A

IV

LITIGATION

COMPARISON of the Board's litigation during the past fiscal year with that of the preceding year shows a marked increase in both Supreme Court and circuit courts of appeals litigation cases in which enforcement or review of Board orders was sought. There was a similar increase in the number of contempt proceedings instituted by the Board. The number of suits for injunctive or declaratory relief against the Board remained substantially at its previous level.

During the fiscal year 1947, the circuit courts of appeals reviewed 70 Board orders, while the Supreme Court decided 5 cases arising under the act. The results of the Board's Supreme Court and circuit court litigation during the past year, and during its entire existence, are separately summarized in the following table: 2

Results of litigation for enforcement or review of Board orders, July 1, 1946, to June 30, 1947, and July 5, 1935, to June 30, 1947

1 One of these cases was remanded to the Board for additional findings on one point.

The proceedings for enforcement or review of the Board's orders in the circuit courts to a large extent were concerned with the sufficiency of the evidence upon which the Board's findings of unfair labor practices were predicated, and with the appropriateness of the Board's remedial orders. However, a considerable number of novel problems, arising from the administration of both the unfair labor prac

1 The past fiscal year was the last one in which the Board operated under National Labor Relations Act of 1935, as in force prior to amendments thereto effected by Title I of the Labor Management Relations Act of 1947 (Public Law 101, 80th Cong., ch. 120, 1st sess.). Unless otherwise indicated, all references to the act are to the old statute in effect prior to the amendments (act of July 5, 1935, ch. 372, 49 Stat. 449, 29 U. S. C. Sec. 151, et seq.). The figures on contempt litigation appear at p. 61, infra.

tice and representation provisions of the act, were also passed upon by the courts. The standards applied by the courts in reviewing the Board's findings, orders, and procedures have remained the same as in the past.

In view of the fact that the amendments to the National Labor Relations Act embodied in Title I of the Labor Management Relations Act, 1947 (enacted June 23, 1947, and effective August 22, 1947) became effective at approximately the end of the fiscal year 1947, several cases decided after the end of the fiscal year 1947, but fully litigated prior thereto, have been included among the cases selected for discussion.

THE SUPREME COURT

During the past year, the Supreme Court decided six cases under the National Labor Relations Act. Three of these involved the question of whether foremen and militarized or deputized plant guards are employees within the meaning of the act and entitled to the benefits of its collective bargaining provisions. A related case coming to the Supreme Court from the Court of Appeals of New York presented the issue of whether a State labor relations board could afford foremen in industries engaged in interstate commerce collective bargaining rights, without thereby trespassing on the domain reserved to the National Labor Relations Board by the Federal act. The fifth case dealt with the Board's power to reject postelection challenges to ballots cast in a Board-conducted election. The sixth involved the relationship between the Board and the courts, where the courts remanded a case to the Board to take further evidence. In all the cases the position urged by the Board was adopted by the Supreme Court.

In Packard Motor Car Co. v. N. L. R. B., 330 U. S. 485, the Supreme Court enforced an order requiring the employer to bargain collectively with the Foreman's Association of America, an unaffiliated union, which had been chosen by a majority of the employer's foremen as their representative in a Board-conducted election. The Court rejected arguments that since foremen were part of management they could not be employees for the purposes of the act, and that if they were employees they nevertheless could not constitute an appropriate unit for purposes of collective bargaining. The Court also approved as proper an appropriate unit composed of four different levels of foremen, i. e., the general foremen, foremen, assistant foremen, and special assignment men.3

In N. L. R. B. v. E. C. Atkins & Co., 331 U. S. 398, and N. L. R. B. v. Jones & Laughlin Co., 331 U. S. 416, the Court held that plant guards who were auxiliary military police and who were deputized as special police officers were employees within the meaning of the act and as such entitled to bargain collectively. In the Jones & Laughlin case the Court also held that it was proper for the plant guards to be members of and be represented in collective bargaining by the same union that represented the employer's production and maintenance employees.'

3 The Packard case is at the present time of only historical interest because the Labor Management Relations Act of 1947 (Public Law 101, 80th Cong., 1st sess., ch. 120) amended the definition of employee in sec. 2 (3) of the National Labor Relations Act to exclude therefrom supervisors and by sec. 2 (11) defined supervisors in a manner which clearly includes all foremen.

