National Labor Relations Board v. Great Dane Trailers, Inc.

PETITIONER:National Labor Relations Board
RESPONDENT:Great Dane Trailers, Inc.
LOCATION:U.S. District Court for the Southern District of California, Central Division

DOCKET NO.: 781
DECIDED BY:
LOWER COURT: United States Court of Appeals for the Fifth Circuit

CITATION: 388 US 26 (1967)
ARGUED: Apr 19, 1967
DECIDED: Jun 12, 1967

Facts of the case

Question

Audio Transcription for Oral Argument – April 19, 1967 in National Labor Relations Board v. Great Dane Trailers, Inc.

Arnold Ordman:

— appeals for the Fifth Circuit which denied enforcement to a board order.

The Board’s order was based on a finding that the employer, Great Dane Trailers, Inc. violated Section 8 (a) (1) and (3) of the National Labor Relations Act by denying payment of previously earned vacation benefits to strikers who elected to remain on strike or who had been replaced while paying such benefits to nonstrikers and strikers who abandoned the strike and returned to work by a certain date.

The court below denied enforcement to the Board’s order on the ground that this disparity of treatment, notwithstanding the return on strike activity was not unlawful despi — absent, an independent showing or an illegal motive on the part of the employer.

Now, the record is devoid of evidence that apart from the disparity of treatment itself, the employer had a subjective intent to penalize the employees for their strike activity.

That’s the common ground in this opinion.

Arnold Ordman:

That is correct.

And the question presented here is whether such independent evidence of subjective intent is in the circumstances here presented a pre-conditioned or finding of unfair labor practice.

Now, before stating the facts, I think it would be helpful to note very briefly that we see the issue in this case as paralleling the issue in Erie Resistor.

In that case, as the Court will recall, the employer awarded super seniority, super seniority to replacements and returning strikers as against those who remained on strike and the question presented there as here was whether you would had to have an independent showing of an intent to penalize strikers, has a precondition to finding an unfair labor practice in that case and this Court held that such a showing was not required.

Now, Great Dane Trailers, Inc. manufactures truck trailers in this plant in south, I mean its plant at Savannah, Georgia through its employees for some years have been presented by the Boilermakers Union.

The most recent collective bargaining agreement between the company and the union was for a three-year period which expired in March 31st, 1963 and was terminable thereafter upon proper notice by either of the parties.

Now, so far as relevant here, that agreement provided that employees with more than 60 days of service, would receive annual vacation pay on the Friday nearest July 1 of each year.

Those who had worked at least 1525 hours or approximately 38 weeks, the proceeding year would receive a weeks vacation pay and for those who work less, in as little actually as a 169 hours, they got a diminished scale of payments which was actually set forth in the contract for those who work fewer hours.

Now, employees who had at least five years or more of continuous employment to the company got double paid.

But the agreement specifically provided that those workers who quit or were laid off were otherwise terminated even during the course of the year and didn’t survived until July 1st nevertheless would get pay if they had worked the minimum 60 days.

On April 30th, 1963, the union gave timely notice to terminate the agreement as of May 16, approximately two weeks later.

And on May 16th, the union went out on an economic strike to support its bargaining demands.

And about 348, I believe, of the company’s 400 employees joined the strike.

Now, within a matter of six weeks, by July 1st, about 259 of the 350 strikers had been replaced and a few of the other strikers went back to work.

The strike, however, continued for several months longer.

But early in July, about 300 of the strikers individually and through their union, asked the company for the vacation pay they had earned under their agreement which had now been terminated.

The company replied by a letter, which was dated July 12 and says — said in effect, “Because you, the union, have terminated the agreement, there isn’t any provision for vacation pay in effect and suggested that may be that matter could be taken up at the bargaining negotiations.”

Potter Stewart:

Well, that was true the agreement was no longer in effect and it was only because of the agreement that they had any right to vacation pay as of July 1st, isn’t that correct?

Arnold Ordman:

That is right.

That was a working condition set up by the agreement but under the terms of the agreement and while it was in effect, this right had accrued.

This was work pay they had during the period of the agreement.

Potter Stewart:

That — that was and remained an issue, I suppose, between the parties, is it not?

Arnold Ordman:

That’s right because the agreement was in effect until May 16th, just six weeks earlier.

Potter Stewart:

But it provided for no payments until July 1st, as I understand.

