National Labor Relations Board v. Insurance Agents International Union, AFL-CIO

• Decision Date: 23 February 1960
• Docket Number: AFL-CIO,No. 15,15
• Citation: 361 U.S. 477,80 S.Ct. 419,4 L.Ed.2d 454
• Parties: NATIONAL LABOR RELATIONS BOARD, Petitioner, v. INSURANCE AGENTS' INTERNATIONAL UNION,
• Court: U.S. Supreme Court

361 U.S. 477

80 S.Ct. 419

4 L.Ed.2d 454

NATIONAL LABOR RELATIONS BOARD, Petitioner,

v INSURANCE AGENTS' INTERNATIONAL UNION, AFL-CIO.

No. 15.

Argued Dec. 7, 8, 1959.

Decided Feb. 23, 1960.

Mr. Dominick L. Manoli, Washington, D.C., for petitioner.

Mr. Isaac N. Groner, Washington, D.C., for respondent.

Mr. Justice BRENNAN delivered the opinion of the Court.

This case presents an important issue of the scope of the National Labor Relations Board's authority under § 8(b)(3) of the National Labor Relations Act,¹ which provides that 'It shall be an unfair labor practice for a labor organization or its agents * * * to refuse to bargain collectively with an employer, provided it is the representative of his employees * * *.' The precise question is whether the Board may find that a union, which confers with an employer with the desire of reaching agreement on contract terms, has nevertheless refused to bargain collectively, thus violating that provision, solely and simply because during the negotiations it seeks to put economic pressure on the employer to yield to its bargaining demands by sponsoring on-the-job conduct designed to interfere with the carrying on of the employer's business.

Since 1949 the respondent Insurance Agents' International Union and the Prudential Insurance Company of America have negotiated collective bargaining agreements covering district agents employed by Prudential in 35 States and the District of Columbia. The principal duties of a Prudential district agent are to collect premiums and to solicit new business in an assigned locality known in the trade as his 'debit.' He has no fixed or regular working hours except that he must report at his district office two mornings a week and remain for two or three hours to deposit his collections, prepare and submit reports, and attend meetings to receive sales and other instructions. He is paid commissions on collections made and on new policies written; his only fixed compensation is a weekly payment of $4.50 intended primarily to cover his expenses.

In January 1956 Prudential and the union began the negotiation of a new contract to replace an agreement expiring in the following March. Bargaining was carried on continuously for six months before the terms of the new contract were agreed upon on July 17, 1956.² It is not questioned that, if it stood alone, the record of negotiations would establish that the union conferred in good faith for the purpose and with the desire of reaching agreement with Prudential on a contract.

However, in April 1956, Prudential filed a § 8(b)(3) charge of refusal to bargain collectively against the union. The charge was based upon actions of the union and its members outside the conference room, occurring after the old contract expired in March. The union had announced in February that if agreement on the terms of the new contract was not reached when the old contract expired, the union members would then participate in a 'Work Without a Contract' program—which meant that they would engage in certain planned, concerted on-the-job activities designed to harass the company.

A complaint of violation of § 8(b)(3) issued on the charge and hearings began before the bargaining was concluded.³ It was developed in the evidence that the union's harassing tactics involved activities by the member agents such as these: refusal for a time to solicit new business, and refusal (after the writing of new business was resumed) to comply with the company's reporting procedures; refusal to participate in the company's 'May Policyholders' Month Campaign'; reporting late at district offices the days the agents were scheduled to attend them, and refusing to perform customary duties at the offices, instead engaging there in 'sit-in-mornings,' 'doing what comes naturally' and leaving at noon as a group; absenting themselves from special business conferences arranged by the company; picketing and distributing leaflets outside the various offices of the company on specified days and hours as directed by the union; distributing leaflets each day to policyholders and others and soliciting policyholders' signatures on petitions directed to the company; and presenting the signed policyholders' petitions to the company at its home office while simultaneously engaging in mass demonstrations there.

The hearing examiner filed a report recommending that the complaint be dismissed. The examiner noted that the Board in the so-called Personal Products case, Textile Workers Union, 108 N.L.R.B. 743, had declared similar union activities to constitute a prohibited refusal to bargain; but since the Board's order in that case was set aside by the Court of Appeals for the District of Columbia Circuit, Textile Workers Union v. N.L.R.B., 97 U.S.App.D.C. 35, 227 F.2d 409, he did not consider that he was bound to follow it.

