Magnesium Casting Company v. National Labor Relations Board

PETITIONER:Magnesium Casting Company
RESPONDENT:National Labor Relations Board
LOCATION:Edward Coolidge’s Home

DOCKET NO.: 370
DECIDED BY: Burger Court (1970-1971)
LOWER COURT: United States Court of Appeals for the First Circuit

CITATION: 401 US 137 (1971)
ARGUED: Jan 18, 1971 / Jan 19, 1971
DECIDED: Feb 23, 1971

Facts of the case

Question

  • Oral Argument – January 19, 1971
  • Audio Transcription for Oral Argument – January 19, 1971 in Magnesium Casting Company v. National Labor Relations Board

    Audio Transcription for Oral Argument – January 18, 1971 in Magnesium Casting Company v. National Labor Relations Board

    Warren E. Burger:

    We’ll hear arguments next in number 370 Magnesium Casting Company against the Labor Board.

    Mr. Chandler you may proceed whenever you’re ready.

    Louis Chandler:

    Mr. Chief Justice, may it please the Court.

    It seems to be a relatively simple issue that we have because we stated it is whether or not the National Labor Relations Board may enforce a decision and order in an unfair labor practice case which is based upon evidence in the transcript that it has never considered or reviewed and based upon a conflicting testimony by witnesses that the Board or its Trial Examiner neither heard or observed.

    The background of this case involves the filing of a petition for an election by a union and a so-called representation case called in our case and appellants of the trade as distinguished from a “C” case which is unfair labor practice charge.

    And the hearing was held, conflicting evidence was presented and one of the questions involved particularly whether or not the assistant foremen were supervisors.

    The question involves some questions of credibility because there was conflicting testimony.

    And this question as to supervisors became critical because the company had evidence that an employee that it contended was a supervisor was acting as an agent for the Union in soliciting authorization cards for the Union.

    This would taint the interest of the Union because the Board has held that the solicitation of cards by an employee or representative is an unfair labor practice.

    It is coercive and it does not permit of a free choice by employees of that collective bargaining agent.

    One must bear in mind that in that case under the rules and regulations of the Board and under the Labor Management Relations Act, a representation case is called an investigation and the results are not called a decision but a certification and it was interesting to hear the prior case where there is a certification of the results.

    And the Hearing Officer will be noted in the representation hearing on the Magnesium case set on page 79 of the record appendix is, we are in a none adversary proceeding.

    The hearing in a representation case is not subject to any of the rules of evidence.

    This is in the rules and regulation 102.66 or to the requirements of the Administrative Procedure Act because there was a specific exemption Section 5 to the certification of employee representatives but not as to unfair labor practice charges.

    The Hearing Officer is actually one of the staff in the Regional Office designated by the Regional Director.

    He is not appointed under the rules established for the appointment of Hearing Officers under the Administrative Procedure Act and he has no authority to make recommendations findings of fact, rulings of law or determinations of credibility.

    The only reason that a representations case is handled in this manner is to expedite the processing of elections and representation matters and because in 1959 under the Act called the Landrum-Griffin Act which amended the Taft-Hartley Act of 1947.

    Section 3 (b) was one of the amendments which authorized the Board to delegate its Section 9 functions.

    Section 9 function is only on representation matters as distinguished from Section 10 of unfair labor practice charges.

    The delegated Section 9 functions only as to representation cases to its regional directors are retaining discretionary powers of review.

    Now, there’s no authority for the Board to delegate to a Regional Director.

    The Board’s obligation to make the findings that are required of unfair labor practices brought under Section 10 and as a matter of fact to make this more binding Section 3 (b) in the amendment said, that the Board could delegate any of its other powers to a three-man panel of the Board.

    The Regional Director, in any event, presumably after reading the record because he wasn’t present at the hearing and the statute says that the staff employee who was assigned as the Hearing Officer may not make any recommendations, so he wasn’t able to evaluate by the appearance of the witnesses or by observing or listening to witness the credibility.

    In any event presumably after reading the record and without seeing these witnesses may it finds the credibility against the employer’s position and ruled that certain assistant foremen contended to be supervisors by the employer were not supervisors.

    And then, another assistant foreman was in fact a supervisor.

    And his decision referred mainly to record statements that were adverse to the employer’s position and also more particularly to Mr. Scott’s testimony.

    And he said at one point that Scott himself testified that he wasn’t a foreman and yet he left out of his decision substantial testimony not only given by the employer and the employer witnesses but by Scott himself in which Scott made many, many statements about his supervisory functions and without trying to develop them because this isn’t the forum for that.

    On page 88, Scott and this is in the record appendix that he recommended a raise to employees.

    He regularly attended the supervisor’s meetings, page 84.

    He said, “I have the right to fire if I didn’t want a man I will get rid of him” page 85.

    Louis Chandler:

    Page 89, “I am in charge of two and sometimes three employees but he agreed he was running the room.”

    He had charge with the employees, gave disciplinary warnings, page 91.

    Testimony by one foreman that all assistant foremen were told they have authority to discharge in page 105.