Arnold Ordman:

It provided that payments would be made on the Friday near July 1.

Potter Stewart:

And as of July 1st, there was no such agreement.

It was — and it was only because of the agreement that there was any right as of July 1st.

Arnold Ordman:

Not exactly because under the agreement itself, for example, people who had been quit or discharged during the year and prior to that date were entitled to pay and did receive it.

Potter Stewart:

On July 1st?

Arnold Ordman:

The record shows it.

On July 1st.

Potter Stewart:

So that remains an issue between the parties, is it not?

Arnold Ordman:

That’s correct.

Now, the company — their company suggested that this matter might be resolved at the bargaining table, which is also in the record an indication they suggest that this might be resolved by an independent lawsuit under the contract.

Now, needless to have at this point, there weren’t any bargaining negotiations so far as the record shows on this issue but — and I think it is a matter of law and not in dispute that the employees couldn’t be forced to bargain away any contract rights or statutory rights which they have or which had accrued.

Now, shortly thereafter, in August — and this was in July — in August, the company did make vacation payments to all the nonstrikers and to those strikers, who had abandoned the strike before July 1st, and had not been — and had not been replaced but the returning strikers even those who returned who were replaced and those who elected to continue to exercise their statutory right to strike, received no vacation pay even though under the — during the existence of the contract their right to vacation pay had accrued.

Now, the company defended its action before the Board on the ground that the payments were made, that the payments that were made were made not under the contract which has been terminated but under a unilateral policy which it said that it adopted following the termination of the contract but it concedes, and these are its own words, that the unilateral policy incorporated substantially the same conditions as to the contract.

Now, as for its refusal to make payments to those who continued on strike and to replace strikers, it simply explained that, well there was a break in the length of service and the employees who weren’t — didn’t get paid were not working as of July 1st and the strikers who were replaced weren’t employees at all.

Now, the Board found that by denying this vacation pay, the strikers who would not abandon the strike or had been replaced, the company discriminated against them because of their adherence to the strike, their continued exercise of the right to strike.

Now, whether the company made its selection of who got paid and who didn’t get paid, pursuant to the contract provisions or pursuant to its unilateral policy which have formulated after the contract terminated, the Board said this was really immaterial.

They’re not under the Board’s holding, it stated, was that under the law, strikers have to be treated uniformly with nonstrikers with the relation to whatever benefits accrued to them from their employment relationship.

In this connection, incidentally, the Board did order that the strikers be awarded back pay but it specifically excluded any compu — that computation of the back pay due them anytime in which they were not working and which they were on strike.

The Board incidentally also agreed and this is agreed that there wasn’t any independent subjective evidence of disparity of treat — of intent to penalize strikers.

Now, the court below disagreed with the Court.

Before the court below, we urged the Erie Resistor principle and the court below made no mention of Erie Resistor.

Instead, it cited the more recent decision of this Court in the American Ship Building case and it said that the American Ship Building case stands for the proposition that if the employers conduct carries with it any other inference, any other inference of a legitimate motive, the inference of illegality which would otherwise bring does not control.

Now, the Court recognized that the record in the case before it, did not disclose any such legitimate motive and I take it that means that it rejected the reasons the company gave it before the Board.

It said the record doesn’t disclose any legitimate motive but the court below itself suggested legitimate motives which might have motivated the employer.

For example, it suggested that may be the company did what it did to reduce expenses.

Maybe it did it to encourage longer tenure among the present employees or may be it did it to discourage early leave before vacation periods and because the court below said because these motivations may have existed and the court below concluded that the Board was required to and failed to establish of the company’s action were prompted by some independent motive to penalize the strikers and the court denied the petition for enforcement.

Now, there is some subordinate matters to which I think are adequately covered in the brief.

I’d like to reach what I think is the overriding issue, whether the interpretation put by the court below on the American Ship decision and its apparent rejection of — we think its apparent rejection of the Erie Resistor principles applied to the fact of this case.

Now, we think the Court of Appeals here as an Erie Resistor, erred in holding that in the absence of a finding of a specific illegal intent, a legitimate business purpose is always a defense to an unfair labor practice charge.

Now, the court below doesn’t, this Court does not and we do not again say the relevance and the importance and even then the necessity in 8 (a) (3) cases of showing an employer’s intent or motive to discriminate or to interfere with union rights.

