Local 174, Teamsters, Chauffeurs, Warehousemen & Helpers of America v. Lucas Flour Company – Oral Argument – November 08, 1961

Media for Local 174, Teamsters, Chauffeurs, Warehousemen & Helpers of America v. Lucas Flour Company

Audio Transcription for Oral Argument – November 07, 1961 in Local 174, Teamsters, Chauffeurs, Warehousemen & Helpers of America v. Lucas Flour Company

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Earl Warren:

Teamsters, Chauffeurs, Warehousemen and Helpers of America, Petitioner, versus Lucas Flour Company.

Mr. Hoague, you may continue your argument.

Francis Hoague:

Mr. Chief Justice, members of this Court.

Your Honors, will remember that this is a case based on a strike to force the reinstatement of a discharged employee who five months after the strike, it was determined by arbitration to have been unsatisfactory in his service to his employer.

I would like to address my remarks this morning toward the contract aspect on which the court below based its opinion in its judgment.

Charles E. Whittaker:

Mr. Hoague, I would like to have you at some time in the argument, discuss the question of whether or not this judgment doesn’t rest on two bases, (1) tort and particularly, that is the face of the case which for me is troublesome.

Felix Frankfurter:

If you — well, I was going to speak to you myself about it.

Francis Hoague:

The —

Charles E. Whittaker:

You take your own time and do it in your own —

Francis Hoague:

Well, I’m trying to decide whether I should go to that right now or not.

Charles E. Whittaker:

You do it in your own way.

Francis Hoague:

Thank you, Your Honor.

The — I think I’ll go to the contract and come back to the tort because there is a certain amount of interrelationship between them.

We start of with the realization that the heart core of both the Wagner and Taft-Hartley Acts is Congress’ faith in the process of collective bargaining.

They felt that if unions were protected in organizing and collective-bargaining was made available to them by law that the free flow of commerce would be eventually fostered by the results.

The Congress did not make any effort to — they were not interested in what the results of collective bargaining were in the sense of what the terms, the substantive terms of the contract would be.

They felt that that was up to the parties whether the contract resulted in terms that were harsh or easy, or for the employer or for the union or the employees was a matter of their relative bargaining strength of the justice of — with which they were able to bargain at the table, and that was left to the parties.

In other words, in looking at the contract from the — with the Wagner and Taft-Hartley Acts in mind, the intent of the parties was the matter — was the thing that should govern rather than some preconceived notions of Congress as to what should be in the contract.

This of course does not apply to the closed shop provision which is outright, but as to the other terms, that was up to the parties.

So in looking at the contract, we try to carry on — out the intent of the parties and try to ascertain what the intent was from a realistic standpoint.

It also was obvious — it is obvious from the congressional reports that Congress was well aware of the very common use of the no-strike clause expressed in contracts.

It certainly — all surveys show that most — the great majority of contracts contained, expressed no-strike clauses.

It was also — the history shows that Congress considered that the no-strike clause would be included in the contract or excluded from a contract as a result of collective bargaining.

They hoped that the no-strike clause would be included in a contract because that would normally lead to industrial fees, but it was to be included or excluded as a result of bargaining.

Our prime objection, our sort of basic objection to the judgment of the court below is that the court was unwilling to look to the intent of the parties in the contract.

They were unwilling to give sway — full sway to the process of collective-bargaining where they felt that the contract should contain a strike prohibition, a no-strike clause, they attributed a strike prohibition to the contract without regard — without regard to whether a no-strike provision was to be implied from a contract.

They state that expressly.

They say it is not necessary to imply a strike prohibition.

John M. Harlan II:

The contracts had an arbitration clause.

Francis Hoague:

I’d like to come to that little later, Your Honor.

Francis Hoague:

I think that’s a very important part.

Now, with respect to our position is that strike prohibitions are not to be imported to a contract or not to be attributed to a contract unless they are to be found in the intent of the contract from a realistic standpoint.

We — many times it has been said that the arbitration provision is the quid pro quo of the no-strike clause or — it’s generally stated the other way, that the no-strike clause is the quid pro quo of the arbitration provision, and this is a proper statement when there is no strike provision and there’s no arbitration provision.

It — or when talking about the subjects to be negotiated at the bargaining table, one is very frequently the quid pro quo of the other.

On the other hand, in looking at a contract to determine whether a no-strike provision should be implied, it certainly is improper to say where there is an arbitration provision, a no-strike provision will be implied.

In the first place, if that so, fairness and logic would say when there is a no strike provision and there’s no arbitration provision, we will imply an arbitration provision and yet nobody would say that.

The —

Earl Warren:

I’m looking at it realistically, Mr. Hoague.

Of what value is an arbitration clause if either party can use its economic power in defiance of the arbitration clause?

Francis Hoague:

A great deal of good in — by having it in there, it — people will — the parties will resort to arbitration and do commonly resort to arbitration without a no-strike provision.

This sets up the arbitration procedure.

Earl Warren:

But they could do it if they didn’t have one, didn’t they?

Francis Hoague:

Yes, but they’d have to setup the procedure.

This is — this is something that has been worked out in advance just like what’s the point of having a grievance procedure short of arbitration, people can go to arbitration you say.

Well, people normally do use a grievance procedure before they go to arbitration because it’s been setup there, even though it’s not required to.

Even though they can say you’re not interested in a preliminary grievance procedure.

The — I can — there’s a very — there is undoubtedly something very attractive about saying, “When there’s an arbitration provision, necessarily, there is a strike prohibition.”

I submit that this frustrates the intent of the parties when the parties decide that there is not — that they will not put in a no-strike provision.

The intent should govern regardless of the attractiveness of a — implied a no-strike — a strike provision implied in law rather than in fact.

Felix Frankfurter:

Are you saying that if you have nearly an arbitration provision or an arbitration procedure, no more than that, that is equivalent as though they didn’t say the foregoing arbitration procedure does not surrender the right to strike and it is conceded, of course, the right to strike you deserve.

That’s what you’re saying aren’t you?

Francis Hoague:

You’re stating —

Felix Frankfurter:

Not merely that there’s an implication that there shouldn’t be a strike, but there’s an implication by not having a specific no-strike provision, you explicitly, for all practical purposes, it’s what’s written to the contract.

Francis Hoague:

I think that the case of United States Steel Corporation against Nichols has — is — raises a situation that is applicable here.

In that case, the ‘shoe is on the other foot.

The employer was — employee was suing his employer to — for damages because he was discharged — he was retired at the age of 65 and he said that the collective bargaining agreement did not reserve to the employer the right to discharge him at 65.

Actually, the agreement said nothing about it.

And — well they — the court for the Sixth Circuit Court properly said that is something that isn’t dealt with, and therefore its right back where it would be, the situation is just as if there had been no contract in this respect.

Felix Frankfurter:

What was then in that contract from which he is charged at 65 could be implied?

Francis Hoague:

Well —

Felix Frankfurter:

Was it the general rule that people at 65 were no good — after 65 were no — is that a physiological fact that people after 65 were no good?

Francis Hoague:

No, Your Honor.

Felix Frankfurter:

Don’t hesitate.

Francis Hoague:

No, no.

I wouldn’t hesitate but I’m getting very close there myself.

Felix Frankfurter:

But there wasn’t any — there wasn’t any specific provision from which that implication could be drawn.

Francis Hoague:

And we submit —

Felix Frankfurter:

Neither of these —

Francis Hoague:

— we submit in this contract, there is no specific —

Felix Frankfurter:

No, no, there is no specific.

What I’m asking you —

Francis Hoague:

That’s what Your Honor said.

Felix Frankfurter:

— of what — of what clause could the restriction against firing or the permission to fire a man at 65, of what clause could that be drawn in any rational discussion?

Was there anything in that contract?

Francis Hoague:

No.

I think the Court was right and I think —

Felix Frankfurter:

Yes, but you think —

Francis Hoague:

— the Court was wrong here to do — to imply it from this.

Felix Frankfurter:

Well, it may not be — it may not be proper to imply it, but there were some starting point for it.

Francis Hoague:

Alright, here’s a starting —

Felix Frankfurter:

Was there any starting point in the other case?

Francis Hoague:

Oh, yes.

Felix Frankfurter:

What was it?

Francis Hoague:

Well, as I remember it, general terms about not discharging people except for cause, that was one (Inaudible) —

Felix Frankfurter:

Well, then I go back to my question.

There must be some implied — some implication that 65 is a cause for discharge.

Now that might be — that might be — has involved a college or university where it’s rather a general rule to retire people at 65.

Francis Hoague:

Well, I think —

Felix Frankfurter:

Or surgeons, if he was a surgeon, I could see the implication there, but what implication is there that we haven’t yet arrived at the Court where 65 is against to the — suspend — suspend the individual.

Francis Hoague:

Well, this is one of the allegations was that he was — he was still able to handle his job and therefore he was not being discharged for a cause and they said to the court — and I think quite properly said, “Since this wasn’t covered in the agreement, it should be left the way it was in the — it would be in the absence of the agreement,” and I submit that the same thing should be done here.

Hugo L. Black:

Is there much bargaining going on now in circles of collective bargaining in connection with surrendering the right to strike?

Francis Hoague:

Yes, Your Honor.

Not as much as there was, say, two decades ago.

