Petition for Writ of Certiorari — National Labor Relations Board v. Columbian Enameling & Stamping Co.

y ed

:

:

:

AEE Oe a,

iocine amet danse nedeineae hehe bee mame eee

Specification of errors to be urged---.....-.-..-------------

Reasons for granting the writ:

I. The court below decided an important question of law

sa contrary to the plain eugene of the National Labor

Ng | eee nearer” “mam a ghey ee ey

A. Even if the strike had been called in violation

of a contract, the court below should have

enforced the Board’s order_________-__-__-

II. The decision of the court below is in conflict with a

decision of the Circuit Court of Appeals for the

IE Sica cdannn <actieebethoweseacnnek

CITATIONS

Agwilines, Inc. v. National Labor Relations Board, 87 F.

In the Matter of Kentucky Firebrick Co. and United Brick

and Clay Workers of America, Local No. 510,3 N. L. R. B.

In the Matter of Standard Lime & Stone Co. and Branch No.

175 Quarry Workers International Union of North

sees, & is: Ba Te . Pe Da osaee ciate.

Jeffery DeWitt Insulator Co. v. National Labor Relations

Board, 91 F. (2d) 134, certiorari denied, 302 U. S. 731_-

Manufacturers Ry. Co. v. United States, 246 U.S. 457___-

Michaelson v. United States, 291 Fed. 940, reversed, 266

he Rig ee ee a eee

National Labor Relations Board v v. ‘Carlisle Lumber Co., 94 F.

“im tN te

27

17

(2d) 138, certiorari denied, May 23, 1938, No. 907 - . 48, 17,238

(1)

83915—38——1

e II

Cases—Continued. ;

National Labor Relations Board v. Fansteel Metallurgical

Corp. (C. C. A. 7th, decided July 22, 1938)__...._..__.

National Labor Relations Board v. Jones & Laughlin Sieel

GE SM Bn dcadicddenetwacdenhesaaseacnesaen

National Labor Relations Board v. Mackay Radio and Tele-

ee Oe I Biche sewdkccsssuceeschendesceass

National Labor Relations Board v. Pennsyleania Greyhound

A, iy Es Os nade Kencncnechavaseecndkes

National Laker Relations Board ». Remington Rand, Ine.,

94 F. (2d) 862, certiorari denie’, No. 970, October Term,

BEERS te nuitue eet Ee Oke Rae eee 18, 23, 24, 25

National Labor Relations Board v. The Kentucky Fire Brick

Company (C. C. A. 6th, decided June 29, 1938) ___.___- 25

Standard Lime & Stone Co. v. National Labor Reiations

Board (C. C. A. 4th, decided June 13, 1938)__._._____- 25

Statute:

National Labor Relations Act (July 5, 1935), c. 372, 49

Stat. 449 (U.S. C., Supp. II, Title 29, Sec. 151 et seg.)_ 2-4, 23

Miscellaneous:

H. Rept. 1147, 74th Cong., lst Sess____._..__________-. 19

S. Rept. 573, 74th Cong., lst Seas_..................--- 19

Inthe Supreme Gourt of the United States

OctToBER TERM, 1938

No, ——

NaTIoNaL LaBork RELATIONS BoaRD, PETITIONER

v.

CoLUMBIAN ENAMELING AND STAMPING COMPANY,

Inc.

PETITION FOR A WRIT OF CERTIORARI TO THE UNITED

STATES CIRCUIT COURT OF APPEALS FOR THE SEVENTH

CIRCUIT

The Acting Soligitor General, on behalf of the

National Labor Relations Board, prays that a writ

of certiorari issue to review the judgment of the

United States Circuit Court of Appeals for the

Seventh Circuit entered on April 28, 1938 (R. 425),

denying the petition of the National Labor Rela-

tions Board for enforcement of its order against

Columbian Enameling and Stamping Company,

Ine.

OPINIONS BELOW

The findings of fact, conclusions of law, and

order of the National Labor Relations Board (R.

372-393) are reported in 1 N. L. R. B. 181. The

opinions of the Circuit Court of Appeals (R. 415-

425) are reported in 96 F. (2d) 948.

(1)

9

JURISDICTION

The judgment of the Circuit Court of Appeals

was entered April 28, 1938. The jurisdiction of

this Court is invoked under 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, assuming that employees have gone

on strike in violation of an agreement between them

and their employer, the employer is thereby freed

from his obligation under the National Labor Re-

lations Act to bargain collectively with representa-

tives of his employees.

2. Whether such a strike terminates the strikers’

status as employees within the meaning of the Act.

