40 612 National Labor Relations Board v. Food Store Employees Union, Local 347 8212 370

• Decision Date: 20 May 1974
• Docket Number: No. 73,73
• Citation: 40 L. Ed. 2d 612,94 S.Ct. 2074,417 U.S. 1
• Parties: . 40 L.Ed.2d 612 NATIONAL LABOR RELATIONS BOARD, Petitioner, v. FOOD STORE EMPLOYEES UNION, LOCAL 347, etc. —370
• Court: U.S. Supreme Court

417 U.S. 1

94 S.Ct. 2074.

40 L.Ed.2d 612

NATIONAL LABOR RELATIONS BOARD, Petitioner,

v FOOD STORE EMPLOYEES UNION, LOCAL 347, etc.

No. 73—370.

Argued March 18 and 19, 1974.

Decided May 20, 1974.

Syllabus

After finding that Heck's Inc. had engaged in pervasive unfair labor practices, the National Labor Relations Board (NLRB) issued a cease-and-desist order against it, but rejected the argument of respondent union, the charging party, for additional remedies, including reimbursement of litigation expenses and excess organizational costs incurred as a result of Heck's illegal conduct. The Court of Appeals enforced the NLRB's order but remanded the case to the NLRB for further consideration of additional remedies. The NLRB again refused to order reimbursement of litigation expenses and excess organizational costs, reasoning that its 'orders must be remedial, not punitive, and collateral losses are not considered in framing a reimbursement order' and that the Board, not the charging party, is entrusted with primary responsibility to protect the public interest. The Court of Appeals enforced the NLRB's amended order but, concluding that the NLRB had meanwhile in Tiidee Products, Inc., 194 N.L.R.B. 1234, changed its policy, enlarged the NLRB's order by requiring Heck's to '(p)ay to the Union any extraordinary organizational costs which the Union incurred by reason of Heck's policy of resisting organizational efforts and refusing to bargain' and to '(p)ay to the Board and the Union the costs and expenses incurred by them' in connection with the litigation. Sections 10(e) and (f) of the National Labor Relations Act authorize courts of appeals to 'make and enter a decree . . . modifying and enforcing as so modified' an NLRB order. Held: The Court of Appeals, although properly refusing to resolve inconsistencies in the Board's decisions in this case and in Tiidee by accepting Board counsel's rationalizations, erroneously exercised its authority under §§ 10(e) and (f), since it was 'incompatible with the orderly function of the process of judicial review' (NLRB v. Metropolitan Life Ins. Co., 380 U.S. 438, 444, 85 S.Ct. 1061, 13 L.Ed.2d 591) for that court to enlarge the Heck's order without first affording the NLRB an opportunity to evaluate this case in the light of the policy enunciated in Tiidee and to decide whether that policy should be applied retroactively. Pp. 8—11.

155 U.S.App.D.C. 101, 476 F.2d 546, reversed and remanded.

Daniel M. Friedman, Washington, D.C., for petitioner.

Mozart G. Ratner, Washington, D.C., for respondent.

Mr. Justice BRENNAN delivered the opinion of the Court.

The National Labor Relations Board refused to include, in a cease-and-desist order against Heck's Inc., a provision sought by respondent union, as charging party, that Heck's reimburse respondent's litigation ex- penses and excess organizational costs incurred as a result of Heck's unlawful conduct. The Board's stated reason was that 'it would not on balance effectuate the policies of the (National Labor Relations) Act to require reimbursement with respect to such costs in the circumstances here.' Heck's Inc., 191 N.L.R.B. 886, 889 (1971). Respondent prevailed, however, in enforcement and review proceedings in the Court of Appeals for the District of Columbia Circuit. That court enlarged the Board's order by adding provisions, paragraphs 2(e) and (f), that Heck's '(p)ay to the Union any extraordinary organizational costs which the Union incurred by reason of Heck's policy of resisting organizational efforts and refusing to bargain, such costs to be determined at the compliance stage of these proceedings,' and '(p)ay to the Board and the Union the costs and expenses incurred by them in the investigation, preparation, presentation, and conduct of these cases before the National Labor Relations Board and the courts, such costs to be determined at the compliance stage of these proceedings.' 155 U.S.App.D.C. 101, 476 F.2d 546 (1973). We granted certiorari to consider whether the enlargement of this order was a proper exercise of the authority of courts of appeals under §§ 10(e) and (f) of the National Labor Relations Act, as amended, 61 Stat. 146, 29 U.S.C. §§ 160(e) and (f), to 'make and enter a decree . . . modifying, and enforcing as so modified' the order of the Board, 414 U.S. 1062, 94 S.Ct. 567, 38 L.Ed.2d 467 (1973). We reverse.

