Earl Warren: Number 339, National Labor Relations Board, Petitioner, versus News Syndicate Company, Incorporated. Mr. Manoli.
Dominick L. Manoli: Mr. Chief Justice, may it please the Court. This case is here on writ of certiorari to the Second Circuit. The Labor Act forbids the conditioning of employment upon union membership. An employee may not be required to join a union in order to obtain employment. Broadly stated, broadly stated the question in this case that threshold question in this case is whether certain contract arrangements between the respondent, Mailers' Union and various newspaper publishers in the New York area covering the employment of mail-room employees at these newspaper publishers whether this contract arrangements violates the closed-shop ban of the statute. Without going into a detail for the moment, the contract limits employment to journeymen and apprentices. It does not have any specific provision that membership on a union or the lack of it is a condition of employment. However, the contract does have a provision which provides that the General Laws of the International Typographical Union, commonly referred to as the ITU, which is the parent organization of the respondent, Mailers' Union. At the General Laws of the ITU to the extent that they are not inconsistent with the specific provisions of the contract and are not in conflict with federal or state law shall govern the relations of the parties with respect to conditions not specifically enumerated in the contract. Now, the General Laws, in turn, contained a number of provisions which comprehensively provide that all employees performing work which falls within the jurisdiction of the ITU, and the Mailers' are among them, that all such employees must belong to the union. I shall in a moment explain in greater detail, the provisions of the contract, the provisions of the General Laws and also the hiring practice which were pursued by the parties under the agreement, but I think what I've said suffices to pose the question which is at the heart of this case as well as the heart of the case which follows it, namely, whether this savings clause -- whether this savings clause in the contract suffices for purposes of the statute, can neutralize or suspend the otherwise illegal provisions of the -- illegal closed-shop provisions of the General Laws. Now, the Board held that the savings clause did not have that effect, it did not effectively suspend the otherwise illegal closed-shop provisions of the General Laws. The court below, on the other hand, held that they -- it did and the First Circuit in the case which follows this one, although not entirely free of doubt as endorsed the Board's position. I shall sketch briefly the facts which give rise to this controversy. The Mailers' Union is an affiliate of the ITU, and it represents mailing -- the mail-room employees of all newspapers in a New York City area including the Daily News and the Wall Street Journal. In 1954 and again in 1956, the union ordered the contracts with the Daily News and the Wall Street Journal covering the employment of mail-room employees and the charges which initiated this case before the Board challenged the legality of those contracts and also the operation of the hiring system under those contracts. The contract, which appears at page 527 of the record, Section 4 of the contract, which is on page 528 requires that the superintendent or the foreman or the assistant foreman in charged of the mail-room must be a union member. Section 5 of the contract, which appears on the following page 510 -- 529, limits employment to journeymen and apprentices, and Sections 20 (a) and 20 (b), and I'm merely paraphrasing these because they're rather lengthy, and which appeared at page 532 and 533, Sections 20 (a) and 20 (b) vest exclusive control over the mail-room employment, over mail-room hiring, in the foreman who, under Section 4 of the contract, is required to be a union member. And finally -- finally, on the following page, 534, there is Section 24 -- Section -- Section 24 of the contract which provides that it is understood and agreed that the General Laws of the International Typographical Union in effect in January 1955, not in conflict with this contract or with federal or state law shall govern relations between the parties on conditions not specifically enumerated herein. Now, the ITU General Laws, in turn, as I stated briefly, first of all, require that all employees performing work falling within the jurisdiction of the ITU must be union members. The General Laws also have a provision which, like the contract, require that the foreman in charge of the mail-room or composing room, as the case may be, that he must be a union member. The General Laws also require the locals -- require the foreman to follow a priority system prescribed by the local. And finally -- finally, under the Constitution of both the Mailers' Union, as well as the ITU, every member is under a duty and, of course, this includes the foreman who, under the contract, is required to be a union member, he's under an obligation to observe the union's rules. Now, in practice, in practice, the hiring of employees from the -- for the Daily News, mail-room employees of the Daily News and the Wall Street Journal went something like this. The work of the mail-room employees consist of bundling and tying newspapers and putting them on trucks for delivery to their destination. And the foreman selects the employees for each evening's work and the number of employees may vary depending upon the size of the paper. It may vary from 50 to 200, we are told. He selects the employees from list which are furnished to him by the union steward who was called the "chapel chairman". The first list consists of full-time employees who are called situation holders. The second list consists of regular substitutes who, either as the name -- as the name indicates, either substitute for the regular situation holders or supplement them in case there was extra -- there was extra work. All of those -- all of the employees who appear on these two lists are union members and the foreman hires them on the basis of a priority determined by the date