WALLACE CORPORATION v. NATIONAL LABOR RELATIONS BOARD.
NO. 66.
Supreme Court of the United States
Argued November 15, 16, 1944. - Decided December 18, 1944.
323 U.S. 248
My duties as a justice as I see them do not require me to make a military judgment as to whether General DeWitt‘s evacuation and detention program was a reasonable military necessity. I do not suggest that the courts should have attempted to interfere with the Army in carrying out its task. But I do not think they may be asked to execute a military expedient that has no place in law under the Constitution. I would reverse the judgment and discharge the prisoner.
Mr. R. Walston Chubb, with whom Mr. Lyle M. Allen was on the brief, for petitioner in No. 66.
Mr. Alvin J. Rockwell, with whom Solicitor General Fahy, Messrs. Robert L. Stern, Marcel Mallet-Provost, and Miss Ruth Weyand were on the brief, for respondent.
In an attempt to settle a labor dispute at the plant of petitioner company, an agreement approved by the Board was signed by a C. I. O. union, an Independent union, and the company. At a consent election held pursuant to this agreement, Independent won a majority of the votes cast,1 and was certified by the Board as bargaining representative. The company then signed a union shop contract with Independent, with knowledge—so the Board has found—that Independent intended, by refusing membership to C. I. O. employees, to oust them from their jobs. Independent refused to admit C. I. O. men to membership and the company discharged them.
In a subsequent unfair labor practice proceeding the Board found that (1) Independent had been set up, maintained, and used by the petitioner to frustrate the threatened unionization of its plant by the C. I. O., and (2) the union shop contract was made by the company with knowledge that Independent intended to use the contract as a means of bringing about the discharge of former C. I. O. employees by denying them membership in Independent. The Board held that the conduct of the company in both these instances constituted unfair labor practices. It entered an order requiring petitioner to disestablish Independent, denominated by it a “company union“; to cease and desist from giving effect to the union shop contract between it and Independent; and to reinstate with back pay forty-three employees, found to have been discharged because of their affiliation with the C. I. O., and because of their failure to belong to Independent, as required by the union shop contract.2 The Circuit Court of Appeals ordered enforcement of the
The Board‘s findings if valid support the entire order. This is so because
The findings of the Board establish the fact of an abiding hostility on the part of the company to any recognition of a C. I. O. union. This hostility we must take it extended to any employee who did or who might affiliate
The contract was executed after notice to the company by the business manager of Independent that Independent must have the right to refuse membership to old C. I. O. employees who might jeopardize its majority. This business manager, who had himself originally been recommended to Independent by a company employee, wrote the company, prior to the making of the contract, that Independent insisted upon a closed-shop agreement because it wanted a “legal means of disposing of any present employees” who might affect its majority, and “who are unfavorable to our interests.” The contract further significantly provided that the company would be released from the clause requiring it to retain in its employ union men only, if Independent should lose its majority and the C. I. O. win it.7
Neither the Board nor the court below found that the company engaged in a conspiracy to bring about the dis-
It is contended that the Board‘s finding as to company domination has no support in the evidence because the evidence as to company domination antedated the settlement and certification, and hence was improperly admitted. The argument is that the Board cannot go behind the settlement and certification. The petitioner does not argue that any language appearing in the Labor Relations Act denies this power to the Board, but relies upon general principles on which the judicial rule governing estoppel is based. Only recently we had occasion to note that the differences in origin and function between administrative bodies and courts “preclude wholesale transplantation of the rules of procedure, trial, and review which have evolved from the history and experience of courts.” Federal Communications Commission v. Pottsville Broadcasting Co., 309 U.S. 134, 143. With reference to the attempted settlement of disputes, as in the performance of other duties imposed upon it by the Act, the Board has power to fashion its procedure to achieve the Act‘s purpose to protect employees from unfair labor practices. We cannot, by incorporating the judicial concept of estoppel into its procedure, render the Board powerless to prevent an obvious frustration of the Act‘s purposes.
