Katz v. National Labor Relations Board

• Citation: 196 F.2d 411
• Decision Date: 21 April 1952
• Docket Number: No. 12827.,12827.
• Parties: KATZ et al. v. NATIONAL LABOR RELATIONS BOARD.
• Court: U.S. Court of Appeals — Ninth Circuit

196 F.2d 411 (1952)

KATZ et al. v. NATIONAL LABOR RELATIONS BOARD.

No. 12827.

United States Court of Appeals, Ninth Circuit.

April 21, 1952.

Paul R. Watkins, Richard W. Lund and Ira M. Price, II, Los Angeles, Cal., for petitioners.

George J. Bott, Gen. Counsel, David P. Findling, Associate Gen. Counsel, A. Norman Somers, Asst. Gen. Counsel, Arnold Ordman, Henry Geller, George O'Brien, Attys., National Labor Relations Board, Washington, D. C., for respondent.

Before DENMAN, Chief Judge, and BONE and POPE, Circuit Judges.

POPE, Circuit Judge.

Petitioners are partners doing business as Lee's Department Store at Huntington Park, California. They seek to review and set aside an order of the respondent Board determining that petitioners had engaged in certain unfair labor practices and requiring them to cease and desist therefrom. The answer of the Board requests that its order against petitioners be enforced.

Petitioners say that the Board was without jurisdiction over them because they were not engaged in commerce within the meaning of the Labor Management Relations Act, 1947, 29 U.S.C.A. §§ 141 et seq., 151 et seq., and that in view of the character of petitioners' business, it cannot be said that either their business as a whole, or the particular acts or activities complained of, were of a character "affecting commerce" under the Act.

Petitioners' store sells men's, women's and children's apparel, jewelry, household goods, furniture, appliances and shoes, in a town of slightly less than 30,000 population. The store employs about 60 full time employees; all sales are to residents of the area, and it ships no merchandise out of the State. During the year ending November 24, 1948, it made purchases of approximately $1,000,000 in value, of which $300,000 orginated outside of California.

Petitioners assert that under the principles laid down in National Labor Relations Board v. Jones & Laughlin Steel Corp., 301 U.S. 1, 57 S.Ct. 615, 81 L.Ed. 893, their business activities are of such an essentially local character that they are not subject to the Board's processes or powers. Petitioners cite a large number of Board decisions wherein the Board has declined to exercise jurisdiction over certain business operations which had a much more substantial relation to, and affect upon interstate commerce, than has the business of these petitioners. In those cases, where the enterprise in question involved out of state sales, or sales to instrumentalities of interstate commerce, or where there were larger volumes of interstate purchases than those made by petitioners, the Board, it is claimed, has nevertheless declined to exercise jurisdiction on the ground that those business operations were essentially local in character, and that to exercise jurisdiction would not effectuate the policies of the Act. Attention is called to the fact that the Board in October, 1950, announced certain standards by which it would thereafter be guided in determining whether it would take jurisdiction of a business. It is said that Lee's Department Store did not measure up to those standards.

However, the Board found upon substantial evidence that the particular allegedly illegal contract out of which grew the unfair labor practices here in dispute, was negotiated by a number of similar local stores who bargained as a group with all of their employees as a single bargaining unit. These stores, members of the group, had in the period mentioned, combined total purchases in excess of $3,000,000, of which more than $750,000 worth was received directly from points outside of the State of California. This combined volume would more than measure up to the Board's October, 1950, standards.

Petitioners say that the Board cannot create jurisdiction by taking this entire group into consideration, as the existence of the group did not change the essentially local character of petitioner's business operations.

In N.L.R.B. v. Townsend, 9 Cir., 185 F.2d 378, 382, this court said that "unless the volume of commerce that might be affected is so slight as to bring into play the maxim de minimis, the applicability of the Act is not dependent upon the amount of commerce affected." In N.L.R.B. v. Atkinson, 195 F.2d 141, decided February 29, 1952, this court recognized that generally whether the Board should, in a borderline case, abstain from or assume jurisdiction, is a decision exclusively for the Board. Compare, also, Haleston Drug Stores v. N.L.R.B., 9 Cir., 187 F.2d 418. We think that without regard to whether the Board should consider in this connection the whole employers' group mentioned, or only the store of petitioners, it cannot be said that the present case is one for the application of the maxim de minimis. National Labor Relations Board v. Denver Bldg. & Const. Trades Council, 341 U.S. 675, 685, 71 S.Ct. 943, 95 L.Ed. 1284. The contention that the Board lacks jurisdiction is without merit.

Proceeding to the question of the merits of the Board's determination, it appears that on January 31, 1947, the group of stores we have mentioned and of which Lee's Department Store was a member, entered into an agreement on behalf of its member stores, with Amalgamated Clothing Workers of America, Local No. 81, C. I. O., providing for rates of pay and conditions of employment of all their employees. The agreement, signed by the six stores which made up the group, contained a union shop provision in the form hereinafter mentioned. By its terms the agreement was to remain in effect until January 31, 1949. It contained a provision that upon written request by either party made not less than thirty days prior to January 31, 1948, the parties should negotiate during the last mentioned month with respect to extending the term of the agreement to January 31, 1950. No party took advantage of such provision, but in the latter part of 1948, when the 1947 agreement was about to expire, the Union initiated discussions for a new agreement providing, among other things, for an increase in wages. The members of the association, including petitioners' store, and the Union, concluded their negotiations and executed an agreement on December 17, 1948, which was to take effect February 1, 1949, the day following the expiration of the old agreement. It was to be in effect for a two year period. It contained, as did its predecessor, a union shop provision that all presently employed full time employees should become members of the Union within 15 days from the date of the agreement, and all employees newly hired after the date of the agreement should become members of the Union within 30 days after the date of their employment. In either case, those employees not conforming with this agreement were required to be discharged. The portions of the provision material here appear in the margin.¹ It was this provision which gave rise to the unfair labor charges involved here.

Retail Clerks International Association, A. F. of L., filed against petitioners a charge alleging that they had assisted and supported the Union with which the above agreement had been made, and that they had discriminated against employees in regard to tenure of employment by discharging such employees for the purpose of discouraging membership in the complaining Union, and for the further purpose of encouraging membership in the signatory Union. It alleged discharge of a named employee for favoring the complaining Union and expressing a dislike for the other Union.

Following this charge, the complaint upon which the hearing was had was filed against petitioners and another store in the group. It set forth the execution of the union shop provision mentioned above on December 17, 1948, and alleged that the respondent stores and the Union "At all times since on or about December 17, 1948 * * * have enforced and given effect to said agreement and all renewals and extensions thereof and have required membership in the Amalgamated Clothing Workers of America, Local Union No. 81, C. I. O., as a condition of employment". It was charged that the agreement had not been sanctioned by any union-authorization election, (which at the time was required by section 8(a) (3), infra, note 2), and hence the agreement was illegal and invalid and Lee's Department Store had been guilty of unfair labor practices within the meaning of § 8(a) subdivisions (1) and (3) of the Act.²

After hearing, the trial examiner found that Lee's Department Store had as alleged, unlawfully enforced an illegal union shop provision, and the Board agreed with the examiner's finding. The order was that such store and the petitioners cease and desist from renewing or enforcing any agreement...