on which they have deposited their union card with the chapel chairman or union steward. Now, if, if, after these two lists are exhausted, additional workers are needed, then the foreman will hire union work -- workmen who may work for some other newspaper, but who are available for work either of the Daily News or the Wall Street Journal on that particular occasion. If more workers are still needed, then the foreman will hire the -- from nonunion extras who, in the parlance of the -- of the shop, shape the shop. Now, despite occasional protests, despite occasional protests, none of these nonunion extras, whatever their competence, whatever their experience, are hired, until all of the union people have been taken cared of including those who may have never worked either for the Wall Street Journal or -- or the Daily News. And they say that none of these are hired until all of the union people are taken cared of. Now, on these facts, which I have sketched rather briefly, the Board found that the savings clause in the contract did not effectively neutralize or suspend the closed-shop provisions of the General Laws. And it found that the contract and the practice pursued thereunder, including the foreman clause, which vested exclusive hiring authority in the foreman, who is required to be a union member and including -- including the General Laws provision which required the locals to prescribe a priority system for its members that the contract and all these things here established an unlawful closed-shop and union preferential hiring system in violation of the statute. Now, in relevant part -- in relevant parts, the Board ordered the parties to refrain from the unfair labor practice which have been found and in accordance with the steps prescribed in the Board's order to specify in the contract which provisions of the General Laws were incorporated into the contract and also, also to make clear, to make clear that the closed-shop provisions of the General Laws were not binding either upon the employees or the foreman who was vested with exclusive hiring authority. The Board also, I might add, had a Brown-Olds problem -- a Brown-Olds remedy in the case, but I believe that we don't reach that issue in this case. We deal what the court below did. The court below refused to enforce the Board's order. It made the initial critical threshold finding that the savings clause -- that the saving clause in the contract was sufficient, was sufficient to neutralize the closed-shop provisions of the General Laws. And having made -- having made this initial critical threshold finding, the Board -- the Court rather, the Court said aside the Board's ancillary findings of unfair labor practice on the ground that the record failed to disclose that there had been an unlawful discrimination in the operation of the hiring system. And as I say, the Court did not reach the Brown-Olds problem, of course, it set -- set aside the Board's order -- set aside the Board's unfairly practice findings. Now, as I have said, the critical threshold issue in this case is whether the contract, despite the savings clause which purports to suspend, which purports to suspend whatever laws are in conflict with the federal -- with federal law, whether the contract, nevertheless, imposed upon the employees a closed-shop. Now, the argument against us, the argument against us is, in essence, in essence that the savings clause must be taken at face value and hence, must be deemed to negative, must be deemed to suspend the closed-shop provisions of the General Laws. Now, viewed nakedly, viewed nakedly without the gloss of history or practice and perhaps, it's clearly as a matter of private contract law, the savings clause might perhaps be deemed to negative the closed-shop provisions of the General Laws. But we submit, we submit that sole view of the clause is to engage in a dry syllogistic exercise that's wholly devoured of any meaningful insight in the problem that we have before us. In order to appraise the significance of the saving clause, its effectiveness or it's ineffectiveness, we think, we must look not only to the bare words of the contract, but we must also look to the history behind it as well as the meaning, as well as the meaning which the employees as well as the hiring foreman were likely to attach to that savings clause.
John M. Harlan II: Your argument assumes the complete bona fide list of the contract in any given situation.
Dominick L. Manoli: I'm not --
John M. Harlan II: Isolated contract.
Dominick L. Manoli: We don't -- that -- that's right, we do --
John M. Harlan II: You don't -- you --
Dominick L. Manoli: We -- we -- the -- the counsel representing the general counsel in this case did not challenge the good faith of the parties in -- in arriving at this contract. In other words, we -- there was no claim that this was a subterfuge --
John M. Harlan II: Yes.
Dominick L. Manoli: -- subterfuge and, of course, I am precluded by that concession from arguing that this was a subterfuge. But we do say, it is our position, it is our position, Your Honor, that in the light of the ITU's traditional historic closed-shop policy, the role which the General Laws have played in implementing, in implementing that policy and the persistent efforts which the ITU made even after the closed-shop had been outlawed in 1947 to preserve that traditional close policy, we say that the parties, without having specified which provisions of the General Laws were included in the contract and which were not included in the contract that they could foreseeably, foreseeably see that the employees would give those significance, would give those significance in the saving clause, that they would continue to regard the closed-shop provisions of the General Laws and continue to be operative and that therefore, therefore, the savings clause, having those foreseeable results, consequences that the parties must be deemed to have intended, to have intended to include their closed-shop provisions in the contract, that's --
John M. Harlan II: Another way of putting it is within the context of this past history of the contract of this kind perceive that, is that a fairway of putting that?
