486 F.2d 837 (8th Cir. 1973), 72-1573, Inter-Collegiate Press, Graphic Arts Div. v. N.L.R.B.

Docket Nº:72-1573, 72-1749.
Citation:486 F.2d 837
Case Date:October 25, 1973
Court:United States Courts of Appeals, Court of Appeals for the Eighth Circuit

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486 F.2d 837 (8th Cir. 1973)

INTER-COLLEGIATE PRESS, GRAPHIC ARTS DIVISION, etc., and Sargent Welch Scientific Company, Petitioners,






Nos. 72-1573, 72-1749.

United States Court of Appeals, Eighth Circuit.

October 25, 1973

Submitted Sept. 10, 1973.

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[Copyrighted Material Omitted] Page 839

Alvin D. Shapiro, Kansas City, Mo., for Intercollegiate Press.

William O. Eisler, Kansas City, Mo., for Bookbinders.

William DuRoss, III, Atty., NLRB, Washington, D. C., for National Labor Relations Board.

Before GIBSON and BRIGHT, Circuit Judges, and SMITH, Senior District Judge. [*]

GIBSON, Circuit Judge.

Does the use of temporary replacements during a bargaining lockout constitute a violation of §§ 8(a)(1) or 8(a)(3) of the National Labor Relations Act, 29 U.S.C. § 151 et seq.? 1

The contending parties 2 are sharply divided on this issue. The Union has contended throughout these proceedings for a per se rule forbidding the hiring of temporary replacements during an otherwise lawful lockout, the Company has viewed the practice as a legitimate economic weapon countering the union's right to strike, and a divided Board (3-2) shunned the per se approach in favor of an approach balancing the conflicting legitimate interests of both the employer and employee.

The Company was charged with violations of §§ 8(a)(1) and (3) for continuing to operate with temporary employees after instituting an otherwise lawful

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lockout. After a hearing, the administrative law judge concluded that he was bound by the Board's decision in Inland Trucking Co., 179 N.L.R.B. 350, 72 LRRM 1486 (1969), and found that the Company had violated the above sections by its use of temporary replacements. A majority of the Board disagreed and ordered the complaint dismissed. Inter-Collegiate Press, 199 N.L.R.B. No. 35 (1972).

While the Sixth Circuit has summarily dealt with this question and the Ninth Circuit referred to it in a different context, the Seventh Circuit is the only court that has previously articulated its views in passing upon this troublesome question. In Inland Trucking Co. v. N.L.R.B., 440 F.2d 562, 565 (7th Cir.), cert. denied, 404 U.S. 858, 92 S.Ct. 106, 30 L.Ed.2d 100 (1971), 3 the Seventh Circuit concluded:

"[T]hat a lockout in the circumstances at bar, accompanied by continued operation with replacement labor, is per se, an interference with protected employee rights, and accordingly, per se, an unfair labor practice under § 158(a)(1)."

If we were to accept this analysis, little more would need be said, for the mere use of temporary replacements would constitute a violation of the Act. However, the Inland opinion is conditioned on the "circumstances at bar," and the parties read that decision more or less expansively according to their interest. Inland supports the Union's position, but we do not think it conforms with the Supreme Court's opinions touching this issue and decide it would be improper for us at this time to adopt a per se rule. To do so would remove the development of the law in this area from the special competence of the Board, which has been proceeding on a case-by-case basis to adjudicate the impact of hiring temporary replacements during a lawful lockout by balancing the interests of employees and employers and thereby fashioning a national body of labor law under the broad Congressional guidelines set forth in the Act. Before placing this court's imprimatur on any per se rule, it would seem advisable to heed the admonitions of the Supreme Court in N.L.R.B. v. Erie Resistor Corp., 373 U.S. 221, 236, 83 S.Ct. 1139, 1150, 10 L.Ed.2d 308 (1963):

"Here, as in other cases, we must recognize the Board's special function of applying the general provisions of the Act to the complexities of industrial life . . . and of '[appraising] carefully the interests of both sides of any labor-management controversy in the diverse circumstances of particular cases' from its special understanding of 'the actualities of industrial relations'. . . . 'The ultimate problem is the balancing of the conflicting legitimate interests. The function of striking that balance to effectuate national labor policy is often a difficult and delicate responsibility, which the Congress committed primarily to the National Labor Relations Board, subject to limited judicial review."' (citations omitted).

