Source: https://supreme.justia.com/cases/federal/us/344/344/
Timestamp: 2019-04-24 12:10:51+00:00

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Justia › US Law › US Case Law › US Supreme Court › Volume 344 › Labor Board v. Seven Up Bottling Co.
National Labor Relations Board v.
Seven-Up Bottling Company of Miami, Inc.
Under § 10(c) of the Labor Management Relations Act, the National Labor Relations Board ordered reinstatement of discriminatorily discharged employees of respondent, with backpay to be computed on the basis of each separate calendar quarter or portion thereof during the period from the date of discharge to the date of a proper offer of reinstatement.
Held: The Board was entitled to a decree enforcing the order. Pp. 344 U. S. 345-352.
(a) In devising a remedy for discriminatory discharge, the Board is not confined to the record of a particular proceeding. Pp. 344 U. S. 348-349.
(b) There are in this case no extraordinary circumstances permitting respondent to raise here for the first time an objection based on the seasonal nature of its business, which had not been urged before the Board or the Court of Appeals. P. 344 U. S. 350.
(c) The fact that the language of the Act was reenacted while the Board adhered to an earlier formula for computing backpay does not preclude the Board from departing from that earlier formula. Pp. 344 U. S. 350-352.
On the petition of the National Labor Relations Board for enforcement of an order, 92 N.L.R.B. 1622, the Court of Appeals denied enforcement of that part of the order prescribing a method for computing backpay. 196 F.2d 424. This Court granted certiorari. 344 U.S. 811. Reversed, p. 344 U. S. 352.
"The public interest in discouraging obstacles to industrial peace requires that we seek to bring about, in unfair labor practice cases, 'a restoration of the situation, as nearly as possible, to that which would have obtained but for the illegal discrimination.' In order that this end may be effectively accomplished through the medium of reinstatement coupled with backpay, we shall order, in the case before us and in future cases, that the loss of pay be computed on the basis of each separate calendar quarter or portion thereof during the period from the Respondent's discriminatory action to the date of a proper offer of reinstatement. The quarterly periods, hereinafter called 'quarters,' shall begin with the first day of January, April, July, and October. Loss of pay shall be determined by deducting from a sum equal to that which [the employee] would normally have earned for each such quarter or portion thereof, [his] net earnings, if any, in other employment during that period. Earnings in one particular quarter shall have no effect upon the backpay liability for any other quarter."
"The employee is entitled to be made whole, but no more. The employees here involved were not compensated on a quarterly basis. We see no sufficient reason to so compute their backpay during suspension. . . . There is nothing to indicate that the conditions apprehended by the Board in the Woolworth case exist here."
196 F.2d 424, 427-428. Accordingly, the court modified the Board's order so that backpay would be awarded on the basis of the entire period during which an employee was denied reemployment in violation of the Act, rather than on a quarterly basis. Since the general method of computing backpay is obviously a matter of importance in the administration of the Act, we brought the case here. 344 U.S. 811.
stand unless it can be shown that the order is a patent attempt to achieve ends other than those which can fairly be said to effectuate the policies of the Act."
Virginia Electric & Power Co. v. Labor Board, 319 U. S. 533, 319 U. S. 540. The Woolworth formula, as a general method of computation, is, under this test, proof against judicial challenge.
"during the period from the date of . . . discharge to the date of [an] offer of reinstatement . . . less the amount . . . earned subsequent to discharge. . . ."
"The cumulative experience of many years discloses that this form of remedial provision falls short of effectuating the basic purposes and policies of the Act."
Board laid down its new method of computation. 90 N.L.R.B. at 292-293.
It is not for us to weigh these or countervailing considerations. Nor should we require the Board to make a quantitative appraisal of the relevant factors, assuming the unlikely, that such an appraisal is feasible. As is true of many comparable judgments by those who are steeped in the actual workings of these specialized matters, the Board's conclusions may "express an intuition of experience which outruns analysis and sums up many unnamed and tangled impressions . . . ;" and they are none the worse for it. Chicago, Burlington & Quincy R. Co. v. Babcock, 204 U. S. 585, 204 U. S. 598. It is as true of the Labor Board as it was of the agency in the Babcock case that "[t]he board was created for the purpose of using its judgment and its knowledge." Ibid.
