Amicus Curiae Brief — USX Corp. v. United States

Roprmes Com, CAL

EILED

(3) FEB 8 1995

No. 94-830 Fon ac Ba ener

tn The - . one om <-: a)

Supreme Court of the United States

October Term, 1994

¢

USX CORPORATION,

Petitioner,

UNITED STATES OF AMERICA,

Respondent.

*

On Petition For A Writ Of Certiorari To The

United States Court Of Appeals

For The Eleventh Circuit

+

BRIEF AMICUS CURIAE OF THE

CHAMBER OF COMMERCE OF THE

UNITED STATES OF AMERICA

IN SUPPORT OF THE PETITIONER

«

Of Counsel:

STEPHEN A. BOKAT

Rosin S. CONRAD

Mona C. ZEIBERG

NATIONAL CHAMBER

LITIGATION CENTER

1615 H Street, N.W.

Washington, D.C. 20062

(202) 463-5337

STANLEY R. Strauss*

ELIZABETH TORPHY-DONZELLA

OGLETREE, DEAKINS, NASH,

SMOAK & STEWART

2400 N Street, .N.W.

Fifth Floor

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

TABLE OF CONTENTS

Page

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

PRELIMINARY STATEMENT....................... 3

REASONS FOR GRANTING THE WRIT ........... ~

I. THE ERRONEOUS DECISION BY THE COURT

OF APPEALS WILL DESTABILIZE UNION-

MANAGEMENT RELATIONS.................. 6

Il. THE COURT OF APPEALS MISCONSTRUED

SECTION 302 OF THE LABOR-MANAGEMENT

WT NE kh Coney tiedice whew ances, 10

A. The Animating Purpose of Section 302..... 10

B. The Circuit Court’s Construction of Section

302 Does Not Comport With the Underlying

Purpose of the Statute..................... 12

eT ag a ee a 19

il

TABLE OF AUTHORITIES

Page

CASES

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

S.A. GSS (ISPO). . oo acnncecneeunageeeeereaeces 2

Allis-Chalmers Corp. v. Lueck, 471 U.S. 202 (1985)...... 2 |

Arroyo v. United States, 359 U.S. 419 (1959).......... 11

BASF Wyandotte Corp. v. Local 227, Int'l Chem. :

Workers Union, 791 F.2d 1046 (2d Cir. 1986) ....10, 11 |

Cheek v. United States, 498 U.S. 192 (1991)........... 16

Communication Workers of America, AFL-CIO v. Bell |

Atlantic Network Serv., Inc., 670 F. Supp. 416

(D.DiC. IGT). so. 0 cvnanesu ce teansee ees 8, 14

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

US. 27 (RR) .+200scnnses wag een kas? 2 |

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

GOB (29G6) «on on vcavdcsinnsasses eee, 2

Hazen Paper Co. v. Biggens, __ U.S. __, 113 S.Ct. |

W7O1 (3903)... . 60 0ccisanckesaabe se aeeeeeeaes 17

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

(TDG)... « 0.0 0.0044's'e 8:0 8h ed oer eel eae a 2

Liparota v. United States, 471 U.S. 419 (1985)......... 16

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

(RODE)... 2... nvdcncweadeesiown auye eee 2

McLaughlin v. Richland Shoe Co., 486 U.S. 128

| Per rer Be 17

Monsanto Co., 68 Lab. Arb. (BNA) 101 (1977)........ 14

Morissette v. United States, 342 U.S. 246 (1952)....... 17

Oe

iii

TABLE OF AUTHORITIES - Continued

Ratzlaf v. United States, __ US. __, 114 S.Ct. 655

A ir eivn eGo ecko chiedicéclian al.

Trailways Lines, Inc. v. Trailways, Inc. Joint Council

of the Amalgamated Transit Union, 785 F.2d 101

(3d Cir.), cert. denied, 479 U.S. 932 (1986). .....

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

I GRAS CeNe bes Foie ves oUiG och ce.

United States v. Murdock, 290 U.S. 389 bo

United States v. Papia, 910 F.2d 1357 (7th Cir. 1990) ....

United States v. X-Citement Video, ee |

1994 WL 662620 (Nov. 29, EE a se ack,

STATUTES

National Labor Relations Act, 29 U.S.C. = 351...

