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Algoma Plywood v. Wisconsin Board (full text) :: 336 U.S. 301 (1949) :: Justia U.S. Supreme Court Center Log In
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Algoma Plywood v. Wisconsin Board 336 U.S. 301 (1949)
U.S. Supreme CourtAlgoma Plywood v. Wisconsin Board, 336 U.S. 301 (1949)Algoma Plywood & Veneer Co. v. Wisconsin Relations BoardNo. 216Argued November 18, 1948Decided March 7, 1949336 U.S. 301CERTIORARI TO THE SUPREME COURT OF WISCONSIN
(b) It is not in conflict with any ruling by the courts or the National Labor Relations Board. P. 336 U. S. 310. Page 336 U. S. 302
The Wisconsin Employment Relations Board ordered an employer to cease and desist from giving effect to a "maintenance of membership" clause in a contract with a union certified by the National Labor Relations Board as the collective bargaining representative of its employees and to reimburse for loss of pay an employee who had been discharged for refusal to pay union dues. A state circuit court modified the order by striking the award of back pay, but otherwise affirmed it. 14 Labor Cases (C.C.H.) No. 64,253. The State Supreme Court sustained the order as originally issued. 252 Wis. 549, 32 N.W.2d 417. This Court granted certiorari. 335 U.S. 812. Affirmed., p. 336 U. S. 315. Page 336 U. S. 303
"It shall be an unfair labor practice for an employer . . . to encourage . . . membership in any labor organization . . . by discrimination in regard to hiring, tenure, or other terms or conditions of employment; provided, that an employer shall not be prohibited from entering into an all-union agreement with the representatives of his employees in a collective bargaining unit where at least two thirds of such employees voting . . . shall have voted Page 336 U. S. 304 affirmatively by secret ballot in favor of such all-union agreement in a referendum conducted by the board. . . ."
The discharge of Moreau and the orders of the Wisconsin Board preceded the Labor Management Relations Act, 1947, colloquially known as the Taft-Hartley Act, 61 Stat. 136, 29 U.S.C. § 141 et seq. The judgments of the Circuit Court for Kewaunee County and the Supreme Court of Wisconsin were rendered after it came into Page 336 U. S. 305 force. If the National Labor Relations Act gave affirmative protection to the employer in discharging an employee under a union security agreement for failure to maintain union membership, it would be necessary to decide whether adoption of the Taft-Hartley Act retroactively removed that protection and whether it equally gave effect to a reinstatement order, an award of back pay, and a cease and desist order which would previously have been invalid. Since, however, we do not find conflict between the Wisconsin law under which the orders were issued and either the National Labor Relations Act or the Taft-Hartley Act, we are relieved from defining the respective applicability of the federal Acts.
The term "unfair labor practice" is not a term of art having an independent significance which transcends its statutory definition. The State are free Page 336 U. S. 306 (apart from preemption by Congress) to characterize any wrong of any kind by an employer to an employee, whether statutorily created or known to the common law, as an "unfair labor practice." At the time when the National Labor Relations Act was adopted, the courts of many States, at least under some circumstances, denied validity to union security agreements. See 1 Teller, Labor Disputes and Collective Bargaining § 170 (1940). Here, Wisconsin has attached conditions to their enforcement, and has called the voluntary observance of such a contract when those conditions have not been met an "unfair labor practice." Had the sponsors of the National Labor Relations Act meant to deny effect to State policies inconsistent with the unrestricted enforcement of union shop contracts, surely they would have made their purpose manifest. So far as appears from the Committee Reports, however, § 10(a) was designed, as its language declares, merely to preclude conflict in the administration of remedies for the practices proscribed by § 8. The House Report, after summarizing the provisions of the section, adds, "The Board is thus made the paramount agency for dealing with the unfair labor practices described in the bill." H.R. Rep. No. 969, 74th Cong., 1st Sess. 21. See also the identical language of H.R. Rep. No. 972, 74th Cong., 1st Sess. 21 and H.R. Rep. No. 1147, 74th Cong. 1st Sess. 23. And the Senate Report describes the purpose of the section as
The contention that § 10(a) of the Wagner Act swept aside State law respecting the union shop must therefore Page 336 U. S. 307 be rejected. If any provision of the Act had that effect, it could only have been § 8(3), which explicitly deals with membership in a union as a condition of employment. We now turn to consideration of that section.
