195 F.2d 141 (9th Cir. 1952), 12880, N.L.R.B. v. Guy F. Atkinson Co.

Docket Nº:12880.
Citation:195 F.2d 141
Case Date:February 29, 1952
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit

Page 141

195 F.2d 141 (9th Cir. 1952)




No. 12880.

United States Court of Appeals, Ninth Circuit.

February 29, 1952

Rehearing Denied March 21, 1952.

Page 142

George J. Bott, Gen. Counsel, David P. Findling, Associate, Gen., Counsel, A. Norman Somers, Asst. Gen. Counsel, Dominick L. Manoli, Melvin Pollack, Attys., National Labor Relations Board, all of Washington, D.C., for petitioner.

Gardiner Johnson, Thomas E. Stanton, Jr., San Francisco, Cal., for respondent.

William H. Thomas, General Counsel, Cleveland, Ohio (William C. Robbins, Spokane, Wash., amicus curiae, of counsel), for International Union of Operating Engineers, AFL Local 370.

Before MATHEWS, BONE and POPE, Circuit Judges.

POPE, Circuit Judge.

This is a petition to enforce an order of the National Labor Relations Board which declared the respondent guilty of an unfair labor practice. The complaint was based upon charges that respondent discharged an employee, one Hewes, for failure to maintain his membership in a union with which respondent had executed a closed shop contract. In July, 1947, respondent, a joint venture composed of the two corporations named in the title, was awarded a contract for the construction of certain facilities required by the Atomic Energy Commission, and General Electric Company, prime contractor, at or near Richland, Washington. The job was regarded as an emergency, and the notice of award of the contract preceded detailed specifications to enable respondent immediately to assemble a labor force.

Accordingly respondent, before employing any of its manual labor, requested the Building Trades Department of the American Federation of Labor at Spokane to assist it in manning the job. This group had what the union would call 'jurisdiction' over the area. Substantially all of the workers of the types required for the job belonged to its constituent unions, and respondent, in seeking the help of the Building Trades Department in recruitment of its labor, was following the procedures common in the industry. On August 16, 1947, respondent and 15 unions, affiliates of this labor group, executed the closed shop agreement 1 here involved. One of the 15 unions

Page 143

was International Union of Operating Engineers, Local 370, A.F.L. On the date of execution of the contract respondent had 125 manual employees, including 10 operating engineers. The latter were members of Local 370, which they had designated as their authorized collective bargaining agent. The record shows that as of December 31, following, the work force had grown to 5400 manual employees, of whom 740 were operating engineers. Throughout the year 1948, total employment did not drop below 8400.

In October, 1947, Hewes, a machinist, who was a member of a machinists union (IAM) applied to respondent for work and was referred to the Union of Operating Engineers. He then applied and was accepted for membership in that union, and received an introduction card assigning him to work. The following February, Hewes was in default on account of dues owing Local 370, and upon the union's demand, he was discharged from the payroll. It was this discharge which led to the complaint and to the board's order now before us.

The contract of August 16, 1947, was executed before the date when the Labor Management Relations Act of 1947, Taft-Hartley, 29 U.S.C.A. § 141 et seq., became effective. Hence, if the contract was made with the representative of the employees in the appropriate collective bargaining unit, its closed shop provisions were valid, and would constitute a defense to the charge made here. 2

At the time the contract was made, and indeed throughout the period since the enactment of the original (Wagner) Act, 49 STAT. 449, 1935, 29 U.S.C.A. § 151, et seq., the Board had refused to take jurisdiction in such cases, where the building and construction industry was involved. 3 Respondent says that since the agreement was made and action thereunder taken 4 at a time when the Board was refusing to exercise jurisdiction over the industry, an application of a contrary policy in this proceeding amounts to adjudging contrary to law actions, which, when taken, were not subject to the application of sanctions under the law. This, it is said, is the equivalent of a

