Mooresville Cotton Mills v. National Labor R. Board, 4207.

• Decision Date: 04 January 1938
• Docket Number: No. 4207.,4207.
• Citation: 94 F.2d 61
• Parties: MOORESVILLE COTTON MILLS v. NATIONAL LABOR RELATIONS BOARD.
• Court: U.S. Court of Appeals — Fourth Circuit

94 F.2d 61 (1938)

MOORESVILLE COTTON MILLS v. NATIONAL LABOR RELATIONS BOARD.

No. 4207.

Circuit Court of Appeals, Fourth Circuit.

January 4, 1938.

Fred D. Hamrick, of Rutherfordton, N. C. (Zeb V. Turlington, of Mooresville, N. C., and Quinn, Hamrick & Hamrick and Fred D. Hamrick, Jr., all of Rutherfordton, N. C., on the brief), for petitioner.

Charles Fahy, Gen. Counsel, and Thomas I. Emerson, Atty., National Labor Relations Board, both of Washington, D. C. (Robert B. Watts, Associate Gen. Counsel, and Joseph Rosenfarb, Atty., National Labor Relations Board, both of Washington, D. C., on the brief), for respondent.

Before PARKER, NORTHCOTT, and SOPER, Circuit Judges.

SOPER, Circuit Judge.

The Mooresville Cotton Mills, a North Carolina corporation, pursuant to section 10(f) of the National Labor Relations Act, 49 Stat. 449, 29 U.S.C.A. 151 et seq., and section 160(f), petitions this court to review an order of the National Labor Relations Board whereby the corporation was directed to cease and desist from discouraging membership in Local No. 1221, United Textile Workers of America, by discrimination in regard to hire or tenure or any condition of employment, and from interfering with its employees in the exercise of the right of self-organization, to join labor organizations, and to bargain collectively; and whereby the corporation was further directed to offer reinstatement to eight former employees to their former positions and to make them whole for any losses of pay that they suffered by reason of the corporation's refusal to reinstate them on the date when each applied for reinstatement.

At the outset the petitioner asks the court to set aside the order in its entirety on the ground that it is engaged wholly in the local intrastate business of manufacturing, and therefore, as applied to it, the National Labor Relations Act is unconstitutional. The character of the business is indicated by the following excerpt from the findings of fact by the Board:

"Respondent is a corporation organized and existing under the laws of North Carolina, with its factory and principal place of business at Mooresville, North Carolina, and is engaged in the manufacture of towels, wash cloths, bath mats, furniture slip covers, automobile slip coverings, dress goods, men's suitings, curtain cloths, flannels, outing flannel, wide inner lining, and other novelty goods. Respondent is the second largest towel manufacturer in the United States, making approximately 15% of the towels manufactured. Its annual gross sales are approximately $3,000,000. In September, 1935, when the present controversy arose, respondent employed about 1400 persons. It employed over 2000 at the time of the hearing.

"Most of the materials used by respondent in the conduct of its business, such as cotton, chemicals, starches, dyes and fuels, are purchased by it from and through brokers and distributors located in North Carolina. Some of these materials, however, have their origin in states other than North Carolina.

"All of respondent's products except towels are manufactured to order. All of the orders for merchandise come to it through the New York offices of an independent commission company which has offices in numerous cities throughout the country and which distributes on a national scale. Upon receipt of an order respondent immediately proceeds to fill such order either by drawing on its stock in the case of an order for towels, or by manufacturing, in the case of an order for other items. Finished products are loaded by respondent's own employees in railroad cars on a siding inside the gates of respondent's plant whence they are shipped to all parts of the United States. Between 90 and 95% of its products are shipped to states other than North Carolina, either to ultimate consumers or to manufacturers for further processing. Respondent markets its products under various registered trade names and marks."

In addition the mill stresses the fact that all of the manufactured goods are sold f. o. b. Mooresville, N. C., through the New York office of a commission house.

