Sperry Gyroscope Co. v. National Labor Relations Board, No. 259.

CourtU.S. Court of Appeals — Second Circuit
Writing for the CourtSWAN, CLARK, and FRANK, Circuit
Citation129 F.2d 922
Docket NumberNo. 259.
Decision Date03 July 1942

129 F.2d 922 (1942)



No. 259.

Circuit Court of Appeals, Second Circuit.

July 3, 1942.

129 F.2d 923

Chadbourne, Wallace, Parke & Whiteside, of New York City (Horace G. Hitchcock and Walter T. Southworth, both of New York City, of Counsel), for petitioner Sperry Gyroscope Co., Inc.

Robert B. Watts, Ernest A. Gross, Gerhard P. Van Arkel, Morris P. Glushien, and Ann Landy Wolf, all of Washington, D. C., for respondent.

Math & Glassman, of New York City, for petitioner Brotherhood of Scientific Instrument Makers of America.

Before SWAN, CLARK, and FRANK, Circuit Judges.

FRANK, Circuit Judge.

The Sperry Gyroscope Company, Inc., and the Brotherhood of Scientific Instrument Makers of America ask us to review and set aside an order of the National Labor Relations Board directing Sperry to withdraw recognition from and disestablish the Brotherhood, to terminate an existing closed-shop agreement with the Brotherhood, and to reinstate with back pay an employee discharged pursuant to that agreement. The Board, by its answer, has asked that its order be enforced. The reason assigned by the Board for its order was that the Brotherhood was a companydominated

129 F.2d 924
union, and that by dominating it, Sperry had violated § 8(2) of the National Labor Relations Act, 29 U.S.C.A. § 158(2). The Board also decided that the discharge was a violation of § 8(3) and that Sperry had also violated § 8(1)

1. Perhaps it should be unnecessary to do so, but, in view of recurrent misconceptions encountered by us in Labor Board cases, we think it well to state at the outset that, under repeated and unequivocal rulings of the Supreme Court, it is not proper for us to consider whether we would have made the same findings of fact as did the Board or whether, on the basis of those findings, assuming them to be correct, we would have deemed it wise to make the order entered by the Board. Our function, says the Supreme Court, is narrowly limited to determining (a) whether there was substantial evidence to support the Board's findings of fact and (b) whether, on the basis of those findings, if thus supported, the Board had the statutory power to make its order.1 It is our duty in this case to comply with the Act enacted by Congress, as interpreted by the Supreme Court, our personal views being entirely irrelevant.

These prefatory remarks are especially appropriate here because something is sought to be made of the fact that one of the three Board members dissented and went on record as favoring dismissal of the proceeding. This he did most laconically, without the slightest indication of his reasons. He did not state (a) what he thought to be the facts, i.e., whether he disagreed with the fact-findings of his colleagues, or (b) whether, assuming those findings to be correct, he thought the order legally unsound or (c) whether he merely believed that the order, although valid, was undesirable as a matter of policy in the exercise of the Board's discretion.2 For all we know, he may have concurred in the findings of fact, and (perhaps for erroneous reasons) disagreed as to the legal power of the Board; if his disagreement with his colleagues was grounded on his views of policy,3 it is obviously no concern of ours. In any event, the Board acts as a unit, and a dissent no more reduces the legal effect of its findings and order than does a dissenting opinion of a member of a court detract from the legal effect of the court's judgment.

Before discussing the Board's findings of fact, we call attention to a mistaken notion which underlies much of the company's argument: § 8(2) of the Act does not forbid merely "interference" by an employer. It also, disjunctively, provides that "domination" of a union by an employer is unlawful. Domination arising from earlier acts of an employer may be violative of the Act even when the employer has stopped all active "interference." It is the provision of the statute as to "domination" on which this case turns.

And, in applying that provision, the courts and the Board must be guided by the statutory interpretation of the Supreme Court. The central factor, we are told, is the state of mind of the employees. In International Ass'n of Machinists v. N.L. R.B., 311 U.S. 72, 80, 61 S.Ct. 83, 88, 85 L.Ed. 50, the Supreme Court said that "where the employees would have just cause to believe that solicitors professedly for a labor organization were acting for and on behalf of the management, the Board would be justified in concluding that they did not have the complete and unhampered freedom of choice which the Act contemplates." And the court further said that such a conclusion may be reached by the Board "even though the acts of the so-called agents were not expressly authorized or might not be attributable to" the employer "on strict application of the rules of respondent superior", since under that Act "we are dealing * * * not with * * * technical concepts pertinent to an employer's legal responsibility to third persons for acts of his servants, but with a clear legislative policy to free the collective bargaining process from all taint of an employer's compulsion, domination, or influence."4

