Guss v. Utah Labor Relations Board/Opinion of the Court

The question presented by this appeal and by Amalgamated Meat Cutters, etc. v. Fairlawn Meats, Inc., 353 U.S. 20, 77 S.Ct. 604, and San Diego Building Trades Council v. Garmon, 353 U.S. 26, 77 S.Ct. 607, is whether Congress, by vesting in the National Labor Relations Board jurisdiction over labor relations matters affecting interstate commerce, has completely displaced state power to deal with such matters where the Board has declined or obviously would decline to exercise its jurisdiction but has not ceded jurisdiction pursuant to the proviso to § 10(a) of the National Labor Relations Act. It is a question we left open in Building Trades Council v. Kinard Construction Co., 346 U.S. 933, 74 S.Ct. 373, 98 L.Ed. 423.

Some background is necessary for an understanding of this problem in federal-state relations and how it assumed its present importance. Since it was first enacted in 1935, the National Labor Relations Act has empowered the National Labor Relations Board 'to prevent any person from engaging in any unfair labor practice * *  * (defined by the Act) affecting commerce.' By this language and by the definition of 'affecting commerce' elsewhere in the Act, Congress meant to reach to the full extent of its power under the Commerce Clause. National Labor Relations Board v. Fainblatt, 306 U.S. 601, 606-607, 59 S.Ct. 668, 672, 83 L.Ed. 1014. The Board, however, has never exercised the full measure of its jurisdiction. For a number of years, the Board decided case-by-case whether to take jurisdiction. In 1950, concluding that 'experience warrants the establishment and announcement of certain standards' to govern the exercise of its jurisdiction, Hollow Tree Lumber Co., 91 N.L.R.B. 635, 636, the Board published standards, largely in terms of yearly dollar amounts of interstate inflow and outflow. In 1954, a sharply divided Board, see Breeding Transfer Co., 110 N.L.R.B. 493, revised the jurisdictional standards upward. This Court has never passed and we do not pass today upon the validity of any particular declination of jurisdiction by the Board or any set of jurisdictional standards.

How many labor disputes the Board's 1954 standards leave in the 'twilight zone' between exercised federal jurisdiction and unquestioned state jurisdiction is not known. In any case, there has been recently a substantial volume of litigation raising the question stated at the beginning of this opinion, of which this case is an example.

Appellant, doing business in Salt Lake City, Utah, manufactures specialized photographic equipment for the Air Force on a contract basis. To fulfill his government contracts he purchased materials from outside Utah in an amount 'a little less than $50,000.' Finished products were shipped to Air Force bases, one within Utah and the others outside. In 1953 the United Steelworkers of America filed with the National Labor Relations Board a petition for certification of that union as the bargaining representative of appellant's employees. A consent election was agreed to, the agreement reciting that appellant was 'engaged in commerce within the meaning of Section 2(6), (7) of the National Labor Relations Act.' The union won the election and was certified by the National Board as bargaining representative. Shortly thereafter the union filed with the National Board charges that appellant had engaged in unfair labor practices proscribed by § 8(a)(1), (3) and (5) of the Act. Meanwhile, on July 15, 1954, the Board promulgated its revised jurisdictional standards. The Board's Acting Regional Director declined to issue a complaint. He wrote on July 21:

'Further proceedings are not warranted, inasmuch as the     operations of the Company involved are predominantly local in      character, and it does not appear that it would effectuate      the policies of the Act to exercise jurisdiction.'

The union thereupon filed substantially the same charges with the Utah Labor Relations Board, pursuant to the Utah Labor Relations Act. Appellant urged that the State Board was without jurisdiction of a matter within the jurisdiction of the National Board. The State Board, however, found it had jurisdiction and concluded on the merits that appellant had engaged in unfair labor practices as defined by the Utah Act. It granted relief through a remedial order. On a Writ of Review, the Utah Supreme Court affirmed the decision and order of the state administrative agency. We noted probable jurisdiction. 352 U.S. 817, 77 S.Ct. 65.

