Amicus Curiae Brief — NLRB v. Town & Country Elec., Inc.

APR 19 19

No. 94-947 Z Nom “

—?

Pata a ee oe

In The

Supreme Court of the United States

October Term, 1994

“

NATIONAL LABOR RELATIONS BOARD,

Petitioner,

TOWN & COUNTRY ELECTRIC, INC., AND

AMERISTAFF PERSONNEL CONTRACTORS, LTD.,

Respondents.

+

On Writ Of Certiorari To the

United States Court Of Appeals

For The Eighth Circuit

+

BRIEF AMICUS CURIAE OF THE

CHAMBER OF COMMERCE OF THE UNITED STATES

OF AMERICA IN SUPPORT OF THE RESPONDENTS

Sd

Of Counsel:

STEPHEN A. BOKAT MARSHALL B. BasBson*

Rosin S. CONRAD STANLEY R. STRAUSS

Mona C. ZEIBERG ELIZABETH TORPHY-DONZELLA

NATIONAL CHAMBER OGLETREE, DEAKINS, NASH,

LITIGATION CENTER, INC. SMOAK & STEWART

1615 H Street, N.W. 2400 N. Street, N.W.,

Washington, D.C. 20062 5th Floor

(202) 463-5337 Washington, D.C. 20037

(202) 887-0855

Counsel for the Chamber of

Commerce of the United

States of America

*Counsel of Record

COCKLE LAW BRIEF PRINTING CO., (800) 225-6964

OR CALL COLLECT (402) 342-2831

~

BEST AVAILABLE COPY

TABLE OF CONTENTS

Page

INTEREST OF AMICUS CURIAE................... 1

EE ME veces rb cwecccceccccccees 3

SUMMARY OF THE ARGUMENT ................. 6

I.

Il.

THE BOARD’S CONCLUSION THAT AN

EMPLOYER IS REQUIRED BY LAW TO HIRE

THE PAID ORGANIZERS OF A UNION THAT

HAS TARGETED THAT EMPLOYER FOR

ORGANIZATION IS AN UNREASONABLE

INTERPRETATION OF THE ACT..............

A. The Principle of Balance Struck by Congress in

the NLRA Between Labor and Management

Demonstrates that an Employer is not

Required to Hire the Paid Agents of the Union

that Has Targeted It for Organization .......

B. Other Settled Principles of the NLRA are

Violated by the Board’s Conclusion that the

Pay and Control Exercised by a Union Over

its Organizers do not Present Disabling Con-

iC ciC eee scab bbe accesses cnc

PAID UNION ORGANIZERS ARE NOT

“EMPLOYEES” UNDER THE LANGUAGE OF

om ee ly eee

ee ee ee

14

ii

TABLE OF AUTHORITIES

Cases

ABF Freight Sys., Inc. v. NLRB, __ U.S. __, 114

S.Ct. G35 (1994). ....-+<0+eeecennenueeeennene

Allied Chemical Workers v. Pittsburgh Plate Glass

Co., 404 US. 157 (2671)... «.. iceucenueeeee

Allis-Chalmers Corp. v. Lueck, 471 U.S. 202 (1985)...

Anthony Forest Products Co., 231 NLRB 976 (1977)....

Betra Mfg. Co., 233 NLRB 1126 (1977), enf'd, 624

F.2d 192 (9th Cir. 1980), cert. denied, sub nom.,

Thomas v. NLRB, 450 U.S. 996 (1981)...........

Cedars-Sinai Medical Center, 223 NLRB 251 (1976) ....

Chevron U.S.A., Inc. v. Natural Resources Defense

Council, Inc., 467 US..GGF (ities os ccan ene

Dee Knitting Mills, Inc., 214 NLRB 1041 (1974),

enf'd, 538 F.2d 312 (2d Cir. 1975)...............

Dubuque Packing Co., Inc., 303 NLRB 386 (1991),

enf'd in relevant part, 1 F.3d 24 (D.C. Cir. 1993) ....

Elias Bros. Big Boy, Inc., 139 NLRB 1158 (1962) enf’d

denied in relevant part, 327 F.2d 421 (6th Cir.

i. |)

Emanuel Hospital, 268 NLRB 1344 (1984)..........

Escada (USA), Inc., 304 NLRB 845 (1991), enf’d

without opinion, 970 F.2d 898 (3d Cir. 1992).....

Fall River Dyeing & Finishing Corp. v. NLRB, 482

U.S. 27 (1987) .... 0000606800005 en eee

First Nat'l Maintenance Corp. v. NLRB, 452 U.S. 666

(19G2) . . . . 60000s.000008 00) mini ieee

Fort Smith Chair Co., 143 NLRB 514 (1963), enf’d on

other grounds sub nom., United Furniture Workers

v. NLRB, 336 F.2d 738 (D.C. Cir. 1964).........

iii

TABLE OF AUTHORITIES - Continued

Page

General Electric Co. v. NLRB, 412 F.2d 512 (2d Cir.

PETG UL GCS cuca scsdeveseccesecccccccccs 9

Golden State Transit Corp. v. Los Angeles, 475 U.S.

UTC CURES USS ance vines'e st veccviccccccss 2

H.B. Zachry Co., 289 NLRB 838 (1988), enf‘d denied,

886 F.2d 70 (4th Cir. 1989).................. 6, 13, 23

H.J. Heinz Co. v. NLRB, 311 U.S. 514 (1941) ......... 10

Henlopen Mfg. Co., 235 NLRB 183 (1978), enf‘d

denied on other grounds, 599 F.2d 26 (2d Cir. 1979) .... 23

Int'l Assoc. .of Machinists v. NLRB, 311 U.S. 72

EN on on 500 6666¥se pecccccccccces 10

Joseph Schlitz Brewing Co., 211 NLRB 799 (1974) ..... 19

Laidlaw Corp., 171 NLRB 1366 (1968), enf’d, 414

F.2d 99 (7th Cir. 1969), cert. denied, 397 U.S. 920

eke tie ase be56 svnccecccccccccccs 16

Lechmere, Inc. v. NLRB, 502 U.S. 527 (1992)....9, 12, 25

Lingle v. Norge Div. of Magic Chef, Inc., 486 U.S. 399

I EGU hak bus cease scdecnecsscccess 2

Livadas v. Bradshaw, __ U.S. __, 114 S.Ct. 2068

Leck ede neesetvccceccccscccces 2

Lucky Stores, Inc., 269 NLRB 942 (1984).............. 18

Marbury v. Madison, 5 U.S. 137 (1803) ............... 22

Margaret Anzalone, Inc., 242 NLRB 879 (1979)........ 23

NLRB v. Amax Coal Co., 453 U.S. 322 (1981)......... 10

NLRB v. Bell Aerospace Co., 416 U.S. 267 (1974) ...14, 18

NLRB v. Corsicana Cotton Mills, 178 F.2d 344 (5th

ee dws a ag bascccccocccceccces 10

iv

TABLE OF AUTHORITIES —- Continued

NLRB v. Elias Brothers Big Boy, Inc., 327 F.2d 421

Sees Gk Weeks ce oss avesasdausceeasemracens

NLRB v. Hearst Pub., Inc., 322 U.S. 111 (1944)...