Heck's Inc. operates a chain of discount stores in the Southeast section of the country. Its resistance to union organization has resulted in some 11 proceedings before the National Labor Relations Board.¹ This case grew out of its efforts to prevent organization by respondent union of Heck's employees at its store in Clarksburg, West Virginia. The case was twice before the Board. In its first decision, the Board determined that Heck's violated § 8(a) (1) of the Act, 29 U.S.C. § 158(a)(1), by threatening and coercively interrogating employees during respondent's organizational campaign, and by conducting a nonsecret poll to ascertain employee support for the union. Further, the Board found that Heck's 'flagrant repetition' of similar unfair labor practices at its other stores and its 'extensive violations of the Act' in the Clarksburg store justified an inference that Heck's did not entertain any good-faith doubt concerning majority support for respondent union when the company refused to recognize and bargain with the union on the basis of authorization cards signed by a majority of employees. Accordingly, the Board found that Heck's violated §§ 8(a)(5) and (1) of the Act, 29 U.S.C. §§ 158(a) (5) and (1). Finally, because Heck's extensive violations were found to have made a free and fair election impossible, an order directing Heck's to bargain with the union was entered. The Board rejected, however, the union's argument that adequate relief required certain additional remedies, including reimbursement of litigation expenses and excess organizational costs incurred as a result of Heck's unlawful behavior.² Heck's Inc., 172 N.L.R.B. 2231 n. 2 (1968).

The Court of Appeals for the District of Columbia Circuit enforced the Board's order, but remanded to the Board for further consideration of additional remedies including reimbursement of litigation expenses and excess organizational costs. 139 U.S.App.D.C. 383, 433 F.2d 541 (1970).³ On remand, the Board amended its original order to encompass certain supplemental remedies,⁴ but again refused to order reimbursement of litigation expenses and excess organizational costs.⁵ 191 N.L.R.B. 886. Although the Board found that Heck's unfair labor practices were 'aggravated and pervasive' and that its intransigence had probably caused the union to incur greater litigation expenses and organizational costs, the Board's rationale, previously mentioned, was that the provision would not effectuate the policies of the Act. The Board reasoned that its 'orders must be remedial, not punitive, and collateral losses are not considered in framing a reimbursement order.' Id., at 889 (footnotes omitted).⁶ Moreover, a charging party's participation in the case is, the Board found, primarily for the purpose of protecting its private interests, whereas the Board has the primary responsibility for protecting the public interest. The Board therefore concluded that, although the public interest might also arguably be served 'in allowing the Charging Party to recover the costs of its participation in this litigation,' that consideration did not 'override the general and well-established principle that litigation expenses are ordinarily not recoverable.' Ibid. (Footnote omitted.)

Prior to review of its supplementary decision by the Court of Appeals, the Board issued its decision in Tiidee Products, Inc., 194 N.L.R.B. 1234 (1972), in which the Board ordered reimbursement of litigation expenses in the context of a finding that an employer had engaged in 'frivolous litigations.'⁷ The Board's opinion in Tiidee reasoned that industrial peace could be best achieved if 'speedy access to uncrowded Board and court dockets (were) available' and therefore that an assessment of legal fees would serve the public interest by 'discourag(ing) future frivolous litigation,' 194 N.L.R.B., at 1236. The Board did not explain why those considerations had not led it to order similar relief in this case. The Court of Appeals therefore concluded in the present case that the Board had abandoned its policy against award of litigation expenses and excess organizational costs,⁸ stating

'Although the Board in its Supplemental Decision in this case has nowhere characterized the litigation as frivolous, it has used the language of 'clearly aggravated and pervasive' misconduct; and in its original opinion it questioned Heck's good faith because of its 'flagrant repetition of conduct previously found unlawful' at other Heck's stores. It would appear that the Board has now recognized that employers who follow a pattern of resisting union organization, and who to that end unduly burden the processes of the Board and the courts, should be obliged, at the very least, to respond in terms of making good the legal expenses to which they have put the charging parties and the Board. We hold that the case before us is an appropriate one for according such relief.' 155 U.S.App.D.C., at 106, 476 F.2d, at 551.

The Court of Appeals also viewed Tiidee as the signal of a shift in the Board's attitude toward excess organizational costs. In Tiidee, the Board refused to order reimbursement of excess organizational costs because "no nexus between (the employer's) unlawful conduct" had been proved. Ibid. Since, in the instant case, the Board had indicated that Heck's violations had probably caused respondent to incur excess organizational costs, a nexus was proved and accordingly the court held that respondent was entitled to an order directing reimbursement of organizational costs.

In the circumstances of this case, the...