National Labor Relations Bd. v. Sterling Elec. Motors

• Decision Date: 09 January 1940
• Docket Number: No. 9209.,9209.
• Citation: 109 F.2d 194
• Parties: NATIONAL LABOR RELATIONS BOARD v. STERLING ELECTRIC MOTORS, Inc.
• Court: U.S. Court of Appeals — Ninth Circuit

109 F.2d 194 (1940)

NATIONAL LABOR RELATIONS BOARD v. STERLING ELECTRIC MOTORS, Inc.

No. 9209.

Circuit Court of Appeals, Ninth Circuit.

January 9, 1940.

COPYRIGHT MATERIAL OMITTED

Charles Fahy, Gen. Counsel, Robert B. Watts, Associate Gen. Counsel, Laurence A. Knapp, and Russell Packard, all of Washington, D. C., for petitioner.

Hardy & Horwin, Leonard Horwin, and Jack W. Hardy, all of Los Angeles, Cal., for respondent.

Before DENMAN, MATHEWS, and HEALY, Circuit Judges.

DENMAN, Circuit Judge.

The National Labor Relations Board petitions for our decree disestablishing the Sterling Electric Motors, Inc., Employees Association, hereinafter described as the Association, a so-called "inside union" of a majority of respondent's employees. It also seeks our frustrating their self-organized contract, evidenced in writing, creating their Association as their bargaining agent, by ordering the respondent to cease and desist from recognizing it in collective bargaining. We are asked to take such action though none of the parties to the contract participated as a party in the Board proceeding.

The situation differs from that in the recent case of the National Labor Relations Board v. Cowell Portland Cement Company, 9 Cir., 108 F.2d 198, decided November 28, 1939, where one of the parties to the frustrated contract was a party in the Board proceeding. There we refused our decree destroying a closed-shop contract recognized in Section 8(3) of the National Labor Relations Act, 29 U.S.C.A. § 158(3), because in the absence of one of its parties as a party to the proceeding the decree would have been a violation of one of the civil liberties of the employees.

Here the self-organizing contract and the labor organization so formed are of the character which, unless invalid, have the special protection of Sections 2(4), 2(5) and 7 of the Act, 29 U.S.C.A. § 152(4, 5), 157.

It is clear that here again we are asked to deny the civil liberty freely to contract and to have the benefit of the contract until it is held illegal by a competent tribunal after notice and the opportunity of a full and fair hearing, protected by the due process clause of the Fifth Amendment of the Constitution. The Board asserts that this denial has been its established practice in administering the National Labor Relations Act and cites some of the cases proving its assertion.

The Board earnestly claims that it has justification in decisions of the Supreme and other courts. Because of the obvious importance of the assertion of the propriety of such a practice in seeking to accomplish the beneficent purposes of the legislation we have given the claim of its legality our extended consideration.

In addition to our decree thus in effect against the employees and their labor organization, the Sterling Electric Motors, Inc., Employees Association, the Board petitions for our decree requiring respondent to cease and desist from certain other acts, later discussed, which the Board finds in violation of Section 8, subdivisions (1) and (2) of the National Labor Relations Act, 49 Stat. 449, 452. No question is raised concerning the interstate character of respondent's commerce nor that such commerce would be affected if the violation charged had been proved.

The Board's order of disestablishment of the Association provides that respondent shall "(a) Withdraw all recognition from the Sterling Electric Motors, Inc., Employees Association as a representative of any of its employees for the purpose of dealing with the respondent concerning grievances, labor disputes, wages, rates of pay, hours of employment, or other conditions of employment, and completely disestablish said Association as such representative;".

The employee-members of the Association are 49 mechanics and others, being about 70 percent of the men engaged in the manufacture of electrical appliances. Their contract of self-organization was in writing, later set forth in full. The Association had a committee as its representative to secure the Association's recognition as bargaining agent. The Board not only did not make any employee or the Association a party, but it gave neither the men nor the Association any notice of the proceeding, much less that what was sought was the destruction of their union by disestablishment. The responsible officers of the Association were mechanics, employees of respondent, and hence there was facility in joinder and service, if in any case that be a pertinent matter.

Neither any one of the employees nor the Association appeared as a party below. There was no one below and there is no one appearing here to speak as their advocate.

