Petition for a Writ of Certiorari — Neptune Meter Co. v. National Labor Relations Board

~ Supreme Oourt, U &

FILAD

FILE COPY JAN 17 1947

Seen TCMORE TROP EY

IN THE

Supreme Court rf the United States

Ocroser TERM, 1946

NEPTUNE METER COMPANY,

Petstioner,

against

NATIONAL LABOR RELATIONS BOARD,

Respondem.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES CIRCUIT COURT OF APPEALS

FOR THE SECOND CIRCUIT AND BRIEF €

IN SUPPORT THEREOF

EDWARD L. COFFEY,

Counsel for Petitioner.

—

SORBET PO

pam et

ee

INDEX

PAGE

PETITION FOR WRIT OF CERTIORARI ............44. 1

SO k's Os bbs ove aen hse hop A0kea Ch eR eh eS OS 1

po eee eres Cera | Piskeweeeeshega 2

CTT PETC ETS Ce eer ee eee 2

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The Questions Presented .........N...0.e eee: 7

Specification of Errors to be Urged ....\....... 9

Reasons for Granting the Writ ..........)...... 9

BRIEF IN SUPPORT OF PETITION FOR CERT

I. The decision of the Court below #6 directly in

conflict with the decision of the Seventh Circuit

Court of Appeals in Keystone Steel & Wire

Corp. v. N. L. R. B., 155 F. (2d) 553, now

awaiting argument in this Court (October

Term 1946, Docket 544) and with decisions of

other Circuit Courts of Appeals ............ 13

II. The ruling of the Court below that the decision

of the Board on the “Successor Union” issue is

for all practical purposes non-reviewable was

based on an erroneous interpretation of the

OEE WE SEE IE na cp anxncauctonwaas 17

III. Whether the Board has power to make an

order which, in effect, prohibits petitioner from

bargaining with any but a nationally affiliated

Union although its employees prefer to be rep-

resented by an independent Union presents a

question of importance in the administration of

PME Rte 6an60 0G en05 66 agaawe she pe bas 20

ii

CITATIONS

Cases:

PAGE

A. E. Staley Manufacturing Co. v. N. L. R. B., 117

F. (2d) 868 (CCA 7th, 1941) .......---- eee eee 15

Commonwealth Edison Co. v. N. L. R. B., 135 F. (2d)

891 (CCA 7th, 1943) 0... eee eee eee eens 15

Consolidated Edison Co. v. N. L. R. B., 305 U.S. 197

.. Peewerreren Srrreir rere) ttt ce eee 22

De Bardeleben v. N. L. R. B., 135 F. (2d) 13, (CCA

i. BO a aia Faas ee vs ts Rrra enw 10

E. I. du Pont de Nemours & Co. v. N. L. R. B., 116

F. (2d) 388, (CCA 4th, 1940) Cert. Den. 313 U.S.

571, 61 S. Ct. 959, 85 L. Ed. 1529 .......--+---. 10

Foote Bros. Gear & Machine Corp. v. N. L. R. B., 114

F. (2d) 611, (CCA 7th, 1940), remanded 311 U. 5.

620 (1940), reaffirmed 121 F. (2d) 802 (1941). .14, 20

Humble Oil & Refining Co. v. N. L. R. B., 113 F. (2d)

85 (CCA 5th, 1940) .... 2... eee eee eee eee eee 15

International Association of Machinists v. N. L. R. B.,

SEL U.S. 72 CUSRD) «ww ew ees e eect eect ees 18

Keystone Steel & Wire Co.,v. N. LR. B., 155 F. (2d)

SES CIDAB) on on wc chasse cc enews e emcee nsserns 13

Magnolia Petroleum Co. v. N. L. R. B., 112 F. (2d)

545 (CCA Sth, 1940) ........-. eee eee eee eees 16, 20

N.L.R.B.v. Columbian Enameling & Stamping Co.,

BO UTS. Be, EES) i wc eww ccc caceavensaes 18

N.L. R. B.v. Donnelly Garment Co., October Term

(1946) Docket Nos. 38-39 .. 2.2.6.0: +s sree ees 21

N.L.R.B.v. Duncan Foundry & Machine Works,

Inc., 142 F. (2d) 594 (CCA 7th, 1944) .......-.. 15

—

iii

PAGE

N.L.R. B.v. El Paso Electric Co., 133 F. (2d) 168

CCA Bay Se Feds Wak Saas Cacia Bets 16

N.L. R. B. v. Fansteel Metalurgical Corp., 306 U. S.

