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MOST v. HIRSCH

November 3, 1978

Most Rev. J. Carroll McCORMICK, Bishop, Catholic Diocese of Scranton, Plaintiff,
v.
Peter W. HIRSCH, Regional Director For the Fourth Region, National Labor Relations Board, Defendant, and Bishop Hoban Education Association, of the Pennsylvania State Education Association and the National Education Association, Defendant Intervenor



The opinion of the court was delivered by: HERMAN

MEMORANDUM

I. INTRODUCTION

 II. BACKGROUND AND PROCEDURAL HISTORY *fn1"

 Plaintiff, The Most Rev. J. Carroll McCormick, is the Bishop of The Catholic Diocese of Scranton, Pennsylvania and is the spiritual and temporal superior of all Catholic elementary and secondary schools within the Diocese. One of these schools is Bishop Hoban High School, the religious enterprise involved in this suit. The Defendant, Peter W. Hirsch, is the Regional Director for the Fourth Region of the National Labor Relations Board. Jurisdiction is asserted under 28 U.S.C. §§ 1331, 2282, and 2284, and the claims are alleged to arise under the First, Fifth and Ninth Amendments of the Constitution of the United States.

 The factual background of this lawsuit began on September 15, 1978 when Bishop Hoban Education Association, PTE/NEA (hereinafter "union") filed a representation petition under Section 9 of the National Labor Relations Act, (hereinafter "NLRA"), as amended, 29 U.S.C. § 141 Et seq., with the Fourth Region of the National Labor Relations Board, (hereinafter "NLRB"), seeking certification as the exclusive representative of the lay teachers employed at Bishop Hoban High School. The petition requested the NLRB to conduct an investigation and following a hearing, to direct a representation election among "all full-time and regular part-time certified, non-certified, degreed and non-degreed lay teachers, and all full-time lay guidance counselors, nurses, librarians, department heads and athletic director." On the same date the NLRB's regional office mailed to the Bishop Hoban Board of Pastors a copy of the union's petition along with a number of other NLRB documents explaining the Board's upcoming investigation and procedures.

 The documents requested the prompt submission of answers to a questionnaire entitled "Interstate Commerce Data", copies of correspondence, existing or recently expired collective bargaining contracts, and an alphabetized list of employees described in the petition. The documents also requested that Plaintiff post notices on the premises of the school relating to the NLRB proceedings. On September 25, 1978 the NLRB sent a "Notice of Representation Hearing" for the representation proceeding that was scheduled for October 5, 1978. Plaintiff then filed his complaint on October 2, 1978 requesting a temporary restraining order, a preliminary and permanent injunction, and a declaration that the NLRA, as amended, is unconstitutional as applied to the Plaintiff.

 III. SUBJECT MATTER JURISDICTION

 The first question that must be resolved is whether this Court has subject matter jurisdiction to entertain this lawsuit. Only two prior decisions have ruled on this specific issue and they have arrived at opposite conclusions. *fn2" In Caulfield v. Hirsch, (E.D.Pa. July 7, 1977) Judge Van Artsdalen held that the District Court had jurisdiction to enter a preliminary injunction and moreover, he ruled that the only other reported decision on the issue, Grutka v. Barbour, 549 F.2d 5 (7th Cir.), Cert. denied, 431 U.S. 908, 97 S. Ct. 1706, 52 L. Ed. 2d 394 (1977) had been incorrectly decided. My review of these two cases leads me to believe that Judge Van Artsdalen arrived at the proper conclusion although as stated below my reasons are somewhat different and additional to those he recited in Caulfield.

 It is true that District Courts generally do not have jurisdiction to enjoin the NLRB from conducting representation or unfair labor practice proceedings. Under Section 10 of the NLRA *fn3" the exclusive means of obtaining judicial review of NLRB rulings is for the aggrieved party to seek review in the Court of Appeals after a Final order has been entered. Final NLRB orders that are reviewable under Section 10 of the Act in the Court of Appeals do not include Board decisions in certification proceedings. *fn4" Therefore, an aggrieved employer must precipitate an unfair labor practice decision by the NLRB by refusing to bargain with the union's representative in order to obtain judicial relief. *fn5" As noted, relief lies then in the Court of Appeals and not in the District Court. *fn6"

