Shepard v. National Labor Relations Board

• Decision Date: 18 January 1983
• Docket Number: No. 81-1627,81-1627
• Citation: 103 S.Ct. 665,74 L.Ed.2d 523,459 U.S. 344
• Parties: Larry SHEPARD, Petitioner v. NATIONAL LABOR RELATIONS BOARD et al
• Court: U.S. Supreme Court

459 U.S. 344

103 S.Ct. 665

74 L.Ed.2d 523

Larry SHEPARD, Petitioner

v NATIONAL LABOR RELATIONS BOARD et al.

No. 81-1627.

Argued Dec. 6, 1982.

Decided Jan. 18, 1983.

Syllabus

Respondent union entered into a collective-bargaining agreement with respondent contractors associations and their members prohibiting dealings by the contractors with nonunion dump truck operators. Petitioner, the owner and operator of a dump truck, who previously had not been a member of a union, joined the union under protest and paid an initiation fee, dues, and a contribution to a fringe benefit plan. Petitioner and one of respondent contractors associations then filed charges with the National Labor Relations Board, claiming that the agreement violated, inter alia, § 8(e) of the National Labor Relations Act (Act), which prohibits so-called "hot cargo" contracts. An Administrative Law Judge held that the union and the contractors had violated § 8(e) by agreeing not to do business with nonunion owner-operators of dump trucks, and recommended that the Board issue a cease-and-desist order and order the union and the contractors to reimburse the owner-operators who were compelled to join the union for amounts paid as dues, initiation fees, and fringe benefit contributions. The Board affirmed and adopted the recommended order except for the reimbursement provision, holding that a reimbursement order would not effectuate the remedial policies of the Act. The Court of Appeals enforced the Board's order in all respects.

Held: The Board acted within its authority in deciding that a reimbursement order would not effectuate the policies of the Act. Congress has delegated to the Board the power to determine when those policies would be effectuated by a particular remedy, and the Board could properly conclude that a remedy such as reimbursement should be reserved for especially egregious situations. There is nothing in the language or structure of the Act that requires the Board to reflexively order "complete relief" for every unfair labor practice. Pp. 349-352.

215 U.S.App.D.C. 373, 669 F.2d 759, affirmed.

Robert F. Gore, Springfield, Va., for petitioner.

Edwin S. Kneedler, Washington, D.C., for respondents.

Justice REHNQUIST delivered the opinion of the Court.

This case grows out of a labor dispute in the construction industry in San Diego County, California. The issue is whether the National Labor Relations Board was required to provide a make-whole remedy for a violation of § 8(e) of the National Labor Relations Act (the Act), 29 U.S.C. § 158(e) (1976), which prohibits so-called "hot cargo" contracts.¹

Petitioner Larry Shepard owns a dump truck, and operates it in the San Diego area to haul materials to and from construction sites. Contractors in this area generally hire dump truck operators through so called "brokers" on a day-to-day basis. Brokers agree with contractors to supply trucks and operators, then refer hauling jobs to individual owner-oper- ators such as Shepard. Brokers handle the owner-operators' billing and perform other coordinating services. They receive commissions based on the amount billed.

Before August, 1978, Shepard was not a member of any union. In 1977 respondent Building Material and Dump Truck Drivers, Teamsters Local 36 (the Union) entered into a new master collective bargaining agreement (the Agreement) with respondent contractors' associations and their member contractors (the Contractors). This Agreement accomplished a long sought objective of the Union by prohibiting dealings on the part of contractors with non-union operators. The effect of the Agreement was described by the Court of Appeals in this language:

"[T]he Union enlisted the aid of the Contractors to insure that only signatory brokers received subcontracts and only union truck operators performed hauling services for building contractors in the San Diego area." 669 F.2d 759, 762 (CADC 1981).

In February 1978 Shepard contracted with Terra Trucking Co., a broker that had subscribed to the Agreement, for brokerage services. Although Shepard was not a member of the Union, he authorized Terra to make deductions from his earnings for several purposes, including the fringe benefit plan created by the Agreement. Terra deducted the appropriate sums when Shepard worked on union jobs and paid them to the Union's fringe benefit funds.

In August, 1978, the Union wrote to Terra stating that under the Agreement Terra must not deal with seven non-union owner-operators, including Shepard. Terra informed these owner-operators that they would have to join the Union or find a new broker. Shepard joined under protest and paid an initiation fee and dues.

