State Bank of India v. N.L.R.B.
| Citation | 808 F.2d 526 |
| Decision Date | 11 December 1986 |
| Docket Number | Nos. 85-1028,85-1585 and 85-1586,AFL-CI,I,85-1029,s. 85-1028 |
| Parties | 124 L.R.R.M. (BNA) 2001, 55 USLW 2350, 105 Lab.Cas. P 12,122 STATE BANK OF INDIA, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent. STATE BANK OF INDIA, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent, Local 6, International Federation of Health Professionals,ntervening Party Respondent. NATIONAL LABOR RELATIONS BOARD, Petitioner, v. STATE BANK OF INDIA, Respondent. |
| Court | United States Courts of Appeals. United States Court of Appeals (7th Circuit) |
John Gibbons, Kelley, Drye & Warren, New York City, for petitioner.
Victoria Higman, National Labor Relations Bd., Washington D.C., for respondent.
Before CUMMINGS, COFFEY, Circuit Judges, and WILL, Senior District Judge. *
The State Bank of India ("State Bank" or "Bank") petitions for review of two orders of the National Labor Relations Board ("Board" or "NLRB") finding that the Bank committed unfair labor practices in refusing to bargain with Local 6, International Federation of Health Professionals ("Union"), in violation of sections 8(a)(1) and (5) of the National Labor Relations Act ("Act" or "NLRA"), 29 U.S.C. Sec. 158(a)(1) and Sec. 158(a)(5). The Board cross-petitions for enforcement of its orders.
The Bank contests the Board's orders on four grounds. Initially, the Bank argues that because it is "a direct instrumentality of the Indian Government," it is not considered as an "employer" within the parameters of Sec. 2(2) of the National Labor Relations Act, 29 U.S.C. Sec. 152(2), even though it does business in this country. Next, the Bank argues that the Foreign Sovereign Immunities Act ("FSIA"), 28 U.S.C. Sec. 1330, Sec. 1602 et seq. immunizes the Bank from the Board's jurisdiction. The Bank argues in the alternative that the NLRB exercise of jurisdiction over it conflicts with prior NLRB's decisions declining to exercise jurisdiction over commercial concerns owned by foreign governments and thus an abuse of discretion by the NLRB. Finally, the Bank insists that the NLRB should have granted the Bank a hearing on the Bank's objections to the representation election conducted on September 2, 1982 at the Bank's New York branch office. We enforce the orders of the NLRB.
On July 14, 1982 the Union petitioned the NLRB for a representation election at the State Bank's New York branch, seeking to represent full-time and regular part-time tellers, clerks, clerk-typists, messengers, bookkeepers, receptionists, secretaries and machine operators. Pursuant to a "stipulation for certification upon consent election," 1 and the Board conducted an election on September 2, 1982. The Union prevailed in the election with a majority of nine votes or forty-three to thirty-four.
The State Bank filed timely objections to the election, arguing that "the laboratory conditions necessary for a free and fair election were destroyed" because: (1) the Union or employees supporting the Union distributed to the eligible voters a forged letter dated August 30, 1982, signed by the Deputy Chief Manager of the State Bank, Mr. P.K. Bhattacharjee, that could have misled voters into believing that Bhattacharjee encouraged the employees to vote in favor of union representation; (2) the Union or its supporters on two occasions marked an "X" on the "yes" box of the sample ballot portion of an official NLRB notice of election posted in an employee lunchroom, suggesting to the voters that the NLRB favored unionization; and (3) the Union, in an effort to persuade employees to vote "Union," distributed a letter to employees that included an inflammatory racial statement that the State Bank, "tr(ied) to keep depressing conditions and low wages for its employees, because most of you are of Indian nationality and other minority groups." 2
On October 15, 1982, after investigating the State Bank's objections and receiving evidence from the parties, the NLRB Regional Director recommended that the objections of State Bank be "overruled" and that the Board issue a "certification of [bargaining] representative." The Regional Director declined to hold a hearing to resolve factual issues because, in his view, even if the evidence offered by the Bank to support its three objections were "deemed to be true ... no substantial and material factual issues exist." With respect to the forged letter from the company (objection 1) and the twice-altered official NLRB notice of election (objection 2), the Regional Director concluded that the Bank's evidence was insufficient as a matter of law to hold the Union responsible. The Regional Director concluded that the State Bank's third objection, concerning the allegedly racially inflammatory statement, was meritless as a matter of law because the text of the letter,
