Source: https://supreme.justia.com/cases/federal/us/396/258/
Timestamp: 2019-04-23 03:56:23+00:00

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Justia › US Law › US Case Law › US Supreme Court › Volume 396 › NLRB v. J. H. Rutter-Rex Mfg. Co., Inc.
J. H. Rutter-Rex Manufacturing Co., Inc.
Respondent company's employees went on strike in April, 1954. The union filed charges against the company, including a charge for refusal to bargain, and while these charges were pending, terminated the strike in April, 1955, and applied for reinstatement of many of the strikers. Not all these employees were reinstated. In February, 1956, the National Labor Relations Board (NLRB) found that the company had been guilty of an unlawful refusal to bargain and ordered it to offer reinstatement to all strikers who applied and to "make such applicants whole for any loss of pay by reason of the . . . refusal, if any, to reinstate them." The Court of Appeals entered a decree in August, 1957, enforcing the order. The NLRB regional office then notified the company that the case would remain open until the company had fully complied with the decree. In November, 1957, the company wrote the regional office that it had complied with "some of the provisions of the decree" and requested that "any instance of a failure to comply" be brought to its attention. In March, 1960, an NLRB compliance officer requested payroll and other records to determine the employment and back-pay rights of employees. In November, 1961, a back-pay specification was filed and the company applied to the Court of Appeals for a permanent stay, alleging that the NLRB had delayed improperly in issuing the specification. The Court of Appeals denied the stay, although noting that the delay was regrettable. After a lengthy hearing, the NLRB, in June, 1966, ordered back pay, which, for cases where no company offer was made, would accrue through the last quarter of 1961, when the specification was filed. On review, the Court of Appeals found that the NLRB had been guilty of "inordinate" delay prejudicing the company, and modified the order to eliminate back pay accruing after July, 1959.
here exceeded the narrow scope of review provided for the NLRB' remedial orders when it shifted the cost of the delay from the company to the employees. Pp. 396 U. S. 262-266.
This case presents the question whether, when an employer has improperly failed to reinstate striking employees, and the National Labor Relations Board has after considerable delay ordered back pay for those employees, a court of appeals may, on account of the delay, modify the Board's order to provide an early cut-off date for back pay. In the circumstances of this case, we hold such a modification to be an unwarranted interference with the Board's remedial power to implement the policies of the National Labor Relations Act.
further with the union representatives. Charges of unfair labor practices, including a refusal to bargain in good faith, were filed against the company. In April, 1955, while these charges were pending, the union terminated the strike and applied for the reinstatement of many of the strikers. The company reinstated some of these employees and failed to reinstate others.
In February, 1956, the Board found that the company had indeed been guilty of an unlawful refusal to bargain. It ordered the company to offer reinstatement to all strikers who applied, and to "make such applicants whole for any loss of pay suffered by reason of the . . . refusal, if any, to reinstate them." J. H. Rutter-Rex Mfg. Co., 115 N.L.R.B. 388, 391 (1956). As is apparently the Board's practice in reinstatement cases involving strikers, the order did not name the individuals covered, but left disputes over the details of reinstatement and back pay to the compliance stage of the proceedings. The Court of Appeals enforced the Board's order, NLRB v. J. H. Rutter-Rex Mfg. Co., 245 F.2d 594 (C.A. 5th Cir.1957), and entered its decree on August 19, 1957.
"When you have fully complied with the affirmative terms of the Decree and there are no violations of its negative provisions, you will be notified that the case has been closed. Until you receive such notice, you will know that the case still remains open for all purposes as awaiting compliance."
heard nothing until March 22, 1960, when a Board compliance officer notified the company that the case had been assigned to him, and requested payroll and other records necessary to determine the employment and back-pay rights of employees.
On November 16, 1961, the regional office filed a 428-page back-pay specification, alleging that the company owed more than $342,000 to some 207 strikers who had either not been reinstated within five days after applying or who had never been reinstated, in violation of the Board and court orders. The company applied to the Court of Appeals for a permanent stay of further action in the back-pay proceedings, alleging that the Board had delayed improperly in issuing the specification. By affidavit, the Board explained that the delay was caused in part by the great complexity of the task of processing the claims of approximately 600 strikers, and in part by the extremely heavy caseload and severe limitations in staff that the New Orleans regional office experienced during the late 1950's. The Court of Appeals noted that the delay was regrettable, but denied the requested stay. NLRB v. J. H. Rutter-Rex Mfg. Co., 305 F.2d 242 (C.A. 5th Cir.1962).
158 N.L.R.B. 1414 (1966). Both the Examiner and the Board considered and rejected the company's contention that the delay in issuing the specification should bar the back-pay award, either in whole or in part.
On review, the Court of Appeals found that the Board had been guilty of "inordinate" delay, in violation of § 6(a) of the Administrative Procedure Act, 60 Stat. 240, 5 U.S.C. § 1005(a), now 5 U.S.C. § 555(b) (1964 ed., Supp. IV), and to the prejudice of the company, which had been "lulled into the belief that the Board was satisfied and that no further action was to be expected." J. H. Rutter-Rex Mfg. Co. v. NLRB, 399 F.2d 356, 363 (C.A. 5th Cir.1968). Arguing that the purpose of back-pay awards is to "deter unfair labor practices," id. at 364, and believing that a substantial award of back pay would be sufficient to achieve such deterrent effect, the court modified the Board order to eliminate all back pay accruing after July 1, 1959, thus reducing the awards of some 37 strikers who had not yet received complying offers of reinstatement by that date. We granted certiorari to consider the propriety of this modification, [Footnote 2] 393 U.S. 1116 (1969), and we reverse the judgment below.
discretionary one, subject to limited judicial review." Fibreboard Corp. v. NLRB, 379 U. S. 203, 379 U. S. 216 (1964).