Dee CY ns Pere eee ele ck ces 22

N.L. R. B. v. Gutmann & Co., 121 F. (2d) 756 (CCA

Fis CORED & ca bne nha Vices bh envaeee eel 15

N. L. R. B. v. Hollywood-Maxwell Co., 126 F. (2d)

BOD CEA Sie, WG: ois idea wreh dvd ek aces 16

N. L. R. B.v. Keystone Steel & Wire Co., October

Term -(1946) Docket No. 544.0... 50... cect ceca 9

N. L. R. B. v. Link-Belt Co., 311 U. S. 584 (1941)... 18

N.L. R. B. v. Southern Bell Tel. & Tel. Co., , 319 VU. S.

| Sy epee meet anit cibige ake ete es 18

N. L. R. B. v. Standard Oil Co., 138 F. (2d) 885

ERs, SUE 6 Deca w eh k bake ode ee 10, 17

Statutes:

Judicial Code, Section 240(a) as amended (28 U. S. C.

CY | new co emireppe tees tens Ser WARE END A 2

National Labor Relations Act,»49 Stat. 449, 29 U.S. C.

§ 151 seq.

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UNUM sc vk a u en 6 cad eahenu kaa ocean 23

ae RPE AD aa gccn iy nh diay By 11, 21, 24

re A ERIS Met I aA a0 2, 24

Se eeEY oe oe eee 2, 24

ee

IN THE

Supreme Court of the United States

OcToBER TERM, 1946

«

NEPTUNE METER COMPANY,

Petitioner,

against No

NATIONAL Lazpor RELATIONS Boarp,

Respondent.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES CIRCUIT COURT OF APPEALS

FOR THE SECOND CIRCUIT

To the Honorable, the Chief Justice of the United States

and the Associate Justices of the Supreme Court of the

United States:

Your petitioner, Neptune Meter Company, respectfully

prays that a writ of certiorari be issued to review the

decree of the United States Circuit Court of Appeals for

the Second Circuit, entered in the above cause on Decem-

ber 20, 1946 modifying and, as modified, enforcing an

order of the National Labor Relations Board dated March

6, 1946.

Opinions Below

The opinion of the Circuit Court of Appeals for the

Second Circuit (R. 753-773) has not, as yet, been officially

reported. The findings of fact, conclusions of law and

—7

2

order (R. 670-700) of the National Labor Reiations Board

(hereinafter referred to as the “Board’’) are reported in

66 N. L. R. B. 292.

Jurisdiction

Tie decree of the Circuit Court of Appeals sought to

be reviewed was entered on December 20, 1946 (R. 774-

776). The jurisdiction of this Court is invoked under Sec-

tion 240(a) of the Judicial Code, as amended (43 Stat. 938,

28 U. S. C. Sec. 347(a)) and Section 10(e) and (f) of the

National Labor Relations Act (49 Stat. 454, 29 U.S. C.

Sec. 160(e) and (f)).

Statute Involved

The statute involved is the National Labor Relations

Act (49 Stat. 449, 29 U.S. C. Sec. 151 et seq., hereinafter

referred to as the “Act’’). The pertinent provisions of the

Act are set forth in the appendix to the accompanying

brief.

Statement of the Case

The Circuit Court of Appeals for the Second Circuit

by a divided court has affirmed an order of the Board finding

that petitioner had violated the Act by dominating a labor

organization known as Independent Employees Association

(hereinafter referred to as IEA) and ordering petitioner

to ‘“disestablish” the IEA and not to recognize or deal in

the future with any labor organization as the representa-

tive of its employees unless and until such organization is

certified by the Board. The Board’s complaint in this pro-

ceeding was issued on March 22, 1945 and hearings were

held before a Trial Examiner during April 1945. The IEA

was permitted to intervene and presented evidence and ar-

3

guments in opposition to the contentions of the Board.

The material facts on which the Board’s order was based

may be summarized briefly as follows:

Beginning in 1919 and prior to the passage of the Act

the Company participated with its employees in an organi-

zation known as the “Congress” which dealt with questions

of wages and working conditions. Upon passage of. the

Act in 1935 the Company immediately disbanded the Con-

gress, and notified its employees of this fact and of their

rights under the Act to select a labor organization of their

own choosing.

The employees thereafter formed Employees Represen-

tative Organization (hereinafter referred to as “ERO”)

which bargained collectively with management for approxi-

mately nine years. During this period the Company with-

out discrimination allowed representatives of the ERO to

use company premises and other facilities and. permitted

such employees to receive their regular pay during the time

spent in attending meetings or otherwise conducting the

business of the ERO. Because of these facts and

circumstance that ERO followed the “Congress” the Boa

in or about June 1944 brought proceedings to disestablish

ERO.

