Appeal from a judgment of the United States District Court for the Southern District of New York, Kevin T. Duffy, Judge, requiring the National Mediation Board to disclose to American Airlines the number of authorization cards that the union submitted in support of its certification petition. The judgment is reversed and the case remanded with directions to deny American's application for a judgment of disclosure because the information is exempt from disclosure under the Freedom of Information Act's Exemption 4 as confidential, commercial information.
Before Oakes, Gurfein and Meskill, Circuit Judges.
This appeal, argued to us with considerable sophistication, presents the fairly simple question whether under the Freedom of Information Act (FOIA), 5 U.S.C. § 552*fn1 the National Mediation Board (the Board) must disclose the number of cards that a union seeking to organize an air carrier's employees submits to the Board. The answer to the question is complicated somewhat by the tortured, not to say obfuscating, legislative history of the FOIA so incisively remarked upon by Kenneth Culp Davis.*fn2 But finding our way through the maze of the legislative history is not as difficult as first appears. We do find the information sought exempt as "commercial . . . information obtained from any person and privileged or confidential" under the fourth exemption to the Act, 5 U.S.C. § 552(b)(4).*fn3 Accordingly we reverse the judgment of the United States District Court for the Southern District of New York, Kevin T. Duffy, Judge, 453 F. Supp. 430 (S.D.N.Y.1978), which would have required such disclosure.
The Railway Labor Act, 45 U.S.C. § 151 et seq., which since 1936 has covered air carriers, 45 U.S.C. § 181, was enacted, among other reasons, as was its analogue the National Labor Relations Act, to prevent "any limitation upon freedom of association among employees" and to ensure "the prompt and orderly settlement" of labor-management disputes. 45 U.S.C. § 151a.*fn4 Each party has the right to designate its bargaining representative "without interference, influence, or coercion by (the other) party," 45 U.S.C. § 152, Third.*fn5 Under International Association of Machinists v. Street, 367 U.S. 740, 759, 81 S. Ct. 1784, 6 L. Ed. 2d 1141 (1961), construing 45 U.S.C. § 152, Fourth,*fn6 it is unlawful for carriers to interfere with an organization of employees or to influence or coerce them in an effort to induce them to join or not to join a labor organization or otherwise to interfere with employees' rights. These prohibitions are similar to those found in the somewhat better-known National Labor Relations Act.*fn7
The Board has two principal duties. First, upon request, it determines and certifies the bargaining representative of any class or craft of air or rail employees, 45 U.S.C. § 152, Ninth.*fn8 It has adopted regulations set out in full in the margin*fn9 describing the procedure by which a party seeking certification as the bargaining representative for a "class or craft" of employees may apply to the Board for an investigation to determine the representation wishes of the employees in the particular class or craft. 45 U.S.C. § 152, Ninth; 29 C.F.R. § 1203.2. Under the regulations the application must show specifically the name or description of the craft or class involved, the estimated number of employees in such craft or class, and the number of signed authorizations submitted from employees in each craft or class. Id., note 9 Supra. Then, After the Board has made its investigation and determined the precise scope of the craft or class involved and whether there has been a "showing of proved authorizations from at least thirty-five percent of the employees in the craft or class," 29 C.F.R. § 1206.2(b),*fn10 the Board will authorize an election or determination proceeding. The thirty-five percent minimum requirement is not imposed upon the Board by statute; rather the Board has adopted it as a regulation presumably to avoid frivolous elections and determination proceedings. It is also significant to note that under 29 C.F.R. § 1208.4(b), the Board regulations require it to "treat as confidential the evidence submitted in connection with a representation dispute and the investigatory file pertaining to the representation function." Once the Board certifies a union based on a majority of the votes in an election or as above provided, the parties are obligated to negotiate in good faith on labor-management issues under judicial construction of 45 U.S.C. § 152, Second. See, e. g., Pyzynski v. New York Central Railway, 421 F.2d 854 (2d Cir. 1970). It is only then that the Board's second principal function of providing mediation services to assist in settlement of labor-management disputes, 45 U.S.C. §§ 155, 183, comes into play.