To prevent disputes like the one here involved, the Board has from the very beginning encouraged compro-
The company denies the existence of a subsequent unfair labor practice. It attacks the Board‘s conclusion that it was an unfair labor practice to execute the union shop contract with knowledge that Independent at that time intended to deny membership to C. I. O. employees because of their former affiliations with the C. I. O. It admits that had there been no union shop agreement, discharge of employees on account of their membership in the C. I. O. would have been an unlawful discrimination contrary to
The duties of a bargaining agent selected under the terms of the Act extend beyond the mere representation of the interests of its own group members. By its selection as bargaining representative, it has become the agent of all the employees, charged with the responsibility of representing their interests fairly and impartially. Otherwise, employees who are not members of a selected union at the time it is chosen by the majority would be
One final argument remains. The company, it is said, bargained with Independent because it was compelled to do so by law. The union shop contract to which the company at first objected, but into which it entered against the advice of counsel, was the result of that bargaining. The company, it is pointed out, persistently though unsuccessfully sought to persuade Independent to admit C. I. O. workers as members of Independent. Hence, we are told, the company did all in its power to prevent the discharges and should not be held responsible for them. Two answers suggest themselves: First, that the company was not compelled by law to enter into a contract under which it knew that discriminatory discharges of its employees were bound to occur; second, the record discloses that
It follows from what we have said that we affirm the judgment of the court below approving the order of the Board in its entirety.
Affirmed.
MR. JUSTICE JACKSON, dissenting.
A more complete statement of the facts than is found in the Court‘s opinion is necessary to disclose the reasons why the CHIEF JUSTICE, MR. JUSTICE ROBERTS, MR. JUSTICE FRANKFURTER, and I dissent.
On September 25, the C. I. O. called a strike. About October 2, the Independent union, one of the petitioners here, came into being. On October 10, 1941, the C. I. O. filed charges with the Labor Board, alleging among other things that the Company had violated the Act by sponsoring the formation of the Independent. Again, without weighing the evidence or the objections of the Company or of the Independent, we will assume that the Company was guilty.
On October 14, the Independent demanded recognition as bargaining representative of the employees, and on October 31, it filed with the Labor Board a petition for investigation and certification of it as the representative of the Company‘s employees.
The Board, however, did not proceed on either the complaint or the request for certification. Instead, as the Government states, “During the ensuing two and one-half months, representatives of petitioner [the company], the Board, and the two unions engaged in negotiations looking toward settlement of the entire controversy, including disposition of the Union‘s charge and the Independent‘s petition.” Again, without considering the Company‘s or the Independent‘s objection or evidence, we will assume that during this two and a half months the Company engaged in unfair labor practices. The strike was proceeding, however, with much bitterness and some
The parties took this agreement to the office of the Board‘s regional manager and on January 19 two agreements were drawn: one by which the C. I. O. withdrew the charges of domination and other charges; and the other for a consent election to determine the employees’ choice of representative. Both of these agreements, after
The employees, without distinction as to union affiliation, all returned to work. The election was held January 30, under the auspices of the Board. Of the 186 valid votes cast, the Independent received 98, the C. I. O. 83, and 5 votes were cast for neither. The C. I. O. filed no objections, and the Board on February 4 certified the Independent as the exclusive bargaining agent for the employees in the plant.
Thereupon the Company bargained with the certified representative, as it was required by law to do. The evidence is uncontradicted that the Company was reluctant still to enter into a closed-shop agreement. The Independent, however, insisted that the Company perform the contract by which the strike had been settled. It stated its position in a letter in which it said: “The ‘Closed Shop’ will, therefore, give us some control in preventing the hiring of additional employees who are unfavorable to our interests and who would further jeopardize our majority. It would also provide us with a legal means of disposing of any present employees, including Harvey Dodrill whom
This is the first knowledge it is claimed the Company had or should have had of the Independent‘s adoption of an exclusionary policy toward its rivals. The Company yielded, considering the union‘s membership policy as something it could not interfere with, and the closed-shop contract was signed. It required that all present and future employees should become members of the Independent within ten days of the date of the contract or from the date of hiring. The contract and notice of the closed-shop arrangement were posted in the plant. On March 18, forty-three employees were dismissed, on demand of the Independent, as not eligible for employment because of non-membership in it. Later it appeared that twelve such dismissed employees never made application for membership in the Independent, and thirty-one members who had applied for membership had been rejected because when their applications came before the meeting in regular course they did not receive the number of ballots necessary under its by-laws to elect to membership. Whether the Company knew that they had applied for membership and had been rejected is disputed, but again we resolve the doubt against the Company and assume that the superintendent knew this fact at the time of discharge.
