National Labor Relations Bd. v. Marshall Field & Co.

• Decision Date: 15 July 1942
• Docket Number: No. 7942.,7942.
• Citation: 129 F.2d 169
• Parties: NATIONAL LABOR RELATIONS BOARD v. MARSHALL FIELD & CO.
• Court: U.S. Court of Appeals — Seventh Circuit

129 F.2d 169 (1942)

NATIONAL LABOR RELATIONS BOARD v. MARSHALL FIELD & CO.

No. 7942.

Circuit Court of Appeals, Seventh Circuit.

June 26, 1942.

Rehearing Denied July 15, 1942.

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Ernest A. Gross, Associate General Counsel, and Gerhard P. Van Arkel, Asst. General Counsel, all of Washington, D. C., Robert Todd McKinlay, of Chicago, Ill., and Leo J. Halloran, of Washington, D. C., Attorneys, National Labor Relations Board, A. Norman Somers and Robert B. Watts, General Counsel, N.L.R.B., both of Washington, D. C., for petitioner.

Ralph E. Bowers, of Chicago, Ill., for respondent.

Before EVANS, KERNER, and MINTON, Circuit Judges.

MINTON, Circuit Judge.

On February 21, 1942 the National Labor Relations Board filed in this court its petition for enforcement of its order against respondent. Upon stipulation of the parties a consent decree enforcing the order with slight modification was entered thereon on February 26, 1942. Our decree expressly reserved jurisdiction to construe paragraph 2(b) of the Board's order, which ordered respondent to: "(b) Make whole said Anice Swift and Georgia Papas Kelly for any loss of pay which they may have suffered by reason of the respondent's discrimination against them by payment to them, respectively, of a sum of money equal to that which they normally would have earned as wages from June 8 and June 1, 1940, respectively, to the date of the offer of reinstatement, less their net earnings during said period:"

The respondent filed its answer to the Board's petition on March 28, 1942, and we now proceed to construe paragraph 2 (b) of the order.

The questions presented are:

1. Whether under this paragraph respondent was entitled to deduct from the amounts due Swift and Kelly a sum equal to the benefits received by them under the Illinois Unemployment Compensation Act¹ during the period set forth in the paragraph; and

2. If paragraph 2(b) is so construed as to preclude respondent from deducting such amounts, whether under the National Labor Relations Act the order to that extent is within the powers of the Board.

In its answer to the Board's petition, respondent alleged full compliance with the Board's order and the court's decree, including payment to Swift and Kelly of such sums as they would have earned during the period prescribed in the decree, less amounts received by them under the Illinois Unemployment Compensation Act during the same period. Whether respondent has fully complied with the order to the extent that the order was within the powers of the Board depends upon the answers to the questions hereinbefore set forth.

Only by distorting the English language could we say that unemployment benefits are "earnings." The word "earnings" denotes an "economic good to which a person becomes entitled for rendering economic service." Webster's New International Dictionary, 2d Ed., unabridged 1937. See also National Labor Relations Board v. Brashear Freight Lines, Inc., 8 Cir., 127 F.2d 198; Words and Phrases, Perm.Ed., Earnings, Volume 14, page 31. The employees concerned did not receive the unemployment benefits in return for services rendered, and the amounts so received did not constitute "earnings" within the meaning of the order. Consequently the order did not authorize their deduction.

To show that the order as we have construed it is beyond the powers of the Board, respondent has argued that the order does not effectuate the purposes of the Act; that it makes the reinstated employees more than whole, and that therefore it imposes a penalty upon respondent.

Section 10(c) of the Act, 29 U.S.C.A. Sec. 160(c), confers jurisdiction upon the Board, if it finds that the employer has engaged in unfair labor practices, to issue

"* * * an order requiring such person to cease and desist from such unfair labor practice, and to take such affirmative action, including reinstatement of employees with or without back pay, as will effectuate the policies of this Act chapter. * * *"

Under this section, the Board possesses discretion to determine whether an order to pay lost wages will effectuate the purposes of the Act. The Board has ordered that the employees be made whole by payment to them of lost wages less net earnings, and we see no merit in the contention that the order fails to effectuate the purposes of the Act.

The only substantial question in this case is whether the order penalizes the respondent. The Act is remedial, and the Board is without power to inflict a penalty upon an employer, even though it believes that such action would effectuate the purposes of the Act. Republic Steel Corp. v. National Labor Relations Board, 311 U.S. 7, 61 S.Ct. 77, 85 L.Ed. 6.

In ordering the respondent to pay the reinstated employees their lost wages less only net earnings, the Board has followed well-established rules of damages, long used in tort and contract actions.²

It is stated in Williston on Contracts (Rev.Ed.1937) section 1358, that: "* * * in an action by the employee against the employer for a wrongful discharge, a deduction of the net amount of what the employee earned, or what he might reasonably have earned in other employment of like nature, from what he would have received had there been no breach, furnishes the ordinary measure of damages."

In the Restatement of the Law of Torts, Sec. 924, Comment (c), it is said that: "The damages (for loss of earnings) are not reduced by the fact that the plaintiff has suffered no net financial loss as the result of the entire transaction, as where he receives insurance money or an amount equal to his lost wages from his employer or from a friend."

In the recent case of National Labor Relations Board v. Brashear Freight Lines, Inc., supra, it was held that the value of groceries contributed to an unlawfully discharged employee was not deductible from his back pay. The court said 127 F.2d 199: "It is clear that the order means that sums received as wages for services performed are to be deducted. Aside from the interpretation to be given the words used, our order could not, we think, be interpreted as intending to give the employer, found to be a wrongdoer, the benefit of gifts or other collateral benefits received by the former employee during his period of unemployment. It is enough that it is permitted to deduct what he earned as wages. The general rule that a tort feasor is not entitled to reduction of damages because the injured one has had the benefit of insurance payment or other collateral benefits would seem to be analogous. Overland Construction Co. v. Sydnor, 6 Cir., 70 F.2d 338; Sprinkle v. Davis, 4 Cir., 111 F.2d 925, 128 A.L.R. 1101."

The mere fact that Swift and Kelly may possibly receive more money for the period of their unemployment...