Dominick L. Manoli: That's right. Now, for nearly a century, for nearly a century, prior to 1947, the ITU has avowedly followed a closed-shop policy. This has been in the historic, traditional policy of the ITU. And the General Laws which the ITU has insisted on incorporating by virtue of these incorporation clauses, the -- the General Laws which the ITU has insisted in incorporating in collective bargaining agreements, have played a significant role in insuring and preserving that closed-shop policy. As I said a moment ago, the closed-shop requires that all people performing work following the jurisdiction of the ITU must be union members. They have a clause that requires a foreman to be a union member and have -- and have exclusive hiring authority, they provide for union control over apprentice system. They provide for union control over a competency test, but 100-year old policy is not easily abandon and, of course, the ITU is not an exception. Is not -- or did prove that you bid any different in this respect because both before, both before and after 1947, when Congress outlawed the closed-shop, the ITU gave notice that it would not abandon its historic and traditional closed-shop policy and the overt steps, the overt steps which the ITU took after 1947, after the closed-shop was outlawed by Congress, the overt steps which the ITU took in -- in relation with publishers to preserve and maintain the closed-shop are a matter of judicial record. They are set forth in our brief, and I will not attempt to recapitulate them here. Now, following these unsuccessful efforts, the ITU then pursued the policy of incorporating its general -- the General Laws, the General Laws in the -- in the collective bargaining agreements but added the savings clause. And they added a comparable proviso to their General Laws, but other than that, they made no significant change in their General Laws. At no time, at no time has the ITU given its membership for its locals, a list of the laws which were suspended because they were in conflict with the federal statute. And although in 1953, the ITU did amend its oath of membership, so as to delete a provision in there, which required union members to prefer fellow union members in employment, no instructions have ever been issued to foreman generally, as to which of the laws were no longer binding upon them in the exercise of their exclusive hiring authority. Indeed, as a record in the case which follows (Inaudible) when publishers have sought to persuade the ITU to specify which laws were deemed to be operative and which were not deemed to be operative, the ITU has refused to do so and instead, it has insisted upon this vague exclusionary clause.
John M. Harlan II: Is this formal contract phenomenon is peculiar to this trade?
Dominick L. Manoli: As far as I know, yes.
John M. Harlan II: Well, what I was wondering was whether its Board's position would have application in other trade for --
Dominick L. Manoli: Oh, we --
John M. Harlan II: -- there have been no practice.
Dominick L. Manoli: Oh, we've had cases, Your Honor, which have -- which have had contracts containing an illegal union security clause with some kind of a suspension clause. We've had that. But I think this is one of the few cases that we've had with this tremendous history impact of the contract. I mean the ITU's traditional closed-shop policy, that's a rather unique sort of situation. But we have had cases, we have had cases which involved the effective suspension of the suspension clause in the contract, there's a number of them. Now, the Act guarantees to employees the right to obtain employment without being union members. And a contract which imposes that condition infringes upon that right. Collective bargaining contracts have an impact beyond the parties -- the immediate parties to the contract. They do have a significant impact upon the employees. And it is our position, it is our position that a contract of this kind, contract of this -- that -- that in interpreting a contract to this kind, we must take into account what the employers are likely foreseeably to read into a savings clause of the kind that we have here. We say that if it was -- if it is foreseeable that the employees will pay -- give low -- intentionally give low significance to the savings clause and that they will continue to regard the closed-shop provisions of the General Laws as being -- as continued to be operative, then we say that the parties here must be deemed to have been intended that arrangement. We believe that the Board is entitled to make that judgment in this case. The savings clause shifts from the employee -- shifts to the employers the duty, the duty of forecasting which of the laws are in conflict with the federal statute and which are not, which are incorporated in the contract and which are not incorporated in the contract. The General Laws themselves certainly give them little guidance because, as I said a moment ago, all of the General Laws have is a savings clause comparable to the one in the contract here. And moreover, curiously enough, curiously enough, the General Laws continue to assert, continue to assert that various unspecified provisions of the Taft-Hartley law are either invalid or unconstitutional. And the contract itself gives the employees no guidance either because it just simply has this vague exclusionary clause that whatever provisions of the General Laws that are not in conflict with the federal state -- that those provisions which are in conflict with federal -- with federal state law are not incorporated in the contract. Now, if the parties themselves were either incapable or unwilling to specify, what provisions of the General Laws were suspended and what were not, how much more difficult a task could have been for the employees as well as the foreman who was vested with exclusive hiring authority. Surely, they cannot be expected to pay the part of the lawyers. We think, we think that the result would be that they would regard the savings clause as either of little significance or is merely signifying that perhaps, in some future date, there might be some judicial determination that some of the laws were no longer applicable. Now, the consequence of that kind of a situation would be that the foreman, in order to hedge, the foreman has to be a union member in order to be able to hold his job, that the foreman in order to hedge against possible disciplinary action of the hands of the union, possible loss of employment as a foreman, that he would continue to abide by the closed-shop provisions of the General Laws. Secondly, that the employees too would play it safe, would play it safe, and they too, as a hedge against the laws of employment, would either maintain their membership in the union in good standing or be encouraged to join, to join the union. In a very real, in a very real in the practical sense, we think that the parties here are created a situation, have created a situation were the employees will act as though the closed-shop provisions of General Laws had been specifically included in the contract. And we say, we say that the Board is entitled -- is entitled to say that the vague savings clause does had that foreseeable consequence and with the employees will act as though the closed-shop provisions of the contract had been specifically inserted in the contract and that therefore, the parties here are just as legally at fault, as though they have specifically included the closed-shop provisions of the General Laws into the contact itself. Now, Your Honor, I don't believe with -- what I'm saying, as to the foreseeable consequences of this kind of a clause, is mere speculation. Because the record in this case -- and the record is -- makes -- makes it clear that those who were in charge of hiring, superintendent and foreman who were in charge of hiring in the mail-room of the Daily News in the Wall Street Journal, that they deemed themselves bound by the ITU rules. One of them testifies that he saw no conflicts, they saw no conflict between the ITU rules and the Taft-Hartley statute and finally, one of them said that, If he had a choice to make as between two equally competent people, two equally competent journeymen, he would select the union member. And finally, let me add this, let me add this that as the record in the case which follows this, shows it was precisely for this reason that the publishers, in succeeding case oppose, oppose these General Laws clause because they felt, they felt that the employees would continue to regard the closed-shop provisions as being operative and binding upon them. And for these reasons, we believe that the Board's position on this issue should be sustained.