Page 144

retroactive application of a newly adopted rule, and a denial of due process. 5

The Board ruled that its previous nonassertion of jurisdiction over construction projects under the Wagner Act was an administrative choice rather than a legal necessity, and pointed to its changed practice in this respect under the 1947 Act. 6 Proceeding to exercise its jurisdiction, the Board held that the closed shop agreement of August 16, 1947, was not a defense against the allegations of an unfair labor practice in the discharge of Hewes. This, it stated, was because International Union of Operating Engineers, Local 370, A.F.L., was not 'the representative of the employees as provided in Sec. 9(a), in the appropriate collective bargaining unit covered by such agreement when made.' The Board pointed to the small work force on August 16, 1947, how the 10 operating engineers employed on that date had grown to 740 by the end of the year, and said: 'It is thus clear, without considering further increments thereafter and without attempting to determine the scope of an appropriate unit, that in virtually all categories, including that of the operating engineers, the work force at the time the contract was signed was not at all representative of that shortly to be employed. Under these circumstances, the union could not have been, as required by the proviso to Section 8(3), the representative of the employees in an appropriate unit.'

The rule thus expressed, suggesting that where a group of employees is rapidly expanding, so that the initial work force cannot truly represent more than a small fraction of the contemplated total, it will not be recognized as representative of an appropriate unit, is one frequently followed by the Board. Coast Pacific Lumber Co., 78 N.L.R.B. 1245, 1246 (1948); Westinghouse Electric Corporation, 85 N.L.R.B. 1519 (1949); Anaconda Wire and Cable Co., 91 N.L.R.B. No. 37, (1950). A collective bargaining agreement made under those circumstances has been held ineffective. Daniel Hamm Drayage Co., 84 N.L.R.B. 458, (1949), enforced N.L.R.B. v. Daniel Hamm Drayage Co., 5 Cir., 185 F.2d 1020.

We think there can be no doubt, speaking generally, of the Board's power to enforce such a policy. The Act, Sec. 9(b), provides that the Board shall in each case decide whether 'the unit appropriate for the purposes of collective bargaining shall be the employer unit, craft unit, plant unit', etc. This, the section states, is in order 'to assure to employees the fullest freedom' in exercising their rights under the Act. The policy is a reasonable one, and well calculated to preserve the principle of majority rule.

And with respect to the other policy decisions here referred to, namely, whether the Board should abstain, or assume jurisdiction, in respect to a particular industry, or a particular labor dispute, this court has held that they are exclusively for the Board. Haleston Drug Stores v. National Labor Relations Bd., 9 Cir., 187 F.2d 418.

But the problem here is whether the Board, in pursuing an undoubted right to choose a policy in this regard, first, that it would refrain from taking jurisdiction in respect to the construction industry, and later, to announce a contrary policy, was essentially exercising a legislative function, and announcing a rule for action in the future. If the statement of the earlier policy was in effect an announcement governing

Page 145

its future action, was its withdrawal of that statement, or reversal of the earlier policy required to have future effect only? Must it be denied retroactive effect? In particular reference to the facts here, after respondent had proceeded in good faith to make the customary closed-shop contracts with the Building and Construction Trades Department, A.F.L., at a time when no union could have had its request for certification processed by the Board, may the Board make an example of the respondent, by retroactively applying to its conduct, at the time it made the contract, and discharged Hewes under it, a ruling it would then have refused? 7

We are urged to say that the Board's application of these sanctions to respondent because of something the latter has done at a time when the Board's change of policy had not been announced, was beyond the Board's power for the same reasons which led to condemnation of retroactive application of rates by the Interstate Commerce Commission in Arizona Grocery v. Atchison Ry., 1932, 284 U.S. 370, 52 S.Ct. 183, 76 L.Ed. 348. The question there was whether the Commission could award reparations with respect to shipments which had moved under rates previously approved by it. The court said 284 U.S.at page 389, 52 S.Ct.at page 186: 'The Commission's error arose from a failure to recognize that, when it prescribed a maximum reasonable rate for the future, it was performing a legislative function, and that, when it was sitting to award reparation, it was sitting for a purpose judicial in its nature. In the second capacity, while not bound by the rule of res judicata, it was bound to recognize the validity of the rule of conduct prescribed by it, and not to repeal its own enactment with retroactive effect. It could repeal the order as it affected future action, and substitute a new rule of conduct as often as occasion might require, but this was obviously the limit of its power, as of that of the Legislature itself.'

Heretofore the Board has had occasion to stay its hand...

To continue reading