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National Labor Relations Board v. Revere Metal Art Co.

May 6, 1960


Author: Friendly

Before LUMBARD, Chief Judge, MOORE and FRIENDLY, Circuit Judges.

FRIENDLY, C. J.: The National Labor Relations Board petitions for enforcement of an order, 123 N.L.R.B. No. 16 (1959), finding that Revere Metal Art Co., Inc. and Amalgamated Union, Local 5, UAW, with which Revere had entered into a union security agreement, had engaged in unfair labor practices in violation of §§ 8(a)(1), (2) and (3) and 8(b)(1)(A) and (2) of the Labor Management Relations Act, 29 U.S.C. § 158. The order required cessation of recognition of the union and of performance of the collective bargaining agreement unless and until the union had demonstrated its majority status through a Board conducted election. It directed the company and the union, jointly and severally, to reimburse employees for any initiation fees, dues or other monies paid or checked off as a condition of employment pursuant to the agreement. And it also forbade the company and the union from "entering into, maintaining, renewing, or enforcing any agreement . . . which provides for obligations to the Union on the part of employees other than the payment of initiation fees and dues as a condition of employment, or which grants the Union exclusive recognition or which requires employees to join, or maintain their membership in the Union as a condition of employment, unless such agreement which grants exclusive recognition or requires membership has been authorized as provided in Section 8(a)(3) of the Act."*fn1

The company does not oppose enforcement; the union does. We hold the Board was warranted in finding that the employer and the union had engaged in unfair labor practices. We sustain also the remedies imposed in the order, including the reimbursement of initiation fees and dues, save only the prohibition of any new union security agreement that provides obtiation fees as a condition of employment. As to this we think the order went beyond the powers granted the Board by Congress.

Revere has its principal office and place of business in New York City where it is engaged in the manufacture and interstate sale and distribution of pen parts. In the summer of 1956 the union began a campaign among Revere's employees, and organizational picketing began. By August the campaign was adversely affecting production. Following the alleged discriminatory discharge of an employee in mid-August, the picket line declared the company unfair, and Revere was cut off from essential supplies and services.

At the end of August, on instructions from the president of the company, counsel for Revere arranged for a meeting to be held with the union on September 10 to negotiate a collective bargaining agreement. The discharged employee returned to work and the picketing ceased. At this time Revere had 58 employees in the unit bargained for with the union. It made no investigation to determine whether the union represented a majority. The president was satisfied with the union organizer's having "shuffled," "flashed" or "flipped" in his presence some 27 to 29 cards, the first few of which bore the names of persons recognized as employees, and with the statement of the plant foreman "that he was inclined to believe that the union probably had a majority." No check was made against payroll or other records. Indeed it is not even clear the company knew whether the cards were signed at all, save the first few. At the hearing only 18 cards signed prior to September 1 were producted.

Negotiations for a union contract continued during the fall. The union organizer came to the plant in order to get additional cards signed. The plant foreman persuaded the organizer to leave the cards with him. The president told the foreman to have the cards signed but not to turn them over to the union organizer. On October 24 the foreman obtained signatures to 24 cards, about a third of these being duplicates of cards already signed. He accomplished this by presenting the cards to employees who were sent down to him "a couple at a time to get their checks and sign the cards." The foreman admitted that one worker was told that "he had to join the union or he would be fired.As far as I knew, that is what the procedure was." An employee testified the foreman gave him a card and said "you have to sign and give it back to me."

An agreement wherein Revere recognized Local 5 as exclusive bargaining representative of the employees in the unit was executed on November 13.This contained a clause requiring all employees to become members of the union within 30 days after the date of the agreement or, in the case of new employees, after the date of their employment and thereafter to continue to remain members of the union in good standing as a condition of employment. The constitution and by-laws of the union have numerous requirements for remaining a member in good standing other than the payment of initiation fees and dues. Fines may be levied by the executive board on any member found guilty of violating the constitution, by-laws or union rules. A member is required to leave the job immediately when ordered out on strike and to aid and picket when so directed and is forbidden to seek redress in any court before first seeking it through union channels. Violation of any of these obligations is expressly subject to such penalty, by way of fine, suspension or expulsion, as the executive board may direct. Assessments and fines must be paid before regular dues can be accepted.

