Petitioners Brief — NLRB v. Friedman-Harry Marks Clothing Co.

INDEX

q Page

. Qpinions below._.-..---------------------------- 099 1

* Seste@iction..._.---.-----~-2----------0---- ooo o-oo == 1

Questions presented ----------.-----------------9-- 7-770 r-

Statute involved._.------------i---------------------"0---"" 2

Statemont.._....-..----,-- 2-3 -- =o nnn nnn nnn 3

Argument......-..----------------»--------29---- 7-9" "= 13

The National Labor Relations. Act, as here applied to this ,

respondent, is a valid exercise of the power of Congress

over interstate commerce-_----------------------------- 15

Conciusion....-----~.-~---- 2-25 nn nn nn nnn 30

CITATIONS

Cases: -

Addyston Pipe & Steel Corp. Vv. United States, 175 U. S.

Sa yorawencesaceenan——annenasbenee=aaae= 28

Bedford Cut Stone v. Stone Cutters’ Association, 274 U. 8.

i cniacnceincnenieantnancaaaes apananae eae RR ee, eee 18

Chicago Board of Trade v. Olsen, 262 U..8. 1------------- 25, 28

Coronado Coal Co. v. United Mine Workers, 268 U. S. 205. 18, 21

Duplez Printing Co. Vv. Deering, 208 U. 8S. 274----------- 18

Federal Trade Commission Vv. Algoma Lumber Co., 291

U. & 67..---.---.-------~--------<---- 25 ---- === Ee ADae: 15

Florida v. United States, 292 U.S. 1--------------------- 15

Industrial Association Vv. United States, 268 U. S. 64----- 21, 26

“International Organization v. Red Jacket C. C. Cc. Co.,

18 F. (2d) 839, certiorari denied, 275 U. S. 536.---- 26

McCall v. California, 136 U. 8. 104--------------------- 28

Stafford v. Wallace, 258 U. 8. 495--------------------- 17, 25, 28

Tagg Bros. & Moorhead v. United States, 280 v. &. 4... 25

Texas & New Orleans R. Co. v. Brotherhood of. Railway

Olerks, 281 U. 8. 548------------------------------- 15, 28, 29

United Leather Workers v. Herkert €. Meisel Trunk Co.,

965 U. 8. 407----~---------------------- 4229-20979 22, 28

United Mine Workers Vv. Coronado Coal Co., 259 U. 8. 344- 21, 26

: United States v. Patten, 226 U. 8. 525--+----------------- 22

Statutes: , .

Criminal Code, Seca. 135 and 136 (U. 8S. C., Title 18, Secs.

241, 042) _...------------->------=--------=--------=-- 14

National Labor Relations Act (Act of July 5, 1935, c. 372, -

49 Stat. 449, U. S. C., Sup. I, Title 29, Sec. 151 et seq.) -- 2

Miscellaneous :

Perlman and Taft, History of Labor in the United States

1896-1982 (1935 ed.) -.------------------- ge icclwatinc 16, 26, 29 °

122177—37——1 (1)

4

Inthe Supreme Court of the Hnited States

OcroseR: TERM, 1936

Nos. 422, 423

NaTIonAL Laspor Rewations BoarbD, PETITIONER

v.

FRIEDMAN-HarRrRY Marks CLoTHING Company, INC.

ON WRITS OF CERTIORARI TO THE UNITED STATES CIR-

CUIT COURT OF APPEALS FOR THE SECOND CIRCUIT

BRIEF FOR THE NATIONAL LABOR RELATIONS BOARD

OPINIONS BELOW

’ The opinion of the United States Circuit Court

of Appeals for the Second Circuit (R. 575-076) is

reported in 85 F. (2d) 1. The decisions of -the.

National Labor Relations Board (R. 375-412,

527-564) are reported in 1 N. L. R. B. 411, 432

(1936).

JURISDICTION

The decrees of the United States Circuit Court

of Appeals for the Second Circuit were entered

July 20, 1936 (R. 576-577). The petition for

(1)

2

writs of certiorari was filed September 30, 1936,

and was granted November 9, 1936. The jurisdic-

tion of this Court rests on Section 240 (a) of the

Judicial Code as amended by the Act of February

13, 1925, and Section 10 (e) of the National Labor

Relations Act. -

: QUESTIONS PRESENTED

1. Whether the National Labor Relations Act,

as applied to this respondent, is a valid exercise by

-Congress of its power to regulate commerce among

the States. .

om Whether the provisions. of Section 8, sub-

divisions (1), (3) and (4) of the National Labor

Relations Act, as applied to this respondent, are

consistent with the Fifth Amendment.

9 Whether the provisions of the National

Labor Relations Act, as here applied, deprive re-

spondent of the right of trial by jury guaranteed

‘nthe Seventh Amendment. —

4. Whether the provisions of the National Labor

Relations Act, as here applied, deprive respondent

of the right of free speech guaranteed by the First

Amendment.

STATUTE INVOLVED

The National Labor Relations Act (Act of July

5, 1935, ec. 372, 49 Stat 449; U. S. C., Sup. I, Title

29, Sec. 151 et seq.) 18 set out as an Appendix to

the Board’s brief in No. 365, The Associated Press

v. National Labor Relations Board, and is summa-

rized at pp- 3-8 of that brief.