On these facts we start from the following uncontroverted premises:

(1) Appellant's business affects commerce within the meaning of the National Labor Relations Act and the National Labor Relations Board had jurisdiction. National Labor Relations Board v. Fainblatt, supra.

(2) The National Act expressly deals with the conduct charged to appellant which was the basis of the state tribunals' actions. Therefore, if the National Board had not declined jurisdiction, state action would have been precluded by our decision in Garner v. Teamsters Union, 346 U.S. 485, 74 S.Ct. 161, 98 L.Ed. 228.

(3) The National Board has not entered into any cession agreement with the Utah Board pursuant to § 10(a) of the National Act.

'The Board is empowered, as hereinafter provided, to prevent     any person from engaging in any unfair labor practice (listed      in Section 8) affecting commerce. This power shall not be     affected by any other means of adjustment or prevention that      has been or may be established by agreement, law, or      otherwise: Provided, That the Board is empowered by agreement      with any agency of any State or Territory to cede to such      agency jurisdiction over any cases in any industry (other      than mining, manufacturing, communications, and      transportation except where predominantly local in character)      even though such cases may involve labor disputes affecting      commerce, unless the provision of the State or Territorial      statute applicable to the determination of such cases by such agency is inconsistent with the corresponding provision of      this Act or has received a construction inconsistent      therewith.' (Emphasis added.)

The proviso to § 10(a), italicized in the quotation above, was one of the Taft-Hartley amendments to the National Labor Relations Act. Timing and a reference in one of the committee reports indicate that it was drafter in response to the decision of this Court in Bethlehem Steel Co. v. New York State Labor Relations Board, 330 U.S. 767, 67 S.Ct. 1026, 91 L.Ed. 1234. In Bethlehem foremen in an enterprise affecting commerce petitioned the New York State Labor Relations Board for certification as a bargaining unit. At that time the National Board was declining, as a matter of policy, to certify bargaining units composed of foremen. The Court held that the federal policy against certifying foremen's units must prevail. However, it took occasion to discuss the efforts of the two boards to avoid conflicts of jurisdiction.

'The National and State Boards have made a commendable effort     to avoid conflict in this overlapping state of the statutes. We find nothing in their negotiations, however, which affects     either the construction of the federal statute or the      question of constitutional power insofar as they are involved      in this case, since the National Board made no concession or      delegation of power to deal with this subject. The election     of the National Board to decline jurisdiction in certain      types of cases, for budgetary or other reasons presents a      different problem which we do not now decide.' Id., 330 U.S.      at page 776, 67 S.Ct. at page 1031.

Three Justices were led to concur specially, because, as it was stated for the three:

'I read * *  * (the Court's opinion) to mean that it is beyond      the power of the National Board to agree with State agencies      enforcing laws like the Wagner Act to divide, with due regard      to local interests, the domain over which Congress had given      the National Board abstract discretion but which,      practically, cannot be covered by it alone. If such     cooperative agreements between State and National Boards are      barred because the power which Congress has granted to the      National Board ousted or superseded State authority, I am      unable to see how State authority can revive because Congress      has seen fit to put the Board on short rations.' Id., 330      U.S. at page 779, 67 S.Ct. at page 1032.

Thus, if the opinion of the Court did not make manifest, the concurring opinion did, that after Bethlehem there was doubt whether a state board could act either after a formal cession by the National Board or upon a declination of jurisdiction 'for budgetary or other reasons.' When we read § 10(a) against this background we find unconvincing the argument that Congress meant by the proviso only to meet the first problem, i.e., cession of jurisdiction over cases the National Board would otherwise handle.

