Court Opinion

ID: 9643469
Source: CourtListenerOpinion
Date Created: 2023-08-22 20:30:21.490645+00
Date Added: 2024-06-11T18:10:59.991346
License: Public Domain

SPARKS, Circuit Judge.
This is a statutory proceeding for a review of án order of the National Labor Relations Board. The order was entered by the Board on March 14, 1938, under the National Labor Relations Act of 1935, 29 U.S.C.A. chapter 7, § 151 et seq. and the petition was filed pursuant to section 10(f) of that Act. 29 U.S.C.A. § 160(f).
The order was the result of the filing on September 15, 1936, of a general charge of unfair labor practices affecting commerce, against petitioner, by local 66 of the Amalgamated Association of Iron, Steel and Tin Workers of America, and the filing, on May 21, 1937, of an amended charge specifically setting forth unfair labor practices in violation of section 7, and subsections 1, 2, 3 and'5 of section 8 of the Act, 29 U.S.C.A. §§ 157, 158(1-3, 5). On May 25, 1937, the Board issued a complaint against petitioner, and gave notice of a hearing to be had on June 7, ■ 1937, at Waukegan, Illinois.
The complaint alleged, in substance, that the petitioner had engaged and was engaging in unfair labor practices affecting commerce within the meaning of section 8, subdivisions (1), (2), (3), and (5) and section 2, subdivisions (6) and (7) of the National Labor Relations Act, 29 U.S. C.A. §§ 152(6, 7), 158(1-3, 5), in that (a) petitioner hired one Alfred Johnstone, an agent and operative of the National'Metal Trades Association, for the purpose of espionage, intimidation, interference, spying, and reporting upon the activities and membership of petitioner’s employees in the Union; (b) petitioner employed one A. J. Anselm as superintendent of its plant for the purpose, among other things, of breaking up the Union; (c) petitioner physically isolated one of , its employees, John Kondrath, who was president of the Union, from the other employees at the plant, and forbade him to associate or talk with them; (d) petitioner on September 10 and 21, 1936, and February 17, 1937, and at all times thereafter, refused to bargain collectively with the Union as representative of its employees although for some time prior to September 10 and at all times thereafter the Union had been designated by a majority of petitioner’s employees in the appropriate unit as their representative for collective bargaining; (e) petitioner on September 10, 1936, and thereafter attempted to organize a labor organization among its employees and to that end threatened its employees with loss of employment if they, failed to join such organization; (f) petitioner on or about February 27, 1937, and thereafter until the issuance of the complaint, sent various persons to the homes of its employees who because of the foregoing unfair labor practices had theretofore, on February 17, gone on strike, and offered to reinstate such employees as individuals if they would abandon the rights guaranteed them by section 7 of the Act, 29 U.S.C.A. § 157; (g) petitioner on February 17, 1937, discharged 92 named employees, and on February 27, 1937, and thereafter, refused to reinstate them, because of their Union affiliation and organizational activities; (h) petitioner on and after February 27, 1937, caused to be organized, and dominated, supported, and interfered with, a labor organization of its employees known as Rare Metal Workers of America, Local No. 1.
Petitioner answered denying all the allegations- of the complaint, and averred with respect to the alleged discharge of employees that it had discharged and refused to reinstate them for cause, in that, during and in connection with the strike they had seized petitioner’s plant and by force and violence retained possession of it and resisted arrest; that the persons engaged in the illegal seizure and occupancy of petitioner’s buildings on February 17, 1937, were on that date, upon their refusal to vacate the premises, discharged for the seizure and retention of the plant and for no other reason; that petitioner was under no duty to reinstate those who had either participated in the plant seizure and been discharged therefor, or had aided and abetted in the illegal and violent retention of the plant with full, knowledge of the injunction; that petitioner was not obliged to reinstate certain of the individ*377uals named in the complaint by reason of their inefficiency in performing their required duties.; that petitioner’s plant had undergone an internal reorganization in which there had been abolished, for efficiency purposes, a number of positions formerly occupied by certain of the persons named in the complaint; that Lodge 66 was not on the dates in question the bona fide representative of a majority of its employees and accordingly was not the proper bargaining agency; and that Rare Metal Workers of America, Local No. 1, was organized and conducted without any ■support; domination or interference from petitioner.