Such men have none of the protection and advice of the skilled labor organizers and counsel of the nation-wide federations and associations. It is true the mechanic-members of the bargaining committee were called as witnesses but, as we have held in National Labor Relations Board v. Cowell Portland Cement Co., 9 Cir., 108 F.2d 198, decided November 28, 1939, witnesses are not charged with knowledge of the pleadings or relief sought. Nor has a witness any right of counsel nor any right to participate in the proceeding by cross-examination or the introduction of testimony. The right in the "discretion" of the Board to intervene under Section 10(b) of the Act, 29 U.S.C.A. § 160(b), is no more a substitute for the service of the complaint, notice and hearing than it would be in any litigation where a person not made a party is to be affected by a judgment.

Later we show in detailed consideration of the evidence at the hearings how helpless these laborers there were to protect their Association and the contract rights of each and of the Association from their frustration and, in effect, destruction by disestablishment. In no class of trials is the presence of counsel for the parties sought to be deprived of their property more required than in these proceedings before the Board.

In such a situation a court of Anglo-American justice is required sua sponte to examine with the meticulous care of a court of equity¹ the treatment by an administrative board or other tribunal of the absent persons from each of whom may be taken fundamental rights. Here the character of the rights is obvious. They are of liberty to contract with regard to the employment in which most of the creative effort of worker's spirit and body are spent, and of property in the contract creating the labor organization which leads to security in and betterment of that employment. As the Supreme Court early said in a case, cited last year by that court in Consolidated Edison Co. v. National Labor Relations Board, 305 U.S. 197, 233, 59 S.Ct. 206, 218, 83 L.Ed. 126, with reference to the labor contract there destroyed by the order of the Board: "The established practice of courts of equity to dismiss the plaintiff's bill if it appears that to grant the relief prayed for would injuriously affect persons materially interested in the subject-matter who are not made parties to the suit, is founded upon clear reasons, and may be enforced by the court, sua sponte, though not raised by the pleadings or suggested by the counsel. Shields v. Barrow, 17 How. 130, 15 L.Ed. 158; Hipp v. Babin, 19 How. 271, 278, 15 L.Ed. 633, 635; Parker v. Winnipiseogee Lake Cotton & Woolen Co., 2 Black 545, 17 L. Ed. 333." Minnesota v. Northern Securities Co., 184 U.S. 199, 235, 22 S.Ct. 308, 322, 46 L.Ed. 499.

The Consolidated Edison case also cites with approval to the same point from Mallow v. Hinde, 12 Wheat. 193, page 198, 6 L.Ed. 599: "We do not put this case upon the ground of jurisdiction, but upon a much broader ground, which must equally apply to all courts of equity, whatever may be their structure as to jurisdiction. We put it on the ground that no court can adjudicate directly upon a person's right, without the party being either actually or constructively before the court. * * *"

This court recently has indicated its attitude where such situations arise in National Labor Relations Board v. Cowell Portland Cement Co., supra. Cf. Wallace v. Hudson-Duncan & Co., 9 Cir., 98 F.2d 985, 992; National Labor Relations Board v. Oregon Worsted Co., 9 Cir., 94 F.2d 671, 673.

Realizing this attitude, the Board in brief and argument sought to justify its order disestablishing the absent and helpless Association on the ground it did not destroy anything of value which the employees possessed. It urged that the Association was not destroyed because it could still have social enjoyments and its members continue to "drink their beer" as they had at one of their meetings. We find no merit in such a contention. The "self-organization" Congress seeks to protect is the self-organization of "employees" in dealing with their "employer" with regard to wages and working conditions. The decree sought from us not only destroys all contact of the Association with the employer for these purposes but asks something in addition — namely, disestablishment, — a destruction of the Association for all the purposes recognized by Section 7. Here the evidence shows that probably they would drift into an entirely different labor organization.

With regard to the destruction of the employee's right to contract and his property in his contract it cites National Labor Relations Board v. Pennsylvania Greyhound Lines, Inc., 303 U.S. 261, at page 271, 58 S.Ct. 571, at page 576, 82 L.Ed. 831, 115 A.L.R. 307,² where the court says, "As the order did not run against the Association it is not entitled to notice and hearing. Its presence was not necessary in order to enable the Board to determine whether respondents had violated the statute or to make an appropriate order against them. See General Investment Co. v. Lake Shore & M. S. Ry. Co., 260 U.S. 261, 285, 286, 43 S.Ct. 106, 116, 67 L.Ed. 244." (Emphasis supplied)

This, it must be noted, was said without counsel for the union to present the argument respecting the civil...