3

STATEMENT

On September 28, 1935 and November 11, 1935,

-written charges against the Friedman-Harry

Marks Clothing Co., respondent here, were ‘filed

with the Regional Director of the Fifth Region

- of the National Labor Relations Board pursuant

to Section 10 (b) of the Act and Article II, See- _

tion 2 of the Board’s Rules and Regulations, The

charges alleged that respondent had engaged in

and was continuing to engage in, certain unfair

labor practices affecting’ commerce within the

‘meaning of the National Labor Relations Act (R.

11-14, 424-425). Each charge was filed by the ©

_ Amalgamated Clothing Workers of America, a la-_

bor organization (R. 399, 407;191).-

On October 26, 1935, and November 19, 1935, the

Regional Director for the Fifth Region issued com-

plaints on the respective charges pursuant to Sec-

tion 10 (by of the Act and Article II, Section 5 of

' the Regulations. These complaints alleged unfair

labor practices affecting commeree within ‘the

meaning of subdivisions (1), (3) and (4) of Sec-

tion. 8, and subdivisions (6) and (7) of Section 2

(R. 15-23, 426-430). Respondent filed in each

case a special appearance objecting to the jurisdic-

tion of the Board on the grounds that the Act, as

applied to it, violated Aticles I and III of the

Constitution and the First, Fifth, Sixth, Seventh,

_ Eighth, Ninth, Tenth and Thirteenth Amendments

(R. 25-29, 431-436). Subject to and reserving its

4

rights under the objection to the jurisdiction of

the Board, respondent also filed in each case an

answer denying the allegations of violation of the

Act (R. 30-32, 437-439).

Both parties agreed at preliminary hearings in

No. 422, the first of the two cases, that evidence

might be introduced in the form of affidavits or

statements to stand uncontradicted by respondent

(R. 33-65). A hearing was held in both cases on

December 5, 1935, before Henry G. Perring, the

trial examiner designated by the Board (R. 24).

At that hearing respondent voluntarily waived its

right to present testimony or to cross-examine

(R. 68), stipulating that the evidence on behalf of

the Board might be introduced in the form of affi-

davits to stand uncontradicted (R. 71-74). Most

of the affidavits and exhibits in No. 422 were also

introduced in No. 423 (R. 450-452), in addition

to oral testimony dealing with the unfair labor

practices charged in the second complaint. Thus

the evidence in. both cases is chiefly in the form of

written statements,.in large part under oath, and

was not objected to by respondent except, in

certain instances, as to materiality, relevance or

competence.

Thereafter the matter came before the Board

pursuant to intermediate reports of the trial ex-

aminer, who found that respondent had engaged in

unfair labor practices and: recommended that an

order issue requiring it to cease and desist there-

* §

from (R. 378-379, 530). On March 28, 1936, the

Board handed down its decisions setting forth its

findings of fact (R. 379-409, 530-562) and the

orders here’ in question (R. 409-412, 562-564).

These findings of fact, which aré identical in all

_ respects except as to the specific unfair labor prac-

tices complained of in each case, may be summa-

rized as follows: * | |

The nature of respondent’s business—Respond-

ent is a Virginia corporation engaged’ in the sale

and distribution of men’s clothing, with its princi-

pal office and plant at Richmond, Virginia (R. 396;

15, 31). It is a large enterprise; its volume of

business having grown from $800,000 in 1933 to

$1,750,000 in the first ten months of 1935 (R. 399;

96), and its employees having increased during the

same period from 550 to 800 (R. 398; 96). _

The principal materials used by respondent in

the manufacture of its finished products are woolen

and worsted goods, over 99 per cent of which come

from States other than Virginia. These materials

are fabricated mainly in Massachusetts (50 per

cent), Connecticut (10 per cent), Rhode Island (8

per cent), New York (8 per cent), New Jersey (5

per cent) and Pennsylvania (4 per cent). Pur-

chases of 75 per cent of these materials are made

1 Where the findings -are identical a reference will be

given only to the finding in the first case. The references

in the parentheses preceding the semi-colon are to the find-

ings; the references following the semi-colon are to the sup-

porting testimony and evidence.

6

- pursuant to contracts made in New York City.

Immediately after purchase, the goods are shipped

to New York City for sponging, and are then for-

warded to the Richmond plant. (R. 397-398. )

Other materials, such as linings, thread and sewing

materials are also purchased and shipped to the:

Richmond plant almost exclusively from States

other than Virginia (R. 397-398; 77-80).

Over 80 per cent of all finished garments made

at the Virginia plant are sold and shipped to cus-

tomers located outside the State of Virginia,

chiefly department and men’s clothing stores. To

facilitate sales, respondent maintains a sales office

and show room in New York City where 15 to 20

per cent of all of its sales are made. It also em-

ploys eight traveling salesmen who operate in

_ many States, and advertises in certain trade pub-

lications. It has a registered trade mark, ‘‘Rock-

ingham’’, for use in interstate commerce (R. 398-

399 ; 90-92, 95).

Respondent’s operatioris reflect those of the in-

dustry as a whole.’ Thus, in 1929 the five New

“~England States of Maine, Vermont, Massachu-

setts, Rhode Island and Connecticut, from which

?The men’s clothing industry is among the 20 most im-

portant industries of the nation. In 1929 it’was sixteenth

in number of wage-earners, nineteenth in value of product,

and sixteenth in amount of wages paid. In 1935 it included

more than 3,000 firms, directly employing approximately

150,000 workers. The total’ value of sales of products of _

the industry in 1929 was $833,242,000. (R. 379; 113-115.

