Office Employees International Union, Local No. 11, AFL-CIO v. National Labor Relations Board

PETITIONER:Office Employees International Union, Local No. 11, AFL-CIO
RESPONDENT:National Labor Relations Board
LOCATION:Congress

DOCKET NO.: 422
DECIDED BY: Warren Court (1957-1958)
LOWER COURT: United States Court of Appeals for the District of Columbia Circuit

CITATION: 353 US 313 (1957)
ARGUED: Mar 28, 1957
DECIDED: May 06, 1957

Facts of the case

Question

  • Oral Argument – March 28, 1957 (Part 2)
  • Audio Transcription for Oral Argument – March 28, 1957 (Part 2) in Office Employees International Union, Local No. 11, AFL-CIO v. National Labor Relations Board

    Audio Transcription for Oral Argument – March 28, 1957 (Part 1) in Office Employees International Union, Local No. 11, AFL-CIO v. National Labor Relations Board

    Earl Warren:

    Number 422, Office Employes International Union, Local Number 11, AFL-CIO, Petitioner, versus National Labor Relations Board.

    Mr. Finley.

    Joseph E. Finley:

    May it please the Court.

    This case presents the important public issue of whether or not labor unions, when dealing with their own employees, must obey the law in the same fashion as do commercial employers.

    The case arose in 1954 in Portland, Oregon, where the Teamsters Unions there were allegedly involved in unfair labor practices against their own employees, that is their office and clerical employees.

    Petitioner, which is a local union of the Office Employes International Union, filed these charges.

    The matter came on for hearing before a trial examiner of the Board.

    And on the merits of the case, the trial examiner found the six Teamster respondents and I refer to them here as Teamster respondents.

    Before the Board there was International Brotherhood of Teamsters, two of its locals, the Joint Council and two other subsidiary organizations and we lumped them together as labor organizations as Teamster respondents for the purposes of arguing this case.

    The examiner found on the merits that the Teamsters Unions toward their own employees violated Sections 8 (a) 1, 2, 3, 4 and 5 encompassing all the unfair — employer unfair labor practice provisions of the Act.

    On the question of Board jurisdiction, which is the only question, the only legal question before this Court, the examiner found that the Teamster organizations were integral parts of a multistate enterprise.

    He found that in 1953, the year prior to the hearing, some approximately $6 million induce an initiation fees across state lines.

    The examiner further found that since the Board normally asserts its jurisdiction over multistate enterprises, it would assert jurisdiction here.

    The case came on before the NLRB and the Board split three ways, the controlling decision of — then Chairman Farmer and member Peterson, which is the decision we are challenging here, held in substance that the Teamsters as unions were not engaged in a proper enterprise.

    They were not engaged in commercial business and that the Board normally, so that decision said, did not assert its jurisdiction over so-called nonprofit non-commercial organizations, and since the Teamsters were not nonprofit non-commercial, we will not assert our jurisdiction over them because it will not effectuate the policies of the Act.

    Member Murdock in a separate concurring opinion read the congressional intent is not to include union as employers engaging — when they are engaged their trade union capacities, and he voted to dismiss the complaints also.

    Two dissenting Board members took the position that the Board should assert its jurisdiction, and they relied largely, I think, upon the equity principle that if commercial employers must obey the law towards their own employees, so should organizations.

    In the Court of Appeals of the District of Columbia Circuit, that Court in a 2-to-1 decision affirmed the Board.

    The Court of Appeals said that the Board had a wide discretion in the exercise of its jurisdiction and that it had made a rational finding in lumping these labor unions in a category with other nonprofit non-commercial organizations.

    And therefore, this was a rational finding and they would not disturb it.

    Now, Judge Bazelon dissented, a very short dissent saying that the reference in Section 2 (2) of the Act, which I will refer to in a moment, to labor unions distinguish them from the normal nonprofit non-commercial organization or which the Board had refused to take jurisdiction.

    Now, Section 2 (2) of the Act which — from which this controversy flows was enacted — remains the same today as it was when it was enacted in the law in 1935.

    Now, Section 2 (2) defines employers and excludes therefrom labor organizations (other than when acting as an employer) and that’s the statutory language here that we come — we bring this case on.

    Now, petitioners first element of argument is that the Board in declining, and I say declining to assert its jurisdiction, ignored the intent of Congress in enacting this specific provision of Section 2 (2) and that is arbitrary and capricious to ignore the congressional intent.

    And our second contention is that in any event it was arbitrary to place unions in a category with a university or a symphony orchestra or a live (Inaudible) or something of that nature.

    Now, let us look for a moment at the legislative history of this provision.

    The first comprehensive Labor Act was introduced by Senator Wagner in 1934 in the 73rd Congress.

    Senator Wagner in his employer definition section excluded labor organizations.

    The bill was referred to committee, hearings were held and the Senate Labor Committee and I might say which Mr. Justice Black was a member at that time, reported the bill out and changed the language of Section 2 (2) to read exactly as it does today.

    And the Committee put in the parenthetical expression other than when acting as an employer.

    Joseph E. Finley:

    And accompanying that bill out of committee was Senate Report Number 1184 in the 73rd Congress, which is set forth — the pertinent provisions are set forth on page 13 of the petitioner’s brief, it’s in the Board brief and the essential notation is that the congressional committee referred to the same kind of people who are involved in this case, clerks, secretaries and the like, office employees.

    The Committee said every labor organizations — in one sense every labor organization is an employer, it hires clerks, secretaries and the like.

    In its relations with its own employees, a labor organization ought to be treated as an employer, and the bill so provides.

    The labor bill field of enactment in the 73rd Congress and when the 74th Congress convened in 1935, Senator Wagner again introduced his labor bill.

    And once again, Senator Wagner went back to his original language, he just exclude labor organizations and did not have the parenthetical expression.

    The bill went to committee, the Senate Labor Committee, with again Mr. Justice Black was a member of that committee, reported the bill out and changed the language once again back to the same language as it had done in 1934.

    And that bill S1958 became the National Labor Relations Act, the Wagner Act.

    And the statutory language has remained the same to this day.

