Court Opinion

ID: 9459520
Source: CourtListenerOpinion
Date Created: 2023-08-04 21:23:12.196789+00
Date Added: 2024-06-11T17:36:12.245441
License: Public Domain

SIMPSON, Circuit Judge
(dissenting) :
I respectfully dissent.
The majority today holds that the Federal Trade Commission properly relied upon the decision of the National Labor Relations Board in a collateral proceeding, Bambury Fashions, 1969, 179 NLRB 447, which also involved NAWCAS. In Bambury Fashions the Board concluded that NAWCAS was not qualified under the National Labor Relations Act to act as the statutory bargaining representative for certain traveling salesmen who potentially competed with employers by conducting trade shows. The majority concludes that the Commission could rely on this Board decision to hold that because NAWCAS may not act as a bargaining representative, it is not a “labor organization” entitled to the protection of the labor exemption to the federal antitrust laws. The basic holding of the majority is:
“The rationale behind this [the Commission’s] deference to the determination of the Board, is that labor’s cloak of immunity must be lined with the fact that the putative labor organization is — or could be — the bargaining representative for the employees in question. This is so because the antitrust laws yield only insofar as the union pursues legitimate subjects of collective bargaining. [citations omitted] If an organization cannot, under any set of circumstances, function as the collective bargaining agent of the employees of a particular employer, that organization may not transgress the employer’s right to unrestrained competition with impunity *146under the cloth of a labor label.” [citations omitted]
Majority opinion at 144.
The Commission’s syllogism, which the majority here endorses, is improper because the Board decided only that NAWCAS could not be a bargaining representative. It did not hold that NAWCAS was not a labor organization.
The core of the Board’s opinion in Bambury Fashions was:
“Finally, notwithstanding the fact that NAWCAS, as found by the Regional Director, satisfies the two part test of the statutory definition of a labor organization, we find that it is disqualified from acting as such because its interest in representing employee salesmen in the industry conflicts substantially with its primary interest in coordinating and strengthening the trade show activities of its affiliates. We agree with the Employers that NAWCAS in its trade show activities in behalf of independent contractor traveling salesmen members is engaged in the business of selling apparel in direct competition with apparel manufacturers.” 179 NLRB at 450.
In Bambury Fashions the Board applied its rule in Bausch & Lomb Optical Co., 1954, 108 NLRB 1555, that “ . . . the Union cannot perform its statutory function as bargaining representative if simultaneously it is an immediate business competitor of the particular employer whose employees it purports to represent.” Ibid, at 1562. Clearly then the Board’s holding in Bambury Fashions was no more than that NAWCAS was disqualified from acting as a bargaining representative, not that NAWCAS was not a labor organization.
The Commission’s extension of the Board’s position is unwarranted for another reason. While it is true, as the majority states, that a union is exempt from the antitrust laws only insofar as it unilaterally pursues mandatory subjects of collective bargaining — wages, hours and working conditions, American Federation of Musicians v. Carroll, 1968, 391 U.S. 99, 88 S.Ct. 1562, 20 L.Ed.2d 460 — it does not follow that a union must be the National Labor Relations Act bargaining representative in order to pursue these goals, and hence enjoy the protection of the labor exemption to the antitrust laws. This is true because the umbrella of the antitrust exemption protects labor organizations. A group may be a “labor organization” within the statutory framework of the National Labor Relations Act without being a “bargaining representative” under that Act, as the language of the statute makes clear:
“The term ‘labor organization’ means any organization of any kind, or any agency or employee representation committee or plan, in which employees participate and which exists for the purpose, in whole or in part, of dealing with employers concerning grievances, labor disputes, wages, rates of pay, hours of employment, or conditions of work.” National Labor Relations Act, Section 2(5); Title 29, U.S.C., Section 152(5).
NLRB v. Cabot Carbon Co., 1959, 360 U.S. 203, 79 S.Ct. 1015, 3 L.Ed.2d 1175, demonstrates that the National Labor Relations Act concepts of “labor organization” and “bargaining representative” are not coequal. In Cabot Carbon the NLRB had ordered the employer to cease and desist from unlawfully dominating certain employee committees, which coexisted with Board certified bargaining representatives at certain of the employer’s plants. This Court refused to enforce the Board’s order on the grounds that by the 1947 amendments to the Act Congress had not intended to include such committees within the statutory definition of labor organization, and that the term “dealing with employers” in the statutory definition of a labor organization meant in reality “bargaining with employers”, and that the committees were not statutory bargaining representatives. The Supreme Court reversed, stating that the statutory term “dealing with em*147ployers” was not to be read as synonymous with the more limited term “bargaining with employers”. 360 U.S. at 211, 79 S.Ct. at 1020, 3 L.Ed.2d at 1180. Further the Court noted that Congress had rejected an amendment which would have substituted the term “bargaining collectively” for “dealing with employers” in the statutory definition of a labor organization. 360 U.S. at 211, 79 S.Ct. at 1021, 3 L.Ed.2d at 1181.
Upon this analysis it seems to me apparent that a group of persons may be a “labor organization” under the terms of the National Labor Relations Act without being a statutory bargaining representative under that Act. Furthermore, the “ . . . grievances, labor disputes, wages, rates of pay, hours of employment, or conditions of work”, National Labor Relations Act, Section 2(5); Title 29, U.S.C., Section 152(5), about which a “labor organization” deals with an employer are essentially equivalent to the “wages, hours, and working conditions” which constitute mandatory bargaining subjects. Unilateral labor organization activity concerning these mandatory bargaining subjects is immune from the federal antitrust laws. I conclude that a group which deals with an employer concerning such subjects is immune from the antitrust laws where such dealings are involved, even though that labor organization is not and cannot be the statutory bargaining representative. In short, an organization may pursue legitimate objectives of collective bargaining even though it is not a bargaining representative. Both the Federal Trade Commission and the majority in this ease have fallen into the trap of equating qualification to act as a bargaining representative under the National Labor Relations Act with status as a labor organization.
Thus, I think the Commission based its decision below upon improper legal reasoning. A fundamental principle of judicial review of administrative action requires that in order for a reviewing court to sustain agency action the legal grounds upon which the agency acted must be correct. FTC v. Sperry & Hutchinson Co., 1972, 405 U.S. 233, 92 S.Ct. 898, 31 L.Ed.2d 170; SEC v. Chenery Corp., 1943, 318 U.S. 80, 63 S.Ct. 454, 87 L.Ed. 686. Because the Commission improperly relied upon the Board’s decision in Bambury Fashions, supra, this case should be remanded to the Commission so that the Commission will have an opportunity to base its decision upon legally correct principles, including the extent to which certain components of NAWCAS might constitute non-labor groups not protected by the labor exemption to the antitrust laws. See generally, United States v. Hutcheson, 1941, 312 U.S. 219, 61 S.Ct. 463, 85 L.Ed. 788; American Federation of Musicians v. Carroll, supra; Cedar Crest Hats, Inc. v. United Hatters, 5 Cir. 1966, 362 F.2d 322. This latter question, which is crucial to the issue before the Commission, the majority here finds it unnecessary to consider. See majority opinion, footnote 2 at page 141.
For this reason I dissent from the majority opinion.