313 U.S. 177 (1941), 387, Phelps Dodge Corp. v. NLRB

Docket Nº:No. 387
Citation:313 U.S. 177, 61 S.Ct. 845, 85 L.Ed. 1271
Party Name:Phelps Dodge Corp. v. NLRB
Case Date:April 28, 1941
Court:United States Supreme Court

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313 U.S. 177 (1941)

61 S.Ct. 845, 85 L.Ed. 1271

Phelps Dodge Corp.



No. 387

United States Supreme Court

April 28, 1941

Argued March 11, 1941




1. Under § 8(3) of the National Labor Relations Act, an employer who refuses to hire an applicant for employment solely because of the applicant's affiliation with a labor union is guilty of an unfair labor practice. P. 182.

2. When applicants have been unlawfully refused employment solely because of their affiliations with a labor union, § 10(c) of the Labor Act empowers the Labor Board to order the employer to undo the discrimination by offering them the opportunity for employment which should not have been denied them. P. 187.

3. In this the Act does not violate the Fifth Amendment. P. 187.

4. In § 10(c) of the Labor Act, empowering the Labor Board to require an employer guilty of an unfair labor practice to desist and

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to take such affirmative action, "including reinstatement of employees with or without back pay," as will effectuate the policies of the Act, the participial phrase "including reinstatement," etc., is illustrative merely, and is not to be construed as a limitation upon the Board's power to remedy unlawful discrimination in the hiring as well as in the discharge of workers. P. 188.

5. Under § 10(c) of the Labor Relations Act, an employer who has been guilty of the unfair labor practice of refusing to hire men because of their union affiliations may be required by the Board, for effectuation of the policies of the Act, to offer them opportunity for employment, even though they have, in the meantime, obtained regular and substantially equivalent employment elsewhere. P. 189.

6. The broad meaning of the term "employee" as used in § 10(c) of the Labor Act and in the earlier part of § 2(3), is not restricted by the concluding clause of § 2(3), which declares that the term "employee" shall include any individual whose work has ceased as a consequence of any unfair labor practice "and who has not obtained any other regular and substantially equivalent employment." P. 191.

This last provision is assignable to other purposes, e.g., for determining who are the "employees" with whom an employer must bargain collectively, §§ 8(5), 9(a), or who are to be treated as "employees" within a bargaining unit, § 9(b).

7. To deny the Board power to neutralize discrimination merely because workers have obtained other compensatory employment would confine the "policies of this Act" to the correction of private injuries, whereas the Board was not devised for such a limited function, but is the agency of Congress for translating into concreteness the purpose of safeguarding and encouraging the right of self organization. P. 192.

8. Although an employer who has denied reemployment to workers solely because of their labor union affiliations may be required to offer them employment notwithstanding their having obtained equivalent employment elsewhere, this remedy does not flow from the Act automatically when the discrimination is found, but depends upon a finding by the Board, in the exercise of its informed discretion, that effectuation of the policies of the Act requires such reinstatement. P. 193.

9. An order of the Labor Board requiring an employer to reinstate strikers who obtained other employment, should state the basis of the order. P. 197.

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10. The remedy of ordering back pay is in the Board's discretion, not mechanically compelled by the Act. P. 198.

11. Where an order of the Labor Board requires that a worker be restored to employment and be compensated for loss of pay, deduction should be made not only for actual earnings of the worker while out of employment, but also for losses which he willfully incurred. P. 197.

12. The amount of such deduction should be determined by the Board prior to formulation of it order. P. 200.

113 F.2d 202, modified.

CERTIORARI, 312 U.S. 669, to review a judgment sustaining in part and in part disapproving an order of the National Labor Relations Board, 19 NLRB 547.

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FRANKFURTER, J., lead opinion

MR. JUSTICE FRANKFURTER delivered the opinion of the Court.

