Case Name: NATIONAL LABOR RELATIONS BOARD v. CARLISLE LUMBER CO.
Court: United States Court of Appeals for the Ninth Circuit
Jurisdiction: United States
Decision Date: 1938-10-15
Citations: 99 F.2d 533
Docket Number: No. 8361
Parties: NATIONAL LABOR RELATIONS BOARD v. CARLISLE LUMBER CO.
Judges: 
Reporter: Federal Reporter 2d Series
Volume: 99
Pages: 533–544

Head Matter:
NATIONAL LABOR RELATIONS BOARD v. CARLISLE LUMBER CO.
No. 8361.
Circuit Court of Appeals, Ninth Circuit.
Oct. 15, 1938.
Charles Fahy, Gen. Counsel, Robert B.. Watts, Associate Gen. Counsel, A. NormanSomers, Senior Litigation Atty., and Philip. Levy, Atty., National Labor Relations Board, all of Washington, D. C., for petitioner.
Theodore B. Bruener, of Aberdeen, Wash., and Charles H. Paul, of Seattle, Wash., for Carlisle Lumber Co.
Before WILBUR, HANEY, andi STEPHENS, Circuit Judges.
See: Jeffrey De Witt Insulator Co. v. National L. R. Board, 4 Cir., 91 E.2d 134, 112 A.L.R. 948.

Opinion:
HANEY, Circuit Judge.
The prior decision herein (9 Cir., 94 F.2d Í.38, certiorari denied 58 S.Ct. 1045, 82 L.Ed. 1539, May 23, 1938) sets forth the facts and nature of the proceeding. At that time we made an order enforcing the order of the Board, except that part requiring back pay. Supplemental orders regarding back pay as suggested in our opinion have been made by the Board, and their enforcement is now sought.
On May 3, 1935, 263 of respondent's employees went on strike. On June 25, 1935, respondent discharged the employees on strike. On July 5, 1935, the National Labor Relations Act, 29 U.S.C.A. § 151 et seq., became effective. Thereafter respondent engaged in practices, which were alleged to be unfair labor practices. On August 5, 1935, respondent resumed operations with 174 employees. Of that number 65 were new employees, and of the 109 old employees, 22 were former members of the union.
The charge that respondent had engaged in unfair labor practices was filed, and the complaint issued on January 16, 1936. Hearings began on April 7, 1936, and on the following day, respondent filed an answer. The Board made its decision, findings, conclusions and order on September 26, 1936. On October 19, 1936, the Board's petition for enforcement was filed.
Respondent contended that the act was not applicable to it because it was not engaged in interstate commerce. We held that the test as to the applicability of the act was whether or not the unfair labor practices directly affected interstate commerce ; that respondent's unfair labor practices did have such an effect, and that therefore the act was not inapplicable for the reason urged (page 144). Respondent seems now to concede that our holding was correct in view of Santa Cruz Packing Company v. National Labor Relations Board, 303 U.S. 453, 58 S.Ct. 656, 82 L. Ed. 954, March 28, 1938.
Respondent also contended that the act was not applicable because the strike had terminated the relation of employer and employee. We held that a strike, independently of the act in question, did not terminate such relationship, *and that the act so provided (pages 144, 145).
Respondent further contended that the act did not apply because it had discharged all employees prior to the effective date of the act, and since the act was directed to unfair labor practices by an employer to his or its employees, respondent had not violated the act because it had no employees. We held that Congress had declared the men to be employees because their work had ceased as a consequence of a current labor dispute by § 2(3) of the act, 29 U.S.C.A. § 152(3), and that the right to discharge was not a vested right but subject to the power of Congress to regulate interstate and foreign commerce (pages 145, 146). Compare: Appalachian Electric Power Co. v. National Labor R. Board, 4 Cir., 93 F.2d 985.
The Board ordered respondent to "Make whole its employees who were employed on May 3, 1935, who struck on that date or thereafter, and who were members of the union on July 29, 1935, the day of the respondent's first act of discrimination against all of the members of the union, for any losses of pay they have suffered by reason of such discrimination, by payment to each of them a sum equal to that which each would normally have earned as wages during the period from July 29, 1935 to the date of respondent's offer of reinstatement, less the amount earned by each of them during such period". With respect to respondent's contention that such provision was arbitrary and capricious, we said that the "act authorizes the Board to make such an order and the provision in the act is constitutional" (page 146). However, because the names of the employees and the • amounts to which they were entitled, .were not specified, we permitted the Board to adduce additional evidence and to find the amounts due (pages 146, 147).