120.) -

7

respondent obtains 68 per cent of its woolen and

worsted goods, produced approximately 65 per

cent of all men’s wear fabrics’ (R. 383, 397; 136-

138). Yet all five of these States produced, in 1929,

less than 4 per cent. of the men’s clothing produced

in the United States (R. 383; 138). The principal

areas from which other essential materials are ob-

tained, such as rayon and eatton fabries, silesia for

pockets, felt, haircloth, and jute and henip fabrics,

jikewise fail to coincide with those States which

lead in the fabrication of men’s clothing - 381-

382 ; 139-143).

_ Again, like respondent, many enterprises-have -

their men’s wear fabrics sponged and shrunk at

independent sponging plants centered in New York

City and Philadelphia. These operations are there.

performed upon the cloth while en route from mill

to purchaser. AR. 382, 398 ; 116, 196.) ~

Interstate movements likewise occur {n the

course of the actual fabrication of aon & gar-

ments. While the fabrics. are ordinarily cut to

shape and size by the purchaser of the cloth, t

processes of actual fabrication of the garment:

sewing, assembling shoulder pads and canvasses;

finishing and pressing—are frequently performed. a

*“Men’s wear fabrics” is the term employed in the in-

dustry and by the Census of Manufacturers to describe

woolen and worsted cloth manufactured for and used by the

men’s clothing industry. These materials represent 75 per

‘ cent of the total cost of the industry’s raw materials (R.

880-381; 115, 131, 196).

122177—387——2

8

by independent contractors (R. 383, 384; 117, 121-

128, 197-198, 205). It is estimated that about 75

per cent of the output in the New York City area,

the principal production center, is fabricated by

contractors (R. 382; 197, 264). In no State is the

proportion of garments cut the. same as the pro-

portion of total man-hours worked (R. 121-128).

New Jersey is a striking example of this phenom-

enon, no doubt because of its proximity to the New

York City center (R. 383; 128). Tables in the

record describe these variations in detail (R. 121-

128).

Distribution of the industry’s products extends

to every State. (R. 384-385; 148-152, 155-156,

159-160). Over 63 per cent: of all sales in the

industry are made directly to retailers (R. 385;

145). Many of the leading manufacturers own or

are financially interested in retail outlets (R. 385;

158-159, 198-199, 235-243). The explanation for

such wide distribution from a restricted fabrica- _

tion area is found in the fact: that transportation

costs are a negligible factor in the ultimate price

(R. 388; 155, 164-165). Ten cents will more than

pay the cost of transporting a suit by fast freight

from New York to St. Louis, and the even faster

facilities of the parcel post may be utilized, at a

cost of only 59 cents, to send a suit from New York

across the continent to Los Angeles (R. 164).

Sales to distributors are accomplished chiefly by

the two methods utilized by respondent, i. ¢.,

9

through the medium of salesmen who travel from

State to State, and through the maintenanc¢ of

show rooms in New York City and other cities for

the exhibition and sale of stocks to prospective

buyers appearing from ail sections of the country

(R. 386; 146-148). New York City is the great

market place of the industry, and there show rooms

and stocks are maintained by most of the industry’s.

substantial firms (R. 386; 198, 232-234). In turn,

large purchasers have permanent buying offices

there (R. 386; 147). Other cities, such as Chicago

and Los Angeles, provide similar although less

extensive facilities (R. 386; 147-148). A sub- .

stantial proportion of the business of the industry

is done on a special order basis (R. 146-147).

In such a nation-wide distributive system, advertis-

ing, frequently of nation-wide character, is a prom-

inent factor, and there is an equally common. re-

sort to the use of trade marks (R. 387; 152-153,

199-200).

The unfair labor practices——In the summer .of

1935 the respondent’s employees attempted to form

a local of the Amalgamated Clothing Workers of

America, a labor organization within the meaning

of Section 2, subdivision (5) of the Act (R. 399;

191). Meetings were regularly held and member-

ships actively solicited by interested employees.

(R. 399, 400, 402-405, 554-558; 336, 339, 342, 344, -

346, 351, 352, 460, 467, 482, 513). Respondent’s

officials immediately showed great hostility to the

10

organization (R. 329, 333, 399-400, 514); threat-

ened employees with discharge if they joined the

union or attended union meetings (R. 400-401;

366, 475-476, 513);.and maintained surveillance

over union meetings in various ways (R. 401, 333,

342, 346, 515-516). On June 28, 1935, three em-

ployees were discharged for attending a union

meeting as an example of what would happen to the

rest (R. 400-401; 329, 333). On Au rust 1, 1935, cer-

tam employees circulated in the plant, during work- -

ing hours, a petition expressing loyalty to the com-

pany, satisfaction with working conditions, and re-

sentment at union organizers. Failure to sign was

regarded as signifying either approval of the union

or membership in it. Supervisors assisted, in se-

curing signatures, some of which were obtained by

threats. (R. 401; 346, 348, 514, 467,481.) After its

circulation the petition was delivered: to respond-

ent’s president (R. 372).

In the period July to November, 1935, the re-

spondent discharged or laid off the twenty-six em-

ployees named in the complaints. Nineteen of

these,. the Board found, were discriminated

against because of their union affiliations. All were

union members and most of them had been active

in organization work (R. 402-405, 554-5589. Many

had refused to sign the “‘loyalty”’ petition€R. 402-

405, 554-558; 336-337, 339, 343-344, 346, 352, 469,

481-482, 487-488) ; others had signed only after |

strong persuasion or threats (R. 401; 514, 365).