Labor-Management Relations Act, Section 302, 29

6's 65s iesitdb oad cod i coeceecce.

MISCELLANEOUS

Major Collective Bargaining Agreements:

Employer Pay and Leave for Union Business,

Bulletin, U.S. Department of Labor (Oct. 1980)

Policies on Leave from Work, Personnel Policies

Forum Survey No. 136, Bureau of National

et ky bok kasi evns x. cs.

2 Legislative History of the Labor-Management

Relations Act of 1947 (1948)..................

Opinion Letter dated July 12, 1977, from the

Department of Labor’s Office of the Solicitor to

William N. Wheat and Associates.............

In The

Supreme Court of the United States

October Term, 1994

5

No. 94-830

———@

USX CORPORATION,

Petitioner,

UNITED STATES OF AMERICA,

Respondent.

+

On Petition For A Writ Of Certiorari To The

United States Court Of Appeals

For The Eleventh Circuit

¢

BRIEF AMICUS CURIAE OF THE

CHAMBER OF COMMERCE OF THE

UNITED STATES OF AMERICA

IN SUPPORT OF THE PETITIONER

e

INTEREST OF THE AMICUS CURIAE!

The Chamber of Commerce of the United States of

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

approximately 220,000 companies and several thousand

other organizations such as state and local chambers of

' This brief is filed with the written consent of the parties

pursuant to Supreme Court Rule 37.2. Letters of consent are

being filed simultaneously with the Clerk of Court.

commerce and trade and professional associations. It is

the largest association of business and professional

organizations 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 two important and interrelated

questions: (1) whether an employer who grants pension

credits and payments to former employees on leave to

work for a labor organization representing its employees

violates Section 302 of the Labor-Management Relations

Act (“LMRA”), as amended, 29 U.S.C. § 186; and (2)

whether the mere fact of such grants entails criminal

liability.>

The Court’s resolution of these issues is of vital con-

cern to the Chamber and its members, many of whom

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

(1994); ABF Freight Syst., 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 v. Thurston, 469 U.S. 111 (1985).

3 This case also raises the question of whether such former

employees who receive pension credits and payments from their

former employers also engage in criminal conduct under Sec-

tion 302.

have a long-standing practice of granting pension bene-

fits to former employees who have taken leave to work

for labor organizations that represent their employees in

collective bargaining. The Circuit Court’s incorrect appli-

cation of Section 302 of the LMRA is likely to chill the

coitinuation of this widespread, and salutary, employer

practice. Accordingly, the Chamber submits this brief

amicus curiae in support of the Petitioner.

PRELIMINARY STATEMENT

In October 1984 —- some 10 months after USX and the

United Steelworkers of America (“Steelworkers” or “the

Union”) successfully concluded an agreement that

reopened the Company’s idled Fairfield Works, located

outside of Birmingham, Alabama‘ — USX adopted a reso-

lution changing its leave of absence policy for employees

of all its current steel producing: operations. The revised

policy provided that under certain conditions former USX

employees who left the Company’s employ to serve as

full-time Union officials would be eligible for retroactive

leaves of absence of indefinite duration which would

render them eligible for accrued pension service credits.

The stated reason for the changed policy was that USX

believed that it was in its interest that potential plant

4 In June of 1982, USX had indefinitely idled the Fairfield

plant because of substantial operating losses. After 19 negotiat-

ing sessions between USX and the Union, an agreement was

reached in late 1983 for the plant’s reopening at an ultimate cost

to USX of some $200 million.

problems, grievances, and the implementation of collec-

tive bargaining agreements be handled by former

employees familiar with USX’s policies and operations.

