Montgomery Ward & Co. v. National Labor R. Board

Decision Date02 December 1940
Docket NumberNo. 490.,490.
PartiesMONTGOMERY WARD & CO., Inc., v. NATIONAL LABOR RELATIONS BOARD.
CourtU.S. Court of Appeals — Eighth Circuit

Stuart S. Ball, of Chicago, Ill. (John A. Barr and R. F. Walker Smith, both of Chicago, Ill., on the brief), for petitioner.

Allen Heald, of Washington, D. C., (Charles Fahy, Gen. Counsel, Robert B. Watts, Associate Gen. Counsel, Laurence A. Knapp, Asst. Gen. Counsel, and Joseph Friedman and Thomas F. Wilson, all of Washington, D. C., on the brief), for National Labor Relations Board.

Before SANBORN and THOMAS, Circuit Judges, and DEWEY, District Judge.

SANBORN, Circuit Judge.

The petitioner, Montgomery Ward & Co., Inc., asks for the reversal of an order of the National Labor Relations Board, which, so far as now pertinent, requires the petitioner to cease and desist from "either directly or indirectly engaging in any manner of espionage or surveillance, or engaging the services of any agency or individuals for the purpose of interfering with, restraining, or coercing its employees in the exercise of the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, or to engage in concerted activities for the purposes of collective bargaining and other mutual aid or protection; * * *"; and requires the petitioner (respondent before the Board) to take the following affirmative action: "Notify in writing all its present and any future under-cover operatives at the St. Paul house that they shall not spy upon the respondent's petitioner's employees in their exercise of the right to self-organization, to form, join, or assist labor organizations of their own choosing, and to engage in concerted activities for the purposes of collective bargaining and other mutual aid or protection, and that they shall not report to the respondent petitioner regarding such exercise by the respondent's petitioner's employees; * * *." The Board asks for the enforcement of this order.

The Board, in 1938, upon charges filed by Warehouse Employees' Union No. 20,297, affiliated with the A. F. of L., issued its complaint, which, as finally amended, alleged that petitioner, following a strike at its St. Paul house, had refused to reinstate fifteen employees because they had struck and had engaged in concerted activities for the purpose of collective bargaining, and that the petitioner had thus discriminated in regard to their hire and tenure of employment, in violation of § 8(3) of the National Labor Relations Act.1 49 Stat. 449, 452; 29 U.S.C.A. § 158 (3). The complaint further alleged that petitioner had maintained a system of espionage and had advised and warned its employees to refrain from joining the union, and thus had violated § 8(1) of the Act.2 The petitioner, in its answer, conceded that the Board had jurisdiction, but denied having committed any unfair labor practices. A hearing was had before a Trial Examiner designated by the Board, at St. Paul, Minnesota. The Trial Examiner subsequently recommended that petitioner be ordered to cease and desist from interfering with the rights of its employees guaranteed by § 7 of the Act, 29 U.S.C.A. § 157;3 and, further, that it be required to reinstate, with back pay, three of fifteen employees named in the complaint, and that the complaint with respect to the other twelve be dismissed. The petitioner filed exceptions to this report, and, after a hearing, the Board decided that petitioner had interfered with, restrained, and coerced its employees in the exercise of the rights guaranteed by § 7 of the Act, thus violating § 8(1) of the Act, but that petitioner had not discriminated in regard to the hire and tenure of employment of any of the fifteen employees named in the complaint, and had not violated § 8(3) of the Act. In addition to the order requiring the petitioner to cease and desist from violating § 8(1) of the Act, the Board ordered it to place the fifteen employees named in the complaint on a preferential list, to be offered employment when available, and to reinstate them to their former or equivalent positions before it hired others therefor. The complaint, in so far as it alleged that petitioner had discriminated against the fifteen employees named in the complaint, was dismissed.

In this court the Board, in its response to the petition for the review of its order, asserted the validity of the entire order, and requested its enforcement, but in its brief it has requested the elimination from the order of all reference to placing the fifteen named employees upon a preferential list. Only so much of the order as relates to the alleged violation of § 8(1) of the Act, through petitioner's use of a system of espionage, need be discussed.