    None of this appears into decision of the Regional Director who had the transfer confronted them presumably.

    In any event, subsequent through his decision these conflicts in Scott’s testimony and the contrary testimony of other witnesses were called to the Board’s attention in a motion to review and the Board refused to review because that has set up standard in a representation case.

    Now, we can’t quarrel with them because the statute gives a Board the authority to set up this stand with and give them discretionary review in a representation case saying that must be compelling reasons and it relates to board policy and that sort of thing.

    So the Board refused to review.

    The election results then were certified and the Union was certified as the bargaining agent.

    And the company position having bend that the employees were coerced because of the supervisors organizational activities on behalf of the Union and under law in case history, the only method for raising this issue was to refuse to bargain with the Union and a complaint would issue and this is what was done so that the employer could have a determination under Section 10 of the Act.

    There was no burden of proof incidentally on the Board or its agents in a representation case it’s an investigation.

    The only standard is whether there was a question of representation whether an unfair labor practice case, the burden is on the general counsel to prove by a preponderance of the evidence that an unfair labor practice exists.

    The burden is not on the party to disprove that there was an unfair labor practice and this is the distinction when the Board refers back to the motion for review and says you prove to us and give us all the evidence you can marshal that you have reason to reverse the Regional Director’s decision.

    Section 10 is not investigative it is advisory and it relates to the handling of these “C” cases.

    Findings of violations subject the respondent to and the petitioner in this case, injunctive penalties including possible contempt.

    It requires the Board to consider the evidence and to consider the evidence under the rules of evidence of the U.S. District Courts.

    These rules do not pertain in the representation case.

    It requires that the Board exercise its own independent judgment and under 10 (c) to make its own finding and conclusions on a preponderance of the evidence taken before it can enter a bargaining order.

    And of course the Administrative Procedure Act is applicable, this Court has so ruled on Mastro Plastics and that requires that all agency decisions include the statement of the findings and conclusions and the reasons of basis therefore and all the material issues or fact and law were discretion presented on a record.

    When the Board’s Trial Examiner issued an order to show cause after general counsel filed a motion for summary judgment on the unfair practice case.

    The employer objected on the basis that the evidence of supervisory status, all of the evidence should be reviewed by the Board of by a Trial Examiner designated under the Rules of the Administrative Procedure Act.

    And incidentally, just about the time of the issuance of this order to show cause on the motion for summary judgment.

    The employer, petitioner learned that the witness Scott some of who’s testimony had been accepted from the transcript by the Regional Director and relied upon had admitted after the representation hearing that he have been less than truthful and had withheld information at the representation hearing.

    The employer called this to the attention.

    Warren E. Burger:

    How did that develop?

    Louis Chandler:

    Pardon me, sir?

    Warren E. Burger:

    How did that develop, Mr. Chandler?

    How it did develop record?

    Louis Chandler:

    It develop because the assistant foreman told —

    Warren E. Burger:

    No, I mean how did they get in record?

    Louis Chandler:

    How did it get in a record?

    Louis Chandler:

    The petitioner, respondent employer at that time made a motion stating that the witness Scott admittedly had withheld information and requested a reopening of a record without getting into the details of what the information was.

    There were some concern and these rather emotionally charge situations as to pressures being brought on witnesses from like subsequently testify and to give names.

    Warren E. Burger:

    What did the Examiner do about it?

    Louis Chandler:

    The examiner said that this doesn’t mean anything to me.

    He said you haven’t said anything that would — it stated on the brief or rather in the record appendix —

    Warren E. Burger:

    Well, don’t stop your argument now.

    Louis Chandler:

    We’ll find it.

    In the meantime, we’ll come back.

    Thank you, sir.

    We asked for the opportunity to present facts on the issue and the Trial Examiner refused to take evidence or to review the record and he therefore could make no independent findings or fact or on credibility and he merely affirmed the Regional Director’s decision on the basis that the Board had refused to review.

    The employer file the exceptions that are required under the Acts and the Board on a sharp one-page decision really rubber stamp the Trial Examiner’s decision who in turn have rubber stamp the to Regional Director’s decision.

    And the First Circuit Court when it ordered enforcement of the bargaining order, admitted that the issue was a difficult one and used the term there are gradations of authority and it is a difficult decision but that they were deferring to the Board’s expertise.

    It’s an interesting term because they should have defer to the Board’s expertise but the Board’s expertise wasn’t involved here because the Board had neglected to perform the duties that were require of it often under Section 10.

    It was the Regional Director who had made some kind of determination based upon a reading of a transcript.

    The portion on the request for commission to produce the evidence the only construction that I can make for respondents reply, this is the trial exam I’m talking that it views Scott’s admission as newly discovered evidence.

    However —

    Warren E. Burger:

    Where are you reading from now?

    Louis Chandler:

    I’m reading on page 164.

    Respondent furnishes no support for it’s contention other than offering to prove on full hearing that Scott had supervisory authority and did various acts consistent thereto.