129 F.2d 925
See, also, N. L. R. B. v. Link-Belt Co., 311 U.S. 584, 585, 599, 61 S.Ct. 358, 85 L.Ed. 368; H. J. Heinz Co. v. N. L. R. B., 311 U.S. 514, 520, 61 S.Ct. 320, 85 L.Ed. 309. Commenting on these cases, we said in N. L. R. B. v. Moench Tanning Co., 2 Cir., 121 F.2d 951, 953, that the issue is as to "creating a belief" in the mind of the employees concerning the employer's attitude and added: "Our powers of review over that decision are especially narrow, the issue being regarded as one in which the Board is peculiarly adept."

So that the question here, for us, is indeed narrow: Was there substantial evidence to support the Board's finding that a union with which the company contracted in June, 1939, was at that time dominated by the company?

Again, because of misconceptions, we note that it has often been held that, in fact-finding, in a case of this kind, involving a charge of violations of the duty not to maintain a forbidden relation, a reliance on so-called circumstantial evidence is not only permissible but often essential. In the very nature of such a case, there will seldom be discoverable data showing direct statements by a party charged with violation that he has performed improper acts. See, e.g., N. L. R. B. v. Link-Belt Co., 311 U.S. 584, 597, 600, 61 S.Ct. 358, 85 L.Ed. 368; Woolworth Co. v. N. L. R. B., 2 Cir., 121 F.2d 658, 660; cf. Morgan Stanley & Co. v. Securities & Exchange Comm., 2 Cir., 126 F.2d 325, 332, 333; Detroit Edison Co. v. Securities & Exchange Comm., 6 Cir., 119 F.2d 730, 739; International Ass'n of Machinist v. N. L. R. B., 71 App.D.C. 175, 110 F.2d 29, 39.5

2. In broad outline, this is what the Board found: For seventeen years before the passage of the Act — July 5, 1935 — the company maintained a company-dominated union. On that date, a continuation of the domination of that union (then known as S. H. E. A.) became unlawful. Yet the company ignoring the Act, continued to dominate that union at least until July 20, 1938 (the name of the union having been changed in April 1938 to Independent). There was thus some twenty years of uninterrupted domination of a union in at least three of which the domination was unlawful. On June 21, 1939, the company and that union (which had again changed its name, in October, 1938, to Brotherhood) executed an exclusive bargaining agreement. The company contends that, even assuming domination up to July 20, 1938, it ceased on that date when, pursuant to a stipulation with the Board, agreed to on the previous day, the company published a disavowal of any future relations with that union. The Board found that such domination still existed eleven months later when the agreement with the union was signed. If there is substantial evidence to sustain that finding of the Board, its order is valid. We shall now consider the facts more in detail.

3. In 1918 the company assisted in the formation of an organization of its salaried and other employees, known as S. P. I. A. In 1933, S. P. I. A. was divided into two parts. We are concerned solely with the successor organization, S. H. E. A., which represented the hourly employees. There is ample evidence that the company dominated S. P. I. A. and its offspring, S. H. E. A., until April, 1938. In March and April, 1938, steps were taken which resulted, the company asserts, in the creation of a new organization, Independent. But the Board found, and substantial evidence supports the finding, that Independent was merely S. H. E. A. under a new name. The first step was taken at a meeting of S. H. E. A.'s Council, held on March 21, 1938. There was testimony that Sylvester, who was President of S. H. E. A., said that "they were going to change the constitution and the name of the S. H. E. A. to conform with the Labor Act," but that "it would be the exact same organization," and that Temme, S. H. E. A.'s vice-president, said the same. A committee was appointed to draft a new constitution. Its draft was approved by the S. H. E. A. Council on April 7, 1938, and was presented for the

129 F.2d 926
membership's approval at a special meeting held on April 27, 1938. No one was allowed at this meeting unless he presented his S. H. E. A. dues book. On this evidence, the Board was justified in finding that Independent was but a refurbished version of S. H. E. A., and that the effect of employer-domination was not destroyed by the new name or constitution

In October 1938, according to the company's argument, a new and distinct union appeared, named Brotherhood. But the Brotherhood's attorney, in January 1939, openly stated on its behalf: "We are the Independent. We...

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