But as Radio Officers has established, specific evidence of such subjective intent is in Justice Reed’s language not an indispensable element of proof of violation.

Arnold Ordman:

Now, such evidence is required, of course, in the typical situation.

Take the normal discharge case which still is a large portion of the National Labor Relations Board work.

There, many otherwise innocent or even ambiguous actions which are normally incident of the conduct of — an employer’s conduct of his business are exempt from the Act’s stretches, unless specific intent of — specific evidence of a subjective intent to discriminate or encourage or discourage union activity as shown.

Now, this requirement is imposed because there’s nothing in the nature of a conduct itself in the normal discharge case; there’s nothing in the conduct itself which necessarily and foreseeably evinces a discriminatory purpose or effect of which is inconsistent with the employer’s normal operation of his business.

But we suggest that this category of cases has to be distinguished from the much smaller category and this Court has done so from the last frequent type of case typified by Radio Officers, by Erie Resistor and we believe this case, where the necessary foundation of discriminatory intent derives from what this Court has called the “inherently discriminatory” or destructive nature of the conduct itself.

Byron R. White:

Mr. Ordman —

Arnold Ordman:

Yes, sir.

Byron R. White:

— let’s assume for the moment that the — that the employer was under no contractual obligation to make vacation pay payments and that he was not obligated to do so at all to anybody, would — you would still certainly still be making the same argument?

Arnold Ordman:

Yes, because —

Byron R. White:

What — what would the remedy be before the Board then?

Arnold Ordman:

I believe the remedy would be the same as it is here.

Byron R. White:

Which is what?

Arnold Ordman:

In other words, the — restoring — restoring of — giving the vacation payments to the employees on the same proposition that was given to the nonstrikers.

We believe, for example, a contract is set out.

There’s no quarrel here that vacation benefits are a term and condition of employment.

And once they had been established by the contract, they would continue after the termination.

Byron R. White:

Well, I know but we didn’t presume that it is so.

Arnold Ordman:

And that under the contract, because it’s a term and condition of employment which had — which had — once established by the contract, continues to exist and cannot be unilaterally changed.

Byron R. White:

Well, that —

Arnold Ordman:

Any more of them for example —

Byron R. White:

Now, let’s assume that it — it — say the employer have not made the vacation payments to anyone, and let’s assume that no one could legally haven’t had have — have enforced the right to vacation payments?

Arnold Ordman:

I think the Court, the Board would still reach the same conclusion.

For example, if he elected for the first time, with no background, if he elected to make vacation payments to employees who did not strike and withheld them from employees who did strike, then the discrimination would be apparent on its face even in that situation.

He may not —

Byron R. White:

Well, maybe the discrimination but how about the remedy?

Arnold Ordman:

These, I suppose, within the Board’s, the discretion, I suppose would be a matter whether to set things right.

It should be make payments to the employees, to the strikers, possibly withholding from the nonstrikers but I don’t conceive the latter continues.

Potter Stewart:

But if he elected to make vacation payments to no one and which I understood from Mr. Justice White’s question to be that is strikers or nonstrikers, you wouldn’t possibly have an 8 (a) (3) violations.

You might —

Arnold Ordman:

No, I think —

Potter Stewart:

— under 301 for violation of —

Arnold Ordman:

No, and I think there would be no 8 (a) (3) violations as I see it.

There may well, however, has been an 8 (a) (5) violation because this would be a unilateral change of a working condition and this Court has established the working conditions having been established by the contract even though the contract expired, the working conditions like the wages in hours would continue.

The employers would not unilaterally change them and if he did, it would be a violation of his bargaining application.

But it would not be an 8 (a) (3).

Potter Stewart:

It could be an action perhaps on the 301 too?

Arnold Ordman:

Yes, it could be.

That could be an action under 301 under the contract.

Yes.

Now, we suggest therefore — now, we are not saying that this is the end of thing.

The discriminatory intent is established, of course, by the nature of the conduct itself.

But this Court has suggested in Erie Resistor there are countervailing considerations; there could be a legitimate motive, a legitimate objective which would overweigh the discriminatory intent.

Now, without dwelling on it too much, I simply say that there are cases and we have cited some of these illustrative situations on page 12 of our brief where a legitimate business consideration can override the discriminatory intent which is inherent in the conduct.

But certainly, the company presented none as the Board below found.

And even assuming that the court as it did itself speculate as to what might have been the reason and it supplied this reasons, the company did not.