11

In eleven’of the discharges, respondent’s discrim-

inatory motive was clearly expressed, in some in-

stances at the time of discharge (Brock, R. 402,

337-338 ; Morgan, R, 557-558, 474; Kenny, R. 558,

475-476; Annie Mae Rogers, R. 554, 496), and in

other instances at a subsequent meeting of the dis-

charged employees called by the management (R.

558 ; 490-491, 499-501, 506, 510, 521, 524). Flimsy

pretexts, some accompanied by thinly-disguised —

references to union activity or failure to sign the

“‘loyalty’’ petition, were utilized in other cases (R.

Koch, R. 402, 340; Williams, R. 403, 344; Holder,

R. 404, 353; McAden, R. 404, 349; High, R. 556-

507, 461-462; D. Koch, R. 557, 524). The clear im-

plications of this testimony were in no way refuted.

by respondent, who offered no evidence whatever.

Effect of unfair labor practices upon interstate

commerce.—Respondent’s president stated on Sep-

tember 26, 1935, that the strife created by the con-

troversies here involved had so curtailed respond-

ent’s operations that, while it had fabricated 84,000

units in the Spring of 1935, its output in the Fall

of that year would not exceed 60,000. He stated

further that a fear on the part of one customer

in a Western State that respondent could not make

delivery because of this dispute, had led ‘to the

customer’s refusal to give respondent an order for

30,000 units (R. 406-407 ; 371-372).

Upon the basis of these findings, the Board con-

cluded that respondent, by discharging seven em-

12

ployees and laying off two in No. 422, and by dis-

charging eleven employees involved in No. 423,"

had engaged in unfair labor practices within the

meaning of subsections (1) and (3) of Section 8

of the Act (R. 409, 562). The Board also found

that one of the employees in, No. 422 had beew dis-

charged because she had participated in filing a

charge with the Board, and that respondent had

thereby engaged in an unfair labor practice within

the meaning of subsection (4) of Section 8 of the

Act (R. 409). The Board also concluded that re-

spondent’s activities were unfair labor practices

affecting commerce within the meaning of subsec-

tions (6) and (7) of Section 2 of the Act, in that

they tended to lead to labor disputes burdening and

obstructing commerce or the free flow thereof (R.

- 409, 562). .

The Board therefore issued an order in each case

(R. 409-412, 562-564) requiring respondent to

cease and desist from discharges, threats of dis-

charge, and other acts of interference with its em-

ployees in the exercise of their rights to self-

organization and otherwise aff guaranteed in Sec-

tion 7 of the Act; to offer full reinstatement with

back pay to the employees found to. have been laid

off or discharged in violation of the Act; and to

‘One employee, Doris Koch, was named in both com-

plaints, in No. 422 by reason of lay-off, and in No. 423 by

reason of discharge (R. 20, 428) emer erage was found

‘in each case, but reinstatement

405, 557, 563).

ered only in No. 423 (R.

13

post. appropriate notices. The complaint was

ordered dismissed for lack of evidence as to certain

employees and certain allegations (R. 411-412,

564). : epee

On March 28, 1936, the Board filed in the court

below its petitions for the enforcement of the

orders it had entered (R. 1-7, 413-419), and filed

amendments to the petitions on May 8, 1936

(R. 571-575). The two petitions were consoli-

dated by leave of court (R. 565-567). On July 20,

1936, the court below entered its decrees denying

the petitions for enforcement (R. 577).

AEBGUMENT

We have shown, in the brief for the Board in No.

365, The Associated Press v. National Labor Rela-

tions Board, that the provisions of the National

Labor Relations Act there, and here, involved are

a valid exercise of the power of Congress to protect

interstate commerce from burdens and injuries,

and that.they were properly applied, in that case,

to an employer engaged in interstate commerce,

with respect to his employeés who were in, or inti-

mately associated with, that commerce. We have

also shown, in that brief, that the provisions of the

Act there, and here, involved, do not conflict with

the Fifth, Seventh or First Amendments. Finally,

we have shown in that brief that the provisions

involved in the present cases are separable from

14

other provisions which have not been invoked,’ par-

ticularly Sections 8 (5) and 9. Accordingly, we

- respectfully refer the Court to the brief in that case

for the discussion of those questions.*

Moreover, in the brief for the Board in No. 419,

National Labor Relations Board v. Jones & Laugh-

lin Steel Corporation, we have set out in detail the

power of Congress to control, and consequently to

prevent through this Act, industrial strife in the

producing or manufacturing divisions of an enter-

prise largely engaged in and dependent upon ‘the

free flow of interstate commerce. Rather than re-

peat the arguments there advanced in the present

brief, we shall only state briefly the legal principles

involved, and shall then indicate their application

to this respondent, a large enterprise which occu-

* In No. 422 the Board found that respondent, by discharg-

ing Sara Sheffield because she filed charges under the Act,

had engaged in unfair labor practices within the meaning

of subsection (4) of Section 8 (R. 409).. Sara Sheffield was

also found to have been discharged in violation of subsec-

tions (1) and (3) of Section 8 (R. 408-409).

Subsection (4) of Section 8 is involved only in this one

case, and here only as an alternative basis for the order of

the Board. The subsection merely accords to persons filing

charges and giving testimony in Board proceedings the

protection against influence and intimidation accorded wit-

nesses in judicial proceedings:in the Federal courts by Sec-

* tions 135 and 136 of the Criminal Code (U. S. C., Title 18,

Secs. 241, 242). If subsections (1) and (3) of Section 8 are

valid, there can be no question of the eo of subsec-

tion (4). : *s

15

pies a prominent place in the manufacture and dis-

tribution in interstate commerce of men’s clothing.” —

THE NATIONAL LABOR RELATIONS ACT, AS HERE APPLIED

TO THIS RESPONDENT, IS A VALID EXERCISE OF THE

POWER OF CONGRESS OVER INTERSTATE COMMERCE.