    Is there any dispute as to the Board’s power here?

    Joseph E. Finley:

    No, sir, I don’t think it’s a question of power at all.

    I think —

    It made jurisdiction in the sense of power?

    Joseph E. Finley:

    That’s right.

    Just a question of whether they abuse their discretion?

    Joseph E. Finley:

    I think it can be phrased in those terms.

    And I think the congressional intent and the reason I have gone into legislative history shows an intention of Congress that the Board should not read out of the Act, labor organizations.

    William O. Douglas:

    I thought that the issue was or one issue at least was phrased in terms of — that the — Mr. Murdock phrased it in the Labor Board whether a labor organization was an employer only when it was engaging in commercial activities.

    Joseph E. Finley:

    That was a particular position of Mr. Murdock —

    William O. Douglas:

    That’s part of the problem for us, isn’t it?

    Joseph E. Finley:

    That’s involved in the problem —

    William O. Douglas:

    Yes.

    Joseph E. Finley:

    — and I’m going to discuss that in a moment, Your Honor, because I think it — it reflects upon what the Board has done here in this case.

    William J. Brennan, Jr.:

    Well, are you suggesting from what you now giving is in a way of legislative history that there is in effect the mandate upon the Board in the cases where apart from the question Justice Douglas just referred to where the union is an employer, that the Congress contemplated that other provisions of the Act being met, that the Board would exercise jurisdiction.

    Is that the point you’re making then?

    Joseph E. Finley:

    Well, I don’t think it’s quite that way, Your Honor.

    I think the point I’m making here is this.

    The Board may not decline to assert it’s jurisdiction over labor organizations all together as employers in view of the statutory language and in view of the specific legislative history would show the intent of Congress.

    It’s when the Board collides with the intent of Congress as expressed in the history that it takes an arbitrary point of view.

    Now —

    William J. Brennan, Jr.:

    Well that may not decline because that’s stated the other way or conversely or rather affirmatively mean much assert.

    Joseph E. Finley:

    No, sir, it does not and that is one of the crucial points in this case.

    Section 10 (a), as we all know, provides that the Board is empowered to prevent unfair labor practices not directed as the courts below have held many times.

    And the Board reads that in a broad discretion and how it will deal with unfair labor practices.

    Now, this to me in this particular case means that the Board yet may exercise a discretion as to whether or not it will remedy a particular unfair labor practice or not, as to whether or not effectuation — a remedy will effectuate the policies of the Act in the particular facts and the particular circumstances.

    But I don’t believe that Section 10 (a)’s language allows the Board to take a whole class of employers and just remove them from the coverage of the Act under a claim discretion.

    William J. Brennan, Jr.:

    Well, then aren’t — aren’t you really saying that assuming a charge, which ordinarily ought to result in the complaint because it establishes an unfair labor practice, made against a union as an employer.

    Aren’t you arguing that the Congress, indicated by this legislative history, contemplated that the Board must in such circumstances proceed with the complaint?

    Joseph E. Finley:

    I — I think again —

    William J. Brennan, Jr.:

    If you’re not, I’m trying to find out —

    Joseph E. Finley:

    Yes.

    William J. Brennan, Jr.:

    — where you stop short.

    Joseph E. Finley:

    That’s — that’s what I’m trying — trying to make here.

    I think the Board could decline its jurisdiction in particular facts and particular circumstances that it has done on many occasions.

    William J. Brennan, Jr.:

    Well, that — that’s where they feel that a given charge, even if it has merit or whatnot result in a complaint, isn’t that what you’re talking about?

    Joseph E. Finley:

    There are cases of that kind.

    William J. Brennan, Jr.:

    Well, it’s part from that.

    Assume you have a case of a charge, which ordinarily if it were not that the union was the employer wouldn’t result in a complaint.

    Joseph E. Finley:

    Yes.

    William J. Brennan, Jr.:

    Is it your argument now that the Congress intended that it must result in a complaint where the employer was a labor union?

    Joseph E. Finley:

    That given premise assumes a great deal about the merits of the unfair labor practice charge which I don’t think is involved here.

    William J. Brennan, Jr.:

    I appreciate what it does.

    I’m just trying to get at — what your position is.

    Joseph E. Finley:

    Well, I think qualifying it by inquiring into the merits of the particular charge.

    What I’m saying is in this particular kind of case here that we have before us, where we have a labor organization which certainly don’t affect the largest labor organization in the country, the Board may not decline its jurisdiction on the ground that it has given us here, that it will just not deal with this question at all regardless of the merits of the unfair labor practices involved.

    And I think there is a difference between a total declining of jurisdiction and a mandate to assert.

    I don’t claim a mandate to assert, but I do claim it is wrongful in law to decline all together which is what the Board has done based on this particular case.

    Now, if this case reached the merits, the Board — the Board might decide it on the merits of this case that it would not effectuate the policies of the Act on the particular merits.

    I don’t think they reached that conclusion because there are some pretty flagrant violations here but they could.

    Felix Frankfurter:

    You said they’ve cut out a category of cases, is that it?

    Joseph E. Finley:

    A category of employer.

    Joseph E. Finley:

    All labor unions who employed persons.

    They removed them from the Act and in effect what the Board has done is take the original language of Senator Wagner, just as he introduced the labor bill.

    Now, in that connection, the Court of Appeals said that all —

    Could I put your question and see if I understand it because I have the same trouble as Justice Brennan does.

    I’d understood your position to be that although there was power here, jurisdiction in the sense of power, that the Board by applying its internal regulation is applicable to charitable organizations.

    This labor union had in effect wiped out — wiped out any jurisdiction over labor union —

    Joseph E. Finley:

    That is correct.

    — despite the provisions of the Act.

    Joseph E. Finley:

    That is correct.

    And then the second string to your argument was that even if that — that there were no other regulations, no other administrative regulations applicable to labor unions, it would justify a refusal to accept jurisdiction, is that — is that it?

    Joseph E. Finley:

    Well, the second string to my argument is that it — it’s arbitrary to take unions and place them in a jurisdictional category that the Board had setup —

    Yes.