3. Whether the fact that such a strike was begun

before the passage of the Act terminates the strik-

ers’ status as employees, or frees the employer

from his duty to bargain collectively with their

representative after the passage of the Act.

4. Whether the strike in this case did constitute

a breach of the agreement between respondent and

its employees.

STATUTE INVOLVED

The pertinent provisions of the National Labor

Relations Act (Act of July 5, 1935, ¢. 372, 49 Stat.

449, U.S. C., Supp. II, Title 29, See. 151 et seq.)

are as follows:

3

Sec. 2. When used in this Act—

= * . * *

(3) The term ‘‘employee”’ shall include

* * * any individual whose work has

ceased as a consequence of, or in connection

with, any current labor dispute or because

of any unfair labor practice, and who has

not obtained any other regular and substan-

tially equivalent employment, * * *

(9) The term “labor dispute’’ includes

any controversy concerning terms, tenure

or conditions of employment, or concerning

the association or representation of persons

in negotiating, fixing, maintaining, chang-

ing, or seeking to arrange terms or condi-

tions of employment, * * *

Sec. 7. Employees shall have the right to

self-organization, to form. Join, or assist

labor organizations, to bargain collectively

through representatives of their own choos-

ing, and to engage in concerted activities,

for the purpose of collective bargaining or

other mutual aid or protection.

Sec. 8. It shall be an unfair labor prac-

tice for an employer—

(1) To interfere with, restrain, or coerce

employees in the exercise of the rights guar-

anteed in Section 7.

* * * * *

(5) To refuse to bargain collectively with

the representatives of his employees, subject

to the provisions of Section 9 (a).

Sec. 9. (a) Representatives designated or

selected for the purposes of collective bar-

gaining by the majority of the employees in

4

aunit appropriate for such purposes, shall be

the exclusive representatives of all the em-

ployees in such unit fe + the purposes of col-

lective bargaining in respect to rates of pay,

wages, hours of employment, or other condi-

tions of employment: Provided, That any

individual employee or a group of employees

shall have the right ai any time to present

grievances to their employer.

Sec. 10:

(c) * * * If upon all the testimony

taken the Board shall be of the opinion that

any person named in the complaint has en-

gaged in or is engaging in any such unfair

labor practice, then the Board shall state its

findings of fact and shall issue and cause to

be served on such person an order requiring

such person to cease and desist from

such unfair labor practice, and to take such

affirmative action, including reinstatement

of employees with or without back pay, as

will effectuate the policies of this Act. * * *

STATEMENT

Pursuant to Section 10 (b) of the National

Labor Relations Act, the National Labor Relations

Board, on November 21, 1935, issued a complaint

and notice of hearing, which were duly served upon

respondent (R. 7-10). The complaint alleged in

substance that respondent had engaged in unfair

labor practices affecting commerce within the

meaning of Section 8, subdivisions (1) and (5), of

the Act (R. 8-10). A hearing was held on Decem-

rrr 0 ee

, 9

ber 9, 10, and 11, 1935, before a Trial Examiner

duly designated by the Board (R. 19-370). Briefs

were filed with the Board by respondent and the

complainant Union. Thereafter, on February 14,

1936, the Board issued its findings of fact, conclu-

sions of law, and order (R. 372-393). The facts as

found by the Board and as shown in the evidence

are as follows:

Respondent is engaged in the manufacture and

sale of metal utensils and other products and is

extensively engaged in commerce among the States

and with foreign nations (R. 375-376). On July

14, 1934, respondent and Enameling and Stamping

Mill Employees Union, No. 19694 (hereinafter

termed the Union) entered into a contract (R. 15-

17), effective for one year, which prescribed vari-

ous conditions of employment and contained the

following provision (R. 17):

In any case in which a satisfactory settle-

ment of a dispute arising under this contract

cannot be reached, such dispute shall be re-

ferred to a committee of arbitration com-

posed of two persons selected by the Man-

agement, two persons selected by the Union,

and fifth person to be selected by these four,

who shall reach % decision which shall be

final and binding upon both parties to this

contract. There shall be no stoppage of

work by either party to this contract pend-

ing decision by the Committee of Arbitra-

tion.

6

On January 4, 1935, the Union, at that time repre-

senting 476 of respondent's 500 odd production em-

ployees (R. 89, 173), submitted to the respondent a

‘number of demands, including proposals that it be

recognized as the bargaining representative of all

the employees, that the Union cooperate with the

Company in correcting defects in workmanship and

in enforcing respondent's rules, that the Company

agree to lay off any member of the Union who was

suspended from the Union, and that minimum

wages be increased at the end of ninety days if by

that time unrest had been eliminated and produc-

tion loss reduced to a normal minimum (Resp. Ex.