However, the Board on review adhered to its ruling in the Personal Products case, rejected the trial examiner's recommendation, and entered a cease-and-desist order, 119 N.L.R.B. 768. The Court of Appeals for the District of Columbia Circuit also adhered to its decision in the Personal Products case, and, as in that case, set aside the Board's order. 104 U.S.App.D.C. 218, 260 F.2d 736. We granted the Board's petition for certiorari to review the important question presented. 358 U.S. 944, 79 S.Ct. 352, 3 L.Ed.2d 351.

The hearing examiner found that there was nothing in the record, apart from the mentioned activities of the union during the negotiations, that could be relied upon to support an inference that the union had not fulfilled its statutory duty; in fact nothing else was relied upon by the Board's General Counsel in prosecuting the complaint.⁴ The hearing examiner's analysis of the congres- sional design in enacting the statutory duty to bargain led him to conclude that the Board was not authorized to find that such economically harassing activities constituted a § 8(b)(3) violation. The Board's opinion answers flatly 'We do not agree' and proceeds to say '* * * the Respondent's reliance upon harassing tactics during the course of negotiations for the avowed purpose of compelling the Company to capitulate to its terms is the antithesis of reasoned discussion it was duty-bound to follow. Indeed, it clearly revealed an unwillingness to submit its demands to the consideration of the bargaining table where argument, persuasion, and the free interchange of views could take place. In such circumstances, the fact that the Respondent continued to confer with the Company and was desirous of concluding an agreement does not alone establish that it fulfilled its obligation to bargain in good faith * * *.' 119 N.L.R.B., at 769, 770—771. Thus the Board's view is that irrespective of the union's good faith in conferring with the employer at the bargaining table for the purpose and with the desire of reaching agreement on contract terms, its tactics during the course of the negotiations constituted per se a violation of § 8(b)(3).⁵ Accordingly, as is said in the Board's brief 'The issue here * * * comes down to whether the Board is authorized under the Act to hold that such tactics, which the Act does not specifically forbid but Section 7 does not protect,⁶ support a finding of a failure to bargain in good faith as required by Section 8(b)(3).'

First. The bill which became the Wagner Act included no provision specifically imposing a duty on either party to bargain collectively. Senator Wagner thought that the bill required bargaining in good faith without such a provision.⁷ However, the Senate Committee in charge of the bill concluded that it was desirable to include a provision making it an unfair labor practice for an employer to refuse to bargain collectively in order to assure that the Act would achieve its primary objective of requiring an employer to recognize a union selected by his employees as their representative. It was believed that other rights guaranteed by the Act would not be meaningful if the employer was not under obligation to confer with the union in an effort to arrive at the terms of an agreement. It was said in the Senate Report:

'But, after deliberation, the committee has concluded that this fifth unfair labor practice should be inserted in the bill. It seems clear that a guarantee of the right of employees to bargain collectively through representatives of their own choosing is a mere delusion if it is not accompanied by the correlative duty on the part of the other party to recognize such representatives * * * and to negotiate with them in a bona fide effort to arrive at a collective bargaining agreement. Furthermore, the procedure of holding governmentally supervised elections to determine the choice of representatives of employees becomes of little worth if after the election its results are for all practical purposes ignored. Experience has proved that neither obedience to law nor respect for law is encouraged by holding forth a right unaccompanied by fulfillment. Such a course provokes constant strife, not peace.' S.Rep. No. 573, 74th Cong., 1st Sess., p. 12.

However, the nature of the duty to bargain in good faith thus imposed upon employers by § 8(5) of the original Act⁸ was not sweepingly conceived. The Chairman of the Senate Committee declared: 'When the employees have chosen their organization, when they have selected their representatives, all the bill proposes to do is to escort them to the door of their employer and say, 'Here they are, the legal representatives of your employees.' What happens behind those doors is not inquired into, and the bill does not seek to inquire into it.'⁹

The limitation implied by the last sentence has not been in practice maintained—practically, it could hardly have been—but the underlying purpose of the remark has remained the most basic purpose of the statutory provision. That purpose is the making effective of the duty of management to extend recognition to the...