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

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for Writ of Certiorari
- **Published:** January 1, 1939
- **Citation:** 306 U.S. 292

## Text

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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

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386401_0118%3A2. Public record. Not legal advice.