Hugo L. Black:

Are there any contracts provided for that now in the collective bargaining field that surrender the right to strike, pending something like arbitration?

Francis Hoague:

Yes, Your Honor.

In my brief, I cite the Bureau of National Affairs.

A study that was made, page 29 of my brief which showed — 28 — that from a 1957 survey — four of — it surveyed 400 representative contracts and found that 89% of them contained some form of expressed no-strike agreement, 37% provided an absolute ban on strikes, 52% were conditioned on various internal procedures or events.

Hugo L. Black:

It is a constant source of bargaining there.

Francis Hoague:

Constantly, yes, Your Honor.

Hugo L. Black:

And it’s the question of arbitration as a constant source of bargaining.

Francis Hoague:

I think that can be said too, yes.

And Your Honor will remember in Lewis against Benedict Coal Company, in the Mead case, Teamsters against Mead, they had a no-strike provision and bargained it away to eliminate it.

Now, I want to get —

Hugo L. Black:

I would suppose maybe that your beginning on the —

Francis Hoague:

Excuse me —

Hugo L. Black:

I would suppose — maybe I misunderstood you that your argument is that there is no part of this contract against strikes.

That’s constantly — to have constantly bargained on that subject and put them in.

They have constantly bargained on the subject of arbitration and put that in, and you say that from that, it would — you have argued that it would be a practical amendment of the contract to imply the existence of something which is well known in the bargaining field and is (Inaudible) guarded against as — given they have the right to strike.

Francis Hoague:

I think that’s particularly true Mr. Justice Black, in view of the fact the if we turn to page 208 of the record, there is the arbitration provision and it starts off with the first paragraph which refers to the arbitration as to the interpretation of this agreement.

And Your Honors will notice that the last sentences said, “It is further agreed by both parties hereto that –”

Hugo L. Black:

What page is that?

208?

Francis Hoague:

208, “That during such arbitration, there shall be no suspension of work.

That is a no-strike provision as to arbitration of an interpretative issue.

It goes on to the second paragraph and says, “Should any difference,” that means any other difference I assume, “Arise between the employer, the same should be submitted to arbitration, and as to such that they omit that no suspension provision.”

William J. Brennan, Jr.:

Now Mr. Hoague is that — am I right that the court below didn’t turn its decision that the strike was a violation of the contract upon the arbitration clause?

Francis Hoague:

No.

William J. Brennan, Jr.:

So we haven’t — I gather you argue that this particular grievance came within the second paragraph (Voice Overlap) —

Francis Hoague:

Yes, but I don’t think there’s any question —

William J. Brennan, Jr.:

And it’s not a matter — well, now you say it’s not a question, but does that conceded the —

Francis Hoague:

That’s never been argued.

I think it’s conceded.

William J. Brennan, Jr.:

Because we don’t have the benefit of the lower courts’ interpretation —

Francis Hoague:

That’s right.

William J. Brennan, Jr.:

— of the agreement whether this particular grievance falls within the first which has a no-strike provision or the second paragraph.

Francis Hoague:

That’s true.

I will concede this, that if it falls within the first —

William J. Brennan, Jr.:

There’s a (Inaudible) question about that.

Hugo L. Black:

It involves within what?

The first paragraph.

Francis Hoague:

The first — first as an interpretative issue.

Hugo L. Black:

Do you mean what you’ve just read on page 208?

Francis Hoague:

Yes, Your Honor.

Now here, the question wasn’t what the meaning of the contract was.

The question was whether this man’s services were unsatisfactory?

And they — when it came to arbitration and the arbitration opinion which is in the record, states that there is no issue as to —

William J. Brennan, Jr.:

No, but if they — as you’ve just said, that these were grievance falling within the first paragraph and you’re out despite that it’s illegal.

Francis Hoague:

No question, no question.

William J. Brennan, Jr.:

Are we going to have to decide where this grievance falls without any help from the lower court as to which paragraph that comes with it on this branch of the argument?

Francis Hoague:

I don’t think is much of a burden, Your Honor.

I don’t think there is any issue on that.

Felix Frankfurter:

I don’t quite understand you concession, because if you’re going to stick in the (Inaudible) of the words — I mean the words are there, if the words aren’t there, there’s no meaning there, which goes all against the wisdom of interpretation generally.

It has merely said that there shall be no suspension of work during such arbitration.

Francis Hoague:

Yes sir, I realize that.

Felix Frankfurter:

But it may mean the next day, it could be.

Francis Hoague:

That’s — I realize that.

Felix Frankfurter:

And if you say it would, you’d be out.

I don’t follow.

Francis Hoague:

I think you’re overstating my position.

I don’t say —

Felix Frankfurter:

I don’t want to overstate it.

I want to know what it is.

Francis Hoague:

My position is we should look and try to find out what the intent was with reference to strike.

Felix Frankfurter:

How can I find out — if you tell me I’m restricted to the words —

Francis Hoague:

I didn’t say that.

Felix Frankfurter:

What?

Francis Hoague:

I didn’t say that.

Felix Frankfurter:

Well — then the implications are opened up, even though it’s a matter of bargaining.

And you know, as well as I do or probably better that not one of the — that one of the most frequent reasons for not putting in the no-strike clause is because they don’t want to use those words.

Francis Hoague:

I think that’s —

Felix Frankfurter:

That’s common to me, if there’s any.

Francis Hoague:

That’s very common, yes.

But the fact that they did —

Hugo L. Black:

But how do we —

Francis Hoague:

— did —

Hugo L. Black:

How do we —

Francis Hoague:

— put it in.

Hugo L. Black:

How do we know that?

Francis Hoague:

What?

Hugo L. Black:

How do we know that?

Francis Hoague:

Well —

Felix Frankfurter:

And that’s the —

Hugo L. Black:

I confess that my brother didn’t know it very well, but I was not familiar with that —

Francis Hoague:

This — this —

Felix Frankfurter:

You know it, don’t you?

Francis Hoague:

This —

Felix Frankfurter:

You know it, don’t you Mr. Hoague?

Francis Hoague:

I know that this has happened.

Felix Frankfurter:

Yes, alright.

Francis Hoague:

But this was put in — in paragraph once, so that they did use it there.

Francis Hoague:

They did not used it in —

Felix Frankfurter:

But they merely said during the arbitration and if — if we’re going to encrypt it, then if you’ve got a restricted suspension of striking, I should think the implication is that the restriction ceases when the condition ceases.

Hugo L. Black:

Do I understand you to say that they — you admit under the strong question of my brother, that it’s a common practice for labor unions that then can’t surrender the right to strike and say, “We’re going to give you the right to strike, we recognize that, but we don’t want to use the word, surrendering the right to strike.”

Do I understand you concede that?

Francis Hoague:

I concede that this was done up in Boston.

Hugo L. Black:

Up in Boston?

Francis Hoague:

Yes, when the Teamsters negotiated their agreement, they cut out the word — they cut out a closed shop provision and yet put in a —

Hugo L. Black:

You mean they put it in to some other language —

Francis Hoague:

They put in some other language.

Hugo L. Black:

— which would mean the same thing, I can understand you.

Francis Hoague:

That’s right.

Hugo L. Black:

Because if it was language, I suppose, it’s pretty clear and lenient, wasn’t it?

Do you mean that they (Voice Overlap) —

Francis Hoague:

Yes, yes.

They said in that case, in that contract which is an important contract.

They said that matters should be exclusively settled by arbitration or different issues should be exclusively settled in arbitration.

Felix Frankfurter:

Mr. Hoague, I don’t want to ask any question unless that would be coercive.

You seem to be able to take care of yourself.

But if I may — are you suggesting — are you suggesting that Boston is the only place where everything like that takes place?

Francis Hoague:

That’s the only place that I know of, Your Honor.

Felix Frankfurter:

Yes.

Are you suggesting that’s the only place where such things take place?

Francis Hoague:

No I’m not.

I’m suggesting that’s the only place I know of.

Felix Frankfurter:

Yes.

William J. Brennan, Jr.:

Well Mr. Hoague, may I get back to this case a minute?

I just want to be clear about this.

This strike occurred before any arbitration had begun.

Francis Hoague:

That’s correct.

William J. Brennan, Jr.:

And therefore, I gather your concession goes to this, but if this was a grievance, subject to arbitration under the first paragraph of Article XIV, then the strike having occurred before the arbitration even began, you were guilty of a violation of the provision no suspension of work pending arbitration.

Francis Hoague:

My concession may have been a little too much.

I didn’t think if it really mattered when I was —

William J. Brennan, Jr.:

But as to the facts — as to the facts, the arbitration began only on a court order eight days or so after the strike started wasn’t it?

Francis Hoague:

That’s right, that’s right.

William J. Brennan, Jr.:

In other words, you didn’t go to arbitration by voluntary agreements between yourself and the company, but rather under the compulsion of a court order that you should go to arbitration.

Francis Hoague:

I’ll have to answer that yes and no.

I can’t — the Court did not order us to arbitrate.

They said, “If arbitration didn’t happen and other things would happen, we would.”

William J. Brennan, Jr.:

So you called off the strike and went to arbitration?

Francis Hoague:

Yes.

Both parties I think were coerced by the — into arbitrating and I think it was a good thing by the — by the temporary injunction.