Hugo L. Black: May I ask you about one sentence in the Court's opinion below --
Dominick L. Manoli: Yes, sir.
Hugo L. Black: -- whether or not it's correct. The contract was made nothing which on its face which has said the violation of the Act, the general counsel so conceded with the juries that the Board does not contend otherwise.
Dominick L. Manoli: That's true, Your Honor. The --
Hugo L. Black: (Voice Overlap) --
Dominick L. Manoli: -- that the contract, the contract does not have any provision saying that, saying that union membership is a condition of employment. But we do say, we do say that the vague savings clause has the foreseeable effect of including, of including in the eyes of the employees, of including the illegal closed-shop provisions of the General Laws, and that, therefore, therefore, even though there's nothing on the face of the contract that says Closed-shop provisions are in effect, that therefore, the parties must be deemed in view of those foreseeable consequences as though they had expressly included the closed-shop provisions of the General Laws into the contract.
Hugo L. Black: But then I don't quite understand. Is this correct or not that the Board's general counsel conceived that there's nothing in the contract on its face which can be violative of the Act?
Dominick L. Manoli: Well, Your Honor, I think that all that means, all that means that there is no specific closed-shop provisions in the contract itself. There is no provisions saying that --
Hugo L. Black: But is there any other language that on the face of the contract, you could say violated the Act?
Dominick L. Manoli: We -- we take the position not that this -- it's a savings clause -- the savings clause, that because of what we deemed to be is its ineffectiveness.
Hugo L. Black: You think it can?
Dominick L. Manoli: To suspend the General Laws. Now, that -- that suit was foreseeable to the parties who entered into this contract.
Hugo L. Black: You think they could utilize it as a vehicle from putting over a closed-shop contract --
Dominick L. Manoli: That --
Hugo L. Black: -- and the facts could show that?
Dominick L. Manoli: That is the foreseeable consequence of this kind of a clause. That is our position, Your Honor.
William O. Douglas: Now, on page 834 of the record, Judge Hanks' opinion, he -- he says, We find a dirt of evidence, either the union journeyman was ever hired with preference to a nonunion journeyman or that the qualifying standards for the examination of the two groups are different.
Dominick L. Manoli: Yes.
William O. Douglas: Do you quarrel with that?
Dominick L. Manoli: Well, Your Honor --
William O. Douglas: Are -- are you talking about the potential in this type of arrangement for discrimination?
Dominick L. Manoli: We -- we -- the Board found here, the Board found here that there had been actual discrimination.
William O. Douglas: Well, the Court disagreed on that?
Dominick L. Manoli: The Court disagreed on that, but we think, Your Honor, we think, Your Honor, that the Court in reaching that conclusion was largely influenced by the fact that he had rejected the Board's original position. It's the threshold, the threshold proposition of the Board that this contract, this contract, in effect, included the closed-shop provisions of the General Laws. Had the court below agreed with us on that, I think that there is a serious question, a serious question whether the Court would've looked to the actual operations of the hiring system as being an innocent non-discriminatory one.
William O. Douglas: Do you, in your brief, point out instances where a union man was hired in preference to a nonunion man?
Dominick L. Manoli: Yes, we do. Yes, because, Your Honor, as I indicated or perhaps, I didn't indicated here, in practice, in practice here, the union foreman and the union's admission committee, they administer the competency test. And then they selected that members from those whom they had found qualified. And -- but these employees and then these employees once they had been admitted into the union, once -- then they enjoyed priority over the non -- the nonunion extras, the nonunion extras. Now, in 1956, when the union decided to enlarge its membership, it took in some 31 out of a 60 nonunion extras in the mail-room of the Daily News. Thereafter, those 31 employees who were inducted in the union, they enjoyed priority over all the nonunion extras, all over all the nonunion extras, including one of the charging parties in this case, Randall, even though prior to their induction into the union, Randall had had seniority over 30, over 30 of the 31 men who had been taken into the union.