NLRB v. Lorimar Productions, Inc., 771 F.2d 1294

GU Cie. Bs his kdedccccnaavescuescnvesines

NLRB v. News Syndicate Co., 365 U.S. 695 (1961).

NLRB v. Parsons School of Design, 793 F.2d 503 (2d

COR SEED cece her cusnexds can es tetkadnsabnes tae

NLRB v. Savair Mfg. Co., 414 U.S. 270 (1973) ....

Nationwide Mut. Ins. Co. v. Darden, 503 U.S. 318,

ec Boe Be 8 Ry Pere a re

Oak Apparel, Inc., 218 NLRB 701 (1975)..........

Office Employees Int'l Union v. NLRB, 353 U.S. 313

COUP i ou 64 bc 500d cautevenbedeckeokeseeuseneens

Overhead Door Corp., 220 NLRB 431 (1975), enf'd

denied in relevant part, 540 F.2d 878 (7th Cir.

SOPs ots os cnoteacscsaneetanacnesemeehnieike

Packard Motor Car Co. v. NLRB, 330 U.S. 485 (1947) ....

Palby Lingerie, Inc., 252 NLRB 176 (1980)........

Parker-Robb Chevrolet, Inc., 262 NLRB 402 (1982),

review denied sub nom., Auto Salesmen’s Union Local

1095 v. NLRB, 711 F.2d 383 (D.C. Cir. 1983).....

Peck, Inc., 226 NLRB 1174 (1976).............0.-

Phelps Dodge Corp. v. NLRB, 313 U.S. 177 (1941).

Pilliod of Mississippi, Inc., 275 NLRB 799 (1985) ..

Reich v. Int'l Alliance of Theatrical Stage Employees,

32 F.3d SIZ (TUM Cae, PIE occ s scenes sauedss

Yee i

. oe re

F

oe »

Vv

TABLE OF AUTHORITIES - Continued

Page

Sakrete of N. Cal., Inc. v. NLRB, 332 F.2d 902 (9th

Cir. 1964), cert. denied, 379 U.S. 961 (1965) ........ 11

Scofield v. NLRB, 394 U.S. 423 (1969) ................ 10

Sears, Roebuck and Co., 170 NLRB 533 (1968)......... 23

Star Tribune, 295 NLRB 543 (1989)................... 10

Sunland Constr. Co., 309 NLRB 1224 (1992).......... passim

Sure-Tan, Inc. v. NLRB, 467 U.S. 883 (1984)........... 8

Town & Country Elec., 309 NLRB 1250 (1992), enf‘d

denied, 34 F.3d 625 (8th Cir. 1994)............. passim

Trans World Airlines, Inc. v. Thurston, 469 U.S. 111

ee ee Ree ch eee enn ene eee 60s 2

United Technologies Corp., 274 NLRB 1069 (1985),

enf'd, 789 F.2d 121 (2d Cir. 1986).................. 10

Wild v. United States Dep't. of Housing and Urban

Dev., 692 F.2d 1129 (7th Cir. 1982) ................ 20

Willmar Elec. Serv., Inc., 303 NLRB 245 (1991),

enf'd, 968 F.2d 1327 (D.C. Cir. 1992), cert. denied,

se cL Be Ci Me GEE cece ccvecceccens 23

Zayre Dep't Stores, 289 NLRB 1183 (1988)............ 10

STATUTES

Labor Management Relations Act, 29 U.S.C. § 141 et seq.:

I I I, OD occ cece scccevcncccese 28

Section 302(c)(1), 29 U.S.C. § 186(c)(1)............. 28

Section 302(c)(5), 29 U.S.C. § 186(c)(5)............. 28

vi

TABLE OF AUTHORITIES —- Continued

Page

National Labor Relations Act, 29 U.S.C. § 151 et seq.:

Section 2(2), 29 U.S.C. § 152(2)............. 14, 24, 25

Section 265), 2D UBA.. © TM o- cs cewccecctae passim

Section 2p, ZO USA. & Bee s ccecivesvccesss 24, 25

we Bt lt | Rr ere vores Tuan 16

Section 8(a)(1), 29 U.S.C. § 158(a)(1) ............ 6, 17

Section 8(a)(2), 29 U.S.C. § 158(a) 2) ............ 9, 13

Section 8(a)(3), 29 U.S.C. § 158(a)(3) ............ 6, 17

Section 8(a)(5), 29 U.S.C. § 158(a)(5) .............. 28

Section 8(b)(1)(A), 29 U.S.C. § 158(b)(1)(A) ..... 10, 17

Section 8(b)(1)(B), 29 U.S.C. § 158(b)(1)(B)......... 10

Section 8(b)(7), 29 U.S.C. § 158(b)(7) .............. 17

Dastion. 12, ar UGS. S BG ks eri ctcvcvtvvevseresve 17

MISCELLANEOUS

1 Legislative History of the National Labor Rela-

CGS FOG, BOD < 6b han ek Ride on Bue Uehs visas adds 25, 26

Restatement (Second) Agency, § 226..............+:- 19

Se = ee

No. 94-947

t

In The

Supreme Court of the United States

October Term, 1994

+

NATIONAL LABOR RELATIONS BOARD,

Petitioner,

v.

TOWN & COUNTRY ELECTRIC, INC., AND

AMERISTAFF PERSONNEL CONTRACTORS, LTD.,

Respondents.

+

On Writ Of Certiorari To the

United States Court Of Appeals

For The Eighth Circuit

¢

BRIEF AMICUS CURIAE OF THE

CHAMBER OF COMMERCE OF THE UNITED STATES

OF AMERICA IN SUPPORT OF THE RESPONDENTS

+

INTEREST OF THE AMICUS CURIAE!

The Chamber of Commerce of the United States of

America (“the Chamber”) is a federation consisting of

approximately 215,000 companies and several thousand

other organizations such as state and local chambers of

commerce and trade and professional associations. It is

1 This brief is fiied with the written consent of the parties

pursuant to Supreme Cuurt Rule 37.3. Letters of consent are

being filed simultaneously with the Clerk of Court.

1

the largest association of business and professional orga-

nizations in the United States.

A significant aspect of the Chamber’s activities

involves regular representation of the interests of its

member-employers before the courts, the United States

Congress, the Executive Branch and independent regula-

tory agencies of the federal government. Accordingly, the

Chamber has sought to advance those interests by filing

briefs amicus curiae in a wide spectrum of labor relations

litigation.?

This case presents the fundamental question of

whether the National Labor Relations Act (“NLRA” or

“the Act”) requires an employer to consider for hire paid

union agents who have been sent by the union to seek

employment with the employer for organizational pur-

poses and who, if hired, will remain with the employer

only so long as the union permits them to do so. The

resolution of this issue presents, inter alia, the question of

whether these paid union agents are “employees” as

defined by Section 2(3) of the NLRA, 29 U.S.C. § 152(3).