In late November 1984, pensions were granted and

paid under the changed policy to six Steelworkers Inter-

national representatives. Included in the grant were two

Union officials who had negotiated the Fairfield Works

reopening, E.B. Rich and Thermon Phillips, and who had

previously been employed at the Fairfield Works. Some

five years later, on November 15, 1989, the United States

Government brought a 16-count indictment against USX,

Rich and Phillips, charging, inter alia, that they had crimi-

nally violated Section 302.°

The indictment originally alleged that USX and nego-

tiators Phillips and Rich engaged in a subterfuge in which

USX granted the latter pension credits entitling them to

pensions they otherwise would not have received as a

“reward” — i.e., a quid pro quo — for Phillips and Rich

approving and administering the new collective bargain-

ing agreement at USX’s Fairfield Work’s operation in a

manner favorable to USX. Had the case been tried and

> Among other things, Section 302 of the LMRA prohibits

an employer from paying any money or other thing of value to

officers or employees of a labor organization that represents the

employer’s employees; it also prohibits such union officers or

employees from requesting or receiving any money or other

thing of value from any such employer. Section 302(c)(1), how-

ever, exempts from the 302 prohibitions payments made to a

union officer or employee “who is also an employee or former

employee of such employer, as compensation for, or by reason of,

his service as an employee of such employer” (emphasis

added).

Se |

decided on this basis, it would have created relatively

little consternation in the labor-management community.

Instead, during the course of the trial, the district court

granted the Government’s request to delete the “reward”

language from the indictment. As thus changed, the

indictment charged only that the pension payments to

Phillips and Rich were unlawful because they were paid

“not as compensation for or by reason of [either Phillips’

or Rich’s] service . . . as an employee” of USX Corpora-

tion. Moreover, the district court’s subsequent jury

instructions effectively eliminated the “by reason of” lan-

guage from the Section 302(c)(1) exemption. Finally, by

instructing the jury that the Government was not

required to prove that the payments were made or

received with “an evil or bad purpose” or even with any

“intent to violate the law,” the district court, as affirmed

by the Eleventh Circuit, essentially ruled that all trans-

gressions of Section 302, no matter how unwitting, were

criminal.

REASONS FOR GRANTING THE WRIT

As aptly demonstrated by the Petition for Writ of

Certiorari, intolerable uncertainty for employers and

union members alike is created by the “patchwork of

rights and risks” (Pet. p. 10) that attends the conflict in

the holdings among the circuits concerning issues of

whether an employer may, without incurring felony lia-

bility, grant former employees continuing credit toward

company sponsored pensions after they go to work full

time for their unions.

I. THE ERRONEOUS DECISION BY THE COURT OF

APPEALS WILL DESTABILIZE UNION-MANAGE-

MENT RELATIONS.

The manner in which this case was prosecuted and

the endorsement of that prosecution by both courts below

seriously impacts an important aspect of traditional

union-management labor relations — the practice of grant-

ing pension benefits to employees on union leave. But the

matter extends beyond the parameters of the practice

involved in this case, for the court of appeals’ rulings also

cast a cloud over other important and related facets of

traditional union-management practices, the so-called

“no-docking” practices. Thus, it is a widespread

employer-union practice — a practice memorialized in

hundreds of collective bargaining agreements - for

employees to be granted time off, with pay and without

the loss of seniority or benefits, to engage in activities on

behalf of their union and their fellow employees. Such

leave is frequently granted to union officers or other

union officials to enable them to engage in such activities

as labor contract negotiations and contract administra-

tion, grievarite handling, health and safety committee

work, administration of welfare and other benefit plans,

substance abuse prevention, apprentice training, the

administration of job security programs and time studies.

These activities may be performed both in-plant and at

other locations.

Similarly, collective bargaining agreements fre-

quently provide for the establishment of so-called joint

committees, comprised of both management representa-

tives and employee union representatives who are

granted time off with pay, benefit and seniority retention.

Functioning on both multi-plant (national) and local plant

levels, these committees are assigned objectives such as

the improvement of the efficiency of plant operations; the

increase of job opportunities; the improvement of product

quality; the identification of cost savings; the reduction of

employee absenteeism; the improvement of job training

programs; the maintenance and improvement of safe and

healthful working environments; the assistance of

employees in avoiding and recovering from alcoholism

and drug dependency; and the furtherance of equal

employment opportunity programs.®

The Chamber submits that these “no-docking” prac-

tices differ from full-time union leave only in degree and

not in kind. Indeed, in very large bargaining units gov-

erned by mature union contracts, even that difference in

degree is sometimes eliminated by the fact that some

employees may be “released” for up to 40 hours of union

work per week. In essence, then, employees sometimes

work full-time on union business while being paid wages

and benefits by the employer — a situation that cannot be

viewed as any less “pernicious” than the practice of

granting pension credit accrual while on extended leaves

of absence for full-time union work.