We suggest that even that — even if that were proper, the speculative reasons the court below assigned don’t carry the ball because this Board — the Board did weigh these considerations and in its judgment under this Court whether that judgment is certainly subject to the review by the courts and by this Court.

But this Court has suggested that there must be a little circumspection attending court review of that judgment.

Now, we find nothing in American Ship which is inconsistent with Erie Resistor and we think to the extent this Court mentioned the Erie Resistor principle in American Ship and it did cite that case for we think it specifically indorsed Erie Resistor.

Now, the bulk of the respondent’s argument here really is that the impact of vacation pay, this case is different from Erie Resistor because the impact of withholding vacation pay benefits even though a term and condition applied.

Byron R. White:

Were there some of these — (Voice Overlap)

Arnold Ordman:

Wasn’t as — excuse me.

Byron R. White:

Were there some of these employees who were refused vacation pay even though they were then working for the company?

Arnold Ordman:

No, but apparently everybody was working for the company, did not go on strike, received vacation pay.

Now —

Byron R. White:

Well yes but they — they drew a line at July 1st.

People who have been on strike but came back by July 1st, got the payment —

Arnold Ordman:

Provided —

Byron R. White:

— and not the people came back after that.

Arnold Ordman:

That is correct.

People who came back after that did not get payments, did not get paid.

Byron R. White:

Although some employees on the job who did not get vacation payments at the time the payment was made.

Arnold Ordman:

That is correct.

Now, the burden of respondent’s argument really is that the impact of what the company did in this case was not as serious as the impact of super seniority in the Erie Resistor case and I think we might, without prejudice even make this concession.

But then, it is again a question of balancing because equally true that on the converse side, the employer in Erie Resistor would make and did make a very cogent case which this Court assumed that he simply couldn’t stand business unless he gave that super seniority to offer that super seniority to replacements.

Now, as I say in this case, we think no serious business exigency to suggest except possibly the saving of money which would necessitate the action of the employer who took here in derogation of the right to strike which this Court has said carry some sort of special safeguard.

Byron R. White:

Yes, but if the employer honestly believe and then again assuming that he was not contractually bound to make any payments to anybody, and he — since I’m not contracted to dominate any payments to anybody, you still get the same — you still get the same inference if he decides, well, I will pay some vacation pay to somebody.

Arnold Ordman:

That is right.

If — if he — if he has made in fact the mistake of law let’s us assume this alright or whatever it — if in law his action necessarily discriminates against strikers versus nonstrikers —

Byron R. White:

Well then, he would make —

Arnold Ordman:

— he must be taken to have intended this discriminatory effect.

Byron R. White:

You would make the same argument, I gather then, if there had been no contractual provision at all for vacation pay.

None at all.

The strike occurred, the people came back and at that time, he instituted the vacation plan and his plan and decided well.

This people — if there are a lot of people then pretty worked last year without a vacation — any vacation pay, I’m going to make some payments for last year.

And he paid the same people and didn’t pay the same people.

Do you think he has got to go back and make vacation payments to people who are no longer on his payroll?

Arnold Ordman:

Yes, if he initiates a term and condition of employment.

And it is a term and condition of employment, he cannot apply it discriminatory as between strikers and nonstrikers.

Then he has penalizing people for exercising their lawful right to strike.

Thank you, Your Honor.

Earl Warren:

Mr. Bowden?

O. R. T. Bowden:

Mr. Chief Justice and may it please the Court.

I think it’s important in this case to take a few moments to lay out may be a little more detail the background of the case so that we can see this, these facts as they actually existed at that time.

Now, this company had dealt with this union from a period of more than 20 years.

The record is devoid of any problems, any unfair labor practices and the only thing we can assume is that company and the union throughout these years had adjusted their problems among themselves.

In this case itself, there’s no finding of any independent unfair labor practices to cloud the issue.

So we have in this case a sterile labor atmosphere other than this one incident and we have the laboratory conditions that the Board strives to get when they consider a case.

It’s been our view, since this case originated, that this is a primarily a suit for money.

It stood by the Board as the improper forum to do this.

We urged from the beginning that if they felt that this vacation money was due to these employees that the proper forum was to the Section 301 of the Labor Management Relations Act which is set out for this purpose to test rights under contract.

Byron R. White:

I gather — I gather in such a suit, you would deny liability for any vacation pay?

