INTERNATIONAL ASS'N, ETC. v. National Labor R. Board

Decision Date20 November 1939
Docket NumberNo. 7258.,7258.
Citation110 F.2d 29
CourtU.S. Court of Appeals — District of Columbia Circuit



Joseph A. Padway and Herbert S. Thatcher, both of Washington, D. C., for petitioners.

Charles Fahy, Gen. Counsel, Robert B. Watts, Asst. Gen. Counsel, and Laurence A. Knapp, Atty. National Labor Relations Board, all of Washington, D. C., for respondent.

Before GRONER, Chief Justice, and MILLER and RUTLEDGE, Associate Justices.

RUTLEDGE, Associate Justice.

The Serrick Corporation, of Ohio, has a plant in Muncie, Indiana, in which it manufactures bolts and screws, automobile moldings, refrigerator parts, and stenotype machines. It is engaged in interstate commerce and has an annual pay roll in excess of one million dollars. Its relations with three labor organizations, which we designate as indicated below,1 are in question here. I.A.M. has appealed from findings and an order of the National Labor Relations Board (8 N.L.R.B. 621). The findings were to the effect that the employer had engaged in unfair labor practices within the meaning of Sec. 8(1), (2), (3) and (5), and Sec. 2(6) and (7), of the Wagner Act.2 The order directed the employer to cease and desist from the unfair practices and to take specified affirmative remedial action. In general, findings and order sustained the contentions of U.A.W. Briefly, the order required the employer to cease giving effect to an alleged closed-shop contract with I.A.M. covering the toolroom; to deal with U.A.W. as the exclusive bargaining agent of its employees, including toolmen, but excluding buffers, polishers, supervisory, and clerical employees; to desist from various practices of assistance and encouragement to I.A.M. and discrimination against U.A.W.; and to reinstate and make whole certain employees improperly discharged. The employer has accepted and complied with the order. The principal issues involve the portions of the findings and order which relate to the toolroom. These held, in substance, that I.A.M. received unlawful assistance from the employer in organizing the toolroom and securing designation by it as bargaining agent; that for this and other reasons the toolroom was not a unit appropriate for collective bargaining or other purposes of the Act; and that consequently3 the closed-shop contract with I.A.M. was invalid. I.A.M. contends that the Board acted arbitrarily in two respects: (1) in finding that I.A.M. received unlawful aid from the employer, or, stating the matter otherwise, that there was no substantial evidence to sustain the findings in this respect; and (2) in holding that the toolroom was not an appropriate unit.

I.A.M. also challenges the portions of the order which require the employer to deal exclusively with U.A.W. as representative of the production employees. This is done because the Board refused to hold an election prior to its decision on July 27, 1938, and to defer its decision pending an election, notwithstanding it was advised by I.A.M. on July 23 that a majority of the production employees had shifted affiliation from U.A.W. to I.A.M. between the hearing, which ended on November 15, 1937, and the date of the order. This contention may be disposed of briefly, before turning to the principal issues.

I. At the hearing it was stipulated that U.A.W. held applications of a large majority of the production employees. Furthermore, the evidence shows that this majority had been created as early as the preceding 10th of August. No attempt was made by I.A.M. at the hearing to show that such a shift had then occurred. Nothing in the record indicates that it took place. Notice of I.A.M.'s claim of subsequent change was not given to the Board until four days prior to its decision. No effort was made, pursuant to Section 10 (e), 29 U.S.C.A. § 160(e), to apply to a court for leave to adduce additional evidence. In addition to failure to exhaust this judicial remedy, two considerations support the Board's refusal to call an election in the present circumstances. First, there is nothing to indicate that the unfair practices, which the Board and (as will appear) we have found existed, were remedied until after the order was entered. Therefore, any shift in majority affiliation between the hearing and the decision, had it occurred, presumably must have been affected or effected by them. Furthermore, the case is not one in which the majority at the time of the hearing was doubtful or improperly constituted, as by the employer's aid or inclusion of ineligible members. Whatever may be the rule when such defects exist,4 in their absence the presumption arises that the freely established majority continues until the Board has an opportunity to make its decision.5 In its discretion it may hear additional evidence as to the majority's continued existence. But these presumptions, when sustained by the facts, should prevent its refusal to do so from being arbitrary, as against mere ex parte and self-serving assertions that a shift has occurred. Any other rule would make a merry-go-round of the Act, since like representations could be made in turn following each new one by the contending unions in order to prevent or delay a decision contrary to their interests, with no other result than to maintain the proceeding in a state of indefinite suspension and indecision. This view does no more than afford the Board a reasonable opportunity to perform its functions under the Act. It does not deprive employees of the power to select their representatives by choice of the majority. If conditions have changed and a majority now wish to join a local of I.A.M., they may do so and call for an election.6