As for the specific practice at issue here, the 1980

Department of Labor Report confirms that numerous

6 A 1980 United States Department of Labor Report con-

firms that numerous employers in the United States allow paid

time off for union-related activities. See Major Collective Bargain-

ing Agreements: Employer Pay and Leave for Union Business, Bulle-

tin 1425-19, U.S. Department of Labor (Oct. 1980) (hereafter

“DOL Report”), pp. 16-17.

employers in the private sector allow employees to take

leaves of absence to serve as full-time union officers or

staff. See DOL Report, pp. 27-29.” The large percentage of

employers maintaining the practice is also noted in a

Bureau of National Affairs study, Policies on Leave From

Work, Personnel Policies Forum Survey No. 136, Bureau

of National Affairs (1983), p. 34. Often the leave that is

allowed for full-time service as a union officer is “open-

ended” as to duration or for relatively long periods; and

when shorter leave periods are granted initially, exten-

sions for additional periods, some quite lengthy, are fre-

quently granted by management. DOL Report, pp. 21-23,

28.

The Department of Labor Report also shows that

many employers allow employees on union leave to con-

tinue to accrue benefits, including pension benefits. DOL

Report, pp. 25-26. See also Communication Workers of Amer-

ica, AFL-CIO v. Bell Atlantic Network Serv., Inc., 670 F.

7 The DOL Report states (p. 27):

Leave of absence clauses pertaining to union

employment appeared in 761 of the 1,765 agree-

ments, covering 3.8 million of the nearly 8 million

workers. .. . Clauses were found in 62 percent of the

manufacturing agreements, and 25 percent of those

in nonmanufacturing. Clauses were found in more

than 75 percent of the contracts for transportation

equipment, non-electrical machinery, utilities, fabri-

cated metal products, ordnance, tobacco, and min-

ing. ... Provisions were found in 75 percent or more

of the agreements held by the Auto Workers, Rubber

Workers, Steel Workers, and Machinists agreements,

as well as a number of smaller unions such as the

Tobacco Workers, Chemical Workers, and Utility

Workers.

Supp. 416, 421 (D.D.C. 1987) (observing that full-time

union leave benefits had “been included in collective

bargaining agreements between the parties for many

years, in some instances for three to four decades.”). The

latter benefits include pension benefits, reduced-

premium medical insurance, no-charge life insurance,

and discounted telephone services.

The rewards derived from all of these practices are

obvious. They further collaborative efforts between

employers, unions and employees, and they thereby help

to improve productivity, increase efficiency, and reduce

labor costs. When former employees represent a union in

contract negotiations, they bring to the bargaining table

their familiarity with a company’s production methods

and plant practices, with needed employee skills, and

with employee gripes and satisfactions. Such knowledge

on the union side helps to minimize irrelevant discus-

sions and unnecessary frictions between the bargainers; it

also facilitates the achievement of speedy compromises

and realistic solutions to problems. Similarly, when

incumbent employees are charged with grievance han-

dling, the processing of meritless complaints can be

reduced, employee claims can be pressed forcefully and

skillfully, and management can be expected to respond

objectively.

Not surprisingly, many of the Chamber’s member

employers have a long-standing practice of-granting pen-

sion benefits to former employees who have taken leave

to work for labor organizations that represent their

employees in collective bargaining. The Chamber

endorses the practice and believes that it: (1) advances

the interests of employees to engage in self-organization

10

and to bargain collectively; (2) enhances the efficacy of

the collective bargaining process; and (3) promotes the

friendly adjustment of industrial disputes concerning

employees’ wages, hours, and other working conditions.

The practice therefore furthers a number of the declared

policies underlying the National Labor Relations Act. See

29 U.S.C. § 151. The erroneous “criminalization” decision

of the Circuit Court inhibits not only the continuation of

the practice herein at issue, but also the other traditional,

and salutary, union-management practices enumerated

above.

Il. THE COURT OF APPEALS MISCONSTRUED SEC-

TION 302 OF THE LABOR-MANAGEMENT RELA-

TIONS ACT.

Petitioner, the Chamber believes, was tried and con-

victed under an erroneous construction and application

of Section 302 of the LMRA.