O. R. T. Bowden:

It’s — it’s — we probably would, Your Honor but if there’s a question and we recognize there’s a question and we pointed this out to the union in our letter to them that since there was a question that we thought it was a matter which should be resolved through negotiation as to what those rights might be to try the one, answer the 301 suit and two, to not cause this action to arise and it may be well remembered that the union would not even discuss this matter at the bargaining table even though there were bargaining sessions being held throughout this period of time.

Potter Stewart:

To go and sue them.

O. R. T. Bowden:

Yes sir.

Potter Stewart:

Excuse me.

Byron R. White:

Why did the employer then it wouldn’t make these payments to some — make payments to the others?

If they run this and the company honestly thought there was — there were unde — it was under no legal liability whatsoever to make payments to anybody of vacation pay and it wanted to save money or whatever the motivation was —

O. R. T. Bowden:

Yes, sir.

Byron R. White:

— why did it make any payments to anybody?

O. R. T. Bowden:

Well, I think we’re all from the premise that we pay it out in the contract.

It’s always been our position that we made no payment for vacation under this contract.

The only vacation policy under which anyone got any vacation pay was that promulgated in August and only concerned employees of the plan at that time.

Byron R. White:

Yes, but you didn’t make payments to all the employees.

O. R. T. Bowden:

No, because of this qualifying which this plan adopted.

They had to be employees as of July 1st and if they were not employees after July 1st, they did not receive any vacation pay.

Byron R. White:

Yes, but that was — you were making payments for prior years.

O. R. T. Bowden:

Well, sir, it was not here — here is the practical problem that you have in this such question.

You have a group of employees who went on a strike and a group who did not.

So, the union cancelled the contract under which there are certain vacation benefits that they had earned because of the service.

They met all the qualifications under the union contract and under the expired or cancelled contract.

So you drop to this time, we at this time was asking the union, let’s negotiate about this matter and say who is entitled to vacation, who is not.

And the only thing —

Potter Stewart:

When — I was going to ask you, Mr. Bowden.

O. R. T. Bowden:

Yes, sir.

Potter Stewart:

When the strike was finally settled, when in December of the year, I think.

O. R. T. Bowden:

Yes.

Potter Stewart:

And I suppose it was after the settlement there was a new collective bargaining agreement.

Am I right about that?

O. R. T. Bowden:

No, sir.

Because during this period of time, and even before July 1st, the union had lost his majority status numerically and even though we continued to negotiate, there was a petition filed in December by the company and to determine whether the union still represented the employees and the union filed a disclaimer of any prior to that time.

William J. Brennan, Jr.:

So there’s no —

O. R. T. Bowden:

There’s none.

William J. Brennan, Jr.:

There is no bargaining agreement anymore?

O. R. T. Bowden:

That’s correct.

William J. Brennan, Jr.:

I see.

O. R. T. Bowden:

Now, there’s other —

Earl Warren:

Well, I just wonder and if — if they cancel the contract and at the time they cancelled it that there are wages due to them, you’d have to pay them as wages, wouldn’t you?

O. R. T. Bowden:

I would say, yes, Your Honor.

Earl Warren:

Well, then there wouldn’t be any question about it.

O. R. T. Bowden:

That’s correct.

Earl Warren:

On — now, on the other hand, they had worked — worked according to their contract and had earned certain vacation rights at that time they terminated but why wouldn’t they — why wouldn’t they be entitled to that also?

O. R. T. Bowden:

Your Honor, the question was, had they qualified under the agreement, and this was the problem that we tried to get the union to the bargain table to discuss, this is the problem that we advised their attorney about by letter in July that there was a question in my mind where they had any rights under that agreement.

Earl Warren:

Isn’t that a question of law for the Labor Board to determine?

O. R. T. Bowden:

No, sir.

They — as my understanding, the Labor Board cannot — is not in the business and were not set up to construe labor contracts, that Section 301 of the Act itself is set up to determine these problems.

Earl Warren:

Suppose you haven’t paid them their wages, would they have any relief for the Board?

O. R. T. Bowden:

I don’t think they would as an independent isolated matter, I’d say no.

But they had — they could go in the state court, federal court and conceivably under Section 301 if there’s a violation of the contract.

You have to understand, Your Honor, that here we have a contract cancelled on May 16 by the union.