The Board held that Respondents, as employers, must

hire such individuals, despite the fact that their employ-

ment was, by agreement with the union, only for organi-

zational purposes, their salary would be subsidized by

2 See, e.g., Livadas v. Bradshaw, __ U.S. __, 114 S.Ct. 2068

(1994); ABF Freight Sys., Inc. v. NLRB, __ U.S. __, 114 S.Ct. 835

(1994); Lingle v. Norge Div. of Magic Chef, Inc., 486 U.S. 399 (1988);

Fall River Dyeing & Finishing Corp. v. NLRB, 482 U.S. 27 (1987);

Golden State Transit Corp. v. Los Angeles, 475 U.S. 608 (1986);

Allis-Chalmers Corp. v. Lueck, 471 U.S. 202 (1985); Trans World

Airlines, Inc. v. Thurston, 469 U.S. 111 (1985).

ot: i hb te ng

———

the union, and the duration of their employment would

be determined by the union. The Eighth Circuit Court of

Appeals rejected the Board’s position as an unreasonable

interpretation of the Act and held such paid union orga-

nizvers to be outside of the NLRA’s definition of

“employee.”

The Court’s resolution of this matter is of vital con-

cern to the Chamber and its members, many of whom are

non-unionized companies that are receiving employment

applications from paid union organizers whose primary

interest in gaining employment is not to work for the

companies, but to organize their workforces for the bene-

fit of the union. These employers need to know whether

they must consider such paid union organizers as legiti-

mate job applicants whom they must hire and retain in

their workforce as the Board held, or whether they need

not be treated as bona fide employees or applicants

because of their union-employer’s control over them.

+

SUMMARY OF THE CASE

Respondent, Town & Country Electric, Inc. (“Town &

Country”), is a Wisconsin-based electrical contracting

company. Malcolm Hansen, a Minnesota State licensed

journeyman electrician, is a member of Local 292 of the

International Brotherhood of Electrical Workers (“Local

292” or “the union”). In September of 1989, Local 292,

acting pursuant to its “job salting organizing resolution,”

encouraged Hansen and some nine other Local 292 mem-

bers to seek jobs on a non-union Town & Country project

4

in International Falls, Minnesota. According to the resolu-

tion, members of the Local who received approval from

the union could seek jobs on non-union projects, like

Town & Country’s, for the purpose of “organizing the

unorganized.” Members who were successful in obtain-

ing such employment were required to “promptly and

diligently carry out their organizing assignments, and

leave the employer or job immediately upon notification

[by the union].” In return for the organizers’ efforts, the

union had to pay them the difference between union scale

and the non-union contractor’s wage rate, and also had to

pay for the organizers’ travel expenses.

On September 7, 1989, Hansen, accompanied by

approximately nine other Local 292 members and two

full-time paid union officials, went to a hotel in Min-

neapolis, Minnesota, where Town & Country officials

were scheduled to interview applicants who had been

pre-screened by Ameristaff, an employment agency.°

None of the individuals from Local 292 had been pre-

screened for interviews, although Hansen had called

Ameristaff on the morning of September 7 and had been

instructed to go to the hotel.

3 Shortly after being awarded the contract in early Septem-

ber, 1989, Town & Country learned that Minnesota law requires

electrical contractors to employ one State-licensed electrician

for every two on the job site who lack such licenses. Because

Town & Country had no employees who met this requirement, it

retained Ameristaff to recruit personnel for the job. Those

recruited would be employees of Ameristaff, not Town & Coun-

try. Local 292 officials learned of the job through an advertise-

ment placed by Ameristaff.

7 |

es

Town & Country’s representatives for these inter-

views, human resources manager Ron Sager and project

manager Dennis Defferding, were delayed in Wisconsin

by inclement weather, and arrived at the hotel in Min-

neapolis one and one-half hours late. By the time they

arrived, of the seven pre-screened interviewees, only one

remained, along with the dozen applicants sent by the

union. Sager and Defferding interviewed one union

applicant, who stated that he had to leave early, and the

one scheduled applicant who had remained. They then

informed the others, whom their applications showed to

be union members, that Sager had to return to Wisconsin

for an important meeting and that only scheduled appli-

cants would be interviewed. Hansen, however,

demanded to be interviewed because he had been told

that morning by Ameristaff to come to the hotel. Sager

then interviewed Hansen and, although knowiz>¢ that he

was a union member, hired him. Hansen thus became an

Ameristaff “employee.”

On September 12, Town & Country’s crew, including

Hansen, began work at the site. The same day, Hansen

announced to the crew that he was there to organize them

for the union. Thereafter, Hansen’s crewmates com-

plained to their foreman about Hansen’s workplace

behavior, including his organizing efforts and his poor

productivity.

On September 14, Town & Country learned that Min-

nesota law prohibits electrical contractors from using

employment agency employees on the job. Hansen was

therefore informed by his foreman that he was termi-

nated, and his request that he be hired by Town & Coun-

try was refused. The union thereupon filed unfair labor

practice charges against Town & Country, alleging that

the Company violated Sections 8(a)(1) and 8(a)(3) of the

NLRA, 29 U.S.C. §§ 158(a)(1) and 158(a)(3), by refusing,

on September 7, to interview the two union officials and

the other union members sent by Local 292, and by

refusing to retain Malcolm Hansen on the job after Sep-

tember 14.

The Board found in favor of the union in all respects.

In so doing, the Board adhered to its view that under the

NLRA paid union organizers, although dispatched to a

targeted employer for the express purpose of fulfilling

organizational responsibilities to the union while in the

guise of bona fide employees, are indistinguishable from

any other job applicant or employee. The Board accord-

ingly concluded that a targeted employer, like Town &

Country, may not refuse to hire such union agents or

dismiss them for engaging in paid organizing activity at

the employer’s worksite. The Eighth Circuit, citing with

approval the Fourth Circuit’s decision in H.B. Zachry v.

NLRB, 886 F.2d 70 (1984), and the Sixth Circuit’s decision

in NLRB v. Elias Brothers Big Boy, Inc., 327 F.2d 421 (6th

Cir. 1964), refused to enforce the Board’s order, conclud-

ing that individuals who are paid and controlled by a

union that has targeted an employer for organization are

not “employees” under the NLRA.

¢

SUMMARY OF THE ARGUMENT

The NLRB’s conclusion that an employer is required

to hire paid union organizers of a union that has targeted

that employer for organization is an unreasonable and

ea

————

me,

arbitrary interpretation of the Act. A requirement that

employers must hire the paid agents of their adversary in

organizing activities is at odds with the fundamental

balance in the statute between the roles of employers,

employees and labor organizations. In addition, the

Board’s requirement that employers must allow paid

union operatives to work side by side with the rank and

file members of a potential bargaining unit is inconsistent

with numerous principles articulated under the NLRA

that are designed to protect fundamental fairness and

freedom of choice. The unreasonableness of the Board’s

rule requiring a targeted employer to hire paid organizers

of the union. targeting him is underscored by the Board’s

arbitrary distinction not applying the same rule in a

strike situation, an exception unsupported by the statute

and by the Board’s experience in administering the stat-

ute.

Moreover, the language of the statute itself supports

the conclusion that paid union organizers are not

“employees” when they are acting as the paid agents of a

labor organization and have presented themselves for

employment to a targeted employer in furtherance of

their paid organizational duties.

I. THE BOARD’S CONCLUSION THAT AN

EMPLOYER IS REQUIRED BY LAW TO HIRE THE

PAID ORGANIZERS OF A UNION THAT HAS

TARGETED THAT EMPLOYER FOR ORGANIZA-

TION IS AN UNREASONABLE INTERPRETATION

OF THE ACT.

