Court Opinion

ID: 9642298
Source: CourtListenerOpinion
Date Created: 2023-08-22 17:54:15.308917+00
Date Added: 2024-06-11T11:36:49.237656
License: Public Domain

PHILLIPS, Circuit Judge
(dissenting).
The street railway employees of petitioner had been unionized for over thirty years, being employees of Street Railway Operators Local, No. 662.
In the spring of 1937, petitioner’s operating employees formed Local No. 667 of the International Brotherhood of Electrical Workers, an affiliate of the American Federation of Labor. Petitioner, in no wise, endeavored to prevent the unionization of its operating employees. In fact, it favored their organization.
W. J. Benning was vice president and treasurer of petitioner and in charge of its office and accounting department.
In April, 1937, H. H. Stewart, an employee in the accounting department, heard that the operating employees were negotiating a contract with petitioner and took up with Benning the matter of an increase in pay for the office and accounting employees. Thereupon, Benning recommended to W. N. Clark, president of petitioner, that the office and accounting force be granted an increase in pay. Clark opposed an immediate increase because a ten per cent cut in the pay of the office and accounting employees had been restored in September, 1936. Benning advised Stewart that Clark desired the matter of an increase in pay for the office and accounting employees to wait until negotiations with the operating employees had been completed.
The contract with the operating employees was signed May 12, 1937. It contained a provision for the arbitration of differences between petitioner and the union, and further provided:
“It is expressly understood and agreed that the services to be performed by the employees covered by this agreement pertain to, and are essential to, the operation of a public utility and to the welfare of the public dependent thereon and in consideration thereof, and of the agreements and conditions herein by the Company to be kept and performed, the Brotherhood and the Union agree that, under no conditions,. and in no event whatsoever, will the employees covered by this agreement, or any of them, be called upon or permitted to cease or abstain from the continuous performance of the duties pertaining to the positions held by them under the Company, and the Company agrees on its part to do nothing to prevent such continuity of performance of said employee, insofar as such performance is required in the normal and usual operation of the Company’s property, and that any differences that may arise between the above *546mentioned parties shall be settled in the manner herein provided.”
Throughout the spring and summer, Ben-ning repeatedly promised the office and accounting employees that he would endeavor to secure a pay increase for them. Action thereon was postponed, first, because the contract with the operating employees had not been consummated, and, later, due to Clark’s absence. Clark was absent from Pueblo on a European trip from about May 20, 1937, to July 27, 1937. On his return he was confined to his home on account of illness for approximately one week.
In the latter part of July, 1937, action was taken under the leadership of Stewart and I. L. Watkins looking to the formation of a union by the office and accounting employees. A meeting was called for August 9, 1937, to consider the organization of such union.
Benning presented a pay increase program for the office and accounting force to Clark on the latter’s return to the office shortly after August 1, 1937. Clark opposed the proposal because they had received an increase in September, 1936. Benning urged the increase on the ground that he had promised the office and accounting employees that a pay increase would be granted on Clark’s return. Clark acceded and approved the proposal with certain modifications. While Benning may have believed the granting of the increase would forestall the organization Of the union, I do not think that was his primary motive in urging the increase.
In the spring of 1937, petitioner began investigating the feasibility of installing certain accounting machines in its accounting department. This was due to an increase in the amount of statistical data required by various governmental agencies. The accounting practices of petitioner did riot provide the required information and it was necessary to employ extra help to make such reports. This investigation continued until November 22, 1937, when petitioner’s board of directors informally authorized the installation of the machines, and Clark approved such installation. Because of increased operating costs, prudent management required their installation.
From information gained from the manufacturer of the machines, it was determined that reduction in force of seven employees could be made and a saving of approximately $6,000 annually effected. Up to June, 1938, there had been a reduction of five employees and two more were dismissed shortly thereafter. Before the new system could be made fully effective, however, it was necessary to train personnel and gradually develop the full efficiency of the machines.
When petitioner determined to install the accounting machines, it took up with the representative of the International Business Machine Corporation, from which the machines were leased, the question of the qualifications of personnel to operate the machines. The representative advised that persons should be selected with electrical education or electrical experience who were mechanically inclined, who were accountants, and had executive ability, and that the persons selected to operate the machines should immediately take over the statistical work ultimately to be done with the machines. Petitioner found persons with the requisite qualifications among its employees. Two of those selected had previous experience as machine operators. One had had four years’ training in the Denver University School of Commerce, including machine accounting. The employees selected took over work of a statistical nature that had theretofore been done by Stewart and W. A. Sheets.
To make provision for the machines it was necessary to construct a separate room and remodel the office quarters. It also was necessary to reorganize the accounting department, to select personnel best fitted to operate the machines and best suited to the new accounting system. After a conference between Benning and his subordinates, it was determined that in the reduction of the accounting personnel, Stewart and Watkins should be discharged. Benning and Robert Miller, his assistant, testified that Stewart was selected for discharge because he had been guilty of loafing, lack of civility to his superiors, insubordination, lack of cooperation, and because of the belief that he would not fit into the new system of accounting; that it was necessary to discharge Sheets or find other employment for him; that Sheets had an invalid wife; that Watkins was employed as a collector; that past experience showed Sheets was a better collector than Watkins, and for those reasons, it was determined to discharge Watkins and transfer Sheets to the position held by Watkins, and that neither Stewart nor Watkins was discharged because of union activity. Solely because they had been active in a movement to organize the office and accounting employees, because they had long been em*547ployed by petitioner, and because they were the first two selected for discharge, the Board found that petitioner had discriminated against them in regard to their hire and tenure of employment.
