American Machinery Corporation v. NLRB

• Decision Date: 15 April 1970
• Docket Number: No. 27283.,27283.
• Citation: 424 F.2d 1321
• Parties: AMERICAN MACHINERY CORPORATION, Petitioner-Cross Respondent, v. NATIONAL LABOR RELATIONS BOARD, Respondent-Cross Petitioner.
• Court: U.S. Court of Appeals — Fifth Circuit

424 F.2d 1321 (1970)

AMERICAN MACHINERY CORPORATION, Petitioner-Cross Respondent, v. NATIONAL LABOR RELATIONS BOARD, Respondent-Cross Petitioner.

No. 27283.

United States Court of Appeals, Fifth Circuit.

April 15, 1970.

Norman F. Burke, Orlando, Fla., for petitioner.

Marcel Mallet-Prevost, Asst. General Counsel, N. L. R. B., Washington, D. C., Harold A. Boire, Regional Director, N. L. R. B., Region 12, Tampa, Fla., Eugene B. Granof, Atty., N. L. R. B., Washington, D. C., for respondent.

George C. Longshore, Birmingham, Ala., Bernard Kleiman, Gen. Counsel, Pittsburgh, Pa., Bredhoff & Gottesman, George H. Cohen, Washington, D. C., for intervenor United Steelworkers of America, AFL-CIO.

Before TUTTLE, WISDOM and BELL, Circuit Judges.

WISDOM, Circuit Judge:

This case presents the question whether an employer must reinstate permanently replaced economic strikers when positions become vacant as a result of the departure of their replacements. We hold that the National Labor Relations Board properly exercised its statutory authority in concluding that reinstatement is necessary to protect the right of employees to engage in concerted activities. Furthermore, we find that the circumstances of this case justify the imposition of a back pay award even though at the time of the activities in question the Board had not adopted its present view that replaced economic strikers have the right to reinstatement.

I.

The collective bargaining agreement between American Machinery and United Steelworkers¹ expired on October 15, 1967. Since negotiations were deadlocked, all fifty-one employees in the unit went on strike on October 17, 1967. November 14, 1967, the Company notified each striker by mail that he had been "permanently replaced".

In late January of 1968, the Union requested a resumption of negotiations. The Company questioned the majority status of the Union and refused to bargain on that ground. Although the Union then filed unfair labor practice charges, the Regional Director refused to issue a complaint. His action was sustained on appeal.

March 13, 1968, the strike and all picketing ended. That same day, the Union notified the Company by registered letter, received March 14, that all the strikers unconditionally offered to resume work and requested reinstatement. The letter stated that if there were no openings, the strikers would be available for employment when openings should occur. The Company replied by letter dated March 21, 1968, that no job openings were currently available and that when they did occur, the strikers would be treated as if they were new applicants, provided that they applied for employment and kept their applications current.²

Eight strikers thereupon made written application for employment. Nine others made oral requests. Most of them were told that they would receive no seniority credit and would return as new employees. No one kept his application current in the sense that the Company used the term — at least weekly checkups — nor did the Company notify the strikers what keeping their applications "current" required the strikers to do. The President of the Company did tell two strikers who applied that he would notify them of openings.

Between March 14 and the date of the hearing, September 17-18, 1968, American Machinery hired approximately eighty-five persons, utilizing employment agencies and hiring from a nearby closed citrus machinery plant. None of the persons hired were strikers. Although the Company maintained a list of the names, addresses, and telephone numbers of the strikers, it did not inform any of them of openings. Some of the persons hired were less skillful than some of the strikers. As of the date of the hearing, there were at least twenty strikers whose former positions were not occupied by the original replacements.

In April the Union filed an unfair labor practice charge. The Board issued a complaint against the Company in August 1968 for its failure to offer reinstatement to replaced economic strikers. After a hearing, the Trial Examiner found that the Board's decision in Laidlaw Corporation, 171 NLRB No. 175 (1968), enforcement granted, 7 Cir. 1969, 414 F.2d 99, cert. denied, 1970, 397 U.S. 920, 90 S.Ct. 928, 25 L.Ed.2d 100, required the Company to offer the strikers positions which became vacant and for which they qualified. In Laidlaw the Board held that "economic strikers who unconditionally apply for reinstatement at a time when their positions are filled by permanent replacements: (1) remain employees; (2) are entitled to full reinstatement upon the departure of replacements unless they have in the meantime acquired regular and substantially equivalent employment, or * * * the failure to offer full reinstatement was for legitimate and substantial business reasons". 171 NLRB No. 175, 68 L.R.R.M. 1252, 1258. The examiner ruled that American Machinery's treatment of the strikers as new employees with loss of seniority violated section 8(a) (1) and (3) of the National Labor Relations Act, 29 U.S.C. § 158(a) (1) and (3), in that it penalized the strikers for engaging in a protected concerted and union activity. Furthermore, he found violations of the same section in that the failure to reinstate the strikers had the discriminatory purpose of preventing the Union from regaining representative status. Consequently, the Trial Examiner ordered reinstatement for all but three³ of the strikers listed in the complaint, with seniority and back pay as of the date upon which they should have been reinstated. January 16, 1969, the Board adopted the Trial Examiner's findings, conclusions, and recommendations. This matter is before us on the Company's petition to review and set aside the order and the Board's cross-application for enforcement.