After charges by an employee, complaint and hearing, the Board's trial examiner concluded that the company had violated § 8(a)(1), (2) and (3) and that the union had violated § 8(b)(1)(A) and (2) of the Act. On exceptions taken by the union, the Board affirmed and entered the order previously described.

The evidence clearly warranted the finding that a majority of the employees had not authorized the union to represent them, either when the company began negotiations with the union in September or when it signed the agreement granting exclusive recognition on November 13. At most 18 of the 58 employees had signed authorizations prior to September, and the additional signatures obtained by the plant foreman in October cannot be counted since these resulted from action forbidden the employer by §§ 8(a)(1) and (2) and the union by § 8(b)(1)(A). We need not determine whether, as urged by the Board and disputed by the union, these sections condemn the mere fact of the grant of exclusive recognition to and the receipt of such recognition by a union which had not been authorized by a majority, although we see the force of the Board's argument and the Fifth Circuit regards the proposition as "well settled," Dixie Bedding Manufacturing Co. v. NLRB, 268 F.2d 901, 905 (1959). Cf. NLRB v. Drivers, Chauffeurs, Helpers, Local Union No. 639, Supreme Court of the United States, March 28, 1960; NLRB v. Local 294, International Brotherhood of Teamsters, etc ., 2d Cir., April 4, 1960. Here the evidence that the employees were summoned to the plant foreman's office, were there presented with cards authorizing union check-off when being given their paychecks, and were told they had to sign, showed coercion in the most literal sense. The Board was likewise justified in finding that the execution of an agreement with a union security clause was an unfair labor practice by the employer under § 8(a)(3) and by the labor organization under § 8(b)(2). Such an agreement is permitted, inter alia, only when the labor organization is "not established, maintained, or assisted by any action defined in this subsection as an unfair labor practice" and when it "is the representative of the employee as provided in § 9(a)," and § 9(a) requires that the representative be "designated or selected for the purposes of collective bargaining by the majority of the employees in a unit appropriate for such purposes." The agreement here failed on both counts. NLRB v. John Engelhorn & Sons, 134 F.2d 553 (3d Cir. 1943).

Since the union had thus been unlawfully imposed as exclusive bargaining agent upon the employees and the union security clause was unlawful in its inception, it was proper for the Board to strike down the agreement and to require that the union desist from representing the employees and to prohibit any further union security agreement until the union had demonstrated its majority status in a Board-conducted election.

We likewise decline to interfere with the Board's direction that the employer and the union jointly and severally reimburse the employees for initiation fees, dues or other monies paid or checked off as a condition of the employment pursuant to the union security agreement.*fn2 This Court said in NLRB v. Adhesive Products Corp ., 258 F.2d 403, 409 (2d Cir. 1958), "The validity of reimbursement orders necessarily depends upon the peculiar circumstances of each particular case." While we annulled similar reimbursement orders in Morrison-Knudsen Co. v. NLRB and Building Material Teamsters Local 282 v. NLRB (2d Cir., both decided March 2, 1960), the circumstances there were quite different from the instant case. Neither of those cases related to a union imposed on employees in violation of §§ 8(a)(1) and (2) and 8(b)(1)(A). Both related to discrimination violating §§ 8(a)(3) and 8(b)(2), Morrison-Knudsen through the method of operation of an exclusive hiring hall, and Local 282 because of the absence of the required 30-day clause in a union security agreement. Both concerned unions admittedly representing the majority of the employees and long recognized as such. In the Local 282 case there was "not a syllable of evidence that . . . the omission of the 30-day clause in fact had any coercive effect" and indeed "no suggestion that anyone would have acted one whit differently if the 1956 agreement had contained the prescribed 30-day clause." In the Morrison-Knudsen case the order was directed solely against the employer, the discrimination related to a small number of employees out of a large group, and the opinion enumerates other special factors making reimbursement an arbitrary remedy there. Slip opinion, pp. 921-922. Here on the contrary there was substantial evidence that a majority of the employees had been coerced into joining the union. Though the Board might have excluded the employees who had voluntarily signed union cards before September 1 from the reimbursement provision, it did not abuse its discretion in not doing so since these employees may well have remained in the union only because of the status it had unlawfully acquired. For the courts to require a determination of the attitude of each employee in every case would impose impossible administrative burdens. Compare F. W. Woolworth Co. v. NLRB, 121 F.2d 658, 663 (2d Cir. 1941). We have been admonished that although orders requiring reimbursement to employees for dues paid to unions unlawfully forced upon them "somewhat resemble compensation for private injury," we must not consider them solely in that light since "they vindicate public, not private rights." Virginia Electric & Power Co. v. NLRB, 319 U.S. 533, 543 (1943). The fact that the union imposed in the Virginia Electric case was company-dominated does not appear to us to be a valid distinction here, at least as regards the union, from which the illegal activity emanated, and we see no other. In an appropriate case we might think a different view ought to be taken with respect to an employer who has been forced into an unfair labor practice by economic pressure from a labor organization. Certainly it would seem more equitable for the Board to consider the relative responsibility of employer and labor organization in these cases and apportion any reimbursement liability accordingly than to apply a mechanical "joint and several" formula in every case. However, we do not need to decide this here since the employer has not objected.

