Source: https://supreme.justia.com/cases/federal/us/380/278/
Timestamp: 2019-04-22 06:16:58+00:00

Document:
Respondents were members of a multiemployer bargaining group with a history of successful bargaining. After the union struck another member of the group, which continued operations using temporary replacements, respondents locked out their employees and utilized temporary replacements to continue business operations. The National Labor Relations Board found that, while the use of temporary replacements by the struck employer was lawful, the lockout of regular employees and their temporary replacement by respondents violated §§ 8(a)(1) and (3) of the National Labor Relations Act. The Court of Appeals disagreed, and refused to enforce the Board's order.
1. Although the Board need not inquire into employer motivation to support a finding of an unfair labor practice where the employer's conduct is demonstrably destructive of employee rights and is not justified by the service of significant or important business ends, respondents' lockout and subsequent operations with temporary help in the face of the struck employer's continued operations during the whipsaw strike do not constitute such conduct. Pp. 380 U. S. 282-286.
(a) Since the struck employer continued to operate, respondents might reasonably have been concerned that the integrity of the employer group was threatened unless they managed to stay open during the lockout. P. 380 U. S. 284.
(b) Respondents' continued operations with the use of temporary employees after the lockout was wholly consistent with a legitimate business purpose. P. 380 U. S. 285.
(c) Respondents' use of temporary replacements, rather than some of their regular employees, does not justify an inference of hostile motivation; to limit the respondents to the use of regular employees under the circumstances here present would be to render largely illusory the right of lockout recognized by Labor Board v. Truck Drivers Union, 353 U. S. 87. P. 380 U. S. 285.
(d) Absent evidentiary findings of hostile motive, there is no support for a conclusion that respondents violated § 8(a)(1) of the Act. P. 380 U. S. 286.
2. Indispensable to a violation of § 8(a)(3) is a determination that the employer's actions were motivated by an unlawful intent, and while no specific evidence of this unlawful intent is necessary when an employer practice is inherently destructive of employee rights and is not justified by legitimate business reasons, where, as here, the tendency to discourage membership is comparatively slight, and the employer's conduct is reasonably adapted to achieve legitimate business ends, the improper intent of the employer must be established by independent evidence. Not only is the record devoid of any evidence that respondents acted with an improper intent, but it contains positive evidence of their good faith. Pp. 380 U. S. 286-290.
3. While courts should be slow to overturn an administrative decision, they are not left to sheer acceptance of the Board's conclusions, and must set aside a Board decision which rests on an erroneous legal foundation. Pp. 380 U. S. 290-292.
to a whipsaw strike against another member of the group. They and the struck employer continued operations with temporary replacements. The National Labor Relations Board found that the struck employer's use of temporary replacements was lawful under Labor Board v. Mackay Radio & Telegraph Co., 304 U. S. 333, but that the respondents had violated § 8(a)(1) and (3) of the National Labor Relations Act [Footnote 1] by locking out their regular employees and using temporary replacements to carry on business. 137 N.L.R.B. 73. The Court of Appeals for the Tenth Circuit disagreed, and refused to enforce the Board's order. 319 F.2d 7. We granted certiorari, 375 U.S. 962. We affirm the Court of Appeals.
terms except the amount and effective date of a wage increase. Bargaining continued without result, and, on March 2, the Local informed the employers that a strike had been authorized. The employers responded that a strike against any member of the employer group would be regarded as a strike against all. On March 16, the union struck Food Jet, Inc., one of the group. The four respondents, operating five stores, immediately locked out all employees represented by the Local, telling them and the Local that they would be recalled to work when the strike against Food Jet ended. The stores, including Food Jet, continued to carry on business by using management personnel, relatives of such personnel, and a few temporary employees; all of the temporary replacements were expressly told that the arrangement would be discontinued when the whipsaw strike ended. [Footnote 2] Bargaining continued until April 22, when an agreement was reached. The employers immediately released the temporary replacements and restored the strikers and the locked-out employees to their jobs.
"is not so absolute as to deny self-help by employers when legitimate interests of employees and employers collide. . . . The ultimate problem is the balancing of the conflicting legitimate interests."
