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Significant Decisions in Labor Cases*

Labor Relations

Superseniority. In a unanimous decision, the U.S. Supreme Court upheld a finding of the National Labor Relations Board that a struck company committed an unfair labor practice by awarding 20 years of extra seniority to strike replacements and employees who returned to work during the strike, even if the company's action was motivated by a legitimate business purpose. The Board had refused to accept evidence supporting the company's argument that granting of additional benefits was necessary to keep its operations going during the strike.

During a strike following an impasse in contract negotiation, the company notified the union. members that it intended to begin hiring replacements and that strikers would retain their jobs until replaced. It assured replacements that they would not be laid off or discharged after the strike and subsequently granted 20 years' seniority, for layoff purposes only, to replacements and strikers who returned to work. The strike eventually collapsed as increasing numbers of strikers returned to work, and the company reinstated those strikers whose jobs had not been filled. A substantial number of employees resigned from the union.

The union subsequently filed an unfair labor practice charge with the National Labor Relations Board, which held, without finding on the employer's intent, that the granting of superseniority violated the guarantees of section 8(a) (1) and (3) of the Labor Management Relations Act that employees shall not be discriminated against for engaging in protected concerted activities. The employer had argued that its overriding purpose in granting additional seniority was to keep its plant open and that business necessity justified its conduct. It was further argued that the right to grant extra seniority was a corollary to the recognized right of employers to replace strikers.2

In the Board's view, granting of superseniority was distinguishable from replacement of strikers in that the latter affects only employees replaced, whereas the former affects the tenure of all strikers. Unlike the replacement of strikers, the Board had said, superseniority creates a cleavage in the plant continuing long after the strike is ended. "Employees are henceforth set apart into two groups: Those who stayed with the union . . . and those who returned before the end of the strike and thereby gained extra seniority. This difference is reemphasized with each subsequent layoff ... and stands as an ever-present reminder of the dangers connected with striking and with union activities in general." The Board concluded that even if the business purpose alleged by the company were indeed its true principal purpose, it was not sufficient to justify the granting of superseniority.

The court of appeals denied the Board's petition for enforcement, but its decision was reversed by the Supreme Court. Speaking for the Court, Justice White endorsed the Board's conclusion that superseniority has a greater impact on union activities than the replacement of strikers which has been declared to be lawful. He emphasized the importance of the strike as an economic weapon and the necessity of protecting that weapon from undue interference. He pointed out that the weighing of the complex interests involved here was within the competence of the Board and that its findings were supported by substantial evidence. The Board could, therefore, properly decline to consider evidence as to whether the employer's actions were motivated by the claimed business purpose.

Uncertain if the Court intended to hold that the Board could disregard the employer's motive in any case involving superseniority, Justice Harlan concurred in this case that the Board was justified in striking down the 20-year superseniority without examining evidence as to the employer's

*Prepared in the U.S. Department of Labor, Office of the Solicitor. The cases covered in this article represent a selection of the significant decisions believed to be of special interest. No attempt has been made to reflect all recent judicial and administrative developments in the field of labor law or to indicate the effect of particular decisions in jurisdictions in which contrary results may be reached based upon local statutory provisions, the existence of local precedents, or a different approach by the courts to the issue presented.

1 NLRB v. Erie Resistor Corp., 53 LRRM 2121 (May 13, 1963). For a summary of the NLRB decision, see Monthly Labor Review, October 1961, p. 1111.

NLRB v. Mackay Radio and Telephone Co., 304 U.S. 333 (1938).

business motive. He believed, however, that under some circumstances, such examination by the Board might be necessary, including, for example, the granting of extra seniority for considerably shorter periods of time.

Railway Labor Act

Union Dues. The U.S. Supreme Court held 3 that under union shop agreements protected by the Railway Labor Act, unions may not exact funds from employees for political purposes over the employees' express objection. The Court also said that it was not necessary for an employee to allege and prove each distinct political expenditure to which he objected, so long as his opposition to any political expenditures is made known to the union.