    Joseph E. Finley:

    — for a so-called nonprofit non-commercial.

    I think that’s a misleading term.

    The Board has declined jurisdiction over operations of educational, religious and scientific charitable organizations in connection with the congressional history in 1947, which is present regarding those employers.

    But when Congress gave us that 1947 history, they certainly did nothing about the provisions of Section 2 (2) with relation to labor unions as employers covered under Section 2 (2).

    Well, pursuing Justice Brennan’s question, could exposing the Board establish a bunch of regulations now saying under these circumstances we would apply to exercise — by exercising jurisdiction over labor unions employer, could it do that?

    Joseph E. Finley:

    I think because of the legislative history we have in this case, on this particular situation, anytime the Board rules labor unions out of the Act all together as employers, that is contrary to what Congress desired when it wrote this Section 2 (2) of the law.

    That isn’t what I asked you.

    I asked you could they pass regulations saying that — I’m not reading them all out but about such-and-such a kind of a dispute or the amount it involved in such-and-such, we declined to take jurisdiction, could they do that?

    Joseph E. Finley:

    Well, I think you’re referring to the Board’s dollar volume yardstick —

    (Voice Overlap) —

    Joseph E. Finley:

    — questions with jurisdiction.

    I don’t think that question is in this case.

    I say —

    But could they do it?

    Joseph E. Finley:

    With regard to labor unions?

    Yes, they could.

    They could.

    Joseph E. Finley:

    They could say, “We will take jurisdiction over the big labor unions, but the little small labor unions that don’t affect commerce, we will use our jurisdictional yardsticks and not take jurisdiction.

    Joseph E. Finley:

    There’s a discretionary power under Section 10 (a).”

    Certainly, I –I agree to that point.

    With — with regard to the point that I think Mr. Justice Douglas asked a moment ago about the position of member Murdock, about the commercial activities of labor organizations, the Board has argued here that it is not declining jurisdiction over unions as a class but merely when they engage in trade union activities, implying that when they embark upon a commercial venture, we’ll assert our jurisdiction.

    Now, petitioner has taken a very strong stand on this point, I think reasonably solvent.

    And my position is a simple affirmative assertion that labor unions do not have employees on their payroll in commercial businesses.

    It is a fact of life which the Board has totally ignored in this case.

    And I have challenged the Board in its brief to show us examples of unions with employees on their payroll in commercial business.

    William J. Brennan, Jr.:

    Well now, I — I have an impression of an office building in my hometown that’s rented out to — to lawyers and accountants and everyone else and it’s owned by a labor union.

    Joseph E. Finley:

    I happen to have my office in one, Your Honor.

    William J. Brennan, Jr.:

    Well now, isn’t that —

    Joseph E. Finley:

    The same kind.

    William J. Brennan, Jr.:

    — isn’t that a commercial enterprise of the labor —

    Joseph E. Finley:

    The union uses this building as a home.

    It’s its house —

    William J. Brennan, Jr.:

    It does in the instance I’m talking about.

    It just leases out that owns the building (Voice Overlap) —

    Joseph E. Finley:

    It has — it does not use it for housing purposes.

    Do you — does Your Honor know whether the building is owned by a corporation when the stock (Voice Overlap) —

    William J. Brennan, Jr.:

    I don’t know a thing about it other than it’s — it’s called.

    I think it’s given the name of the union.

    Joseph E. Finley:

    Well, there are numerous instances as we point out.

    William J. Brennan, Jr.:

    Well, if that’s the situation that would be an instance of commercial operation —

    Joseph E. Finley:

    If that — if that is the fact, yes, but we don’t know the facts of the situation and I don’t know of any.

    There maybe rare instances where this maybe true.

    The Board has tried to come up with — with instances of this kind but there are no instances that I know about as a fact that unions have employees on their payrolls in commercial businesses.

    Now, they can own stock in corporations, members of unions can own stock in corporations and the — and the business can be surrounded with an atmosphere of union — of union control certainly, but it’s the corporation that it is the employer, not the stockholders, not the union.

    And anytime there’s an unfair labor practice in a commercial activity of this kind, the Board has a simple way for a remedy.

    All it needs to do is issue an order direct against the corporation and the corporation must comply and you remedied your unfair labor practice.

    You have no occasion to reach behind the so-called corporate veil that the Board is bringing in here which I think is a diversionary argument.

    It doesn’t meet the real test.

    Joseph E. Finley:

    And when we add further to the fact that Congress wasn’t talking about commercial activities and non-commercial activities, the Senate Committee in 1934 said clerks, secretaries and the like, and that’s what we have involved in this particular case.

    Now, with regard to — I would like to take one of the point about — the point you raise, Mr. Justice Brennan, if we could find rare isolated examples of unions engaging direct in businesses, I can’t say there are none because I don’t know.

    I don’t know of any but there might be some.

    And it seems to me that — again, I don’t know how many labor unions there are in this country, but I think a figure of 10,000 would be very conservative.

    And if you can find one, two or even a dozen instances of unions with employees on their payrolls, engaged in commercial business, I say in relation to the massive unions in this country, de minimis non curat lex.

    And for all practical purposes, the Board here has read unions as employers completely out of the Act.

    And we come back around in our circle, right back again to what Senator Wagner had intended and the Board by so doing this has given us Senator Wagner’s bill back in the 73rd Congress.

    Felix Frankfurter:

    You — you, as I understand you, you thought there would be no difficulty in the Board differentiating for purposes of entertaining complaint or initiating complaint as between what you call a big labor union or small labor union, is that right?

    Joseph E. Finley:

    I think it could do that, yes, sir.

    Felix Frankfurter:

    On grounds that not to deal with small ones would not frustrate or would be an exercise by it or what does and doesn’t effectuate for purposes of the Act.

    Joseph E. Finley:

    If you concede the Board’s power, yes.

    Felix Frankfurter:

    You say that the Board can’t differentiate between a labor union also employing as it necessarily does some people and other employers, that’s your position is it, rather I over simplified it?

    Joseph E. Finley:

    I think it is, Your Honor.