The Board also found as to the effect upon interstate commerce of unfair labor practices or disturbances in the cotton textile industry, the following:

"The cotton textile industry is one which is singularly characterized by constantly recurring labor strife. Vicious competition has brought low wages and long working hours to the workers employed in that industry. To improve their wages and working conditions employees have attempted to organize but their efforts have frequently proved unsuccessful. Interference with organization activities by employers, and the failure of employers to recognize the organization of employees, have been a constant source of unrest. Such unrest in the industry has in the past led to strikes and lockouts which have had a disastrous effect on commerce. Board Exhibit No. 16, under the title `Strikes and lockouts in the Cotton Textile Industry in 1934, and in January to July, inclusive, 1935, by Major Issues Involved,' reveals that during the year 1934 and the first seven months of the year 1935, 94 strikes and lockouts took place in the cotton textile industry. These strikes and lockouts involved issues similar to those involved in the strike in the present case. These labor controversies involved 290,154 men, and resulted in a total of 3,958,891 man-days of idleness. The enormous economic loss incident to such controversies, caused in a great measure by conduct similar to that which gave rise to the strike in this case, and the resultant disastrous effects on commerce, and made apparent by the foregoing statistics.

"During the textile strike of 1934 respondent's plant was shut down for a period of three weeks. During this period it purchased no raw materials and shipments of merchandise from its plant were materially reduced. Such failure of production, of purchase of raw materials and shipments of merchandise is inherent in respondent's business in the event of any labor trouble in its plant."

Upon these facts, it is our opinion that the Board was correct in its conclusion that the National Labor Relations Act is applicable to the operations of the mill because they have a close, intimate, and substantial relation to commerce among the several states. Stoppage of the operations through industrial strife would result in substantial interruption to the flow of interstate commerce in the manner and to the extent described in decisions of the Supreme Court as sufficient to justify a regulation by the federal government. National Labor Relations Board v. Jones & Laughlin Steel Corporation, 301 U.S. 1, 57 S.Ct. 615, 81 L.Ed. 893, 108 A.L.R. 1352; National Labor Relations Board v. Fruehauf Trailer Co., 301 U.S. 49, 57 S.Ct. 642, 81 L.Ed. 918, 108 A.L.R. 1352; National Labor Relations Board v. Friedman-Harry Marks Clothing Co., 301 U.S. 58, 57 S.Ct. 645, 81 L.Ed. 921, 108 A.L.R. 1352. We do not regard as important in this respect the fact that much the greater part of the raw materials and supplies used in the mill are purchased in the state of North Carolina. In National Labor Relations Board v. Jones & Laughlin Steel Corporation, 301 U.S. 1, 36, 57 S.Ct. 615, 623, 81 L.Ed. 893, 108 A.L.R. 1352, it was said that the Congressional authority to protect interstate commerce is not limited to transactions that form an essential part of the flow of commerce from state to state; and it has been subsequently held, where a substantial obstruction to interstate commerce would be involved in the stoppage of the operations of a manufacturing business, that the statute is applicable although the raw materials are found in the home state and do not move into it from other states. National Labor Relations Board v. Santa Cruz Fruit Packing Co., 9 Cir., 91 F.2d 790. It is also immaterial that there is a technical passing of the title to the goods when they are delivered by the manufacturer to the carrier at the factory, for this circumstance is merely incidental to the disposition of the goods in the state of manufacture, and has no relation to the interference with interstate commerce by labor disputes which the statute was designed to prevent.

The complaint against the employer, issued by the Board upon charges filed with it by the union, involved two specifications which in substance were as follows: (1) That on September 21, 1935, and at all times since that date, the corporation, by John F. Matheson its president, failed and refused to meet with, discuss, or bargain collectively with the duly authorized representatives of the union on grievances or any other matter; and (2) that at all times since July 5, 1935, the effective date of the act, the corporation, through W. F. Summers, superintendent of the plant, and Martin Wilhelm, overseer of the plant, "has constantly discouraged membership in said union by advising, urging and warning employees not to remain members of or assist said union by exhibiting open hostility to said union and its activities, by threatening employees with discharge or discrimination for remaining in said union or engaging in activities in connection therewith, and by refusing to hire workers who are members of the union or who have engaged in activities in connection therewith."

The circumstances relating to the alleged failure of the president of the mill to bargain collectively with the representatives of the union, as set out in the findings of the Board and in the record, are substantially as follows: The union was established in 1919. It ceased to function in 1927, became active again in October, 1933, and in September, 1935, had approximately 424 members and shortly before the hearing in March, 1936, approximately 285 members. During the year 1935 T. F. Moore, the president of the union, was discharged, the reason being inefficiency, as the record abundantly shows, although as the Board said the committees of the union did not...