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National Labor Relations Board v. Matthews

August 6, 1946


Author: Goodrich

Before MARIS, GOODRICH, and McLAUGHLIN, Circuit Judges.

GOODRICH, C.J.: This case is before us for enforcement of an order of the National Labor Relations Board*fn1 against Jas. H. Matthews & Co. The action is brought under the National Labor Relations Act,*fn2 pursuant to Section 10(e).*fn3

The matter of chief interest in the case is the legality of a group called the "Manufacturing Board" or sometimes "Junior Board". The order before us directs its disestablishment. The validity of this order is strenuously contested by the employer.

The Company had in operation a plan which it called by the pretentious name of "Multiple Management". It called its Board of Directors a "Senior Board". Then it had the "Manufacturing" or "Junior" Board above mentioned. There was also a "Sales Board" and a "Foremen's Board". The latter two are not concerned in this case. This plan of organization was described to the employees in a pamphlet called "Personnel Policies and Partnership Plan".

The Manufacturing or Junior Board was composed of factory employees. That it was set up by the Company was not disputed. The Company bore all the expenses. Its Personnel Department conducted the elections, the Company's Board of Directors approved all the nominees and had the power of removal. Meetings and elections were held on Company property on Company time and Company officers could and did participate in meetings.If this Board is a "labor organization" there is no doubt that it falls within the provision of the statute making it an unfair labor practice to "dominate ... any labor organization or contribute any financial or other support to it ..."*fn4

But the Company says this was not a labor organization. Labor organizations, it contends, make demands, fight, negotiate. We are cited to fourteen characteristics of such organizations that might be found in any standard text book on labor problems. This Junior Board, says the Company, is but a committee of the workers designed to discuss and make recommendations to management about production problems. It follows, the argument runs, the general plan recommended for labor-management committees which were organized to help solve various types of production problems and increase output during the late war and earlier.*fn5 It may be added that there was a committee of this Junior Board that served just that purpose.

This phase of the case perturbed us considerably at the argument for we were reluctant to reach a conclusion that labor and management cannot confer about production problems without violating the Act.Subsequent examination of the record, however, removes any source of perturbation. The scope of activities of this Junior Board went far beyond that of a labor-management committee. The Board had several committees. One of these was specifically named "The Suggestions and Grievance Committee". There was a "Safety Committee" and a "Personnel Committee" which was to labor for "ever-improving working conditions ..." The minutes of its meetings show that the Junior Board discussed such matters as the rates of pay, hours of employment, retirement plan, profit sharing system, wage raises, vacation pay, working hour schedules, Saturday work, payday change. Its minutes show consideration and recommendation of at least oen discharge case. The statutory definition in the Act with regard to a "labor organization" is "Any organization of any kind, ... in which employees participate and which exists for the purpose ... of dealing with employers concerning grievances, labor disputes, wages, rates of pay, hours of employment or conditions of work."*fn6 When the activities of the Junior Board are put down beside the statutory definition of a labor organization the conclusion seems pretty clear that the Junior Board fits in perfectly with the Congressional definition.

The missing link, according to argument for the respondent here, is in the word "dealing". Respondent says that this Junior Board did not deal, it only recommended and that final decision was with management. Final decision is always with management, although when a claim is made by a well organized, good sized union, management is doubtless more strongly influenced in its decision than it would be by a recommendation of a board which it, itself, has selected and which has been provided with no fighting arms. We think it clear that the Junior Board was a labor organization, that it was Company-fostered and dominated and that the Board was clearly right in ordering its disestablishment. In so doing we are in no way even suggesting the illegality of a program of labor-management committees.

One phase of the Board's order, however, gives us trouble. A general order prohibiting unfair labor practices was made.We are not impressed in considering this phase of the case by argument made on behalf of the Board that the scope of the order had not been considered by it and is therefore not subject to review here. Respondent did complain that there was no support for the broad order made and it has made that same point in this Court. We are bound to consider it and we do.

There are two phases to this part of the case. Certain anti-union statements were made by three employees named, respectively, Renton, Bachner and Griffin. The statements, as these things go, were not very violent, but they were sufficient to get the Company into trouble if made by people for whose talk it is responsible.

We do not go along with the respondent in the argument that an employer is not liable for anti-union statements which his foremen make. That has already been discussed in the opinions of this Court and we abide by what has been previously said.*fn7 These men, however, were Assistant Foremen and the evidence shows that they spent at least 80% of their time in working*fn8 and only the remainder in supervision and direction. The Trial Examiner concluded and the Board adopted the conclusion that these men had supervisory duties "which charge the respondent with their statements and activities".If this were all we had we should perforce be compelled to accept the conclusion although we disagreed with it.

But there is another element here which gives us concern. When an election, held under Board auspices, was being prepared for, a list of eligible voters was drawn up. Renton was included in this list without question. There was objection by Union representatives to the inclusion of Bachner and Griffin, and they were put on a separate list. It was understood that if desired, the Union could challenge their eligibility at the election. The record contains no evidence of such challenge. A circular put out to the factory personnel prior to the election by the Unions, who were seeking recognition, specifically directs a notice to working supervisors telling them and all other employees that the working supervisors were eligible to vote. The arrangements concerning the election and eligibility to vote in it were made under the general supervision of the National Labor Relations Board representative.*fn9

It should be apparent what this set of facts does to the respondent's position under the statute. If an employer seeks to prevent discussion among employees who are about to have an election to determine whether a given organization is to be their bargaining representative, he certainly will get himself into trouble under the Act. We cannot protect the right of these voters to discuss merits or demerits of a particular proposed bargaining agent and in the same breath declare the employer responsible, under the Act, for what these eligible voters say to each other. Of course, it is true that the Board has responsibility for the administration of the National Labor Relations Act and that private individuals cannot interfere with the Board's exercise of its statutory function. But the arrangements for this election were carried on under Board auspices. The men concerned were on the list of voters. We do not think that after the election the Company can be held responsible for what some of those voters have said to each other on the theory that their statements constitute unfair labor practice. The statements of Renton, Bachner and Griffin must, therefore, be rejected as Company responsibility.

This leaves only statements ascribed to William Witte who was Vice-President and General Superintendent of the Company. Of course, he is a man for whose acts the Company is responsible. One thing Mr. Witte did was to cause a notice to be posted ...

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