This part of the decision in the Jones & Laughlin case no longer represents the law, for the Labor Management Relations Act amended sec. 9 (b) of the National Labor Relations

In Bethlehem Steel Co. v. N. Y. S. L. R. B., and The Allegheny Ludlum Steel Corp. v. Kelley, 330 U. S. 767, the Court held that the New York State Labor Relations Board lacked the power to certify collective bargaining representatives for foremen in industries over which the National Labor Relations Board had taken jurisdiction. The Court pointed out that "If the two boards attempt to exercise a concurrent jurisdiction to decide the appropriate unit of representation, action by one necessarily denies the discretion of the other. The second to act either must follow the first, which would make its action useless and vain, or depart from it, which would produce a mischievous conflict." The Court therefore, in effect, ruled that as to all matters as to which the National Board had jurisdiction the State board was precluded from acting.5

In N. L. R. B. v. A. J. Tower Co., 329 U. S. 324, the Court upheld the Board's rule refusing to permit any challenges to be made to a voter's eligibility after the voter has cast his ballot and its identity has been lost through commingling with the other ballots. The Court recognized that the Board was merely applying the usual procedure followed in political and corporate elections, adding that "Long experience has demonstrated that once a ballot has been cast without challenge and its identity has been lost, its validity cannot later be challenged." In the case before the Court the application of this rule made it possible that the outcome of the election had been determined by the vote of a person who might not have been an employee at the time she cast her ballot, since the outcome of the election was determined by one vote. The court below had thought that the requirement that a union be selected by a majority of the employees in an appropriate unit was a jurisdictional requirement to the Board's finding that an employer had committed an unfair labor practice by refusing to bargain collectively with it. The Supreme Court rejected this

argument, stating:

The reliance of the court below upon the asserted jurisdictional requirement was misplaced. It is true that it is an unfair labor practice for an employer to refuse to bargain with a union only if that union was chosen by a majority of the voting employees. But the determination of whether a majority in fact voted for the union must be made in accordance with such formal rules of procedure as the Board may find necessary to adopt in the sound exercise of its discretion. The rule prohibiting post-election challenges is one of those rules. When it is applied properly, it cannot deprive the Board of jurisdiction to find an unlawful failure to bargain collectively. That is true even where it subsequently is ascertainable that some of the votes cast were in fact ineligible and that the result of the election might have been different had the truth previously been known. The rule does not pretend to be an absolute guarantee that only those votes will be counted which are in fact eligible. It is simply a justifiable and reasonable adjustment of the democratic process.

In N. L. R. B. v. Donnelly Garment Co., 330 U. S. 219, the Court dealt with six problems arising out of a disagreement between the Board

Act so as to prohibit the Board from certifying as the representative of plant guards who enforce plant rules against employees or other persons any union which admits or is affilated directly or indirectly with a union which admits members other than plant guards. Here again the Labor Management Relations Act of 1947 amended the National Labor Relations Act to make explicit the congressional intention in the matter. Thus sec. 10 (a) thereof was amended to provide that "the Board is empowered by agreement with any agency of any State or Territory to cede to such agency jurisdiction over any cases in any industry, (other than mining, manufacturing, communications, and transportation except where predominantly local in character) even though such cases may involve labor disputes affecting commerce, unless the provision of the State or Territorial statute applicable to the determination of such cases by such agency is inconsistent with the corresponding provision of this Act or has received a construction inconsistent therewith."

and the Circuit Court of Appeals for the Eighth Circuit as to what the Board's duties and powers were in a situation where the circuit court had remanded a case to the Board for the purpose of receiving and considering evidence which the circuit court believed the Board had improperly excluded at its first hearing of the case. Although the circuit court's opinion remanding to the Board had been based on the exclusion by the Board of testimony of employees that they joined a plant union of their own free will, the circuit court held when the case was again before it that the Board should have granted a new trial rather than merely receive the testimony previously excluded. The Supreme Court pointed out that while the construction of a court of its own mandate is usually controlling, the relationship between an administrative agency and the courts is such that an administrative agency on such a remand need not give a new trial but may instead take merely the excluded evidence. The circuit court had further held that the Board had not considered the evidence as directed by the remand. Although the Board in its decision had stated that it had "carefully considered" the evidence, the circuit court thought this statement was negatived by a subsequent statement by the Board that evidence of this type had so generally proved unpersuasive as to warrant the view that it was immaterial. The Supreme Court held that this generalization by the Board as to the worth of the testimony did not overcome the Board's assurance that it had considered the evidence. The Supreme Court likewise reversed holdings of the circuit court that a trial examiner who has once erroneously excluded evidence is not the proper person to sit to receive such evidence on a remand; that the Board should have tried issues as to the violence engaged in at other plants by the charging union; that the Board should on the remand have received other evidence in addition to that which the circuit court in its remand opinion had directed the Board to receive; and that the Board had erred by limiting the employer on one issue to background events occurring 6 months prior to the formation of the plant union, while allowing the Board on another issue to show background events occurring 2 years earlier.