Shepard and Respondent California Dump Truck Owners Association (the Association) filed charges with the National Labor Relations Board, claiming that the Agreement vio- lated both § 8(e) and § 8(b)(4) of the Act,² 29 U.S.C. § 158(b)(4) (1976), the latter of which prohibits secondary boycotts. At the request of the Regional Director of the Board, Shepard filed a new charge alleging only a violation of § 8(e). In 1979 the Regional Director consolidated the two charges and issued a complaint against the Union and the Contractors alleging only a violation of § 8(e). After a hearing, an Administrative Law Judge found that these owner-operators are independent contractors rather than employees, and that the Union and the Contractors had therefore violated § 8(e) by agreeing not to do business with non-union owner-operators. The ALJ recommended that the Board issue a cease and desist order and order the Union and the Contractors to reimburse owner-operators who were compelled to join the Union for amounts paid as dues, initiation fees, and fringe benefit contributions.

The Board affirmed the ALJ's findings and adopted his recommended order except for the reimbursement provision. The Board stated:

"The Board has on one occasion adopted without comment an [ALJ's] recommended order containing such a remedy. Local 814, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America (Santini Brothers, Inc.), 208 NLRB 184, 201 (1974). In the present case, however, there is insufficient evidence in the record with respect to alleged losses directly attributable to actual coercion by Respondents. Furthermore, we find a reimbursement order, typically used to "make whole" employees for violations of the Act, to be generally overbroad and inappropriate in the context of 8(e) violations. We note that aggrieved owner-operators engaged in business as independent contractors may pursue a damage claim under Sec. 303 of the Act. For the foregoing reasons, we find that the reimbursement of owner-operators ordered by the [ALJ] would not effectuate the remedial policies of the Act. See [Carpenters Local 60] v. N.L.R.B., 365 U.S. 651 [81 S.Ct. 875, 6 L.Ed.2d 1] (1961)." 249 N.L.R.B. 386, n. 2 (1980) (emphasis in original).

On petitions for review, the Court of Appeals enforced the Board's order in all respects. It held that "the Board's explanation of its decision is adequate and that, given our limited authority to disturb the Board's exercise of discretion in such matters we may not interfere." Id., at 766. In a similar case involving dump truck owner-operators and a similar collective bargaining agreement, the Court of Appeals for the Ninth Circuit remanded the case to the Board to order reimbursement, or to explain why reimbursement would not effectuate the purposes of the Act. Joint Council of Teamsters No. 42 v. N.L.R.B., 671 F.2d 305, 310-313 (CA9 1981). We granted certiorari in this case, --- U.S. ----, 102 S.Ct. 2232, 72 L.Ed.2d 844, and now affirm the judgment of the Court of Appeals for the District of Columbia Circuit.

The Board's authority to issue an order in this case is granted by § 10(c) of the Act, 29 U.S.C. § 160(c) (1976):

If . . . the Board shall be of the opinion that any person named in the complaint has engaged in or is engaging in any such unfair labor practice, then the Board . . . shall 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.

Shepard and the Association argue that the Board is required to order a make-whole remedy in this case. They rely on the reasoning of the Ninth Circuit in Joint Council of Teamsters No. 42, supra, that "where money has been collected illegally, the Board should order a refund, absent some rational ground for not doing so." 671 F.2d, at 310. We think the Court of Appeals for the Ninth Circuit took too restricted a view of the Board's discretion in designing a remedy. We conclude that the Board need not order reimbursement because its conclusion that the policies of the Act would not be effectuated by such an order is reasonable.

Congress has delegated to the Board the power to determine when the policies of the Act would be effectuated by a particular remedy. "In fashioning its remedies . . . the Board draws on a fund of knowledge and expertise all its own, and its choice of remedy must therefore be given special respect by reviewing courts." N.L.R.B. v. Gissel Packing Co., 395 U.S. 575, 612, n. 32, 89 S.Ct. 1918, 1939, n. 32, 23 L.Ed.2d 547 (1969). See Fibreboard Paper Products Corp. v. N.L.R.B., 379 U.S. 203, 216, 85 S.Ct. 398, 405, 13 L.Ed.2d 233 (1964). In this case, the Board issued a cease and desist order and an order requiring the Union and the contractors to post notices stating that the illegal portions of the Agreement will not be enforced. Shepard insists that the Board should have gone the last mile and ordered reimbursement as well.

The Board justified its action in declining to grant this additional remedy by the portion of its order quoted above. This explanatory paragraph strikes us as something less than a model of precise expository...