National Labor Relations Board v. Servette

PETITIONER:National Labor Relations Board
RESPONDENT:Servette
LOCATION:Apartment

DOCKET NO.: 111
DECIDED BY: Warren Court (1962-1965)
LOWER COURT: United States Court of Appeals for the Ninth Circuit

CITATION: 377 US 46 (1964)
ARGUED: Feb 19, 1964
DECIDED: Apr 20, 1964

Facts of the case

Question

  • Oral Argument – February 19, 1964 (Part 2)
  • Audio Transcription for Oral Argument – February 19, 1964 (Part 2) in National Labor Relations Board v. Servette

    Audio Transcription for Oral Argument – February 19, 1964 (Part 1) in National Labor Relations Board v. Servette

    Earl Warren:

    Number 111, National Labor Relations Board, Petitioner, versus Servette Incorporated.

    Mr. Solicitor General.

    Archibald Cox:

    Mr. Chief Justice, this is another secondary boycott case, very similar to the case just argued.

    Here the primary employer, the company with which the union had its dispute.

    With Servette, a wholesale, packer, distributor of candy, holiday supplies, salad oil, and similar specialty products sold in grocery stores.

    The secondary employers were chains of retail grocery stores that bought and resold Servette products.

    The union here, in order to put pressure upon Servette, the wholesaler and primary employer, engaged in two kinds of activities with respect to the independent chain stores.

    At first the union went to the managers of the individual stores but because these were chains, so the manager didn’t run a dog store, he ran a store for company like Safeway or the AMP or something like that and asked the manager to cooperate with the union by stopping and selling on the Servette’s products.

    It was very like the last case wherein they asked the Safeway to — in effect the Safeway to stop selling tree fruit apples, and they have had a lot of salad oil on their hands here, if they didn’t have it, they’d have a lot of rotten apples on their hands in that case, I take it if they didn’t have it.

    Potter Stewart:

    In the previous —

    Archibald Cox:

    Some —

    Potter Stewart:

    — case — I know that’s finished but that they didn’t ask the storeowner to stop buying apples, do they?

    Archibald Cox:

    No, they never said “stop buying”, they asked him to stop selling them.

    I suppose the consequence would be that he had a lot of apples on him — rotten apples on his hands and he would therefore, I think he’d stop buying.

    Potter Stewart:

    I didn’t realize he has to stop but they had to stop —

    Archibald Cox:

    Not in so many words.

    Potter Stewart:

    — selling.

    But that case —

    Archibald Cox:

    I’m sorry.

    I didn’t mean to — I was trying to prepare the analogy, I will stick to this case so I didn’t want to reargue.

    Here, I think they asked him to stop buying from the Servette.

    In any event they certainly in effect asked them to stop buying because they said, “Don’t sell Servette goods.”

    And the consequence would be that you inevitably that you didn’t buy Servette products unless you wanted to fill your warehouse with it.

    Some of the managers exceeded to the union’s request, others refused.

    There was no threat, coercion or restraint except by the handbill that I will describe in a moment.

    And the first question presented here is whether this request to the managers not to continue to deal in Servette products where an unfair labor practice under Section 8 (b) (4) (i), that’s not the one we’ve been discussing in this case, but the one I had discussed in laying the background as to the old Taft-Hartley Act.

    Where the manager didn’t cooperate, where he continued to sell Servette products, then the union threatened to and then didn’t did pass out handbills asking the public not to buy various Servette products.

    Some of them listed the products by trade name and others spoke of Servette as I remember it specifically.

    There was no picketing of any kind.

    There was no strike, no stoppage of deliveries.

    Archibald Cox:

    And the second question presented is whether the threats to handbill and the handbilling violated Section 8 (b) (4) (b) (ii), the section we were talking about in the last case.

    I’ll discuss the two questions in the order that I stated them.

    The Board’s order can — finding that there were no unfair labor practices, can stand only if there was no unfair labor practice under either section, so we have to make out two points to succeed here.

    Once again coming to the first of those questions that the request to the store manager, I think it’s most helpful to go back and note the evolution of the sections of the statute.

    May I ask the Court to turn therefore to the same comparative print once more that is labeled at numbers 88 and 111, and look at page 2 where with the typography, we’ve shown what happened to the statute.