Pursuant to the notice the hearing was had before a Trial Examiner who, on September 2, 1937, filed his report finding that petitioner had engaged in and was engaging in unfair labor practices within the meaning of section 8, subdivisions 1, 2, 3 and 5 of the Act, and recommended that petitioner cease and desist from such practices and take certain affirmative action to remedy them. A general statement of the facts adduced before the Examiner will be helpful in appraising the Board’s findings and conclusions.
The petitioner was and is engaged in the production, processing and fabrication of rare metals in North Chicago. In its principal departments its work is highly technical and scientific. During the summer of 1936, Local 66 was formed by a small group of petitioner’s employees, with the aid of field representatives of the Amalgamated Association of Iron, Steel and Tin Workers of America. Following a membership drive a committee of Local 66 met with petitioner’s plant superintendent, Anselm, on September 10, 1936. It presented a contract containing provisions for regulation of working conditions, a closed shop, check-off system and recognition of the union. The superintendent objected to the closed shop and check-off provisions. He also took exceptions to the recognition of an outside union, and asked the committee to consider an employees’ representation plan. The closed shop demand was subsequently withdrawn, but the superintendent declined to acquiesce in the other demands. The committee, accompanied by. its organizer, called again on September 21, 1936, but no agreement was entered into. On neither of these dates ■did Local 66 represent a majority of petitioner’s production and maintenance employees, which was the unit for which the demands were made.
No further meetings were held or requested until February 17, 1937. That morning a large committee of Local 66 presented to Anselm a request for recognition of their union. He rejected the request and suggested that they return at 2 P. M. They returned at that time, and he announced there was no change in the company’s position. He questioned the constitutionality of the National Labor Relations Act, and called their attention to the fact that the Supreme Court had not yet ruled upon its validity. No agreement having been reached, the committee withdrew and held a brief secret meeting in the chemical building, wherein it was determined to engage in a sit-down strike.
Within half an hour after the afternoon conference began, about one hundred men seized two key buildings of the plant. Foremen and other employees were requested to leave with the warning that they had better do so peaceably. The buildings were then locked and barricaded from the inside, which effected a complete stoppage in the operations of the entire plant.
About four hours after the seizure, Anselm, accompanied by the company’s counsel and two police officials, sought entrance into the buildings and demanded surrender of possession. Upon the occupants’ refusal, counsel for the petitioner, by order of its president, announced to the occupants in loud tones that all of the men remaining within the buildings were discharged for the violent seizure and retention of the buildings. It was stipulated that at the time of such discharge the number of occupants, their identity and their union affiliations, if any, with eight or ten exceptions, were totally unknown to petitioner or anyone connected with its management, and that the discharge was a blanket discharge of all the men then in occupation of the buildings.
That same evening there were passed into the buildings written notices that the next morning petitioner would apply to the Circuit Court of Lake County, Illinois, for a temporary injunction against the continued illegal occupancy of its property. This was done, and after a hearing, at which counsel for Local 66 and the individual defendants appeared and were heard, the court found that the seizure and occupancy were illegal. Thereupon a *378mandatory injunction was issued directing the occupants of the buildings to vacate them and restore possession to petitioner. The sheriff, accompanied by several deputies, went to the buildings and attempted to gain entrance ’to serve and execute the writ, but all were refused by the occupants. The sheriff and his deputies then read the writ to the occupants, and passed copies of it into the buildings through the open windows. The occupants refused to comply with the injunction and announced their intention to remain in the buildings. Thereupon the court issued a writ of- attachment for the occupants to show cause why they should not be held in contempt. On the morning of February 19, 1937, the sheriff, accompanied by about one hundred deputies, attempted to serve the writ. They read it to the occupants, but they refused to come out of the building. Thereupon the officers attempted to force an entrance into one of the buildings. With axes and battering-rams they succeeded in breaking down one door, but they were met by pressure streams of fire extinguishing chemicals fed from large tanks and directed by the occupants. At the same time the occupants in the upper floors of both buildings began bombarding the officers with large quantities of sulphuric acid and heavy steel and iron missiles, including pipes, bolts, nuts, reamers, wire reels and sharp end tools. The sulphuric acid was poured from the windows and hurled in quart bottle containers at the officers, as a result of which some of the officers were burned by the acid, and others were injured by the missiles. To protect his men, the sheriff withdrew and employed tear gas in an effort to dislodge the occupants. This served only to increase the intensity of the barrage of missiles and acid, and the officers were compelled to leave without carrying out the court’s order.