A. The Animating Purpose Of Section 302

Section 302 of the LMRA was enacted into law in

1947. The original Section 302 was introduced on the floor

of the Senate as a proposed amendment to a bill under

consideration.® Senator Ball, who introduced the pro-

posed amendment, described its purpose as follows:

[T]he pending amendment deals with so called

welfare funds, which are becoming increasingly

8 The legislative history of Section 302 is described fully in

BASF Wyandotte Corp. v. Local 227, Int'l Chem. Workers Union, 791

F.2d 1046, 1050-51, 1053 (2d Cir. 1986).

11

prominent in negotiations between unions and

employers. .. . The sole purpose of the amend-

ment is not to prohibit welfare funds, but to

make sure that they are legitimate trust funds,

used actually for the specified benefits to the

employees of the employers who contribute to

them, and that they shall not degenerate into

bribes... .

2 Legislative History of the Labor-Management Relations Act

of 1947 (1948), pp. 1304-05. See also Arroyo v. United States,

359 U.S. 419, 425-26 (1959) (observing that Section 302

was enacted because of Congress’ concern “with corrup-

tion of collective bargaining through bribery of employee

representatives by employers, with extortion by

employee representatives, and with the possible abuse by

union officers of the power which they might achieve if

welfare funds were left to their sole control.”). Moreover,

as the Second Circuit has noted, although Section 302 has

been amended several times since 1947, in enacting the

amendments Congress reaffirmed Section 302’s purpose

“as the limited one of ‘prevent[ing] bribery, extortion,

shakedowns, and other corrupt practices. . . . ’ [and

prohibiting] ‘all forms of extortion and bribery in labor-

management relations.” BASF Wyandotte Corp. v. Local

227, supra, 791 F.2d at 1053, quoting H.R. Rep. No. 286,

91st Cong., Ist Sess. 1-2, and S. Rep. No. 187, 86th Cong.,

Ist Sess. 13.

In sum, as the principal legislative purpose underly-

ing Section 302 was to ensure the legitimacy of union

welfare funds and to prevent their use as bribes to union

officials, it follows that the per se construction of Section

302 adopted by the court of appeals — i.e., that a Section

302 violation may be present even in the absence of an

12

evil intent and even with the elimination of the “reward,”

or bribe, allegations from the indictment — is inconsistent

with that purpose.

B. The Circuit Court’s Construction Of Section |

302 Does Not Comport With the Underlying

Purpose cf the Statute.

As we show below, the Circuit Court’s restrictive

reading of Section 302 is not only erroneous but effec-

tively criminalized a wide range of conduct long consid-

ered to be lawful.

1. Although the court below did not refer to the

case, its construction of the Section 302(c)(1) exemption is

essentially consistent (cf. Pet. pp. 18-19) with the decision

of the panel majority in Trailways Lines, Inc. v. Trailways,

Inc. Joint Council of the Amalgamated Transit Union, 785

F.2d 101 (3d Cir.), cert. denied, 479 U.S. 932 (1986). That

majority held, in a case involving pension credits to

employees on union-related leaves of absence, that the

Section 302(c)(1) exemption was applicable “solely to

payments made as ‘compensation for or by reason of’ |

the . . . past services actually rendered by . . . former |

employees while they were employees of the company.” Id. at

106, 108 (emphasis in original).

Judge Becker’s dissent in Trailways presents a cogent

response to the equally specious construction of Section

302(c)(1) by the court below.’ Relying on the “by reason

of” language in Section 302(c)(1), Judge Becker stated that

9 Judge Becker was joined by two other circuit Judges in

voting to rehear the Trailways case en banc. 785 F.2d at 101.

|

|

en

13

“[cJontributions made as compensation for services ren-

dered to Trailways simply do not constitute bribery of the

Union or any other kind of support of the Union by

Trailways,” and that “upholding the contributions in this

case neither offends the policy of the act nor entails a

waiver of strict compliance with the language of § 302.”

Id. at 110.

Judge Becker also found that the cases validating the

“no-docking” principle (Section I above) provided

“strong support” for the legality of the pension pay-

ments. Id. He rejected the majority’s efforts to distinguish

those cases, saying:

The distinction does not work. . . . During the .

hours that these persons spent on union activ-

ities, they were not rendering services to their

employer, and they were not under their

employer’s control. The distinction between

using part of the day for union business and

taking leaves of absence to become full-time

union officials is only one of degree: the nature

of the absences and the payments by the

employer during them (or measured by them) is

the same.