1; R. 382).* In a circular letter of January 21 to

the employees individually, respondent rejected the

proposals enumerated above (Pet. Ex. 1). On

February 5 the Union wrote respondent asking that

the proposals of January 4 be submitted to arbitra-

tion pursuant to the provision of the agreement

set forth above (Resp. Ex. 14). On February 8

respondent wrote the Union, and at the same time

stated in a circular to the employees individually,

that it refused to arbitrate on the ground that the

proposals of January 4 were not arbitrable under

the July 1934 agreement (Pet. Ex. 3, 10).

~_,

~

* These proposals did not include a demand for a closed

shop, although the summary of the facts by the court below

(R. 416) indicates the contrary. Although such a demand

had been made in 1934, it was not renewed in 1935 until

March 17. See page 7, infra.

7

The Union subsequently presented other de-

mands to respondent.’ On March 11 the Union

again presented its demands of Jantary 4, and

again received an unsatisfactory response (R. 211-

212, 315-316). On March 17 the Union sent re-

spondent a copy of resolutions adopted by it in

which it declared that, whereas it had consistently

adhered to every provision of the agreement, re-

spondent had broken the agreement by refusing to

arbitrate the demands made by the Union and by

failing to comply with Section 9 of the agreement

(see note 2), that respondent had been deliberately

seeking to injure the Union by attacking the integ-

rity of the Union Committee and thereby violating

the principles of collective bargaining, and that

“peace and harmony cannot exist under the present

conditions owing to the unfair practices of the

Company’’; and it was resolved that the men would

not continue to work with anyone eligible for Union

membership who did not join the Union before

March 23 (Pet. Ex. 2). On that day a strike was

called (R. 64, 216). About 485 of 500 production

employees of respondent were members of the

Union at that time, and approximately 450 left

*The Union claimed that the employees were entitled

under Section 9 of the agreement (R. 16) to two hours’ pay

for waiting time after a breakdown, and that the Company

should stop sending circulars to the employees individually

rather than communicating with their representatives (R.

314-315, 209-210: Resp. Ex. 15).

53915—38——2

' 8

work (R. 173, 176-178, 377, 383). On March 30 re-

spondent announced that the factory was closed

indefinitely (Resp. Ex. 16).

Attempts to.settle the strike were futile (R. 383-

385). Respondent insisted, despite the fact that

the vast majority of at» employees belonged to the

Union, that it would reopen the factory only ‘‘as ar

open shop without union /recognition or agree-

ment’’ (R. 384, Pet. Ex. 14, Resp. Ex. 17).

The strike was still in effect when the National

Labor Relations Act was approved on July 5, 1935.

On July 19 respondent began to take steps leading

to the reopening of its plant (R. 70, 221, 384-385).

On July 23, conciliators of the Department of

Labor, at the request of the Union, attempted to

open negotiations with resporident, and induced

the president of respondent to, agree to meet with

the Union Committee. On that day respondent re-

opened its plant, and several days later respond-

ent’s president told the conciliators, contrary to his

original promise, that *he would not meet either

with them or with the Union (R. 72-73, 143-149,

216, 238, 303-306, 385). By the middle of Septem-

ber respondent had employed a full foree, includ- -

ing approximately 215 of the strikers (R. 239, 241-’

242). On September 20 and again on October 11

the Union wrote asking for a meeting to settle the

strike, but received no reply (Pet. Ex. 5, R. 306).

*The Union permitted about 35 men in the power house

to remain at work (R. 178, 383).

©

9

The Board found that respondent’s refusal to

bargein with the Union after the request made on

July 23 was an untair labor practice in violation

of Section 8, subdivisions (5) and (1), of the Act,

and ordered respondent to cease and desist from

refusing to bargain with the Union (R. 393). The

Board further found that in view of the replace-

ment of the strikers by new men after respond-

ent’s refusal to bargain, such an order would be

futile unless the situation were restored to the

status quo existing before the violation of the Act

‘R. 391). Accordingly, respondent was ordered

to reinstate men employed on July 22, 1935, who

had not received substantially equivalent employ-

ment elsewhere, discharging if necessary persons

who were not employed on that date (R. 393).*

On July 9, 1937, the Board, pursuant to Section

10 (e) of the Act, filed with theCireuit Court of

Appeals for the Seventh Circuit its petition for

enforcement of the foregoing order (R. 1-4). On

April 28, 1938, the court denied the Board’s appli-

cation (R. 425). ry

‘The order further provided that a preferred list shou'd

be created for those individuals employed on July 22 for

whom there would be no jobs (R. 393). Back pay was not

ordered. Respondent has argued that the order required

the discharge of all men employed after July 22, 1935, re-

gardless of whether such discharges were necessary to make

reom for men previously employed. That is not what the

order means; and, as the Board advised the court below, it

did not and does not intend the order to have any such

effect.