The dominating question which this litigation brings here for the first time is whether an employer subject to the National Labor Relations Act may refuse to hire employees solely because of their affiliations with a labor union. Subsidiary questions grow out of this central issue relating to the means open to the Board to "effectuate the policies of this Act," if it finds such discrimination in hiring an "unfair labor practice." Other questions touching the remedial powers of the Board are also involved. We granted a petition by the Phelps Dodge Corporation and a cross-petition by the Board, 312 U.S. 669, to review a decision by the Circuit Court of Appeals for the Second Circuit, 113 F.2d 202, which enforced the order of the Board, 19 NLRB 547, with modifications. The main issue is intrinsically important, and has stirred a conflict of decisions. Labor Board v. Waumbec Mills, 114 F.2d 226.

The source of the controversy was a strike, begun on June 10, 1935, by the International Union of Mine, Mill and Smelter Workers at Phelps Dodge's Copper Queen Mine, Bisbee, Arizona. Picketing of the mine continued until August 24, 1935, when the strike terminated. During the strike, the National Labor Relations Act came into force. Act of July 5, 1935, 49 Stat. 449, 29 U.S.C. § 151 et seq. The basis of the Board's conclusion that the Corporation had committed unfair labor practices in violation of § 8(3) of the Act was a finding, not challenged here, that a number of men had been refused employment

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because of their affiliations with the Union. Of these men, two, Curtis and Daugherty, had ceased to be in the Corporation's employ before the strike, but sought employment after its close. The others, thirty-eight in number, were strikers. To "effectuate the policies" of the Act, § 10(c), the [61 S.Ct. 847] Board ordered the Corporation to offer Curtis and Daugherty jobs and to make them whole for the loss of pay resulting from the refusal to hire them, and it ordered thirty-seven of the strikers reinstated with back pay, and the other striker made whole for loss in wages up to the time he became unemployable. Save for a modification presently to be discussed, the Circuit Court of Appeals enforced the order affecting the strikers, but struck down the provisions relating to Curtis and Daugherty.

First. The denial of jobs to men because of union affiliations is an old and familiar aspect of American industrial relations. Therefore, in determining whether such discrimination legally survives the National Labor Relations Act, the history which led to the Act and the aims which infuse it give direction to our inquiry. Congress explicitly disclosed its purposes in declaring the policy which underlies the Act. Its ultimate concern, as well as the source of its power, was "to eliminate the causes of certain substantial obstructions to the free flows of commerce." This vital national purpose was to be accomplished "by encouraging the practice and procedure of collective bargaining and by protecting the exercise by workers of full freedom of association." § 1. Only thus could workers ensure themselves economic standards consonant with national wellbeing. Protection of the workers' right to self-organization does not curtail the appropriate sphere of managerial freedom; it furthers the wholesome conduct of business enterprise. "The Act," this Court has said, "does not interfere with the normal exercise of the right of the employer to select

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its employees or to discharge them." But "under cover of that right," the employer may not "intimidate or coerce its employees with respect to their self-organization and representation." When

employers freely recognize the right of their employees to their own organizations and their unrestricted right of representation, there will be much less occasion for controversy in respect to the free and appropriate exercise of the right of selection and discharge.

Labor Board v. Jones & Laughlin, 301 U.S. 1, 45, 46. This is so because of the nature of modern industrialism. Labor unions were organized "out of the necessities of the situation. . . . Union was essential to give laborers opportunity to deal on equality with their employer." Such was the view, on behalf of the Court, of Chief Justice Taft, American Steel Foundries v. Tri-City Council, 257 U.S. 184, 209, after his unique practical experience with the causes of industrial unrest as co-chairman of the National War Labor Board. And so the present Act, codifying this long history, leaves the adjustment of industrial relations to the free play of economic forces, but seeks to assure that the play of those forces be truly free.

It is no longer disputed that workers cannot be dismissed from employment because of their union affiliations. Is the national interest in industrial peace less affected by discrimination against union activity when men are hired? The contrary is overwhelmingly attested by the long history of industrial conflicts, the diagnosis of their causes by official investigations, the conviction of public men, industrialists and scholars.1 Because of

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the Pullman strike, Congress, in the Erdman Act of 1898, prohibited inroads upon the workingman's right of association by discriminatory practices at the point of hiring.2 Kindred legislation has been put on the statute books of more than half the states.3 And during the late war, the National War Labor Board concluded that discrimination against union men at the time of hiring violated its declared policy that

The right of workers to organize in trade unions and to bargain collectively . . .

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shall not be denied, abridged, or...

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