During the course of the Board’s hearings on the ERO

in July 1944 various employees who attended reached the

conclusion that the ERO or a reorganization of ERO would

not satisfy the Board and decided to form an entirely new

organization (R. 224-225, 227-228, 232, 244). These em-

ployees, who had been representatives in the ERO (R.

246), thereupon enlisted the aid of other employees and

began soliciting initiation fees and applications for member-

4

ship in what they advised was to be a “brand new organiza-

tion” (R. 229-233). The organizers for the new union,

which became known as the IEA, engaged the services of

an attorney and at a mass meeting of employees held on

August 30, 1944, attended by a very large majority of the

employees, elected temporary officers (R. 234, 295-296;

Board’s Exhibit 8, R. 517-522). A Constitution and By-

Laws were adopted at a subsequent mass meeting held on

October 4, 1944 (R. 304; Board’s Exhibit 8, R. 523-524).

Meanwhile, on September 6, 1944, the Board’s Trial

Examiner handed down his intermediate report recommend-

ing disestablishment of the ERO (Board’s Exhibit 2, R.

474-493). On September 21, 1944 the Company complied

with such recommendation, withdrew secognition from the

ERO and posted throughout its plant notices of disestab-

lishment in the form recommended by the Trial Examiner

(Respondent’s Exhibit 1, R. 607-608).

The IEA, claiming to represent a majority of the em-

ployees, made its first demand upon the Company for recog-

nition on September 7, 1944 (R. 401), and this demand

was rejected by the Company (R. 309-310, 402). When

the Company’s refusal to recognize IEA was communicated

to its members at the mass meeting on October 4th strenu-

ous disapproval was registered by the employees present

(R. 312), who insisted upon immediate recognition by the

Company (R. 523-524). A walkout, the first in the history

of the Company, followed (R. 393), and the representatives

of the IEA were sent back with instructions to force the

issue with management (R. 392-393).

On October 6, 1944 a representative of a union affili-

ated with the American Federation of Labor called on

the management claiming to represent certain workers in

-—

5

the foundry of the Company’s plant and asking for recogni-

tion of his union (R. 201-203). His claim was similarly

rejected by the Company, and he did not press the issue

further with the Company (R. 203).

The IEA, however, did press the issue, demanding

recognition again and threatening another work stoppage

(R. 278-280, 392,404), and after a long and stormy ses-

sion with management on October 12, 1944 agreement was

obtained that the Company wouid recognize IEA if it could

prove that it represented a majority of the Company’s em-

ployees (R. 392, 404-405). Recognition was granted two

days later after a check of IEA membership cards against

the signatures on the payrolls showed a representation by

IEA of over 600 employees out of a total of approximately

725 eligible employees (R. 316-317, 394-395).

The final organization of IEA was not completed until

December, 1944, at which time permanent officers were

elected (R. 184-186). This was approximately 214 months

after the first notices disestablishing ERO were posted.

The Constitution and By-Laws had not been adopted until

October 4, 1944 (R. 304; Board’s Exhibit 8, R. 523-524),

about 2 weeks after the posting of the disestablishment

notices.

In addition to the foregoing facts bearing on the

organization and recognition of IEA, the record showed

that the Company took no part in the formation of IEA

and contribited no financial or other support to it (R. 147,

235, 353-354, 397), nor did Company supervisors or officers

at any time participate in or give encouragement to IEA

(R. 147, 234, 296-297, 398-399). The evidence wholly

failed to show any actions or statements by the Company

hostile to other unions or any instance of discrimination

6

against members of other unions, but it affirmatively ap-

peared that-a union affiliated with the CIO freely carried

on an active organizational campaign throughout this

period (R. 399-401, 718-719). The desire of a iarge ma-

jority of the employees to be represented by IEA and their

vigorous insistence that the Company must deal with IEA

was repeatedly manifested (R. 245, 94, 126, 234, 392-

393, 523-524, 350-351, 710-711, 718, 720).

Further important facts found by the Board were set

forth in the Trial Examiner’s report as follows (R. 695):

“* * * the undersigned further finds that the

IEA as an organization differs structurally from

the ERO in that the constitution and by-laws of the

former provide, inter alia, for regular meetings

of the general membership, membership dues and

initiation fees, and autonomy in the election of offi-

cers and further conduct of its business as a labor

organization. Officers chosen, with few exceptions,

have not been prominently identified with the prior

company dominated organizations. Beginning with

the organizational meeting of August 30, 1944, all

of its meetings appear to have been held away from

Respondent's premises and outside of working

hours. No supervisors or officers of the Respondent

have participated therein. The contract executed

by the IEA and the Respondent on January 1, 1945,

appears to have been agreed upon after several bar-

gaining conferences and incorporates certain benefits

not previously enjoyed by the employees. Standing

alone, it would not seriously challenge the legitimacy

of the organization. In short, it appears that the

IEA has made a consistent effort to divest itself

of the indicia of company domination (R. 695).”