@ The National Labor Relations Act is an exercise

of the power of Congress to protect interstate com-

merce from injuries caused. by industrial strife.

Texas & New Orleans R. Co. v. Brotherhood of

Railway Clerks, 281 U. 8S. 548. ‘Experience has

shown this strife to be a burden upon commerce

not only in its totality, but also because in many

individual instances strife eventuated in conspira-

cies to affect commerce, or otherwise imposed di-

rect and substantial burdens upon it.

Congress, in dealing with the evil of industrial

strife, -‘might have approached the problem by a

statute designed to remove the burden on interstate

commerce after it had evidenced itself in a particu-

-*QOn the merits of these cases, the Board made detailed

findings (R. 399-409, 551-562) with respect to the unfair

labor practices engaged in by respondent and conciuded that

it had discharged a total of eighteen and laid off two em-

ployees under circumstances which constituted violations of

Section 8, subsections (1), (3) and (4)- of the Act. Re-

spondent offered no evidence of any kind. The Act pro-

vides that the Board’s findings as to the facts, if supported

by evidence, shall be conclusive (Section 10 (e)). The

evidence clearly supports the findings (supra pp. 9-11), and

respondent is therefore not in a position to overthrow them.

Florida v. United States, 292 U. S. 1, 12; Federal Trade

Commission v. Algoma Lumber Company, 291 U. S. 67, 73.

122177373

16

lar case, or it might have enacted a statute de-

signed to eliminate the causes of the burdens in

anticipation of their probable effect. The National

Labor Relations Act follows the second alterna-

tive.’ J

The Act does not, however, attempt to eliminate

the causes of industrial strife in all enterprises.

satiate ; «i

* The record in the present case presents much proof of

the reasonableness of the means employed by this Act in*

eliminating the burdens on interstate commerce arising out

of industrial strife. See brief for the Board in No. 365, The.

Associated Preas v. National Labor Relations Board, at pp.

45-69. In the period from 1910 to the present time the

industry has been characterized by the gradual acceptance

of the procedure of collective bargaining. The Chicago area,

for example, suffered from constant labor controversies ;

only one firm, that of Hart Schaffner and Marx, which had

entered into a collective bargaining agreement in 1911 (R.

299) which has been continued to the present time (R. 219,

292, 301) escaped strikes and lockouts (R. 282-286, 291-296,

297-302). However, in 1919 the remainder of the industry

in that area entered into an agreement recognizing the rights

of organization and collective bargaining similar to the

existing agreement with Hart Schaffner and Marx. As a

result, the burdens upon commerce resulting from industrial

strife have been eliminated in that area (R. 285, 293-296,

301-302).

The New York City area presents a similar history of

strikes and lockouts (See Perlman and Taft, A¥story of

Labor in the United States, 1896-1932 (1935 ed.), pp. 315,

435-436, 500-501 ;.R. 309-319). In 1924, however, an agree-

- ment similar to that of the Chicago area was adopted (R.

311), and industrial strife has been virtually etiminated

(R. 259-260, 265, 285-286, 303, 311, 313, 316-320). Similar

results have been obtained in Rochester, Boston, Cincinnati,

Cleveland, Baltimore, Philadelphia, and St. Louis (R. 219-

220, 267-269, 283-284, 301, 322).

17

The statute is specifically directed to the elimina-

tion of the practices prescribed by Section 8 only

when they are found to be ‘‘affecting commerce”’

(See. 10 (a))}. The phrase ‘“‘affecting commerce”’

is defined in Section 2 (7) as ‘‘in commerce, or

burdening or obstructing commerce or the free flow

of commerce, or having led or tending to lead to

a labor dispute burdening or obstructing commerce

or the free flow of commerce.’’ These jurisdic-

tional limitations, obviously patterned upon the de-

cisions of this Court under the commerce clause,

are manifestly a direction to the Board to exercise

the national power within the limits permitted by

the Constitution. -

Thus the validity of any specific application of.

the preventive measures of this Act depends upon

whether industrial strife resulting from the prac-

tices in the particular enterprise under considera-

tion would be of the character which Federal power

could control if it occurred. If strife in that en-

terprise could be controlled, certainly it could be

prevented. Stafford v. Wallace, 258 U. 8. 495,

525. In the Board’s brief in No. 419, National

Labor Relations Board v. Jones & Laughim Steel

Corporation, at p. 39, we pointed out the three sit-

uations in which Congress may exercise its power

to control burdens and obstructions on interstate

commerce after they have arisen. We submit that.

in the application of the Act to respondent each of

these three situations is presented. Of course,

18

-the existence of any one of the three situations is

- sufficient to sustain the jurisdiction of the Board.

I

It is well settled that an industrial dispute involv-

ing an intent to restrain commerce is within the

control power of Congress, even though arising out

of local activity. Coronado Coal Co. v. United

Mine Workers, 268 U. 8. 295; Bedford Cut Stone

Co. v. Stone Cutters’ Association, 274 U. S. 37;

Duplex Printing Co. Vv. Deering, 254 U. 8. 448;

Loewe v. Lawler, 208 U. S. 274. Consequently,

where the situation in a particular enterprise pre-

- gents the likelihood that a labor dispute, if it oc-

curred, would involve an intent to restrain com-

merece, then the -Board can apply the preventive

measures of this statute to that enterprise. It is

not claimed in the present case that there is any

proof of the existence of an actual intent to affect

commerce. However, respondent’s enterprise pre-

- sents a situation in which a labor controversy over

employee’s basic rights of self-organization and

freedom from interference in choice of representa-

tives for purposes of collective bargaining would

belikely to involve the purpose not merely by stop-

ping production, but also by interrupting or hind-

ering actual sales and shipments in interstate com-

merce, .

