Case Name: NATIONAL LABOR RELATIONS BOARD v. MACKAY RADIO & TELEGRAPH CO.
Court: United States Court of Appeals for the Ninth Circuit
Jurisdiction: United States
Decision Date: 1937-10-19
Citations: 92 F.2d 761
Docket Number: No. 8137
Parties: NATIONAL LABOR RELATIONS BOARD v. MACKAY RADIO & TELEGRAPH CO.
Judges: 
Reporter: Federal Reporter 2d Series
Volume: 92
Pages: 761–768

Head Matter:
NATIONAL LABOR RELATIONS BOARD v. MACKAY RADIO & TELEGRAPH CO.
No. 8137.
Circuit Court of Appeals, Ninth Circuit.
Oct. 19, 1937.
For former opinion, see 87 F.(2d) 611.
Charles Fahy, Gen. Counsel, Robert B. Watts, Associate Gen. Counsel, Norman I. Somers, Senior, Litigation Atty., and Thomas I. Emerson and Stanley S. Surrey, Attys., all of Washington, D. C., for petitioner.
Louis W. Myers, of Los Angeles, Cal., J. Harold Merrick, of New York City, and Homer I. Mitchell, of Los Angeles, Cal., for respondent.
Before WILBUR, GARRECHT, and MATHEWS, Circuit Judges.

Opinion:
WILBUR, Circuit Judge.
My associates in this case adhere to the views they expressed and the conclusions they reached on the first hearing. These opinions are reported in 87 F.(2d) 631 and 632.
The opinion of the Supreme Court in National Labor Relations Board v. Jones & Laughlin S. Corp., 301 U.S. 1, 57 S.Ct. 615, 629, 81 L.Ed. 893, 108 A.L.R. 1352, and companion cases, sustain the constitutionality of the act in most of the aspects under attack in this case, and conformity with those decisions requires that I review the case from the standpoint of the validity of the Wagner-Connery Labor Relations Act (29 U.S.C.A. § 151-166). I refer to the opinions heretofore written for a statement of the facts.
Suffice it to say here that the five persons ordered re-employed with back pay were on a strike; that of sixty-nine members of the union who struck sixty-four were re-employed. The remaining five places had been filled by other employees of the respondent who had been transferred from Los Angeles and New York. The Reason given for failure to re-employ the five persons whom the Board ordered restored to employment was that all vacanies were filled. Respondent contended that these persons were not reemployed because they delayed their applications for re-employment until after their places had been filled; that four of them were placed upon a list of eleven whose reinstatement was to be passed upon by the officers of the respondent in New York; and that the reason they rather than the other seven were not re-employed, was because of their delay in applying. The Board, however, was of the opinion, and so found, that the respondent so manipulated the list of eleven who were required to apply for reinstatement and so fixed the time for such application that these individuals were thus deprived of the privilege of reinstatement accorded the other members of the union. The conclusion of the Board is stated in the following portion of their findings:
"The inference seems clear that the respondent's officials readily perceived that circumstances had provided them with an excellent opportunity to rid the respondent of the leaders of the Local which had just caused it to pass through a costly strike and it did not fail to make the most of the opportunity. And in thus taking advantage of that opportunity the respondent committed a violation of the act.
"We conclude that the four operators in question were placed on the list (of eleven) because of their union leadership and activity and therefore turn to the effect of that list upon the actions of the men named thereon.
"These four were induced to postpone their applications because of the reasonable belief that they would not be permitted to return to work and that belief was planted in their minds by conduct of the respondent directed against them because of their union activities."
As to the respondent's refusal to reemploy P. D. Phelps, the fifth employee, the Board likewise refused to accept the explanation that Phelps was not reinstated because at the time he made application his position had already been filled, and concluded that the refusal of the respondent was a violation of section 8, subdivisions (1) and (3) of the act (29 U.S.C.A. § 158 (1, 3).