353 U.S. at 353 U. S. 96. We concluded that the Board correctly balanced those interests in upholding the lockout, since it found that the nonstruck employers resorted to the lockout to preserve the multiemployer bargaining unit from the disintegration threatened by the whipsaw strike. But, in the present case, the Board held, two members dissenting, that the respondents' continued operations with temporary replacements constituted a "critical difference" from Buffalo Linen -- where all members of the employer group shut down operations -- and that, in this circumstance, it was reasonable to infer that the respondents did not act to protect the multiemployer group, but "for the purpose of inhibiting a lawful strike." 137 N.L.R.B. at 76. Thus, the respondents' act was both a coercive practice condemned by § 8(a)(1) and discriminatory conduct in violation of § 8(a)(3).
It is true that the Board need not inquire into employer motivation to support a finding of an unfair labor practice where the employer conduct is demonstrably destructive of employee rights and is not justified by the service of significant or important business ends. See, e.g., 373 U. S. S. 283Á Board v. Erie Resistor Corp., 373 U. S. 221; Labor Board v.Burnup & Sims, Inc.,@ 379 U. S. 21. We agree with the Court of Appeals that, in the setting of this whipsaw strike and Food Jet's continued operations, the respondents' lockout and their continued operations with the use of temporary replacements, viewed separately or as a single act, do not constitute such conduct.
Drivers Union, supra; Labor Board v.Dalton Brick & Tile Corp., supra; Leonard v. Labor Board, 205 F.2d 355; Betts Cadillac Olds, Inc., 96 N.L.R.B. 268; International Shoe Co., 93 N.L.R.B. 907; Pepsi-Cola Bottling Co., 72 N.L.R.B. 601, 602; Duluth Bottling Assn., 48 N.L.R.B. 1335; Link-Belt Co., 26 N.L.R.B. 227. And, in American Ship Building Co. v. Labor Board, 380 U. S. 300, we hold that a lockout is not an unfair labor practice simply because used by an employer to bring pressure to bear in support of his bargaining position after an impasse in bargaining negotiations has been reached.
"If . . . the struck employer does choose to operate with replacements, and the other employers cannot replace after lockout, the economic advantage passes to the struck member, the nonstruck members are deterred in exercising the defensive lockout, and the whipsaw strike . . . enjoys an almost inescapable prospect of success."
319 F.2d at 11. Clearly, respondents' continued operations with the use of temporary replacements following the lockout were wholly consistent with a legitimate business purpose.
"These employees are willing only to receive wages while their brethren in the rest of the association-wide unit are exerting whipsaw pressure on one employer to gain benefits that will ultimately accrue to all employees in the association-wide unit, including those here locked out."
137 N.L.R.B. at 78. Moreover, the course of action to which the Board would limit the respondents would force them into the position of aiding and abetting the success of the whipsaw strike, and consequently would render "largely illusory," 137 N.L.R.B. at 78-79, the right of lockout recognized by Buffalo Linen; the right would be meaningless if barred to nonstruck stores that find it necessary to operate because the struck store does so.
U.S. 1 at 301 U. S. 46. We have determined that the "real motive" of the employer in an alleged § 8(a)(3) violation is decisive, Associated Press v. Labor Board, 301 U. S. 103, 301 U. S. 132; if any doubt still persisted, we laid it to rest in Radio Officers' Union v. Labor Board, supra, where we reviewed the legislative history of the provision and concluded that Congress clearly intended the employer's purpose in discriminating to be controlling. Id. at 347 U. S. 44. See also Textile Workers v. Darlington Mfg. Co., ante at 380 U. S. 275-276; American Ship Building Co. v. Labor Board, post at 380 U. S. 311-313; Local 357, International Brotherhood of Teamsters v. Labor Board, 365 U. S. 667, 365 U. S. 674-676.
conduct is reasonably adopted to achieve legitimate business ends or to deal with business exigencies, we enter into an area where the improper motivation of the employers must be established by independent evidence. When so established, anti-union motivation will convert an otherwise ordinary business act into an unfair labor practice. Labor Board v.Erie Resistor Corp., supra, at 373 U. S. 227, and cases there cited.