II.

The background of the Board's present posture must be considered.

NLRB v. Mackay Radio & Telegraph Co., 1938, 304 U.S. 333, 58 S.Ct. 904, 82 L.Ed. 1381, held that section 8 of the National Labor Relations Act prohibits an employer from discriminating on the basis of union activities in its reemployment of striking workers. The real significance of the case in this controversy, however, is its oft-quoted dictum that

Although § 13 29 U.S.C.A. § 163 provides, "Nothing in this Act shall be construed so as to interfere with or impede or diminish in any way the right to strike," it does not follow that an employer, guilty of no act denounced by the statute, has lost the right to protect and continue his business by supplying places left vacant by strikers. And he is not bound to discharge those hired to fill the places of strikers, upon the election of the latter to resume their employment, in order to create places for them. The assurance by respondent to those who accepted employment during the strike that if they so desired their places might be permanent was not an unfair labor practice nor was it such to reinstate only so many of the strikers as there were vacant places to be filled. 304 U.S. at 345-346, 58 S.Ct. at 910-911, 82 L.Ed. at 1390 (Citations omitted).

And later in the opinion,

the respondent was not bound to displace men hired to take the strikers\' places in order to provide positions for them. * * * It might have resorted to any one of a number of methods of determining which of its striking employees would have to wait because five men had taken permanent positions during the strike * * *. 304 U.S. at 347, 58 S.Ct. at 911, 82 L. Ed. at 1391.

The Board adopted this dictum as a decisional rule. Adams Brothers Manifold Printing Co., 17 N.L.R.B. 974, 980 (1939). Thereafter, the established position of the Board with respect to an economic strike was that an employer who hires replacements intended to be permanent thereby cuts off all employment rights of the replaced strikers; the employer could treat the replaced strikers as if they were new applicants. Atlas Storage Division, 112 N.L.R.B. 1175, 1179-80 & n. 15 (1955), enforced sub nom. Chauffeurs, Teamsters, etc., Local No. 200 v. NLRB, 7 Cir. 1956, 233 F.2d 233; Brown and Root, Inc., 132 N.L.R.B. 486, 493-494 (1961), enforced in part, 8 Cir. 1963, 311 F.2d 447.

NLRB v. Fleetwood Trailer Co., 1967, 389 U.S. 375, 88 S.Ct. 543, 19 L.Ed.2d 614, like the instant case, involved a strike over economic demands. The Supreme Court in upholding a Board decision, ruled that an employer could not refuse to rehire striking employees simply because at the date they applied he had not yet resumed full production and their jobs had not yet been reactivated. Instead, since the strikers' applications remained current, he must hire them in preference to new employees whenever the jobs were reactivated. The Board proceeded from Fleetwood to a new principle enunciated in Laidlaw: When job vacancies arise as a result of the departure of permanent replacements, striking employees whose applications are outstanding are entitled to preference over new applicants. It is this principle which the Board seeks to have us approve in this case as the Seventh Circuit has done in Laidlaw Corp. v. NLRB, 7 Cir., 1969, 414 F.2d 99, cert. denied, 1970, 397 U.S. 920, 90 S.Ct. 928, 25 L. Ed.2d 100.

III.

Section 7 of the National Labor Relations Act affords employees the right to engage in concerted activities. The basic question at issue here is the scope of protection afforded employees in the exercise of this right. Section 8(a) (1) and (3) of the Act provides that

It shall be an unfair labor practice for an employer —

(1) to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in section 7;

* * * * * *

(3) by discrimination in regard to hire or tenure of employment or any term or condition of employment to encourage or discourage membership in any labor organization * * *. 29 U.S.C. § 158(a) (1) and (3).

Recent Supreme Court cases have subjected an employer's conduct to scrutiny.⁴ NLRB v. Erie Resistor Corp., 1963, 373 U.S. 221, 83 S.Ct. 1139, 10...