Upon the foregoing facts the Board found that the

Company was dominating and interfering with and con-

7

tributing support to the IEA in violation of Section 8(1)

and (2) of the Act (R. 697-698), and by the order now

under review the Board directed the Company to “dis-

establish” the IEA and prohibited the Company from bar-

gaining or dealing with any labor organization represent-

ing its employees unless and until such organization was

certified by the Board (R. 673-675).

Following issuance of the Board’s order on March 6,

1946 the IEA served notice upon the Company that ap-

proximately 700 of the Company’s employees had unani-

mously resolved at a meeting to resist the Board’s order

and that the IEA intended to contest the order in the courts

and demanded its continued recognition by the Company

(R. 710-711). A motion was then made by the Company

for a stay of the order, and this was denied by the Board

by its order of March 22, 1946 (R. 723). A motion by

the IEA to reopen the proceedings before the Board or

for an election or clarification of the Board’s order was

denied by an order of the Board dated March 29, 1946

(R. 726).

The Company petitioned the court below to review and

set aside the Board’s order on May 6, 1946, following the

filing of a similar petition by the IEA. The Board

answered and filed a cross petition for enforcement of its

order. The court dismissed the petitions for review and

entered its decree (R..774-776) enforcing, with a slight

modification in language, the order of the Board.

The Questions Presented

1. Whether, in the absence of any evidence of inter-

ference by the employer or its supervisors in the organiza-

tion of an independent union and of any history of hostility

~

8

toward or discrimination against nationally affiliated unions,

and where the great majority of the employees have affirma-

tively shown, their desire for an independent union; the

independent union differs structurally from a former union

found to be company-dominated; its temporary president

and vice-president, and all of its permanent officers were

neither officers of nor prominently identified with the prior

union; and its meetings have been held away from the com-

pany’s premises and outside of working hours, the court

below erred in permitting the Board to conclude that the in-

dependent union was also company-dominated from the

circumstances that employees who had been prominent in

the former union took a leading part during the formative

stages of the independent union, but not thereafter, and

that the preliminary organization of the independent union

occurred before thesdisestablishment of the former union.

2. Whether, in ine light of the record, the court below

erred in holding that there was substantial support in the

evidence for the Board’s finding that petitioner had violated

Section 8 (1) and (2) of the Act by dominating, interfering

with and contributing support to the IEA.

3. Whether the court below has incorrectly interpreted

the decisions of this Court dealing with the question of

“successor unions” by considering that a decision of the

Board on this question is for all practical purposes not

open to review by the courts.

4. Whether the court below erred in failing to set aside

the order of the Board as beyond the power and authority

of the Board under the Act in that (a) the requirement

that petitioner “disestablish” the union desired by the

majority of its employees would not, upon the facts in

_

9

this record, effectuate the policies of the Act but would

defeat such policies, and (b) the requirement that peti-

tioner shall not recognize or deal with any labor organiza-

tion as representative of its employees until and unless

certified by the Board is unauthorized and in contravention

of the principles of the Act.

Specification of Errors to be Urged

The Circuit Court of Appeals in affirming the order of

the Board erred in its rulings on each and all of the fore-

going questions.

Reasons for Granting the Writ

Like the case of N. L. R. B. v. Keystone Steel & Wire

Co. now awaiting argument in this Court (October Term,

1946, Docket No. 544), this case presents for determina-

tion a conflict of authority between the court below and

other Circuit Courts of Appeals. The existence of this

conflict was recognized and urged upon this Court in the

Solicitor General’s petition for the writ of certiorari which

was granted on November 12, 1946 (see Keystone petition,

p. 14). The decision of the Seventh Circuit in the Key-

stone case was represented by the Solicitor General as being

in conflict. with earlier decisions of the Second Circuit,

which in turn were relied upon by a majority of that court

in deciding the case at bar. (See R. 764-765; Keystone

petition, pp. 14-17).

In the case at bar the Second Circuit, as did the Seventh

Circuit in the Keystone case, had before it an unafhliated

union which had been conceived and organized by employees

without company interference. In each of the two cases a

A ey

10

previously existing union, found by the Board to have been

company-dominated, had been voluntarily dissolved. In

each case the Board concluded that the subsequently organ-

ized independent union was a “successor” to the earlier

company-dominated union and therefore that it, too, was

company-dominated.

