National Labor Relations Board v. BANK OF AMERICA, ETC.

• Decision Date: 17 December 1942
• Docket Number: 9785.,No. 9784,9784
• Citation: 130 F.2d 624
• Parties: NATIONAL LABOR RELATIONS BOARD v. BANK OF AMERICA NAT. TRUST & SAVINGS ASS'N.
• Court: U.S. Court of Appeals — Ninth Circuit

130 F.2d 624 (1942)

NATIONAL LABOR RELATIONS BOARD v. BANK OF AMERICA NAT. TRUST & SAVINGS ASS'N.

Nos. 9784, 9785.

Circuit Court of Appeals, Ninth Circuit.

September 14, 1942.

Rehearing Denied December 17, 1942.

Robert B. Watts, Gen. Counsel, Ernest A. Gross, Associate Gen. Counsel, Gerhard P. Van Arkel, Asst. Gen. Counsel, and Frank Donner, Atty., N. L. R. B., all of Washington, D. C., Richard A. Perkins, Regional Atty., N. L. R. B., of San Francisco, Cal., for petitioner.

Louis Ferrari and G. D. Schilling, both of San Francisco, Cal., and Edmund Nelson, of Los Angeles, Cal., for respondent.

Before WILBUR, STEPHENS, and HEALY, Circuit Judges.

HEALY, Circuit Judge.

These cases are here on petitions of the National Labor Relations Board for the enforcement of orders issued pursuant to § 10(c) of the National Labor Relations Act, 29 U.S.C.A. § 160(c). In case No. 9784 the Board found that the respondent violated § 8(1) and (3) of the Act, 29 U.S.C.A. § 158(1, 3) by the discriminatory discharge of an employee, and in No. 9785 that it violated the same provisions by the discharge of a group of employees and by certain other inhibited conduct.

Respondent is a national banking association having its main office in San Francisco and transacting business at 493 branches in 307 California communities and at a branch in London. In the proceedings before the Board it interposed two jurisdictional defenses, the first of which is that it is not engaged in commerce within the meaning of § 2(6)¹ and that its operations do not affect commerce within the intendment of § 2(7)² of the Act. The second defense is that respondent is not an "employer," as that term is defined in the statute.

1. The Board found against respondent on the jurisdictional issue. Its findings in this respect proceed upon uncontroverted evidence.

Respondent is one of the ten largest banks in the world and one of the five largest in this country. At the end of 1937 its total resources amounted substantially to a billion and a half dollars, and its capital, surplus, and undivided profits to over 109 million dollars. It had on deposit with banks in New York, Chicago, and other cities almost 80 million dollars, and had outstanding liabilities of almost 24 million dollars for letters of credit and acceptances and foreign bills on which it was the acceptor, endorser, or maker. It had commercial deposits of over 565 million dollars and loans and discounts outstanding of over 630 million dollars.

In addition to conducting a general commercial banking business respondent offers trust services, small loans, foreign banking, savings banking, and safety deposit boxes. Like any commercial bank, it transmits funds for its customers from one part of the country to another by the drawing of drafts upon its correspondent banks. It has such correspondents in at least 34 states of the Union and in one territory. It finances the current business operations of its customers, whether they are engaged in agriculture, industry, or commerce, beginning with the production and proceeding through the distribution and marketing of their products. It issues letters of credit and bank drafts, secured by bills of lading or warehouse receipts — standard instruments for the facilitation of domestic and foreign commerce. It trades in foreign exchange. It supplies the capital requirements of every type of industrial and commercial enterprise both through supporting the underwriting and distribution of securities by investment bankers and by maintaining a market for commercial paper. It facilitates the sale and shipment of goods in the channels of commerce through the discounting of trade acceptances; and through a checking system it provides for its customers a means of payment for goods and services which eliminates the necessity and delay of the actual shipment of currency from one part of the country to another. Through its correspondent banks and the Federal Reserve System it participates in a worldwide collection and check clearance system which facilitates commercial transactions. It furnishes fiduciary services, supplies credit information to other banks, acts as fiscal agent for others, handles the transfer and registration of corporate stocks, etc.