    I think it is —

    Felix Frankfurter:

    That is your position or —

    Joseph E. Finley:

    No, I don’t say that the Board is trying to place petition in position here of saying that Congress wasn’t, that this means that union should be treated differently than other employers.

    That’s not the case at all.

    The Board couldn’t rule all employers out of the Act.

    Felix Frankfurter:

    You mean all employers?

    Joseph E. Finley:

    It couldn’t do that or else it would destroy the Act.

    Felix Frankfurter:

    Yes.

    Joseph E. Finley:

    And when it starts taking out particular classifications of employers, I think we must scrutinize it to see if there’s a rational reason behind it.

    And — and on this particular circumstance —

    Felix Frankfurter:

    Once you’ve said that — once you’ve said that then we have to consider or not whether the Board — the Board’s ground isn’t a reason that one must respect as rational although once — itself doesn’t entertain it, is that right?

    What you’re saying they must scrutinize it to find out whether there isn’t a difference then — then the consideration is — then the real question is whether we sitting here can say, this Court can say, there is no justifications between, including union as an employer in one category as against people engaged in commercial business — in commercial enterprises as they achieve them in life, at least they achieve out with activity, is that right?

    That’s your position.

    Joseph E. Finley:

    For the purposes of the employer section, yes.

    Felix Frankfurter:

    And certainly, I’m (Inaudible)

    Joseph E. Finley:

    That’s right.

    Felix Frankfurter:

    (Inaudible)

    Joseph E. Finley:

    And —

    Felix Frankfurter:

    And when we you say for the purpose of that, if there are any hearing social economic after, aren’t those relevant?

    Joseph E. Finley:

    Yes, sir, they may be relevant but the Board hasn’t dealt with the question in this fashion in this case.

    Felix Frankfurter:

    You mean to say they have given a reason which is untenable, non constat they couldn’t give a good reason, is that it?

    Joseph E. Finley:

    That’s — that’s one of the things I’m saying.

    Yes, sir.

    And their lumping them into this category with religious, charitable, scientific organizations is not a rational — rational classification because we come right back again to a congressional intent.

    I don’t believe we can ignore the congressional intent in this case.

    Felix Frankfurter:

    Well, I — I don’t see how you can say that when there is on the statute book a very important measure to which the Clayton Act, on which in significant sentence is labor should not be deemed of the commodities or whatever they —

    Joseph E. Finley:

    Yes.

    Felix Frankfurter:

    I mean there, drastic of differences could be in the conceptual congressional policy that when you’re dealing with state of labor, you rephrase that it’s like very much, when you deal with — with humans trying to be active in the organization which promotes those interests, why isn’t — why is it so irrational?

    I’m not saying that vague union or a religious organization or it may be occasional, but certainly has this educational aspect.

    It has charitable aspect and all the things that you say just what you exceeded.

    Joseph E. Finley:

    On those kinds of policy grounds, Your Honor’s position may be well taken, but I think Congress and I come back to congressional intent again, Congress indicated that it wanted unions treated in the same fashion as other employers when they commit unfair practice against their employees.

    Felix Frankfurter:

    You’re theory will be satisfied if the Board made it a rule to consider union employers in the case of union’s having a membership of 500,000 or more.

    Joseph E. Finley:

    No, the Board might adopt a varying standard for this.

    I — I don’t say what it should be.

    I don’t know.

    I don’t —

    Felix Frankfurter:

    The fact that you know and we know less shows what a policy question it is.

    Joseph E. Finley:

    Yes, it is a policy question.

    But I don’t think the policy can be taken on one side and your eyes can be blinded to the congressional intent (Voice Overlap) —

    Felix Frankfurter:

    You can’t leave them all out together is your position.

    Joseph E. Finley:

    That’s my point.

    You can’t leave them out all together.

    And that’s what this Board has done and that is why it’s arbitrary and wrongful in this case.

    Hugo L. Black:

    Where do you find that?

    To what do you refer to show that that’s precisely what they’ve done, read them out all together?

    Joseph E. Finley:

    Because — you mean, Your Honor, in the Board decision?

    Hugo L. Black:

    Yes.

    Joseph E. Finley:

    Because the Board says it will not take the jurisdiction over labor organizations as employers engaged in trade union capacities.

    The Board says that in its opinion.

    And I read that and all together exclusion and that — that come back to the point.

    And if there are rare cases where you can find otherwise, it is a de minimis principle that in effect emasculates this provision of the Act.

    That is the point.

    Felix Frankfurter:

    Mr. Finley, may I ask you and I — I will understand if you say you’re not here.

    You don’t have to carry more of a burden than you have to carry.

    Hasn’t the Board indicated by a rule or by — by a decision or whatever you call it that there’s certain industries that — that they will not take cases in?

    Joseph E. Finley:

    The only one —

    Felix Frankfurter:

    I just want to know whether your — the question we have doesn’t involve that issue also.

    Joseph E. Finley:

    Yes.

    I — I — that is — that question is raised, Your Honor, in the briefs.

    The Board has declined its jurisdiction over the entire hotel industry for example.

    Felix Frankfurter:

    Yes.

    Joseph E. Finley:

    Hotel industry.

    Felix Frankfurter:

    Yes.

    Joseph E. Finley:

    — and the taxicab industry.

    I don’t know of any others but it’s arguable in those cases there is some congressional intent that the Board can do this.

    Felix Frankfurter:

    I just want — wanted your view when — when Mr. Manoli comes to argue his view as to the reach of the problem it was and you — you are entitled to say you’re dealing with this problem and the other one.

    Joseph E. Finley:

    That — that is correct.

    Felix Frankfurter:

    All right.

    Joseph E. Finley:

    I’d like to just say one other thing before I sit down.

    The Board has suggested here that this Court remand the case because of the change administrative personnel on the policy ground in complying that since the two members of the Board who decided this case are no longer with the agency and that two more men have come along to replace them, that these two new members of the Board might have a different policy view on this question.

    The petitioner has asked this Court to decide this question on the issues presented.

    Felix Frankfurter:

    Has the Board — well, Mr. Manoli would tell us (Inaudible)

    Has the Board taken a definite position on this matter?