Hearings were held oh the 1st, 2nd, 3rd and 4th of February, 1938, before a trial examiner. Respondent participated therein, was given full opportunity to cross-examine, and adduced evidence. The trial examiner then certified the evidence directly to the Board, and made no intermediate report as specified in § 32 of the Board's rules and regulations. On March 3, 1938, the Board made its supplemental decision and order. It found that "the employees named in Schedule A were employed by the respondent on May 3, 1935, struck on that date or thereafter, were members of the Union on July 29, 1935, and had not obtained regular and substantially equivalent employment elsewhere at the time of our order on September 26, 1936" and that the "amount due for the period up to February 1, 1938 is that set forth in Schedule A after his name" and ordered payment thereof. The date of February 1, 1938, was fixed because respondent had not offered reinstatement to employees. Schedule A, attached to the Board's order of March' 3, 1938, contains the names of 134 men, and amounts set after their names, totalling approximately $175,000.
The trial examiner took further evi-. dence on April 18, and 19, 1938. Respondent took part in the hearing. The trial examiner then certified the evidence to the Board. Ón May 21, 1938, the Board made a second supplemental decision and order concerning a' class of employees who "had apparently obtained regular and substantially equivalent employment". It found that certain of such employees "indicated their desire to return to their former positions with the respondent company. The evidence also indicates that they have lost valuable seniority rights, in some cases as much as ten years, which they would have retained had they continued in the employ of the respondent.
"We find, therefore, that these individuals did not have regular and substantially equivalent employment at the time of the Board's order of September 26, 1936."
It ordered payment of back pay, totalling about $9,000 to 12 men. An amendment to the latter order was made on June 9, 1938, inserting the name of one further employee with back pay in the approximate sum of $1,000.
Respondent was ordered to reinstate a total of 147 men and to give them back pay totalling approximately $185,000. Under the order the largest sum fixed as the amount of back pay was $3,080.16, and the smallest was $17.59. The following table shows groups consisting of amounts paid, and the number of men in each group:
The case is again before us on the Board's application to enforce these supplemental orders.
The main, if not the only purpose of the act, is to prevent obstructions to interstate and foreign commerce. It was legislatively -determined that some of the strikes, which are obstructions to such commerce, were caused directly or indirectly by certain practices frequently engaged in by an employer. Such practices were listed and designated as unfair labor practices (§ 8, 29 U.S.C.A. § 158). With the exception of § 8(2), 29 U.S.C.A. § 158(2) all the unfair labor practices spring from conduct by an employer to his "employees" (as defined in the act) only. Section 8(2), although not mentioning "employees" was directed to "company" unions. See: Senate Committee on Education and Labor Report No. 573, 74th Congress, p. 9; House Committee on Labor Report No. 972, 74th Congress, p. 15. I think we may therefore assume that § 8 provides as "unfair" the conduct of an employer toward his "employees" ás described in that section.
The Board is empowered to prevent any person from engaging in such practices. It may do so by an order requiring such person to cease and desist such practices, but it is not limited to such an order, for it may require such person "to take such affirmative action, including reinstatement of employees with or without back pay, as will effectuate the policies of this Act [chapter]". Section 10(c), 29 U.S.C.A. § 160(c). Regarding that provision, House Committee on Labor Report No. 972, 74th Congress, p. 21, states:
" The most frequent form of affirmative action required in cases of this type is specifically provided for, i. e., the reinstatement of employees with or without back pay, as the circumstances dictate. No private right of action is contemplated. Essentially the unfair labor practices listed are matters of public concern, by their nature and consequences, present or potential; the proceeding is in the name of the Board, upon the Board's formal complaint. The form of injunctive and affirmative order is necessary to effectuate the purpose of the bill to remove obstructions to interstate commerce which are by the law declared to be detrimental to the public weal."
A condition of reinstatement is that the employer must have been guilty of an unfair labor practice. Nat. Labor Relations Board v. Mackay Radio & Tel. Co., supra. Another condition is that the affirmative action must be such as will effectuate the policies of the act. The time when it is to be determined whether or not the affirmative action will effectuate such policies is the time When the Board makes its order, for what might effectuate such policies at a previous time might not do so at the time of the order. For example, an employee might die prior to the order, and although his reinstatement might effectuate the policies of the act prior to his death, the Board of course would not order an employer to reinstate a dead employee.