"The proviso attached to the third unfair labor practice deals with the question of the closed shop. Propaganda has been widespread that this proviso attaches special legal sanctions to the closed shop or seeks to impose it upon all industry. This propaganda Page 336 U. S. 308 is absolutely false. The reason for the insertion of the proviso is as follows: according to some interpretations, the provision of section 7(a) of the National Industrial Recovery Act, 48 Stat. 198, assuring the freedom of employees 'to organize and bargain collectively through representatives of their own choosing,' was deemed to illegalize the closed shop. The Committee feels that this was not the intent of Congress when it wrote section 7(a), that it is not the intent of Congress today, and that it is not desirable to interfere in this drastic way with the laws of the several States on this subject."
"The proviso to the third unfair labor practice, dealing with the making of closed shop agreements, has been widely misrepresented. The proviso does not impose a closed shop on all industry; it does not give new legal sanctions to the closed shop. All that it does is to eliminate the doubts and misconstructions in regard to the effect of section 7(a) upon closed shop agreements, and the possible repetition of such doubts and misconstructions under this bill, Page 336 U. S. 309 by providing that nothing in the bill or in section 7(a) or in any other statute of the United States shall illegalize a closed shop agreement between an employer and a labor organization, provided such organization has not been established, maintained, or assisted by any action defined in the bill as an unfair labor practice and is the choice of a majority of the employees, as provided in section 9(a), in the appropriate collective bargaining unit covered by the agreement when made. The bill does nothing to legalize the closed shop agreement in the States where it may be illegal; but the committee is confident that it would not be the desire of Congress to enact a general ban upon closed shop agreements in the States where they are legal. And it should be emphasized the no closed shop may be effected unless it is assented to by the employer."
The Senator went on to explain the purpose of the section as dispelling misunderstanding of § 7(a) of the National Industrial Recovery Act, 48 Stat. 198, denied Page 336 U. S. 310 either advocacy or disapproval of the closed shop, then added:
No ruling by the courts or the National Labor Relations Board, the agency entrusted with administration of the Wagner Act, has adopted a construction of § 8(3) in disregard of this legislative history. It is suggested, however, that the interpretation given the section of the War Labor Board supports petitioner's position. The Page 336 U. S. 311 Board, it is true, in view of the practical desirability of the "maintenance of membership" clause in settling wartime disputes over union security, found authority to order contracts containing such clauses despite inconsistent State law. It found such authority, however, not in § 8(3), but in the conclusion that
Greenebaum Tanning Co., 10 War Lab. Rep. 527, 534. [Footnote 2] The Supreme Court of Wisconsin itself acknowledged the supremacy of the war power in a decision suspending an order directing the reinstatement of an employee discharged under a "maintenance of membership" clause ordered by the War Labor Board. International Brotherhood of Papermakers v. Wisconsin Employment Relations Board, 245 Wis. 541, 15 N.W.2d 806. When the orders of the Wisconsin Board in the present case were entered, the War Labor Board had ceased to exist, Exec.Order No. 9672, 11 Fed.Reg. 221, and, with the occasion that had called it into Page 336 U. S. 312 being, the necessity for suppression of State law had also come to an end. [Footnote 3]
Since we would be wholly unjustified, therefore, in rejecting the legislative interpretation of § 8(3) placed upon it at the time of its enactment, it is not even necessary to invoke the principle that, in cases of concurrent power over commerce, State law remains effective so long as Congress has not manifested an unambiguous purpose that it should be supplanted. See, e.g., 63 U. S. Davenport, 22 How. 227; Missouri, K. & T. R. Co. v. Haber, 169 U. S. 613. Nor need we, if Congress, in enacting § 8(3), did not mean to enlarge the right to bargain for union security, consider contentions based on Hill v. Florida, 325 U. S. 538, to the effect that, in guaranteeing the right to collective bargaining, the National Labor Relations Act also guaranteed the right to contract upon any terms which are commonly the subject of collective bargaining. Page 336 U. S. 313
Other provisions of the Taft-Hartley Act make it even clearer than the National Labor Relations Act that the Page 336 U. S. 314 States are left free to pursue their own more restrictive policies in the matter of union security agreements. Because § 8(3) of the new Act forbids the closed shop and strictly regulates the conditions under which a union shop agreement may be entered, § 14(b) was included to forestall the inference that federal policy was to be exclusive. It reads:
It remains to consider whether certification of the Union by the National Labor Relations Board in 1942 thereby forever ousted jurisdiction of the Wisconsin Board to enjoin practices forbidden by Wisconsin law. Since the enumeration by the Wagner Act and the Taft-Hartley Act of unfair labor practices over which the National Board has exclusive jurisdiction does not prevent the States from enforcing their own policies in matters not governed by the federal law, such freedom of action Page 336 U. S. 315 by a State cannot be lost because the National Board has once held an election under the Wagner Act. The character of activities left to State regulation is not changed by the fact of certification. Certification, it is true, makes clear that the employer and the union are subject to federal law, but that is not disputed. So far as the relationship of State and national power is concerned, certification amounts to no more than an assertion that, as to this employer, the State shall not impose a policy inconsistent with national policy, Hill v. Florida, 325 U. S. 538, or the National Board's interpretation of that policy, Bethlehem Steel Co. v. New York State Labor Relations Board, 330 U. S. 767; La Crosse Telephone Corporation v. Wisconsin Employment Relations Board, 336 U. S. 18. Indeed, the express disclaimer in § 8(3) of the National Labor Relations Act of intention to interfere with State law, and the permission granted the States by § 14(b) of the Taft-Hartley Act to carry out policies inconsistent with the Taft-Hartley Act itself, would be practically meaningless if so easily avoided. For these provisions can have application, obviously, only where State and federal power are concurrent; it would have been futile to disclaim the assertion of federal policy over areas which the commerce power does not reach.
The decision just rendered holds that the Wisconsin can compel the petitioner to pay unearned back wages to an employee found to have been discharged Page 336 U. S. 316 by petitioner under the terms of a collective bargaining agreement which required such discharge. The petitioner had originally entered into the agreement in response to irresistible pressure by the United States Government. 252 Wis. 549, 559, 32 N.W.2d 417. The circumstances under which the contract was made were these:
The union appealed to the National War Labor Board to settle the closed shop dispute. That Board, in collaboration with the United States Department of Labor, put pressure on petitioner to yield to the union's demands. Petitioner was informed that, unless it agreed to a maintenance of membership clause, which was at the time forbidden by Wisconsin law, the clause "would be put in by the War Labor Board anyhow," since inclusion of Page 336 U. S. 317 such provisions was a part of that Board's national policy. Thus, fired at from one side by the state and from the other side by powerful federal agencies, petitioner had to flee to one side or the other. Neither side offered a safe sanctuary. In weighing the conflicting considerations, petitioner, not unreasonably, found the scales tipped on the United States' side. Had petitioner refused the demands of the federal agency, the Government could and might have seized and operated its plants. [Footnote 2/1] Furthermore, petitioner's employees might have stopped work. In response to its best judgment, though contrary to its own strong desires, petitioner finally yielded to the Federal Government's demands and agreed to the union's terms. January 23, 1943, a collective bargaining agreement was executed which contained the controversial maintenance of union membership clause and an automatic extension clause. This contract was approved by the War Labor Board. The controversial clause was extended automatically from year to year, and was in effect when the alleged discharge took place. The Court apparently concedes that this clause of the collective bargaining contract was valid when petitioner entered into it under federal compulsion. In my judgment, it was equally valid when Page 336 U. S. 318 the employee was discharged under it. It seems at least a questionable interpretation of federal statutory policy for this Court -- a federal tribunal -- to hold that a state is free to impose a money penalty on this company for acting in obedience to a contract which a federal agency validly compelled it to make. [Footnote 2/2]