10

Cireuit Judge Evans found that the Board’s

findings with respect to respondent’s refusal to bar-

gain were supported by the evidence and that re

spondent had engaged in ‘‘an open defiant, flouting

of the law of the land’”’ (R. 422). He held, how-

ever, that the employees had gone on strike in vio-

lation of the agreement of July 14, 1934, and had

thereby completely severed the employment rela-

tion and ended all obligation of respondent to bar-

gain with their representatives (R. 421). Judge

Evans further held that such action barred the em-

ployees, under the equitable doctrines of unclean

hands and estoppel, from seeking relief agaihst

respondent’s unfair labor practices (R. 421-423).

He therefore held that the Board’s petition for en-

forcement of its order should be denied (R. 423).

Judge Sparks concurred in the result (R. 423).

Circuit Judge Treanor, dissenting, agreed with

Judge Evans that the Board’s findings with respect

to the unfair labor practices were supported by evi-

dence, but held in addition that the Board’s findings

that respondent had refused to arbitrate and that

therefore the non-stoppage clause of the agreement

had not been violated were supported by the record

and conclusive upon the court. He further held

that the strikers remained ‘‘employees”’ within See-

tion 2 (3) of the Act, and that respondent’s duty

to bargain continued regardless of whether the

strike was in breach of the agreement or not. An

unfair labor practice having occurred, Judge

Treanor held, the court should not deny en-

11

forcement to the Board’s order upon equitable

considerations which were not properly before it

(R. 423-425).

SPECIFICATION OF ERRORS TO BE URGED

The Cireuit Court of Appeals erred:

1. In holding that the strike violated the agree-

ment of July 14, 1934.

2. In not holding that individuals who cease Work

in connection with a current labor dispute remain

employees for the purposes of the National Labor

Relations Act, whether or not their cessation of

work was in breach of contract.

3. In not holding that it is an unfair labor prac-

tice for an employer to refuse to bargain collec-

tively with the authorized representative of his

striking employees in an appropriate bargaining

unit, whether or not the strike is in breach of

contract.

4. In not holding that the National Labor Rela-

tions Act authorizes the National Labor Relations

Board to require the reinstatement of striking em-

ployees, with whom the employer has wrongfully

refused to bargain collectively, whether or not the

strike is in breach of contract.

9. In not holding that the defenses of unclean

hands and equitable estoppel, based upon conduct

of the employees, cannot be urged against or defeat

a petition by the National Labor Relations Board

for enforcement of its order.

12

6. In not holding that the fact that the strike

began before the passage of the Act had no effeet

upon the validity of the Board’s order.

7. In refusing to enforce the Board’s order as

supported by the evidence and the findings.

REASONS FOR GRANTING THE WRIT

I

THE Covrt BeLow Decipep aN IMPORTANT QUES-

TION OF Law ConTRARY TO THE PLarn LANGUAGE

OF THE NaTIONAL Lasor RELATIONS ACT

The Circuit Court of Appeals found that re-

spondent’s conduct constituted an ‘‘open defiant,

flouting of the law of the land’’ (R. 422). It did

not indicate that the Board’s finding that respond-

ent had refused to bargain with the representative

of the majority of its employees was unsupported

by evidence, but held to the contrary. Nor did the

court hold that the mere oceurrence of a strike

prior to such refusal had terminated the employee

status of the members of the Union.

The court’s refusal tu enforce the Board’s order

appears to be predicated both en the hypothesis

that the Union had called the strike in violation of

the agreement of July 14, 1934, and on the fact that

the strike commenced before the passage of the

National Labor Relations Act. Upon this basis the

court reached the conclusion that the strikers were

not employees within the meaning of the Act.

13

It is clear from the opinion, however, that tLe

fact that the strike commenced before the passage

of the Act was regarded as of slight significance,

since the court assumed, following Jeffery-DeW itt

Insulator Co. v. Nattonal Labor Relations Board,

91 F. (2d) 134 (C. C. A. 4th), cert. den., 302 U. 8.

731, and National Labor Relations Board v. Carlisle

Lumber Co., 94 F. (2d) 138 (C. C. A. 9th), cert.

den. May 23, 1938, that ‘‘ordinarily the status of

employer-employee exists, although the strike oc-

curred before the passage of the National Labor

Relations Act and continued after its passage’’ (R.