A more critical examination of the reinstatement provision is required by the contentions of respondent. The statute says that the Board may order "reinstatement of employees with or without back pay". While the act permits the Board to reinstate with or without back pay, it does not, I think, permit an award of back pay without reinstatement, because the back pay provision is connected with and dependent upon the reinstatement provision. It can be seen from the quoted portion of the committee report, that the provisions were not placed in the act specifically to benefit employees, although they may have such effect, but were designed to insure that an employer would cease unfair labor practices. In other words, I think Congress was dealing with causes of obstructions affecting commerce, and not with the relationship of master and servant as such. For these reasons, I decline to follow Mooresville Cotton Mills v. National Labor R. Board, 4 Cir., 94 F.2d 61, 66. It was there said that back pay might be awarded without reinstatement because it "would not offend the terms of the act, would do justice to the worker, and would tend to effectuate the policies of the act". I think such a construction offends the terms of the act, and what would effectuate the policies of the act is a legislative question for the Board, subject only to the constitutional prohibitions applicable to all such administrative agencies. It may be that such an order could be said to "do justice to the employee", yet I think that the real purpose of the statute was to deal with obstructions affecting commerce and that such purpose must be controlling in a construction of the act.
The only apparent basis for a construction which would permit "back pay" without reinstatement is by considering that such power arises from the Board's power to order a person guilty of unfair labor practices "to take such affirmative action as will effectuate the policies of this Act" independently of the words omitted from that quotation, which are: "including reinstatement of employees with or without back pay". I believe that since "reinstatement" and "back pay" were singled ©ut for special treatment, it was intended that the general words were to be limited thereby.
It should be noted that only "employees" may be reinstated. Section 2(3) of the act, 29 U.S.C.A. § 152(3), defines "employee" to. "include any individual whose work has ceased as a consequence of, or in connection with, any current labor dispute or because of any unfair labor practice, and who has not obtained any other regular and substantially equivalent employment". Respondent makes several contentions regarding the time when the men are to be considered as employees. T think that since the act provides that the Board may "order reinstatement of employees with or without back pay" before it could make such an order it would first have to determine whether or not the men were "employees" at the time of its order. If the men were not "employees" the Board would have no power to order their reinstatement. Therefore, the Board must determine when it makes its order, whether or not the men are "em ployees" at such time. The Board made a like construction of the act by its finding that the men in question had not obtained substantially equivalent employment on September 26, 1936, the date of its first'order, partially enforced by our former decision.
If any of the men did obtain such employment the "employee" status, as respondent contends, could not be revived by their voluntarily. or involuntarily ceasing such employment.
The Board now contends that the word "employees" as "used in Section. 10 (c) means employees as of the time the unfair labor practices occurred". For the reasons expressed I believe the time meant, is the time of the Board's order. The application of the definition thus urged by the Board would require that we disregard that portion of the act reading "has not obtained any other regular and substantially equivalent employment" and lead to an unchangeable status on the part of such "employees".
, The more difficult question is presented here, as to whether or not the definition of employees is limited in application as to time. We have held the definition is applicable to workmen prior to the Board's order. Is it also applicable after the Board's order and before reinstatement? In other words, where as here, the Board has made a general order requiring the employer to offer reinstatement to unnamed employees and to pay them an indeterminate amount of back pay, and the Board holds subsequent hearings to identify the employees and to determine the amount of back pay, must the Board again determine whether any of the men had received equivalent employment after its first' order, before awarding back pay? Inasmuch as there is no limitation of application in the definition of "employees", there are expressions in the opinion in Mooresville Cotton Mills v. National Labor Relations Board, 4 Cir., on rehearing, 97 F.2d 959, 962, 963, which indicate that the answer should be in the affirmative.
It can be seen that if the answer is in the affirmative, a workman might lose the back pay accruing after the Board's order and prior to the time when equivalent employment is obtained. On the other hand, if the answer is in the negative, the employee may obtain equivalent employment elsewhere, and also obtain back pay, and thus receive double pay. In the present case, this latter condition could not exist, however, because under the terms Of the Board's original order the amounts earned elsewhere were to be deducted from the amount the employee would have earned if he had been working for respondent. But as will be seen, I think neither of these considerations is important or material in determining the question.
