Foster Bros. Mfg. Co. v. National Labor Relations Board

• Decision Date: 06 October 1936
• Docket Number: No. 4074.,4074.
• Citation: 85 F.2d 984
• Parties: FOSTER BROS. MFG. CO., Inc., v. NATIONAL LABOR RELATIONS BOARD.
• Court: U.S. Court of Appeals — Fourth Circuit

85 F.2d 984 (1936)

FOSTER BROS. MFG. CO., Inc., v. NATIONAL LABOR RELATIONS BOARD.

No. 4074.

Circuit Court of Appeals, Fourth Circuit.

October 6, 1936.

Leonard Weinberg and Harry J. Green, both of Baltimore, Md. (Weinberg & Sweeten and Zanvyl Krieger, all of Baltimore, Md., on the brief), for petitioner.

Charles Fahy, Gen. Counsel for National Labor Relations Board, of Washington, D. C. (Robert B. Watts, Associate

Gen. Counsel for National Labor Relations Board, Thomas I. Emerson and Laurence A. Knapp, Attys., National Labor Relations Board, all of Washington, D. C., on the brief), for respondent.

Before PARKER, NORTHCOTT, and SOPER, Circuit Judges.

SOPER, Circuit Judge.

This case arose under the National Labor Relations Act of July 5, 1935, 49 Stat. 449, 29 U.S.C.A. §§ 151-166. Charges were filed with the National Labor Relations Board against the petitioner as an employer of labor by Federal Labor Union, Local No. 20137, a labor organization chartered by the American Federation of Labor, alleging the commission by the employer of certain unfair labor practices affecting commerce within the meaning of the act. The Board issued a complaint and gave notice of hearing. The complaint in substance alleged that the employer is a Maryland corporation, engaged at Baltimore in the production, sale, and distribution of bed springs, day beds, studio couches, and related products and equipment; that it had discharged and refused to reinstate 11 employees for the reason that they had joined the union, and that the employer had therefore engaged in unfair labor practices affecting commerce within the meaning of section 8, subdivisions 1 and 3, and section 2, subdivisions 6 and 7 of the act (29 U.S.C.A. §§ 152 (6,7), 158 (1, 3).

The employer filed a special appearance challenging the jurisdiction of the Board and the validity of the act on constitutional grounds, and without waiving its rights under this appearance, admitted the allegations concerning the nature of its business, but denied the allegations in regard to unfair labor practices. The objections were overruled by the Trial Examiner designated by the Board to hear the case, and hearing upon the complaint was held, at which counsel for the employer waived the right to present testimony and to cross-examine witnesses for the union.

After the hearing, the matter came before the Board which issued a decision containing in substance the following findings of fact supported by the evidence: The employer is in fact engaged in the business described in the complaint. In 1935 its sales totaled $390,000, and its employees averaged 125 in number. Eighty per cent. of the raw materials used in the manufacture of its products are shipped to Baltimore from states other than Maryland, and more than 50 per cent. of its finished products are sold and shipped to customers outside that state. Substantial shipments are made to warehouses of the company in Virginia and North Carolina as distributing points. Ninety per cent. of the products are sold to retailers and the remainder to mail order houses. Six traveling salesmen solicit orders in the various states other than Maryland.

In protest against an announced cut of 10 per cent. in wages, 70 of the employees held a meeting on December 4, 1935, rejected proposals for an immediate strike, but decided to form a union affiliated with the American Federation of Labor. This movement became known to officers of the corporation, and after investigation, 4 of the leaders in the movement were discharged; but were later reinstated through the intervention of the Board's Regional Director at Baltimore on December 12, 1935. The union movement persisted. A charter from the Federation was received at a meeting of seventy employees on December 11, 1935, and at a later meeting, officers, an executive board and a shop committee were selected by the local union. During the period from December 30, 1935, to January 15, 1936, the company discharged the 11 employees named in the complaint, including the officers, the shop committee and five out of seven members of the executive board of the local union. Efforts were made in a conference between the company's officials and a committee of the union to secure a reinstatement of the discharged men, but reinstatement was refused, whereupon the union members and sympathizers voted a strike and 88 employees went out. At the time of the hearing in February, 1936, sixty employees were still on strike.