The proviso is directed at least equally to the type of cases which the Board might decline 'for budgetary or other reasons' to hear as to the type of cases it might wish to cede to the States for policy reasons-if, indeed, there is any difference between the two classes. Cases in mining, manufacturing, communications and transportation can be ceded only where the 'industry' is 'predominantly local in character.' In other industries, which Congress might have considered to be more or less typically local, it put no such limitation on the Board's power. The Senate Committee spelled the matter out:

'The proviso which has been added to this subsection (§     10(a)) permits the National Board to allow State      labor-relations boards to take final jurisdiction of cases in      borderline industries (i.e., border line insofar as      interstate commerce is concerned), provided the State statute      conforms to national policy.'

The Committee minority agreed as to the purpose of the proviso and agreed 'with the majority that it is desirable thus to clarify the relations between the National Labor Relations Board and the various agencies which States have set up to handle similar problems.'

We hold that the proviso to § 10(a) is the exclusive means whereby States may be enabled to act concerning the matters which Congress has entrusted to the National Labor Relations Board. We find support for our holding in prior cases in this Court. In Amalgamated Ass'n of St. Elec. Ry. & Motor Coach Employees v. Wisconsin Board, 340 U.S. 383, 397-398, 71 S.Ct. 359, 367, 95 L.Ed. 364, the Court said:

'The legislative history of the 1947 Act refers to the     decision of this Court in Bethlehem Steel Co. v. New York      State Labor Relations Board, 1947, 330 U.S. 767, 67 S.Ct. 1026, 91 L.Ed. 1234, and, in its handling of the problems     presented by that case, Congress demonstrated that it knew      how to cede jurisdiction to the states. Congress knew full     well that its labor legislation 'preempts the field that the act covers insofar as commerce within the meaning of the act      is concerned' and demonstrated its ability to spell out with      particularity those areas in which it desired state      regulation to be operative.' (Footnotes omitted.)

In a footnote to the first sentence quoted above the Court cited § 10(a) and described its authorization to cede jurisdiction only where the state law is consistent with the national legislation as insuring 'that the national labor policy will not be thwarted even in the predominantly local enterprises to which the proviso applies.' Id., 71 S.Ct. 367, note 23. See also Algoma Plywood & Veneer Co. v. Wisconsin Board, 336 U.S. 301, 313, 69 S.Ct. 584, 590, 93 L.Ed. 691; People of State of California v. Zook, 336 U.S. 725, 732, 69 S.Ct. 841, 844, 93 L.Ed. 1005.

Our reading of § 10(a) forecloses the argument based upon such cases as H. P. Welch Co. v. New Hampshire, 306 U.S. 79, 59 S.Ct. 438, 83 L.Ed. 500, and Missouri Pacific R. Co. v. Larabee Flour Mills Co., 211 U.S. 612, 29 S.Ct. 214, 53 L.Ed. 352, that 'where federal power has been delegated but lies dormant and unexercised,' Bethlehem Steel Co. v. New York State Labor Relations Board, supra, 330 U.S. at page 775, 67 S.Ct. at page 1031, the States' power to act with respect to matters of local concern is not necessarily superseded. But in each case the question is one of congressional intent. Compare H. P. Welch Co. v. New Hampshire, supra, with Napier v. Atlantic Coast Line R. Co., 272 U.S. 605, 47 S.Ct. 207, 71 L.Ed. 432. And here we find not only a general intent to pre-empt the field but also the proviso to § 10(a), with its inescapable implication of exclusiveness.

We are told by appellee that to deny the State jurisdiction here will create a vast no-man's-land, subject to regulation by no agency or court. We are told by appellant that to grant jurisdiction would produce confusion and conflicts with federal policy. Unfortunately, both may be right. We believe, however, that Congress has expressed its judgment in favor of uniformity. Since Congress' power in the area of commerce among the States is plenary, its judgment must be respected whatever policy objections there may be to creation of a no-man's-land.