The purpose of the provision as has been stated, is not to reward the employee, although it may have that effect, but is to serve in a measure as punishment so that employers are less likely to engage in unfair labor practices which Congress determined would lead to obstructions affecting commerce. Although Congress might have provided for no "punishment", it might have permitted double, triple or quadruple pay, or damages. E. g., the bill as originally introduced (S. 2926, 73rd Cong.) provided: "The order may require such person to cease and desist from such unfair labor practice, or to take affirmative action, or to pay damages, or to reinstate employees " Therefore, we. should not construe the ambiguous provision on the basis of what we think might be just between employer and employee, but attempt to ascertain the intent of Congress, leaving the burden fall where it may.
The act provides that the Board may order a person who has engaged in an unfair labor practice "to take such affirmative action, including reinstatement of employees with or without back pay, as will effectuate the policies of this Act [chapter]." § 10(c), 29 U.S.C.A. § 160(c). The term "employee" is defined to include "any individual whose work has ceased as a consequence of, or in connection with, any current labor dispute and who has not obtained any other regular and substantially equivalent employment". § 2 (3), 29 U.S.C.A. § 152(3). I believe Congress intended that the controversy would be settled by the Board's first order, did not contemplate that there would be further orders as here, before enforcement of the first order, and therefore could. not have intended the definition to be applicable beyond the first order of the Board. Thus we find the provision that "The findings of the Board as to the facts, if supported by evidence, shall be conclusive." § 10(e), 29 U.S.C.A. § 160(e). Therefore, a finding that individuals were employees at the time of its order, if supported by evidence is conclusive on us. After such finding, the Board may order reinstatement of such employees "with or without back pay". The only remaining question involves the amount of "back pay", that is, does the provision empower the Board to award back pay to the date of reinstatement or only to Ihe date of the order. I think it clearly means the former. The bill as introduced empowered the Board to order a person who had engaged in an unfair labor practice "to take such affirmative action including restitution, as will effectuate the policies of this act." It is indicative of the intent to restore to the employee both his job and the pay he lost, which would include the time to reinstatement.
As further support for the view taken herein that Congress did not contemplate further orders as here, and therefore could not have intended the definition of "employees" to be applicable to a time subsequent to the Board's first order, is the provision in Sec. 10(i), 29 U.S.C.A. § 160(i), that "Petitions filed under this Act [chapter] shall be heard expeditiously, and if possible within ten days after they have been docketed." Thus there would be practically no time after the Board's order for the status of the employees to change, and no time for subsequent orders as were made here.
The foregoing brings us to the action of the Board in declining to argue many of the questions discussed above, on the ground that we had sanctioned by our prior decision reinstatement and back pay, and that the' only questions now open, are the identity of the men and the amount of their back pay. It is my opinion that we should have ordered enforcement of the Board's order of September 26, 1936, with respect to back pay, in our opinion (9 Cir., 94 F.2d 138), but we felt bound by the action of this court in National Labor Relations Board v. Pacific Greyhound Lines, 9 Cir., 91 F.2d 458, wherein we declined to enforce an order requiring reinstatement of employees with back pay without stating in the order the amount of the back pay. After our first decision herein, the Supreme Court reversed 303 U.S. 272, 58 S. Ct. 577, 82 L.Ed. 838, the decision of this, court in the Greyhound Case, so that it is no longer a binding precedent.
Considered as an independent proposition, I find nothing in the act which requires insertion in the Board's order of the names of employees and amounts of back pay. Since the Board may order bade pay to the time of reinstatement, a date subsequent to its order, it could not of course place in the order the amount of back pay, and since Congress contemplated only one order it obviously intended that the enforcing court would enforce the order, if at all, without specifying names and amounts. Since the act itself provides no procedure for determining names and amounts, it obviously left those matters to be regulated by the Board by "rules and regulations". § 6(a), 29 U.S.C.A. § 156. If a dispute arises in regard to the identity of employees or the amounts due them, the issue can be tried by the institution by the Board of contempt proceedings before the enforcing court.,
It seems necessary to conclude that the supplementary orders should be disregarded and the "back pay" provision of the order of September 26, 1936, should now be enforced. Since the Board has held hearings, heard evidence, and made findings upon which the supplemental orders were based, there will be no necessity in this case of holding further hearings to go over the same ground. I think these findings are supported by evidence, and conclude that we should enforce the order of September 26, 1936, and direct respondent to pay the men, found by the Board to be "employees" on September 26, 1936, the amount of back pay which the Board found was due to them.