It will not be denied that the Board may be mindful of the practical interplay of two remedies, backpay and reinstatement, both within the scope of its authority. Surely it may so fashion one remedy that it complements, rather than conflicts with, another. It is the business of the Board to give coordinated effect to the policies of the Act. We prefer to deal with these realities and to avoid entering into the bog of logomachy, as we are invited to, by debate about what is "remedial" and what is "punitive." It seems more profitable to stick closely to the direction of the Act by considering what order does, as this does, and what order does not, bear appropriate relation to the policies of the Act. Cf. Labor Board v. Gullett Gin Co., 340 U. S. 361. Of course, Republic Steel Corp. v. Labor Board, 311 U. S. 7, dealt with a different situation, and its holding remains undisturbed.
before us. But, in devising a remedy, the Board is not confined to the record of a particular proceeding. "Cumulative experience" begets understanding and insight by which judgments not objectively demonstrable are validated or qualified or invalidated. The constant process of trial and error, on a wider and fuller scale than a single adversary litigation permits, differentiates, perhaps more than anything else, the administrative from the judicial process. "[T]he relation of remedy to policy is peculiarly a matter for administrative competence. . . ." Phelps Dodge Corp. v. Labor Board, supra, at 313 U. S. 194. That competence could not be exercised if, in fashioning remedies, the administrative agency were restricted to considering only what was before it in a single proceeding.
circumstances as a result of proceedings had before the Board prior to the issuance of orders. See, e.g., Crossett Lumber Company, 8 N.L.R.B. 440, 496-498; Gullett Gin Company, Inc., 83 N.L.R.B. 1, 2, n. 4, enforced sub nom. Labor Board v. Gullett Gin Co., Inc., supra. We assume that the Woolworth formula will be applied in like manner.
"No objection that has not been urged before the Board, its member, agent, or agency, shall be considered by the court, unless the failure or neglect to urge such objection shall be excused because of extraordinary circumstances."
In its Exception XXII to the Intermediate Report of the Trial Examiner, the Company objected that the recommendations as to the remedy were contrary to, and unsupported by, the evidence, and contrary to law. This is not adequate notice that the Company intends to press the specific issue it now raises. Marshall Field & Co. v. Labor Board, 318 U. S. 253. The Company did not urge this issue either before the Board or in the Court of Appeals. No extraordinary circumstances are present such as would justify permitting the issue to be raised here for the first time.
Relations Act, and that it adopted new language whenever it desired results other than the ones reached by the cases. We are cited to Labor Board v. Gullett Gin Co., supra, and asked to conclude as a general proposition that, whenever Congress reenacted without change provisions of the National Labor Relations Act, it thereby froze administrative decisions rendered under those provisions. Gullett Gin carries no such generalization. Having held that the Board's practice of failing to deduct unemployment compensation payments in the calculation of backpay awards did not go beyond its powers, we said in that case that our holding was supported by the fact that Congress had reenacted the relevant part of § 10(c) of the National Labor Relations Act with what we took to be notice of this practice. We thought Congress could be said to have agreed that the Board was acting within the authority Congress meant it to have.
power to mould remedies suited to practical needs which we had declared the Board to have and which the Board was asserting and exercising. We cannot infer an intent to withdraw the grant of such power from what is at most a silent approval of special exercises of it.
We hold that the Board's order is to be enforced.
I agree that the Board has the power to use the Woolworth formula in computing backpay awards. But I do not think that its application in every case, regardless of the circumstances, is in accord with the policy of the Act. In the usual case, computation of backpay awards on a quarterly basis will serve the purpose of making the employee whole, and it may even be necessary to effectuate the remedy of reinstatement. On the other hand, the use of the formula may in some cases produce an inequitable result.
a quarter during which his income would have been low, he would receive no backpay, provided his outside employment yielded him more than his old job. The net result will probably be that this employee will receive a total amount of earned income, plus backpay, which exceeds what he would have earned at his regular job. Such a result is both inequitable and unwarranted. The Board should not be allowed to use this formula for backpay when, in a given case, it glaringly works an injustice. There are exceptions to most general rules, and the Board should be the guardian of the exceptions, as well as the formula itself.