    Dominick L. Manoli:

    In this particular case —

    Felix Frankfurter:

    Well, I — I don’t mean just a —

    Dominick L. Manoli:

    I’d like to —

    Felix Frankfurter:

    — an ad hoc case or —

    Dominick L. Manoli:

    I will explain that in just one moment, Your Honor.

    Felix Frankfurter:

    All right, that’s — that’s quite necessary about the last point that Mr. Finley made, isn’t it?

    Dominick L. Manoli:

    That’s right.

    I think we don’t quite take the same view of our —

    Felix Frankfurter:

    All right.

    Dominick L. Manoli:

    — position as Mr. Finley has taken.

    Felix Frankfurter:

    Would you mind telling that as the outset, what the position —

    Dominick L. Manoli:

    I will.

    Let me say first that the nub of the petitioner’s case here as we see it, as we understand it is that the Board may not adopt an administrative jurisdictional standard, the effect of which is — the result of which is to exclude labor organizations when acting as an employers from the coverage of the statute as a class.

    Now, while I shall address myself to that question in the course of my time, a serious doubt has arisen in our minds at least whether this question is presently a right for adjudication by this Court in view of the posture of this case before the Board.

    Now, let me explain briefly what the posture of this case was before the Board.

    As Mr. Finley has indicated, there were charges filed here against a number of labor organizations and it was claimed that these various labor organizations had engaged in numerous unfair labor practices with respect to their own employees and their normal functions with or their union functions in order to defeat the efforts of the petition to represent these employees for purpose of collective bargaining.

    Now, the trial examiner found that these labor organizations were employers with the meaning of the statute, that their activities affected interstate commerce, that their activities also met the Board’s jurisdictional test with respect to the multistate enterprises and that it would effectuate the policies of the statute to assert jurisdiction and then he went on to find on the merits of the unfair labor practice charges.

    Now —

    William J. Brennan, Jr.:

    Then a complaint issued in this case?

    Dominick L. Manoli:

    Oh, yes, complaints issued of course.

    Now, when the case came before the Board, this is the posture before the Board, four members of the Board agreed with the trial examiner that these labor organizations were employers within the meaning of the statute.

    Two of — of these four — these four Board members assumed that the interstate transactions of — of these various unions satisfied the Board’s legal test of jurisdiction.

    However, they divided on the policy question as to whether or not they should or should not assert jurisdiction.

    Two of those four board members concluded that — that they would not assert jurisdiction because they regarded these labor organizations in the same category as the Board regards nonprofit enterprises which are now engaged in commercial enterprise — in commercial ventures in the normally accepted sense.

    And on the basis of that policy, two of these Board members voted to dismiss the complaint.

    The other two Board members would have asserted jurisdiction on the same basis that the trial examiner did, they said that as a matter of policy we think we ought to assert jurisdiction.The fifth board member who is Mr. Murdock, Mr. Murdock said, “I will vote to dismiss the complaints.

    I will join my two colleagues who are voting to dismiss the complaint on policy grounds but I joined them on an entirely different ground, namely, that the labor organizations are not enforced when they are acting in their normal capacity as distinguished from engaging in some commercial enterprise.”

    Now in short, you have — the complaint here was dismissed because one board member, Mr. Murdock, thought that the Board lacked power all together over this case.

    The other two Board members although assuming that the Board had power, nevertheless were not inclined to exercise —

    William J. Brennan, Jr.:

    Well, (Inaudible) now gone?

    Dominick L. Manoli:

    There (Inaudible) now gone, that’s right.

    And so that you have four Board members who divided evenly, two and two, on the question of policy with the decisive vote being cast by Senator Murdock who concurred in the dismissal of the complaint on power — on lack of power, that the Board lacked power.

    Now, we have suggested in our brief and not because of the change of personnel, it maybe noted as a fact of life that there has been a change of personnel on the Board but certainly we would make the same suggestion today even if there had been no change of personnel on the Board and that is this.

    That we think that perhaps the appropriate course for this Court is to resolve the threshold question, the question on which Senator Murdock or Mr. Murdock went off on, namely, whether a labor organization when acting as an employer in his normal functions is within the coverage of the statute, if of course this Court decides that Senator Murdock is correct in that view, that’s the end of this case.

    Dominick L. Manoli:

    If on the other hand, this Court agrees with the four Board members that a labor organization is an employer within the meaning of the statute even when acting in its normal capacity, then we suggest that this Court addressed itself to the Murdock position.

    And if it concludes that the Senator is wrong, if it concludes that — that the majority of the Board is correct in — in saying that a labor organization in its normal capacity is an employer within the meaning of the statute, then we think that the case should be remanded to the Board so that all five Board members starting from a common premise may then determine whether or not —

    William J. Brennan, Jr.:

    Which — which position on the Murdock point are you supporting?

    Dominick L. Manoli:

    Well, Your Honor, I am compelled to support of course the majority position on that, namely —

    William J. Brennan, Jr.:

    Well, that’s —

    Dominick L. Manoli:

    — that a labor organization even its normal capacity is an employer within the meaning —

    William J. Brennan, Jr.:

    Well, that’s only a dissenting view then of Mr. Murdock —

    Dominick L. Manoli:

    That’s right.

    William J. Brennan, Jr.:

    — within the Board as presently composed.

    Dominick L. Manoli:

    The — the Board has agreed on the question of its power but they’re divided, the four Board members are divided evenly, two and two, on the question of policy.

    And as I said a moment ago —

    William J. Brennan, Jr.:

    I know — I know but I mean on this Murdock point, he’s the only one who opposed toward it.

    Dominick L. Manoli:

    Yes, that’s right.

    William O. Douglas:

    Does the present Board disagree with Murdock?

    Dominick L. Manoli:

    There have been no other — there has been no other case on that.

    This is the only case that we have on that — on that question.(Voice Overlap) —

    Felix Frankfurter:

    Mr. Manoli, do I — do I — set me straight on this.

    Dominick L. Manoli:

    Yes, sir.