1. The termination of the War Labor Board was accomplished by Executive Order of the President, No. 9672. 11 Fed.Reg. 221. But there is nothing in that Executive Page 336 U. S. 319 Order that indicates a purpose to authorize invalidation of contracts made under the Board's directions. A contrary purpose is indicated. The Executive Order established the National Wage Stabilization Board. As the name of that Board indicates, it was established to exercise functions in connection with wage disputes which might adversely affect the national economy. For the limited purposes enumerated in the Order, the new Board was vested with all the "powers, functions and responsibilities of the National War Labor Board. . . ." While scope for operation of these powers was within more narrow limits than had been the scope of the War Labor Board's powers, the creation of this new Board negatives any possible contention that dissolution of the War Labor Board showed an intention to permit states to invalidate previously executed legal contracts approved by the War Labor Board in the interests of industrial peace. And far from indicating a presidential belief that wage stabilization and industrial peace were no longer essential in the war emergency period, the new Executive Order, as had the old, rested on the war power and the statutes that had stemmed from it. The War Labor Board was created to implement a congressional war policy expressed in part in the War Labor Disputes Act. 57 Stat. 163. The Board's dissolution could not detract from the force of the statute or from the congressional war power. See Kelly v. Washington, 302 U. S. 1, 302 U. S. 14. This Executive Order recognized the continued existence of conditions that called for the further exercise of war powers. It was promulgated January 4, 1946. The last automatic extension of the compelled contract was April 4, 1946. This automatically extended contract was the basis for the discharge. Under the foregoing circumstances, I cannot agree that dissolution of the War Labor Board authorized Wisconsin to punish petitioner for its continued observance of the contract. Page 336 U. S. 320
3. I suppose it cannot be denied that congressional authority to force contracts under the war power carries with it authority to provide that (at least during the existence of the war power) the obligations assumed under those contracts should be faithfully observed, and that the contracts should be invulnerable to state attack. In this view, after the War Labor Board ceased to exist and before Page 336 U. S. 321 peace had been officially declared, Congress, under the war power, doubtless could have made it possible under enumerated contingencies for states to invalidate contracts such as this one. But no suggestion has been made that any statutory language of Congress can be stretched far enough to find such congressional intent. Since no such intent has been manifested, it seems fair to assume that Congress intended that such contracts should remain immune from state attack and continue in force unless terminated under their valid provisions. I would therefore hold that petitioner was obligated to continue to observe the terms of the contract until terminated according to its provisions.
It is apparent that the Wisconsin statute as here applied deprives petitioner and his employees of a substantial federal right if § 8(3) of the National Labor Relations Act [Footnote 2/3] authorized union membership maintenance agreements without regard to contrary state policies. For, given that interpretation of § 8(3), the Wisconsin Act would not only impair collective bargaining rights Page 336 U. S. 322 protected by § 8(3); [Footnote 2/4] it would also stand "as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress." Hill v. Florida, 325 U. S. 538, 325 U. S. 542; Bethlehem Steel Co. v. New York Labor Board, 330 U. S. 767, 330 U. S. 775-776.
The action of the United States Department of Labor and the National War Labor Board in forcing this petitioner to accept a maintenance of membership provision in its collective bargaining agreement was not the result of an isolated or haphazard interpretation of § 8(3) of the Page 336 U. S. 323 National Labor Relations Act. The action forced upon petitioner was pursuant to a thoroughly considered and well established policy of the National War Labor Board. [Footnote 2/6] Both the National War Labor Board and the conciliation division of the United States Department of Labor were charged with special duties in regard to labor disputes by the War Labor Disputes Act of June 25, 1943, 57 Stat. 163, 50 U.S.C.Appendix, §§ 1501-1511. And the War Labor Disputes Act required both these federal agencies to conform to the provisions of the National Labor Relations Act. In order that these government agencies might be better able to carry out their statutory duty of conforming to the National Labor Relations Act, an interdepartmental committee was established. It consisted of representatives of the National Labor Relations Board, the Department of Labor, and the National War Labor Board. This committee was vested with power to discuss and consider policy questions and other problems relating to administration of the duties of the National Labor Relations Board and the National War Labor Board. This power was exercised. Rep.N.L.R.B. 74 (1943).