 The long-settled rationale for this doctrine of exhaustion is that the administrative agency must be given an opportunity to correct its alleged wrongful action. The doctrine has been generally applied to the NLRB, and proceeding through the administrative remedies of the Board is typically a prerequisite to federal jurisdiction. Myers v. Bethlehem Shipbuilding Corp., 303 U.S. 41, 58 S. Ct. 459, 82 L. Ed. 638 (1938). *fn7" The reasons for the exhaustion doctrine as outlined by the Supreme Court in Weinberger v. Salfi, 422 U.S. 749, 95 S. Ct. 2457, 45 L. Ed. 2d 522 (1975) are to prevent premature interference with agency processes, to afford parties and the courts the benefit of its experience and expertise, to compile a record which is adequate for judicial review, and to afford an opportunity to correct its own errors. *fn8" Therefore, while there are strong policy reasons for requiring exhaustion of administrative remedies, those reasons must be analyzed in terms of their applicability to the particular circumstances involved in this case.

 The questions thus presented by the broad outline above can be stated as follows. First, does § 10 of the NLRA even apply to this case where First Amendment liberties are alleged to be infringed by any exercise of jurisdiction by the NLRB and where the question is not one of "review" of agency action? Second, do any of the well-known judicially created exceptions to the reach of Section 10; for acts of the NLRB beyond its statutory grant of authority, Leedom v. Kyne, 358 U.S. 184, 79 S. Ct. 180, 3 L. Ed. 2d 210 (1958); where swift judicial resolution is necessary to avoid international complications, McCulloch v. Sociedad Nacional, 372 U.S. 10, 83 S. Ct. 671, 9 L. Ed. 2d 547 (1963); and where Plaintiff makes a bnonfrivolous assertion that the Board has deprived it of fundamental constitutional rights, Fay v. Douds, 172 F.2d 720 (2d Cir. 1949), apply to the issues raised here? And finally, do the exceptions to the exhaustion doctrine, where the reasons for exhaustion are inapplicable, where exhaustion would be futile, and where the agency is inherently incompetent to deal with the issue, apply to the First Amendment claim presented by the Plaintiff?

 Judge Van Artsdalen discussed the first question in Caulfield of whether Section 10 of the NLRA had any applicability to the First Amendment claims, and concluded by saying: "I . . . determined that this case was not a "labor' case but a "First Amendment' case (as) the court was not being asked to review a representation order or decision of the NLRB." *fn9" It cannot be doubted that the Plaintiff seeks to protect a prime constitutional right or that the relief he seeks is to stop at the very threshold any exercise of jurisdiction by the NLRB. That is, it is not a question that concerns certification, or the bargaining unit, or the manner of a Board-conducted election or any other matter of the administration of the NLRB for which Section 10 would control, rather, it is a question of whether at the very first instance the NLRB should be prohibited from proceeding in any manner when that conduct would allegedly infringe basic constitutional rights. Therefore, as Judge Van Artsdalen aptly noted, the rationale of Section 10 simply does not apply where review is not sought of any agency action within its area of competence, but instead, involves a non-frivolous colorable constitutional claim.

 In this respect, I agree with Judge Van Artsdalen that Grutka, the only other decision dealing with precisely this issue, was incorrectly decided due to its apparent failure to appreciate the nature of the claim presented. In Grutka the panel treated the fundamental question of religious liberty as a question of intervention into the autonomy of the NLRB. It gave no special consideration of the First Amendment issue, rather, it adjudicated the matter as a typical "labor" case and applied the doctrine of exhaustion as developed in the labor context. Therefore, such cases as Boire v. Greyhound Corp., 376 U.S. 473, 84 S. Ct. 894, 11 L. Ed. 2d 849 (1964), which involved an allegation that the NLRB had erroneously assessed the facts in a certification proceeding, are not on point, nor properly controlling when the allegation of immediate unconstitutional encroachment by the government is the specific contention. By relying on the "labor" decisions and the case law developed under Section 10, we believe the Grutka court was wrong for the following reasons: this is not a petition for review of Board action; the rationale of Section 10 is simply not applicable to a religious liberty claim; and because it is inconceivable that Congress intended the exhaustion requirement of Section 10 to apply to a case of this nature.