The legitimacy of back pay as a remedy for unlawful discharge or unlawful failure to reinstate is beyond dispute, Mastro Plastics Corp. v. NLRB, 350 U. S. 270, 350 U. S. 278 (1956), and the purpose of the remedy is clear.
"A back pay order is a reparation order designed to vindicate the public policy of the statute by making the employees whole for losses suffered on account of an unfair labor practice."
Nathanson v. NLRB, 344 U. S. 344, 346 (1953). As with the Board's other remedies, the power to order back pay "is for the Board to wield, not for the courts." NLRB v. Seven-Up Bottling Co., 344 U. S. 344, 344 U. S. 346 (1953).
"When the Board, 'in the exercise of its informed discretion,' makes an order of restoration by way of back pay, the order 'should 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.'"
Id. at 344 U. S. 346-347.
had to bear the cost of the Board's delay. The Board placed that cost upon the company, which had wrongfully failed to reinstate the employees. In an effort to discipline the Board for its delay, the court shifted part of that cost from the wrongdoing company to the innocent employees.
"rubber-stamp their affirmance of administrative decisions that they deem inconsistent with a statutory mandate or that frustrate the congressional policy underlying a statute."
NLRB v. Brown, 380 U. S. 278, 380 U. S. 291 (1965).
the Board is not required to place the consequences of its own delay, even if inordinate, upon wronged employees to the benefit of wrongdoing employers. NLRB v. Electric Cleaner Co., 315 U. S. 685, 315 U. S. 698 (1942); Labor Board v. Katz, 369 U. S. 736, 369 U. S. 748 n. 16 (1962).
The Court of Appeals reasoned further that the purpose of the back-pay remedy is deterrence of unfair labor practices, and that the substantial back-pay award that it enforced would sufficiently serve that deterrent purpose. But the Board could properly conclude that back pay is not only punishment for an unfair labor practice, but is also a remedy designed to restore, so far as possible, the status quo that would have obtained but for the wrongful act. Cf. Phelps Dodge Corp. v. NLRB, 313 U. S. 177, 313 U. S. 194 (1941).
Finally, the Court of Appeals reasoned that the company was "lulled into the belief that the Board was satisfied and that no further action was to be expected." 399 F.2d at 363. We need not decide whether this sort of estoppel argument would justify a court in reducing a back-pay award, for no estoppel appears in this case. The Board clearly informed the company that this case would remain open as awaiting compliance until the company received a notice that the case was closed. No such closing notice was ever given. As the Court of Appeals itself stated, the company's subsequent letter asking that violations of the order be called to its attention "could not shift or avoid its duty of compliance." Ibid.
of the delay and the company's illegal failure to reinstate them. It may be that the company could have, through the courts, compelled earlier Board action. [Footnote 3] But the Court of Appeals exceeded the narrow scope of review provided for the Board's remedial orders when it shifted the cost of the delay from the company to the employees in this case.
NLRB v. Seven-Up Bottling Co., 344 U. S. 344, 344 U. S. 345 (1953).
The Court of Appeals also reversed back-pay awards as to 10 strikers in their entirety, finding the awards not supported by substantial evidence. 399 F.2d at 365. Certiorari was not sought as to this modification of the Board's order.
Section 10(e)(A) of the Administrative Procedure Act, 5 U.S.C. § 1009(e)(A), now 5 U.S.C. § 706(1) (1964 ed., Supp. IV), provides that courts shall "compel agency action unlawfully withheld or unreasonably delayed."
MR. JUSTICE DOUGLAS, with whom THE CHIEF JUSTICE and MR. JUSTICE HARLAN concur, dissenting.
Universal Camera Corp. v. NLRB, 340 U. S. 474, requires a dismissal of the writ of certiorari.
"The remedy of back pay, it must be remembered, is entrusted to the Board's discretion; it is not mechanically compelled by the Act. And in applying its authority over back pay orders, the Board has not used stereotyped formulas, but has availed itself of the freedom given it by Congress to attain just results in diverse, complicated situations."
Thus, the employees in this case have no automatic "right" to any award of back pay.
only for evidence which, when viewed in isolation, substantiated the Board's findings. Congress registered its dissatisfaction with this restricted scope of review by stating the proper test in the Taft-Hartley Act as one of "substantial evidence on the record considered as a whole." 61 Stat. 148, 29 U.S.C. § 160(e). This meant that the courts of appeals were to "assume more responsibility for the reasonableness and fairness of Labor Board decisions" than had been the practice of many of these courts in the past. 340 U.S. at 340 U. S. 490.
"Our power to review the correctness of application of the present standard ought seldom to be called into action. Whether, on the record as a whole, there is substantial evidence to support agency findings is a question which Congress has placed in the keeping of the Courts of Appeals. This Court will intervene only in what ought to be the rare instance when the standard appears to have been misapprehended or grossly misapplied."
Id. at 340 U. S. 490-491.
an exercise of its responsibility "for assuring that the Board keeps within reasonable bounds" (id., at 340 U. S. 490) in a subject area that necessarily involves "diverse, complicated situations."
Casting the issue as one of "law", rather than as one of "fact" does not conceal the substantial departure in this case from the learning of Universal Camera: that the courts of appeals, and not this Court, are the watchdogs of the Board.
I would dismiss the writ as improvidently granted.
J. H. Rutter-Rex Manufacturing Company, Inc.

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