There is no dispute, however, that when Mr. Wallace, the president of the company, learned of the discharge he attempted to persuade the Independent to allow these employees to be reinstated. On March 20, 1942, he wrote to the business agent of the Independent a letter. The Board has not found that it was not written in good faith.
“Entirely aside from the fact that having to lay off this large number of experienced people will badly cripple our production which is urgently needed, we feel that it is indeed a sad situation where, account of some individual differences of opinion, people who have perhaps been friends and neighbors for many years cannot work together. I will appreciate your advising me what can be done.”
The Regional Director of the Board was notified of the discharges and, as the Court‘s opinion states, he did urge the Company to disregard its closed-shop contract and re-employ nonmembers of the certified union. The Company‘s counsel reminded him that he had expressed concern about the closed-shop provision to the Regional Director when it was being negotiated, and that the Director had replied that he probably “would have to agree to it as the C. I. O. certainly would have insisted upon it if they had prevailed in the election.” The Company insisted that “membership in the union is beyond the Company‘s control” and that unless the union relented it would stand by the closed-shop contract. The Company sug-
At the opening of the hearing before the examiner July 9, 1942, the Company declared it was “ready to take any steps which are necessary to the end that these people be put back to work, as it has been throughout, since this agreement was entered into.” It suggested that the attorney for the Board and the attorney for the Independent work out a settlement. The Board‘s attorney expressed “to the representative of the Company my thanks for the suggestion.” Adjournment was taken and counsel for the union went from Summerville, the place of hearing, to Richwood and called a meeting of the Independent union. The Board attorney‘s objection kept further developments out of the record except that he stated, “I am willing to let the record show that Mr. Ritchie [attorney for the Independent] made me a proposition which I was unable to accept and that I made him one which he was unable to accept.” The case therefore proceeded against the Company.
The Board did not find any unfair labor practice on the part of the Company between the date of the settlement agreement and the election. In fact, it refused to accept the recommendation of the trial examiner for such a finding, saying that “such interference, if any, was too trivial,” was known to the C. I. O., which made no objection to the certification, and had come to the knowledge of the Re-
No unfair labor practices at any time after the settlement agreement are found or charged against the employer except the making and performing of the closed-shop agreement. The Board states its position as follows: “The issue remains whether, by entering into the closed-shop contract with the Independent with knowledge that the Independent intended to exclude employees from membership and by discharging employees denied membership in the Independent, as set forth above, the respondent violated the Act. The respondent contends that it was bound to enter into a closed-shop contract by the terms of the election agreement between the respondent, the Union, and the Independent, and urges the Board to regard the discharges as proper since made pursuant to the closed-shop contract.
“We do not agree. An employer may not enter into a closed-shop contract which to his knowledge is designed to operate as an instrument for effecting discrimination against his employees solely because of their prior union activities. The proviso in
“. . . The facts in the case make it apparent that the respondent [Company] was put on notice that its [Inde-
Holding that execution and performance of the closed-shop agreement after the settlement and certification by the Board were “unfair labor practices,” the Board held them effective also to revive the old charges settled by the agreements and election and it went back to those events to find grounds on which to hold that the employer dominates the Independent.
Accordingly it ordered that the Company disestablish and withdraw all recognition from the Independent as representative of any of its employees. It forbade “any continuation, renewal, or modification of the existing contract [which] would perpetuate the conditions which have deprived employees” of their jobs; it ordered the Company to cease giving effect to any contract between it and the Independent or to any modification or extension thereof. It also ordered that the Company “offer the aforesaid 43 employees immediate and full reinstatement to their former or substantially equivalent positions, without prejudice to their seniority or other rights and privileges, and to make them whole for any loss of pay they may have suffered.”