Felix Frankfurter:

And not by force of the agreement?

Francis Hoague:

After the injunction, the company agreed to arbitrate.

Mr. Justice Whittaker asked me to talk on preemption.

I do want to save a little time for rebuttal.

I wonder if Your Honor would allow me to refer to my brief as far as preemption and I just — I’m frightened to leave no time for rebuttal.

Thank you, Your Honor.

Earl Warren:

Mr. Oles.

Stuart G. Oles:

Mr. Chief Justice, members of the Court.

First, let me address the Court on the issue which counsel for petitioner asserted yesterday is so clearly in his favor as to require no discussion in which he has suited the action of the word by not discussing it.

This is the old issue of preemption, an area which this Court has declared to be wrapped in Delphic Mystery.

Now briefly, this is whether the rule in the Garmon case applied here to deprive the courts of the State of Washington of initial jurisdiction over the subject matter of this case at least insofar as it related to tort.

Now that rule in the Garmon case may be simply stated as I understand that case —

Hugo L. Black:

You don’t mean that the Garmon case leaves it in Delphic Mystery?

Stuart G. Oles:

Pardon Mr. Justice Black.

Hugo L. Black:

You don’t mean that the Garmon left it in Delphic Mystery?

Stuart G. Oles:

It — well, this is a question that I would rather leave for this Court to decide sir.

Hugo L. Black:

How — decided by what?

Stuart G. Oles:

At least as applied here, I believe that the rule is clear, and I think that rule, and I say that in humility, I think the rule is that whenever a state court has before it, whether in tort or in contract, condone which is either clearly or fairly to be assumed to be, or arguably it’s protected by Section 7 or condemned as an unfair labor practice by Section 8 of the Taft-Hartley law, that the state court should in that instance defer to the initial jurisdiction of the specialized tribunal of Congress created to deal with these matters, the National Labor Relations Board.

Now, we don’t believe that counsel is very serious in asserting that their conduct in this matter was condemned by Section 8 as an unfair labor practice.

Stuart G. Oles:

They have nowhere asserted just what section — what part of Section 8 they’re violating.

I believe Mr. Justice Frankfurter asked counsel that question directly yesterday and said just what part do you mean?

He received no answer and we have received no answer throughout these proceedings.

We think, however, if there is any thrust of their argument at all, it relates to their contention that their conduct was arguably protected by the mutual aid and protection language of Section 7 of the Act.

So this is the question to which I would like to direct my first remarks.

I think that by reviewing a few of the facts of this case, it will become apparent that at the time this matter was presented to the state court, and the state court was asked to defer to the initial jurisdiction of the National Labor Relations Board, it was not a matter that could be fairly assume to be or even arguably conduct protected by Section 7 of the National Labor Relations Act.

And moreover, it is our position that this statement is based on facts which had already been found and stipulated to before the state court was asked to defer to the alleged jurisdiction of the National Labor Relations Board.

Now, the facts have been pretty well outlined from time to time but some of them have been overlooked.

Felix Frankfurter:

And you say stipulated?

Stuart G. Oles:

I’m about to document why I say that.

Lucas of course is a wholesale flour dealer with three or four employees, Local 174, and I think it‘s important to remember, it’s an enormous local union with 400 or 500 such contracts such as we are dealing with here.

Collective bargaining in the sense that it is being used by counsel is not a very descriptive term of what goes on here.

The Exhibit 1, which is the contract, will be shown to be a mimeographed piece of paper, with the blank for the name of the employer, and the collective bargaining consists of signing and staying in business or not signing and staying out of business.

There is no other choice presented or suggested.

William J. Brennan, Jr.:

Everyone signed the same agreement.

Stuart G. Oles:

I assume that some of the big dealers in this business actually negotiate this contract, I don’t know.

I only know that Lucas Flour Company has never asked to negotiate, nor is there any suggestion in the record that it does.

Hugo L. Black:

Would that have any effect on the legal question?

Stuart G. Oles:

I think, Your Honor, in a general way, all of the facts and background are a substratum of any decision and I think that we have to face the facts as this Court dealt with it.

And specifically, I think that we are also concerned with whether this union acted, acted in such a way as to violate the National Labor Relations Act, and acted as they can in good faith.

I think the relative bargaining power does have some applications.

This is particularly true, Mr. Justice Black, because counsel has just finished an argument based on what he said is the intent of the parties to this contract.

Now, I submit that the intent must be found from the objective instrument before us in the light of the labor policy enunciated by this and other courts, not upon any actual implied or imputed intent which actually the parties never had at all.

Hugo L. Black:

Well, there’s not any challenge to the fact if the contract was made, does it?

Stuart G. Oles:

None at all, none at all Your Honor.

We are concerned with what it means.

Hugo L. Black:

That’s right.

Stuart G. Oles:

And when we’re concerned of what it means, we could as in the case of Congress, search back to the congressional record to see what they said.

Here, of course, I’m submitting that we do not have that avenue of research open to us.

Now here, Melvin Welsch is the name of this employee, he had been employed by Lucas about two years.

Stuart G. Oles:

He was incompetent, so incompetent as to be dangerous not only to himself but to the company and his fellow employees.

The union would not let him be fired, not just on this occasion but the record shows on numerous occasions prior to this date when the company tried to fire this man.

The union said you fire him and we’ll close you down.

This in spite of the fact that the union had, as I submit, imposed a contract upon this employer which reserved to the employer the right to discharge unsatisfactory employees.

Now all of these of course is why the employer in the ultimate act to discharge hemmed and hawed considerably, before reaching the decisive decision only when the union business agent called him up as the records shows, and said either you take him back to work we’re going “shut your joint down” as the record indicates without dispute.

Now, it was this tyrannical conduct which finally triggered the discharge which led to this strike.

Not because the other employees were unhappy, the undisputed testimony is that the other employees agreed with management but Welsch was incompetent and dangerous, but nonetheless they were called off, they stayed home and the company was shut down, there were no deliveries allowed in or out.

In fact the Vice President of this local and its principal business agent personally chased one of the officers of this company when he tried to load a few sacks of flour into his automobile and deliver them about to town, chased him around town until he got lost in the traffic.

Why such enthusiasm to keep this one incompetent employee when 400 or 500 such contracts exist in the Seattle area with this vast local.

I don’t think we’ll ever know the interior answer to that although counsel has urged at every level that their motives were pure.

I do know that there was evidence undisputed that perhaps this company, the Lucas Flour Company had offended the union, because it had employed a man called Lawrence Anderson who had the (Inaudible) to be one of the group who are seeking an audit of the books of the union in a totally separate action.

And although he was a member in good standing, the union tried to get him fired.

And the union — the company would not fire this man simply because he had a quarrel with the union officials, and this very possibly is why the Court decided at all levels that the union did not act for mutual aid and protection as a matter of subjective motive.

As I shall say in a moment, I don’t think subjective motive has anything to do with it, but the counsel so asserted it was their principal defense at the trial of this case.

Now continuing our chronology of what occurred, and here, I’m trying to lay before this Court, the pictures that actually was presented to the state courts, the suit was brought in May 1958, immediately after the strike began, and there were various proceedings in and out of court, pleadings filed affidavits.

William J. Brennan, Jr.:

Mr. Oles.

Stuart G. Oles:

Yes sir.

William J. Brennan, Jr.:

May I just ask?

Was there a reason why you had a (Inaudible) tort rather than just on breach of contract?

Stuart G. Oles:

Very frankly, Mr. Justice Brennan, we commence the suit under the practice in the State of Washington which permits you to state a claim without identifying the theory in which you are bringing it which I think is also the principle of federal practice modernly.

Very candidly, we hope we would win on one ground at least.

To our happiness, we won on both, and have there been some third ground, we would have asserted that at the time of the trial.

All we pleaded I think you will find is the facts and hope they would bring us within some recognizable area of the law.

This may not be an answer.

Hugo L. Black:

What is the legal question as you see it here, different to the ones you’ve stated in your brief, on the question it presented?

I frankly —

Stuart G. Oles:

I don’t —

Hugo L. Black:

— I do not quite understand yet the relevance of what you’re saying with reference to the legal issue we have before us.

Stuart G. Oles:

I’m about — I think Mr. Justice Black to answer your question when I point out that in these initial proceedings before the state court, no claim was made of lack of jurisdiction.

The assertion that has now been made and is now being argued in this Court was not made in 1958 at any time in any of the proceedings.

Hugo L. Black:

But I can understand why that would be relevant but why would it be necessary to go into all these facts if that legal question is the one you’re presenting, if they didn’t raise that question early enough.

Stuart G. Oles:

They did not raise it early enough because factually, the matter had already been decided by stipulation by the time they raised it.

This is our position.

I feel perhaps incorrectly that this is part of the background and I have completed the discussion of these facts which I think are part of the background which I think to myself at least are essential to give us a full understanding of what happened.

Hugo L. Black:

But if — I’ve been confused as to what you consider to be the legal issue frankly, that’s the reason I’m asking (Voice Overlap) —

Stuart G. Oles:

I haven’t come to it yet Mr. Justice Black, and I confess I haven’t, but I’m about to assert it I trust.

Felix Frankfurter:

You haven’t — unless I — I was — I was attentive, but I didn’t hear the stipulation to which you refer.