Over 125,000 employees in the men’s clothing

industry are members of the Amalgamated Cloth-

19

ing Workers of America, the largest collective

bargaining agency in the industry (R. 191, 198).

Acting through that labor organization as their

representative for collective bargaining purposes,

those employees have secured collective agreements

which cover the greater part of the industry (R.

219-220). By those agreements, wages have been

increased, hours shortened, and other ameliorating

standards of employment obtained and maintained

(R. 218-220, 206). By them, also, the processes of

negotiation and arbitration have been substituted

for the strike and lock-out as a peaceful method of

solving industrial problems affecting employer

and employee. See p. 16, supra.

Employees who are members of this organiza-

tion will not lightly yield to influences endangering

the favorable conditions of employment now estab-

lished and existing in the principal centers of the

industry. See footnote 7, p. 16, supra. On the

contrary, itis only reasonable to assume that they

would endeavor effectively to counteract any such

dangers. Dangers of the character suggested in

fact exist today. They-are found principally in

a wide-spread movement of enterprises away from

the areas in which collective bargaining prevails,

with correspondingly high standards of employ-

ment, to areas where employees are unorganized

and standards of employment are low. Thus there

’ has been, in recent years, .a steady decline in num-

ber of employees, establishments and production

20

in New-Yotk City, Rochester, Chicago, Baltimore,

and Philadelphia—the organized, high-wage and

most important centers of the industry—and a

corresponding increase in other and unorganized

areas (R. 166-67, 171). The chief incentive for

this migration unquestionably is the search for

lower wages (R. 165-173), for labor cost consti-

tutes 40 per cent of the value added by manufac-

ture (R. 169, 207), and other principal costs are

relatively inflexible (R. 162, 169): When viewed

in the light of the fact that distance is no obstacle

to competition in the industry’s main markets, the —

direct effect of this migration upon the organized

areas is plainly evident.

With effective competition between the siden

try’s enterprises an accepted fact regardless of lo-

cation, and bearing in mind the purpose and effect

of the migration of enterprises just: diseussed, it

seems unavoidable that the members of the Amal-

gamated Clothing Workers should, as they do, re-

gard the industry as one whose economic organiza-

- tion is not based on the interests of each individual —

enterprise, but is one in which union conditions, to

be maintained at all, must prevail generally

(R. 192). Industrial strife in respondent ’s enter-

prise would, therefore, be likely to have as its ob-

ject, not merely the application of economic pres-

sure upon respondent, but the cessation of ship-

ments from respondent’s plant into the national

market, i in order to safeguard the organization and

21

collective bargaining rights in competing enter-

prises and areas beyond the State of Virginia. Cf.

Coronado Coal Co. v. United Mine Workers, 268

U. S. 295, 310. |

We are not here contending that the circum-.

stances described above establish a valid basis for

wage stabilization legislation under the commerce

clause. We do contend that such circumstances

“give rise_to a reasonable probability of industrial

strife involving the purpose to restrain actual sales

and shipments in the channels of interstate com-

merce, and that they do establish a valid basis for a

statute such as this, dealing solely with the prob-

lem of labor disputes as they affect the national

interest. | |

We submit, therefore, that there is a reasonable

likelihood that industrial strife in respondent’s

enterprise would, if it occurred, be likely to involve.

’ an intent to affect interstate commerce. Accord-

ingly, the Board was justified in holding that the

preventive measures o* the National. Labor Rela-

‘tions Act should be invoked afainst respondent in

order to anticipate that industrial strife which

would be within the control power of Congress.

Bai

This Court has recognized that Congress may

exercise control over some industrial disputes even

where intent cannot be or is not proven. United

Mine Workers v. Coronado Coal Co., 259 U.S. 344,

410-411; Industrial Association v. United States,

22

268 U. S. 64, 81; United Leather Workers v. Her-

kert & Meisel Trunk Co., 265 U. S. 457, 471. Cf.

United States v. Patten, 226 U. 8. 525. The opin-

ions of the Court do not clearly define this category

of industrial strife with the necessary effect of sub-

stantially burdéning interstate commerce. How-

ever, in the brief in No. 419, National Labor Rela-

tions Board v. Jones & Laughlin Steel Corpora-

tion, at p. 51, we have suggested three possible con-

structions which might be adopted: (1) Industrial

strife has the necessary effect of burdening or ob-

structing interstate commerce when it occurs jn an

enterprise lying within a well-defined “strearh”’ on

“flow”? of commerce; (2) industrial strife is of

that type when its effect would be to restrain a sub-

stantial proportion of all the commerce in the par-

ticular commodity; or (3) industrial strife is of

that type when its effect would be to prevent inter-

state sales or shipments of a substantial volume of

goods which would otherwise move in interstate

commerce. We submit that industrial strife in re-

spondent’s enterprise would fall within each of

these constructions.

It is true that respondent’s enterprise is not so

clearly within a stream of interstate commerce as

that of the Jones & Laughlin Steel Corporation,

respondent in No. 419. Nevertheless, we submit

that respondent’s enterprise may be considered as

an integral part of a stream of commerce among

the States.