At the time this closed-shop agreement was made the Board had certified the Independent as representative of the employees. Under
Of course the closed shop is well known in labor relations. Its essential philosophy is that once the employees have chosen their representative union, it is entitled to bargain for the employer‘s help to maintain its control. Other employer aids to a dominant union, such as the check-off, are also conceded to unions by bargaining on behalf of a majority when they would not be at all permissible for the employer to use in the first place to influence the workmen to choose a particular union because he favored it. But the idea of the closed shop is that, while these acts of influence or pressure on workmen are unfair when exerted by the employer in his own interest, they are fair and lawful when enforced by him as an instrument of the union itself. A closed shop is the ultimate goal of most union endeavor, and not a few employers have found it a stabilizer of labor relations by putting out of their shops men who were antagonistic to the dominant union, thus ending strife for domination. It puts the employ-
Neither the National Labor Relations Act nor any other Act of Congress expressly or by implication gives to the Board any power to supervise union membership or to deal with union practices, however unfair they may be to members, to applicants, to minorities, to other unions, or to employers. This may or may not have been a mistake, but it was no oversight. We suppose that there is no right which organized labor of every shade of opinion in other matters would unite more strongly in demanding than the right of each union to control its own admissions to membership. Each union has insisted on its freedom to fix its own qualifications of applicants, to determine the vote by which individual admissions will be granted, to prescribe the initiation or admission fees, to fix the dues, to prescribe the duties to which members must be faithful and to decide when and why they may be expelled or disciplined. The exclusion of those whose loyalty is to a rival union or hostile organization is one of the most common and most understandable of practices, designed to defend the union against undermining, spying, and discord, and possible capture and delivery over to a rival. Some unions have battled to exclude Communists, some racketeers, and all to exclude those deemed disloyal to their purposes. See Williams v. Quill, 277 N. Y. 1, 7, 12 N. E. 2d 547; Miller v. Ruehl, 166 Misc. 479, 2 N. Y. S. 2d 394.
There are those who think that the time has come when unions should be denied this control over their own affairs. However this may be, we only know that Congress has included no such principle expressly in the Act. If the Board should attempt to exercise it as we have suggested by way of a condition on its conducting an election or making a certification, a question of its statutory power
But the Court is deciding not only that without authority of Congress the admission practices of a labor organization having a closed shop may be policed, but also, contrary as we think to the Act, that the employer is empowered and required to do the policing. This we think defies both the express terms and the philosophy of the Act. The letter of the Act makes it a forbidden practice for an employer to “interfere with” or “restrain” employees in the “right to self-organization.” We assume this employer knew the Independent would exercise its power over admission privileges to some extent to protect itself against infiltration of hostile elements. The Board must have known it, too. And both must have known the C. I. O. would, also, if it won. However, the Independent has not indiscriminately excluded all who were against it in the election. The C. I. O. had 83 votes; all but 43 of these voters seem to have been admitted to the Independent, and 12 of those never applied, making 31 apparently rejected. In view of the bitterness and duration of the strike, involving some shooting, it is not strange that good will did not descend on the victors at once. The Board may have expected more moderation when it conducted the consent election and certified the Independent. There is nothing to show that the Company did not, too. When it was found how harshly the Independent had behaved, the Company did try persuasion to get the union leaders to relent—the Company‘s own interests were to get back more of its experienced employees. How it could have done more without breaking both faith and the law, the Court does not point out, and we do not know.
The statute expressly permits a closed shop. It can be denied only when the certified union is “established, maintained, or assisted” by unfair labor practices of the employer. But the statute cannot mean that the making and performance of a closed-shop contract in itself is an unfair practice which invalidates a closed shop. To so interpret it would be to believe the Congress by this provision was perpetrating a hoax. But if it means that the union can have a closed shop and the employer will supervise its membership, it is a strange contradiction in an Act whose chief purpose was to sterilize the employers and to free workmen of the influence they exerted through control of the right to work.
We can quite understand, and we do not mean to criticize, the motives which animated the Board. We are deal-
It happens to be an independent that won here. But counsel for the Board assured us on argument that this is not a one-way policy to require independent unions to admit their enemies. It would, as we understand it,
Of course it is the employer who is penalized here, and on shallow and superficial examination it may seem like another victory for labor. The employer must pay many thousands of dollars for hours unworked, because it performed reluctantly but in good faith its closed-shop agreement made under authority of Congress and with knowledge and encouragement of the Board, and with the approval and instigation of the C. I. O. union whose members now gain back pay by its repudiation. We think this cannot be justified as an unfair labor practice outlawed by Congress. That resistance to closed-shop unions will likely be stiffened if employers must underwrite the fairness of closed-shop unions to applicants and members, and that a good deal labor has fought for may be jeopardized if the price of obtaining it is to have the union policed by the employer, are considerations beyond our concern. We can only view this as a very unfair construction of the statute to the employer and one not warranted by anything Congress has directed or authorized.