    Felix Frankfurter:

    I’m — I’m sure I misunderstand you.

    Do I get the impression from you that this Court can decide what would be more or less an abstract question that the Court’s power over a union employer but by remanding it to the Board, the Board can say yes, we have the power but we didn’t exercise it in any union employer case, is that right?

    Dominick L. Manoli:

    I’m suggesting that they’d do that, that this Court may — may appropriately do that.That the Board —

    William O. Douglas:

    That’s not what the majority said.

    Dominick L. Manoli:

    Pardon me, sir?

    William O. Douglas:

    That — that’s not what the majority said.

    Dominick L. Manoli:

    The majority — the majority — I don’t know when you speak of the majority.

    (Inaudible)

    Dominick L. Manoli:

    You mean the majority that — that concurred in dismissing the complaint?

    William O. Douglas:

    Well, you said that the Board felt that there was power?

    Dominick L. Manoli:

    Yes.

    They divided on the policy question of whether —

    William O. Douglas:

    The question whether to assert it, yes.

    Dominick L. Manoli:

    That’s right.

    And as I say the decisive vote for not asserting jurisdiction was cast by Senator Murdock but on the ground unlike that of his colleagues.

    William J. Brennan, Jr.:

    Well, I — I’m just a little interested why — why we should take up even that Murdock point in place of the —

    Dominick L. Manoli:

    Because —

    William J. Brennan, Jr.:

    — position of the Board majority that it does embrace labor union employers.

    Dominick L. Manoli:

    Because you have no — you have no Board majority on the question of policy.

    Well, didn’t the Court of Appeals show they had power?

    Dominick L. Manoli:

    Your Honor, the Court of Appeals treated the opinion that was filed by chairman — then Chairman Farmer and Peterson as the Board opinion.

    Actually, it’s only the opinion of the two member — of those two members.

    It’s not the Board opinion.

    There is no difference as to the four Board members if they had the power but there was a difference.

    They split as to the policy which — great, I’m repeating myself, was resolved by Senator Murdock but on the ground that the Board lack legal power.

    And I think that this — if the Board lacks legal power here and it’s true there is no dispute between the petitioner and — and myself as on that point.

    We take the position that the Board does have legal power —

    Felix Frankfurter:

    And you speak —

    Dominick L. Manoli:

    — all of the amicus —

    Felix Frankfurter:

    And you — and you urge on, speaking for the Board — let’s see if I’m right, speaking for the Board, you submit to this Court the proposition which you want this Court to decide that there is naked policy, is that right?

    Dominick L. Manoli:

    That’s right.

    Felix Frankfurter:

    What you say whether it should be exercised and send it back to the Court — to the Board.

    Dominick L. Manoli:

    To the Board.

    Felix Frankfurter:

    Now, I suggest this that the argument and I ask this, not suggest, I ask, because I followed Mr. Finley’s argument.

    Mr. Finley’s argument is that they cannot, as an exercise of discretion, abdicate power over a whole class or a whole category of employers.

    And you suggest — you will come to that I’m sure.

    What you suggest on this third question what we should do when you were talking to (Inaudible) not to decided any more than one has to.

    But you suggest we should decide the naked question of power that the Board may then say the Supreme Court has recognized that we have power and we in our own right now decide we’ll never exercise it.

    And Mr. Finley would be back and say they can’t do that.

    Dominick L. Manoli:

    One or two things may happen.

    They may either say that we will exercise it in which event there is no occasion for this Court to pass upon Mr. Finley’s question.On the other hand, if a majority of the Board then again reaffirms the position that is in matter of policy, it will not then Mr. Finley of course may again take it to the course and come back here.

    William J. Brennan, Jr.:

    Well, the other thing that bothers me, Mr. Manoli, you’re — you’re asking us to resolve the Murdock position and there’s no one here defending the Murdock position.

    William J. Brennan, Jr.:

    Both sides are opposed to the Murdock position as I understand it.

    Dominick L. Manoli:

    Let me say that there — that the amicus is defending.

    There’s a brief been filed here on behalf of the Teamster labor organizations as amicus, rather a lengthy one, 100 and somewhat cases.

    And the opposing views — the opposing views on that question are fully set forth in our brief and in the amicus brief.

    The Court will not be deprived of — except for oral argument on the part of amicus which was not granted.

    But in the briefs, the question is explored I think fully by both ourselves and the amicus to the issues and the — the supporting authorities on that problem will be before the Court.

    William J. Brennan, Jr.:

    It’s unusual to me to tell it — as does to tell that the Senator is wrong if apparently the majority view in the Board is that — that he is wrong.

    Dominick L. Manoli:

    This is a very unique case, Your Honor, if someone said it’s a free case I’m quite — I’m quite well to believe that it is.Let me go on now and assuming that what the Board majority has done, I suppose the Court would like to hear on discussion of that from us.

    Let’s assume that it’s been a majority of the Board that has said we will adopt the standard here and as Mr. Finley says the effect of that standard is to exclude labor organizations when acting as an employer from the coverage of the statute.

    Now, essentially, Mr. Finley’s position on that is that in view of the specific designation of labor organizations as employers within the definition of that term in Section 2 (2) of the statute, that the Board is precluded from adopting a standard which would mean the exclusion of — of labor organizations as a class from the coverage of the statute.

    Now, preliminarily, I should say that — that this argument overlooks the fact that the Board’s power with respect to the exercise of its discretion does not stem from Section 2 (2) of the statute but rather from Section 10.

    Section 2 (2) of the statute merely defines a term employers who are within the coverage of the statute, but it is Section 10 of the Act, however, which vest authority in the Board to take action, to exercise it’s jurisdiction.

    And that Section of the — that Section of the statute as this Court had very reasonable case and they’re not noticed is cast in permissive terms.

    The statute says that the Board is empowered to prevent any person from engaging unfair labor practice.

    It shall have the power to issue complaints, and the statute also gives the Board a broad discretion with respect to whether or not what type of order will effectuate the policies of the Act and even where it enters an order.

    The Board may or may not as complete discretion on the matter whether to seek judicial enforcement of its orders.