The Board concluded that as to 10 of these employees, the acts and omissions of the employer constituted unfair labor practices within the meaning of the act, and under the authority of section 10 (c) of the act (29 U.S.C.A. § 160 (c), the Board directed the employer to cease and desist from such practices, and specifically to offer reinstatement with back pay to the 10 discharged employees and to offer employment to the employees on strike who had not secured employment elsewhere. Thereupon, the employer filed its petition for review praying that the order of the Board be reversed and set aside.

The employer does not question the findings of fact by the Board, but sets up the contentions (1) that the National Labor Relations Act does not apply to the employer's local manufacturing business, since it does not involve or directly affect interstate commerce; and (2) that if intended to apply thereto, the act is invalid (a) because it attempts to exercise a power and control over intrastate commerce not given to Congress by the federal Constitution; (b) because it violates the due process clause of the Fifth Amendment by interfering with the rights of employer and employees to enter into contracts of employment; and (c) because it delegates to the Board legislative power to decide in each case what form of organization is best suited to ensure to employees the right to self organization and collective bargaining, as provided in section 9 (b) of the act (29 U.S.C.A. § 159 (b).

It will be sufficient to consider the applicability of the act to the petitioner's manufacturing activity. Sections 7, 8 (1), 8 (3) and 10 (a) of the act (29 U.S.C.A. §§ 157, 158 (1,3), 160 (a) are as follows:

"Sec. 7. Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in concerted activities, for the purpose of collective bargaining or other mutual aid or protection."

"Sec. 8. 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 section 157 of this title. * * *

"(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."

"Sec. 10. (a) The Board is empowered, as hereinafter provided, to prevent any person from engaging in any unfair labor practice (listed in section 158) affecting commerce. This power shall be exclusive, and shall not be affected by any other means of adjustment or prevention that has been or may be established by agreement, code, law, or otherwise."

It will be observed that there is no limitation in sections 7 and 8 of the act (29 U.S.C.A. §§ 157, 158) restricting the terms "employer," "employees," and "unfair labor practice" to persons or activities in interstate commerce; nor is such a limitation found in the definition of these terms in sections 2 (2), 2 (3), and 2 (8) of the act (29 U.S.C.A. § 152 (2, 3, 8). But the term "commerce" and the term "affecting commerce," as defined in sections 2 (6) and 2 (7) of the act (29 U.S.C.A. § 152 (6, 7) are so limited.

"Sec. 2. (6) The term `commerce' means trade, traffic, commerce, transportation, or communication among the several States, or between the District of Columbia or any Territory of the United States and any State or other Territory, or between any foreign country and any State, Territory, or the District of Columbia, or within the District of Columbia or any Territory, or between points in the same State but through any other State or any Territory or the District of Columbia or any foreign country."

"Sec. 2 (7). The term `affecting commerce' means in commerce, or burdening or obstructing commerce or the free flow of commerce, or having led or tending to lead to a labor dispute burdening or obstructing commerce or the free flow of commerce."

It is important to note that the power conferred upon the Board to prevent unfair labor practice set out in section 10 (a) is restricted to any person engaged "in any unfair labor practice * * * affecting commerce." We therefore conclude that the purpose of the act was to prevent unfair labor practice in interstate commerce on the part of those engaged in such commerce and not to interfere in the field of intrastate commerce in which Congress has no power to intrude and the specific question in this case is whether the employer was engaged in such business in its manufacturing plant when it discharged certain employees for union activity.

It is not the position of the Board that the act applies to all industry or to all employers and employees, but that by its terms it is applicable only where interstate or foreign commerce is subject to substantial interruption from industrial strife arising out of the unfair labor practices which the act prescribes. However, it is contended that when a substantial proportion of the raw materials or of the finished products of a manufacturing business move in interstate or foreign commerce, so that the flow thereof will be hampered or obstructed by industrial strife in the factory, Congress has power under the commerce clause to adopt by legislation appropriate methods to eliminate or reduce such industrial strife on the ground that it constitutes a direct and substantial burden upon such commerce. In view of this contention, it...