In the Keystone case (155 F(2d) 553), the Board’s

conclusion was reversed by a divided court, the majority

saying (at p. 558): “The Board further found that at the

same time the members of KEA [the earlier company-dom-

inated union] decided to abandon it, they also decided to

establish Alliance, another unaffiliated d_union. This, of

course, is a violation of no statute. E. J. du Pont de

Nemours & Co. v. N. L. R. B., 4 Cir., 116 F. 2d 388, cer-

tiorari denied 313 U. S. 571, 61 S. Ct. 959, 85 L. Ed. 1529;

De Bardeleben v. N. L. R. B., 5 Cir., 135 F. 2d 13.” In

the case at bar a divided court affirmed the conclusion of

the Board and relied upon the following language from one

of its earlier decisions* (R. 765): “* * * certainly when

the sequence is not broken by a substantial period, marked

at the outset by an outright repudiation of whatever has

gone before, we shall regard the matter as not open to

review unless the Supreme Court advises us to the con-

trary”.

Other similarities in fact and conflicts as to the law

between the case at bar and the Keystone and other Sev-

enth Circuit decisions will be discussed in the accompany-

ing brief. We shall also show there that holdings of the

Fifth and Ninth Circuits are in accord with the Seventh

Circuit and in conflict with the holding in the court below.

*N. L. R. B. v. Standard Oil Co., 138 F (2d) 885.

11

In addition, the Circuit Court of Appeals for the Second

Circuit has gone so far in holding that the conclusion by

the Board that an employer is dominating a “successor”

union is for all practical purposes not open to review at all

(R. 772), that it is not only in conflict with the other

Circuit Courts referred to above but has, we believe, mis-

interpreted the decisions of this Court, and has so far

departed from the accepted and usual course of judicial

proceedings as to call for an exercise of this Court’s power

of supervision.

The inappropriateness of the Board’s order requiring

a “disestablishment” on the facts of this case presents an

important question as to the scope of the Board’s power

under Section 10(c) of the Act. More important, the

provision of the Board’s order, affirmed by the court below,

prohibiting petitioner and its employees from engaging in

any of the rights of collective bargaining except through

a union which has received the prior certification and ap-

proval of the Board, presents a novel and important ques-

tion in the administration of the National Labor Relations

Act which should be passed upon by this Court.

WHEREFORE, for the reasons stated above and discussed

more fully in the annexed brief, it is respectfully submitted

that this petition for rit of certiorari to review the

decision of the Circuit Court of Appeals for the Second

Circuit should be granted.

NEPTUNE METER Company,

Petitioner.

By Epwarp L. Correy,’

Counsel for Petitioner.

January 17, 1947.

ne eas a emma gy

13

IN THE

Supreme Court of the United States

OctToBeR TERM, 1946

NEPTUNE METER COMPANY,

Petitioner,

against No.

NATIONAL LaBor RELATIONS Boarp,

Respondent.

BRIEF IN SUPPORT OF PETITION FOR CERTIORARI

I

THE DECISION OF THE COURT BELOW IS DIRECTLY

IN CONFLICT WITH THE DECISION OF THE SEVENTH

CIRCUIT COURT OF APPEALS IN KEYSTONE STEEL &

WIRE CORP. vy. N.L.R.B., 155 F. (2d) 553, NOW AWAITING

ARGUMENT IN THIS COURT (OCTOBER TERM 1946,

DOCKET 544) AND WITH DECISIONS OF OTHER CIRCUIT

COURTS OF APPEALS.

The conflict between the circuits is illustrated by the

case of Keystone Steel & Wire Co. v. N. L. R. B., 155 F.

(2d) 553 (1946), certiorari granted by this Court Novem-

ber 12, 1946, where the Circuit Court of Appeals for the

Seventh Circuit held there was no substantial evidence that

a “successor” union was company-dominated. The court

so held despite evidence relied upon by the Board showing

14

that officers in a former company-dominated union took a

leading part in its formation, that the independent union

was quickly formed and promptly recognized by the com-

pany without verification of its claim to a majority, that

the independent succeeded to the treasury of the company-

dominated union and adopted a similar constitution, that

the company never posted notices disestablishing the old

union or announced to its employees at large that it would

respect their rights to select a union of their own choosing,

that company supervisors expressed hostility to other unions

and various supervisory employees joined the independent,

and that the company discriminated against other unions

in applying its rule against solicitation on company time.