As the court of appeals recognized, it is settled that

the Board, as the agency charged with interpreting the

NLRA, is entitled to deference in its interpretation of the

statute only if that interpretation is reasonable in light of

the terms, structure and policies of the Act. See Sure-Tan,

Inc. v. NLRB, 467 U.S. 883, 891 (1984). See also Chevron

U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467

U.S. 837, 843 (1984) (where the statute is silent or ambig-

uous, agency’s interpretation is upheld if it is a permis-

sible construction of the statute). The NLRB is not

entitled to deference, however, in a case such as the one

here, where the Board unabashedly has ignored the dis-

tinct roles of employers, employees and unions carefully

cast by Congress, and has articulated a rule that conflicts

with numerous other provisions and principles of the

statute. As we show in Section II, infra, there is even

support in the text of the Act for the court of appeals’

conclusion that paid union organizers who seek a job

with a targeted employer on behalf of the targeting union

are excluded from the definition of “employee.” In such

circumstances, it is clear that the Board’s conclusion that

paid union organizers must be hired by a targeted

employer during an organizing drive is at odds with the

terms, structure and fundamental policies of the statute.

A. The Principle of Balance Struck by Congress in

the NLRA Between Labor and Management

Demonstrates that an Employer is not Required

to Hire the Paid Agents of the Union that has

Targeted It for Organization.

Even a cursory analysis of the structure of the NLRA

shows why the Board was wrong to conclude that paid

union organizers who have targeted an employer for

organization must be hired by that employer. By design,

employers, unions, and employees constitute three dis-

tinct groups under the NLRA. The major emphasis of the

Act is to protect the rights of employees by keeping

employee interests distinct from those of employers and

of unions. Lechmere, Inc. v. NLRB, 502 U.S. 527, 532 (1992).

The paramount employee right under the NLRA is the

Section 7 right to form, join, or assist labor organizations

or to refrain from doing so. 29 U.S.C. § 157. Unions and

employers have the right to convince employees legit-

imately that they either should or should not support a

union, but neither has the right to make that decision for

employees. Lechmere, 502 U.S. at 532.

Recognizing that employee interests are best served

by independent persuasion from labor and management,

Congress carefully separated the roles of unions and

employers under the statute and designed the NLRA to

keep either from interfering with the independence of the

other. There are numerous examples of the independent,

and at times adversarial, roles that are delineated for

employers and unions under the NLRA.

A first principle of the NLRA is that labor and man-

agement may not dictate who shall be the collective bar-

gaining agents of the other. See generally General Electric

Co. v. NLRB, 412 F.2d 512, 516-17 (2d Cir. 1969) (discuss-

ing fundamental right of both employers and employees

to choose their own bargaining representatives). Consis-

tent with this principle, the NLRA prohibits an employer

from interfering “with the formation or administration of

any labor organization.” 29 U.S.C. § 158(a)(2). An

employer violates that section of the Act if its managers

and supervisors play a meaningful role in the selection of

a union as the employees’ bargaining representative. Int'l

10

Assoc. of Machinists v. NLRB, 311 U.S. 72, 79-80 (1940); H.J.

Heinz Co. v. NLRB, 311 U.S. 514, 519-20 (1941). Similarly,

the Act prohibits a labor organization from restraining

management in the selection of its representatives. 29

U.S.C. § 158(b)(1)(B); NLRB v. Amax Coal Co., 453 U.S. 322,

334-335 (1981).

Further evidence of the independent and distinct

roles occupied by employers and unions under the Act is

that no union is required to bargain with an employer

about the union’s rules of membership, 29 U.S.C.

§ 158(b)(1)(A) (proviso); Betra Mfg. Co., 233 NLRB 1126,

1135 (1977), enf’d, 624 F.2d 192 (9th Cir. 1980), cert. denied

sub nom, Thomas v. NLRB, 450 U.S. 996 (1981); NLRB v.

Corsicana Cotton Mills, 178 F.2d 344 (5th Cir. 1949); Zayre

Dep't Stores, 289 NLRB 1183, 1186 (1988). By the same

token, management is not required to bargain with a

union about the individuals the employer hires, Star Tri-

bune, 295 NLRB 543, 547-48 (1989); United Technologies

Corp., 274 NLRB 1069, 1070 (1985), enf’d, 789 F.2d 121 (2d

Cir. 1986), or about the employer’s basic decisions on

how it will run its business. First Nat'l Maintenance Corp.

v. NLRB, 452 U.S. 666 (1981). See also Dubuque Packing Co.,

Inc., 303 NLRB 386 (1991), enf’d in relevant part, 1 F.3d 24

(D.C. Cir. 1993).

The NLRA has been construed to allow an employer

to discharge its managers and supervisors who support

union representation. E.g., Parker-Robb Chevrolet, Inc., 262

NLRB 402 (1982), review denied sub nom, Auto Salesmen’s

Union Local 1095 v. NLRB, 711 F.2d 383 (D.C. Cir. 1983).

Similarly, a union may expel its members who aid man-

agement by working during a strike. Scofield v. NLRB, 394

U.S. 423, 430 (1969).

11

Furthermore, an employer may permit its managers

and supervisors to join a union, but it is not required by

the Act to do so. NLRB v. News Syndicate Co., 365 U.S. 695,

699 n.2 (1961). At the same time, a union is not required

to accept a management representative into its ranks,

although it may do so voluntarily. Id. See also Sakrete of N.

Cal., Inc. v. NLRB, 332 F.2d 902, 908 (9th Cir. 1964), cert.

denied, 379 U.S. 961 (1965). Cf. Reich v. Int'l Alliance of

Theatrical Stage Employees, 32 F.3d 512, 515 (11th Cir. 1994)

(observing that union’s prohibition on a managerial

employee-member having a voice or vote in union busi-

ness appropriately avoids “a conflict of interest in [the

individual] carrying out his duties for the union, on the

one hand, and his employer, on the other.”).

Given the foregoing principles, it is inconceivable

that Congress nevertheless could have intended that an

employer would be required to hire full-time union orga-

nizers paid and controlled by the union even though the

employer knows that the organizers’ express purpose in

applying for jobs is to drum up support for the union.

Indeed, it is apparent that the conclusion of the Board in

this case is in direct conflict with core tenets of the NLRA.

It is only by unreasonably equating paid union activity

with the Section 7 right of employees to form, join, or

assist a labor organization, and by giving no meaningful

consideration to the balancing principles upon which the

Act is based, that the Board could come to the remarkable

conclusion that a targeted employer must hire a paid

union adversary.*

* Thus, the Board miscasts the challenge to the “employee”

status of paid union organizers as an attack on the premise that

12

This Court, in Lechmere, supra, reiterated that union

organizers could not use the Section 7 rights of the

employees they sought to organize to excuse their tres-

pass onto an employer’s property. Lechmere, 502 U.S. at

537. Nonetheless, the Board concluded here that the

union can assume the rights of employees by the simple

expedient of directing its paid agents to apply for

employment with a non-unionized company. But this dis-

patch of its agents to the employer’s work site, employ-

ment applications in hand, no more changes the character

of the union’s right than if an employer sent its super-

visors to apply for a job with a union and thereby

attempted to vest them with “employee” status for the

purpose of advancing the employer’s opposition to

unionization from within the union. Neither the union

nor the employer should be permitted to gain

employees can be both loyal to their union and to their

employer. Town & Country Elec., 309 NLRB 1250, 1257 (1992),

enf'd denied, 34 F.3d 625 (8th Cir. 1994). In the same vein, it

mischaracterizes the arguments in support of this challenge as

“arguments that employers be permitted to discriminate based

on an individual’s presumed or avowed intention to join or

assist a labor organization.” Id. 1256. The briefs of the Board and

its amici in this Court continue this {.eme.