We agree with the Court of Appeals that respondents' conduct here clearly fits into the latter category, where actual subjective intent is determinative and where the Board must find from evidence independent of the mere conduct involved that the conduct was primarily motivated by an anti-union animus. While the use of temporary nonunion personnel in preference to the locked-out union members is discriminatory, we think that any resulting tendency to discourage union membership is comparatively remote, and that this use of temporary personnel constitutes a measure reasonably adapted to the effectuation of a legitimate business end. Here, discontent on the part of the Local's membership in all likelihood is attributable largely to the fact that the membership was locked out as the result of the Local's whipsaw strategem. But the lockout itself is concededly within the rule of Buffalo Linen. We think that the added dissatisfaction, with its resultant pressure on membership, attributable to the fact that the nonstruck employers remain in business with temporary replacements is comparatively insubstantial. First, the replacements were expressly used for the duration of the labor dispute only; thus, the displaced employee could not have looked upon the replacements as threatening their jobs. At most, the union would be forced to capitulate and return its members to work on terms which, while not as desirable as hoped for, were still better than under the old contract.
union shop provisions have been incorporated in the collective bargaining agreement between the Local and the employers for many years; in these very negotiations, the employers' association waived the failure of the Local to give timely notice of its desire to bargain over new terms of employment and consented to hear the Local's claims at the bargaining table; the record contains undisputed testimony by the store owners that they had no bone to pick with the Local, that, on the contrary, they thought that unions were a good thing, but felt forced to take action in order to preserve the multiemployer group from disintegration and to save their considerable stock of perishable food produce. Even the struck member of the association did not resort to permanent replacements for the striking workers, though it could have under Mackay; rather, it sought to ride out the dispute with temporary replacements to avoid depriving the regular employees of their jobs. Thus, not only is there absent in the record any independent evidence of improper motive, but the record contains positive evidence of the employers' good faith. In sum, the Court of Appeals was required to conclude that there was not sufficient evidence gathered from the record as a whole to support the Board's finding that respondents' conduct violates § 8(a)(3). See Universal Camera Corp. v. Labor Board, 340 U. S. 474.
American Ship Building Co. v. Labor Board, post at 380 U. S. 318.
"(1) to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in section 157 of this title;"
"(3) 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. . . ."
"Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection, and shall also have the right to refrain from any or all of such activities except to the extent that such right may be affected by an agreement requiring membership in a labor organization as a condition of employment. . . ."
Food Jet used supervisory personnel and hired some "sack boys"; respondent Safeway Stores, which operated two stores in Carlsbad, closed one and transferred its managerial personnel to the other; respondent Thrifty Way Food Stores used management personnel and their wives and also hired some part-time "box boys"; respondent Brown Food Store relied on management personnel and their relatives, and a "sack boy" transferred from an out-of-town branch store; respondent Cashway Food Stores also relied on management personnel and their relatives and some transferees from out-of-town branches.
See brief for the National Labor Relations Board in American Ship Building Co. v. Labor Board, 380 U. S. 300. See also 76 Harv.L.Rev. 1494, 1497.
For a history of rejection by Congress of proposals to limit or outlaw multiemployer bargaining, see Buffalo Linen, 353 U.S. at 353 U. S. 95-96.
This is evident from the authorities cited in Buffalo Linen, 353 U.S. at 353 U. S. 96, n. 28.
In Labor Board v.Babcock & Wilcox Co., 351 U. S. 105, we set aside, as resting on an erroneous legal foundation, a Board decision finding that the employer's refusal to allow distribution of union literature on a company-owned parking lot violated § 8(a)(1). In Republic Aviation Corp. v. Labor Board, 324 U. S. 793, we sustained the Board's decision, but emphasized that judicial review is contemplated by 29 U.S.C. §§ 160(e), (f), 324 U.S. at 324 U. S. 799. Phelps Dodge Corp. v. Labor Board, 313 U. S. 177, involved a question of remedy as to which the statute expressly grants the Board broad authority, 29 U.S.C. § 160(c). Since Buffalo Linen, numerous Board orders have been set aside as outside of the Board's statutory authority. See, e.g., Labor Board v.Insurance Agents, 361 U. S. 477; Labor Board v.Drivers Local Union, 362 U. S. 274; Local 357, International Brotherhood of Teamsters v. Labor Board, 365 U. S. 667; Labor Board v.Fruit and Vegetable Packers, 377 U. S. 58. Even where the Board is sustained, its analysis in support of its conclusion is subjected to full, independent judicial review. See Labor Board v.Erie Resistor Corp., supra.