Our role as a reviewing court is to determine whether the Board's order is supported by substantial evidence on the record as a whole, Universal Camera Corp. v. N.L.R.B., 340 U.S. 474, 71 S.Ct. 456, 95 L.Ed. 456 (1951), or has misapplied the law. N.L.R.B. v. Insurance Agents, 361 U.S. 477, 80 S.Ct. 419, 4 L.Ed.2d 454 (1960). Here the Board

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has chosen not to promulgate a per se rule, but rather to proceed on an individual case basis giving consideration to the special circumstances of each case. Admittedly, the conduct in question has some effect upon protected employee rights, but we are not prepared to say absolutely that a lockout plus the hiring of temporary replacements is conduct so "inherently destructive" of employee rights to warrant a reviewing court in promulgating a per se rule when the Board itself has chosen not to do so. To the extent that Inland Trucking is interpreted as setting forth a per se rule, it has been criticized by commentators, 4 and to follow that path would seem to ignore the caution raised in American Ship Bldg. v. N.L.R.B., 380 U.S. 300, 337-338, 85 S.Ct. 955, 977, 13 L.Ed.2d 855 (1965) (Goldberg, J., concurring), that "the problem of lockouts requires 'an evolutionary process,' not 'a quick, definitive formula,' for its answer." 5 It was also unnecessary to the decision reached in Inland to announce a per se rule, since the court went on to find a lack of any legitimate and substantial business justification for the employer's conduct, which would warrant a finding of a violation of the Act under the test of N.L.R.B. v. Great Dane Trailers, Inc., 388 U.S. 26, 34, 87 S.Ct. 1792, 18 L.Ed.2d 1027 (1967).

Since we deem a per se approach inappropriate, we think it important to relate in some detail the facts of this case. The Company prints scholastic year books and graduation announcements at its plant in Mission, Kansas. The Union represents all the full-time and permanent seasonal employees in the cover and bindery departments, and those in the announcement department, who perform paper cutting, finishing, and packaging work. 6 In February, 1967, the Union was recognized as the bargaining representative of the above employees. After seven months of negotiations in 1967 during which a two week strike occurred, agreement was reached between the Union and the Company on a collective bargaining contract that expired August 31, 1970.

Negotiations on a new contract began July 7, 1970. 7 Fourteen bargaining sessions were held after this date until the Company lockout October 16th. It is uncontroverted that the Company and the Union were at impasse in their negotiations by October 15th, for on that date a federal mediator stated that further bargaining would be "an exercise in futility." The Company locked out all employees represented by the Union on October 16th, after being informed that morning that the Company's last contract proposal was unacceptable and the Union had no proposals to make. The last proposal offered provisions somewhat better than those in the expired contract.

The Union had been made aware as early as September 16th that the Company was considering a lockout, but no progress was made on any of the unresolved issues from that date until the date of the lockout. The parties and the Board are in agreement that the lockout was entirely legal at its inception. 8 No

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claim has been made that there was any bad faith on the part of the employer at the time the lockout began. The lockout failed to bring about any fruitful negotiations or agreements and effected no change in the Union's bargaining position. A substantial backlog of work had accumulated in the areas manned by locked out employees, and a failure to resolve the impasse before the Company's busy season would have prevented the Company from meeting its delivery schedules. Competitors were contacting Inter-Collegiate's customers and informing them that there would be late deliveries because of the labor dispute, and these customers were threatening to take their business elsewhere unless the Company could guarantee timely delivery. During the time when the Company's busy season was approaching, the Company's salesmen were warning of a substantial loss of customers and good will unless the labor dispute was resolved.

Inter-Collegiate is engaged in a highly...

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