United States v. Weirton Steel Co.

• Decision Date: 29 May 1934
• Docket Number: No. 1060.,1060.
• Parties: UNITED STATES v. WEIRTON STEEL CO.
• Court: U.S. District Court — District of Delaware

7 F. Supp. 255

UNITED STATES v. WEIRTON STEEL CO.

No. 1060.

District Court, D. Delaware.

May 29, 1934.

Frank K. Nebeker, James Lawrence Fly, and Milton Handler, Sp. Assts. to Atty. Gen., and Leonard E. Wales, U. S. Atty., of Wilmington, Del., for the United States.

Robert H. Richards and Caleb S. Layton (of Richards, Layton & Finger), both of Wilmington, Del., and Earl F. Reed (of Thorp, Bostwick, Reed & Armstrong), of Pittsburgh, Pa., for defendant.

NIELDS, District Judge.

This is a motion for preliminary injunction heard on bill, answer, affidavits, and exhibits in an equity suit brought by the United States against Weirton Steel Company. Pending final determination of the cause the bill prays for an order restraining defendant from violating the labor section of the Code of Fair Competition for the Iron and Steel Industry, approved by the President August 19, 1933, through the means described in the bill of complaint or otherwise.

Jurisdiction of the suit is conferred by section 3(c) of title 1 of the National Industrial Recovery Act (15 USCA § 703(c):

"Sec. 3 (c) The several district courts of the United States are hereby invested with jurisdiction to prevent and restrain violations of any code of fair competition approved under this chapter; and it shall be the duty of the several district attorneys of the United States, in their respective districts, under the direction of the Attorney General, to institute proceedings in equity to prevent and restrain such violations."

The Code of Fair Competition for the Iron and Steel Industry, approved under title 1 of the National Industrial Recovery Act, provides in article 4, § 1:

"(1) That employees shall have the right to organize and bargain collectively through representatives of their own choosing, and shall be free from the interference, restraint, or coercion of employers of labor, or their agents, in the designation of such representatives or in self-organization or in other concerted activities for the purpose of collective bargaining or other mutual aid or protection;

"(2) That no employee and no one seeking employment shall be required as a condition of employment to join any company union or to refrain from joining, organizing, or assisting a labor organization of his own choosing;"

The National Industrial Recovery Act, § 7(a), 15 USCA § 707(a), prescribes as conditions of every code of fair competition the above recited paragraphs.

The¹ bill avers that the steel code was proposed by the American Iron and Steel Institute representing 95 per cent. of that industry, including defendant, and that E. T. Weir, chairman of the board of directors of defendant and a director of the Institute, participated in formulating the code. On July 14, 1933, defendant became a party to the code. That "defendant's plants are an integral part of a stream of commerce originating with the mining of coal, iron ore, and other raw products in various states, which are shipped across state lines to defendant's plants to be processed, and which, as processed, are shipped across state lines and delivered, all in the current of interstate commerce, to defendant's customers at their factories where finished products are fabricated therefrom." That the business of defendant is dependent in large measure upon its ability to produce and ship its products without obstruction or delay and therefore obstruction of production directly obstructs transportation and delivery and thereby restrains the flow of interstate commerce and tends to diminish the amount thereof.

The bill further avers "during the month of June, 1933, defendant, in anticipation of the adoption of the Code, initiated, organized, and imposed upon its employees and at all times since has maintained and controlled the activities of a company dominated union organized under the plan of employee representation, formulated by defendant. * * * Said company union plan is wholly ineffective as a means of collective bargaining, and through it and by means thereof, defendant has interfered with the employees' right of collective bargaining, and their right freely to select representatives and to organize, join, and maintain their own union."

The bill further avers that "in July, 1933, a substantial number of defendant's employees joined a certain union known as the Amalgamated Association of Iron, Steel and Tin Workers and sought through said Union to exercise the rights conferred by the above-quoted provisions of the Code, but defendant has continuously refused to recognize the representatives of such employees as so or otherwise selected. As a direct result of all of the activities of defendant alleged in this and the preceding paragraph hereof, and of dissatisfaction of the employees resulting therefrom, a strike occurred at defendant's plants on or about September 26, 1933. Thereupon the defendant closed down its plants for a period of three weeks. * * * As a result thereof the ordinary flow of interstate commerce in such products was substantially obstructed."