Stuart G. Oles:

The stipulation sir was made in September of 1958, and again, it is necess —

Felix Frankfurter:

When was the suit — when was the strike began?

Stuart G. Oles:

May.

Felix Frankfurter:

May.

Stuart G. Oles:

You see, this is why I think it’s necessary to trace the chronology.

The suit was in May following the strike immediately.

The Court issued an injunction which was conditioned upon the party’s arbitrating.

The union in its response to the action for an injunction, asserted as its prime defense that this matter should be arbitrated, not asserting that it had demanded such, but simply saying it should be.

The employer did not disagree, and accordingly, the matter was in affect agreed by both parties that the injunction would be dependent upon an arbitration taking place.

Felix Frankfurter:

Well, I take if the Court had before it the agreement which included —

Stuart G. Oles:

It had —

Felix Frankfurter:

— which included an obligation of it.

Stuart G. Oles:

Correct.

And the court felt, the trial court at that level which is — this of course is not the case from which an appeal, not the proceeding from which an appeal is taken, but the arbitration came about because in the affidavits in connection with an injunction, it appeared to the Court that there was an arbitration clause.

The injunction was granted.

The strike stopped and the parties stipulated in addition to what the court had ordered that there would in fact be an arbitration.

That stipulation is set forth in the record.

And specifically at page 210 of the record, it says — and this is what the party has stipulated to.

“It is further stipulated and agreed that the decision of the three arbitrators when reached shall be final and binding upon all parties hereto,” and it goes on to say that if they — only two agree, the decision of the two shall be final and binding.

So that in September of 1958, it was stipulated between the parties that the issues on the merits would be decided.

Hugo L. Black:

Well, does that mean prospectively or retroactively?

Stuart G. Oles:

That answer is very simple Mr. Justice Black, because there was nothing prospectively to be concerned with at that stage.

Mr. Welsch, the employee in question had already decided to retire and taken retirement before this stipulation was entered into.

Stuart G. Oles:

This is specifically decided by the Board of Arbitrators.

In other words, there was no real issue although it states whether he would be entitled to be reinstated as an issue.

In fact, there was none.

Hugo L. Black:

What you’re saying as I understand it is that this decision rendered, I don’t know, six months after the bill was filed, after it is tried, this decision rendered that this man had been rightfully discharged, has to be accepted as a basis to decide whether the Court was originally right in issuing the injunction?

Stuart G. Oles:

Even the injunction Mr. Justice Black, was then become moot.

Hugo L. Black:

That would deprive the Board of any right that it had even if it had a right before by reason of the — there being an issue between them?

Stuart G. Oles:

There would be no factual issue left to be decided by the National Labor Relations Board is our position, that the parties in September of 1958 –-

Hugo L. Black:

But would that decide whether there was preemption at the beginning of the lawsuit —

Stuart G. Oles:

I think I —

Hugo L. Black:

— before this issue was decided, when that was the question that the strike was about.

Stuart G. Oles:

Keep in mind sir, that we are not concerned with a rule that says state courts have no jurisdiction.

What we are saying is that a state court, and the Garmon case makes this clear, and counsel has not asserted otherwise, is that the National Labor Relations Board has the initial exclusive power to make determinations in the areas within its competence.

My point is —

Hugo L. Black:

But who had it — who had it six months before when the strike started?

Stuart G. Oles:

I can’t say who had before the strike started.

I only know —

Hugo L. Black:

That’s the time the strike started.

Who had the right to pass on the contro — labor controversy or labor dispute that was in (Inaudible), the Labor Board?

Stuart G. Oles:

This is asking me a question that I could not predict the answer to.

Have the employer filed —

Hugo L. Black:

Isn’t that — isn’t that vital that – I can’t – that’s why I’d like you to tell why that is not a vital thing and (Voice Overlap) —

Stuart G. Oles:

The reason it isn’t —

Hugo L. Black:

— it’s not.

Stuart G. Oles:

The reason it isn’t vital Mr. Justice Black is that the parties agreed instead by stipulation to submit the merits of the controversy to a Board of Arbitrators and to agree to be bound by the result of that finding of that Board.

Hugo L. Black:

Suppose the Board didn’t found that there had been an unlawful discharge and that it had been done, I mean if arbitrators had found —

Stuart G. Oles:

Yes sir.

Hugo L. Black:

What would have been the — what would have been the condition then?

Would it still — the strike have been justified, I mean, unjustifiable?

Stuart G. Oles:

Frankly, I don’t —

Hugo L. Black:

(Inaudible)

Stuart G. Oles:

Frankly, I suppose that they would have had to find out what the reason was for the discharge and I suppose that it’s theoretically possible that a Board could have found that this employer had discriminated against this man because of his union activity which would be an unfair labor practice and which conceivably is a matter which again the NLRB could have decided in the first place.

Felix Frankfurter:

Was that ever suggested that he was discharged on that ground?

Stuart G. Oles:

They so asserted in front of the Board of Arbitrators at length.

This was the whole heart of their argument before the Board of Arbitrators.

Felix Frankfurter:

Now, but when the – when the — what is the date of the — of your temporary injunction?

Stuart G. Oles:

In -– in May or early June of 19 —

Felix Frankfurter:

What is the date of the answer?

Stuart G. Oles:

There were three complaints and three answers and the first case came to issue on the first complaint, I would say in the early summer of 1958.

Felix Frankfurter:

Well in that –- in that answer, did they set forth that there is preemption because they claim that the discharge was in violation of Section 8?

Stuart G. Oles:

Absolutely no.

No preemption was ever asserted until May 1959, a year after the strike, simply because they had agreed to stipulate to an arbitration and they didn’t like the results of it.

And when that failed, they went to Court and tried to retry it there on the third of minute complaint and the answer thereto in March of 1959, and they lost there.

Hugo L. Black:

What was the original answer?

Stuart G. Oles:

The original —

Hugo L. Black:

— (Voice Overlap) the same preemption.

What was their defense?

Stuart G. Oles:

Their principal defense to the first —

Hugo L. Black:

Where is that?

What was the defense they set up in there?

Stuart G. Oles:

Your Honors will find that the record has not included in being sent out, the pleadings other than under the second amended complaint which is the – of course the case — a decision on which is now on appeal here.

Felix Frankfurter:

That’s 1959 —

Stuart G. Oles:

And that’s in 1959.

None of the 1958 pleadings are as far as I know —

Felix Frankfurter:

I’d like to ask —

Stuart G. Oles:

— before this Court.

Felix Frankfurter:

I’d like to ask about Mr. Justice Black’s question.

What was the basis of the defense in the summer of 1958?

Stuart G. Oles:

Their defense was — number one, that this man had been discharged because of some other reasons.

They had various theories, not that he was unsatisfactory.

Hugo L. Black:

What reason?

Stuart G. Oles:

One reason they asserted was that this was to get even with him because he complained to the union.

Hugo L. Black:

Would that have been an unfair labor practice?

Stuart G. Oles:

I don’t think there’s any question, but that would have been an unfair labor practice.

They asked the Court, however, to decide this.

They asked the arbitrators to decide this.

They argued this matter and presented 180 pages of testimony on this issue to a Board of Arbitrators.

This is a very long record in front of the Board, much longer than before —

Hugo L. Black:

I understand that but I haven’t been able to make my — clear my — my thoughts.

I haven’t been able to make it clear.

My inquiry is this, if at the time that the — you started to enjoin this trial, they’ve claimed that there was an unfair labor practice which had brought this, could the jurisdiction of the Board be escaped to pass upon — its preemption be refused or rejected because six months later, there was an arbitration which decided the facts in a way that the Board might or might not have decided.

Stuart G. Oles:

Well of course, to be fair, the Garmon case had not yet been decided.

Whether the law was already so — is – it’s perhaps arguable, it seemed to be arguable when the Garmon case was heard here.

Felix Frankfurter:

Arguable afterwards, in the Garmon case?

Stuart G. Oles:

Well, I will not object myself Mr. Justice Frankfurter into that.

I do point out that in the fall of 1958 when the arbitrators met, they decided and I quote from page 217 of the record, “The majority of the Board is firmly of the view that Welsch’s work was unsatisfactory to the employer.”

Hugo L. Black:

I have no doubt about that.

Stuart G. Oles:

That there was a —

Hugo L. Black:

The legal question that I’m talking about is —

Stuart G. Oles:

Well —

Hugo L. Black:

Were they deciding something which had been decided the other way that would have been an unfair labor practice, and if that is true, why did not the Board’s right to pre — the power — preempt state power at the time this proceeding was found?

Stuart G. Oles:

You’re asking Mr. Justice Black for a knowledge that nobody had and – for a declining of jurisdiction —

Hugo L. Black:

I have —

Stuart G. Oles:

— which nobody asked.

Hugo L. Black:

— (Voice Overlap) we have to decide it, maybe I’m wrong about it.

Stuart G. Oles:

You see, nobody asked, nobody asserted, nobody contended that there was lack of jurisdiction.

Nobody referred to the fact that this was protected or violated by Federal Law.

Nobody asserted the Taft-Hartley law one way or the other.

Hugo L. Black:

They didn’t say, there had been an unfair labor —

Stuart G. Oles:

No.

Hugo L. Black:

— practice by the company?

Stuart G. Oles:

No, no Mr. Justice Black.