In its "Concluding findings of fact and conclusions of law," the Board states:
"2. By refusing to reinstate to employment A. B. Loudermilk, L. K. Bash and P. D. Phelps on October 8,1935 and L. N. Rone and G. E. Palmer on October 9, 1935, thereby discharging said employees on the respective days, and by each of said discharges, the respondent did discriminate in regard to tenure of employment and has thereby discouraged membership in the labor organization known as American Radio Telegraphists' Association, San Francisco Local No. 3.
"3. By the acts described in paragraph 2 above, and each of them, the respondent has interfered with, restrained and coerced its employees in the exercise of the rights guaranteed in section 7 of the National Labor Relations Act [29 U.S.C.A. § 157]."
The Board further finds that the respondent has engaged in an unfair labor practice affecting commerce within the meaning of section 8, subd. 3, and section 2, subds. 6 and 7, of the National Labor Relations Act (29 U.S.C.A. § 152(6, 7), 158 (3).
In view of the decision of the Supreme Court in National Labor Relations Board v. Jones & Laughlin S. Corp., supra, and companion cases, holding that the Wagner Act is not in conflict with the Constitution, only two points remain to be considered. The first point is whether or not the order of the Board requiring the re-employment of the five former employees "is so arbitrary, capricious, unjust and unreasonable that it should be annulled for this reason alone." This question concerns the power of the court "to modify or set aside in whole or in part the order of the Board." Section 10, subd. (e), of the Act (29 U.S.C.A. § 160(e). The second question goes to the statutory power of the Board to order the re-employment of the five former employees. This proposition is thus stated by the respondent : "Even if the Act were constitutionally valid, the order of the Board requiring respondent to reemploy the five former employees, and to pay them wages for the period when they were not employees and rendered no services, was clearly beyond the power of the Board."
In view of the conclusion I have arrived at concerning this second proposition, it is unnecessary to consider the first or to exercise the discretionary power of the court in its enforcement order. Compare Federal Trade Comm. v. Curtis Pub. Co., 260 U.S. 568, 580, 43 S.Ct. 210, 213, 67 L.Ed. 408; International Shoe Co. v. Fed. Trade Comm., 280 U.S. 291, 50 S.Ct. 89, 74 L.Ed. 431.
The question of the statutory power of the Board I will now consider:
The respondent's argument on that question is as follows:
"The Board's decision is predicated throughout upon the assumption that these men were wrongfully 'discharged' by respondent. The Board purports to 'find' as a fact that they were so 'discharged' on October 8th and 9th, respectively. This purported 'finding' is purely a conclusion of law and is clearly erroneous. It is predicated solely upon the definition in section 2(3) [of the act, 29 U.S.C.A. § 152(3)] defining the word 'employee' to 'include any individual whose work has ceased as a consequence of, or in connection with, any current labor dispute. ' It is conceded that Congress in enacting a statute may attach to a word used therein any definition it sees fit, and such definition must be accepted as conclusive for the purpose of interpreting that statute. It is equally clear that such a statutory definition has no effect whatsoever, except as an aid to the interpretation of that particular statute. Obviously, the Congress has no power, by mere legislative fiat, to create a fact or to change a fact.
"The obvious purpose of this definition in the statute was to provide that employees, while out on strike, shall be regarded as if they still were employees in fact, for the purposes o'f collective bargaining. Without such a provision in the Act, its collective bargaining provisions would fail utterly in the event of a strike. There is no good reason to suppose that Congress, by creating this definition, solely for the purposes of this statute, intended or attempted thereby to create the relationship of employer and employee where no such relationship exists in fact. Clearly, this would be beyond its power, and it is not to be supposed that Congress was attempting something so obviously futile.
"The relationship of employer and employee is a status which rests in contract, and can be created only by a contract, expressed or implied. Under our American Constitution, no legislative body has power to create a contract between two parties without the assent of both. When an employee quits his job and walks out and refuses to return to work, the result is eithér that he breaches his contract of employment or that he terminates it. If it is a term contract and the term has not expired, he breaches it, — and the employer, at his option, may elect to treat such' breach as a termination thereof.