Hugo L. Black: Are you asking us -- I don't quite -- are you asking us to review the holding of the Court that the record is varying that even in the slightest answer, there has been discrimination in the conduct of these examinations?
Dominick L. Manoli: No --
Hugo L. Black: Are you asking us?
Dominick L. Manoli: We did not --
Hugo L. Black: Is that the question presented as it must (Voice Overlap) --
Dominick L. Manoli: We did not preserve that question, Your Honor. But as I say, I think that the -- those that -- at the basic issue, the threshold issue in this case is so intertwined, is so intertwined with the operation of the -- of the -- the actual practical operation of the hiring system, that you really can't divorce it to. And that there is nothing, it seems to me, that precludes this Court from looking at the objective facts but the objective facts relating to the hiring system has practiced both by the Daily News and the Wall Street Journal.
Hugo L. Black: I still don't quite understand that.
Dominick L. Manoli: Yes, sir.
Hugo L. Black: If we're not asked to upset what the Court found, how could we consider and in connection with what the contract -- whether the contract, on its face, is vague?
Dominick L. Manoli: Well, Your Honor --
Hugo L. Black: I mean the particular facts of this case.
Dominick L. Manoli: It seems to us that you can still look at what the objective facts were as to the how the hiring did -- did proceed. Now, it's true, it's true that the court below disagreed with the inference that the Board drew, as to whether or not there was illegal discrimination. Now, but I don't think that that precludes this Court, however, from looking at the objective facts.
Hugo L. Black: Certainly it wouldn't if you presented it as a question, but should we do it if you do not present it as a question?
Dominick L. Manoli: Well, otherwise, Your Honor, if it seems that the Court doesn't look to the background, to the -- to the background here. There will be -- that you would just simply have an abstract question and it's important, I think, in order to appraise the situations, you'll look to that. And we say that it's important because in large measure, at least it's our view, in large measure, the court below found that non-discriminatory operation of the hiring system largely because of its rejection of the Board's position with respect to the savings clause. Thank you.
John M. Harlan II: You made a very sweeping finding on page 42A --
Dominick L. Manoli: 42A?
John M. Harlan II: -- which includes the record does not warrant the finding if the hiring system in general is not merely this contract or the competency system in particular, by its discrimination against nonunion applicants incur his union membership.
Dominick L. Manoli: Well, Your Honor, once -- once they had decided, once they had decided that the -- that the closed-shop provisions of the general laws were not incorporated in the contract or that there was no reason to attribute to the parts that they could have foreseen that the employees would've acted as though they were closed-shop provisions. Once the Court had made that critical threshold finding, he could very -- he'd very easily came to the conclusion that the -- that the hiring was done in a very benign non-discriminatory fashion. But had they agreed with us, had they agreed with us on our threshold proposition, I venture to say that the Court might have had a different view of the actual operation.
John M. Harlan II: Well, I understand.
Earl Warren: Well, I wonder why you didn't raise it in -- in -- on your petition.
Dominick L. Manoli: Well, I suppose that we didn't raise it because we had so many other issues in the case and that we felt that unless we could win upon these threshold questions that we'd never be able to get to that last one.
Earl Warren: Mr. Schoemer.
John R. Schoemer, Jr.: Thank you, Mr. Chief Justice, may it please the Court. I'm appearing in this case on behalf of the employer which is one of the daily newspapers of New York, which for a number of years has had collective bargaining agreements with the union represented here by Mr. Van Arkel, a local of the International Typographical Union. Mr. Van Arkel and I are appreciative of the Court's allowing us to divide the argument time between us, since sometimes happens in the case of labor and management refinery and not fully in agreement with each other's position in all respects. I think, if I may, I would like to point out as a starter, some of the points of difference between this case and the ones which have preceded it and the one which follows it. In the first case which Your Honors heard yesterday, the hiring hall case, it was made quite plain that in that kind of situation where alleged discrimination against employees, because they elect union membership occurred, took place off the employer's premises at a hiring hall represented by the union. We have no such question as that here. The Board does say here that, in effect, this operated is a kind of de facto hiring hall because the union -- the foreman who actually did the hiring had to be member of the union. But, in fact, he did it at the employer's shop and as the proof is abundantly clear, many of the employees hired were, in fact, nonunion men. A point of difference between this case and the one which immediately preceded it is that in that case, the hiring system was conceded by the union to be illegal, as I understood it. And the union therefore is attacked on the whole theory of the mass dues reimbursement order which the Court had directed against it. Again, that is something quite different from our case where there is anything but a concession that the actual hiring practices were illegal and in fact, until this Court rules otherwise, on the basis of existing positions by the Courts of Appeal. It appears that the hiring practices were quite legal. Finally, in the case which follows us in which Mr. Van Arkel would represent the petitioner, the employer, in that case, was the -- was the charging party and no application of Brown-Olds against the employer was involved there. Now, as we understand the argument or the position that is taken by the Board here, it is basically that this collective bargaining agreement which is one applicable to a local of the International Typographical Union and to all of the New York City newspapers, in effect, constituted a per se violation of the Act because it provided for a closed-shop. As we understand it further, the Board has purported to go farther and to find that these respondents, both the union and employer, maintained and enforced an illegal, unlawful union security system and a preferential hiring practice. As members of the Court have already observed all of the significant findings by the Board, have been reversed by the Court of Appeals in what, although my motives maybe suspect I say, it's an unusually well-written and recent opinion showing very careful study of the rather complicated record -- facts in the record here. As we, the respondents, stand before you now, we thus have two issues to present to the Court, recognizing that the Board's declination of our invitation, if we can put it that way, to argue Brown-Olds in the context of the present case, is understandable and must presumably be accepted by us. We have, nevertheless, made the argument in our brief on the point of view of an employer who, I think, has an even stronger story to tell than the presentation made yesterday on behalf of the union, which had been visited with the Brown-Olds remedy. But so far as this argument is concerned and in order not to foreclose Mr. Van Arkel from his argument, I would like to confine myself to the actual mechanics of the hiring system and whether, in fact, a violation of law took place and whether the Board was correct in finding that such a violation took place or conversely, whether the Court of Appeals correctly found that the system was perfectly legal, understandable and in no sense operated as one design to encourage union membership.