Intervenor-defendant-appellant here, International Brotherhood of Teamsters, Airline Division (IBT), filed an application (sometimes called a petition) for investigation of representation on September 9, 1977. The union sought a determination under the statute and regulations of the representation wishes of passenger service employees of American Airlines (American). A week after the filing the Board, pursuant to its powers under 45 U.S.C. § 152, Ninth,*fn11 requested from American the number of its passenger service employees and whether they were already represented by a bargaining representative. In reply American provided the information as required but also demanded from the Board under the FOIA the number of authorization cards filed, the dates of such filings, the number of cards filed on each such date, the form or forms of the cards used, and the number of cards filed in each such form. Ultimately the Board did provide American with the date of filing of the cards and the forms of cards but on the basis of Exemptions 4 and 7(A) to the FOIA declined to provide the number of cards either in toto or by form of card.*fn12 Because we hold that the forms were exempt under Exemption 4, we omit reference to Exemption 7(A), relating to investigatory records compiled for law enforcement purposes, as to which see our own Title Guarantee Co. v. NLRB, 534 F.2d 484 (2d Cir.), Cert. denied, 429 U.S. 834, 97 S. Ct. 98, 50 L. Ed. 2d 99 (1976), and the more recent NLRB v. Robbins Tire & Rubber Co., 437 U.S. 214, 98 S. Ct. 2311, 57 L. Ed. 2d 159 (1978) (statements of employees in labor dispute under NLRA held to be exempt as gathered in the course of the Board's investigatory function).
As action on the IBT petition proceeded, American contested the IBT's definition of the appropriate class or craft and requested a hearing on the issue. The hearing commenced in November, 1977, and concluded in March, 1978; although the parties had filed post-hearing briefs at the time this case was argued, the hearing officer had not as yet made any recommendation. Until the examiner makes his recommendation as to the appropriate class or craft and the Board acts upon the recommendation, the application is still "pending," no election will be held, and, obviously, it would be impossible to determine whether the IBT had satisfied the Board's thirty-five percent requirement. Thus, for purposes of this appeal, it is not known whether the Board will order an election in accordance with the regulation above. Nevertheless, American commenced suit to compel the Board to disclose the information denied, and after the filing of appropriate cross-affidavits the district court granted American's motion for summary judgment, holding that the information did not "constitute commercial information in its ordinary sense" within the meaning of Exemption 4 and that the representation investigation was not a "law enforcement" proceeding under Exemption 7.
The affidavits filed by the Board and the union allege that disclosure during an organizing campaign of the number of authorization cards would disadvantage the union in a number of respects, E. g., by giving the employer an incentive to attempt to affect the timing of an election; by enabling the employer to convey the impression that unionization is a lost cause, that the employees should not make the effort, or that impending defeat would entail adverse consequences; or by assisting carrier resistance through the use of small selective layoffs or hirings. The affidavits also refer to raiding by other unions and damage to the union's credibility. American's affidavits disputed these propositions, but in the posture of the case we must accept them as true even though we might take them somewhat with a grain of salt.
As Professor Davis notes, Supra note 2, the legislative history of Exemption 4 is confusing, if not misleading. Nevertheless, the case law has essentially followed the lead of the late Judge Thomas Croake of the Southern District of New York in Consumers Union of United States, Inc. v. Veterans Administration, 301 F. Supp. 796 (S.D.N.Y.1969), Appeal dismissed as moot, 436 F.2d 1363 (2d Cir. 1971), which rejected the argument that noncommercial or nonfinancial information may be exempt if it is simply privileged or confidential and held that "(t)he plain language of this section exempts only (1) trade secrets and (2) information which is (a) commercial or financial, (b) obtained from a person, and (c) privileged or confidential." Id. at 802. As Judge Croake said, the exemption given by Congress does not apply to information (other than trade secrets) which does not satisfy the three requirements stated in the statute. Id. Judge Croake's construction was adopted in Getman v. NLRB, 450 F.2d 670, 673, 146 U.S.App.D.C. 209, 212 (1971) (list of names and addresses of employees which employers are required by law to give to the National Labor Relations Board not exempt where there was no express promise of confidentiality); and Getman, in turn, has been followed in National Parks & Conservation Association v. Morton, 162 U.S.App.D.C. 223, 224, 498 F.2d 765, 766 (1974) (information about national park concessions operated is "financial" but exempt only if also confidential); Washington Research Project, Inc. v. HEW, 164 U.S.App.D.C. 169, 176-177, 504 F.2d 238, 244-45 (1974) (information about certain research projects funded by HEW not a trade secret or commercial), Cert. denied, 421 U.S. 963, 95 S. Ct. 1951, 44 L. Ed. 2d 450 (1975); and Brockway v. Department of Air Force, 518 F.2d 1184, 1188 (8th Cir. 1975) (witness's statements about airplane crash, even though given in confidentiality to safety investigators, were not exempt because not commercial or financial information). See generally Davis, Administrative Law of the Seventies, supra note 1, at § 3A.19. Thus it is not surprising that American argues here that the information it seeks is not "commercial information," a view adopted by Judge Duffy below, and that even if commercial the information is not "privileged or confidential" because its disclosure will not impair the Government's ability to obtain such information in the future or subject the IBT to cognizable competitive harm. American concedes that the information was "obtained from a person." See generally Note, The Freedom of Information Act: A Seven-Year Assessment, 74 Colum.L.Rev. 895, 948-53 (1974).