"If it is a contract at will,.it is terminated by the mere act of the employee in .quitting. In either case, the contract of employment has been terminated and the status of employer and employee no longer exists.
"The facts of this case, as found by the Board, show conclusively that the employment contracts of these five men were terminated on October 4th and 5th, respectively, by the voluntary action of the men in quitting their jobs. In fact, none of these men has been an employee of respondent at any time subsequent to October 5th.. Therefore, the conclusion, that these men were 'discharged',' is not merely contrary to' the evidence ; it is contrary to the facts as found by the Board itself.
' "It follows that the order herein is beyond the power of the Board under the Act, even assuming the Act to be constitutionally valid. It requires respondent to offer 'full reinstatement' to each of these men and to pay to each the full amount of wages, during the period from October 9, 1935, to the date of such offer of 'reinstatement,' which he would have earned if he had been employed by and rendering full service to respondent throughout that period. (This amount to be reduced in each case, by the amount the man had earned in other employments, during the relatively brief period between October 9, 1935, and December 2, 1935, the date of hearing. Under the Board's order there can be no reduction on account of the earnings of these men during the period subsequent to December 2, 1935, however large those earnings may have been.
"The Board evidently predicated its action in this behalf upon a misinterpretation of that portion of section 10(c) [of the act, 29 U.S.C.A. § 160(c)] which purports to authorize the Board by its order to require the employer to 'take such affirmative action, including reinstatement of employees with or without back pay, as will effectuate the policies of this Act.' It is submitted that this provision for 'reinstatement' of employees with or without back pay must be construed as applying only to such employees as have been wrongfully, discharged. So construed, it would be entirely reasonable (assuming the Act be otherwise valid). An employee who has been wrongfully discharged has the right to treat his contract of employment as still subsisting, and to recover his wages thereunder, less what he may have earned in the meantime. This is a legal right and may be enforced by an action at law."
In dealing with this question on the previous hearing, I said:
"The case might be disposed of on the theory advanced by the respondent that the individuals who were ordered restored to their positions by the Board had themselves, by their voluntary act, ceased to be employees; consequently, that the act does not apply because the act authorized the reinstatement of employees and does not regulate the re-employment or the employment of laborers. Thus interpreted, the act applies only to a situation where the .employer has discharged an employee against the will of the employee and his reinstatement is directed in consequence. But to base our conclusion upon that theory in the case at bar would require us to ignore the declarations in the act itself that employees on a strike are to be considered still as employees within the meaning of the act which declares the term 'employee' as used in the act 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.' Section 2, subd. 3, of the act (29 U.S.C.A. § 152(3). Consequently, the Board was acting well within the power Congress sought to vest in it, and our decision must be based upon the broad ground that the act, according to its plain terms, is unconstitutional as violative of the Fifth Amendment in so far as it attempts to force upon an employer engaged in interstate commerce a contract of employment with those so engaged who have voluntarily terminated contract of employment.
"The order requiring the employment of the five individuals named is beyond the power of the Board and cannot be enforced."
