonder if the Supreme Court majority really wanted that.
The master here acted promptly and efficiently. That, even so, we find his hearings insufficient and at this late date return the matter to the Board seems to me to add all the more force to the arguments I have previously advanced, N. L. R. B. v. Giannasca, 2 Cir.,
True, the court, following its lengthy discussion of the factual issues, did summarily direct modification of the Board’s order with respect to reimbursement of union dues deducted from employees’ wages and of Public Relief Agencies for wages paid, as well as with respect to the form of notices to be posted, page 630 of 118 F.2d; but these modifications were all required by well-settled precedents in this circuit and obviously could have been secured without the appeal on the facts.
