National Labor Relations Board v. JI Case Co.

• Citation: 134 F.2d 70
• Decision Date: 26 February 1943
• Docket Number: No. 8149.,8149.
• Parties: NATIONAL LABOR RELATIONS BOARD v. J. I. CASE CO.
• Court: United States Courts of Appeals. United States Court of Appeals (7th Circuit)

134 F.2d 70 (1943)

NATIONAL LABOR RELATIONS BOARD v. J. I. CASE CO.

No. 8149.

Circuit Court of Appeals, Seventh Circuit.

February 26, 1943.

Robert B. Watts, Ernest A. Gross, Robert Todd McKinlay, Howard Lichtenstein, Asst. Gen. Counsel, and Owsley Vose, and Jacob I. Karro, Attys., National Labor Relations Board, all of Washington, D. C., for petitioner.

Ben T. Reidy, of Rock Island, Ill., and Clark M. Robertson and Howard R. Johnson, both of Milwaukee, Wis., for respondent.

Before EVANS and KERNER, Circuit Judges, and LINDLEY, District Judge.

LINDLEY, District Judge.

Petitioner seeks to have enforced its order entered in mid-summer, 1942, directing respondent to cease and desist from certain acts declared violative of the National Labor Relations Act, 29 U.S.C.A. § 151 et seq., and to give notice of such action.

Beginning with 1937, respondent tendered to each of its employees at its Rock Island manufacturing plant a contract fixing wages and terms of employment for a year ending July 31, to be renewed from year to year, that in effect at the time of the hearing expiring July 31, 1942. Execution of this agreement was entirely voluntary, and in no way a condition precedent to initial employment or to continuation of employment. Approximately 75 per cent of the employees signed.

On January 26, 1942, an election having been held to determine the collective bargaining agent of the employees, at which 352 votes were cast for International Union United Automobile, Aircraft & Agricultural Implement Workers of America, C.I.O., herein termed the Union, and 190 against, the Board certified the Union as the exclusive bargaining representative. On March 7, the Union requested the plant manager to bargain collectively with it, with respect to wages, hours and other conditions of employment, as the exclusive representative of all employees. Respondent refused, declaring that respondent could not negotiate with the Union in any matter affecting the rights and obligations of respondent and its employees "under the individual contracts while the contracts remain in full force and effect." It expressed willingness to bargain on all matters which did not affect the rights of the respective parties under the contracts and to deal with the Union as exclusive bargaining agency upon all matters upon their expiration and, by letter, notified its employees of its decision, saying in part: "In other words, the Union has taken the position that the company must tear up its contracts with its individual employees and disregard the rights and obligations of its employees and of itself under those agreements. The Company believes and has been advised that the contracts for their term constitute legal and binding obligation both on the part of the Company and on the part of the employees, and that its individual employees have constitutional rights which they are entitled to have preserved and which the Company has no right to surrender."

The Board interpreted this action as refusal upon respondent's part to bargain collectively and further held that, by writing the letter referred to, the employer had interfered with, restrained and coerced its employees in the exercise of their rights guaranteed by Section 7 of the Act. It insists here that, though respondent may enter into voluntary contracts with its individual employees, the existence of such agreements does not relieve it of its statutory duty to bargain collectively with the designated agent as the exclusive representative of the employees and that the power and right of the employer and employees to enter into individual contracts must be subordinated to and so effectuated as not to interfere with full achievement of the purpose of the Act, i. e., collective bargaining with the selected agency as the exclusive representative of all employees, and that to assert, as respondent did, that it would not bargain collectively except subject to and in accord with existing contracts, was per se a failure to bargain collectively.

Respondent, on the other hand, contends that, inasmuch as the contracts had been entered into between its employees and itself in good faith and were still in effect, to require collective bargaining as to the subject matter thereof was to interfere with freedom of contract; that the Act does not contemplate or require such interference with respondent's constitutional right to contract freely with its employees and that the Board in its findings and conclusions exceeded its constitutional and statutory power.

Thus our rather narrow question is whether existing individual agreements with employees must yield to and be subordinated to the duty of the employer to bargain collectively with the Union as the exclusive agency, designated by law.

More specifically respondent insists that, under the language of N. L. R. B. v. Jones & Laughlin Steel Corp., 301 U. S. 1, 45, 57 S.Ct. 615, 81 L.Ed. 893, 108 A. L.R. 1352, the duty of the employer to bargain collectively with the designated agency does not preclude "such individual contracts as the company may elect to make directly with individual employees" and asserts further authority for its position in the language of this court in N. L. R. B. v. Bear Brand Hosiery Co., 7 Cir., 131 F.2d 731. However, we believe that other decisions of the Supreme Court remove any uncertainty as to the full scope of the statutory duty of the employer to bargain collectively with the selected agency and as to the relationship of individual contracts with such duty, and establish the rule that inasmuch as the Act was expressly intended to promote and enacted under the constitutional congressional right to protect commerce, any existing contractual right interfering with effectuation of the legislative intent must yield to the duty imposed upon both employer and employees. Thus in National Licorice Co. v. N. L. R. B., 309 U.S. 350, at page 364, 60 S.Ct. 569, at page 577, 84 L.Ed. 799, the court said: "The Board asserts a public right vested in it as a public body, charged in the public interest with the duty of preventing unfair labor practices. * * * Obviously...