420). The entire emphasis in the opinion is placed

on the alleged breach of contract ; no reason is sug-

gested why the conjunction of the two facts should

make any difference, and we think it fair to assume

that the asserted misconduct of the employees was

the true ratio decidendi.

This holding of the court below, that, because of

what is at most a technical breach of contract by

his employées, a public regulatory statute is ren-

dered inoperative and cannot be applied by the

Government to restrain the unlawful conduct

of an employer is plainly unwarranted under the

Statute and is contrary to accepted principles of

law. Moreover. in arriving at the premise upon

which this conclusion was based—that the Union

had violated the agreement—the court found it

necessary completely to disregard undisputed facts

showing that there had been no such violation. The

~~ 14

court’s refusal to enforce the Board’s order for this

reason is thus plainly erroneous because (@) even

if the strike were in breach of the contract, the

court’s refusal to enforee the order of the Board

was in violation of the statute, and (b) the em-

ployees did not strike in violation of their contract.

A. EVEN IF THE STRIKE HAD BEEN CALLED IN VIOLATION

OF A CONTRACT, THE COURT BELOW SHOULD HAVE

FNFORCED THE BOARD’S ORDER

Even if the court below were correct in holding

that the Union had broken its contract with the re

spondent, the court should not have denied enforce-

ment to the Board’s order. The Act nowhere pro-

vides that employers whose employees have violated

agreements shall be exempt from its provisions.

On the contrary, the Act declares that it shall be

an unfair labor practice for an employer ‘‘to refuse

to bargain collectively with the representatives of

his employees’’ and requires the Board, upon a

finding that an employer has engaged in such a

practice, to issue a cease and desist order (Sections

8 (5) and 10 (e)).

The court below came to the conclusion that the

Board’s order was invalid (1) because the breach

of contract terminated the employer-employee re-

lationship between respondent and the strikers, and

(2) because the doctrines of estoppel and unclean

hands precluded the granting of relief to the

strikers in a court of equity. The opinion seems

15

to join these two entirely unrelated propositions

together. But whether regarded jointly or sepa-

rately, the reasoning of the court below in support

of them is plainly unsound.

1. The court below conceded (R. 420) that the

existence of a strike does not interrupt the em-

ployer-employee relationship under the Act; the

concession was of course essential in view of the

statutory definition of employee as including ‘“‘any

individual whose work has ceased as a consequence

of, or in connection with, any current labor dis-

pute.’ Section 2 (3); National Labor Relatigns

Board v. Mackay Radio and Telegraph Co., 538

S. Ct. 904.

But the court held that if the strike was called

in violation of a contract, the employment relation-

ship no longer continued—a conclusion which can

be supported under the statute only if the impro-

priety of a strike warrants a holding that the

strikers have not ceased work in consequence of a

current labor dispute. This is plainly a non

sequitur. As this Court pointed out in the Mackay

ease (58 S. Ct. at 910):

The wisdom or unwisdom of the men, their

justificatio» or lack of it, in attributing to

respondent an unreasonable or arbitrary at-

titude in connection with the negotiations,

cannot determine whether, when they struck,

they did so as a consequence of or in con-

nection with a current labor dispute.

[Italics supplied. ]

16

The decision below adopts the same line of rea-

soning as that of the same Circuit Court of Appeals

in Michaelson v. United States, 291 Fed. 940,

wherein the court held that railroad strikers were

not “‘employees”’ within the meaning of the Clay-

ton Act because railroad strikes were contrary to

public policy and because the strike was called

against compliance with a decision of the Railroad

Labor Board. In reversing that decision, this

Court said in language equally applicable here (266

U.S. 42, at 68):

To say that railroad employees are out-

side the provisions of the statute, is not to

construe the statute, but to engraft upon it

an exception not warranted by itsterms. If

Congress had intended such an exception, 1t

is fair to suppose that it would have said so

affirmatively. The words of the act are

plain and in terms inclusive of all ciasses

of employment ; and we find nothing in them

which requires a resort to judicial construe-

tien. The reasoning of the court below

really does not present a question of stat-

utory coustruction, but rather an arguinent

justifying the supposititious exception on the

ground of necessity or of policy—a matter

addressed to the legislative and not the ju-

dicial authority.

_2. Although the decision below purports to be

based on the termination of the employment rela-

tionship resulting from a strike in breach of con-

tract, the court does not discuss the statutory def-

17

inition of employee; on the contrary the court’s

argument seems to indicate that the breach of con-

tract would have precluded the granting of relief

by the Board even if the strikers had been em-

ployees. Here, too, in the language of the Michael-

son case, supra, the court was not construing the

statute but engrafting upon it an exception not

warranted by its terms.