As early as April, 1942, the National War Labor Board, in the Little Steel Companies' controversy, 1 War Lab.Rep. 325, asserted its power to require that contracts for maintenance of union membership be inserted in collective bargaining agreements. It reached the conclusion, see pp. 354-356, that such collective bargaining provisions were valid because they fell within the proviso of § 8(3) of the National Labor Relations Act. From then on until 1945, when its last decisions were made, the National War Labor Board continued to require maintenance of membership contracts. [Footnote 2/7] Page 336 U. S. 324
"The Board is satisfied that, were it not for the existence of the war emergency, the employees involved in this case would have had the right to demand maintenance of membership in favor of the designated representative of a majority Page 336 U. S. 325 of employees. This right is granted to the employees under the National Labor Relations Act, and is a right which could be enforced in peacetime by strike. If the Wisconsin Employment Peace Act requires more than a majority of employees to vote for maintenance of membership under those circumstances, it must be subordinated to the provisions of the National Labor Relations Act."
Thus, up to 1943, when petitioner originally made this contract, and up to 1946, when it was automatically renewed, all indications were that § 8(3) authorized the type of contract which federal authorities practically commanded petitioner to accept. There seemed to be no reason then why petitioner or any other employer should anticipate that § 8(3) would be construed to permit states to nullify collective bargaining rights which Page 336 U. S. 326 that section was generally supposed to have recognized. It is apparent from this record that petitioner entered into the contract and permitted its automatic renewal in the belief that § 8(3) deprived the state of power to enforce its policy and that petitioner's reluctant action was due to pressure incident to the then accepted interpretation of § 8(3).
The new interpretation given § 8(3) by the Court rests on the conclusion that the legislative history of the Act shows that Congress intended to leave states free to bar the type of contract here involved. The committee reports and legislative comments on the national Act set out in the Court's opinion do lend strong support to this contention. In the light of this legislative history, I would join in the Court's interpretation of § 8(3) if we were interpreting that section on a clean slate. But we are not. The section has a history of administrative interpretation counter to the one that the Court gives it today. The language of § 8(3) [Footnote 2/10] is reasonably Page 336 U. S. 327 susceptible of the interpretation the section was given by the Conciliation Division of the United States Department of Labor and by the National War Labor Board, an interpretation to which the National Labor Relations Board appears to have assented. And, as previously pointed out, the National Labor Relations Board held this very petitioner guilty of an unfair labor practice for its refusal to bargain with its Wisconsin employees on their demand for a closed shop. Algoma Plywood Co., supra, at 994, 998. This NLRB finding was in 1940, a year after the passage of the Wisconsin Act here held controlling. I think a change in the interpretation of § 8(3) should not be made at this late date, when the section is no longer the law, merely to invalidate a contract made under federal compulsion and founded on a justifiable belief that § 8(3) authorized the contract. I would not make a trap of this settled administrative interpretation by subjecting this employer to penal damages for his good faith reliance on it. See Labor Board v. Hearst Publications, 322 U. S. 111, 322 U. S. 123.
"* * * *" "(3) By discrimination in regard to hire to tenure of employment or any term or condition of employment to encourage or discourage membership in any labor organization: Provided, That nothing in this Act, . . . or in any code or agreement approved or prescribed thereunder, or in any other statute of the United States, shall preclude an employer from making an agreement with a labor organization . . . to require as a condition of employment membership therein, if such labor organization is the representative of the employees as provided in section 9(a), in the appropriate collective bargaining unit covered by such agreement when made."