The first question, then, is whether the number of authorization cards submitted is commercial information. The legislative history is of limited assistance to us because the words "commercial or financial" were added to the 1964 bill, S. 1666, 88th Cong., 2d Sess. (1964), when it was reintroduced in 1965 as S. 1160, and the congressional reports on S. 1160 simply adopted the Senate Report on the 1964 bill, S.Rep.No.1219, 88th Cong., 2d Sess. (1964), without altering the commentary specifically to reflect the addition of these words, See Consumers Union, supra, 301 F. Supp. at 802,*fn13 except as below stated. Professor Davis considers Exemption 4 to be "probably the most troublesome provision in the Act," Administrative Law Treatise § 3A.19, at 146 (1970 Supp.), and the professor's commentary plainly destroys the explanation of this language in the Attorney General's Memorandum which would have exempted information that was not even "commercial or financial." In the cases cited above, at least, the professor's views have carried the day with the courts.
This does not mean, however, that in seeking to determine the scope of the exemption for commercial information we can or should discard the legislative history altogether. Whatever other uncertainties may surround the "commercial or financial" language, at least in the view of the House of Representatives it protects the confidentiality of the information that American seeks. The House Report, See note 13 Supra, did amend the commentary to speak of "disclosures made in procedures such as the mediation of labor-management controversies" and state that the exemption would include "negotiation positions or requirements in the case of labor-management mediations." Moreover, the House added this language to the Senate's legislative history after holding hearings on the bill and apparently in direct response to a request by a spokesperson for the National Mediation Board for express protection of labor-management mediation proceedings and information. The House took the view that the phrase "commercial or financial" included labor-related information of this nature, I. e., pertaining to "negotiation positions" (to which a representation election is a prelude). It amended the legislative history accordingly.*fn14 In a statute with as confused and tortured a legislative history as this one, one House's version must be accorded great weight, absent compelling contraindications, which American does not here provide.
Evidently the district court thought, and American argues, that the information sought is not commercial or financial because the IBT does not have profit as its primary aim. This interpretation gives much too narrow a construction to the phrase in question. "Commercial" surely means pertaining or relating to or dealing with commerce. Labor unions, and their representation of employees, quite obviously pertain to or are related to commerce and deal with the commercial life of the country. The cases on which American relies are entirely inapposite. Getman v. NLRB, supra, involving lists of employees' names and addresses, is the closest; but the employers there did not receive a promise of confidentiality, and the information in and of itself served no commercial function. Here the information sought directly affects the status of the union's effort to obtain majority support and ultimate certification. The Board has traditionally treated this information as confidential, and the union provides it under the express promise of confidentiality in the regulations above set forth. In Washington Research Project, Inc., supra, there was insufficient proof that the information was commercial; the court held that the National Institute of Mental Health scientists were not engaged in "trade or commerce" or that in any event their commercial interest in their work was "extremely remote." Here the commercial nature of the information is apparent.
We cast aside as quite irrelevant to a construction of the FOIA American's reliance upon the Clayton Act, 15 U.S.C. § 17,*fn15 and the exemption of labor organizations from the antitrust laws. The Clayton Act's exclusion of "labor of a human being" from regulation as a commodity or article of commerce does not detract from the clearly commercial nature of the activity of a labor organization seeking to organize and its substantial effect on commerce. American's reliance on the definition of a labor organization in the Labor Management Relations Act, 29 U.S.C. § 152(5)*fn16 is even less helpful to its position. That Act after all was enacted as an exercise of the Commerce power.*fn17
Relying upon the two-pronged test set forth originally by the District of Columbia Circuit (in an opinion written by Judge Lumbard of the Second Circuit, sitting by designation) and adopted for our circuit in Continental Stock Transfer & Trust Co. v. SEC, 566 F.2d 373, 375 (2d Cir. 1977), American also argues that the information here submitted was not "confidential." In Continental, we said that "(t)he information to be confidential must have the effect either (1) of impairing the government's ability to obtain information necessary information in the future, or (2) of causing substantial harm to the competitive position of the person from whom the information was obtained." We do not dwell on the first prong of this test the ability of the Government to obtain such information because in the context of certifying a bargaining representative the Government of course can legitimately require disclosure. We also need not address the more recent criticism that both the courts and Professor Davis have leveled at the restrictiveness of the "competitive disadvantage" concept. See Washington Research Project, Inc. v. HEW, supra, 504 F.2d at 244; Davis, Administrative Law of the Seventies § 3A.19, at 91, because in this case we find that the standard was met. It seems apparent that the disclosure of this information which was supplied on a confidential basis would adversely affect the union's competitive position vis-a-vis both other unions and the employer itself. Not only does the union supply this information in reliance upon the promise in the regulations that the Board will keep the information ...