In none of the decisions of the Supreme Court involving the power of Congress to order a reinstatement of employees has the court gone so far as to sustain an order requiring the reemployment of persons who had terminated their employment by striking. Texas & N. O. Ry. v. Brotherhood of Ry. & S. S. Clerks, 281 U.S. 548, 50 S.Ct. 427, 74 L.Ed. 1034; National Labor Relations Board v. Jones & Laughlin S. Corp., and companion cases, supra. In the latter case Chief Justice Hughes, speaking for the court, said:
"The act does not compel agreements between employers and employees. It does not compel any agreement whatever. It does not prevent the employer 'from refusing to make a collective contract and hiring individuals on whatever terms' the employer 'may by unilateral action determine.' The act expressly provides in section 9(a) [of the act, 29 U.S.C.A. § 159(a)] that any individual employee or a group of employees shall have the right at any time to present grievances to their employer. The theory of the act is that free opportunity for negotiation with accredited representatives of employees is likely to promote industrial peace and may bring about the adjustments and agreements which the act in itself does not attempt to compel. As we said in Texas & N. O. R. Co. v. Railway & S. S. Clerks, supra, and repeated in Virginian Railway Co. v. System Federation No. 40 [300 U.S. 515, 57 S.Ct. 592, 81 L.Ed. 789] the cases of Adair v. United States, 208 U.S. 161, 28 S.Ct. 277, 52 L.Ed. 436, 13 Ann.Cas. 764, and Coppage v. Kansas, 236 U.S. 1, 35 S.Ct. 240, 59 L.Ed. 441, L.R.A.1915C, 960, are inapplicable to legislation of this character. The act does not interfere with the normal exercise of the right of the employer to select its employees or to discharge them. The employer may not, under cover of that right, intimidate or coerce its employees with respect to their self-organization and representation, and, on the other hand, the board is not entitled to make its authority a pretext for interference with the right of discharge when that right is exercised for other reasons than such intimidation and coercion. The true purpose is the subject of investigation with full opportunity to show the facts. It would seem that when employers freely recognize the right of their employees to their own organizations and their unrestricted right of representation there will be much less occasion for controversy in respect to the free and appropriate exercise of the right of selection and discharge.
"The requirement of restoration to service of employees discharged in violation of the provisions of that act [Railway Labor Act, 45 U.S.C.A. § 151 et seq.] was thus a sanction imposed in the enforcement of a judicial decree. We do not doubt that Congress could impose a like sanction- for the enforcement of its valid regulation. The fact that in the one case it was a judicial sanction, and in the other a legislative one, is not an essential difference in determining its propriety."
On the previous hearing I put my decision flatly upon the constitutional question; namely, the want of power m Congress to compel an employer to make a contract of employment. In so doing I assumed, contrary to the contention of the respondent, that the definition of the word "employee" contained in the Wagner Act applied to an employee on strike, as it clearly does, and said that the evident intent of Congress is to permit an order of reinstatement of such employees with back pay. Since our former decision in this case the Circuit Court of Appeals for the Fourth Circuit in Jeffery-DeWitt Insulator Co. v. National Labor Relations Board, 91 F.(2d) 134, decided June 16, 1937, has so held. As pointed out by Chief Justice Hughes, supra, speaking for the Supreme Court, in National Labor Relations Board v. Jones & Laughlin Steel Corp., the act does not require the employer to enter into a contract. If it did, it would be subject, no doubt, to the constitutional objections declared in the earlier cases to which he refers as not applicable (Adair v. U. S., supra, and Coppage v. Kansas, supra), which hold in effect that Congress cannot define the terms of a contract between employer and employee, nor require them to enter into a contract. The word "reinstatement" used in section 10(c) of the Wagner Act (29 U.S.C.A. § 160(c) must be construed in the light of this constitutional limitation upon the powers of Congress which would permit "reinstatement" of employees wrongfully discharged (National Labor Relations Board v. Jones & Laughlin S. Corp., supra) but would, in my opinion forbid a requirement of "reemployment"; that is, a new contract of employment. Moreover, as pointed out by the respondent the ordinary meaning of the word "reinstate" is "to place again in possession, or in á former state: to restore to a state from which one has been removed, to instate again." Webster's International Dictionary. The order of "reinstatement" must therefore refer to the status of the "employee" at the time of the unfair labor practice which, in the case at bar, occurred after the strike. To reinstate such an employee to his status at the time the respondent was guilty of the unfair labor practice would be to require the respondent to recognize his right to collective bargaining. It is not contended that this right was denied them. I conclude that under the statute (section 10(c) properly construed in the light of the Constitution the power of the Board to order "reinstatement" of an employee does not authorize an order requiring the employer to re-employ at his former salary or wage, or otherwise, a striking employee who was on a strike and who had thus voluntarily terminated his right to salary or wages at the time the alleged unfair labor practice was committed by the respondent.
I therefore concur in the conclusion of Judge MATHEWS that the application be denied.
MATHEWS, Circuit Judge.
I adhere to the views expressed in my separate opinion filed January 11, 1937, 87 F.(2d) 631.