Charles E. Whittaker: The first thing the legal system as it is actually operated for has delineated in the contract.
John R. Schoemer, Jr.: This will be the system, Mr. Justice, as it actually operated as found by the -- as found by the Court of Appeals. There is not too much to deal with the operation of the system in the contract itself. There was, of course, many relevant provisions dealing with seniority and things like that. But the basic problem here is, as -- as we understand it and this is the charge with which we have been confronted for nearly five years now, that you go out and you hire people to work in the mail-room of your newspaper and if you have two people in front of you, one of whom has a union card and one of whom doesn't, you hire the union cardholder and not the nonunion man. That is basically the charge that's made against us, and we would like to explain why, in a sense, that happens to be true, but why it happens to be true and why we think it leads to no illegal results. In the operation of a manufacturing business, which, in a sense, the production side of a newspaper is, the manpower requirements vary very considerably from one day to the next on a quiet night when the papers is small when you only need, perhaps, 50 men, but when you get to the Sunday paper, where there is one of bigger size and wider circulation and you perhaps need four times as many. Now, in order to meet the shifting demands for manpower, a system, such as I will now describe you, has grown up over the years. Initially, we start off with the hardcore or calvary of individuals who work each night, they are called in the trade regular situation holders. They are the persons who come to work, go to the locker room, change their clothes and report immediately for work without having to see the foreman first. The next group is called regular substitutes. Now, these are journeymen also. These are the individuals who fill in for the absent regular situation holders, who are away because of vacations or illness or the like. Now, everybody in these first two groups, the record shows in this case, is a member of the Mailers' Union, which is not too surprising considering that the union has had a contract with the New York City newspaper publishers for, I suppose, more than half a century. Now, we get down to the third group which really divides into two classes, and these are the people who are known as ?extras.? And for the most part, they are needed on Friday and Saturday night when these -- the Sunday newspaper is being produce. There are two types really of extras. The first extra -- extras are the men who come, who are working regularly at other shops, but who want to have an extra shift of work because of the extra income involved during the week. So consequently, they come around to a particular newspaper, let us say, the news, and as a result, they are put to work before the last group of extras who are known as the nonunion extras, the casuals, a term descriptive of the group in which the charging party in the case now before Your Honors fell. The man who filed the charge was named Burton Randall. His livelihood was earned in the fish business in New York City. He worked five days a week at Fulton fish market starting at 5 o'clock in the morning. But for a number of years, he had followed the policy of coming around to the Daily News to work in its mail-room on Friday and Saturday nights. And he would get off work at 2 o'clock in the afternoon or something and would shape, as it has been called, which means to apply for work in the trade regularly on those nights. Now, he was never a member of the Mailers' Union. And he never had the slightest difficulty for many years in obtaining employment on those nights. When -- in 1956, the Mailers' Union, the other respondent here inaugurated a further program of modifying its traditional hiring practices because of the impact of the Taft-Hartley Act and so forth. And came forward to the publishers in New York City with the scheme under which certain of the men, who fell in this last group of nonunion extras, could convert themselves and be promoted to regular substitute status, that being the highest step on the ladder as you would recall. In order to decide who of the nonunion extra group would be eligible to apply for passing the competency test so that he could move up the step, the arbitrary, but I submit entirely reasonable requirement was laid down that the individuals who, during the previous year, had worked an average of not less than three shifts per week would be eligible to take the examination. Now, this was a test that Randall couldn't make. Randall being nothing but a moonlighter as he is called, working -- working weekends was not able to take the competency test because he couldn't meet this three-shift requirement.
Charles E. Whittaker: Not just to weigh it down, not by whom.
