RESPONDENT:National Labor Relations Board
LOCATION:Braunfeld’s furniture store
DOCKET NO.: 68
DECIDED BY: Warren Court (1958-1962)
LOWER COURT: United States Court of Appeals for the Seventh Circuit
CITATION: 365 US 651 (1961)
ARGUED: Feb 28, 1961 / Mar 01, 1961
DECIDED: Apr 17, 1961
Audio Transcription for Oral Argument – March 01, 1961 in Local 60, United Brotherhood of Carpenters and Joiners of America, AFL-CIO v. National Labor Relations Board
— United Brotherhood of Carpenters and Joiners of America, AFL-CIO, et al., Petitioners, versus National Labor Relations Board.
Mr. Come, you may continue your argument.
Norton J. Come:
May it please the Court.
As I concluded yesterday, I was — I had finished outlying — outlining the practical problem that the — that the Board had before it, which prompted it to device the Brown-Olds refund remedy.
The practical problem being that despite the fact that Congress had 10 years ago outlawed the closed-shop, those practices were continuing to persist in industry’s short-term employment for the union controlled the hiring process, such as in industries like the building construction industry and the trucking industry.
The Board believes that such a remedy is authorized by Section 10 (c) of the Act and by the holding, although concededly the facts here are different, by the holding of this Court in the Virginia Electric Power case, sustaining a Board refund remedy, the Board’s power to order refund of dues and fees.
The majority of the Court there, in sustaining that remedy, enunciated this test, namely, that such a remedy should stand unless it can be shown that the order is a patent attempt to achieve ends other than those which can fairly be said to effectuate the policies of the Act.
Now, I’m going to try to show if I can that this refund remedy in situation such as we have in — in these cases falls within that test.
Now, one of the declared policies of the Act is to protect the exercise by workers of full freedom of association, self-organization and this policy is reflected in the guarantee of this right in Section 7 of the Act, which specifically guarantees these rights to employees and adds that they include the right to refrain from any or all such activities.
And this Court made clear in the Radio Officers case that one of the corner stones of the Section 7 right to refrain from assisting the union was the right to get a job without having to be a union member or in full conformity with union policies.
Now, there can be no more flagrant impairment of this freedom and the type of practice which is conceded in Number 68, the closed-shop practice.
The Board found and the court below agreed that mechanical handlers, the employer and Local 60 entered into an agreement whereby the Company would obtain all their millwrights from Local 60 and abide by its rules and under the rules of the union, only members of Local 60 and those who are obtaining work permits from it, could get a job.
And as a result, two employees were referred — were denied the jobs because Local 60 did not give them work permits.
Similarly, the hiring arrangement in the preceding case, under the Board’s view of it, likewise, unlawfully encourages union membership, albeit and not as traumatic or fashion as a closed-shop.
Now, a refund of dues and fees paid to the union by employees as a price for getting jobs under these illegal hiring arrangements, in the Board’s view, vindicates the policies of the Act which have been negated by — by that arrangement for this reason.
The question is why has the union been willing to persist in maintaining a hiring arrangement such as we have in Local 68, a blatant form of closed-shop practice that is clearly outlawed by the Act.
The reason, it is fair to say, is because it assures that a regular flow of dues and fees will come to the union.
It maybe that these employees would have paid anyhow, but the union certainly has not been willing to risk that chance because they have continued to maintain the closed-shop practices for years after Congress outlawed them in the Taft-Hartley Amendments.
Now, a refund of dues and fees, in the Board’s view, removes the incentive for continuing these illegal closed-shop practices.
And it differs from a jail sentence or a fine in that it is commensurate what the incentive for maintaining the illegal arrangement.
It is not some figure picked at — picked at random, it is measured by what the union is benefiting as a result of continuing these closed-shop practices.
This Court said in the Virginia Electric Power that an order such as this, of course, they were talking about a different set of facts, which deprives an employer of the advantages accruing from a particular method of subverting the Act, is a permissible method of effectuating the statutory policy.
We think that a refund of dues and fees in the circumstances that we have here does no more than that.
And the Board has been careful to restrict the refund remedy to just situations where it would have the effect of removing the incentive for violating the Act because it has not applied this remedy in situations where a union security provision has been illegal for only technical reasons such as a failure to comply with Sections 9 (f), (g) and (h) or where employees were not required to be a union a member in order to get a job, but instead of giving them 30 days, as the statute requires, they were given only 29 days, let’s say.
Moreover, the Board has not applied the remedy in cases where the parties have cleaned up their agreements during the moratorium period provided by the General Counsel, which was in March 1st to November 1st, 1958, as a recent case.