    As it originally stood taking the Roman type, the statute made an unfair labor practice for a labor organization or its agents, to engage in or induce or encourage the employees of any employer to engage in a strike or a concerted refusal in the course of their employment to do certain things.

    To use manufacture, process, transport or otherwise handle or work on any goods and so forth, or to perform any services, and then it goes on for one of the prohibited objectives.

    Here the objective of inducing the secondary employer not to sell the primary employer’s goods or not deal with the primary employer.

    The time the statute as it stood after 1947, you’ll note that there were four requirements which one had to prove to make out the unfair labor practice, but first there had to be inducement or encouragement.

    There had to be second inducement or encouragement of employees of any employer.

    And then they had to be induced to engage in a certain kind of conduct to strike or to, for a shorthand I’d say, withhold employment services to work on goods and so and so forth that withhold services, and then forth when that proved that the union has an objective forbidden by the statute.

    Then the change was made in 1959, the only change that Congress made was in this respect, was to strike out the phrase the employees of any employer and put in any individual employed by any person engaged in commerce or any industry affecting commerce.

    That change was made to cover what almost everyone agreed with loopholes in the original version.

    The terms employees and employer had technical definitions in the National Labor Relations Act that they excluded a number of kinds of persons, excluded all railway employees so that you could induce railway employees not to carry that goods of any primary employee.

    They excluded public employees, the school district employees, and the like.

    They also, and the important here, excluded supervisors, alright.

    It meant, for example, that you could induce the foreman on a loading dock of a trucking company to refuse to do their work, or the working foreman out of construction job to refuse to do their work because they were supervisors and not included within the statute.

    Now, the purpose of the change, this is shown by the legislative history in our brief, was to cause those loopholes.

    It read any individual employed by any person, the use of the word “employ” may have been a little unfortunate but employ wasn’t defined in considering that the change was made, the Congress apparently thought there wasn’t too much danger that the border the Court would miss the point.

    But the only change I submit was made in this second of the four requirements to whom the inducement or encouragement was to be addressed.

    And there was not any change in the third of the four requirements I mentioned as to the kinds of things that they were to be induced to do.

    Potter Stewart:

    Wasn’t there a great change before 1959 it had to be a concerted activity by two or more people?

    Archibald Cox:

    Yes.

    Potter Stewart:

    Concerted —

    Archibald Cox:

    That — that is quite true.

    Potter Stewart:

    A change isn’t relevant here.

    Archibald Cox:

    It’s not relevant here but I was —

    Potter Stewart:

    That was a substantial change.

    Archibald Cox:

    Your Honor is entirely correct but that perhaps you should say another word, alright.

    In connection with that and this comes up in the next case, after this case.

    Archibald Cox:

    In connection with that there is a proviso on page 3 that has to do — provided that nothing in this clause would be construed to make unlawful, were not otherwise unlawful in a primary strike to primary picket.

    This has to do with the truck drivers coming to the primary location and the fear that striking out concerted might mean that you couldn’t induce one truck driver not to go into the primary location.

    But this is not relevant here basically, I’m sorry if I mislead — if I slipped over it, because it doesn’t matter here.

    The point that I’m trying to emphasize is that while there was a change as to who and the broadening, as to whom it was an illegal to induce.

    There was no change with respect to what you couldn’t induce them to do, and therefore what you were left free to induce them to do.

    That made because this goes to the heart of this case to put to simple, or perhaps childishly simple examples.

    Suppose that they — the Garment Workers Union were in dispute with a contractor that live chiefly on borrowed capital, went to the bank, the finance keeper, and said, “We want you to cut off his line of credit as long as he employs people at substandard wages under filthy working conditions” and so forth.

    And if the bank refused to cut off his credit, the union then induced the 17 vice-presidents to go on strike.

    Under the earlier statute, the vice-presidents would have been the supervisory capacity, the statute clearly would not apply to them.

    The Board in its opinion in this case and some of its other opinions, they suggested that maybe the statute wouldn’t apply to them at all.

    But I concede with the Board’s full approval for the purposely argument of this case that the change in putting individual employed by, would cover the vice-presidents and that inducing the 17 of them to go on strike would be a violation of the 8 (b) (4) (i).

    But suppose now the union, in a dispute again with my garment employer, went to the vice-president who handled the line of credits for the clothing industry and said, “If the garment union had done to as I suggested yesterday to retailers buying the products of some of these sweatshops, that we think you should finance this kind of enterprise.