The nature and extent of the facilities afforded by a banking institution of the size and spread of respondent are too well known to warrant further exploration of the findings. That respondent's activities lend vital support to the commercial life of the nation is of course beyond debate. The impact upon commerce of the partial or complete cessation of its banking operations would be felt immediately throughout the country, and indeed the world. Shipments of merchandise and manufactured wares covered by bills drawn for the acceptance of respondent would be halted; and similar results would follow upon a cessation of its other credit activities. It is immaterial that substitute service might be obtained elsewhere, National Labor Relations Board v. Bradford Dyeing Ass'n, 310 U.S. 318, 326, 60 S.Ct. 918, 84 L.Ed. 1226. The dependence of commerce upon the continuity of credit furnished by these great banking institutions is as marked as was its dependence upon the electric energy furnished by the intrastate utilities involved in Consolidated Edison Co. v. N. L. R. B., 305 U.S. 197, 59 S.Ct. 206, 83 L.Ed. 126. While credit services, considered as aids to commerce, may be less tangible than is electric current, for present purposes the differences would appear to be immaterial.

But apart from the undeniable effect of respondent's operations upon commerce among the states and with foreign nations, it is itself directly and every hour of the business day engaged in interstate activities not describable otherwise than as commerce. To mention but a few of many examples, it sends to banks elsewhere notes, bills, coupons, and drafts for collection, a very large percentage of which latter are drafts covering bill-of-lading shipments of commodities to points outside of California or to foreign countries. It makes telegraphic transfers of money in huge sums to places in other states. And it receives like transfers of money from banks outside the borders of California. Like the news association held to be within the reach of the Act in Associated Press v. N. L. R. B., 301 U.S. 103, 128, 129, 57 S.Ct. 650, 81 L.Ed. 953, respondent's operations "involve the constant use of channels of interstate and foreign communication." These activities "amount to commercial intercourse and such intercourse is commerce within the meaning of the Constitution," Associated Press v. N. L. R. B., supra, 301 U.S. at page 128, 57 S.Ct. at page 654, 81 L.Ed. 953. And see Electric Bond & Share Co. v. Securities and Exchange Commission, 303 U.S. 419, 432, 433, 58 S.Ct. 678, 82 L.Ed. 936, 115 A.L.R. 105; Gibbons v. Ogden, 9 Wheat. 1, 189, 229, 230, 6 L. Ed. 23.³

2. We turn briefly to the argument that respondent is an instrumentalilty of the United States, hence is not an employer as

defined in the Act. Section 2(2) provides that the term "employer" shall not include "the United States, or any State or political subdivision thereof * * *." On this point it seems enough to observe that respondent is not within the terms of the exclusion. It is a privately owned corporation, privately managed and operated in the interest of its stockholders. United States Shipping Board Emergency Fleet Corporation v. Western Union Telegraph Co., 275 U.S. 415, 416, 425, 48 S.Ct. 198, 72 L.Ed. 345. The United States did not create it, but has merely enabled it to be created.⁴ True, national banks are subject to strict regulation and supervision, but so are a host of other private enterprises. It is true, also, that national banks may at times be called upon as aids in carrying out the fiscal policies of the government, but their activities in these respects are occasional and incidental to the primary purpose of the individuals who organize them.

3. On the merits the cases require the granting of enforcement orders. The record shows that in the spring of 1937 and during the ensuing year the American Federation of Labor and the C. I. O. were active in San Francisco in attempts to organize white-collar workers. Employees of respondent were represented among those who became affiliated with one or the other of these organizations. High officials of respondent knew of the membership campaign and "viewed with uneasiness and hostility the attempt to organize its employees." There is uncontradicted evidence of statements made by one or more of such officials reflecting the attitude described in the findings. It appears further that the bank's counsel, who was also a vice president, officially expressed the view that the bank is not amenable to the National Labor Relations law. Putting the sentiment and the legal opinion together, it is not to be wondered at if employees who participated in or fostered movements for self-organization found themselves in the more or less open displeasure of the bank.

Case No. 9784 has to do with the discharge of an employee named Washer. Washer had been employed in March 1935 to work in respondent's trust department at Los Angeles. Less than a year later he was transferred to the chief clerk's division in the same department. His monthly salary at the commencement was $125, but he received two increases and was being paid $165 by the end of his second year of service. He appears to have been an experienced man,...