Magnolia Petroleum Co. v. National Labor R. Board

• Decision Date: 18 November 1940
• Docket Number: No. 2056,2070.,2056
• Citation: 115 F.2d 1007
• Parties: MAGNOLIA PETROLEUM CO. v. NATIONAL LABOR RELATIONS BOARD. MAGNOLIA PRODUCTION AND SHOP DEPARTMENT EMPLOYEES' ASS'N v. SAME.
• Court: U.S. Court of Appeals — Tenth Circuit

115 F.2d 1007 (1940)

MAGNOLIA PETROLEUM CO. v. NATIONAL LABOR RELATIONS BOARD.

MAGNOLIA PRODUCTION AND SHOP DEPARTMENT EMPLOYEES' ASS'N v. SAME.

Nos. 2056, 2070.

Circuit Court of Appeals, Tenth Circuit.

November 18, 1940.

Ross Madole, of Dallas, Tex., and W. R. Wallace, of Oklahoma City, Okl. (Walace Hawkins, of Dallas, Tex., on the brief), for Magnolia Petroleum Co.

Don Anderson, of Oklahoma City, Okl., for Magnolia Production and Shop Department Employees' Ass'n.

Sylvester Garrett, of Washington, D. C. (Charles Fahy, Gen. Counsel, Robert B. Watts, Associate Gen. Counsel, Laurence A. Knapp, Asst. Gen. Counsel, Richard C. Barrett, and Malcolm S. Mason, all of Washington, D. C., on the brief), for National Labor Relations Board.

Before PHILLIPS, BRATTON, and MURRAH, Circuit Judges.

MURRAH, Circuit Judge.

By these proceedings the Magnolia Petroleum Company, herein called petitioner, seeks to set aside and the National Labor Relations Board, herein called Board, by answer seeks to enforce an order of the Board, finding and adjudging that the petitioner had engaged and was engaging in unfair labor practices affecting commerce within the meaning of Section 8, Subdivision (1) and (2), and Section 2, Subdivision (6) and (7), of the National Labor Relations Act, 29 U.S.C.A. §§ 158 and 152.

Upon charges and amended charges, duly filed by the Oil Workers International Union, Locals Nos. 280 and 378, herein called the Union, the Board issued its complaint dated November 25, 1938, against the petitioner, alleging that the petitioner had engaged and was engaging in unfair labor practices in violation of Section 8, paragraphs (1) and (2) and (3), and Section 2, paragraphs (6) and (7), of the National Labor Relations Act, herein called the Act. The complaint charged the wrongful discharge of one employee and unfair discrimination in the transfer of other employees because they had joined and assisted the Union and had thereby discouraged membership in the Union. The complaint further charged its officers, agents, and persons acting in its behalf with dominating and interfering with the formation and administration of and with contributing to the support of a labor organization in the State of Oklahoma, known as the Magnolia Production Shop and Department Employees' Association, herein called Association, thereby interfering with and restraining its employees in the exercise of the rights guaranteed in Section 7 of the Act, 29 U.S.C.A. § 157.

The petitioner, by its answer, admitted the essential jurisdictional facts but denied any violation of the Act and by way of affirmative defense alleged that the Board and Union were estopped to deny the validity of the Association as a proper bargaining agent of the employees represented, because the Board and the Union had recognized the same as a proper bargaining agent by the approval of, and participation in, a consent election in certain districts in Oklahoma,¹ wherein under the supervision of the Board the employees of the Company were allowed to choose between the Association and the Union as their bargaining agency; that the Board and Union are thereby precluded from attacking the same on the ground that it is, or was, dominated by the petitioner in violation of the Act.

The Association was permitted to intervene in support of its validity as a proper bargaining agency for the employees it represented. After hearing, which began on April 10, 1935, and filing of an intermediate report by the Trial Examiner with the Board, the Board considered the case on the exceptions filed by the petitioner and intervenor. On confirmation of the intermediate report of the Trial Examiner the Board found that the petitioner had not engaged in unfair labor practices within the meaning of Section 8, Sub-division 3, of the Act, which related to the discharge of an employee and the discrimination with respect to hire and tenure of employment and membership in the Union, but found that the petitioner had and was engaging in unfair labor practices within the meaning of Section 8, paragraphs (1) and (2) and Section 2, paragraphs (6) and (7), of the Act and ordered petitioner to desist from interfering, restraining or coercing its employees in the exercise of the right of self-organization, guaranteed under Section 7 of the Act and to withdraw all recognition from the Association as a representative of any of its employees within the state of Oklahoma, except in the two districts wherein elections had been held under the supervision of the Board as hereinbefore related and to post notices as required by the Act, evidencing compliance with the same.

