National Labor Relations Bd. v. Sterling Elec. Motors

• Decision Date: 07 May 1940
• Docket Number: No. 9209.,9209.
• Citation: 112 F.2d 63
• Parties: NATIONAL LABOR RELATIONS BOARD v. STERLING ELECTRIC MOTORS, Inc.
• Court: U.S. Court of Appeals — Ninth Circuit

112 F.2d 63 (1940)

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

No. 9209.

Circuit Court of Appeals, Ninth Circuit.

May 7, 1940.

Charles Fahy, Gen. Counsel, Robert B. Watts, Associate Gen. Counsel, and Laurence A. Knapp, Asst. Gen. Counsel, National Labor Relations Board, 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.

Our opinion in the first hearing of this review appears in 109 F.2d 194. The National Labor Relations Board has petitioned for and we have granted it a rehearing of the entire proceeding. The contentions argued covered a much wider area than those of the briefs. This opinion concerns the issue of the right of Sterling Electric Motors, Inc., Employees Association, a self-organized inside or company union, to be made a party or to have notice and an opportunity to be heard before it can be destroyed by the Board's order of non-recognition and disestablishment. We discuss and attempt to appraise the congressional intent in this labor legislation, with a consideration, "material to the philosophy of that Act,"¹ of the effect of the "abuse" of administrative "power",¹ under the Board's renewed contention that Congress conferred on it this kind of administrative absolutism.

As stated in our first opinion, it was for the "protecting" of the laborers' human right to regulate their creative effort in American society, with their increased power in union organization, that Congress created the Board. Its "protecting" extends as much to the self-organized unions, provided for in Section 1 of the Act,² as to the powerful unions already existing and seeking to increase their membership.

In this case the destruction was attempted by an order forbidding the employer to bargain with its employees' union for higher wages, shorter hours or better working conditions — the destroyed functions being the only ones for which the employees created it. The men's association was not made a party or given notice and an opportunity to be heard in the proceeding.

One of the contentions of the Board is that the union, organized solely to bargain collectively with the employer, is not destroyed because the order does not "run against" the union but only orders the employer not to have anything to do with it. To us this contention is as absurd as if old Procrustes of the Greek myth had said to an athlete captured on his journey to the Olympiad, "You are not to be destroyed for the races for I am proceeding to cut off only the one leg which happens to protrude over the footboard of my bed. If you are barred at the starting line it is only because you are indirectly affected. My sword `runs against' your leg not against you. Besides, I maintain, Lycurgus has given an opinion stating that you are not a `necessary party' to the amputating process I administer. Can't you see I am only `protecting' you from running with that leg?" Yet, the Board insists, such was the congressional intent with respect to its and necessarily, all the many other administrative processes created by Congress.

As well could it be argued by another board, created for "protecting" religious instead of labor organizations, (successfully argued, perhaps, in cases in which the board meets no opposing counsel) that an order does not necessarily affect the religious freedom of the worshippers, though it "runs against" one Bishop to "withdraw all recognition from" the parishes of his diocese, or against other Bishops to "disestablish" their missionaries, or against the Convention to ignore its baptising clergy, or against the Rabbi to disband his congregation, or against the Synod to refuse to consider anything from the Presbyters, or against the Indian priests to withdraw their clans from their ceremonial dances in prayer for rain in the desert. We are not in accord with the view that, where the denial of any such constitutional right appears in any case, it is then "ill advised" to afford the injured persons the court's judicial power, or to describe with emphasis the wrong done,³ whether the "protecting" assault be on a mundane or a religious liberty.

The reargument offered nothing new on the Board's contention that Congress intended to relieve the Board of the burden (sic) of serving notice of the charges and time of hearing on the officials of the union in the same plant as that of the employer, who must be served, with the corollary implication of the vexation to the Board, as prosecutor, in meeting the union's evidence, the cross-examination of the Board's witnesses and the argument of the union's counsel, and of the disturbance to the Board, as judge, in facility in reaching a decision on its own charges.

The Board did not, because it cannot, deny that the employer's interest at the time of the trial often may be quite different from and opposed to that of the absent union. The employer himself then may want to destroy the union, either because he cannot control it, or because a more powerful rival threatens a strike and a picket line. He then may "ride to a fall" at the hearing, preferring to submit to an order to desist from something already prohibited by the statute, to the pressure of a disliked union he does not control, or to a costly shutdown which may throw him into bankruptcy. The likelihood of such motivation of the employer whose trial the Board claims determines the life of the union is obvious not only to those of us who have had intimate contact with industrial disputes of the recent decades, but to anyone who gives the consideration required here of employer psychology. We cannot believe that Congress ignored it, or rather, would have ignored it if, when the Labor Board bill was under discussion, some Congressman then had had the temerity to propose that the Board should destroy a union without notice and an opportunity to be heard.

Nor has the Board made any answer to the obvious fact that it is a greater evil wrongfully to destroy the union itself than it is to destroy a mere contract made by the union with the employer, leaving the union still existing for future bargaining. If it be true as held in Consolidated Edison Co. v. National Labor Relations Board, 305 U.S. 197, 233, 59 S.Ct. 206, 83 L.Ed. 126, that due process requires notice and hearing when a contract between the union and employer is sought to be destroyed, a fortiori is it true where the life of the union or its sole function of collective bargaining is at stake.

The case loses none of its importance because, recently, the Board, for the time being at least, divested itself of the power it claims Congress gave it to deny to a union its civil liberty of notice and an opportunity to be heard. This was done by the Board's promulgation of a rule granting that right. The right now exists, the Board claims, solely by virtue of its grant. The Board makes strong and now repeated insistence, first, that Congress can create in the administrative process such absolutism of control over human relations, and, second, that it intended to create it in the Labor Board. It is apparent that the Board may annul its rule, attempt to abrogate the right and reassume the absolute power it claims. Significant is the absence at the hearing of any request by the Board for a return of this proceeding for service on the employees' association, to give it an opportunity to be heard on the charge of employer dominance.

Preliminarily it may be said that this court recognizes that no case subject to our review could show more clearly the need for a wise and deliberative exercise of the national administrative process which Congress has created for the control of labor relations in industrial plants throughout the United States. This proceeding was initiated by a nation-wide union of the American Federation of Labor. It was seeking to bring into its organization the 70-odd employees of a small manufacturing plant in Los Angeles, California. A rival union, organized by the men within the plant, had a membership of 75 percent of the employees. The great Brotherhood's national organizers filed a complaint which led to the Board proceeding in which the destroying order removed its rival. None of the national organizers was an employee of the plant. One of them had his headquarters in Chicago. The central control of the national union was in Washington, with a power and prestige in the American industrial world which, in large part, arises from its millions of associated employee-members in unions in every state. It was such cases as this which must have quickened the congression intent to enact Section 1 of the National Labor Relations Act.⁴

In one of the earliest decisions after 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, this court in Edwards v. United States, 9 Cir., 91 F.2d 767, 780, construed that decision as extending the congressional power even to the planting in California of orange trees whose product is "to be transported" in interstate commerce. It was on this construction of the Act that we upheld the Secretary of Agriculture regulating the flow of the product of orange trees into interstate commerce. True, that statement of the law was by two of the three judges sitting, but it now stands for this circuit as a declaration of the broad area of congressional administrative power under the commerce clause. In that and a succession of cases, this court has recognized the congressional intent in a widely expanding creation of administrative agencies. Nor has any court gone farther in recognizing the congressional intent to free the Labor Board's administrative process from the technicalities of court procedure. National Labor Relations Board v. Biles-Coleman Lumber Co. 9 Cir., 98 F.2d 16, 17.

The many cases now decided show...