MR. JUSTICE MINTON, with whom THE CHIEF JUSTICE joins, dissenting.
It seems to us that we enter a "bog of logomachy" when we start to retract what we plainly said twelve years ago in Republic Steel Corp. v. Labor Board, 311 U. S. 7, and reaffirmed as late as 1951 in Labor Board v. Gullett Gin Co., 340 U. S. 361. The statute was the same then as now.
In the Republic Steel case, the Board had ordered the company to deduct from the backpay due wrongfully discharged employees the amounts they had received on "work relief" projects and to pay the amounts so deducted to the United States Government. On review, only of the question of the payment of these amounts to the Government, this Court held that there was no authority for the payment to the Government of the sums the employees had earned on work relief. Such payment to the Government had nothing to do with making the employees whole, and only punished the employer.
of the employees, and it can require that such employees as have been discharged in violation of the Act be reinstated with backpay. All these measures relate to the protection of the employees and the redress of their grievances, not to the redress of any supposed public injury after the employees have been made secure in their right of collective bargaining and have been made whole."
"As the sole basis for the claim of authority to go further and to demand payments to governments, the Board relies on the language of Section 10(c) which provides that if, upon evidence, the Board finds that the person against whom the complaint is lodged has engaged in an unfair labor practice, the Board shall issue 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 backpay, as will effectuate the policies of this Act."
"This language should be construed in harmony with the spirit and remedial purposes of the Act. We do not think that Congress intended to vest in the Board a virtually unlimited discretion to devise punitive measures, and thus to prescribe penalties or fines which the Board may think would effectuate the policies of the Act. We have said that"
"this authority to order affirmative action does not go so far as to confer a punitive jurisdiction enabling the Board to inflict upon the employer any penalty it may choose because he is engaged in unfair labor practices, even though the Board be of the opinion that the policies of the Act might be effectuated by such an order."
Board, 305 U. S. 197, 305 U. S. 235-236. See also Labor Board v. Pennsylvania Greyhound Lines, 303 U. S. 261, 303 U. S. 267-268. We adhere to that construction.
311 U. S. 311 U.S. 7, 311 U. S. 11-12.
As we understand the decisions of this Court up to now, they have all held that the power of the Board to effectuate the policies of the Act is remedial, and is for the purpose of making the employee whole, and not of punishing the employer. It is conceded, and cannot be denied, that the rule heretofore applied by the Board in calculating backpay does not fail to make the employee whole.
The rule undoubtedly derives from the common law rule of damages for the breach by the employer of a contract of employment. The measure of damages is what an employee would have earned if he had not been wrongfully discharged, less what he did earn during the period of the breach. American Trading Co. v. Steele, 274 F. 774, 782; 5 Williston, Contracts (rev. ed.1937), § 1358; McCormick on Damages (1935) §§ 158, 160.
By the quarterly calculation approved by the Court in the instant case, not only may a wrongfully discharged employee often receive as backpay a greater amount than he would have received had he worked at his regular job, but the employer must pay more than he would have had to pay if he had had the employee's services during the period. Thus, both of the avowed purposes of the rule which this Court has held must guide the Board in allowing backpay have been violated, namely, the employee is made more than whole, and the employer has accordingly been penalized.
that. The employee is entitled to no more, the employer to no less.
This Court having laid down this rule, the Board having consistently applied it for over twelve years, and Congress having considered and completely overhauled the Act in 1947 without changing this provision of the statute with its long interpretation, we think it has become part of the administrative practice that Congress should change if it is to be changed. Helvering v. R. J. Reynolds Tobacco Co., 306 U. S. 110, 306 U. S. 114; Taft v. Commissioner, 304 U. S. 351, 304 U. S. 357; Hartley v. Commissioner, 295 U. S. 216, 295 U. S. 220; Stairs v. Peaslee, 18 How. 521, 59 U. S. 526.

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