It’s our position that we had no agreement of any kind when they cancelled.

Now, the Board argued that they have some vested rights or interest but the cases go both ways.

This have much vested these rights have.

So we say and took position with the Board that these rights are not so fixed that we think there’s some question to whether we are required to pay.

So from the period of May 16 until August the 15th, there was no vacation policy.

Now, during this period of time and the record show that by July the 1st, which was only six weeks after the strike started, over 75% of the employees who went on strike had been replaced.

Now, these employees had no reinstatement rights or they had no employee rights after that time.

And this was six weeks before the vacation plan was instituted.

Earl Warren:

Let me just see if I understand you.

If these men went on strike at the time and they went on strike, you owe them wages that they have — for work they had performed and you said, “Well, we’re not going to pay you for those things but when it comes to bargaining, we’ll take it up at the bargaining table.

Now, would they have any relief before the Board?

Earl Warren:

Is that an unfair labor practice —

O. R. T. Bowden:

Your Honor —

Earl Warren:

— or isn’t it?

O. R. T. Bowden:

— it’s going to depend on what position of the party.

Well, let’s say that they — they said that —

Earl Warren:

Well, let’s take — just take the position that I gave you.

That’s a very simple thing and I don’t want to complicate it than this is necessary.

In that simple situation, would they have any relief before the Board?

O. R. T. Bowden:

I would say no.

Earl Warren:

They’d have to go — they’d have to sue under 301 and some other —

O. R. T. Bowden:

They have the relief be that if they had to violate contract, they would have relief to the greatest procedure and the other function there.

I think that independent to that, they can bring a suit for these wages but this is where there’s no question about them being due to wages.

And that is where our case is different to as a genuine dispute between the company and the union in this case that these people were entitled any vacation pay.

But I think again, we have to keep this in mind that by August the 1st —

Byron R. White:

You really mean it, the refusal to pay accrued wages —

O. R. T. Bowden:

Yes.

Byron R. White:

— because people were on strike, is not an unfair labor practice?

O. R. T. Bowden:

Well, I don’t know that that was the exact question.

Earl Warren:

That was the exact question.

Yes, it was.

O. R. T. Bowden:

Yes, sir and if you refuse to pay vacation wages to all or some.

Earl Warren:

I was talking about wages.

I wasn’t talking about vacation.

I was talking about wages at that time and exactly the way Justice White put it.

O. R. T. Bowden:

Yes, but are you referring to, a refusal to pay any wages or part wages and part — they did not pay?

Earl Warren:

Well, I’m not sure aware.

Byron R. White:

All or any part.

All or any part of these wages that are accrued and payable and they refused — then they refused because these men were on strike.

O. R. T. Bowden:

I’m speaking now that when you say all or part, you mean that some of the striker or some of the employees received while some did not receive.

I think that in that case, there would be the basis for an unfair labor practice.

Potter Stewart:

Clearly, clearly if you refuse to pay because they were on strike, there would be an open and shut unfairly labor practice.

O. R. T. Bowden:

That’s right.

Potter Stewart:

But if you refuse to anybody his wages, that would simply be a breach of contract.

O. R. T. Bowden:

That’s correct.

Potter Stewart:

That’s your point, wasn’t it?

O. R. T. Bowden:

I agree with you.

Now, before this, I think we have to take this a step further.

Now, before this vacation plan was instituted around the middle of August, 325 out of the 348 strikers had been replaced.

So you have a — you have only 23 unrep — have not been replaced at the time the vacation plan was instituted.

Now, how can the Board say that the institution of this vacation plan at this time called these people who had been replaced and had no re-employment rights to lose their interest in the union as they represented in this plan.

Now, keeping in mind too that this vacation plan unlike Erie did not attract anybody to leave the strike and join the company because it had a retroactive effective date, which mean that after they heard the plan and went to work, that they wouldn’t be affected by the plan at all.

So this is not like Erie at all, the facts or situation of this case.

This is not made for the purpose of inducing people to break the strike.

They come in because they had already been replaced or returned prior to any effective time of the strike.

Now, vacation plans are not like super seniority plans.

This is an unusual — the super seniority was unusual remedy that the company used.

Vacation plans were accepted and they were facet of employer-employee relationship whether you have a union or not.