Neither of these characterizations is accurate or useful.

There is no question that employees may be both loyal union

adherents and loyal employees and that the right to join unions

and to assist labor organizations is fundamental. Those princi-

ples are not at issue. Rather, what is at issue is whether a paid

operative of a union that has targeted an employer for organiza-

tion, who seeks to work for the employer to further the union’s

objectives, and whose duration of employment is controlled by

the union’s agenda, and not by the individual’s or the

employer’s requirements, is a bona fide “employee” who must be

hired and retained.

if

13

“employee” status for its paid agents through such strata-

gems.

Moreover, as the Fourth Circuit recognized in H.B.

Zachry Co. v. NLRB, supra, the requirement that an

employer accept into its ranks paid union organizers,

particularly during a representation campaign, effectively

requires the employer to subsidize the organizational

activities of the union that, by statute, it is privileged to

oppose. Zachry, 886 F.2d at 75. In like manner, Congress,

in Section 8(a)(2) of the Act, 29 U.S.C. § 158(a)(2), sought

to maintain the independence of unions for the benefit of

employees by prohibiting employers from funding their

efforts.

The Board cursorily dismisses the latter prohibition,

stating that Section 8(a)(2) would not be violated by such

employer “support” for the union because organizers

would be paid for work performed for the employer, not

for their organizing activities. See Town & Country, supra,

309 NLRB at 1257-58 n.36. Such analysis begs the ques-

tion, however, because it ignores the statutory policy

embodied in Section 8(a)(2) that in the realm of organiz-

ing, most employers and unions are adversaries — com-

petitors for the sympathies of the employees. No

competitor should effectively be required to subsidize the

competition. Yet, the decision of the Board ignores logic

and the very fabric of the NLRA by requiring such an

untoward result.

In sum, the basic structure of the Act clearly supports

the conclusion that the paid organizers of a union that

has targeted an employer for organization need not be

14

hired by that employer, whatever their technical status

under the Act.°

B. Other Settled Principles of the NLRA are Vio-

lated by the Board’s Conclusion that the Pay

and Control Exercised by a Union Over Its

Organizers do not Present Disabling Conflicts

of Interest.

The erroneous nature of the Board’s decision in this

case is highlighted by its decision in Sunland Construction

Co., 309 NLRB 1224, 1230-31 (1992), a companion case to

5 The Board and its amici argue that NLRA Section 2(3)’s

broad definition of “employee,” when considered in light of the

list of exclusions set forth therein, mandate that “paid union

organizers” be classified as statutory employees, given that they

allegedly are not among the groups expressly excluded. Peti-

tioner and its amici base this contention on the “expressio unius

est exclusio alterius” principle of statutory construction, that is,

the inclusion of one thing negatively implies the exclusion of

others. As we show in Section II, the text of the Act supports the

proposition that paid union organizers are excluded from the

Act by operation of Sections 2(2) and 2(3). Yet, even were this

not the case, other categories of workers have been determined

to be outside the protection of the Act despite their absence

from Section 2(3)’s list of exclusions. See NLRB v. Bell Aerospace

Co., 416 U.S. 267, 289 (1974) (holding, contrary to the Board’s

conclusion, that all managerial employees are excluded from

Section 2(3)’s definition of employee); Cedars-Sinai Medical Cen-

ter, 223 NLRB 251 (1976) (holding that medical residents and

medical interns are excluded from the NLRA definition of

employee). Thus, even if Congress failed to expressly exclude

“paid union organizers” from Section 2(3), this is not dispositive

of Congress’ intent on the issue, particularly where, as here, a

contrary result is inconsistent with the fundamental policies of

the statute.

15

Town & Country before the Board. In Sunland, the Board

held that an employer may refuse to hire a paid union

organizer during a strike without violating the NLRA.

The Board reasoned that the conflict of interest between

the employer and the union justified the employer’s

refusal to hire the organizer based upon his paid union

status, saying: “[the union agent’s] interest and objec-

tives . . . were [presumptively] aligned with the Union -

on whose behest he acted.” Id. at 1231. Emphasizing the

point, the Board also noted that an employer could not

presume that unpaid union adherents who applied to

work behind a picket line operated under such a dis-

abling conflict “because they are not obligated to the

union as paid agents.” Id. n.41.°

The paradox is that in Sunland, the Board acknowl-

edged that a fundamental divergence of interests exists

between unions and employers. According to the Board,

an employer is privileged to presume that the union’s

motive is illicit and at odds with the employer’s desire to

operate when the union sends its agents into the

employer’s workforce during a strike. In such an

instance, the employer need not hire an applicant who is

a paid union organizer. Inexplicably, however, the Board

would forestall an employer targeted by a union for

organization from drawing a negative inference about the

union’s motives in sending its paid operatives to work for

the employer in the absence of a strike.

6 In Sunland, the Board, as in this case, found paid union

organizers to be Section 2(3) “employees.” In this respect, the

Board’s conclusions in the cases cannot be reconciled.

16

The Chamber submits that the Board’s demarcation

between a strike situation and a non-strike (organizing)

situation is utterly untenable. For example, if paid union

organizers must be hired by a targeted employer before a

picket line is erected as the Board holds, then all a union

need do is send its agents to apply for work before a

strike is called, and if qualified for the job, they must be

hired by the employer. Presumably, the union could then

call a strike, instruct its operatives to continue to work

behind the picket line, and the Board, predicated on

Sunland, would then permit the targeted employer to

terminate the same paid organizers who, under the

Board’s doctrine in this case, the employer was compelled

to hire originally. A similar absurd result follows that

paid union organizers may be discharged if they, at the

union’s direction or urging, engage in lesser forms of

economic activity against the employer, such as a pro-

tected “sit-down” strike. See Overhead Door Corp., 220

NLRB 431 (1975) (finding employees’ refusal to leave

plant at the end of shift to protest change in working

hours to be protected conduct), enf’d denied in relevant

part, 540 F.2d 878 (7th Cir. 1976). See also Peck, Inc., 226

NLRB 1174 (1976) (affirming continued adherence to rule

in Overhead Door). It does violence to the Act to permit

the irreconcilable conflict between paid union organizers

and targeted employers to be acted upon only in the

strike situation.”

7 Thus, the Board’s distinction requires it to disregard that

striking is protected activity under Section 7 of the Act, 29

U.S.C. § 157; that under Section 2(3) of the Act, “employees” do

not lose their status by exercising their right to strike, 29 U.S.C.