    And we wish to persuade you not to do it.”

    The vice-president thought it over and said, “Well, I agree with you.

    It’s bad for the community.

    It’s bad for the bank to be financing such an enterprise.

    I will exercise the discretion vested in me by this corporation and not to extend any more credit.”

    That we say and we think it’s quite clear, would not be an inducement to engage even though you leave out concerted, Mr. Justice Stewart, would not be an inducement to engage in a strike or a refusal to use, manufacture, process, transport, or otherwise handle their work and any goods, or to perform any services.

    He’d be performing these services.

    He’d be doing what the employer had set him up there to do and even if he simply made a recommendation to the Committee on Loans instead of deciding it for himself, he would still be performing his job.

    And we think that it would fail, the case against the bank would fail not because of the second requirement but because of the third, that it’d be an inducement to do this kind of thing.

    Now, I say that by a second bank case is this very case that the inducement to the managers here was not to withhold their employment services, it was to do their job to decide from whom these grocery stores would buy and whose products they would sell.

    And that if they didn’t have the sole discretion to make that decision of sales then it was a request to them to go to their boss and give him a recommendation and they’re urging what was better for the business.

    Potter Stewart:

    But don’t you — isn’t it certainly clearly arguable just talking about the plain meaning of language, if there is such a thing, that this case is within a literal language of Section 8 (b) (4) (i)?

    Wasn’t there here an inducement of an individual before and by a person engaged in commerce to refuse, in the course of his employment as the manager of the store to deal in or handle the product of the — distributed by the primary employer.

    Archibald Cox:

    I think it — I think that it permits that reading literally but I think that the whole sense of it having in mind of the string of words that’s beginning with strike or a concerted refusal and that concerted being talking out solely because of the problem of inducing one various skill the employee not to do his job and the concluding expression, or to perform any services, and this being in the course of his employment, all suggest that it means the refusal to do your job, the job for which the employer hired you rather than to exercise a managerial discretion.

    Now, if there’s any doubt, that I would submit or induce (Inaudible), that this issue would have to be resolved the way we urge Mr. Justice by the history of Section 8 (b) (4) (ii) that I discussed yesterday.

    You will remember that when 8 (b) (4) (ii) was first proposed as it was by the Eisenhower administration then came up on the floor of the Senate, one of the questions that was raised is will this prohibit a union from going to a secondary employment and seeking to persuade him for his own good, but I don’t mean that with any kind of threatened implication of reprisal, for his good and the good of the community and as a decent human being, that he shouldn’t continue to do business with the employer, with whom the union has its dispute.

    And everybody agreed that there was no intentions in 8 (b) (4) (ii) to block that kind of approach to the secondary employer.

    And there were notable instances, I think I mentioned one yesterday, in labor history where that has been done.

    Archibald Cox:

    I would think that this isn’t the fact.

    Potter Stewart:

    The reason given that that kind of conduct would not be prohibited was that the — in that kind of conduct would not be to threaten, coerce, or restraint, isn’t that right?

    That workers —

    Archibald Cox:

    Yes.

    Potter Stewart:

    — would merely be to persuade or induce or encourage

    Archibald Cox:

    Yes.

    Potter Stewart:

    But your difficulty there is that in 8 (b) (4) (i), you have induced or encouraged, you have different language.

    Archibald Cox:

    But it would have been — the premise of that whole discussion must have been that 8 (b) (4) (i) didn’t reach this.

    It would have been — and of course remember, there had been experience under 8 (b) (4) (i).

    The words to which you called attention were in its earlier version and I don’t pitch my case on the word “induce or encourage”, but on what they were induced or encouraged to do.

    It’s with conduct not the word, “induce or encourage”, they have been given the very broadest interpretation that I’m not quarrelling with that.

    Now, it would mean that this whole discussion over the right to try to persuade an employer to cut off a customer or not to deal with the particular source of supply was meaningless if this was covered by 8 (b) (4) (i), not quite meaningless, I overstated just a little bit.

    It would mean that you could apply it to an individual, then an individual entrepreneur, provided he was small enough, so the request was made to the fellows who run the business.

    But it seems to me very hard to see how you could apply it to anyone else and surely everybody assumed knowing the way modern business is conducted that the approach would be made to a sales manager or to a manager who apply it to.