    What I’m getting at is this that the whole tenure of Section 10 is cast in the permissive language and we believe that that Section of the statute vest in the Board the power to determine the discretionary authority, to determine whether or not the public interest will be better served, whether the posture of the statute will be better effectuated by asserting or declining to assert its jurisdiction over a particular case or a class of cases.

    Now, Mr. Finley says, well, the Board may — may have the power, it would have some discretion perhaps to decline — to assert its jurisdiction but it can’t adopt the standard which excludes a whole class of employers from the — from the coverage of the statute.

    I suggest Your Honor that in dealing with that issue that the — the fact that a Board administrative standard may exclude a whole class of employers from the coverage of the statute of this.

    Well, that’s the administrative policies in effect does not necessarily — does not necessarily destroy the validity of the standard, that the decisive factor is what are the underlying reasons that — that lead the Board, prompt the Board to adopt such a standard.

    Now, take this case.

    Here — again, I am assuming you that this is the Board majority position.

    Actually, it’s the position of only two members of the Board.

    Here, the Board said in effect that we think that these labor organizations, they’re of not of a nonprofit character, they’re not engaged in the commercial venture and we think that we ought to treat to them just as we treat for jurisdictional purposes that we think we ought to treat them just like we treat other types of nonprofit non-commercial enterprises, not —

    William J. Brennan, Jr.:

    (Inaudible)

    Dominick L. Manoli:

    Yes.

    The underlying reason is this, Your Honor, that while the activities of some of these nonprofit non-commercial enterprises may in some situations take place across state lines and while they may satisfy the Board’s legal test of its jurisdiction, nevertheless, the Board has felt that — in general, on the whole that the prejudice to the national economy that it would result from a disruption of the activity of these noncommercial enterprises would be relatively — would be relatively insubstantial.

    And in line with the Board’s basic position, it’s basically —

    William J. Brennan, Jr.:

    (Inaudible)

    Dominick L. Manoli:

    I think that there’s a common denominator here, Your Honor.

    Dominick L. Manoli:

    There’s a common denominator between the ordinary type of noncommercial — nonprofit noncommercial enterprise and labor organizations here.

    Here, the labor organizations are not engaged in any commercial enterprise.

    They’re not engaged in any — in any profit — any profit venture.

    William J. Brennan, Jr.:

    Lateral to the operation of these other nonprofit organizations had little impact upon the national economy —

    Dominick L. Manoli:

    That’s right.

    William J. Brennan, Jr.:

    (Inaudible)

    Dominick L. Manoli:

    That is right.

    William J. Brennan, Jr.:

    (Inaudible)

    Dominick L. Manoli:

    Well, there would undoubtedly be some — some impact — some impact on commerce.

    We’re not — well, I’m not suggesting that there wouldn’t be so as to bring them within the Board’s legal test of its jurisdiction.

    But I think it could properly be said at least there wouldn’t be completely unreasonable for the Board to conclude that strikes affecting office employees of — or the various employees of labor organizations that on balance there of such a character as not to seriously prejudice the national economy.

    Felix Frankfurter:

    Mr. Manoli, what has the Board done about nonprofit cooperative?

    Dominick L. Manoli:

    Well, it all depends, Your Honor.

    If the — the nonprofit cooperatives, it — there are cases in which it has declined to assert jurisdiction because in the particular case the Board thought they were not engaged in some commercial ventures.

    But as I recall they were in our briefs, the cases are.

    As I recall, there had been also cooperative enterprises where there was some kind of commercial activity going on there and there the Board has asserted jurisdiction over that kind of — over that kind of an enterprise.

    Now, the —

    Felix Frankfurter:

    If Mr. Finley is correct, the jurisdiction has to be asserted, the Board could be mandamus to take it effectively.

    Dominick L. Manoli:

    The — if —

    Felix Frankfurter:

    Am I right about that?

    Dominick L. Manoli:

    Well, that raises —

    Felix Frankfurter:

    Well, I mean —

    Dominick L. Manoli:

    That might lie — that might lie, Your Honor.

    That’s right.

    Felix Frankfurter:

    If the commerce commission can’t say we will take reparation suit, they could be mandamus.

    Dominick L. Manoli:

    Mandamus might lie.

    In the fact, I think one of Your Honors’ questions in the preemption cases has suggested that to a number of counsel that they have that course open if the Board cannot decline to assert — cannot decline to assert jurisdiction.

    Felix Frankfurter:

    I don’t mean — I don’t mean to suggest that as an argument one way or the other.

    Dominick L. Manoli:

    Yes, I understand.

    The — now —

    Felix Frankfurter:

    Am I — is my question that I took from Mr. Finley and to you.

    Does this — if — am I right in thinking that the problem in this case implicates the exclusion of the hotel construction industry?

    Dominick L. Manoli:

    That’s right.

    The same problem I think underlies if — if we take this to the Board’s majority position that it excludes — I want to say one more thing before I — on that.

    It just occurs to me but the Board has taken the position they will not assert jurisdiction over city hotel industry as a class or all the taxicab — the industry even though the taxicab industry or the hotel industry may come within the sleeve of jurisdiction.

    And if Mr. Finley’s position — formulation of the Board’s position here is correct that the Board has declined jurisdiction over labor organizations when acting as employers as a class, then of course the problem is also through these other cases — of this other situations, the hotel industry.

    Felix Frankfurter:

    Well, it — why is it if — it has declined, hasn’t it?

    Dominick L. Manoli:

    Well, I say this, Your Honor, that it — that I think that we cannot assume —

    Felix Frankfurter:

    Actually because of this number (Voice Overlap) —

    Dominick L. Manoli:

    We — we cannot — we cannot — no, no, not because of this number, not because of the number.

    But I think that Mr. Finley isn’t correct in saying that the Board’s test here has excluded labor organizations when acting as employers as a class from the coverage of the statute.

    The Board’s test, this nonprofit non-enterprise test applies to labor organizations only when they are acting in their normal functions.

    The test does not apply to them when as and if they may engage in commercial enterprises.