The sit-down strikers continued their occupancy of the buildings until the morning of February 26, 1937, when the officers again returned and attempted to gain entrance. This was met by a like resistance of the occupants, but more violent in its character. It was stipulated at the hearing that the officers were then compelled to use tear and emetic gas, and by so doing they succeeded in accomplishing the eviction, and restoring possession to the petitioner. It was further stipulated that fourteen of the men named in the Board’s complaint, knowing of the injunction, procured and delivered to the occupants the food, equipment and supplies which enabled them to retain possession of the buildings. Sixty-six of the men named in the complaint were admittedly participants in the seizure and retention of the plant, and had full knowledge of the injunction.
After their eviction those occupants who could be found were seized by - the sheriff under the writ of attachment, and were subsequently tried for contempt, by the Circuit Court of Lake County. ■ Thirty-seven of the men who participated in the seizure of the plant were convicted and fined in sums ranging from -$100 to-$300, and sentenced to jail imprisonment for respective terms ranging from ten to-one hundred eighty days. An appeal from this judgment was prosecuted to the Appellate Court of Illinois, and the judgment was affirmed May 10, 1938. Fansteel Metallurgical Corporation v. Lodge 66 of Amalgamated Ass’n of Iron, Steel & Tin Workers of North America et al., 295 Ill. App. 323, 14 N.E.2d 991. The hearings, on contempt with respect to the other occupants were continued until further order of the court. There ensued a full hearing on the merits of the case and a decree was entered adversely to the defendants in that case. No objection to that decree was interposed, and no appeal therefrom has been prosecuted.
.The record discloses the following losses directly suffered by the petitioner, as a result of the men’s participation in the seizure, retaining possession of the plant, and resistance to the officers. Most of the windows and many of the sashes were broken to obtain air in combatting gas, and to provide openings for throwing missiles at the officers. Numerous small tools and parts were lost; large quantities of acid, 50,000 valuable contact points and other inventory materials were lost or rendered useless by being dropped from the windows; two furnaces were permitted to cool rapidly and burn out; foamite and other chemicals from the fire extinguishers damaged the buildings and ruined a large Niagara shear; and other physical injury was occasioned by 'the usé of the buildings for living quarters. Uncontradicted evidence of petitioner’s president disclosed that the injury to buildings, equipment and inventory amounted to more than $10,000; the loss of fixed charges and overhead expense amounted to $20,000; and loss through inability to make shipments amounted to $30,000. Within ten days aft*379er the eviction, operations were resumed, and the president ' made the following statement:
“ * * * From a preliminary inspection and survey of plants three and five, we have arrived at the tentative conclusion that:
“(1) There has been no major injury :to the machinery itself.
“(2) Materials, parts and supplies of’ :an approximate value of $25,000 have been-•destroyed or otherwise rendered useless.
“(3) Physical injury to the buildings themselves, including broken window panes, has resulted in damage of approximately $7,500 * * *
“All of the men who participated in the sit-down strike were discharged by the •company. It has been the company’s consistent belief that more than half of the 80 men who participated in the seizure of the plants were compelled to do so through coercion and intimidation. Applications for re-employment from such men will receive favorable consideration.