The Court of Appeals for the Seventh Circuit held that

such facts do not support the inference that the independent

was a successor to the former union “in any material and

substantial respect.”

More specifically, the court also held (p. 558) :

“The fact that the former officers of K. E. A.

took the leading part in the formation of Alliance

and eventually became its officers is of no impor-

tance in determining the question of domination,”

The Seventh Circuit had previously rejected a similar

inference of the Board in Foote Bros. Gear & Machine

Corp. v. N.L.R.B., 114 F. (2d) 611, 619 (1940), remanded

311 U. S. 620 (1940), reaffirmed 121 F. (2d) 802 (1941):

“Egner’s active participation in the affairs of the

Independent is cited by the Board as evidence that

the former was merely a continuation of the repre-

sentative plan because Egner had formerly been a

leader of it. Such a conclusion is unwarranted. It

is natural for a man who is active in union affairs

t. Ce din J

15

to continue such activities because of his liking for

them. The end of the representation plan did not

change Egner’s personality, his ability, or his views.”

In contrast with this approach, the majority opinion in

the case at bar contains the following (R. 763):

“On the basis of inferences from these facts thus

found, the Board further found, in effect, as follows:

The fact that the company failed to disestablish

E. R. O. before the formation of I. E. A. and the

fact that I. E. A. was initiated and sponsored by a

group of E. R. O. officers. and representatives sug-

gested to the employees a substantial identity be-

tween I. E. A. and E. R. O.; the employees there-

fore would reasonably conclude that the company

approved I. E. A. as it had E. R. O. and the Con-

gress, so that the employees’ choice of I. E. A. was

‘not as free as the statute demands.’ ”

The decision below is also in direct conflict with other

holdings of the Seventh Circuit.’

The Fifth Circuit Court of Appeals, in dealing with

the question of successor unions, is also in conflict with

the Second Circuit. This is evidenced by the Fifth Cir-

cuit’s refusal to enforce the Board’s order disestablishing a

successor union in Humble Oil & Refining Co. v. N.L.R.B.,

113 F. 2d 85 (1940) on facts very similar to those in the

case at bar.

‘A. E. Staley Manufacturing Co. v. N.L.R.B., 117 F. (2d) ?

868 (CCA 7th, 1941) ; a

N.L.R.B. v. Duncan Foundry & Machine W orks, Inc., 142

F. (2d) 594 (CCA 7th, 1944) ;

Commonwealth Edison Co. v. N.L.R.B., 135 F. (2d) 891

(CCA 7th, 1943) ;

N.L.R.B. v. Gutmann & Co., 121 F. (2d) 756 (CCA 7th.

1941) ;

Be

16

In that case, the Court stated in commenting on the activ-

ities of the leaders of the old organization in the formation

of the new (at p. 92),

“The Board lays some stress on the fact that

Thomas, who first set to work on the Baytown con-

stitution, had been a secretary of the employees’ rep-

resentatives under the Joint Conference plan and had

been a leader in the Security League drive against

the union. He was a man of college education and

well qualified to lead. He was an employee with-

out any supervisory authority. We see nothing

either in his familiarity with the old plan or in his

pronounced opposition to the union which would

disqualify him to lead in the new organization.”

Other decisions of the Fifth Circuit in the field of succes-

sor unions are also in conflict with the Second Circuit,’ and

the only reported decision in the Ninth Circuit dealing with

the question also shows a conflict with the decisions in the

Second Circuit Court of Appeals? —

The error of the court below in sustaining an order of

the Board based upon facts which courts of other circuits

have held do not constitute substantial evidence, calls for

the exercise of this Court’s powers of review.

*Magnolia Petroleum Co. v. N.L.R.B., 112 F. (2d) 545

(CCA 5th, 1940) ;

N.L.R.B. v. El Paso Electric Co., 133 F. (2d) 168 (CCA

5th, 1943).

5N.L.R.B. vy. Hollywood-Maxrwell Co., 126 F. (2d) 815

(CCA 9th, 1942).

17

Il

THE RULING OF THE COURT BELOW THAT THE

DECISION OF THE BOARD ON THE “SUCCESSOR UNION”

ISSUE IS FOR ALL PRACTICAL PURPOSES NON-REVIEW-

ABLE WAS BASED ON AN ERRONEOUS INTERPRETATION

OF THE HOLDINGS OF THIS COURT.

The question of substantial evidence is of particular

importance in this case in view of the position taken by the

Circuit Court of Appeals for the Second Circuit that find-

ings of the Board as to illegal “successorship” are not open

to review by the courts. Its decision can We explained only

by the extraordinary limitation imposed’by it upon its own

powers of review. In its opinion, the court followed and

applied its former decision in the case of N. L. R. B. v.