 In respect to the judgment of the Seventh Circuit and in assuming arguendo that Section 10 does apply to the instant case, there are two applicable exceptions which permit this Court to exercise jurisdiction. *fn10" The two exceptions applicable to the present case were developed in the leading decisions of Leedom v. Kyne, 358 U.S. 184, 79 S. Ct. 180, 184, 3 L. Ed. 2d 210 (1958) and Fay v. Douds, 172 F.2d 720 (2d Cir. 1949). *fn11"

 In Leedom v. Kyne, the Supreme Court held that a District Court had the power to intervene in NLRB proceedings whenever the Board acted in excess of its express statutory mandate. The Supreme Court there was confronted with a situation in which the NLRB, despite a finding that one group of employees was professional and another was non-professional, nevertheless ordered an election with both groups joined in one bargaining unit. The unions that had originally represented only the professional employees brought suit to invalidate the Board's action. The suit was based on a section of the Act that expressly prohibited the joining of professional and non-professional employees in one unit without the approval of a majority of the professional employees involved. *fn12" Affirming the jurisdiction of the District Court, the Supreme Court stated that the action was:

 
"not one to "review' in the sense of that term as used in the Act, a decision of the Board made within its jurisdiction. Rather it is one to strike down an order of the Board made in excess of its delegated powers and contrary to a specific prohibition in the Act." *fn13"
 
The Court held that the Board's derogation of this statutory right was an "attempted exercise of power that had been specifically withheld" by Congress. *fn14"
 
The similarities between Kyne and the instant action are many. First, and most importantly, this is not a case to review a decision of the NLRB made within its jurisdiction. *fn15" It is one to stop at the threshold any action by the NLRB that would be contrary to the First Amendment. Second, if the action of the NLRB is unconstitutional, it would be per se beyond the Board's jurisdiction and in conflict with the legislative intent of the Act. Third, the exercise of jurisdiction by this Court is the only method of safeguarding the Plaintiff's rights as the alleged harm is in the NLRB taking any action, not in whatever action that may eventually result if the proceedings are permitted to continue. Last, the relief the Plaintiff seeks is from actions of the NLRB that allegedly go beyond not only its statutory authority, but beyond its constitutional power. Certainly, if the protection of any right is sufficiently extraordinary to require immediate review, it is an allegation that First Amendment Rights are on the verge of being abused. The Seventh Circuit, subsequent to Grutka, has conceded that "a lesser showing should be required to invoke the jurisdiction of the district courts, (when a constitutional violation is alleged)." Squillacote v. Int'l Brotherhood of Teamsters, Local 344, 561 F.2d 31, 38 (7th Cir. 1977). *fn16"
 
Even without the alleged constitutional violation, there are serious questions of whether the NLRB is exceeding the jurisdiction granted by Congress. Plaintiff persuasively argues that Congress never entertained the notion that the NLRA should apply to church schools as is evidenced by the text of the Act; the complete absence of a record evidencing an intent to regulate church schools; and in the presumed intention of the Congress to enact constitutional legislation. Of course, ultimately resolving the issue presented here on statutory grounds would avoid deciding the constitutional issue as is the preferred approach. *fn18" Regardless of what this Court's final determination will be on the granting or denial of the permanent injunction, the close question of whether the NLRB is exceeding the grant of jurisdiction under the NLRA adds to our conclusion that the Kyne exception applies to the instant case.
 
The text of the NLRA and the legislative history shows that Congress most likely did not contemplate the Act's applicability to Catholic parochial schools. The purpose of the Act was to avoid industrial strife and obstructions to the free flow of commerce. Outside of the fact that the commerce clause was not interpreted to be so sweeping at the time of the passage of the Act, *fn19" it is obvious from the testimony and other evidence now before this Court that the Act could at best only apply awkwardly to religious schools. *fn20"
 
The crux of this question is whether the definition of employer in the Act *fn21" includes religious institutions. The House version of the Taft-Hartly Act would have excluded from the definition of employer religious entities. *fn22" The reasons for the failure to specifically exclude religious enterprises appears, however, in the House Conference Report as follows:
 
"The other non-profit organizations excluded under the House bill are not specifically excluded in the conference agreement, for Only in exceptional circumstances and in connection with purely commercial activities of such organizations have any of the activities of such organizations or of their employees been considered as affecting commerce so as to bring them within the scope of the Act." *fn23"
 
Certainly from the language, there is a strong indication that Congress did not perceive the Act as applying to religious institutions.
 
The rules of statutory construction also arguably point to the conclusion that "employers" as used in the Act does not include religious institutions. In the landmark case of Church of the Holy Trinity v. United States, 143 U.S. 457, 12 S. Ct. 511, 36 L. Ed. 226 (1892) the Supreme Court held that if a literal construction of the words of a statute would lead to an absurd, unjust, nonintended result, the statute must be construed as to avoid the result. *fn24" In that case the federal government attempted to apply to a church a federal statute prohibiting the importation of aliens under contract or agreement to perform labor or service in the United States. The church had made a contract with an English pastor to come to the United States and enter into service for the church. On the basis of the contract, the United States sued the church for penalties ...

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