We do not here decide whether the case would be the same had the struck employer exercised its prerogative to hire permanent replacements for the strikers under our rule in Labor Board v.Mackay Radio & Telegraph Co., 304 U. S. 333, and the nonstruck employers had then hired permanent replacements for their locked-out employees.
I agree with the Court that, given the Buffalo Linen case, Labor Board v.Truck Drivers Union, 353 U.S.
87, and applying it in light of the actualities of industrial relations, the employers' conduct here is shown to be justified, and necessary to preserve the integrity of the employers' bargaining unit. After the union attempted a whipsaw strike against one member of the multiemployer bargaining unit, the other members locked out their employees. The struck employer attempted to carry on business by using management personnel, relatives of such personnel, and a few temporary employees. To avoid the whipsaw effect of the strike, the nonstruck employers then did the same. During the period of the lockout, all of the employers, struck as well as nonstruck, bargained with the union, and, when agreement was reached, in all cases, the temporary employees were dismissed and the union employees returned to their jobs.
bargaining unit. Since, in this case, the nonstruck employers did nothing more than hire temporary replacements, an activity necessary to counter whipsawing by the union and to preserve the bargaining unit, I agree that, applying Buffalo Linen, the judgment of the Court of Appeals should be affirmed.
"[a] statute expressive of such large public policy as that on which the National Labor Relations Board is based must be broadly phrased and necessarily carries with it the task of administrative application,"
weigh the interest of employees in concerted activities against that of the employer in operating his business, Phelps Dodge, 313 U. S. 177; Buffalo Linen, 353 U. S. 87, 353 U. S. 95; Erie Resistor, 373 U. S. 221; Burnup & Sims, 379 U. S. 21. The Board's discretion under these sections is not without substantial limits imposed by the policy of the Act and the requirement that the Board "disclose the basis of its order" and "give clear indication that it has exercised the discretion with which Congress has empowered it." Phelps Dodge, 313 U. S. 177, 313 U. S. 197; cf. Burlington Truck Lines v. United States, 371 U. S. 156, 371 U. S. 168. But, in my view, the Board has set out the basis and requisite findings for its order in this case, and has not exceeded its power in finding the lockout and replacement of union employees an unfair labor practice.
The Court reasons that Buffalo Linen gave the nonstruck employer in a multiemployer unit a "right" to lock out whenever a member of the unit is struck so that a parity of economic advantage or disadvantage between the struck and nonstruck employers can be maintained. In order to maintain parity where the struck employer hires replacements, the nonstruck employers must also be free to hire replacements, lest the right to lock out to protect the unit be illusory. And they need not offer these jobs to the locked-out employees desiring to work, lest the parity between the struck and nonstruck employers be lost and the right to lock out be meaningless. If this reasoning is sound, the nonstruck employers can not only lock out employees who belong to the union because of their union membership, but also hire permanent, as well as temporary, nonunion replacements whenever the struck employer hires such replacements, for parity may well so require. But I cannot accept this reasoning.
language of the Act in finding no unfair labor practice in the nonstruck members' ceasing operations after the union had successfully shut down the operations of one of the employers. Although a departure from the Board's general ban on lockouts because of their severe effect on protected employee rights, the Board found such a lockout justified by the union-imposed pressure on the employer unit where one employer could not operate and the others maintained full operations. The Board decided that the Act did not require the employers to contribute to this pressure by maintaining full operations.