Standard Oil Co., 138 F. (2d) 885 (CCA 2nd, 1943) and,

quoting from its opinion in that case, stated (R. 765):

“* © * ‘We understand the law tv be that the decision

of the Board upon that issue is for all practical

purposes not open to us at all; certainly not after we

have once decided that there was “substantial” evi-

dence that the “disestablished” union was immedi-

ately preceded by a period during which there was

a “dominated” union * * * and certainly when the

sequence is not broken by a substantial period,

marked at the outset by an outright repudiation of

whatever has gone before, we shall regard the mat-

ter as not open to review unless the Supreme Court

advises us to the contrary.’ We know of no sub-

sequent Supreme Court decision which so advises

us.”

This holding is based, we submit, upon a misunderstand- _

ing of the law as laid down in the decisioris of this Court.

7;

18

It has perpetuated an error which deprives petitioner of

a fair judicial review and which should be reviewed and

corrected by this Court. By having held that the issue of

“successorship” in this case is “not open to review”, the

court below appears to have departed from the rule of sub-

stantial evidence which requires, as this Court has stated,

that there be evidence “affording a substantial basis of fact

from which the fact in issue can be reasonably inferred”.

N. L. R. B. v. Columbian Enameling & Stamping Co., 306

U. S. 292, 299 (1939).

By excessively limiting its powers of review the court

below has reached a result wholly unjustified under the

decisions of this Court. This Court has indicated the

factors which will “lend credibility” to an inference of

company domination in a successor union case. Such

factors are the failure of the employer to disestablish a

former company-dominated union, acts by the employer

displaying hostility or discriminations against other unions,

or participation or influence exerted by foremen or super-

visors in the organization of an independent union—all of

which facts this Court has held may “make tenable” an

inference by the Board that the employer has interfered

with the free choice of his employees in the selection of a

labor organization. See /nternational Association of Ma-

chinists v. N. L. R. B., 311 U.S. 72 (1940) ; N. L. R. B.v.

Link-Belt Co., 311 U. S. 584 (1941); N. L. R. B. v. South-

orn Bell Tel. & Tel. Co., 319 U. S. 50 (1943).

In the present case such elements are entirely lacking.

Petitioner’s record is free from anti-union bias. Its offi-

cers, foremen and supervisors have taken no action,

directly or indirectly, to assist the organizing activities of

the IEA or to oppose those of any rival union. Petitioner

ee

19

has formally withdrawn recognition and posted notices dis-

establishing a former organization in the very manner

directed by the Board (R. 388-389, 395-396). The absence

in this case of such factors as might lend credibility to a

finding of company domination i§ an indication of the ex-

tent to which the court below has misinterpreted the deci-

sions of this Court.

In this respect, as Judge Swan points out in his dis-

senting opinion below (R. 772), the Circuit Court of

Appeals has gone much further than have other circuit

courts. Courts in other circuits have not considered that

they are bound, for all practical purposes, to accept the

Board’s inference that an employee is dominating a so-

called successor union but on the contrary have conceived

that their duty as reviewing courts under the statute re-

quires a careful review of the evidence and an independent

determination whether the Board’s inferences and conclu-

sions are reasonable and fair. Thus, the Circuit Court of

Appeals for the Fifth Circuit in setting aside the Board’s

finding of company-domination of an alleged “successor

union”, has stated:

“When then, as here, the Board applies to this

court for enforcement of its order, and there is a

substantial challenge of the findings and order as

unsupported by evidence, it is the duty of this court

to examine the evidence for itself, not, of course, to

determine what fact inferences it, acting as a trier,

would have drawn, what fact findings it would have

made, but to determine whether reasonable minds

having no interest as accuser or otherwise in the

result, but wholly impartial, could, upon the evi-

dence, have legally and fairly drawn the fact infer-

ences, made the fact findings. And, when, it is clear

20

as here, that the material evidence, is entirely with-

out dispute; that no witness denies a fact to which

another testifies; that in short, the findings are

based, not upon conflicting but upon non-conflicting

evidence, our determination as to whether the

Board’s findings must stand or fall must not rest

upon whether the Board deems that the inferences

it drew are supported by substantial evidence. It

must rest upon whether measured by the settled

rules governing the review of jury verdicts, it is

the opinion of this court that the undisputed facts

are in law capable of fairly giving rise to the fact

inferences the Board has drawn.” Magnolia Petro-

leum Co. v. N. L. R. B., 112 F. (2d) 545, 549

(1940).