§ 152(3); see also Laidlaw Corp., 171 NLRB 1366 (1968), enf’d, 414

| a

eee — -—

17

In contrast with the Board, the administrative law

judge in the Sunland case® realistically recognized that

conflicting agendas are equally possible in both the strike

and the organizing context:

It is not farfetched to regard the [union’s]

“strike back” strategy as built upon a form of

entrapment reminiscent of other “blackmail”

devices which in 1958 led to enactment of the

Section 8(b)(7) strictures on recognition picket-

ing. . . . [In this case], the employee protections

of Section 8(a)(3) were central ingredients of a

scheme whereby an unorganized employer

would be pressured to capitulate, go out of busi-

ness, or face recurring union sponsorship of

mass applications in the midst of future projects.

From my perspective, a serious question arises

as to whether, through the complaint in this

proceeding, the Board has been conscripted as

F.2d 99 (7th Cir. 1969), cert. denied, 397 U.S. 920 (1970); and that

nothing in the NLRA “shall be construed so as either to interfere

with or impede or diminish in any way the right to strike,” 29

U.S.C. § 163. Similarly, both employers and unions are prohib-

ited under the Act from discriminating against employees who

exercise their right to strike. 29 U.S.C. §§ 158(a)(1), 158(b)(1)(A).

It is precisely because fundamental employee rights under the

Act must be disregarded in order for the Board’s distinction to

work that the Board was wrong to conclude that a paid union

organizer is a bona fide arplicant or employee of a targeted

employer at any time.

8 In Sunland, the Board disavowed reliance on the adminis-

trative law judge’s discussion of the motives of the union in

inundating the employer with applications of union organizers.

Yet, the ALJ’s candid assessment is entitled to much weight,

because it demonstrates the falsity of the distinction that the

Board would draw between the strike situation and “business as

usual.”

18

an unwitting conspirator in the effort to achieve

union goals — be they organizational or eco-

nomic — through pressures, rather than through

the statutory procedures designed to assure that

compulsory bargaining begins with procedures

preserving freedom of choice.

Sunland Constr. Co., 309 NLRB at 1245 (decision of ALJ

Harmatz).?

By acknowledging that the control exercised by the

union over its organizers makes them different in kind

from other laborers in the strike context, but then failing

to account for those differences in the organizing context,

the Board clearly reaches an unreasonable interpretation

of the Act. For in each case, unions and employers should

properly be viewed as “separate factions in warring

camps.” NLRB v. Bell Aerospace Co., 416 U.S. 267, 278

(1974), quoting Packard Motor Car Co. v. NLRB, 330 U.S.

485, 494 (1947). Just as an employer need not hire a paid

union organizer to work behind a picket line, so too an

employer should have a right to refuse to hire - and,

therefore, not to pay — individuals who are concurrently

employed by a union adversary to enter the employer’s

workplace for the express purpose of furthering the

union’s interests at the location. Cf., e.g., Lucky Stores, Inc.,

269 NLRB 942 (1984) (permissible to terminate a confi-

dential employee based on the presumption that close

marital or social relationship to a union adherent might

®° ALJ Harmatz recognized the particular vulnerability of a

construction employer to this tactic if he is targeted by a union

when nearing his contract deadline to complete a job, because

normally such contractors are subject to stiff monetary penalties

for delay. 309 NLRB at 1245.

19

improperly disclose confidential labor relations informa-

tion to union); Joseph Schlitz Brewing Co., 211 NLRB 799

(1974) (same).

A conclusion that an employer need not hire a paid

union organizer who only will remain with the employer

so long as the union permits him to do so is consistent

not only with the NLRA, but also accords with common

law agency principles, which recognize that such divided

loyalty is inconsistent with the normal master-servant

relationship. See Restatement (Second) Agency § 226,

comment a (“giving service to two masters at the same

time normally involves a breach of duty by the servant to

one or both.”). See also Nationwide Mut. Ins. Co. v. Darden,

503 U.S. 318, 112 S.Ct. 1344, 1349 (1992) (observing that

construing the employer-employee relationship under the

NLRA “to imply something broader than the common-

law” thwarts congressional intent); H.R. Rep. 245, 80th

Cong., Ist Sess. at 18 (1947), reprinted in 1 Legislative

History of the National Labor Relations Act, 1947, 309

(admonishing courts to apply the common law rules

when construing the master-servant relationship under

the statute because “Congress . . . intends . . . that the

Board give to words not far-fetched meanings but ordi-

nary meanings”).

What the Board seemingly fails to comprehend is that

where union pay and union control motivate the orga-

nizer’s conduct, the organizer is acting as an agent of the

employer’s adversary, not as a run-of-the-mill pro-union

employee. As such, irrespective of whether a paid union

organizer technically falls within the NLRA definition of

“employee,” a targeted employer should be privileged to

refuse to hire the union agent on the presumption that the

20

union’s conflicting interests ultimately will be given pre-

cedence. Cf. Emanuel Hospital, 268 NLRB 1344, 1348 (1984)

(“suspicion, doubt or fear” that employee with potential

conflict of interest will act in derogation of employer’s

interest is sufficient basis to take action against

employee). Cf. also Wild v. United States Dep't of Housing

and Urban Dev., 692 F.2d 1129, 1133 (7th Cir. 1982) (where

employee’s off-duty behavior is in conflict with

employer’s mission, employer could reasonably termi-

nate him, as, for example, “[i]f a union officer of a musi-

cians’ union owned a nightclub that employed non-union

musicians”). To conclude otherwise, as did the Board in

this case, is to exalt form over substance and to ignore the

realities of the workplace.

Additionally, determining that an employer need not

hire the paid organizers of a union safeguards the right of

bona fide employees to freely choose whether or not they

wish to be represented by a union. It cannot be disputed

that the right to take part in free and fair elections is

crucial to realization of the Section 7 right to organize or

to refrain from organization. This right is necessarily

impaired by the Board’s construction of the statute in this

case because, under the Board’s view, paid union orga-

nizers might well be permitted to vote in a representation

election brought by the union paying them. See Dee Knit-

ting Mills, 214 NLRB 1041 (1974), enf’d, 538 F.2d 312 (2d

Cir. 1975). Thus, the Section 7 rights of legitimate

employees clearly are threatened by the Board’s rule.

Yet, even if paid union organizers were to be

excluded from such an election, there is harm to the bona

fide employees’ section 7 rights merely through the

thrusting of the paid union agents among their ranks. For,

7 /

21

moving about in the guise of rank and file employees, the

paid union agents are apt to “paint a false portrait of

employee support during the representation campaign.”

NLRB v. Savair Mfg. Co., 414 U.S. 270, 277 (1973). The

results of the election may be tainted thereby. Moreover,

it is well recognized that employees who are choosing

whether or not to be represented by a union are entitled

to know the character and scope of the unit in which they

will be included. See, e.g., NLRB v. Parsons School of

Design, 793 F.2d 503, 507-08 (2d Cir. 1986); NLRB v.

Lorimar Productions, Inc., 771 F.2d 1294, 1301 (9th Cir.

1985). If paid union organizers populate the ranks of a

targeted workforce in sufficient numbers, in addition to

the false portrait of support that they will paint, they will

distort the character and scope of the actual bargaining

unit and bargaining unit employees likely will become

confused about the role of “employee” organizers in the

collective bargaining process.