23

This stream or flow of commerce begins with the

movement of the raw wool from the West to the

New England States (R. 381). Five States in that

area weave over 65 per cent of the principal

material for the clothing ‘industry—woolen and

worsted cloth (R. 380,383). Yet the flow does not

stop there. Only one of these five New England

States is among the eight in which are located 95

per cent of the establishments of the industry, and

even that State, Massachusetts, has but 3.6 per cent

of the enterprises (R. 383). Most of the cloth

moves on in interstate commerce to the centem

of the industry such as New York (50.2 per cent

of the enterprises), Pennsylvania (10.4 per cent),

and Maryland (10.2 per cent) (R. 382-383). This

preponderantly interstate movement takes on an

added significance from the fact that more than

one-third of all woolen woven cloth is made for the

men’s clothing industry; indeed, it is commonly

made to order (R. 115-116, 135, 196).

In many cases the flow of woolens and worsteds

passes through an operation intermediate to the

weaving and the fabrication of the clothing—the

sponging and shrinking. If the clothing manu-

facturer does not perform this operation at his own

plant, his cloth commonly goes from the mill to a

Philadelphia or New York sponging plant, and is .

there reshipped to him (R. 382).

This interstate flow of goods from mill to manu-'

facturer is likewise true to a substantial extent of

24

many other materials essential to clothing, such as

rayon fabrics for. lining, silesia for pockets, felt,

haircloth and cotton, jute and hemp fabrics (R.

139-143).

Large interstate movements occur even during

the actual fabrication of the garments. The pur-

chaser of the cloth commonly cuts the fabric to

shape and size, but the actual sewing, finishing and

pressing are frequently done in other States.

See pp. 7-8, supra.

_ The interstate movement in the distribution of

products is, of course, a matter of common knowl-

edge. Seven States account for 90 per cent of: the

total production of mens’ clothing (R. 122) and

only 48 per cent of the sales to consumers (R. 122,

150-152, 157).. Indeed 21 States produced no

industry products whatever, but consumed 12 per

cent of. the total, valued at over $130,000,000

(R. 156). The explanation for the wide distribu-

tion lies in the fact that transportation costs are

but a negligible factor in the ultimate price; ten

cents will pay fast freight on a suit from New

York to St. Louis, and even parcel post costs only

fifty-nine cents per suit from New York to Los

Angeles (R. 164).

These general characteristics of the industry are,

as the statement shows (supra, pp. 5-9) character-

istic of respondent. Its cloth comes from the New

England States, is purchased in New York, stops

at a sponging and shrinking plant in that city, and

25

then arrives at respondent’s plant in Virginia. All

other materials used in men’s clothing (see pp. 7,

24, supra), are brought to the plant from points

outside Virginia. Respondent does not have con-

tracting work performed for it elsewhere, but its

distribution system, consisting of salesmen, a New

York City showroom, and national advertising,

reaches a national market (R. 91-92). We submit,

therefore, that industrial st#ife in respondent’s

plant would have the necessary effect of burdening

and obstructing commerce within the first construc-

tion suggested above (p. 22, supra), and is therefore

within the control power of Congress. Stafford v.

Wallace, 258 U. S. 495; Chicago Board of Trade Vv.

Olsen, 262 U. S. 1; Tagg Bros. & Moorhead v. ~~~

United States, 280 U .S. 420.

If, however, the second suggested definition of in-

dustrial strife with the necessary effect of burden-

ing and obstructing interstate commerce be

adopted—i. e., strife which has the effect of pre-

venting er disrupting a substantial proportion of

all the interstate commerce in a particular com-

modity, we submit that strife in respondent’s plant

would be included. Respondent alone, it is true,

does not occupy such a posftion, although it is

among the fifty largest enterprises in the industry

(R. 120, 212). However, industrial strife in the

men’s-clothing industry, as the record shows, may

be expected to spread to other enterprises (R.

267-269, 283-284, 293, 301-302, 309-310; see also

26

Perlman & Taft, History of Labor in the Umted

States, 1896-1932 (1935 ed.) pp. 304-307, 315-316,

435-436, 500). The strong national unions, and

the keen competition between the organized and

unorganized areas (see pp. 18-21, supra) increase

the likelihood that strikes will spread to other en-

terprises and areas, particularly if they have as

their basic causes the refusal of employers to allow

organization of their employees for-collective bar- _

gaining and other purposes. Consequently, the

Board was justified in applying the preventive

measures of the Act to respondent in order to re-

move the causes of industrial strife which would be

apt to spread, by sympathetic action, until a sub-

stantial part of all the commerce in men’s clothing

had been restrained. United Mine Workers v. Cor-

-onado Coal Co., 259 U. S. 344; Industrial Associa-

tion v. United States, 268 U. S. 64; International

Organization v. Red Jacket C. C. & C. Co., 18 F.

(2d) 839 (C. C. A. 4th)gpeertiorari denied, 275

U.S. 536. ;

Inasmuch as we believe that industrial strife

within respondent’s plant would have the neces-

Sary effect of burdening or interrupting interstate

commerce within either construction (1) or (2)

supr, p. 22, we do not consider it necessary to

pass upon the third construction: suggested—. e.,

that industrial strife has the. necessary effect of _

burdening or obstructing interstate commerce if its

effect would be to prevent interstate sales or ship-

27

ments of a substantial volume of goods which

would otherwise move in-imterstate commerce.