Congress is free to change the situation at will. In 1954 the Senate Committee on Labor and Public Welfare recognized the existence of a no-man's-land and proposed an amendment which would have empowered state courts and agencies to act upon the National Board's declination of jurisdiction. The National Labor Relations Board can greatly reduce the area of the no-man's-land by reasserting its jurisdiction and, where States have brought their labor laws into confromity with federal policy, by ceding jurisdiction under § 10(a). The testimony given by the Chairman of the Board before the Appropriations Committees shortly before the 1954 revisions of the jurisdictional standards indicates that its reasons for making that change were not basically budgetary. They had more to do with the Board's concept of the class of cases to which it should devote its attention.

The judgment of the Supreme Court of Utah is

Reversed.

Mr. Justice WHITTAKER took no part in the consideration or decision of this case.

Mr. Justice BURTON, whom Mr. Justice CLARK joins, dissenting.

I believe the Court is mistaken in its interpretation of the proviso which Congress added to § 10(a) of the National Labor Relations Act in 1947. It is my view that the proviso was added merely to make it clear that the National Labor Relations Board had the power, by making specific agreements, to cede jurisdiction to state or territorial agencies over certain labor disputes. Congress sought thereby to facilitate state cooperation in the supervision of labor practices affecting interstate commerce. The Court is not justified in interpreting this action as evidencing an unexpressed and sweeping termination of the States' pre-existing power to deal with labor matters over which the Board, for budgetary or other administrative reasons, has declined, or obviously would decline, to exercise its full jurisdiction.

The Labor Acts of 1935 and 1947 granted to the Board extensive jurisdiction over labor controversies affecting interstate commerce but neither Act required the Board to assert at all times the full measure of its jurisdiction. In each Act the first sentence of § 10(a) 'empowered,' but did not direct, the Board to prevent unfair labor practices. Likewise, the first sentence of § 10(b) granted the 'power,' instead of imposing the duty, to issue complaints upon receipt of appropriate charges. The Board is not a court whose jurisdiction over violations of private rights must be exercised. It is an administrative agency whose function is to adjudicate public rights in a manner that will effectuate the policies of the Act. See Amalgamated Utility Workers v. Consolidated Edison Co., 309 U.S. 261, 60 S.Ct. 561, 84 L.Ed. 738.

From the beginning, budgetary limitations and other administrative considerations have prevented the Board from exercising jurisdiction over all cases in which interstate commerce was affected. Congress knew this when, in 1947, it left unchanged the discretionary language of § 10 and added the proviso to § 10(a). Congress has consistently refrained from appropriating funds sufficient to permit the Board to entertain all complaints within its jurisidction. In recent years Congress has repeatedly recognized the Board's jurisdictional practice. In National Labor Relations Board v. Denver Bldg. & Trades Council, 341 U.S. 675, 684, 71 S.Ct. 943, 949, 95 L.Ed. 1284, this Court said that 'Even when the effect of activities on interstate commerce is sufficient to enable the Board to take jurisdiction of a complaint, the Board sometimes properly declines to do so, stating that the policies of the Act would not be effectuated by its assertion of jurisdiction in that case.' Courts of Appeals have approved the Board's practice and none of the parties to the instant cases question it.

Unless restricted by the proviso added to § 10(a), there is title doubt that the States have the necessary power to act in labor controversies within their borders, even when interstate commerce is affected, provided the Federal Government has not occupied the field and the National Board has not taken jurisdiction. Where the Board has declined, or obviously would decline, to take jurisdiction, then federal power lies 'dormant and unexercised.' Bethlehem Steel Co. v. New York State Labor Relations Board, 330 U.S. 767, 775, 67 S.Ct. 1026, 1031, 91 L.Ed. 1234. Unless the proviso stands in their way, the States may then exercise jurisdiction since their action will not conflict with the Board's administration of the Act. Substantive provisions of the Act may limit the action of the States. See United Mine Workers v. Arkansas Oak Flooring Co., 351 U.S. 62, 75, 76 S.Ct. 559, 566, 100 L.Ed. 941. But the States are not deprived of all power to act.