Hugo L. Black:

They said in fact, would you say, if true, would have shown an unfair labor practice.

Stuart G. Oles:

They set out facts, which if true, would have constituted conceivably an unfair labor practice, something which frankly, I did not know at the time and which counsel did not raise and which was never presented to the Board of Arbitrators or anyone else.

Felix Frankfurter:

Let me ask you this question.

This case is here on the basis of the litigation of 1959, is it right?

Is that right?

Stuart G. Oles:

Yes.

Felix Frankfurter:

Now, could — even assuming, assuming that if omnisciently Garmon too has been foreseen by counsel and has been raised in the pleading, and therefore, the matter should arguably have gone to the full.

What I’m asking is this question.

Could counsel by free willing stipulation or agreement not change the course of the litigation which arose in 1959?

Stuart G. Oles:

Well, of course the only thing that the parties, Mr. Justice Frankfurter, can stipulate —

Felix Frankfurter:

I don’t think that conferred jurisdiction, I understand that.

Stuart G. Oles:

You can’t stipulate jurisdiction.

Felix Frankfurter:

No, no, no, I understand that, but couldn’t facts or the ascertainment of fact have change, which changed the course of the litigation?

Stuart G. Oles:

This is precisely our position that by the time the matter was presented to the Superior Court of King County, State of Washington, at that point, the facts had already been conclusively stipulated and decided.

And those facts as conclusively stipulated and decided, did not present conduct which was arguably or could fairly be assumed to be a violation of or protected by the National Labor Relations Act.

That is why I started to quote what the Board of Arbitrators decided.

The Board of Arbitrators decided that this man was unsatisfactory, that he was fired for that reason, that he was fired in good faith for that reason.

And I repeat, too often perhaps, that this had been stipulated too in advance, that the parties would be bound to these facts.

Therefore, by the time in May 1959, when for the first time they asserted that there was a lack of jurisdiction in the Superior Court of King County, the facts presented to them were not arguably or could fairly be assumed to be anything but what they had been stipulated to be.

This so issue before the trial court on the case which is now before this Court was damages.

How much money should the union have to pay this employer, for what, under the admitted facts was a breach of contract.

Now, there was another issue injected into it.

It was asserted by the union at the time of the trial as an additional defense that its motives were good.

Its subjective motives were good.

We objected with vigor on the ground that that was irrelevant.

And parenthetically, let me say that it’s quite obviously is if you reverse the positions, supposing the Board of Arbitrators had decided this man was wrongfully discharged because he was not unsatisfactory and was not discharged for that reason, would it be a defense to Lucas Flour Company in a suit brought by Mr. Welsch for several months of lost wages that the employer thought the man was unsatisfactory?

Quite obviously not.

We are forced to deal with the objective intent of the parties under this contract and it was decided by the arbitrators that the man was unsatisfactory and dis – and discharged for that reason.

In any event, the Court heard the testimony on the motives and decided even that issue against the local saying, “As a matter of fact, its subjective motives were other than mutual aid and protection and then awarded damages.”

Stuart G. Oles:

Stating in it’s decision, as the record shows that actually, it shouldn’t even heard the matter on the motives and that the only issue before had been damages.

And of course, it is our point that it was until after that memorandum decision of the trial court was issued that for the first time, this union said, “You don’t have jurisdiction.”

The initial determination of the facts should go before the NLRB.

That’s what they said and that’s what they say now after they had lost at every level including the arbitration which they stipulated would be final, conclusive, and binding.

So it is simply our position that at the time they raised the question, there was no jurisdiction to defer it to.

It could not be initially deferred to a body which had no jurisdiction at all since the facts had already been decided.

Let me note here that —

John M. Harlan II:

What was the date?

What was the exact date on which they raised the preemption issue?

Stuart G. Oles:

They made a motion to dismiss which they served upon our office in May of 1959.

It wasn’t –- it wasn’t filed until July of 1959.

I don’t know the reason for that.

John M. Harlan II:

And the arbitration decision, the award has been made when?

Stuart G. Oles:

In the – the decision was rendered in November of 1958.

Felix Frankfurter:

The stipulation was in September of 1958, is that right?

Stuart G. Oles:

The stipulation to hold an arbitration and to be bound by it was in September of 1958.

William J. Brennan, Jr.:

Well, now when was the third amended complaint filed, Mr. Oles?

Stuart G. Oles:

In the late fall of 1958, I would -– I have to check the record but I would say around October or November.

William J. Brennan, Jr.:

Or after –- after the coming down of the arbitrators award.

Stuart G. Oles:

I frankly don’t remember Mr. Justice Brennan, whether it was before or after, the — it was contemporaneous with this arbitration because we anticipated that we would succeed in the arbitration.

And as a result of it, we asked for damages, dropped the injunction which all parties agreed was now moot.

The union didn’t intend to strike anymore, it was through with that.

It relied on the arbitration to settle the merits.

I think they were surprised at the results.

Felix Frankfurter:

Mr. Oles, before you sit down, it occurred to me that here, unlike the freedom you have under the — what you tell us as the Washington procedure, here in this case for us, you will have to differentiate between the contract and the tort claim so far as the 301 suability in a state court is considered.

Stuart G. Oles:

I intend to discuss that sir.

Let me note this much.

The counsel — the only law that’s applicable to this question and still talking about preemption for a moment and the tort claim is that the protection of Section 7 is withdrawn if the strike is in violation of a contract.

I note that counsel has stated it very well on page 18 of the petitioner’s brief, citing authority.

“It is of course true,” he says, “that the protection is withdrawn if the strike is in violation of an existing collective bargaining agreement.

Stuart G. Oles:

Now, if —

William J. Brennan, Jr.:

Excuse me Mr. Oles, I wonder if this helps us on — on the question I asked you at page 4 of the record.

It’s the second amended complaint filed on December 9 at page 8, paragraph 8 or recited the facts of the arbitration.

Stuart G. Oles:

Yes.

William J. Brennan, Jr.:

And the prayer is for permanent injunctive relief, and I gather this is the damages claim, 4781 with interest?

Stuart G. Oles:

Yes, it is.

William J. Brennan, Jr.:

So that –- that –- then it’s –- so this complaint to which the motion was addressed on preemption ground —

Stuart G. Oles:

After the case was tried.

William J. Brennan, Jr.:

Yes.

Stuart G. Oles:

The answer to that, you will notice, does not raise any issue and the answer is found at page 11 of the record.

The answer sets forth –- no contention that there was lack of jurisdiction although presumably they now argue that this is the result of it.

They did not so argue with them.

Now — what — may I ask further, could the Washington Court be expected to do when this motion was presented to it?

All it really had decided is the damages were to be allowed.

Something which of course it cannot defer to the NLRB because the NLRB has no jurisdiction to award damages, it’s not concerned with it.

Had this contention been made of the outset of the case conceivably?

Conceivably, have they shown that this was a matter arguably protected or fairly to be assumed to be conduct protected by Section 7.

At that stage, the Court might very well have deferred the jurisdiction to the NLRB, an action or a proceeding could have been initiated by the employer in the –- in the local office of the NLRB and perhaps if we convince the regional council, some sort of an injunction would be issued to stop the strike.

By the time this contention was raised, however, and for the first time in the Superior Court of King County, already the strike was over and was moot, the injunction was moot, the trial court so states at the outset, the facts had become agreed and stipulated.

The only matter that was left was damages.

The employer had no complaint to file at that point.

There was no unfair labor practice then being committed by the -– by the union.

The union has never asserted there was an unfair labor practice committed by the employer in those terms.

And certainly, did not so argue at the time of the trial of this case.

They are asking the State of Washington to defer to a tribunal which did not have and I don’t see any way in which they could have obtained jurisdiction or heard the matter.

So, all I’m asserting is that they stipulated to wait any contention that factually, this matter could be fairly assumed or arguably protected by Section 7 of the Taft-Hartley Act.

Now there are other issues in this case and there’s two I would like to dispose very quickly.

One is, was this protected or was this condemned by Section 8 and I’ve already I think answered that.

There is nothing in Section 8 of the Taft-Hartley Act which renders an unfair labor practice that which was done by the union in this instance.

They only raised this argument for the first time in the Supreme Court of the State of Washington where they said, as they have said here, “Our conduct was an unfair labor practice.”

Stuart G. Oles:

But they haven’t shown why or how.

And frankly, I can only do what the Supreme Court of the State of Washington does if you will review what they say since nothing is said in the briefs or in argument to support this contention.

The State of Washington Supreme Court prints in its entirety in the opinion the Section 8 of the Taft-Hartley Act, condemning certain unfair labor practices by the union.

It says, “Here they are.

We have read them.

We don’t see anything remotely relating to the kind of conduct which is the subject of this suit.”

I don’t know how anybody could arrive at a different conclusion in reading it.

Now, another argument or issue in this case on which I don’t wish to spend any time is the question of whether they failed to exhaust the remedies below.

I merely reiterate to this Court what is obvious that there was available to this union, a petition for rehearing before all nine judges of the State Supreme Court of the State of Washington.

There is no urgency shown, no reason shown why they should not have taken that remedy.

I suspect in all deference and in some sympathy to counsel that very likely he overlooked it.

I don’t know his reason.