II. Upon the principal issues, first a preliminary and then a more complete statement of the circumstances out of which this controversy arose are required. Serrick Corporation was organized under the laws of Ohio with authority to do business in Indiana. It has a plant in Defiance, Ohio, with which we are not concerned. Late in 1936 it acquired the business of Acme Machine Products Company, of Muncie, Indiana, and in January, 1937, that of John Lees Company, of Indianapolis. It brought the Lees Company assets and some of its personnel, including both managing officers and employees, to Muncie. Thereafter it operated the business derived from the two companies as a single enterprise under a single roof as the "Acme-Lees Division." It employed some 800 persons, of whom approximately 65 or more were supervisory and clerical, 63 were in the toolroom, 75 were buffers and polishers, and 577 were production employees. Prior to the merger there existed in the old Acme Company a so-called employees' organization, the Acme Welfare Association, which the company sponsored, checking off weekly dues from wages of employees who did not protest too greatly and taking active part in its affairs through executive officers. Funds were used for social and athletic purposes and operation of a cafeteria located in the plant. At the time of and following the merger, the Muncie plant was unorganized, but Serrick Corporation kept Acme Welfare Association in existence much as its predecessor had done, expanding it by including as members employees brought to Muncie from Indianapolis.

In March officials of the company began to address the Association on the subject of "outside" unions, adversely to the latter, although at the same time the company made a collective bargaining contract with Local 453, Buffers and Polishers. In May U.A.W. began an intensive plant-wide campaign to enroll all employees, except supervisory and clerical ones and buffers and polishers, all of whom were ineligible to membership. The employer immediately converted Acme Welfare into an active company union to hold employees in line and keep them out of U.A.W. The company's opposition was strenuous and determined. During June and early July numerous and persistent unfair labor practices were perpetrated. Nevertheless, U. A.W.'s campaign gained in effectiveness during June, July, August, and even in September. On August 10 it had acquired a clear majority of all eligible employees and demanded exclusive bargaining rights for them, including the toolroom. On August 16 U.A.W. filed with the Board a petition for certification under Sec. 9(c) of the Act, as exclusive representative of production workers.7 The climax came in a strike on August 25 because of the company's refusal to recognize and deal with U.A.W. as exclusive bargaining agency.

I.A.M. did not appear upon the scene officially until July 28. As will be shown later in detail, the company failed in its use of Acme Welfare to oppose U.A.W. and abandoned it as a company union about the middle or latter part of July. At the same time a group of toolroom employees began to discuss and promote organization of that room for I.A.M. Their efforts resulted in a meeting with an organizer for I.A.M. on July 28, at which a narrow majority of toolmen signed I.A.M. cards. In rapid succession followed negotiations with the management, recognition and signing of the closed-shop contract covering the toolroom on August 11. The contract was antedated to August 6.

Before setting forth further essential facts, a more concrete statement of the basic issues is appropriate. The nature and importance of the issues, together with the division between the Board and its trial examiner8 and that within this court regarding them, also require a more detailed examination of the evidence than ordinarily is necessary.

III. Two basic issues are involved. Under the Wagner Act a closed-shop contract is valid only if it is made with a labor organization which is (1) "not established, maintained, or assisted" by any unfair labor practice; and (2) is the representative of the employees in the appropriate unit...

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