The Bank filed exceptions to the Regional Director's recommendation, arguing that the Regional Director erred in not holding a hearing and in overruling the Bank's objections. On February 23, 1983, the Board issued a decision adopting the Regional Director's recommendation and certifying the Union as the exclusive bargaining agent for the Bank's clerical employees. 3
Subsequently, the State Bank refused the Union's request to bargain and on April 28, 1983, unilaterally awarded a retroactive wage increase to the State Bank non-managerial employees. Pursuant to the Union's charges filed with the NLRB, the NLRB's Regional Director issued two complaints alleging that the State Bank had violated sections 8(a)(5) and 8(a)(1) of the Act in refusing to bargain with the Union and in unilaterally granting a wage increase. 4 The State Bank admitted in its answer that it had refused to bargain but contested the NLRB's certification of the Union. 5 The NLRB issued two decisions and orders ruling that the State Bank had committed violations of sections 8(a)(5) and (1) of the Act in refusing to bargain with the Union, 273 NLRB No. 38, and in unilaterally conferring a wage increase on State Bank non-managerial employees. 273 NLRB No. 39. The Board ordered the State Bank to cease and desist from these practices, and to bargain with the Union. The Bank petitioned for review 6 requesting that we set aside the two NLRB orders arguing: (1) that the NLRB lacks statutory jurisdiction over the State Bank because the State Bank is a "direct instrumentality of the Indian Government" and therefore is not an "employer" within the meaning of the NLRA, Sec. 2(2), 29 U.S.C. Sec. 152(2); (2) that the State Bank is immune from NLRB jurisdiction as an instrumentality of the government of India under the Foreign Sovereign Immunities Act, 28 U.S.C. Secs. 1330, 1602 et seq.; (3) or, in the alternative, that the NLRB abused its discretion in exercising jurisdiction over the State Bank because the Board overruled its prior decisions declining to exercise jurisdiction over instrumentalities of foreign governments doing business in this country; and (4) that the Regional Director must hold an evidentiary hearing on the State Bank's objections to the election and "certification of representative."
II
The State Bank asserts that as "a direct instrumentality of the Indian government" the NLRA impliedly excludes it from the jurisdiction of the NLRB. 7 The State Bank of India was nationalized and incorporated in India by the State Bank of India Act of 1955. The Reserve Bank of India, a wholly-owned and controlled agency of the Indian Government, owns more than 92% of the stock in the State Bank of India. The State Bank acts as an agent for the Reserve Bank of India in locations where the Reserve Bank is not established. Petitioner State Bank fails to explain how this agency relationship between itself and the Reserve Bank of India distinguishes it from American banks similarly obligated to the American Federal Reserve Bank, nor how this relationship sets the State Bank apart from any other foreign-owned commercial entity doing business in the United States. Although the American branches of the State Bank of India have assisted the Reserve Bank of India and the government of India in obtaining loans, making investments, buying and selling foreign currency, and financing food purchases, the State Bank performs the same services as the typical American bank and nothing in the record establishes that these operations serve to distinguish these American branches from any other bank operating in this country.
Nor do the regular operations of the State Bank or its internal organization distinguish the State Bank from American banks. The Bank maintains branch offices in New York and Chicago, as well as an agency in Los Angeles. The branch offices offer general banking services to the public, including checking and savings accounts, commercial loans, letters of credit and foreign currency exchange. In the United States, the Bank is subject to federal and state banking regulations and taxes, the Bank's deposits are insured by the Federal Deposit Insurance Corporation, and the Bank's foreign employees work in the United States subject to United States immigration law.
The upper level management of the United States branch offices of the State Bank (e.g., manager, assistant manager, accountant) are assigned to their employment positions in the United States from India on a temporary basis. The State Bank hires all other U.S. branch employees, including those represented by the union, locally. Although the International Division of the State Bank in Bombay, India, makes all policy decisions concerning the foreign operations of the Bank, the local...
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