John R. Schoemer, Jr.: By the union initially with the agreement of the employers. The employers were consulted in their agreement obtained before such a scheme was put into effect. As a result of the --
Potter Stewart: What kind of an examination is this?
John R. Schoemer, Jr.: Well, I believe it's both written and practical, Mr. Justice Stewart. I'm not entirely sure, but there is a method described in the record by which the individuals' competency is determined, that is they --
Potter Stewart: (Voice Overlap) to wrap newspapers?
John R. Schoemer, Jr.: Well, there is -- there is a little more to it than that. I -- I wouldn't want to concede that it was two highly skilled a job, since we still have to bargain collectively with this union from time to time. But I would -- I would honestly concede that there is more to it than simply tying a string around the bundle of newspapers. The record does contain evidence of the type of the examination that was administered, and --
Charles E. Whittaker: Does this involve (Inaudible)
John R. Schoemer, Jr.: Well, most of that is done by machine, but not all of it, Mr. Justice Whittaker, and I can't answer question. I'm sorry, I just don't know enough about the mechanical side of it. In any event, as a result of the examination, 30 people who were junior to Randall in the sense that they had been working for many years at the news -- been working for less years at the news than Randall had, were moved up to this regular substitute status. And thereafter, because they were in that status which is the higher rung on the ladder than the extras, when they came to work, they were hired ahead of Randall. Now, coincident -- coincidentally with that move, they became members of the union. Now, the Board finds very sinister motives in this in regard to this a highly suspicious circumstance, but I submit that there is no basis for that because the union as part of this arrangement had agreed that it would throw open its membership list and would take in additional members, those who met this competency availability requirement. Those persons who, having shown over a period of years their willingness to earn their primary livelihood at this trade by working at least three weeks, were found -- three shifts a week, excuse me, were found acceptable by the union as -- as members, and the fact that they -- when they became union members, they, thereupon, went ahead of Randall in hiring is, to our mind, no reflection at all of the fact that Randall was being discriminated against because he was not a union member. Now, basically, that is the -- the factual background of this case as a result of Randall's charge, protracted hearings were held before the Board, extending over a long period of time, as besides the record before you will attest, throughout these hearings. Well, I should say that in the course of the hearings, it soon became apparent that the -- the woes of Mr. Randall were lost in sight of and this case became another battleground between the Labor Board and the International Typographical Union with the employer again in the unhappy position of being an unwilling participant in the (Inaudible). During the course of the hearings, general counsel's representative made what we have always regarded to be a very significant concession in this case in terms of the liability thereafter sought to be imposed upon the employer. It appears at page 129 of the record, and he said, May I state for the record that we don't question the good faith of the parties in trying to deal with this problem. What we do allege here is that the conclusions they've reached or the practice that resulted and the contract that resulted, unfortunately, ran afoul of the provisions of the Taft-Hartley Act. Now, notwithstanding that concession, notwithstanding that throughout the subsequent proceedings in this case, no claim had, at any time, been raised that some liability should be imposed on the employer in terms of a payment of back pay, union dues, initiation fees or the like. The Board, on its own motion in the -- as a result of inquiry made by a member of the Board during oral argument of the case, nobody having said a word about Brown-Olds that Your Honors have already heard how this Brown-Olds' thunderbolt was forged in the construction and trucking industries and so forth, but unfortunately it was hurled in our direction without the slightest warning that it was coming, as a result of the oral argument in the case, we find ourselves in the position of having a tale added by the Board to the order recommended by its trial examiner, in which the employer and the union are ordered jointly and severally to reimburse members, all employees in the mail-room for dues and assessments and initiation fees paid to the union over period of time, which extends back to Christmas day, 1955 at this point. This is a relatively small unit. They're only something over 200 employees involved, but our potential liability under that order at this moment is in excess of $350,000. I would close --
Hugo L. Black: Do you think they wanted -- wanted you to replenish all workers in that --
John R. Schoemer, Jr.: All -- all employees in the mail-room, Mr. Justice Black, yes. Regardless of when they became union members whether it was long before Taft-Hartley or anything like that. Regardless of whether the individual member was coerced in anyway, there is no proof of coercion. We have instead been given the -- the same argument of inevitable coercion. In order not to preempt Mr. Van Arkel's time entirely, I would just like to close by noting three ironic twists to this case, which I think are -- are relevant to this question of -- of Brown-Olds and to the question as to whether or not, there was actual discrimination here. If instead of, as the Board says we did, encouraging union membership, we had discouraged union membership, I would not have the pleasure of standing here today because under those circumstances all that happens to us, if we send the foreman out to tell everybody in the shop, "This union is no good, get out of it," all that happens to us is that we get hit with the cease and desist order, which we can live with and in fact that the earlier stage of this case, when a cease and desist order was recommended by the trial examiner, we filed no exceptions because we have no great problem with that. Now, our --
Hugo L. Black: (Voice Overlap) why does that distinction appear in the --
John R. Schoemer, Jr.: Well, we --
Hugo L. Black: (Inaudible) of the Board?