I do know that it is no answer to say that it is a routine technicality which would have been futile.

Many of such petitions are granted.

It is no more futile than in, for instance a state which has intermediate appellate court, where the right to this –- to be heard before the Supreme Court of that State rest on discretionary power in a State’s Supreme Court.

Surely, no applicant to this Court for certiorari could justifiably assert that it would be futile –- “I’m not likely to get it anyway,” and say, that the Court —

William J. Brennan, Jr.:

This is an argument going to our jurisdiction —

Stuart G. Oles:

Yes.

William J. Brennan, Jr.:

— that this is not a final judgment?

Stuart G. Oles:

I do not believe — oh, it’s a final judgment, but I don’t think it is a certiorari to the decision of the Highest Court of the State of Washington.

It was not heard before nine judges of that Court.

John M. Harlan II:

Could you explain what your practice is in that respect?

Stuart G. Oles:

The practice is that within 30 days after a department hears a case, that is a department consists of four judges plus the Chief Justice.

Within 30 days thereafter, a written petition for rehearing maybe filed with the Court asking that the matter be heard en banc that is before all nine judges.

Such a rehearing is automatically granted if the decision of the department was three to two.

It is sometimes granted when it was four to one.

And I understand about 4% of them are granted if it was five to zero as it was in this case.

I wouldn’t concede that’s futile, but I will admit that the chances were reasonably remote that it would have been granted.

But nonetheless, they fail to file such a petition.

Felix Frankfurter:

May I ask you this?

Felix Frankfurter:

Under your practice, if a rehearing is allowed before the — what you call the intermediate — if that’s the name for which the panel —

Stuart G. Oles:

The department, Mr. Justice Frankfurter.

Felix Frankfurter:

The department.

Thank you very much.

Are rehearings — may rehearings be granted before the department?

May a petition for rehearing be filed before the department?

Stuart G. Oles:

As I read the rules, this is within the depth and scope of the statute and the rules.

That is that there could be such a rehearing.

I think I can state confidently in practice.

It is never been done to my knowledge.

Felix Frankfurter:

My question is this, my question is this.

Is this application to your Supreme Court en banc like a petition for rehearing?

I take it, I don’t speak by the book, but I do not think that it’s necessary before a person comes here from a state court judgment to file a petition for rehearing even though such a petition is trialable I suppose in every country in the land.

Stuart G. Oles:

Of course.

Felix Frankfurter:

Now, is this the same as a petition for rehearing?

Stuart G. Oles:

No, it is not for this reason, Mr. Justice Frankfurter.

Felix Frankfurter:

That this can be reversed by a larger tribunal?

Stuart G. Oles:

By a larger tribunal.

We call them petitions for rehearing customarily and I’m falling into that language.

It is in technically a petition for hearing en banc is what we call it and entitle it.

Felix Frankfurter:

Well now, suppose this case had reasoning in your court of — United States Court of Appeals or Circuit — what is your Circuit?

Stuart G. Oles:

The Ninth Circuit.

Felix Frankfurter:

The Ninth Circuit.

Suppose that this had been before a panel of the Ninth Circuit and there was then — a person can come here directly on a petition from a three-judge panel of the Court of Appeals and it wouldn’t be an answer to say you’re the first to ask for a rehearing en banc would it?

Stuart G. Oles:

I believe not.

Felix Frankfurter:

Now, what is the difference?

Stuart G. Oles:

Simply because your statutory authority of this Court to hear appeals from the Court of Appeals is most specific as I understand it, upon what constitutes a judgment of the Court of Appeals from which a —

Final judgment.

Stuart G. Oles:

Yes.

Here, we are concerned with a statute which as I understand it says, “Appeal from the Highest Court of the State.”

Felix Frankfurter:

(Inaudible)

Stuart G. Oles:

And I’m simply asserting that for the purposes of that statute, the Highest Court surely is the nine judges of the Supreme Court of the State of Washington.

Felix Frankfurter:

It’s — it’s the court that has the reversing power, as you have it there.

Stuart G. Oles:

No question about that.

Felix Frankfurter:

We can — of course, from the Court of Appeals, finality is not a requirement as you point out.

Stuart G. Oles:

No.

Actually, what happens again and again, we publish Washington decisions, a paperbound booklet of departmental decisions.

Again and again, we will find that these — that en banc, our State Supreme Court changes that decision and it will appear at the bottom — this opinion will be withdrawn, it will be replaced by one en banc.

Sometimes this doesn’t get out in time to appear in the printed leaflet, but there’s no question that it is an affirmative act of reversing or overruling a decision of a department.

Felix Frankfurter:

Have we had a question like this coming out from your state — from your state?

Stuart G. Oles:

This has never been raised in this Court out of the State of Washington as far as I know.

I’m quite confident it has never been.

William O. Douglas:

Did you Shepardize our Garmon case to see if there has been any subsequent —

Stuart G. Oles:

Mr. Justice Douglas, I examined it with care through the Shepard’s citator and I can find no subsequently determination that has any existence at all to this question.

Felix Frankfurter:

May I detain you a minute longer.

We’ve had some cases coming here from — in fact there’s one question in my mind that in this term from Washington, the decision is very (Inaudible).

I don’t mean Washington, I mean Missouri.

Stuart G. Oles:

From Missouri.

Felix Frankfurter:

My brother here didn’t know it.

But I think they withheld that you have to go through a — through the whole thing.

Stuart G. Oles:

I would assume so.

Felix Frankfurter:

Haven’t you heard that?

Stuart G. Oles:

It seems to me —

Hugo L. Black:

(Inaudible)

Stuart G. Oles:

— a matter so intimately within the — within the scope and concern of this Court, I hesitate to express an opinion on it, but it does seem to me that the real heart of the matter is if this Court to hear matters, barring some sort of urgency in which the Supreme Court of a state which has solemnly being asked to be overruled hasn’t really had a shot at it.

Oh, I suppose that the judges of the State Supreme Court read all their own decisions of other departments.

But they haven’t really had a shot at this one.

And I submit that before the — this Court say that you are wrong, they should be speaking to all nine and not just to four plus the Chief Justice.

Felix Frankfurter:

Can they still go there?

Can they still make application before your (Voice Overlap) —

Stuart G. Oles:

No, no, 30 days sir, is the limit.

Felix Frankfurter:

Well then, if there are, do you mean —

Stuart G. Oles:

They’ve been —

Felix Frankfurter:

— they should have gone there.

Stuart G. Oles:

I have to say they should have gone there.

It’s too late now.

Felix Frankfurter:

Like the decision of the Appellate Division in New York.

Well, I have agreed to go to the Court of Appeals to be a justice, but I didn’t.

Stuart G. Oles:

So, if he doesn’t go, it’s too late.

Earl Warren:

Does your court sua sponte ever — take the case over?

Stuart G. Oles:

Yes, frequently.

And this has occurred to me this term that sua sponte, the court simply issued an order in saying we are transferring this en banc, for a hearing en banc after it already been heard before the department.

William O. Douglas:

And after the opinion has been rendered?

Stuart G. Oles:

No opinion had been rendered.

I assume that they split two and three.

I’m guessing.

I would like to know which were the two and which were the three, but I don’t know.

Now, let me turn if I may to the more serious question of breach of contract which is correctly been pinpointed here yesterday as an alternative ground for the upholding of the Supreme Court of the State of Washington either tort or contract supports the judgment.

Now, in the Dowd case which was argued yesterday, it was asserted by the petitioner that Section 301 deprives the state court of all jurisdictions over breaches of contract of collective bargaining agreements in interstate commerce.

And I can only say as to that since I haven’t been asked to argue that case that I read its briefs and hardly accord with the brief filed by the Attorney General of the State of Wisconsin amicus curiae.

I feel compelled because the result in that case would have such an effect upon this one, they had one comment.

It was argued in that case with much bigger that Congress expressly grants state’s jurisdiction over a federally created causes of action when this is intended.

And there he cited Section 303 of the Taft-Hartley Act.

I can only respond that this is because the substantive jurisdiction of state courts to try any federal offense derives any federally created cause of action, derives from Congress.

The right to try a suit for breach of contract in the State of Washington does not derive from Congress.

It is the historic jurisdiction of the states.

It is so ancient and so firmly established that surely it would require an expressed statement by Congress to the contrary, to deprive them of that jurisdiction, and this I think is a distinction in which if I may say with difference to counsel in that case should have been made.

And I make it now only because I sat camping at the bench in the corner listening to it.

Now, returning to argue with my own case rather than that one, here, the petitioner only argues that the Lincoln Mill’s decision substituted federal common law for a state contract law.

And both sides, I noticed in the Dowd case, took the same position.

Stuart G. Oles:

So I find myself one against four because I don’t agree that that is what the Lincoln Mills case said at all.

That was a case brought in federal court under Section 301 which conferred jurisdiction substantively, remedially or procedurally makes no difference which in fact conferred jurisdiction upon federal courts to try breaches of collective bargaining agreements in interstate commerce.

It was a case of that sort and the issue before this Court.

And the issue which as I understand that was decided in this Court is to what law should govern that kind of a case.

There is no discussion in the Lincoln Mills’ decision or in any of the opinions filed with it which states what law should be applied to a state court determining under its historic jurisdiction, the breaches of contract cases that come before it.