To the same effect, see Foote Bros. Gear & Machine Corp.

v. N. L. R. B., supra, at page 621.

It is a question of utmost importance to employers and

employees affected by the National Labor Relations Act

that the existing conflict between the circuits in “successor-

ship” cases should be determined and that the proper powers

of review by the courts should be clarified and affirmed by

this Court.

iil

WHETHER THE BOARD HAS POWER TO MAKE AN

ORDER WHICH, IN EFFECT, PROHIBITS PETITIONER

FROM BARGAINING WITH ANY BUT A NATIONALLY

AFFILIATED UNION ALTHOUGH ITS EMPLOYEES PREFER

TO BE REPRESENTED BY AN INDEPENDENT UNION

PRESENTS A QUESTION OF IMPORTANCE IN THE ADMIN.

ISTRATION OF THE ACT.

Enforcement of the Board’s order in this case amounts

to a permanent injunction requiring petitioner to refuse all

a

21

recognition to an independent union selected by the large

majority of its employees and recognized by petitioner

only after the vigorous insistence of its employees, enforced

by a walkout and threat of a further walkout in its plant.

The order further requires petitioner to refuse to deal with

any labor organization representing its employees unless

certified by the Board.

It is apparent that compliance with the decree can be

achieved only at the cost of a serious conflict with the wishes

of petitioner’s employees, resulting in probable industrial

strife and an interference with the employees’ freedom of

choice, which is opposed to the basic purposes of the

National Labor Relations Act. There is serious doubt

whether an order suspending all collective bargaining be-

tween an employer and his employees can be imposed under

a statute designed to protect the right to bargain collec-

tively. In short, as Judge Swan states in his dissenting

opinion below (R. 773), “the ‘remedy’ applied destroys

the very right which it purports to preserve, namely, the

right ‘to bargain collectively through representatives of

their own choosing’.””. Furthermore, this order will, con-

trary to the policies of the Act, inexorably drive petitioners’

employees into a nationally affiliated union in order to re-

solve their dilemma. For, as Judge Swan pointed out (R.

773), “The provision in the order of March 6th forbidding

recognition of any union until it shall be certified by the

Board will necessarily result either in compelling the em-

ployees to join a union affiliated with C. I. O. or A. F. of L.,

or in leaving them without a collective bargaining repre-

sentative for an indefinite period of time, * * *”. (See

N. L. R. B. v. Donnelly Garment Co., October Term 1946,

~ an

22

Docket Nos. 38-39, now awaiting decision by this Court;

and see R. 348-351).

The power of the Board to make affirmative orders

under Section 10(c) of the Act extends only to measures

which will “effectuate the policies” of the Act. In enforc-

ing the Board’s order in this case the court below has, we

believe, failed to heed the admonition of this Court that

the Board is without power to impose a penalty or to select

a remedy which is arbitrary and unreasonable.

N.L. R. B. v. Fanstcel Metalurgical Corp., 306

U. S. 240 (1939) ;

Consolidated Edison Co. v. N. L. R. B., 305

U. S. 197 (1938).

In no previous case, to our knowledge, has the Board

imposed such broad and sweeping requirements. The

power of the Board so to act presents a novel and important

question which should be passed upon by this Court.

CONCLUSION

The petition for a writ of certiorari should be granted.

Respectfully submitted,

Epwarp L. CorFrey,

Counsel for Petitioner.

23

APPENDIX

The pertinent provisions of the National Labor Rela-

tions Act (49 Stat. 449, 29 USC§ 151, et seq.) are as

follows:

“Sec. 7. Employees shall have the right to self-

organization, to form, join, or assist labor organiza-

tions, to bargain collectively through representatives

of their own choosing, 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 practice for

an employer—

(1) To interfere with, restrain, or coerce em-

ployees in the exercise of the rights guaranteed in

section 7.

(2) To dominate or interfere with the forma-

tion or administration of any labor organization or

contribute financial or other support to it: Provided,

That subject to rules and regulations made and pub-

lished by the. Board pursuant to section 6(a), an

employer shall not be prohibited from permitting

employees to confer with him during working hours

without loss of time or pay.

Se eee Se

Sec. 9. (a) Representatives designated or se-

lected for the purposes of collective bargaining by

the majority of the employees in a unit appropriate

for such purposes, shall be the exclusive representa-

tives of all the emloyees in such unit for the pur-

poses of collective 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

- —_——

Tg

24

right at 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 engaged 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. * * *

(e) * * * The findings of the Board as to the

facts, if supported by evidence, shall be conclusive.

* **

(f) * * * the findings of the Board as to the

facts, if supported by evidence, shall in like manner

be conclusive.”