Source: https://caselaw.findlaw.com/us-supreme-court/321/332.html
Timestamp: 2019-04-19 19:24:00+00:00

Document:
J. I. CASE CO. v. N.L.R.B.
While the individual contracts executed August 1, 1941 were in effect, a C.I.O. union petitioned the Board for certification as the exclusive bargaining representative of the production and maintenance employees. On December 17, 1941 a hearing was held, at which the Company urged the individual contracts as a bar to representation proceedings. The Board, however, directed an election, which was won by the union. The union was thereupon certified as the exclusive bargaining representative of the employees in question in respect to wages, hours, and other conditions of employment. [321 U.S. 332, 334] The union then asked the Company to bargain. It refused, declaring that it could not deal with the union in any manner affecting rights and obligations under the individual contracts while they remained in effect. It offered to negotiate on matters which did not affect rights under the individual contracts, and said that upon the expiration of the contracts it would bargain as to all matters. Twice the Company sent circulars to its employees asserting the validity of the individual contracts and stating the position that it took before the Board in reference to them.
The Board held that the Company had refused to bargain collectively, in violation of 8(5) of the National Labor Relations Act, 29 U.S.C.A. 158(5); and that the contracts had been utilized, by means of the circulars, to impede employees in the exercise of rights guaranteed by 7 of the Act, 29 U.S.C.A. 157, with the result that the Company had engaged in unfair labor practices within the meaning of 8(1) of the Act. It ordered the Company to cease and desist from giving effect to the contracts, from extending them or entering into new ones, from refusing to bargain and from interfering with the employees; and it required the Company to give notice accordingly and to bargain upon request.
After the collective trade agreement is made, the individuals who shall benefit by it are identified by individual hirings. The employer, except as restricted by the collective agreement itself and except that he must engage in no unfair labor practice or discrimination, is free to select those he will employ or discharge. But the terms of the employment already have been traded out. There is little left to individual agreement except the act of hiring. This hiring may be by writing or by word of mouth or may be implied from conduct. In the sense of contracts of hiring, individual contracts between the employer and employee [321 U.S. 332, 336] are not forbidden, but indeed are necessitated by the collective bargaining procedure.
Concurrent existence of these two types of agreement raises problems as to which the National Labor Relations Act makes no express provision. We have, however, held that individual contracts obtained as the result of an unfair labor practice may not be the basis of advantage to the violator of the Act nor of disadvantage to employees. National Licorice Co. v. National Labor Relations Board, 309 U.S. 350 , 60 S.Ct. 569. But it is urged that where, as here, the contracts were not unfairly or unlawfully obtained, the court indicated a contrary rule in National Labor Relations Board v. Jones & Laughlin Steel Corp., 301 U.S. 1, 44 , 45 S., 57 S. Ct. 615, 627, 628, 108 A.L.R. 1352, and Virginian R. Co. v. System Federation, 300 U.S. 515 , 57 S.Ct. 592. Without reviewing those cases in detail, it may be said that their decision called for nothing and their opinions contain nothing which may be properly read to rule the case before us. The court in those cases recognized the existence of some scope for individual contracts, but it did not undertake to define it or to consider the relations between lawful individual and collective agreements, which is the problem now before us.
Individual contracts no matter what the circumstances that justify their execution or what their terms, may not be availed of to defeat or delay the procedures prescribed by the National Labor Relations Act looking to collective bargaining, nor to exclude the contracting employee from a duly ascertained bargaining unit; nor may they be used to forestall bargaining or to limit or condition the terms of the collective agreement. 'The Board asserts a public right vested in it as a public body, charged in the public interest with the duty of preventing unfair labor practices.' National Licorice Co. v. National Labor Relations Board, 309 U.S. 350, 364 , 60 S.Ct. 569, 577. Wherever private contracts conflict with its functions, they obviously must yield or the Act would be reduced to a futility. [321 U.S. 332, 338] It is equally clear since the collective trade agreement is to serve the purpose contemplated by the Act, the individual contract cannot be effective as a waiver of any benefit to which the employee otherwise would be entitled under the trade agreement. The very purpose of providing by statute for the collective agreement is to supersede the terms of separate agreements of employees with terms which reflect the strength and bargaining power and serve the welfare of the group. Its benefits and advantages are open to every employee of the represented unit, whatever the type or terms of his pre-existing contract of employment.
But it is urged that some employees may lose by the collective agreement, that an individual workman may sometimes have, or be capable of getting, better terms than those obtainable by the group and that his freedom of contract must be respected on that account. We are not called upon to say that under no circumstances can an individual enforce an agreement more advantageous than a collective agreement, but we find the mere possibility that such agreements might be made no ground for holding generally that individual contracts may survive or surmount collective ones. The practice and philosophy of collective bargaining looks with suspicion on such individual advantages. Of course, where there is great variation in circumstances of employment or capacity of employees, it is possible for the collective bargain to prescribe only minimum rates or maximum hours or expressly to leave certain areas open to individual bargaining. But except as so provided, advantages to individuals may prove as disruptive of industrial peace as disadvantages. They are a fruitful way of interfering with organization and choice of representatives; increased compensation, if individually deserved, is often earned at the cost of breaking down some other standard thought to be for the welfare of the group, and always creates the suspicion of being [321 U.S. 332, 339] paid at the long-range expense of the group as a whole. Such discriminations not infrequently amount to unfair labor practices. The workman is free, if he values his own bargaining position more than that of the group, to vote against representation; but the majority rules, and if it collectivizes the employment bargain, individual advantages or favors will generally in practice go in as a contribution to the collective result. We cannot except individual contracts generally from the operation of collective ones because some may be more individually advantageous. Individual contracts cannot subtract from collective ones, and whether under some circumstances they may add to them in matters covered by the collective bargain, we leave to be determined by appropriate forums under the laws of contracts applicable, and to the Labor Board if they constitute unfair labor practices.
[ Footnote 1 ] See Hamburger, 'The Extension of Collective Agreements to Cover Entire Trade and Industries' (1939) 40 International Labor Review 153; Methods of Collaboration between Public Authorities, Workers' Organizations, and Employers' Organizations (International Labour Conference, 1940) p. 112.
[ Footnote 2 ] Cf. National Labor Relations Board v. Sands Mfg. Co., 306 U.S. 332 , 59 S.Ct. 508; National Labor Relations Board v. Columbian Enameling & Stamping Co., 306 U.S. 292, 297 , 298 S., 59 S.Ct. 501, 504; National Labor Relations Board v. Brashear Freight Lines, Inc., 8 Cir., 119 F.2d 379; Hoeniger, 'The Individual Employment Contract and Individual Bargain,' 10 Fordham L.Rev. 14, 22-25.

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