THE CIRCUIT COURTS OF APPEALS

I. Business located within a Territory held subject to the act

The Board's finding that a department store business operating in Puerto Rico was subject to its jurisdiction was upheld by the Circuit Court of Appeals for the First Circuit. N. L. R. B. v. Gonzales Padin Co., Inc., 161 F. 2d 353. Following earlier judicial pronouncements, the court held that Puerto Rico, while not incorporated into the United States is, nevertheless, an organized Territory to which Congress' plenary jurisdiction extends. The court therefore concluded that Congress had power to regulate commerce within Puerto Rico and pointed out that Congress had clearly intended to exercise such power when it defined commerce under the act as including "comwithin any Territory of the United States" (sec. 2 (6)). The court added that Congress "intended to deal comprehensively with labor disputes affecting commerce," and, as in the case of

merce

* ** *

• Cases v. U. S., 131 F. 2d 916, 920 (C. C. A. 1), certiorari denied, 319 U. S. 770, and cases cited therein.

the antitrust laws (Puerto Rico v. Shell Co., 302 U. S. 253, 259), "to that end exercised all the power it possessed in the premises." Relying again on the Shell case (supra), the court took the view that the existence of a local labor relations statute did not affect the Board's jurisdiction under the Federal act. The broad basis on which the court thus rested the Board's jurisdiction made it unnecessary for it to consider the narrower ground alternatively relied on by the Board, i. e., the flow of goods from the United States to the Puerto Rican business.

2. Classes of persons whom the Board may properly find to be entitled to, or excluded from the benefits of the act

(a) Supervisory employees.-The Board's conclusion in the Packard Motor Car Company cases, that supervisory employees were "employees" within the definition of section 2 (3) of the act and were thus beneficiaries of its guarantees, was judicially approved first by the Circuit Court of Appeals for the Sixth Circuit (N. L. R. B. v. Packard Motor Car Co., 157 F. 2d 80) and finally by the Supreme Court (Packard Motor Car Co. v. N. L. R. B., 330 U. S. 485, discussed at p. 42, supra). The principles laid down in the Packard case have since been applied in several cases decided by circuit courts of appeals.

In N. L. R. B. v. Wyandotte Transportation Co., 162 F. 2d 101 (C. C. A. 6), the court held that the question whether first, second, and third mates on the employer's ships were "employees" for collective bargaining purposes, had been foreclosed by the Supreme Court's decision in Packard case. Observing that the gist of that decision was that the position of supervisory employees "is adverse to [the employer] in the matter of the terms of their employment," the court concluded that the closer relationship of the mates to the management in the present case, as compared with that of the foremen in the Packard case, was a difference in degree only, which did not justify the denial to them of bargaining rights. The same court, in N. Ľ. R. B. v. Budd Mfg. Co., 162 F. 2d 460, held that since, under the authority of the Packard case, foremen are "employees," interference with their organizational activities violated the act.

8

In Eastern Gas and Fuel Associates v. N. L. R. B., 162 F. 2d 864, the Sixth Circuit, on July 7, 1947, on the authority of the Packard decision held that a foreman was not barred from the protection of section 8 (3) and (1) of the act because he was a member of or active in a union of foremen, even though that union was affiliated with a national labor organization which also represented rank and file employees.

In L. A. Young Spring and Wire Corp. v. N. L. R. B., 163 F. 2d 905, the Court of Appeals for the District of Columbia stated that no valid distinction could be drawn between the unit of foremen there involved and those involved in the Packard case on the basis of the relative extent of their managerial authority, and hence "except for interven

61 N. L. R. B. 4, Tenth Annual Report (1945); 64 N. L. R. B. 1212, Eleventh Annual Report (1946).

See also American Steel Foundries v. N. L. R. B., 158 F. 2d 896, in which, prior to the disposition of the Packard case by the Supreme Court, the Circuit Court of Appeals for the Seventh Circuit expressly adopted the reasoning of the Sixth Circuit in the Packard case in holding that foremen who had been discharged because of their union activities were entitled to the protection of the act.