Id. at 111.

Finally, Judge Becker faulted the majority for not

according weight to the widespread nature of the practice

involved, finding that the pervasiveness of such practices

“provides further reason to believe that the pension con-

tributions at issue here are not illegal and that the dan-

gers the majority alleges are ‘more fictitious than real,”

and cautioning that the “Court should be reluctant to

overturn so widespread a practice, which represents a

14

practical accommodation agreed upon by both businesses

and unions.” Id.

Prior to 1986, when Trailways was decided, the legal

authority on the subject had uniformly treated this prac-

tice as lawful under Section 302. As early as 1977, the

United States Department of Labor had rendered the

opinion that Section 302 does not prevent “an employee,

who is on leave of absence without pay from a company

in order to serve as a union officer, from receiving retire-

ment credit for the period during which he serves as a

union official.” Opinion Letter dated July 12, 1977, from

the DOL’s Office of the Solicitor to William N. Wheat and

Associates.

Also in 1977, an arbitrator considering the issue held

that it was not a violation of Section 302 for an employer

to grant “credited service” for pension benefit purposes

to an employee who had been on annual leaves of

absence for more than 30 years in order to serve as an

International Union Representative on a full-time basis.

Monsanto Co., 68 Lab. Arb. (BNA) 101, 110, 112-13

(1977).1° In Communication Workers of America, AFL-CIO v.

10 In response to the parties’ request that he render an

opinion on the legality of the practice in question, the arbitrator

in Monsanto stated:

In the judgment of the arbitrator, there is no intent

manifested in the language of Section 302, to restrict

and abolish the almost universal practice of granting

leaves of absence to union employees for union busi-

ness. To so interpret and construe the statute, would

be straining the language of Section 302 to an unrea-

sonable, and unwarranted extent... .

15

Bell Atlantic Network Serv., Inc., 670 F. Supp. 416 (D.D.C.),

a case decided in 1987, the Court explicitly rejected the

reasoning of the Trailways majority and its view that

Section 302(c)(1)’s “by reason of” language was no

broader than the more specific “compensation” language

of that provision:

It is unlikely that Congress intended to be

redundant. The fact that the phrase “as compen-

sation for” and “by reason of” are cojoined by

the disjunctive “or” usually indicates that the

two phrases have different meanings. See Garcia

v. United States, 469 U.S. 70, 73, 105 S. Ct. 479,

481, 83 L. Ed. 2d 472 (1984) (“canons of con-

struction indicate that terms connection [sic] in

the disjunctive . . . be given separate mean-

ings.”). Thus, contrary to defendants’ urgings,

the Court accords independent significance to

the meaning of the phrase “or by reason of... . ”

Id. at 419-20. Accordingly, the court concluded that the

union leave benefits at issue did not contravene Section

302’s purpose of “prevent[ing] bribery, extortion, shake-

down and other corrupt practices.” Id. at 422-24.

In sum, as the foregoing shows, the restrictive con-

struction of Section 301(c)(1) by the court below is

flawed.

... Section 302 of the Taft-Hartley Act, in no manner

prohibits, nor was it intended to prohibit the granting

of a pension to an employee on approved leave of

absence for purpose of serving as a Union Interna-

tional Representative.

68 Lab. Arb. (BNA) at 110, 112.

16

2. In contrast to Section 302’s civil provisions, one

of its criminal provisions, Section 302(d)(2), states that

“any person who willfully violates this Section . . . shall be

guilty of a felony.” This language, the Chamber submits,

refers not to the willful commission of acts — here the

intentional payment and receipt of pension benefits — but

to the willful violation of the statutory prohibition, i.e.,

acting with bad purpose to disobey or disregard the law.

The court of appeals, acting in conflict with the Sev-

enth Circuit’s decision in United States v. Papia, 910 F.2d

1357 (7th Cir. 1990), determined that the defendants’ mere

awareness of their actions, as opposed to any evil intent |

or knowledge of illegality, supplied the requisite mens rea

under 302(d)(2). The foregoing construction is fallacious

for at least three reasons. First, as set forth in Section I,

above, the breadth of the Circuit Court’s holding reaches

a wide range of conduct long considered to be lawful.