On the other hand, a holding that paid union agents,

like Hansen, do not have the right to engage in paid

organizing at an employer’s workplace is not tantamount

to permitting employers to discriminate against bona fide

employees who engage in union activity. Nor will if chill

the rights of such employees to form, join, and assist

labor organizations. Bona fide employees, who have a

stake in the employer’s enterprise, and who will endure

the consequences of whatever representation choice is

ultimately made by the employee group, will still enjoy

all of the rights afforded them under the NLRA. Unions

still will be able to appeal legitimately to employees

within the broad parameters permitted by the Act.

Unions simply will not be able to require employers to

22

subsidize their position by the forced employment of

individuals whose interest in and loyalty to the employer

is dictated by the union’s agenda.

II. PAID UNION ORGANIZERS ARE NOT

“EMPLOYEES” UNDER THE LANGUAGE OF

SECTION 2(3) OF THE ACT.

Where a statute is clear, the agency charged with

interpreting it is bound to apply it as written and the

reviewing court, in turn, should accord no deference to

an agency’s determination.-Chevron U.S.A., Inc. v. Natural

Resources Defense Council, Inc., 467 U.S. 837, 843 (1984)

(reasoning that where Congress has spoken on the precise

issue, deference is inappropriate); NLRB v. Hearst Pub.,

Inc., 322 U.S. 111, 130-31 (1944) (same). Cf. Marbury v.

Madison, 5 U.S. 137, 177 (1803) (“[i]t is emphatically the

province and duty of the judicial department to say what

the law is”).

The Chamber submits the text of the NLRA supports

the Eighth Circuit’s conclusion that paid union organizers

are not “employees” when they present themselves for

employment to a targeted employer. The Chamber

believes that paid union organizers are excluded from

NLRA Section 2(3) when they act in this capacity. Accord-

ingly, the Board’s contrary interpretation of the NLRA is

a misreading of the statute and is entitled to no deference

by the Court.1°

10 Although the Brief of Local 292 on the merits (note 17

therein) disingenuously implies that the Board’s position on the

employee status of paid union organizers dates back to the

a

23

‘Section 2 of the NLRA, defines, inter alia, the terms

“employer,” “employee” and “labor organization.” Each

entity is recognized as distinct and apart from the others

1930s, the Board cannot be said to have announced its position

on the status of that group until the 1960s, in a footnote that the

Board candidly described as dictum in Sears, Roebuck and Co., 170

NLRB 533, 535 n.3 (1968), stating “[a]s long as the employee

gives a full day’s work to his ‘regular’ employer, the fact that he

renders services in other hours to the Union does not affect his

employee status, whether such latter services are paid or not.”

See also Elias Bros. Big Boy, Inc., 139 NLRB 1158, 1165 (1962)

(Board adopting without opinion the ALJ’s recommended deci-

sion in which he concluded that, on the facts presented, a wait-

ress who received a nominal sum from the union for expenses

incurred in organizational efforts did not thereby lose her

employee status), enf’d denied in relevant part, 327 F.2d 421 (6th

Cir. 1963). In Dee Knitting Mills, Inc., 214 NLRB 1041 (1974),

enf‘d, 538 F.2d 312 (2d Cir. 1975) (unpublished opinion), and Oak

Apparel, Inc., 218 NLRB 701 (1975), the Board definitively held

paid union organizers to be protected “employees” under Sec-

tion 2(3), even if they were working for an employer for the

express purpose of organizing that employer’s employees. The

Board has adhered to this interpretation, see Pilliod of Missis-

sippi, Inc., 275 NLRB 799 (1985); Palby Lingerie, Inc., 252 NLRB

176 (1980); Margaret Anzalone, Inc., 242 NLRB 879 (1979);

Henlopen Mfg. Co., 235 NLRB 183 (1978), enf’d denied on other

grounds, 599 F.2d 26 (2d Cir. 1979); Anthony Forest Products Co.,

231 NLRB 976 (1977), and, in light of this Court’s decision in

Phelps Dodge Corp. v. NLRB, 313 U.S. 177 (1941), has extended it

to include paid union organizers who apply for work with the

objective of organizing an employer. E.g., Escada (USA), Inc., 304

NLRB 845 (1991), enf’d without opinion, 970 F.2d 898 (3d Cir.

1992); Willmar Elec. Serv., Inc., 303 NLRB 245 (1991), enf’d, 968

F.2d 1327 (D.C. Cir. 1992), cert. denied, U.S. ___, 113 S.Ct. 1252

(1993); H.B. Zachry Co., 289 NLRB 838 (1988), enf’d denied, 886

F.2d 70 (4th Cir. 1989).

24

by the language of the definitions. In Section 2(2) of the

Act, the term “employer”

includes any person acting as an agent of an

employer, directly or indirectly, but shall not

include the United States or any wholly owned

Government corporation, or any Federal

Reserve Bank, or any State or political subdivi-

sion thereof, or any person subject to the Rail-

way Labor Act, as amended from time to time,

or any labor organization (other than when acting as

an employer), or anyone acting in the capacity of

officer or agent of such organization.

29 U.S.C. § 152(2) (emphasis added).

The definition of “employee” is set out in Section 2(3)

and states

the term “employee” shall include any

employee, and shall not be limited to the

employees of a particular employer, unless the

Act explicitly states otherwise . . . but shall not

include any individual employed as an agricultural

laborer, or in the domestic service of any indi-

vidual employed by his parent or spouse, or any

individual having the status of an independent

contractor, or any individual employed as a

supervisor, or any individual employed by an

employer subject to the Railway Labor Act, as

amended from time to time, or by any other

person who is not an employer as herein defined.

29 U.S.C. § 152(3) (emphasis added).

11 Section 2(5) defines a “labor organization” as

any organization of any kind or any agency or

employee representation committee or plan, in which

j

a 4 ete ee a

25

As the foregoing demonstrates, the definitions of

these terms are interrelated and refer to each other. While

the term “employee” is defined broadly, the term

expressly excludes anyone who is employed “by any

other person who is not an employer” as defined by the

Act. Similarly, although the term “employer” is broad, it

contains a nuraber of exclusions, including one for a

“labor organization.” Through these two interrelated

exclusions, Congress has spoken: individuals who are

paid employees of a labor organization — including paid

union organizers — are not “employees” under the NLRA

because they are carrying out the union’s organizational

work.

The parenthetical to Section 2(2), which states that a

union is an employer when it is “acting as an employer,”

confirms the conclusion that a union’s agents are not

“employees” when acting as a labor organization, that is

attempting to organize an employer, like Town & Coun-

try. Indeed, this parenthetical statement was added for

the limited purpose of subjecting labor organizations to

the strictures of the NLRA in their treatment of their own

employees. See S. Rep. No. 1184, 74th Cong., 2d Sess. 4

(1934), reprinted in 1 Legislative History of the National

Labor Relations Act, 1935, 1099, 1102 (stating that “[i]n its

employees participate and which exists for the pur-

pose, in whole or in part, of dealing with employers

concerning grievances, labor disputes, wages. rates of

pay, hours of employment, or conditions of work.

29 U.S.C. § 152(5). While the Act defines a labor organization as

comprised of employee-members, as this Court has empha-

sized, a labor organization has an identity distinct from that of

its constituents. Lechmere, Inc. v. NLRB, 502 U.S. 527, 532 (1992).