Certain employees of the Amalgamated Union, according to the bill, appealed to the National Labor Board "to compose and mediate the dispute." That on October 16, 1933, the National Labor Board conducted a hearing at which defendant and representatives of the striking employees were present. At the conclusion of the hearing the defendant, a representative of the striking employees, and the chairman of the National Labor Board entered into the agreement hereinafter set out.

The bill further avers that "defendant itself prescribed and arbitrarily imposed the methods and procedure for the election. Defendant refused to permit the National Labor Board to conduct the election, denied representatives of the National Labor Board access to company property, refused to post notices of election prepared by the Board, declined to furnish lists of employees, and repudiated the agreement, and thereby interfered with the designation of the representatives of the employees' own choosing."

The bill further avers that "in order to force support of the company dominated union and to defeat the right of the employees to organize and bargain collectively through representatives of their own choosing, defendant employed various measures of coercion, intimidation, and interference, including discharges, lay-offs, demotions, and changes in conditions of employment, and threats thereof; it threatened the closing of plants, the transfer of work, and the reduction of operations. * * * The management engaged in individual and collective solicitation and urging, held mass meetings, gave special inducements, and made coercive speeches; it engaged in misrepresentation and espionage."

The bill further avers that in February, 1934, defendant's employees requested the National Labor Board to hold an election and the board was planning to conduct such election. "Defendant nevertheless continued its policy of obstructing efforts to procure a fair election, again refused to permit Board representatives to enter upon company premises, again declined to furnish identification lists of employees, which lists are essential to the conduct of a fair election, and announced it would not recognize or deal with any representatives of its employees, except those claimed by it to have been elected in the December elections. Meanwhile it has threatened the discharge of all employees who signed election petitions or who participated in any poll conducted by the National Labor Board. At the date hereof the defendant is continuing the activities in this bill complained of, is threatening to continue them in the future and is defeating the right of the employees to organize and to bargain collectively."

Defendant owns and operates three plants for the manufacture of iron, steel, and tin products. They are located at Weirton, W. Va.; Clarksburg, W. Va.; and Steubenville, Ohio; with executive offices at Pittsburgh and Cleveland. The plant at Weirton is the largest, employing in addition to executives about 9,500 persons. The one at Steubenville, just across the river from Weirton, employs about 1,200, and the Clarksburg plant about 1,000. A substantial number of these employees are foreign born including Italians, Greeks, Slavs, Scandinavians, and Poles. Defendant does not own or operate any mines or mining property for the production of raw materials used in the operation of its business. It purchases coal, ore, and scrap material in manufacturing its iron, steel, and tin products. The greater part of the raw material is delivered across state lines to the plants of defendant. Defendant sells its finished products to customers in other states. Raw materials are acquired in advance of actual needs and stored in sufficient quantities to meet estimated requirements over an indefinite period of time. Defendant's process of manufacture is normally conducted in two stages. It uses the raw material in producing ingots, billets, and bars which are stored at Weirton. The second stage of the manufacturing process is the fabrication of these ingots, billets, and bars into finished products at the three plants according to specifications and pursuant to orders received. Generally speaking, the manufactured products are: Tin plate used by purchasers in the manufacture of tin cans, bottle caps, tobacco boxes, buckets, etc.; steel products such as I-beams, channel iron, angle iron, tie plates, and railroad spikes used in the construction of bridges, buildings, and railroads; strip and sheet steel for shipment to automobile manufacturers. Defendant's business requires extensive plants and the use of elaborate equipment. Its plants are divided into numerous departments, including open hearth and blast furnaces, tin plate, strip steel, sheet steel, and blooming mills, with annealing departments, assorting rooms, boiler houses, and a system of railroad tracks. The mills have operated uninterruptedly for upwards of...