“We cannot condone the defiance of the •courts or the resistance with violence to the enforcement of the law. For the men who participated in such unlawful activities, there can be no place in our plant.
Twelve of the men who had voluntarily left the buildings before the eviction, and twenty-three who remained until evicted, filed applications for re-employment and were hired. None of those sentenced for contempt was re-employed. Many old employees returned and the vacant places were filled by new applicants. Sixty-one men and women who returned to work were members of Lodge 66, and were reinstated without any condition as to union membership or activity.
When the plant was reopened changes were made in the interest of more economical operation. As a result thereof numerous jobs were abolished, others were materially altered and substantial savings were effected in many departments.
About the middle of April 1937, hourly production employees of appellant organized the Rare Metal Workers of America, Local No. 1. Supervisory employees did not directly participate either in the organization of that union, or the management of its affairs. However, petitioner did suggest the organization - of such a union, and expressed its approval of Local No. 1, when informed of its inception. Local No. 1 was accorded the use of petitioner’s mimeograph machine for printing ballots, and the use of its bulletin boards for posting notices'. • Its two first meetings and its election for selecting a bargaining agent were held ih petitioner’s buildings, and immediately thereafter it was recognized by petitioner as the collective bargaining agent for the employees, although the Lodge never attempted to bargain with petitioner. . ■ •
' The Board found that' approximately seventy per cent of the petitioner’s business constituted or directly affected interstate or foreign commerce; that petitioner employed a labor spy to engage in espionage within the Union, and physically isolated its president from the other employees at the plant, thereby interfering with, restraining and coercing the employees within the meaning of section 8 (1) of the Act, 29 U.S.C.A. § 158(1); that on February 17, 1937, and at all times thereafter a majority of petitioner’s employees within the unit found by the Board to be appropriate, had designated the Union as their collective bargaining representative, within the meaning of section 8(5) of the Act, 29 U.S.C.A. § 158(5); that, as a result of the foregoing labor practices, the employees went on strike on February 17, 1937, taking over and holding from that date until February 26, two of petitioner’s key buildings, on which last date they were evicted by the officers, pursuant to an injunction issued by the state court; that although the strikers resorted to violence in resisting arrest and eviction by the officers, no sabotage of equipment occurred; that at the outset of the strike petitioner announced that all strikers who remained in the plant were discharged, but that this did not constitute a 'discharge in fact, and the strikers at all times remained employees of petitioner ; that on March 3 and 5, petitioner again refused to bargain collectively with the Union, but sent agents among the strikers to certain of those who had participated in the sit-down strike, and resisted eviction, as well as others, requesting them to return to work, individually, under the conditions existing at the time the strike was called; that at the time of the hearing, although the plant had then been reopened and in operation for several months, the 92 strikers named in the complaint were still out on strike. Many of them had refused the solicitation of petitioner’s agents to return *380to work insisting that before they would do so petitioner first should recognize the Union and bargain collectively with it.
It was further found that petitioner had dominated and interfered with the formation and administration of the Rare Metal Workers of America, Local No. 1, and had contributed support to it, in violation of Section 8(2) of the Act, 29 U.S.C.A. § 158(2).
The Board found that none of the persons named in the complaint was discharged or denied reinstatement by reason of union membership or activity, and the discharge of the men in occupancy of the buildings for their seizure and retention of the petitioner’s plant was held not to constitute a discriminatory discharge.
It also found that neither on September 10 nor on September 21, 1936, did Lodge 66 represent a majority of the employees in the appropriate unit.
On February 17, 1937 (the day of the plant seizure), membership in Lodge 66 was found to exceed a majority of the employees in the appropriate unit and the Board held that by failing to bargain with Lodge 66 on that date petitioner engaged in an unfair labor practice. The decision states that while some of the employees returning to work may have abandoned membership in Lodge 66, the petitioner must nevertheless now recognize and bargain with Lodge 66 as the representative of all of its employees.