26

relations with its own employees, a labor organization

ought to be treated as an employer, and the bill so pro-

vides.”). See also Office Employees Int’l Union v. NLRB, 353

U.S. 313, 316 (1957) (holding Teamsters to be employer

liable for unfair labor practices in interfering with right of

its clerical employees to organize themselves). Congress

understood that any broader application of “employer”

status to labor organizations would “deprive unions of

one of their normal functions,” namely, organizing other

employers. S. Rep. No. 573, 74th Cong., Ist Sess. 6 (1934),

reprinted in 1 Legislative History of the National Labor

Relations Act, 1935, 2300, 2305. See also S. Rep. No. 1184,

74th Cong., 2d Sess. 4 (1934), reprinted in 1 Legislative

History of the National Labor Relations Act, 1935, 1099,

1102 (distinguishing between a union’s relations with its

“clerks, secretaries and the like” and its actions as an

advocate of unionization).

Thus, Congress drew a sharp distinction between the

union in its relationship with its own employees regard-

ing wages, hours, and terms and conditions of employ-

ment and the union’s organizing activities of other

employers. The union, in short, was to be an “employer”

only in the limited context of its relations with its own

employees. Paid agents of labor organizations were

intended to be statutory “employees” only when dealing

with their own employer, the union, not when dealing

with some other employer whom the union has targeted

for organizing.

The Board, responding to this analysis, asserted that

it was “immaterial” whether a union is a statutory

employer because the paid union organizer draws his

“employee” status from his attempted employment with

27

the targeted employer. Town & Country, supra, 309 NLRB

at 1257-58 n.36. In support of this proposition, the Board

drew an analogy between the union organizer and an

agricultural or government worker (neither of whom is

an “employee” under Section 2(3) of the Act) who seeks

work with an “employer covered by the NLRA” and thus

becomes an “employee vis-a-vis that new employer.” The

Board’s summary conclusion, however, ignores the poli-

cies underlying the NLRA and the facts of the case under

consideration. Thus, as a matter of fact, the paid union

organizers in this case, including Hansen, who applied

for work with Town & Country at the behest of the union,

could only work at Town & Country in furtherance of the

union’s organizational goal, could only work for Town &

Country so long as the union permitted them to do so,

and were to be paid for fulfilling these obligations.!? By

contrast, the typical agricultural or federal employee

seeking a second job does not labor under such restric-

tions, nor is he paid by his agricultural or federal

employer for his outside efforts. Furthermore, as dis-

cussed above in Section I, as a matter of NLRA policy,

Congress has struck a delicate balance between

employers, unions and employees. This balance is

destroyed when paid agents of labor organizations who

apply for work in order to further their union’s objectives

12 Indeed, while Mr. Hansen received $725 from Ameristaff,

the employment agency retained by Town & Country to help it

staff the project, he was additionally paid nearly $1,100 by the

union for his concurrent organizational efforts. See Town &

Country, supra, 34 F.3d at 629 n.2.

28

are deemed indistinguishable from any employee who

seeks a second job.!5

13 The Board and its amici also look to Section 302 of the

Labor Management Relations Act, 29 U.S.C. § 186, as evidence

that paid union personnel could be both employees of unions

and of targeted employers such as Town and Country. See Town

& Country, supra, 309 NLRB at 1257-58 n.36. Section 302 restricts

payments that an employer can legally make to an employee

representative, but excludes payments “to any representative of

his employees, or any officer or employee of a labor organiza-

tion, who is also an employee . . . of such employer, as compen-

sation for or by reason of his service as an employee of such

employer.” 29 U.S.C. § 186(c)(1). The Chamber submits that

there is a difference between Section 302, which permits an

employer to employ a union official if it wishes to do so without

being guilty of bribery under the LMRA, and the Board’s deci-

sion in this case, which requires, an employer to employ the paid

union agent. Furthermore, the Board’s logic in this regard is no

more persuasive than that rejected by this Court in Allied Chemi-

cal Workers v. Pittsburgh Plate Glass Co., 404 U.S. 157, 170-71

(1971), that retirees are “employees” under the NLRA because

of their employee status under Section 302(c)(5) of the LMRA.

29 U.S.C. § 186(c)(5). There, the Court found there to be

no anomaly in the conclusion that retired workers are

“employees” within § 302(c)(5) entitled to the benefits

negotiated while they were active employees, but not

“employees” whose benefits are embraced by the bar-

gaining obligation of § 8(a)(5).

Id. at 170. So too here, there is no anomaly in Congress permit-

ting employers and unions willingly to enter into agreements

whereby union officials could be recognized as paid

“employees” of the employer without violating the bribery stat-

ute, while at the same time excluding such individuals from the

NLRA definition of “employees” whom employers must con-

sider for hire without regard to their concurrent union employ-

ment for the express purpose of organizing that employer.

a De ~*~

29

If the language of the statute is examined closely, it is

clear that neither Hansen and his cohorts, nor the two

paid union officials who applied for work at Town &

Country, should be considered statutory employees when

they sought a job with the Company to organize its

workforce. When these paid union organizers apply for

work in order to organize an employer, and are paid by

their union to do so, they are carrying out duties as the

union’s agents vis-a-vis that employer — duties that bring

them outside the ambit of protections provided to

“employees” under the NLRA. Lacking “employee” sta-

tus, they, like any other non-employee, could be rejected

or dismissed by a targeted employer without violating

the NLRA. Cf. Fort Smith Chair Co., 143 NLRB 514, 518

(1963), aff'd on other grounds sub nom., United Furniture

Workers v. NLRB, 336 F.2d 738 (D.C. Cir. 1964) (loss of

“employee” status under the NLRA means loss of the

Act’s protection and an employer’s motive for discharg-

ing those who have forfeited this status - including its

otherwise unlawful desire to rid itself of the employees’

union — is immaterial). In this respect, a paid union

organizer is similar to a company supervisor who is also

excluded from the definition of “employee” under Sec-

tion 2(3) of the Act, and who may be discharged because

of his union activities or sympathies. See, e.g., Parker-Robb

Chevrolet, Inc., 262 NLRB 402 (1982), review denied sub

nom., Auto Salesmen’s Union Local 1095 v. NLRB, 711 F.2d

383 (D.C. Cir. 1983).

The Board’s disregard of statutory language consis-

tent with the separate and diverse roles of employers and

unions has led to the erroneous and paradoxical conclu-

sion that the paid agents of one are “protected,” and

30

therefore must be “hired” by the other. Such an intoler-

able result must be rejected, and its conclusion that paid

union organizers are Section 2(3) “employees” set aside.

S

CONCLUSION

For the foregoing reasons, the Chamber of Commerce

of the United States of America urges the Court to sustain

the Eighth Circuit’s judgment.

Of Counsel:

STEPHEN A. BOKAT

Rosin S. CONRAD

Mona C. ZEIBERG

NATIONAL CHAMBER

LITIGATION CENTER, INC.

1615 H Street, N.W.

Washington, D.C. 20062

(202) 463-5337

Dated: April 1995

Respectfully submitted,

MARSHALL B. BABSON

STANLEY R. STRAUSS

ELIZABETH TORPHY-DONZELLA

OGLETREE, DEAKINS, NASH,

SMOAK & STEWART

2400 N Street, N.W., 5th Floor

Washington, D.C. 20037

(202) 887-0855

Counsel for the Chamber of

Commerce of the United

States of America