The question raised here portrays the familiar contest of a nationally affiliated labor union to organize and exclusively represent workers which had in the past been represented by an unaffiliated labor organization, sponsored by the employer.

The decision of the Board finds support primarily in a course of conduct followed by the petitioner, originating in the formation of an employee representation organization, prior to the enactment of the National Labor Relations Act and culminating in the formation of the organization known here as the Association. Prior to April 12, 1935, the employees of the Magnolia Petroleum Company were represented in their labor relations with the employer by what was known as the "Plan." This plan embraced representatives of the employees, duly elected from certain geographical districts, in Oklahoma and Texas, which together with representatives of the employer composed an executive, or advisory committee. Under the rules of procedure, stated meetings were held, usually at the office of the employer and the members were paid the expenses incident to travel and attendance at said meeting. It may be fairly stated that this plan did not conform to the requirements of the National Labor Relations Act in its freedom of self-organization and independent bargaining rights.

In the Spring of 1937, the employer and employees realized that the plan could not be continued under the National Labor Relations Act. On May 11, and approximately one month after the Supreme Court of the United States had sustained the constitutionality of the National Labor Relations Act, the President of the petitioner company directed a letter to every employee of the Magnolia Petroleum Company in the State of Oklahoma, by the terms of which he recognized the force and effect of the Act; quoted from its provisions relating to freedom of self-organization, without interference, and stated that the employees were free to organize in any manner and in any way they saw fit, saying: "the employees compose the jury to decide for themselves the kind of organization they wish." The letter appears to represent fairly the spirit and purpose of the National Labor Relations Act, except he did we think, erroneously state that the "plan" was a proper labor organization within the meaning and protection of the Act.

For purposes of policy the company did not thereafter contribute to or in any way support the plan. The evidence shows that the Advisory Committee, of the plan, held no meetings after April 29, 1937.

Thereafter, and until the following October, the employees, as well as the employer, were in a state of confusion concerning the method and manner of employer and employee representation. Several attempts were made to organize the employees. The complaining Union was represented in all of the districts and apparently there was considerable Union activity after abandonment of the Plan. It was conceded, however, that they did not have a majority in any of the districts except one.² Certain employees of the company (not members of the Union), three in particular, Matlock, Jackson, and Bruce, took the initiative in drafting a proposed covenant which was to operate as the framework of a new organization and by mailing and contacting the representatives of the old plan, a meeting was called at Dallas, Texas, on October 20, 1937. The meeting was composed primarily of representatives of the old plan, newly elected for the Dallas meeting. The meeting was concluded on October 22, 1937, after those present, representing their respective districts, by election, had agreed upon a covenant, by-laws and rules of procedure for a new organization. It is herein designated as the Association.

The Association retained the old officers of the plan until their successors could be elected and qualified. Indeed, the Association in many respects took the same form as the old plan, except the elimination of certain obviously objectionable features condemned by the Act.³

There is no evidence that the petitioner contributed financially or sponsored the organization of the Association, except it is plain that the head of the Personnel Department and his Assistant were informed of the progress of the organization at all times and attended a number of the meetings, at the invitation of the officers of the Association, apparently for the purpose of discussing the legal effect and the application of the National Labor Relations Act.⁴ It may be fairly inferred from the record that certain supervisory employees of the petitioner called the district and division superintendents, evidenced opposition to the Union and in a subtle guarded manner gave encouragement to the formation and organization of the Association.⁵

In passing upon the question of whether or not the petitioner has dominated and interfered with the formation and administration of the Association and has contributed support to it to such an extent that the Association does not offer to the employees the freedom of representation and collective bargaining guaranteed by the Act, we must accord to the Board the functions of a tribunal charged with the province of weighing the evidence as a trier of fact and if there is any substantial evidence to support its findings we are not warranted in overturning the decision of...