Having found that the petitioner failed to bargain collectively with Lodge 66 on the day the sit-down strike occurred, the Board ordered the status quo on that day restored. The petitioner was directed, upon application, to re-employ all individuals who ceased work on that day.
The Board declined to -award any back pay, upon the grounds that the petitioner had not been guilty of discrimination and no application for reinstatement had been made. On the matter of reinstatement the Board’s decision made- no reference to the discharge. It merely required reinstatement of all who ceased work on February 17, regardless of their conduct, including the thirty-seven who were convicted and sentenced, upon the ground that petitioner’s failure to bargain on February 17, was the moving cause of the employees’' conduct. With the internal reorganization and resultant continuance of jobs the Board took no notice other than to suggest that after the reinstatement as ordered, the petitioner might then reorganize- or reduce its staff.
The record in this case is voluminous,, and our problem is to determine whether-' there is substantial evidence to support the-findings that petitioner violated the provisions of section 7 and section 8, subsections (1), (2), and (5) of the Act.1 A perusal of the evidence convinces us that there is substantial evidence to support the-finding that petitioner employed men to-engage in espionage within the Union, and' thus interfered with, restrained and coerced its employees within the meaning of-section 8(1). It may also be- said that there is substantial evidence to support the-finding that petitioner contributed support to the. organization of the Rare Metal: Workers of America, Local No. 1, in violation of the literal interpretation of section 8(2). With the weight of the evidence on these questions we are not permitted to-concern ourselves.
With respect to the Board’s findings- and conclusions relating to petitioner’s violation of section 8(5) we are unable to* *381concur, because some of the facts upon which the conclusions are said to be based are not only not supported by substantial evidence, but the contrary is undenied. The difference of opinion in this respect arises over the questions whether petitioner had good cause to discharge the sit-down strikers on February 17, and, if so, did the petitioner at that time discharge them? There seems to be no denial by the Board that there was ample cause for discharge. Indeed, in the argument before this court the Board admitted that the men in conducting a sit-down strike and resisting the officers “did a foolish and illegal act.” Certainly it cannot be denied that an employer is warranted in discharging his employees, and severing that relationship, when they take and retain exclusive possession of his property against his will. They had a complete and adequate remedy, without cost to them, at the hands of the Board, by the use of which they would have lost nothing in time or wages, if their cause were just. The employer had no coordinate right in this respect. The employees, however, spurned this legal remedy, disregarding all law on this subject and essayed to settle the difficulty according to their own sense of right and justice, and contrary to the better thought of those who really have at heart the best interests of all laborers. In this they violated the law which they now seek to enforce against petitioner. We are convinced that petitioner was warranted in discharging the employees, and we are compelled to so hold in order to avoid placing our approval upon such activities as they engaged in. To do otherwise would be an injustice not only to the employer, but to the unions and their friends who wish them well.
Appellee contends that the petitioner did not actually discharge the employees. It is not denied, however, that it told them they were discharged, and why. The reason given was not that they were striking, or that they were members of a union, or that they were attempting to organize petitioner’s plant, or that they were seeking to bargain with it with- respect to wages, hours or conditions, but, in language which could not be misunderstood, they were notified that it was because of their violent seizure and retention of the buildings. The Board seeks to parry the force of this notice by finding that petitioner did not really intend it as a discharge, and that the occupants did not- think that it was so intended. This conclusion is not claimed to be based upon any direct statement to that effect by any representative of the company, but upon certain subsequent circumstances from which it is said petitioner’s negative intention may rationally be inferred. For instance it is said, and truly, that petitioner afterwards re-employed many of these occupants, some of whom actually participated in the illegal acts, thus disclosing that petitioner never intended to discharge them. We think this is a non-sequitur. It is undisputed that petitioner at all times believed that more than fifty per cent of the occupants were compelled to participate in the seizure through coercion and intimidation, and it stated that applications for re-employment from such men would receive favorable consideration. The word re-employment would seem to indicate a former discharge and severance of relationship, at least it is not inconsistent with such indication. While several of the men who participated in the violence were also re-employed, yet, for the same reason we think that fact does not militate against the uncontradicted evidence that they were all discharged on February 17. It is also worthy of note that the fact that those reemployed were union -men, or had been, would certainly support petitioner’s contention that they were not discharged because of union membership, or lawful union activities.