When the union shop agreement went into effect, certain employees refused to pay periodic dues, initiation fees, and assessments uniformly required as a condition of acquiring or maintaining membership in the union. They brought an action in a North Carolina court, seeking to enjoin enforcement of the union shop agreement because of alleged expenditures by the unions for political purposes which they disapproved. The court prohibited the union from compelling employees to join its ranks or to pay any of the union fees, but provided that the injunction would be modified appropriately when the union had shown what proportion of these funds was reasonably necessary and relevant to collective bargaining.

The Supreme Court, in accordance with its decision in International Association of Machinists v. Street, agreed that it was improper for unions under a union shop agreement to use exacted funds for political purposes where employees affirmatively protest such expenditures. On the other hand, it concluded that the State trial court had erred in permitting employees to withhold all payments to the union pending a showing by the union as to the proportion representing political expenditures. As the Court suggested in the Street case, the employees were obliged, as a

* Brotherhood of Railway and Steamship Clerks v. Allen 53 LRRM 2128 (May 13, 1963).

367 U.S. 740 (1961); for summary, see Monthly Labor Review, September 1961, pp. 998–999.

5 Brotherhood of Locomotive Engineers v. Louisville and Nashville Railroad Co., 52 LRRM 2944 (April 29, 1963).

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condition of continued employment, to make payments to their unions, though they might seek injunctive relief against expenditures which they opposed and restitution of that portion of payments made to the unions which had already been wrongly expended.

The Supreme Court went beyond the remedies outlined in the Street case and suggested a refund to employees of exacted funds in the same proportion that union political expenditures bore to total union expenditures, and a similar reduction of future demands. The Court noted that the unions bear the burden of proof as to the size of the proportion since they are in the possession of financial records. The Court also took note of the difficulty involved in solving these problems through court action and suggested that unions work out internal procedures excusing dissenters from assessments to the extent that they will be used for political purposes. Nevertheless, the Court indicated that it could fashion a judicial remedy if necessary.

Justice Harlan, while agreeing with the Court in its reversal of the State court decision, believed that union members objecting to political expenditures should be required to specify the particular payments which they oppose.

Antistrike Injunction. The U.S. Supreme Court ruled that a railroad union was properly enjoined from striking in support of its interpretation of the National Railroad Adjustment Board's award of backpay to a discharged employee.

The railroad company dismissed an employee for allegedly assaulting other employees; the employee's union protested. When grievance procedures failed to resolve the dispute and the union threatened to strike, the employer submitted the matter to the National Railroad Adjustment Board. The Board sustained the employee's claim, but a controversy arose subsequently as to whether the Board ruling had awarded the employee total backpay or whether the employer could deduct the amount the worker had earned elsewhere during the period of his dismissal. The union continued to threaten a strike; after the Board turned down the employer's request for clarification of the award, he obtained injunctive relief from a Federal district court. The court held that, under the Railway Labor Act, the union could not legally strike to enforce its interpretation

of the Board's money award, but should instead seek judicial enforcement provided by the act.

Justice Stewart, speaking for the majority, concluded that the grievance procedures set forth in the act were a "mandatory, exclusive, and comprehensive system for resolving grievance disputes," and that a party cannot defeat it by resorting to another forum or by striking in order to enforce its interpretation of a Board ruling. He noted that in Trainmen v. Chicago R. & I.R.R. Co., the Court held that a strike called by the union while Board hearings on a grievance were in progress violated those provisions of the act which make minor dispute procedures compulsory on both parties. He saw no distinction between. a strike to compel compliance with a Board ruling and a strike to enforce union demands while Board hearings were pending.

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Justice Stewart noted that this case involved a monetary award and, therefore, was not final and binding under the act. He pointed out that the act specifically provides that suits may be instituted in Federal district courts to enforce such awards. Board findings are regarded as prima facie evidence of the facts stated in the complaint. He concluded that a strike in this instance would be no less destructive of the statutory procedures than a strike called while Board procedures were in progress.