The tenor of the court’s opinion indicates that it

regarded the case as an equity suit between the em-

ployees and respondent. The employees were

“estopped’’ (R. 421, 422); the employees were not

“entitled to invoke the aid of a court of equity”

(R. 423). Those expressions demonstrate that the

court misconceives the nature of proceedings be-

fore the Board for the enforcement of the Act.

The proceeding is not one in equity; it is ex-

clusively statutory. National Labor Relations

Board v. Jones d&: Laughlin Steel Corp., 301 U.S. at

48. The Board, representing the public interest, is

the complainant in such proceedings. Agwilines,

Inc. v. National Labor Relations Board, 87 F. (2d)

146 (C. C. A. 5th). The Union is not the moving

party and the Board is not estopped or chargeable

with unclean hands by reason of the conduct of the

Union. As the Cireuit Court of Appeals for the

Ninth Cireuit declared in National Labor Rela-

tions Board v. Carlisle Lumber Co., 94 F. (2d) 138,

146, certiorari denied, No. 907, Oct. Term, 1937:

18

Respondent contends that the proceeding

before us is an equitable proceeding; that

the union’s picketing resulted in violence. as

the Board tviind, which was a violation of

the iaws of Washington, and therefore en-

forcement should be denied for the reason

that the union has not come into the court

with clean hands. It is not the union. but

the Board, which is asking enforcement.

See to the same effect National Labor Relations

Board v. Remington Rand, Inc., 94 F. (2d) 862,

872-873; certiorari denied, No. 970, Oct. Term,

1937.

But there is another equally fundamental reason

why an employer is not exculpated by the improper

acts of his employees. The Board’s cease and de-

sist orders look to the future: their purpose is to

prevent the recurrence of conduct found by Con-

gress and recognized by this Court to be **prolific

causes of strife’? which burden interstate com-

merce (National Labor Relations Board v. Jones

d Laughlin Steel Corp., 301 U. S. 1, at 42). The

purpose of the Act is not to be achieved by leaving

the employer free to engage in unfair labor prac-

tices whenever his employees or their representa-

tives have acted unlawfully. Remedies are avail-

able against the illegal acts of employees in the state

civil and criminal courts and under other statutes

than this Act. The Act was not meant to cover the

entire field of labor relations. Cf. National Labor

Relations Board v. Jones & Laughlin Steel Corp.,

19

supra, at 46. This was specifically recognized in

the report of the Congressional committees rec-

ommending the passage of the Act.'

A distinction may be drawn between the effect of

unlawful acts by strikers upon the power of the

Board to issue cease and desist orders and the scope

of affirmative relief to be granted in a particular

case. The statute imposes upon the Board the

mandatory duty of issuing a cease and desist order

up ™n proof that an employer has engaged in an un-

fair labor practice, and the definitions of the unfair

labor practices contain no exception for cases in

which the employees have acted unlawfully (See-

tions 10 (¢) and8). It would be an abuse of author-

‘Compare the following statement by the Committee on

Education and Labor of the Senate (Sen. Rep. No. 573, 74th

Cong., 1st Sess.) in rejecting the proposal that the Board

have power to prevent burdens to commerce occasioned by

employee action (pp. 16-17):

“Nor can the committee sanction the suggestion that the

bill should prohibit fraud or violence by employees or labor

unions. The bill is not a mere police court measure. The

remedies against such acts in the State and Federal courts

and by the invocation of local poiice authorities are now

adequate, as arrests and labor injunctions in industrial dis-

putes throughout the country will attest. * * * In ad-

dition, the procedure set up in this bill is not nearly so well

Suited as is existing law to the prevention of such fraud and

violence. * * * The only results of introducing pro-

posals of this sort into the bill, in the opinion of the com-

mittee, would be to overwhelm the Board in every case with

-ounter-charges and recriminations that would prevent it

from doing the task that needs to be done.”

This section of the report was quoted with approval by

the Committee on Labor of the House of Representatives

(H. Rept. 1147, 74th Cong.. 1st Sess., p. 16).

20

ity under the Act for the Board to refuse to issue

a cease and desist order because of the employees’

_ improper conduct. ‘n the granting of affirmative

relief, however, there is room for the exercise of

discretion, since the Board is empowered to order

the taking of *‘such affirmative action * * * as

will effectuate the policies of this Act’’ (Section 10

(c)). The Board has recognized that unlawful

acts of strikers may make it inappropriate to grant

affirmative relief which inures to their benefit.

See, e. g., In the Matter of Kentucky Firebrick Co.

and United Brick and Clay Workers of America,

Local Union, No. 510,3 N. L. R. B. No. 46; In the

Matter of Standard Lime & Stone Co. and Branch

No. 175, Quarry Workers International Union of

North America, 5 N. L. R. B. No. 15.