We come finally to the clause in the Board's order quoted above which forbids the employer and the union from "entering into, maintaining, renewing or enforcing any agreement . . . which provides for obligations to the Union on the part of employees other than the payment of initiation fees and dues as a condition of employment." We think the only reasonable construction of the order is that the Board meant to ban such a clause in a new agreement even though the agreement "has been authorized as provided in Section 8(a)(3) of the Act." The Board's brief confirms this since it asserts (p. 13) that "the union-security agreement in this case is unlawful in that it exceeds the permissible statutory limits of preferential treatment for union members." We are therefore required to decide the question, on which both the Board and this Court found it unnecessary to rule in Biscuit and Cracker Workers Local Union No. 405, 109 N.L.R.B. 985 (1954), enforcement granted, 222 F.2d 573, 577 (2d Cir. 1955), whether a union security agreement is ipso facto an unfair labor practice if the union's constitution creates obligations other than payment of initiation fees and dues, unless the agreement expressly negates any claim by the union of a right to seek discrimination by the employer against a member who fails to comply. We hold it is not.

NLRB v. Spector Freight System, Inc ., 273 F.2d 272, 275-76 (8th Cir. 1960), petition for certiorari filed 28 U.S. Law Week, cites abundant authority for the proposition that "the internal rules of a labor organization, designed to control its members, such as imposition of fines for failure to attend meetings, special assessments, and other penalties, not being 'periodic dues' may not be enforced by the union by a threat of loss of employment." However, the order here does not simply forbid a union from enforcing such rules by threat of loss of employment against a member and an employer from complying with such a demand. In effect, it prohibits the employer from entering into a union security agreement with a union whose constitution imposes on members any obligation other than the payment of initiation fees and dues unless the agreement expressly negates any right of the union to request discrimination against an employee for any default other than non-payment of these items, as did the agreement in NLRB v. International Ass'n of Machinists, 203 F.2d 173, 174-75 (9th Cir. 1953). We have found no court decision that either upholds or negates the authority of the Board to do this. All the cases cited to us by the Board, as well as those in Judge MATTHES' recent opinion in the Spector case, supra, arose from the discharge of an employee under a union security agreement, allegedly because of termination of union membership for a cause other than non-payment of dues and initiation fees, and the remedy was simply reinstatement and a prohibition against similar action in the future. Nor are the Board cases clear. In International Harvester Co ., 95 N.L.R.B. 730 (1951), the Board held that a union security agreement requiring an employee to pay general assessments violated § 8(a)(3) and that a contract containing such a clause thus did not bar another union from seeking an election. Accord, John Deere Planter Works, 107 N.L.R.B. 1497 (1954). However, three years later, in the Biscuit and Cracker Workers case, supra, the Board declined to adopt the "discussion and rationale" of an examiner who held the mere existence of such a clause to be an unfair labor practice, and the Board's instant decision contains no discussion of the question.

The problem arises from the manner in which the Taft-Hartley amendment dealt with union security arrangements. Section 8(a)(3) of the National Labor Relations Act of 1935 made it an unfair labor practice for an employer "by discrimination in regard to hire or tenure of employment or any term or condition of employment to encourage or discourage membership in any labor organization," subject to a proviso that an employer was not thereby precluded from making an agreement with a labor organization not established as the result of an unfair labor practice and selected as representative of the employees as provided in Section 9(a), which would "require as a condition of employment, membership therein." The Labor Management Relations Act of 1947 qualified this broad exemption in three respects. The first was by inserting after the word "therein" the words "on or after the thirtieth day following the beginning of such employment or the ...

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