Justices Goldberg, Douglas, and Black dissented. In his dissent, joined in by Justice Douglas, Justice Goldberg argued that the rationale of the Chicago Railroad case did not apply to this situation. In that case, the Court had concluded that a strike would interfere with a congressional intent to establish an exclusive and comprehensive system of compulsory arbitration for such disputes. Justice Goldberg pointed out that Chicago Railroad involved a nonmonetary award by the Railroad Adjustment Board. Such awards are final and binding under the act. present case involved a monetary award, which is not final and binding. He, therefore, did not regard such awards as subject to this comprehensive system of compulsory arbitration.

The

Justice Goldberg regarded the majority's decision as contributing to an unfair imbalance in favor of carriers. He noted that unions are not permitted to appeal to the courts or strike if the Board denies their claim, whereas the employer

can seek a court trial on the merits if the union wins. He, therefore, regarded it as particularly unfair to deny the union in addition the right to strike for the purpose of enforcing a favorable Board monetary award.

Federal-State Jurisdiction

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The Supreme Court held that State laws forbidding racial discrimination in hiring may be applied to interstate air carriers since they do not place an unconstitutional burden on interstate commerce and Federal law does not prevent such regulation.

Upon rejection of his job application by the airline, the petitioner filed a complaint with the Colorado Anti-Discrimination Commission alleging that the company had refused to hire him because he was a Negro. The Commission found that the airline had committed an unfair employment practice by refusing to select the petitioner solely because of his race, and ordered the airline to cease such discrimination and to offer the petitioner the first opening in its training school. The Supreme Court of Colorado affirmed the judgment of a lower State court setting aside the Commission's findings and dismissing the petitioner's complaint.

The argument that State regulation of interstate carriers relative to racial discrimination placed an undue burden on interstate commerce was founded on earlier decisions of the Court that have been overruled. The basis of this contention was that the subject must be free from differing schemes of regulation by the various States, and, if at all, it should be regulated uniformly by Congress. The earlier decisions, invalidating State laws concerning discrimination by interstate carriers, were based on the assumption that State laws requiring segregation and those forbidding it would otherwise both be valid, thus subjecting a carrier to conflicting State laws. Subsequent Supreme Court decisions, however, made it clear that this kind of burden could not exist. "Any State or Federal law," the Court.

353 U.S. 30 (1957)

1 Colorado Anti-Discrimination Commission v. Continental Air Lines; Green v. Same (U.S. Sup. Ct., Apr. 22, 1963).

Hall v. De Cuir, 95 U.S. 485 (1878); and Morgan v. Virginia, 328 U.S. 373 (1946).

Brown v. Board of Education, 347 U.S. 483 (1954); Bolling v. Sharpe, 347 U.S. 483 (1954); and Bailey v. Patterson, 369 U.S. 31 (1962).

said, "requiring applicants for any job to be turned away because of their color would be invalid."

In rejecting the argument that Federal law relating to racial discrimination in interstate commerce preempts State legislation in this field, the Court held that mere identity in purpose of Federal and State laws does not invalidate the State law. The Court then systematically examined the Federal regulation involved. Concededly, the Federal Aviation Act authorizes the Civil Aeronautics Board and the Federal Aviation Agency to prevent air carriers from subjecting any person to "any unjust discrimination." However, these agencies have not yet exercised the authority to prohibit racial discrimination by air

carriers, and as long as this power remains "dormant and unexercised," it does not preempt State legislation in the field, nor did Congress intend to bar such legislation.

Although the Railway Labor Act bars discrimination by unions against minority groups in employee representation and employer's assistance to unions in such discrimination, nothing in the act places a duty upon an employer to engage in fair employment practices.

The Court also disposed of a contention that the President's executive orders requiring nondiscriminatory pledges in Government contracts preempts the subject, noting that this airline had no mail contract with the Government and would not be subject to those executive orders.

Chronology of

Recent Labor Events

May 1, 1963

PRESIDENT JOHN F. KENNEDY announced that he had directed Secretary of the Interior Stewart Udall to conduct a review of safety regulations and practices in the coal industry, because of the loss of 59 lives in two recent mine disasters. (See also MLR, May 1963, pp. 560-561.)