By this decision the Court restricts the power of the State to those labor disputes over which the National Board expressly cedes its jurisdiction to the appropriate state agencies. However, the proviso's requirements are so highly restrictive that not a single cession has been made under it. The result of this decision is the creation of an extensive no man's land within which no federal or state agency or court is empowered to deal with labor controversies. It is difficult to believe that Congress, sub silentio, intended to take such a step backward in the field of labor relations.

The immediate occasion that led to the enactment of the proviso throws light on its proper interpretation. That occasion was this Court's decision in the Bethlehem case, supra, where it was held that a State Board did not have jurisdiction to certify a union of foremen as a collective-bargaining agency because the National Board, by asserting general jurisdiction over foremen's unions, had occupied the field. Although an agreement had been negotiated between the National Board and the State Board ceding jurisdiction over certain labor matters, this Court concluded that the agreement did not cede jurisdiction over foremen's unions. Three Justices decried certain overtones they found in the opinion of the Court to the effect that the National Board lacked authority to cede jurisdiction over predominantly local labor matters by agreement with state agencies. It was to clarify the power of the National Board to make such a cession that the proviso was added to § 10(a).

While the proviso thus evidenced a congressional purpose to encourage state action, there is no indication that it was intended to wipe out, by implication, the States' recognized power to act when the National Board declined to take jurisdiction. Neither the language of the proviso nor its legislative history discloses a conscious congressional intent to eliminate state authority when the National Board has declined to act. Unequivocal legislative history would be necessary to sustain a conclusion that Congress intended such a drastic result. In the Bethlehem case, supra, the Court did not question the authority of the States to act when the Board, for budgetary or other administrative reasons, declined to exercise its full jurisdiction. The Court expressly refrained from passing on that question but three Justices said that they found in the opinion of the Court a 'suggestion that the National Board's declination of jurisdiction 'in certain types of cases, for budgetary or other reasons' might leave room for the State in those situations * *  * .' 330 U.S., at page 778, 67 S.Ct. at page 1032.

As a matter of fact, in 1947, nearly 40 States lacked labor agencies and comprehensive labor legislation. Obviously, those States were ineligible to take advantage of the proviso. It is hard to imagine that Congress meant to make the proviso the exclusive channel for state jurisdiction when so many States would be automatically excluded from using it. The full mission of the proviso was to supply the National Board with express authority to cede jurisdiction over labor disputes by agreement where, as a matter of deliberate judgment, it concluded that due regard for local interests made that course desirable. The Board's jurisdictional yardsticks always have reflected its need to distribute its limited resources so as best to effectuate the policies of the Act. The Board does not 'cede' jurisdiction when it declines to exercise its full jurisdiction; it merely allows the States to exercise their pre-existing authority.

The Court's interpretation of the proviso is contrary to the established practice of the States and of the National Board, as well as to the considered position taken by the Board as amicus curiae. Congress has demonstrated a continuing and deep interest in providing governmental machinery for handling labor controversies. The creation by it of a large, unsupervised no man's land flies in the face of that policy. Due regard for our federal system suggests that all doubts on this score should be resolved in favor of a conclusion that would not leave the States powerless when the federal agency declines to exercise its jurisdiction. As three Justices said in the Bethlehem case, supra:

'Since Congress can, if it chooses, entirely displace the     States to the full extent of the far-reaching Commerce      Clause, Congress needs no help from generous judicial      implications to achieve the supersession of State authority. To construe federal legislation so as not needlessly to     forbid preexisting State authority is to respect our federal      system. Any indulgence in construction should be in favor of     the States, because Congress can speak with drastic clarity      whenever it chooses to assure full federal authority,      completely displacing the States.' 330 U.S., at page 780, 67      S.Ct. at page 1033.

I would sustain the jurisdiction of the respective States in these cases.