Another question presented to us has reference to the meaning of "any other regular and substantially equivalent employment". The word "regular", in my opinion, means substantially the same amount of work from point of time, as the employee had received from respondent. The words "substantially equivalent" cover many things, including rate of pay, hours, working conditions, location of the work, kind of work, and seniority rights, if any. In this cdnnection, respondent contends that many of the men in question made no effort to obtain work elsewhere, and that the rule requiring an employee to minimize his damages in an action for breach of a contract of employment, is here applicable. I would have no hesitancy in applying that rule, if the purpose of the act was to deal with the relationship of master and servant as such. But as is hereinbefore said, these provisions were not enacted to make a reward of damages to the employee because of the employer's conduct based upon justice between them. Such provisions were, I believe, designed as an additional safeguard to insure that the unfair labor practices will not obstruct commerce. As such, the act d.oes not state as a matter of law when reinstatement and back pay may be granted or withheld, other than as above delineated. The Board may and probably does consider the effort of the employee to obtain other employment, when it determines (in its discretion) whether or not reinstatement and back, pay should be awarded.
Respondent again contends that reinstatement and back pay should not be awarded because the men in question committed acts of violence, and do not, therefore, have clean hands. We answered that contention in the prior decision by the statement that "It is not the union, but the Board, which is asking enforcement". 9 Cir., 94 F.2d 138, 146. What I have said regarding the purpose of' the act is also applicable here, and requires the conclusion that the penalty is not controlled by equity. See also: National Labor Relations Board v. Remington Rand, Inc., 2 Cir., 94 F.2d 862, 872; Senate Committee on Education and Labor Report No. 595, 74th Congress, p. 16. I am unable to follow a contrary holding in National Labor Relations Board v. Columbian Enameling & Stamping Co., 7 Cir., 96 F.2d 948, 953. As an illustration of the foregoing it seems to me that had the act provided specifically for the imposition of a direct penalty by way of a fixed amount to be forfeited by the employer, that the "clean hands" doctrine could not be appropriately urged against the imposition of such penalty. Since the Supreme Court has said that "Reinstatement of the employee and payment for time lost are requirements imposed for violation of the statute" (National Labor Relations Board v. Jones & Laughlin Corp., 301 U.S. 1, 48, 57 S.Ct. 615, 629, 81 L.Ed. 893, 108 A.L.R. 1352), it would seem that we should consider such orders in the nature of penalties, and free from the application of the equita* ble defense suggested.
Finally, respondent urges that the supplemental orders were invalid because it was denied a full and adequate hearing, on the ground that it was at no time "advised of the contentions of the Board with reference to the back pay to be awarded the several employees, it had no opportunity to present its side of the question to the Board, either by oral argument or by written brief". The Board contends that respondent was fully apprised of the issues. In view of our decision enforcing in full the original order and disregarding the supplemental orders, it is unnecessary to decide whether or not the supplemental orders were made in violation of the "due process" clause of the constitution.
Enforcement of the Board's order of September 26, 1936 as herein stated, should be granted.
See: Senate Committee on Education and Labor, Report No. 573, 74th Congress, p. 6, and House Committee on Labor, Report No. 972, 74th Congress, p. 8; Nat. Labor Relations Board v. Mackay Radio & Tel. Co., 304 U.S. 383, 58 S.Ct. 904, 82 L.Ed. 1381, May 16, 1938; Black Diamond S. S. Corp. v. National Labor R. Board, 2 Cir., 94 F.2d 875, 879.
See also: Nat. Labor Relations Board v. Mackay Radio & Tel. Co., supra. "No person has a vested interest in any rule of law, entitling him to insist that it shall remain unchanged for his benefit". New York Central R. Co. v. White, 243 U.S. 188, 198, 37 S.Ct. 247, 250, 61 L. Ed. 667, L.R.A.1917D, 1, Ann.Cas.1917D, 629; Second Employers' Liability Cases, 223 U.S. 1, 50, 32 S.Ct. 169, 56 L.Ed. 327, 38 L.R.A.,N.S., 44.