However, in the event that the Court believes that

the facts with respect to respondents’ enterprise

do not warrant the application of constructions (1)

or (2), we diseuss constrtiction (3).

Respondent is, compared to the size of other

firms in the clothing industry, of relatively large

size, being among the fifty largest of the three

thousand firms which make up the industry (R.

‘120, 212). Its sales during the first ten months of

1935 totalled $1,750,000, involving 150,000 units of

clothing (R. 95-96). Industrial strife would thus

cause the cessation of this large volume of inter-

state commerce even if confined to respondent’s

enterprise, which, as We have shown above (supra,

p. 25), would be unlikely. Even if it were so

limited, however, it seems impossible to believe that

Congress is powerless to prevent a burden on com-

merce of that magnitude. As we have shown in

the brief for the Board in No. 419, National Labor

Relations Board. v. Jones & Laughlin Steel Corp.,

at pp. 77-85, the effect of industrial strife on inter-

state commerce, even though arising out of local

activity, is immediate and would be substantial

here. And certainly the cessation of purchases and

shipments by an enterprise of the size of respond-

ent’s cannot be regarded as without national sig-

nificance. Nor can the fact that other units of the

industry could probably increase production suf-

%

‘ ae

ficiently to supply the deficiency caused by re-

spondent be determinative of the power of Con-

gress, for the disruption of the channels of com-

merce, even with no change in the amount of ma-

terial shipped, is in itself a burden on interstate

commerce within the constitutional concern of Con-

gress. Addyston Pipe & Steel Corp. V. Umited

States, 175 U. S. 211, 243-245; McCall v. California,

136 U. 8. 104, 111.

III

There remains one further ground upon which

the order of the Board in the present case may be

- supported. This Court has on many occasions

enunciated the principle that where Congress, after

investigation, directs its legislation to the preven-

tion of certain activities which even though usually

only of local concern, recur with such frequency

as to constitute an undue burden on commerce,

those activities may be subjected to the control’

power of Congress. Stafford v. Wallace, 258 U.S.

495, 520-521; Chicago Board of Trade v. Olsen,

262 U.S. 1, 40; United Leather Workers v. Herkert

dé Meisel Trunk Co., 265 U.S. 457, 469. See also

Texas &: New Orleans R. Co. v. Brotherhood of

Railway Clerks, 281 U. S. 548.

We have already described, in the briefs for the

Board in Nos. 363 and 419, the recurring and wide-

spread character of the burden on interstate com-

merce resulting from industrial strife in enter-

prises which receive a substantial part of their ma-

29

terials from, and send a substantial amount of

their products in interstate commerce.’ We have

also described there the close and substantial re-

lationship which industrial strife in such enter-

prises bears to interstate commerce, the efforts of

the Federal government, by various devices, to

mitigate it, and the studies made over‘a long period

of years which eventuated in this Act, the basic

principles of which have already been sustained by

this Court in their application to the prevention of

industrial disputes affecting the railroads. Tezas

& New Orleans R. Co. v. Brotherhood of Railway

Clerks, 281 U.S. 548.

If, as we contend, the control power of Congress

extends to recurrent industrial strife in these tater-

state enterprises, there can be no doubt that the

order of the Board in the present ease was within

its jurisdiction. Respondent is dependent upon the

products of States other than Virginia for al-

most 100 percent of the woolen and worsted goods

which it uses (R. 77-78). The same condition pre-

vails with respect to cotton, rayon and silk linings,

felt, wigan and cotton tape, Hymo and under-collar

* Industrial strife in the men’s clothing industry has fre-

quently paralyzed the commerce in men’s clothes in whole

sections of the country. Such was the effect of each of the

three general strikes in the New York area—in 1918, 1920-

1921 and 1924—and of the general strike in the Chicago

area in 1910-1911. R. 309-310; Perlman and Taft, History

of Labor in the United States, 1896-1932 (1935 ed.) pp.

304-307, 435436, 500-501.

30

cloth (R. 75-80). It can fairly be said that the con-

tribution of Virginia enterprises to the operations

- conducted at respondent’s plant is | negligible.

Nor is respondent’s market a local one. Over 82

percent of all its salés are made to purchasers lo-

-eated in States othér than V rginia, the principal

ones being sueh widely-separated States as Texas,

North Carolina, New York, Illinois, Tennessee and

Louisiana (R. 91). From 15 to 20 pereent of all of

its sales are made through the medium of its New

York office and sales room (R. 91-92).

- We submit, therefore, that industrial strife in

respondent’s enterprise is of the character which,

by its recurrence, comes within the control of Con-

gress under the principle stated above. Conse- .

quently, the Board was justified in holding that the

preventive measures of the National Labor Rela-

tions Act might be invoked against respondent in

order to anticipate industrial strife affecting com-

merce which would be within the control power of

Congress.

CONCLUSION

.Wherefore, the decrees of the court below should

be reversed, and the causes remanded with instruc- —

31

tions to grant the petitions of the Board for the

enforcement of its orders.

Respectfully submitted.

HoMER CUMMINGS,

Attorney General.

STANLEY REED,

Solicitor General.

CHARLES E. W YZANSKI, JR.,

_ A. H. FELLER,

Special Assistants to the Attorney General.

CHARLES A. HORSKY,

Attorney.

CHARLES FaRy, ~ a

General Counsel.

RosBert B. Warts,

Associate General Counsel.

LAURENCE A. KNappP,

A. L. WIrIN,

Attorneys,

National Labor Relations Board.

FEBRUARY 1937.

GU. &. COVERESERT PRinTING OFFice. tea7