So that all the company did in this instance was to put in the same vacation plan in August that they have offered the union and had been rejected by which the Board will concede we had a right to do with any, during the bargain, at any offer that we made the union in a way of a benefit, wage and hours that we have a right have a new bias and during the strike to institute those.

Now, let’s assume that we had made 20-cent an hour increase.We could have put that into the nonstrikers until the replacements and this to me is this is just discriminatory against the strikers as such as this vacation plan.

Yet this is accepted and the Board will not use this as a basis of a discriminatory charge.

We’ve put in the charge plan, that’s been offered, and the union rejected.

Byron R. White:

But at least you have had to give the increase to everybody who was back at work at that time?

O. R. T. Bowden:

Yes, sir.

If they qualify it again under whatever this plan was.

Abe Fortas:

Were the nonstrikers paid on the basis of computation that would have been the same as — that was the same as if it had been made under the contract?

O. R. T. Bowden:

Yes, sir.

Abe Fortas:

So that what happened here is that the nonstrikers were paid on the basis of the contract formula or its equivalent and the strikers were not?

O. R. T. Bowden:

Yes, sir, that’s correct.

Alright, sir.

Now, the — as been stated here, this matter was suggested to the union as a matter of the vacation pay on the expired contract or cancelled contract should be discussed and as the record shows, there is no record that the union ever discussed it or brought the matter up again.

O. R. T. Bowden:

Now, from the above, the Board found that we agree with the trial examiners that the denial of vacation pay to strikers who had not abandoned the strike by July 1st, 1963 unlawfully discriminate against them because of their errands to union strike.

Now, we’re talking about they’re making it as option in the face of a plan which did not come into effect for six weeks after this and at which time, more than 325 of the 348 strikers had been replaced and lawfully discharged.

So we say that this is — there is no basis for this finding in the record.

The court below in considering this case noted that the Board had found that this vacation plan which is what had been offered to the union and rejected by them and then put it back in August of 1963 to be an ipso facto per se violation of the Act.

And frankly, gentlemen, the Court just couldn’t buy that type of a situation.

The Court considered the respondent’s conduct, carries with it an inference of an unlawful intention, so compelling that it is just fine to disbelieve what the company testified about this and the Court said we’ve looked at this case from the American Ship Building point of view and we just can’t find it.

Now, the Court further said that when viewed in a strong evidence showing otherwise exemplary conduct on the part of the company, the argument fairing the inference of illegality becomes increasingly weaker.

And the Board still argued Erie Resistor.

As I pointed out, to me there’s no factual basis by which these cases can be even argued together, Erie Resistor.

The plan was put in for the purpose of breaking a strike and it succeeded from the — were found in the record in doing that.

As far as this case is concerned, the strike had been disposed off before the plan had been put in effect and it would not have affected anyone who came to work after the plan had been announced because there was retroactive.

Now, the desired position, and we still submit, that the findings of the Court of Appeals below is correct and that the findings to that court should be affirmed here on appeal.

Now, thank you very much.

Yes, sir.

Byron R. White:

I never did understand that why it was the company adopted this vacation plan?

O. R. T. Bowden:

Well, the reason that they —

Byron R. White:

And I assume that there was no — say no contractual obligation here.

O. R. T. Bowden:

Yes.

Byron R. White:

At least that was your position and so the company decides to be what?

O. R. T. Bowden:

Well, you have to remember and keep in mind that during this period of time, even though there was a strike in progress and there were replacements being made, there were negotiations.

Byron R. White:

Yes.

O. R. T. Bowden:

There were certain offers by the company and certain offers by the union on the Board being negotiated.

We had for example a complete contract being negotiated.

These — these concerned wages, hours and all other benefits that contract —

Byron R. White:

Even it was a good business policy to put in a vacation pay plan.

O. R. T. Bowden:

Yes, this was a proposal and — so this was put into effect because there were employees who were inquiring about it as a matter of some concern about who was going to get vacation pay and what the policy on vacation would be.

And as I said, the company, as I understand the law, has a right to put in any plan which has been previously offered by the union and rejected by them during negotiations when an impact has been reached.

And they call a strike as being prima facie evidence of an impact.

So we have a situation here where this offer had been made, had been rejected.

There was a problem about vacation.

O. R. T. Bowden:

They put in their plan as been offered to union and all of the employees who are always — were under the plan adopted by the company received payments.

Byron R. White:

What was the purpose of adopting the July 1 cut-off for employees when the vacation pay was in the new plan and there actually lose payments for the year before?