    To whoever may be the fellow had authority to make these decisions and that if you got the person who didn’t have authority to make the decision, that he at least could put it up to someone else, to tell his boss what had happened and urge them to do it.

    Now, of course, I still have a problem under 8 (b) (4) (ii).

    I’m not suggesting that there was no necessarily — that there isn’t a problem under that section.

    But I think under this section, the simple fact is that it wasn’t an inducement or encouragement to withhold employment services, that it wasn’t a — and request as to how those services should be performed.

    Now, as I understand the respondent’s brief, they don’t quarrel very much with this interpretation of the statute.

    Indeed, I wouldn’t think one could or wouldn’t have thought that could, alright.

    What they say is that well the managers didn’t have any authority to decide that the stores wouldn’t handle this product.

    The two very short answers to that contention, one is that the finding to the Board are squarely against the respondents on that very point of the trial examiner at page 27 and over on 28 of this record found the managers of McDaniel’s Markets, that’s one of the chains, were authorized to decide as they best could whether they’d continue doing business with Servette in the face of threatened or actual hand on.

    This policy decision was one for them to make.

    The evidence is persuasive, the same authority was best in the managers of Kory.

    None of these managers I find that was in any respect refusing to perform services for his respective employer.

    The agency was empowered to do and decided what course of action would best solve the dilemma with which he was faced.

    I see no way of getting around that finding.

    And second, even if the finding were there — weren’t there, I think I would argue that the request here even if it was made to the wrong person, was still a request to make a business decision and not a request not to do your job as an employee.

    I think one way of testing that is to suppose how the conversation might have gone as so far as we know it didn’t, but might have gone, and probably would have gone but if the store manager, one of the Kory’s Markets had said, “Well I’m sorry.

    I don’t have any authority to stop handling the Servette products.

    Archibald Cox:

    The boss has told me to sell all the Servette products, I can.

    I’ve got to do what he said.”

    It seems to me that on this record, it’s inconceivable if the reply would have been, “Well we want you to stop anyway, disobey your boss, don’t do your job.”

    That isn’t what the union was getting at.

    The reply would have been, “Alright then, we’re going to handbill the store.”

    And the pressure would have fallen on the employer not on the store manager.

    Or the reply might have been, “Well you better tell your boss because if you keep on selling them, we’re going to handbill the store.”

    But I can’t see any evidence that there was an inducement to do something that would be in a sense a breach of loyal — the duty of loyalty to the boss or being disobedient of the boss’ instruction, or be a refusal to perform the service issue owed him, and that surely is the kind of thing that 8 (b) (4) (i) has always been supposed to deal with.

    Alright, so we think that the heart of this case is really under 8 (b) (4) (ii) that the question is whether the handbilling or the threats to handbill come under the kind of thing that Congress intended to prohibit by 8 (b) (4) (ii) that that’s where it fits in, in terms of the discussion of the legislative history with the previous history of 8 (b) (4) (i) and this is the one which the language most naturally covers.

    The Board, in its treatment of the case, assumed they did not decide and to the best of my knowledge it has never ruled on the question, but it assumed that the handbilling or the threat to handbill would constitute a threat, coercion, or a restraint within the meaning of the first part of Section 8 (b) (4) (ii).

    In other words, the Board did assume in its decision of the case that absent of proviso, there would be an unfair labor practice.

    Subsequently, when the case — when its order have been set aside in the Ninth Circuit, the Board has to have the case remanded so that it might consider whether the handbilling was a violation of the 8 (b) (4) (ii).

    That motion was denied by the Court of Appeals through the Ninth Circuit and it said that the question wasn’t raised in the proceedings before the Board and that it was therefore too late to raise it after the decision in the Ninth Circuit.

    And we didn’t bring that question here, so it seems to me that — and I have planned to treat it as if for the purpose of this particular case of the handbilling constituted coercion or restraint and that saying “we’ll handbill” was to threat.

    After all it is a threat that you have a lot of spoiled products on your hands and if you said, “We’ll destroy all your Servette product, we’ll blow them up,” I suppose that would certainly be a threat and if they rot, it would stand to be a threat too.

    So the case really turns this aspect to the case on this proviso on page 4 of the comparative print.

    Provided that for the purposes of this paragraph 4, nothing contained in such paragraph should be construed to prohibit publicity other than picketing.

    For the purpose of truthfully advising the public — I see that the red light is on.

    I’ll finish the sentence —