In other words, the Lincoln Mills case created — said that Section 301 created not only a form, a new form, for such cases, but also a new remedy, a substantive remedy.

It said nothing at all as I read the decision of that court as to what the substantive law of contract was, nor that it should be applied by the states.

I can only note that the majority opinion in the Lincoln Mills case refers with approval to Judge Wyzanki’s opinion in Massachusetts where that judge makes a very clear and very persuasive distinction between substantive remedial law and substantive contract law.

In any event, however, I suspect —

Hugo L. Black:

Did you say clear and understandable one?

Stuart G. Oles:

Pardon?

Hugo L. Black:

Did you say a clear and understandable distinction?

Stuart G. Oles:

Well, no I think I said the decision was —

Hugo L. Black:

I’ve always had a little difficulty (Voice Overlap) —

Stuart G. Oles:

I thought I said the decision of Judge Wyzanski was — was clear and understandable.

And maybe this is egotism, I thought it was.

But I’ll admit that the question has a certain element of what one of the opinions referred to the empty blackness or was it the black emptiness of the Section 301.

Hugo L. Black:

I have no doubt if it’s understandable, if he made it that way in order to (Inaudible).

Stuart G. Oles:

But be that as it may.

Hugo L. Black:

— some controversy about what’s remediable.

Stuart G. Oles:

I gather there was in reading the opinion, Mr. Justice Black.

I’m only asserting that that case didn’t — what it did not hold, I’m reasonably certain of it.

And what it did not hold is what everybody seems to have agreed three counts in a row and that is that the State of Washington is bound to apply a federal common law in deciding cases involving breaches of contract before it if they fall in this area.

Now, whether this would be true or not, however, it does not have to be decided by this Court in this case.

It’s probably entirely academic because when it is asserted boldly in the brief of the petitioner that the State of Washington here applied state contract law, I see no basis or authority for that assertion.

The Washington State Supreme Court as a matter of fact in this case cited no legal authority for its determination that there was a breach of contract.

It cites no scholars and no cases.

I think the Court of the State of Washington was rather outraged that it should be contended, seriously, that it is not a breach of contract to strike — to require an employer not to exercise the duties or the rights which are expressly reserved to him.

In fact, the Court makes this rather clear.

I submit that some fine construction of the words of the arbitration provisions of the contract here in question can be and were argued at all levels of this case.

Stuart G. Oles:

But if it is true as counsel says that he stipulates that there was a no-strike provision if the arbitration involved interpretation of the contract, then I must direct his attention to page 214 of the record before this Court where the arbitrators are speaking.

And this is what the arbitrators held.

It will be recalled and I quote, “That under the working agreement, the employer reserved the right to discharge any man in his employees if his work is not satisfactory.”

The Board feels that a proper interpretation of that clause is that the right of discharge is preserved in the case where the man’s services are not satisfactory to his employer but that the right must be invoked reasonably and in good faith.

During oral argument, counsel for the parties virtually agreed that such should be the interpretation although disagreeing as to its application under the facts in the record.

Sure, if that’s the —

Stuart G. Oles:

I hope that to point out that in the arbitration in this matter, there was, and that was simply while sitting here and listening to argument, there were many instances in which the interpretation of this collective bargaining agreement was an issue before the Board of Arbitrators and was in fact decided by them.

Hugo L. Black:

Did the arbitrators interpret it?

I haven’t looked at it carefully as I should.

Did they interpret the contract meaning, any part of its meaning, that the right to strike would be full borne?

Stuart G. Oles:

No.

They — that question was not presented to them, Mr. Justice Black because it was moot by the time it came to them.

The strike was over and nobody contemplated it would be resumed.

Hugo L. Black:

It was moot so far as future responsibility or consequences was observed.

Stuart G. Oles:

Yes, you’re correct in correcting me, Mr. Justice Black because they did have before them still the rightness or wrongness of what occurred in May 1958 and that they decided.

That’s what was really before it and it involved interpretation — argued interpretation of the contract and if Mr. Hoague’s theory of what this contract means, and that it implies a no-strike clause only in one instance where interpretation is involved, then by his own theory, he clearly has a no-strike clause.

But obviously, the State Supreme Court of the State of Washington relied on no such narrow ground, and I would not desire too either, because had the Supreme Court of the State of Washington expressly followed such federal common law as there is in this area, that is the decisions of the various Courts of Appeal that have dealt with this matter.

It would find that with the exception of one case, cited by counsel in his brief and I believe in our own with only one exception every Court of Appeals to which this matter has been brought has decided that under these circumstances, this conduct constitutes a breach of contract.

Now, I have cited this —

Hugo L. Black:

Which conduct?

Stuart G. Oles:

Pardon?

Hugo L. Black:

Which conduct, the strike?

Stuart G. Oles:

The strike to force an employer to forego the exercise of a right reserved to him in the contract even though there is no expressed no-strike clause.

And those cases are collected beginning at page 13 of our brief and there’s an extensive American annotated ALR citation, a very recent one on the subject, and we submit that it expresses what its common reason.

And certainly, it’s common law if there is such a thing in this area as federal common law.

If we have to decide that there is, this is it.

Earl Warren:

Did the parties argue Lincoln Mills to the Supreme Court of Washington?

Stuart G. Oles:

Yes.

Earl Warren:

And did they take any notice of the argument?

Stuart G. Oles:

The Supreme Court of Washington says that the opening part of its opinion that it does not view that Lincoln Mills case deprived it of jurisdiction to decide the issue before it.

Stuart G. Oles:

That it only decided that, as I’ve stated what I think it held, and that is that it gave a substantive as well as purely form creating influence to the law.

But it felt as I feel that it did not deprive the State Supreme Court of authority to decide a breach of contract case before it.

Felix Frankfurter:

But if this judgment that can rest on tort, can we avoid all of these nice subtle questions?

Stuart G. Oles:

You can, indeed.

William J. Brennan, Jr.:

Well, the other way around to it, Mr. Oles, we can rest on breach of contract and the arguably protected — prohibited argument —

Felix Frankfurter:

I meant not to reference to that problem, in reference to the exclusive — with reference to the —

Stuart G. Oles:

Exclusive jurisdiction.

Felix Frankfurter:

— jurisdiction.

William J. Brennan, Jr.:

Oh yes.

Felix Frankfurter:

You’re quite right, Your Honor.

Let me add this word on this subject because it — I think it should be said.

Are we going to hold that it is the law that a union can agree to a $3 wage to the employees, sign it solemnly, and the next morning call out its people and put up pickets demanding $4?

Because this is exactly what this local is saying, it has the right to do without breaching the contract.

Can it do so even though there is written into its contract an arbitration clause which says that matters in dispute shall be arbitrated?

Incidentally, there’s been some argument at all levels of this case that after all, the employer didn’t demand arbitration to start with.

Well, of course, all that the employer was doing was doing what he had an expressed right to do and do it to discharge a man.

There’s nothing in the labor contract that says you shall never discharge a man or I suppose sell some flour without arbitration.

This reaches to absurdity.

The point is that the union exercise economic power, overwhelming economic power, conclusive economic power in this instance to force an employer to do something or to refrain from doing something which he had a clear right to do.

Or for that matter, could an employer agree to pay $3 an hour and cut the wages to $2.

Now, if the man wouldn’t agree, lock him out.

Because again, this is exactly what this local says it can do without breaching contract.

Now, I recognize that this Court is confronted daily with profound and difficult conceptual problems particularly in this empty blackness of jurisdictional lines to be drawn.

I recognize that this Court has to deal with difficult relationships, but I also and reminded constantly in sitting here that this is the Supreme Court, the Highest Court.

And we do have before us a question of something that is fairly fundamental, a right or wrong.

Unless the Supreme Court of the State of Washington is upheld in this matter, in this case, a real and genuine injustice has been done.

We are holding that in effect, this respondent has no remedy and no solution, unless he had what he did take by arbitration and subsequently in the courts.

In other words, it is the duty of course of this Court to use its phrase to elucidate in litigation these difficult areas.

It has of course also a higher duty.

And we submit that in this case, it points very clearly to doing justice and equity in this case and thereby affirming this rather small and perhaps to this union a rather insignificant little judgement.

Felix Frankfurter:

Thank you.

Francis Hoague:

May it please the Court.

Earl Warren:

Mr. Hoague.

Francis Hoague:

Mr. Chief Justice, I am somewhat shocked to hear Mr. Oles say that we did not raise the preemption issue until the end of the case, until after the case was over.

And the answer on page 15 of the record, we have, “And for further affirmative defense, we set out the entire facts going to interstate commerce.”

Felix Frankfurter:

That’s 1959.

Francis Hoague:

But this was —

Felix Frankfurter:

That was filed in 1959.

Francis Hoague:

Your Honor, I’m correcting Mr. Oles’ statement that we didn’t raise this issue until after the case had been tried.

Felix Frankfurter:

No, he said you didn’t raise it until after the stipulation on September 1958.

Francis Hoague:

I heard him say that it wasn’t until we made our motions for judgement notwithstanding the oral opinion.

In the brief that we submitted —

Earl Warren:

Where is the language you were pointing out Mr. Hoague?

Francis Hoague:

On page 15 going over to 16, we alleged that the business of the respondent affects — substantially affects interstate commerce in industrial strife and unrest would and did affect and burdening, obstruct interstate and territorial commerce.