    Now, it maybe that it’s a rare case where they directly — directly engage in a commercial enterprise, although there are numerous cases where they engage in commercial enterprises for some corporate structure.

    They owned the stock.

    Felix Frankfurter:

    What is it — or they — they amalgamated as a bank?

    Dominick L. Manoli:

    Oh, there are banks —

    Felix Frankfurter:

    Or they sometimes go into shares with manufacturers.

    Dominick L. Manoli:

    There are banks, hotels or —

    Felix Frankfurter:

    That’s out — that’s out of this of this exclusion.

    Dominick L. Manoli:

    Well, that’s out of this exclusion.

    That’s correct.

    Isn’t —

    William J. Brennan, Jr.:

    (Inaudible)

    Dominick L. Manoli:

    Pardon?

    I’m sorry, sir.

    William J. Brennan, Jr.:

    (Inaudible) houses and things like that, haven’t they?

    Dominick L. Manoli:

    Yes, they amalgamated it as (Inaudible)

    That’s right.

    That’s right, so —

    William J. Brennan, Jr.:

    Summer resorts and — summer res231orts.

    Summer resorts or homes for the aged and what have you — there’s — they say now — I don’t want to overstate my position on that.

    It is true that the union seldom directly engages in a commercial enterprise.

    It’s usually done through some stock corporate — corporate ownership.

    Felix Frankfurter:

    An automated bank in New York but it’s separate —

    Dominick L. Manoli:

    Yes.

    Now, we say that the Board standard does not apply — does not apply to a union whenever it engages in that kind of an enterprise and that it’s not true to say — it’s not correct to say that the Board’s standard has virtually wiped out labor organizations from the coverage of the statute.

    Felix Frankfurter:

    No, but within the circle that Mr. Finley said.

    Dominick L. Manoli:

    Yes.

    Felix Frankfurter:

    There is a class exclusion.

    Dominick L. Manoli:

    That — if we take that two Board member position, there is that class exclusion.

    And I have suggested that the fact that there is a class — class exclusion does not necessarily invalidate it, that we must look to the reasons and we think that here the Board could properly say — could properly say that because of the character of the enterprise and it can treat them just as it treats other nonprofit noncommercial —

    Charles E. Whittaker:

    Mr. Manoli, is it not true that Section 2 (2) makes no mention of any commercial activities?

    It simply says that the union shall be subject to the Act when acting as an employer, isn’t that right?

    Dominick L. Manoli:

    It makes no — it makes no distinction —

    Charles E. Whittaker:

    Yes.

    Dominick L. Manoli:

    — on that basis.

    Felix Frankfurter:

    And what you’re saying is that that’s a jurisdictional section —

    Dominick L. Manoli:

    Right.

    Felix Frankfurter:

    — and not an enforcing section.

    Dominick L. Manoli:

    That’s right.

    All that does is simply give the Board legal power, legal power over a labor organization whether it’s acting in a commercial capacity or a non-commercial capacity.

    But it doesn’t go to the question of how the Board will exercise that jurisdiction.

    William O. Douglas:

    Don’t you get into a lot of difficulty when you come to the portions of the provisions of the Act like Section 8 (a) and 8 (b) (Inaudible)

    Dominick L. Manoli:

    Well, on that one of course, Your Honor, we have entirely different standards because there the union is not an employer under Section 8 (b) provisions.

    The Section 8 (b) provisions reached the union there because those —

    William O. Douglas:

    But the fact that the — that the Congress had selected out the unfair labor practices in 8 (b) as respects labor unions did not put them under 8 (a) as employers indicates perhaps that they were not using an employer in the broad sense in which the Board has indicated.

    Dominick L. Manoli:

    Of course that was the Senator Murdock’s position but our answer to that — my answer to that, Your Honor, is that the Section 8 (b) does not shed any light upon the coverage of Section 8 (a) with respect to unions when they are acting as employers.

    Section 8 (b) is directed to unions not when they’re acting as employers but rather when they are organizing the employees of other employers and it places restrictions upon what they may do, not vis-à-vis their own employees but rather vis-à-vis the employees of other employers.

    William O. Douglas:

    Well now, under your interpretation would the — would the labor union be subject to 8 (a)

    Dominick L. Manoli:

    Labor union, when acting as an employer, as a matter of law?

    Yes.

    William O. Douglas:

    In this case?

    Dominick L. Manoli:

    As a matter of law, yes.

    As a matter of policy, that’s the — that’s the argument.

    William O. Douglas:

    Well, it would be subject to both 8 (a) and to 8 (b)?

    Dominick L. Manoli:

    The — no, no, no, 8 (a) is —

    William O. Douglas:

    8 (a) describes unfair labor practices of employers.

    Dominick L. Manoli:

    That’s right.

    William O. Douglas:

    Employer is defined in Section 2 (2).

    Dominick L. Manoli:

    You’re correct.

    That’s right.

    And the Section 8 (a) would apply to a labor organization lifts a discharge in one of its employers, discharge one of its employers because he adjourned some other union or threaten to discharge him or engage in any — of the other 8 (a) type of the employer unfair labor practice.

    That would apply that union in that situation.

    William O. Douglas:

    And 8 (b) would also apply.

    Dominick L. Manoli:

    8 (b) — 8 (b) would apply generally to any — any situation where the union was —

    William O. Douglas:

    So you — you come out in effect with a more rigorous control of unfair labor practices of unions and unfair labor practices of — of commercial employers?

    Dominick L. Manoli:

    Oh, I don’t think so, Your Honor, because —

    William O. Douglas:

    If you put them under both — both 8 (a) and 8 (b).

    Dominick L. Manoli:

    Well, of course 8 (b) has to do with secondary boycott jurisdictional strikes.

    Section 8 (b) (1) says that — that the union shall not restrain or coerce employees in the exercise of their rights under Section 7.

    Now, conceivably a union might be reached under that Section — under that Section with respect to its own employees.

    But —

    William O. Douglas:

    Has there been any case of that kind?

    Dominick L. Manoli:

    No, sir.

    Not — none that I know of.

    Thank you.

    Earl Warren:

    We’ll recess now.