Accordingly, to permit such conduct to be penalized by

felony sanctions absent a showing of an intent to violate

the law, or at least a reckless disregard of its duties, runs

afoul of this Court’s precedent. See Liparota v. United

States, 471 U.S. 419, 426 (1985). See also United States v.

X-Citement Video, Inc., __. U.S. __, 1994 WL 662620 (Nov.

29, 1994).

Second, the difficulty that would be encountered in

ascertaining whether a benefit »ayment made by an

employer during leave for union service would violate

Section 302 mandates against the per se criminalization of

all such conduct. See Cheek v. United States, 498 U.S. 192,

199-200 (1991) (showing of specific intent required where

regulatory or statutory context makes “it difficult for the

average citizen to know and comprehend the extent of

17

the duties imposed by the . . . law” ); United States v.

Murdock, 290 U.S. 389 (1933) (same).?!

Third, it does not necessarily follow from the fact

that Congress arguably intended that Section 302 be con-

strued to constitute a malum prohibitum offense — as the

court of appeals implicitly determined in this case — that

the “willfully” provision of § 302(d)(2) should be con-

strued to require only general, rather than specific, intent.

Cf. Morissette v. United States, 342 U.S. 246, 259-60 (1952).

Indeed, it is because many common and innocent prac-

tices could run afoul of the statute under a general intent

construction that we submit Congress must have

intended the willfulness term to require proof of intent to

violate, or recklessly disregard, the law.

This Court’s reasoning in Ratzlaf v. United States, __

U.S. __, 114 S.Ct. 655 (1994) - a case involving the

statutory prohibition on structuring cash-transactions to

avoid federal currency reporting requirements - is

11 We note that a criminal violation of Section 302 only

arises for a “willful” violation of the Act, whereas no intent

requirement is indicated for a civil violation. Such a “two-

tiered” liability scheme — with “willful” violations carrying a

penalty greater than mere violations — has been interpreted even

in the civil context as requiring proof “that the employer either

knew or showed reckless disregard for the matter of whether its

conduct was prohibited by the statute[.]” Hazen Paper Co. v.

Biggens, ___ U.S. __, 113 S.Ct. 1701, 1708 (1993) (Age Discrimi-

nation in Employment Act), quoting McLaughlin v. Richland Shoe

Co., 486 U.S. 128, 133 (1988) (Fair Labor Standards Act), and

Trans World Airlines, Inc. v. Thurston, 469 U.S. 111, 133 (1985)

(Title VII of the Civil Rights Act). We submit that the sanctions

attending a criminal violation of the law present an even greater

reason for requiring proof of actual intent.

18

instructive in this regard. In Ratzlaf as here, the Act

imposed criminal penalties upon those who willfully vio-

lated the Act. Nonetheless, the Government argued, as

the court of appeals reasoned in this case, that no proof of

intent to violate the law was required for conviction

because the conduct at issue was ” ‘not the kind of

activity that an ordinary person would engage in inno-

cently.’ ” 114 S.Ct. at 660. After referring to instances in

which structuring might occur without unlawful intent,

the Court concluded “we are unpersuaded with the argu-

ment that structuring is so obviously ‘evil’ or inherently

‘bad’ that the ‘willfulness’ requirement is satisfied irre-

spective of the defendant’s knowledge of the illegality of

structuring.” Id. The Chamber submits that the reasoning

of Ratzlaf applies equally to the employer practices

reached by the holding of the court of appeals in this

case.

In sum, the Eleventh Circuit’s treatment of the “will-

ful” requirement of Section 302(d)(2) is not only erro-

neous on a practical level, but also runs afoul of Ratzlaf’s

teaching, and, as Petitioner has shown, it is in conflict

with rulings of other circuits.

19

CONCLUSION

For the foregoing reasons, the Chamber urges that

the petition for a writ of certiorari be granted.

Respectfully submitted,

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: January 10, 1995

STANLEY R. StRAUusS*

ELIZABETH TORPHY-DONZELLA

OcLETREE, DeaAkINs, NASH,

SMOAK & STEWART

2400 N Street, N.W.

Fifth Floor

Washington, D.C. 20037

(202) 887-0855

Counsel for the Chamber of

Commerce of the

United States of America,

Amicus Curiae

*Counsel of Record