The facts out of which this controversy arises are not seriously in dispute. It is the inferences, drawn by the Board from the facts, that the petitioner challenges.

The petitioner is an Illinois corporation engaged in merchandising, with its main office and place of business in Chicago. It owns and operates a large retail and mail order house or establishment in St. Paul, Minnesota. For a long time the petitioner has maintained a system of espionage or surveillance of its employees, which has been primarily used for obtaining information relative to matters in which it has a direct and proper interest, such as the honesty, moral character, and efficiency of the large number of employees who work in its establishment at St. Paul. These matters were not in any way related to the rights of its employees guaranteed by § 7 of the National Labor Relations Act. In 1936, 1937 and 1938 the system was utilized by the petitioner to secure information as to the attitude of its employees toward unionization and with respect to union activities; and it was this use of the system which caused the filing of charges by the union with the Board that petitioner had interfered with the rights of its employees and thus violated § 8(1) of the Act.

The evidence disclosed that the head of petitioner's espionage or secret service system at St. Paul was the chief of petitioner's store police. His operatives were secured from among the regular employees of petitioner, who received, as their compensation for this special service, either extra pay or promises of an increase in pay or of promotion. Confidential instructions were given to the operatives, both verbal and in writing, by the chief of the system. They were directed to report thefts and irregularities of fellow employees which required immediate attention to the Personnel Director of petitioner, or, in case of necessity, to the chief. At the end of each week, each operative was required to mail a confidential report, containing matters of interest, to the chief at his residence address, or, in case of his absence, to the residence address of the Personnel Director. The operatives were instructed to report fairly and impartially upon both the bad and the good qualities of their fellow employees. The reports were to show "the true attitude of employees regarding their work, efficiency, attitude towards their immediate superiors, the management or company in general, employees' outstanding qualities or dishonest or careless tendencies." The operatives were advised that all information furnished was to be held in strictest confidence and referred only to the management.

In June, 1936, the operatives received from their chief a letter which contained the following: "The management is very much interested in knowing the full details of the present labor situation throughout the house, namely, what the attitude is of the persons who have recently joined Local 120, what benefits they expect to derive from it, what their general attitude is towards this movement, also if there is any talk of organizing the house as a whole. * * * Please destroy this letter as soon as read."

In December, 1936, after an affiliated union had initiated the unionization of petitioner's employees, the chief wrote his operatives as follows:

"Labor organizers are again at work among Ward...

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5 cases
  • Bethlehem Steel Co. v. National Labor R. Board
    • United States
    • U.S. Court of Appeals — District of Columbia Circuit
    • 12 Mayo 1941
    ...F.2d 76, 78; Atlas Underwear Co. v. National Labor Relations Board, 6 Cir., 1941, 116 F.2d 1020, 1023; Montgomery Ward & Co. v. National Labor Relations Board, 8 Cir., 1940, 115 F.2d 700. 45 The terms of Section 8(1) appear in footnote 46 To spell this out: Section 7 provides: "Employees sh......
  • Western Electric Co. v. NATIONAL LABOR REL. BOARD, ETC.
    • United States
    • U.S. Court of Appeals — Fourth Circuit
    • 9 Abril 1945
    ...is properly for the Board, not for the courts. N.L.R. B. v. George P. Pilling & Son Co., 3 Cir., 119 F.2d 32; Montgomery Ward & Co. v. N.L.R.B., 8 Cir., 115 F.2d 700; N.L.R.B. v. Christian Board of Publication, 8 Cir., 113 F.2d On, or shortly after, April 13, 1937, Hicok, the Company's supe......
  • National Labor R. Board v. Grower-Shipper V. Ass'n
    • United States
    • U.S. Court of Appeals — Ninth Circuit
    • 21 Julio 1941
    ...attention which discusses the particular question raised by respondents, and in that one, it was not decided. Montgomery Ward & Co. v. National Labor R. Board, 8 Cir., 115 F.2d 700. National Labor Relations Board v. National Motor B. Co., 9 Cir., 105 F.2d 652, 657, is not in point. That cas......
  • Lundell v. Wood, 11706
    • United States
    • U.S. Court of Appeals — Eighth Circuit
    • 18 Diciembre 1940
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