The court below did not differentiate between the

negative and affirmative portions of the Board’s

order, but invalidated it as a whole on the ground

that the strikers had acted in breach of contract.

Such a decision is plainly unwarranted under the

statute,

In any event, however, there can be no question

as to the appropriateness of the affirmative relief

granted in this case. The Board ordered the re-

spondent to reinstate (without back pay) strikers

replaced by new men upon respondent’s refusal to

bargain with their representative. Order‘ug re-

spondent to obey the law would have been futile.

as the Board found, if respondent could have re-

fused to reemploy the members of the Union who

21

continued on strike after the commission of the

unfair labor practice. It can not be said that the

strikers’ prior conduct rendered the order of rein-

statement any the less appropriate. There was a

dispute between the Union and respondent as to

which first violated the agreement. Such a dis-

pute is of the kind usually settled in the civil

courts. The losing party in a suit for breach of

contract is not commonly treated as a law breaker,

and the winning party is not thereby exempted

from the operation of statutes prohibiting conduct

regarded by the legislature as contrary to publie

policy.

In any event, it was for the Board and not for

the court below to infer from the evidence wheiher

or not ordering reinstatement in this case wouid

effectuate the policies of the Act. National Labor

Relations Board v. Pennsylvania Greyhound Lines,

Ine., 303 U. §. 261. The court below did not hold

that the Board’s finding that the relief was appro-

_ priate was unsupported by evidence ; it merely sub-

stituted its conclusion for that of the Board, and

“this can not be done.”’ Manufacturers Ry. Co.

v. United States, 246 U. S. 457, 482. The court

treated the case as if it were an equity suit being

tried de novo before it rather than a review, sub-

ject to statutory limitations, of a decision of the

National Labor Relations Board. The court clearly

had no power to determine the case on any such

basis,

22

B. THE STRIKE DID NOT CONSTITUTE A BREACE OF

CONTRACT

~In concluding that the strike called by the Union

was a breach ef contract, the court relied entirely

upon the provision in the agreement of July 14,

1934, that ‘‘There shall be no stoppage of work by

cither party to this contract pending decision by

the Committee of Arbitration’’ (R. 420, 423, 17).

The court did not dispute the findings of the Board

that on January 4, 1935, the Union made certain

demands on respondent, that respondent rejected

these demands, that the Union requested arbitra-

tion pursuant tu the agreement, and that respond-

ent refused the request on the ground that the

questions were not arbitrable. While the court

enumerated these facts in a footnote to its opinion

(R. 416-417), it ignored them completely in decid-

- ing that the Union had violated the contract.

We need not here consider whether respondent

was justified in refusing to arbitrate the demands.

If respondent’s position that the demands were not

arbitrable under the agreement was correct, the

Union was not required to refrain from stopping

work ‘‘pending decision by the Committee of Arbi-

tration,’’ and accordingly the strike did not consti-

tute a breach of the agreement. If, on the other

hand, the demands were arbitrable, respondent

itself violated the agreement by refusing to permit

their submission to arbitration, and the Union was

released from its promise not to strike nending

23

arbitration. See Pet. Ex. 2, p. 7, supra. Which-

ever view is taken, it is clear that the Union’s action

in calling a strike without awaiting arbitration was

not a breach of contract. In entirely disregarding

the Board’s findings of fact that the Union had

sought to arbitrate the matters in controversy and

that respondent had refused, the court violated the

express statutory direction that ‘‘The findings of

the Board as to the facts, if supported by evidence,

shall be conclusive’? (Section 10 (e)). National

Labor Relations Board v. Pennsylvania Greyhound

Lines, Inc., 303 U.S. 261.

II

THE DEcISION OF THE CouRT BELOw Is IN CONFLICT

WitTH Aa DECISION OF THE CircUIT CouRT oF AP-

PEALS FOR THE SECOND CIRCUIT

In National Labor Relations Board v. Reming-

ton Rand, Inc., 94 F. (2d) 862, certiorari denied,

No. 970, Oct. Term, 1937, the Poard found that

the company had refused to bargain collectively

with the union representing the majority of its

employees, in violation of Section 8 (5) of the Act.

The company contended in the Circuit Court of

Appeals that the union had called a strike in vio-

lation of a binding contract, that the union had

been guilty of violence during the strike, and that

because of such misconduct by the union the

Board’s order should not be enforced (see re-

spondent’s brief in the Circuit Court of Appeals,

pp. 35-37). The Circuit Court of Appeals for the

24

Second Circuit found it unnecessary to determine

whether the union had in fact been guilty of the

alleged misconduct. Assuming the charge to be

well founded, the court held it to be immaterial.