John R. Schoemer, Jr.: I'm sorry, I'm afraid I don't understand that, Mr. Justice.
Hugo L. Black: Do you say that the rule wouldn't -- you wouldn't have this liability of tax to you if your offense was discouraging (Voice Overlap) --
John R. Schoemer, Jr.: Discouraging, I say, yes, because the normal remedy there the cease and desist order with back pay for discharged employees. In my hypothesis, we have -- we have discharge nobody, we have simply gone around and said, Get of this union. Nobody is --
Charles E. Whittaker: (Inaudible) got out. (Inaudible) hypothesis, nobody got out.
John R. Schoemer, Jr.: But on my hypothesis, nobody got out. So, it causes us nothing. You see, under those circumstances, I know of no case where any -- anymore -- any broader remedy than the payment of back pay to discriminatorily discharge employees has been ordered. But this way, you see, having supposedly by the Board's hypothesis told them to, Come on, everybody get in to the union, we are ordered to pay $350,000 that we've never ever seen, it never even been passed through our hands to a check off scheme. We've never had anything to do with that at all. If this is not a fine, I really can't imagine what one is. There are other circumstances which have also made it impossible -- possible for us to avoid the unfortunate situation which we find ourselves. If, for example, this man Randall had decided to give up the fish business and go into the newspaper business, we'd have no problem at all. He wanted to join the union. The union would've taken him if he could've met the required number of shifts requirement, but no, he decided to just remain a weekend worker in the business. Finally, if the International Typographical Union which, as has already been stated here, is not known for its devotion to the Taft-Hartley Act, had relented in its opposition and had met the filing requirements of the Act so that a lawful union security provision under Section 8 (a) (3) of the Act, could've entered into, we'd have no problem here. All full-time employees within 30 days after employment would have joined the union. Unfortunately, none of these came about. Thank you very much.
Earl Warren: Mr. Van Arkel.
Gerhard P. Van Arkel: May it please the Court, Your Honor. The Board's order in this case rests on a single undisputed fact, namely, that all journeymen mailers hired by the New York publishers were members of the union. Your Honors will agree with me that this is a completely neutral fact, that is, to say it is, of course, consistent with the closed-shop agreement or practice. It is equally consistent with the perfectly lawful right of all of these employees to join the union if they wish. It, therefore, becomes necessary to look further to ascertain the significance of this fact and happily on this record, we need not look far. There is, in this record, notes until I have evidence that any employee was restrained or coerced or was persuaded or induced or was even asked to become a union member. The rest of the contrary, if massive evidence from a many witnesses including the charging parties themselves, that all of the employees who were eligible to union membership were not only willing, but eager to join. So, if we put aside the Board's unwarranted assumption that it is unthinkable that all of the employees in a bargaining unit would desire to become a union members and look instead at this record, this quest -- the significance of this fact, the want of significance of it, immediately appears. But says the Board, Union men were hired before nonunion men, so they were, and this statement is as grossly misleading as half truths normally are. Had the Board desired to be candid with Your Honors, they would have said that pursuant to be expressed provisions of the agreement between the parties. Journeymen, all of whom had lawfully undertaken to become union members, were hired before casual extras, none of whom were union members because the union had lawfully undertaken to admit none of them to membership. That is what the findings of the fact -- the fact to the Board amounted to. They were set aside in their entirety by the court below. I suggest to Your Honors that a reading of Judge Hanks opinion will demonstrate that he saw complete through the verbal trick by which the Board attempted to fasten on the parties here, in assertion of unfair labor practices. Your Honors, therefore, have before you a case in which it was conceded that the hearing below that this contract is lawful on its face.You have findings which were not challenged here because the Board did not seek certiorari, that the practices under this contract were entirely lawful. We say to Your Honors that your opinions have made it entirely clear that the entire reach of the Board's powers has been reached when it has once been found that the contract is lawful and that the practices under it have been lawful. There is only one ground for asserting the contrary that is a reliance on certain decisions of the Court of Appeals for the Second Circuit, epitomized by the Red Star Express line of cases, which hold that where an agreement is unlawful on its face, a savings clause will not cure the defect. Now, we have set forth in our brief our reasons for questioning the -- those holdings of the Court. But accepting them as a correct statement of the law, it must be entirely clear that where a contract is lawful on its face as this one is conceded to be, that there is no meet for any savings clause, there is nothing to say, there is therefore in this contract no savings clause and this line of case is, therefore, has absolutely no application. The court below in this case, the Court of Appeals for the District of Columbia and the Honolulu Star-Bulletin case, the Court of Appeals for the Six Circuit in the Fentress Coal & Coke case, the Court of Appeals for the Seventh Circuit in the Quality Coal and Perry Coal cases, have all distinguished the Red Star Line of authority on this very ground. We suggest to Your Honors that this is the appropriate reading of the statute that therefore the holding of the court below is correct, and we urge that Your Honors affirm the judgment below.