Now, the obvious purpose for this was to raise the preemption issue and under our practice there, we allege — at that time, allege the facts and not law — if we had alleged that jurisdiction was in the Labor Board, it would have been stricken as a conclusion of law.

This third affirmative answer raised that issue and in the memorandum of authorities submitted to the trial court at the — on the first day of trial which is not in the printed record but is in the unprinted record, we, as the third issue —

William J. Brennan, Jr.:

Excuse me Mr. Hoague.

You say the first day of trial was that on March 16, 1959?

Francis Hoague:

That’s correct.

William J. Brennan, Jr.:

Proceedings that begin at page 19.

Francis Hoague:

That’s correct.

Charles E. Whittaker:

Did I understand you to say Mr. Hoague that the — the court would strike out a plea to — challenging its jurisdiction?

Francis Hoague:

It’s in the answer.

We said that the jurisdiction is in — no, that we pleaded to the jurisdiction.

Charles E. Whittaker:

But it challenged the jurisdiction, did you do it — did your court strike that?

Francis Hoague:

Yes, it would strike everything except the facts under the old practice at the time.

Now, since then, the federal rules have been adopted.

Charles E. Whittaker:

Well, then how did you question the power of the Court?

Francis Hoague:

I set out —

Charles E. Whittaker:

How would you?

Francis Hoague:

Set out as an issue of fact that they — in allegation, that they affected interstate commerce.

This was denied by reply and then we stipulated that it did affect the interstate commerce.

And I argued in my brief peaceful picketing for mutual aid and protection as secured by the Taft-Hartley Act and states cannot declare it illegal, I cite Weber against Anheuser-Busch.

I quote the much quoted thing if this conduct does not fall within the prohibitions of Section 8, it may fall within the purposes of Section — protection of Section 7.

And I cite Garner against the Teamsters, International Union against O’Brien, Amalgamated Association against Wisconsin Employment Board, I say this doesn’t fall within the Russell and Laburnum cases, these was all raised at the outset of the trial and that it’s absolutely incorrect to say that it wasn’t raised by the pleadings.

It also —

Felix Frankfurter:

Did you raise it in answer to the complaint filed on May 27, 1958?

Francis Hoague:

I can’t answer that, I don’t know, I don’t remember.

Felix Frankfurter:

Well, did you raise it before the thing went to arbitration in September of 1958.

Francis Hoague:

I can’t answer that either, Your Honor.

William J. Brennan, Jr.:

Well, the second complaint —

Francis Hoague:

I don’t think.

William J. Brennan, Jr.:

— which I gather you did answer —

Francis Hoague:

Yes.

William J. Brennan, Jr.:

— it was not filed in December 1958 and that complaint cited all the facts of the completed arbitration, isn’t it?

Francis Hoague:

Yes, that’s correct.

William J. Brennan, Jr.:

And as I understood Mr. Oles, his point is, that then, it was too late to raise this question because all of the facts have been decided and there wasn’t any possibility of there being a matter for the National Labor Relations Board.

Francis Hoague:

There certainly — we never stipulated and the Arbitration Board never undertook the question as to whether the strike was a protected activity, and we submit that it still was a protected activity, looked at from hindsight or foresight.

It was a protected activity, should have — the matter should have gone to the Labor Board to determine whether it was —

Felix Frankfurter:

Was the —

Francis Hoague:

— a protected activity.

Felix Frankfurter:

— protectiveness of the strike was the question of whether it was a protected activity, whether the strike was a protected activity, was the determination of that question unrelated to the discharge of Welsch?

Francis Hoague:

Yes.

Felix Frankfurter:

Welsch have nothing to do with the strike?

Francis Hoague:

Oh no Your Honor, of course he had something to do with the strike.

Felix Frankfurter:

Well then —

Francis Hoague:

But the discharge of him, a strike to reinstate a person who is properly discharged is not a wrongful illegal strike, and furthermore I’d like to remark that —

Felix Frankfurter:

But the quality of the discharge is on whether the strike was a protected activity, doesn’t it?

Francis Hoague:

No, not unless —

Felix Frankfurter:

There is no connection.

Francis Hoague:

Not unless it’s a — it was a discriminatory unfair labor practice strike.

Every economic strike is to force an employer to do something that he has a right not to do.

Every economic strike forces him or it is intended to force him to grant higher wages, to submit to this sort of procedure as to seniority, and so on.

All of which he has a right not to do.

Felix Frankfurter:

And he may not limit — and the union may not limit its right to strike by its own voluntary action and say, “You’re striking because — you’re striking because you’re asking us to reinstate a fellow whom we admit was properly discharged.”

Francis Hoague:

They didn’t make any such statement, Your Honor.

Felix Frankfurter:

Well that is the question here.

Francis Hoague:

There was no such admission.

Felix Frankfurter:

That is the question here.

Francis Hoague:

There was no such admission.

Felix Frankfurter:

Whether the — whether the submission to arbitration to be bound by it, isn’t the same thing as saying, “Yes we agree that Welsch was properly discharged.”

Francis Hoague:

I —

Felix Frankfurter:

I don’t know the facts.

Francis Hoague:

Because —

Felix Frankfurter:

All I’m saying is I’m —

Francis Hoague:

Time —

Felix Frankfurter:

— just trying to find out what the issues are.

Francis Hoague:

Because is time is short, I will have to refer Your Honor to the footnote on page 18 in which I discussed this business of the admission.

There was no admission at the time that he was — he was — excuse me.

That he was —

Felix Frankfurter:

Suppose there had been, suppose they said after the litigation got underway, we agree that they had a right to discharge him, we agree he need not taken back, but we strike so that you should take him back.

Isn’t that relevant to our problem?

Francis Hoague:

Yes, and that is — that is on the matter of Mr. Oles’ suggestion as to them making an agreement for a $3 wage and going out right to the next day.

That would be a repudiation of the contract.

This was not a repudiation of the contract, but was an effort to enforce the terms of the contract which were —

Felix Frankfurter:

It all depends because there was a provision in the contract that they may discharge a properly dischargeable employee.

And if he was properly dischargeable and they agree that he had a right to discharge him and they then do not allow him to enforce that agreement, I don’t see the difference between that and the $3 and $4.

Francis Hoague:

They didn’t agree that —

Felix Frankfurter:

Well, that’s the question.

That’s the issue.

Tom C. Clark:

Do you understand that the doctrine of preemption which allows the Board to determine questions is governed or controlled by how the Board or how someone may eventually decide the issue that the Board has a right initially to determine?

Francis Hoague:

Of course, Your Honor, there’s no question about that.

It couldn’t.

The Board’s jurisdiction cannot be conditional on some subsequent arbitration.

Either —

Felix Frankfurter:

Do you agree that the facts on which the — if you agree that an arguable question has its underpinning, taken away because the facts aren’t — what the argument can be based on, do you think that’s irrelevant to the question?

Francis Hoague:

I think that the Board’s jurisdiction either existed at the time of the strike, or it didn’t exist at the time of the strike, and nothing that could happen subsequent could —

Take it away.

Francis Hoague:

Take it away.

Hugo L. Black:

Do you mean, it had the jurisdiction to determine the facts?

Francis Hoague:

Determine whether this was —

Hugo L. Black:

— (Voice Overlap) be taken away because someone determined those facts one way or the other later on.

Francis Hoague:

Well actually, it has to end and actually, there were — there were a lot of facts that were determined in the arbitration, Mr. Justice Black.

Felix Frankfurter:

The parties couldn’t agree that the — the practice — the parties couldn’t agree that white is — isn’t black, was it?

Because, once the Board has jurisdiction, that’s been usable, this — that must persist through all its synergy.

Earl Warren:

Mr. Hoague, if you would like about three minutes to sum up your argument, to point to any other portion of your brief, you may do so.

Francis Hoague:

It’s very kind of you Your Honor, I would.

The — in the case decided by this Court, National Labor Relations Board against Mackay Radio Company, there was a strike to enforce a contract, to get it, to obtain a contract.

The — this Court held that — and the strikers were fired immediately.

This Court held that the wisdom of the strike was not an issue.

It’s a protected activity whether it is wise or unwise.

That is by the Taft-Hartley Act is left to the parties to determine what action they will take, and I submit that this is a proper way.

Perhaps the strike was unwise from hindsight to — I guess — I guess it was.

At that time, it did not seem so unwise, nevertheless, that is a concerted activity, and the cases that I have cited on page 17 of my brief were all cases where the union went out on a strike to get a man reinstated.

Fairly foolishly they went out on a strike and still they held that that was a concerted activity and was protected by the Act.

And that the strikers could not be fired.

They could be replaced as Your Honors know.

But short of replacement, they could not be fired and they were reinstated.

And this has been the rule all through it.

That being so, the issue as to — the issue as to whether this was a protected activity which doesn’t come down to just the item of the — that was determined by the Arbitration Board but comes down to what the union had reason to believe was happening.

Francis Hoague:

In other words, did the — did the employer mislead the union into thinking that they had to go out on strike and the arbitrators stated this and the lower court, the trial court stated that they were so mislead, that was an issue that should have been decided not by the trial court, but by the Labor Board.

Thank you Your Honor.