On several occasions during the spring and summer of 1937, in response to inquiries made by office and accounting employees, Clark and Benning stated that they favored the merit system rather than unionization of the office and accounting force.
On August 7, 1937, T. F. Roach, an employee in the general accounting department, had a conversation with Mr. Milliken, an executive of the petitioner. Roach told Mil-liken that there was unrest in the office, and he thought if Clark would see a committee it could be quieted and no further union activity would take place. As a result, Clark sent for Roach and told the latter that he would not see a committee, that he was opposed to the unionization of the office employees, that if they did unionize they would receive no increase in pay, and if they went out on strike, the entire office personnel would be replaced, and directed Roach to bring those facts to the attention of the employees who did not attend the meeting on August 9th.
The Jurisdiction of the Board
In Santa Cruz Fruit Packing Co. v. National Labor Relations Board, 303 U.S. 453, 467, 468, 469, 58 S.Ct. 656, 661, 82 L.Ed. 954, the court-said:
“The critical words of the provision of the National Labor Relations Act in dealing with the described labor practices are ‘affecting commerce/ as defined. Section 2 . (7), 29 U.S.C.A. § 152(7). * * * The question that must be faced under the act upon particular facts is whether the unfair labor practices involved have such a close and substantial relation to the freedom of interstate commerce from injurious restraint that these practices may constitutionally be made the subject of federal cognizance through provisions looking to the peaceable adjustment of labor disputes. * * *
“Fourth. The direct relation of the labor practices and the resulting labor dispute in the instant case to interstate commerce and the injurious effect upon that commerce are fully established. The warehousemen in question were -employed by petitioner in loading its goods either into the cars of carriers or into the trucks which transported the goods to the docks for shipment abroad or to other states. The immediacy of the effect of the forbidden discrimination against these warehousemen is strikingly shown by the findings of the Board. When the men found themselves locked out because of their joining the union, they at once formed a picket line; and this was maintained with such effectiveness that eventually ‘the movement of trucks from warehouse to wharves ceased entirely.’ The teamsters refused to haul, the warehouse-men at the dock warehouses declined to handle, and the stevedores between dock and ship refused to load, petitioner’s goods. These became, in the parlance of the men, ‘hot’ cargo. * * *
“It would be difficult to find a case in which unfair labor practices had a more direct effect upon interstate and foreign commerce.”
It follows that the narrow issue presented is whether the unfair labor practices here involved, directed toward the office and accounting employees, bore such a close and substantial relation to interstate commerce as to make such practices subject to federal regulation.
The unfair labor practices were:
An increase in pay made in keeping with repeated promises of Benning throughout the spring and summer of 1937, to prevent the formation of a union by the office and accounting force;
The statements made by Clark and Ben-ning in response to inquiries made to them by office and accounting employees, and the statement made by Clark to Roach;
In a proper and legitimate reduction of the office and accounting force, the selection of Stewart and Watkins for discharge because they had engaged in efforts to organize a union.
To affect interstate commerce, unfair labor practices with respect to the office and accounting employees would have to prevent or impede the generation and transmission of electrical energy by the operating department for instrumentalities engaged in interstate commerce and for manufacturers of goods for sale and shipment in interstate commerce.
The undisputed proof shows that the office and accounting force were receiving higher pay than like employees were receiving from other employers in Pueblo and *548were also receiving' free street car transportation and vacations and sick leaves with pay, and in the event of a strike by the office employees, that their places could be readily filled by other persons.
Mr. Bell, an organizer for the International Electrical Workers, attended the meeting held on August 9, 1937, and expressed opposition to taking the office and accounting employees into the operating employees’ union. The operating employees, in their contract with petitioner, recognized the necessity for continuous operation of the electric generating and transmitting facilities and agreed not to strike and to submit any differences that might arise between them and petitioner to an arbitration board. There was undisputed evidence that a cessation of work by the office and accounting force for a period of as long as ten months would not seriously affect the generation and transmission of electric energy. Hence, it is my opinion that the facts as disclosed by this record do not warrant the finding that unfair labor practices with respect to the office and accounting force would in any substantial degree injuriously affect interstate commerce.
Because of the confidential relation between the office employees and the management, the latter was opposed to the unionization of the office and accounting employees. The wisdom of that view may be challenged, but whether wise or unwise, the office and accounting employees had the right, if they saw fit, to organize for their mutual aid and protection and to bargain collectively, and petitioner should not interfere with the free exercise of that right. But in the instant case, I think the protection of that right should be through the exercise of. state rather than national power. The scope of federal power under the Commerce Clause must be “considered in the light of our dual system of government and may not be extended so as to embrace effects upon interstate commerce so indirect and remote that to embrace them, in view of our complex society, would effectually obliterate the distinction between what is national and what is local and create a completely centralized government” National Labor Relations Board v. Jones & Laughlin, 301 U.S. 1, 37, 57 S.Ct. 615, 624, 81 L.Ed. 893, 108 A.L.R. 1352.
I think the proceeding should be dismissed for want of jurisdiction in the Board.