    And he goes on, into what extent such evidence as new is impossible to determine other than Scott’s admission which presumably came after the hearing and of for which we know nothing or I would ask the Trial Examiner how could he know anything about it if we know nothing about it until after the hearing, and how could he learn anything about it unless since it was newly discovered evidence he would give us the opportunity to present it.

    Byron R. White:

    Do you think the original director is violating Section 3 (b) or the Board is by permitting a — another person that in his office to hear the evidence and he himself just passing on that?

    Louis Chandler:

    No, I don’t.

    The acts provides that it be a Hearing Officer or staff employee but it also provides that he may make no recommendations and that the Regional Director will make the decision but the important aspect of this is that it’s really investigatory and it results as I said in a certification and it contemplates that ultimately.

    The intent of Congress is that a charge will be filed and at least this expedites the representation area of the proceedings so that the election can be governed over with and if there were issues they will be raise in the complaint case.

    I say that the board violated the Act by adopting the Regional Director’s decision and applying it in the “C” case without an independent —

    Byron R. White:

    You don’t think that —

    Louis Chandler:

    — evaluation of facts.

    Byron R. White:

    You don’t think the Regional Director’s determination is entitled to the same finality as a Board determination of representation?

    Louis Chandler:

    If it’s not appeal —

    Byron R. White:

    Let’s Assume the Board had agreed to review the Regional Director’s representation determination and have reviewed it and determined it and then the company refused and there was unfair legal practice about a proceeding filed.

    Byron R. White:

    The Board wouldn’t have to rehear the unfair labor practice — the representation issue, would it?

    Louis Chandler:

    If there has been an independent review by the Board.

    Byron R. White:

    So your answers is no?

    Louis Chandler:

    The answer is I would expect to comply with the Board’s determination in that case unless they were newly discovered evidence.

    Byron R. White:

    And so you say but you say the Regional Director’s determination is not entitled to the same finality as the Board says on the representation issue?

    Louis Chandler:

    That is right because there hasn’t been an independent review that applies to the “C” portion of the case.

    Byron R. White:

    But Section 3 (b) says that the Regional Director is the Board but for —

    Louis Chandler:

    Only for representations cases.

    Byron R. White:

    Well, alright but —

    Louis Chandler:

    But not when it comes to unfair labor practice.

    Byron R. White:

    Well, he’s made that determination though.

    And if the Board had made the representation determination it wouldn’t have to do it again in the unfair labor practice?

    Louis Chandler:

    But they would have it examined the entire record and that’s my point.

    Byron R. White:

    I know but —

    Louis Chandler:

    But they’ve refuse to examine the record.

    Byron R. White:

    But the Act — the Section says the Regional Director is the Board for this group?

    Louis Chandler:

    Only for that purpose of representation but not for charge cases and if we have a complaint case the Board must look at all of the evidence and when they put — they shifted the burden in the motion for review when they said to the employer and they say to any party filing a motion for review.

    You prove to us by compelling reasons that the Regional Director is wrong.

    They shifted the burden that is on them to show by a preponderance of the evidence that an unfair labor practice charge has been committed.

    There’s a difference in the burden that is required between a representation issue and a trial.

    Byron R. White:

    Well, the discretion of the Board not to take representation cases doesn’t mean very much that they’re going to have to take them and decided one on the unfair labor practice that unfair labor practice stay?

    Louis Chandler:

    And 50% of those that they took and the last records that were available from the Board, they reversed the Regional Director.

    Byron R. White:

    Well, it may be but they didn’t take this case?

    Louis Chandler:

    And they didn’t take case and they didn’t look at the evidence and I submit sir, that the Section 10 of the Act requires that in an unfair labor practice case they must look at the record and that the at the Trial Examiner is, I mean the Regional Director is not the Board for unfair labor practice purposes; for representation cases, yes, to process up through to the time of the elections.

    Byron R. White:

    Well, maybe if they may be right I was just curious to know why Section 3 (b) didn’t make the Regional Director’s determination as final as the Board’s.

    Louis Chandler:

    As a matter of fact, in the short time remaining until three, I like to quote from Judge Kaufman’s statement in Pepsi Cola case on the Second Circuit where he says, that the Board procedure for review under 102.67 which is exactly what we’re talking about is even more cursory than certiorari since the petition for review must be a self-contained document cut adrift from the record.

    In certiorari, the record is certified to the higher court for examination that for consideration with the petition and the shift of responsibility is improper because the there’s preponderance of evidence required.

    In the —

    Byron R. White:

    Mr. Chandler, are you saying here that there is no possible review anywhere of the Regional Director’s determination if the Board chooses not to make?

    Louis Chandler:

    That’s right, sir.

    Byron R. White:

    That’s what you’re saying?

    Although under court review.

    The court of appeals should review the substantial evidence —

    Louis Chandler:

    Not behind, this is what we were going to get to, the —

    Warren E. Burger:

    We’ll get to that in the morning, —

    Louis Chandler:

    Thank you.

    Warren E. Burger:

    Mr. Chandler.