It makes that clear, which I do not think is cited in our brief, namely, Booth & Flinn Company, 129 NLRB, Number 89.
Now, we believe that if we have shown that the refund order meets the test in Virginia Electric Power, the fact that it was devised as a more effective means of deterring illegal hiring arrangements, does not impair its validity.
We think that purpose of a — of a refund — of a — of a Board remedy, if otherwise, appropriate, is a measure of — of deterrence under the — for the Board to look around to modify its — its remedies in order to — to make them more effective, is not in its itself — does not in itself, make the remedy invalid.
We think that the Seven-Up case before this Court indicates that.
This Court will recall, that was a situation where the Board found that as a result of computing back pay over the entire period between discharge and offer of reinstatement, it found that the employers were tending to delay offers of reinstatement and the hope that the employee would get a better paying job and thus, reduce its back pay liability.
Norton J. Come:
As a result of its experience, whit this situation, the Board found that it would have to take a step in order to make the — the reinstatement remedy more effective.
That it was not having its full effect and therefore, it devised the procedure of computing back pay on a quarterly basis.
And this Court sustained that, though in some cases, it might have resulted in an employee being made more than whole or putting in another way, and the employer having to pay more back pay than he would had to pay had the employee remained on the job.
It was sustained because that modification in the remedy was reasonably related to effectuating the statutory policy which was to ensure that employees that had been unfairly discharged would be promptly reinstated.
Now, the big argument that — that petitioner advances is that we cannot show that the dues were coerced here.
These are union members longstanding — belong to the union before they were subjected to this particular unlawful hiring arrangement.
And there’s no reason to believe that they wouldn’t have continued to pay dues even without the arrangement.
Well, that maybe so, although one wonders is that, if that is so sure, why, as I indicated earlier, unions, particularly in the building trades, would continue to take no chances and persist in their closed-shop practices.
My opponent pointed out that the building trades industries are very highly unionized industry.
That’s very true.
It also has been the leading practitioner of the closed-shop.
And it has continued to engage in those practices long after Congress outlawed them.
And Congress in 8 (f), I might point out, although it did permit the building trades unions to enter into pre-hire contracts, it did not give them the closed-shop.
It limited them to a union shop and although it cut down the time from the 30 days to 7, it still did not authorize or sanction, even in that industry, a closed-shop.
But beyond that, we submit that a showing of — of coercion is not necessary to sustain the refund remedy as we read Virginia Electric Power.
Indeed, as we read it, we think that was the issue which divided the Court in that case.
As this Court may recall, there were three sets of opinions in Virginia Electric Power.
It was the opinion of the three dissenters who did not sustain the refund remedy on the ground that was no showing, no proof that the employees were actually coerced in the payment of dues.
Mr. Justice Frankfurter wrote a separate opinion concurring with the majority of the Court sustaining a refund remedy.
He did so on the ground that he agreed that coercion had to be shown but that sufficient coercion was shown by the fact that there was a closed-shop contract in that case, which required the employees to join the union.
They had no choice about whether they wanted to join or not.
The remaining five members of the Court, however, in an opinion by Mr. Justice Murphy, sustained the refund remedy on the ground under — under the test that I enunciated earlier.
They did not rest the holding, as we read it, upon a showing or requirement that you show that the dues were actually exacted under coercion.
Now, I should like to say a word about petitioner’s reading of the Virginia Electric to limited — limit it to a company-dominated union situation.
It is true that the — that the union in Virginia Electric was company-dominated.
Since the closed-shop, however, was legal under the Wagner Act, you had to have something more than the closed-shop to give the Board any predicate for finding an unfair labor practice.
Company domination was the particular predicate in Virginia Electric Power.
The Courts, however, have not viewed Virginia Electric as limited to the company-dominated union situation.
We have had refund orders sustained by many of the same courts, which have not sustained them in this particular case, in situations where you had nothing more than a grant of recognition to a minority union with a union security clause and the unions were — such unions as the Teamsters and the machinists, which were not in the company-dominated union character, our pledge.
We have set forth those decisions in our — in our brief and I’d like to call the Court’s attention particularly to the Revere Metal Art case, which is set forth at page 33 of our brief.
Norton J. Come:
I could take the Court’s time for a moment to just read a moment briefly from that case.
The Court in sustaining the refund order in that situation, which was a minority union which had been granted exclusive recognition in the union’s security clause, sustaining the refund of dues there, even though there had been no proof that the employees had — had paid the dues under coercion.
The Second Circuit in an opinion by Judge Friendly said, “For the courts to require a determination of the attitude of each employee in every case would impose impossible administrative divergence.”