It is further suggested by respondent, we suppose by way of mitigating circumstances, that the men were not engaged in sabotage, and that no malicious sabotage of equipment occurred. Both of these findings were made, and we think neither was supported by substantial evidence. Indeed, the contrary was supported by undisputed evidence. True, there was evidence to the effect that there was no major or serious injury to the machinery, but machinery is not the only item of a plant that may be the subject of sabotage, and it does not constitute the entire equipment of á plant. Malice may be either express or implied. It may be implied from acts themselves. Within the meaning of the law it includes not only hatred and revenge, but every other unlawful and unjustifiable act. It is not confined to ill-will towards an individual, but it is intended to denote an action flowing from any wicked and corrupt motive; a thing done with a wicked mind, and attended with such circumstances as plainly indicate a heart regardless of social duty and fully bent on *382mischief. Here we have an admitted illegal seizure and retention of property, intentionally perpetrated; and intentional destruction of property with respect to the plant and portions of its equipment, supported hy undisputed evidence. This we think conclusively shows a heart regardless of social duty and bent on mischief. But whether or not there was sabotage is not decisive of this case. Without it there still remained to petitioner a valid cause for discharge, which is supported by uncontradicted evidence, admitted by counsel in argument and not denied in the findings. Neither is it denied, but it is admitted, that petitioner told the men on February 17, that they were discharged, and we think this can not be brushed aside by a finding that petitioner did not intend to discharge them, based only on the fact that it afterwards re-employed some of them. This being true, the occupants of the building who were discharged on February 17, were no longer employees of petitioner, and none of them sustained that relationship again until they were reemployed. Hence there was no longer a majority of petitioner’s employees who were members of that union, and the finding to the contrary is not supported by any evidence.
It is urged by the Board that the commission of a crime by strikers does not preclude their right to bargain with petitioner. This we admit, provided they still are employees and represent a majority of all. What we hold is that there was just cause for discharge, it was exercised, and those who" have not been re-employed are not employees and were not at the time of the finding and order of the Board. The present employees still have their rights of bargaining without interference of the petitioner, and these may be enforced upon proper procedure. See National Labor Relations Board v. Jones & Laughlin Steel Corp., 301 U.S. 1, 57 S.Ct. 615, 81 L.Ed. 893, 108 A.L.R. 1352; National Labor Relations Board v. Sands Mfg. Co., 96 F.2d 721, decided by the Circuit Court of Appeals for the Sixth Circuit, May 13, 1938; Standard Lime & Stone Co. v. National Labor Relations Board, 97 F.2d 531, decided by the Circuit Court of Appeals for the Fourth Circuit, June 13, 1938.
The order is set aside.

 See. 7. “Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in concerted activities, for the purpose of collective bargaining or other mutual aid or protection.”
Sec. 8. “It shall be an unfair labor practice for an employer—
“(1) To interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in section. 7 [section 157 of this title].
“(2) To dominate or interfere with the formation or administration of any labor organization or contribute financial or other support to it: * * *.
“(5) To refuse to bargain collectively with the representatives of his employees, subject to the provisions of section 9 (a) [section 159(a) of this title].”
Sec. 9 “(a) Representatives designated' 'or selected for the purposes of collective-bargaining by the majority of the employees in a unit appropriate for such, purposes, shall be the «sclusive representatives of all the employees in such unit for the purposes .of collective bargaining in respect to rates of pay, wages,, hours of employment, or other conditions of employment * * 29 U.S.O.A. §§■ 157, 158(1,2, 5), 159(a)