May 3

ACCORDING to the U.S. District Court in Washington, D.C., the Railway Labor Act requires that employees have the chance to vote expressly for no collective bargaining representative in a representation election. The National Mediation Board had construed the act as forbidding such an express choice. The NMB maintained the rights of the majority are protected, because if only a minority of the employees in a craft or class return ballots, no representative is certified. The court held, however, that since the scope of the craft or class of employees is at the discretion of the NMB, the "no-union" choice is a necessary safeguard against arbitrary Board action. As a result of the suit-brought by the Association for the Benefit of Non-Contract Employees against the NMB—an election scheduled for the Railway Clerks and Machinists at United Airlines, Inc., was halted by injunction.

May 6

RATIFICATION of a 50-month Teamsters' union contract for 18,000 Montgomery Ward and Co. employees was announced, to provide increases averaging 9.8 cents the first year, 7.5 cents the second, and 5 cents in the third and fourth. A profit sharing plan (MLR, June 1963, p. 711), and improved health and welfare benefits which the union estimates will cost the company over $3 million a year were among terms of the contract effective June 1. (See also pp. 832-833 of this issue.)

Later in the month, six Teamster locals ratified a 3-year contract with Motor Transport Labor Relations, Inc., and 500 independent truckers in eastern Pennsylvania, southern New Jersey, Delaware, and northern Maryland providing increases up to 57 cents in wages and fringes. Except for road drivers or platform men and helpers, all covered employees received wage increases of 43 cents an hour during the agreement's first year. Road drivers received 12 to 33 cents, depending on previous rates; platform men and helpers received 23 cents. (See also p. 833 of this issue.)

May 7

THE SEAFARERS' INTERNATIONAL UNION rejoined the International Transportworkers Federation after being suspended and subsequently resigning from the federation 2 years ago (Chron. item for Apr. 18, MLR, June 1961) in a dispute over the union's aid to British seamen revolting against the leadership in their own union. When the federation lifted its suspension, the Seafarers withdrew its resignation.

May 12

AGREEMENT was reached by the Amalgamated Clothing Workers and the nationwide Clothing Manufacturers Association on a 3-year contract for 125,000 workers valued at about 26 cents an hour. Wages, which averaged $1.961⁄2 an hour for a 40-hour week, are to be raised 171⁄2 cents an hour on June 1. Health and welfare provisions include increases in disability benefits, hospital allowances (from $18 to $23 a day), incidental hospital expenses, and surgical payments. Employees with at least 1 year's service are to receive a third week of vacation. (See also p. 830 of this issue.)

May 13

A PRESIDENTIAL EMERGENCY BOARD appointed April 3 under the Railway Labor Act recommended gradual elimination of the jobs of most diesel locomotive firemen in freight and yard service, except where elimination would jeopardize safety or unreasonably burden other employees. (See also Chron. item for Mar. 4, MLR, May 1963.)

ENGINEERS on the nuclear ship Savannah, represented by the Marine Engineers' Beneficial Association, were paid off and dismissed by States Marine Lines, which has operated the ship under contract. The following day, Secretary of Commerce Luther H. Hodges announced the ship would not sail for 4 to 6 months while new engineers were trained, to replace those involved in the longstanding labor dispute (Chron. item for Aug. 12, MLR, Oct. 1962.)

THE U.S. Supreme Court held that employees covered by a union shop agreement under the Railway Labor Act are not required to pay that part of their dues used for political purposes to which they object. The case was Railway and Steamship Clerks v. Allen. (See also p. 825 of this issue.)

REVERSING a U.S. court of appeals decision in the Erie Resistor case (Chron. item for May 15, MLR, July 1962), the U.S. Supreme Court ruled that an employer violated the Labor Management Relations Act by offering 20-year seniority credit for determining layoffs to new employees hired as strikebreakers or to strikers returning to work. The Court held that since the National Labor Relations Board found that the "consequences upon employees'

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