The court declared, in language plainly demon-

strating the existence of a conflict ® between that

case and the decision of the Circuit Court of Ap-

peals for the Seventh Cireuit here (94 F. (2d)

872-873) :

There remains only the defence raised by

the respondent that the union has disquali-

fied itself by its own misconduct from appeal-

ing to the Board; a carry over from ihe doc-

trine of equity that the court will not inter-

vene in favor of one who has been guilty of

wrongful conduct in the transaction in ques-

tion. This defence was overruled in Na-

tional Labor Relations Board v. Carlisle

Lumber Co., supra, 94 F. (2d) 138, and

we agree, although our reasons go beyond

the procedural peculiarity that the Board is

the petitioner. * * * the conduct of a

*In its reply to the Board’s brief in opposition to the

granting of a writ of certiorari, Remington Rand, Inc.,

pointed out that the decision in that case conflicted with

that of the Circuit Court of Appeals for the Seventh Cir-

cuit in the Co/umbian case, which had been decided since the

filing of the petition for certiorari. Despite the conflict on

the point here involved, it is believed that this Court prop-

erly denied certiorari in the Remington Rand case, inas-

much as the question of the effect ot the misconduct of the

employees was not a substantial one on the facts there pre-

sented, and was correctly decided by the Circuit Court of

Appeals for the Second Circuit.

union, like that of an employer, not only

during the negotiations when there are any,

but before there are, may be relevant in as-

certaining whether the proposal to confer is

genuine, or only part of the tactics of the

fight. Nothing else can be material; though

the union may have misconducted itself, it

has a locus poenitentiae; if it offers in good

faith to treat, the employer may not refuse

because of its past sins. * *

iil

THE PRIMARY QUESTION PRESENTED IS OF GREAT

Pvslic IMPORTANCE

The question whether misconduct by employees

las the result of exempting their employer from

he National Labor Relations Act is a question of

jublic importance which should be decided by this

Sourt. Various aspects of this problem have

irisen in cases before the Circuit Court of Appeals,

ind the different courts have adopted varying and,

n some cases, conflicting methods of dealingywith

t. See, in addition to the instant case, National

wabor Relations Board v. Fanstcel Metallurgical

‘orp. (C. C. A. Tth, decided July 22, 1938); Na-

lonal Labor Relations Board v. The Kentucky Fire

triek Company (C. C. A. 6th, decided June 29,

938); Standard Lime cd: Stone Co. v. National

abor Relations Board (C. C. A. 4th, decided June

83,1938) ; National Labor Relations Board v. Rem-

wgton-Rand, Inc., supra; National Labor Rela-

ons Board v. Carlisle Lumber Co., supra. In the

ee nae eee ee a ‘ a

26

recent Fansteel case, the Circuit Court of Appeals

for the Seventh Circuit went so far as to hold that

an employer’s unfair labor practices in using labor

spies, in dominating and supporting a ‘‘company

union,’’ and in refusing to bargain collectively,

could not be prohibited by the Board because of

misconduct by his employees.

The establishment of an exemption of the kind

approved by the court below would seriously limit

the intended scope of the Act. As has been pointed

out, an employer injured by the misconduct of his

employees has various familiar remedies available

in the ordinary civil and criminal courts (supra,

pp. 18-19). The purpose of the National Labor

Relations Act is to safeguard commerce by guaran-

teeing to employees protection of the rights con-

ferred by this statute.

It is particularly important that exemptions

from the Act be not created for all employers whose

employees have broken contracts. As collective

bargaining becomes common, collective agreements

between employers and employees will become more

numerous and comprehensive. If the application

of the Act is to depend upon technical compliance

with the terms of such agreements, a large number

of industrial disputes may be removed from its

scope. It is not always easy to determine which

side first violates an agreement. Moreover, would

the employees involved lose their right to choose

representatives and to bargain through them? Is

the protection of the Act withdrawn from all em-

BS Ss

Si

loyees because of the misconduct of some? These

roblems do not arise if the Act is construed ac-

ding to its plain terms. They do arise under

e doctrine enunciated by the court below.

CONCLT'SION

Wherefore it is respectfully submitted that this

tition for a writ of certiorari to review the judg-

ent of the Circuit Court of Appeals for the

eventh Circuit should be granted.

d N. A. TOWNSEND,

, Acting Solicitor General.

CHARLES Fany,

General Counsel,

Nattonal Labor Relations Board.

JULY 1938.

GOVERNMENT PRINTING OFFICE: 1938