“We’ve been admonished that although orders requiring reimbursement to employees for dues paid to unions unlawfully forced upon them, both somewhat resemble compensation for private injury, we must not consider them solely in that light seems they vindicate public not private rights,” quoting from Virginia Electric Power.
The fact the union imposed in Virginia Electric was company-dominated, does not appear to be a valid distinction here.
Now, to be sure, the facts even in these cases that I’m referring to where a refund order has been de-sustained, even though there has been no company domination, differ from the situation that we have here, because they did not involve old-time union members in an inference of coercion as possible from the — form the union security clause.
I think they illustrate, however, that Virginia Electric Power cannot be put to one side, simply on the ground that it involved a company-dominated union.
I think that they indicate that there is more to Virginia Electric in this factor and that the decisive consideration that Virginia Electric leaves you with is the test that I alluded to at the outset, namely, whether or not, the refund order can be shown to be a patent attempt to achieve ends other than those which can fairly be said to effectuate the policies of the Act.
And I have tried to — to indicate why the Board believes that a refund order in the circumstances here satisfies that test and fall short of a penalty, a jail sentence or an arbitrary fine.
In conclusion, I would like to give the Court one more citation, if I may, which I find is not in our brief.
Yesterday, Mr. Justice Black asked for decisions in which the Board’s rationale in Mountain Pacific had been set forth.
Now, of course, there is the Mountain Pacific case itself which is cited in our brief.
I find it there has — is some discussion of the basis for the safeguards at 123 N.L.R.B. at page 1887.
Unfortunately, that case was not cited in our brief, it is the concurring opinion of Mr. — of Board Member Jenkins in one of these Mountain Pacific cases, which sets forth, I think, better than our brief does, the rationale for the safeguards.
I would like to call that to the Court’s —
Hugo L. Black:
Is that named the Mountain Pacific case?
Norton J. Come:
No, it is a case called the Boilermakers case.
Hugo L. Black:
Norton J. Come:
That is 123 N.L.R.B. at 1887.
Thank you, Mr. Come.
May it —
May it please the Court.
We are told that the reason for a closed-shop practice is to compel payment of dues which would otherwise not be paid.
This is a novel reading of industrial history.
The reason for a closed-shop practice is to safeguard for members of the unions, the available work opportunities.
It — in the competition forward between members and nonmembers, members are favored.
This is a wrong, but the wrong is not one which is designed to collect dues.
We would — to follow the argument that a closed-shop practice has for its purpose to collect the dues and if closed-shop practices were only eliminated, the conclusion we would have that there would be no building and construction trade unions in this country.
If only building — if only closed-shop practices were eliminated, the 2.3 million people who are now members of building and construction trade unions, which ceased to be.
Now, if the purpose, as we are told, of this refund remedy is to restore dues that would not have been paid, there would be not the slightest reason for having that remedy run for a period in excess of 30 days.
Because with respect to any union which has not assisted or company-dominated, there is the power legally to compel the payment of dues once the 30-day period has passed.
So in all these cases, if the collection of dues were the truly the objective of this refund remedy, the refund should be limited to a 30-day period that the employee was on the job.
Under the Brown-Olds remedy, when is the starting point?
Is that the time the charge is filed or the time of —
Six months preceding the filing of the charge.
Six months preceding the filing of the charge.
That is correct, sir.
Now, it is actually, of course, untrue that the refund remedy is confined to situations were you have closed-shop agreements.
The preceding case illustrates this precisely.
In the preceding case, there was no invalid closed-shop agreement.
There was a hiring hall agreement.
There was a separate union security provision which required the payment of dues, but that separate union security provision was entirely valid.
It left a 30-day period.
And in fact that separate union security provision in Number 68 — in the preceding case, could not have compelled the payment of any dues because what the Board in that case requires is the refund of dues to casual employees.
They never work a period of 30 days.
Their payment to dues never could have been coerced even by a valid union security agreement.
So, it is utterly inaccurate to say that the remedy is designed to compel the return of dues which otherwise would not had been paid.
We are told that Virginia Electric says, “It doesn’t matter that dues were not coercively paid:” On page 30 to 31 of the Board’s brief, there is a quote from Virginia Electric.
I think it suffices to read from that quote, one part of it, on page 30.”
The reimbursement order does restore to the employees in some measure what was taken from them because of the Company’s unfair labor practices.
The heart of the vice of the remedy in this case is that though a wrong exists, the Board cannot show that the payment of dues was because of that wrong.
In the absence of a connection between the wrong and the payment of dues, there is no valid basis for a requirement of a refund of dues.”