Well, —

It’s for the year before and a lot of people might have — had worked the same period of time before which the vacation pay was made who didn’t get the vacation pay.

O. R. T. Bowden:

That’s correct.

But —

Byron R. White:

So what was the purpose of adopting the July 1 —

O. R. T. Bowden:

The July 1 date and this goes back in history, as we’ve pointed out, there have been negotiations and contract relationship between this union and this company for more than 20 years.

When I first saw this contract myself in reference to vacation, I inquired.

No one could tell me what the historical significance of the July 1 date was.

So because everyone understood it, it remained in the contract —

Byron R. White:

Well, has anybody figured out what it is yet?

O. R. T. Bowden:

No, they have not but I think the only — the only — the only reason I see it for being there that someone in the negotiation period that in as much as that contract was expiring on May 16 that the fact that they had a subsequent — they were receiving the money, might be some bargaining too later used to keep it from being kept.

Byron R. White:

For what period at time where the vacation payments made to those to whom they were made for the year prior to what date?

O. R. T. Bowden:

For the year prior to July 1.

Byron R. White:

Or it wasn’t for the year prior to May 16?

O. R. T. Bowden:

No, for the year prior to July 1.

That used essentially the same vacation qualifications that it was understood by the employees or while as I said, it didn’t make too much sense to me.

At least, they wouldn’t seem to understand it but me and so I, couldn’t go along with what they’re feeling about it.

If there’s no other question, I’ll sit down.

Thank you.

Just last question.

Do you — what are the differences you see between here in effect this Court used in Erie and in effect you used here?

O. R. T. Bowden:

The in here in effect here, Your Honor, in Erie Resistor, I think it’s apparent what the company was trying to do.

It was trying to induce employees to go to work or induce replacement.

In this case, all of these that had already been accomplished before this plan was even announced.

There was only 23 employees out of the 348 who had not been replaced.

And when the plan was announced, it was so phrased so that if the other 23 who want to come back, they would not have enjoyed the benefits under it.

So the whole purpose of the two plans, I think is different.

Potter Stewart:

Here, there was a — this plan could not, your point is, have possibly been an inducement to make striking employees return to work —

O. R. T. Bowden:

Right.

Potter Stewart:

Because any who return to work after the announcement of this plan would not have received any benefits under it?

O. R. T. Bowden:

That’s correct.

Potter Stewart:

And that makes it different from Erie.

O. R. T. Bowden:

Yes, sir.

Potter Stewart:

That’s your point?

Byron R. White:

But the — you were then negotiating with the union and there was a question on whether they even represented the majority.

Earl Warren:

Mr. Ordman?

Arnold Ordman:

Only two very brief comments.

I don’t know whether inadvertently an impression might have been created that there was bargaining about this unilateral vacation plan.

The record is flat and the testimony by the — in page 63 of the record by Harvey Granger, who was a plant manager, “Do you recall, Mr. Granger if vacation pay was ever discussed in the bargaining sessions with the union after the union that cancelled the contract?”

Answer, “It was not.”

The only other thing I might just touch briefly on the most recent question about —

Earl Warren:

Would you speak a little louder please, Mr. Ordman?

Arnold Ordman:

Yes, sir.

I want to touch just briefly on the last question about the effects.

I think I pointed out that we might get out prejudiced, concede that the impact in super seniority was not in the super seniority case probably greater than it is in this case but there certainly is in effect on the strikers or employees who are aware and will be aware in the future that if they — unless they proffered their right to strike, they may be endangered in the future if they strike.

They might be endangered of losing benefits that would otherwise accrue to them if they didn’t strike —

Potter Stewart:

That has to be your argument, the future effects, future strikes.

That has to be your argument Mr. —

Arnold Ordman:

Yes, sir.

Potter Stewart:

And that does make it different from Erie Resistor not only in the —

Arnold Ordman:

That’s correct.

Potter Stewart:

Not only in the quantum of the — of the — of the favor to them shown by between super seniority and vacation pay.

But much more important is that we would have no immediate effect upon inducing these strikers to return.

Arnold Ordman:

As we see this case in the balancing consideration that this Court talked about in the Erie Resistor, the weights on both sides —

Potter Stewart:

Yes.

Arnold Ordman:

— are correspondingly less but it must be viewed in that context.

Earl Warren:

Very well.