Two, the threat to the integrity of the multiemployer unit, the consideration that was decisive in Buffalo Linen, is obviously very different where the struck employer continues operations with replacements; it certainly cannot be assumed that the struck employer operating with replacements is at the same disadvantage vis-a-vis the nonstruck employers as the employer in Buffalo Linen whose operations were totally shut down by the union. Indeed, there was no showing here that the struck employer was substantially disadvantaged at all, and the Board found that there was "no economic necessity . . . for the other members shutting down." 137 N.L.R.B. 73 at 77. The Court makes irrelevant the consideration that justified the lockout in Buffalo Linen -- the effect of the single employer strike on the unit -- on the faulty premise that Buffalo Linen established the nonstruck members' right to lock out. Neither the Board nor this Court said the right to lock out ineluctably follows from a single employer strike.
but surely that consideration cannot justify employer tandem action destructive of concerted activity.
Four, the Court asserts that the right of nonstruck employers to hire temporary replacements, and to refuse to hire union men, is but a concomitant of the right to lock out to preserve the multiemployer group. This sanctification of the multiemployer unit ignores the fundamental rule that an employer may not displace union members with nonunion members solely on account of union membership, the prototype of discrimination under § 8(a)(3), Labor Board v.Mackay Radio & Telegraph Co., 304 U. S. 333, and may not maintain operations and refuse to retain or hire nonstriking union members, notwithstanding that most of the union members and most of the workers at that very plant are on strike. The struck employer need not continue operations, but, if he does, he may not give a preference to employees not affiliated with the striking union, any more than he may do so after the strike, for § 7 explicitly and unequivocally protects the right of employees to engage and not to engage in a concerted activity, and § 8(a)(3) clearly prohibits discrimination which discourages union membership. See Firth Carpet Co. v. Labor Board, 129 F.2d 633 (C.A.2d Cir.); Labor Board v.Shenandoah-Dives Mining Co., 145 F.2d 542 (C.A.10th Cir.); Labor Board v.Clausen, 188 F.2d 439 (C.A.3d Cir.), cert. denied, 342 U.S. 868; Labor Board v.Anchor Rome Mills, 228 F.2d 775, 780 (C.A.5th Cir.); Labor Board v.Robinson, 251 F.2d 639 (C.A.6th Cir.). If dismissing and replacing nonstriking union members at a struck plant discourages union membership and interferes with concerted activities, I fail to understand how this same conduct at a nonstruck plant, even if in the name of multiemployer parity and unity, has a different effect on employee rights. The employees are not on strike, and desire to work, for whatever reasons, and nothing in the right to lock out can alter these facts.
The Court finds it unnecessary to explain how they are removed from the explicit protections of the Act, except to say they belong to the union or the unit the union represents, and to assume conclusively they share its whipsawing purpose. Membership has never quite meant this before. The Court's justification for this invasion of employee rights by a member of a multiemployer unit is the employer's right to burden the union strike fund with all its members to bring economic pressure to bear on the union. Unfortunately, this reasoning has equal, if not greater, force in the single employer partial strike situation.
was well within its authority in opting for explicitly protected statutory rights of employees as against a limited employer privilege allowable only in exceptional circumstances under an unbroken line of Board decisions since the inception of the Act.
"Although the Act protects the right of the employees to strike in support of their demands, this protection is not so absolute as to deny self-help by employers when legitimate interests of employees and employers collide. Conflict may arise, for example, between the right to strike and the interest of small employers in preserving multiemployer bargaining. . . . The ultimate problem is the balancing of the conflicting legitimate interests. The function of striking that balance to effectuate national labor policy is often a difficult and delicate responsibility, which the Congress committed primarily to the National Labor Relations Board, subject to limited judicial review."
Buffalo Linen, 353 U. S. 87, 353 U. S. 96.
"the compelling conclusion is that Congress . . . 'intended to leave to the Board's specialized judgment to inevitable questions concerning multiemployer bargaining bound to arise in the future.'"
"delicate task . . . of weighing the interests of employees in concerted activity against the interest of the employer in operating his business in a particular manner."
Erie Resistor, 373 U. S. 221, 373 U. S. 229. I would adhere to our prior cases and affirm the decision of the Board.

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