Local 60, United Brotherhood of Carpenters and Joiners of America v. National Labor Relations Board/Opinion of the Court

Petitioner, United Brotherhood, entered into a contract with Mechanical Handling Systems, Inc. (which we will call the Company), whereby the Company agreed to work the hours, pay the wages, abide by the rules and regulations of the union applicable to the locality where the work is done, and employ members of the union.

The Company, undertaking work at Indianapolis, agreed to hire workers on referral from a local union, one of the petitioners in this case. Two applicants from another local union were denied employment by the Company because they could not get referral from petitioner local union.

The Board found that petitioners had violated § 8(b)(1)(A) and § 8(b)(2) of the National Labor Relations Act, as amended by the Taft-Hartley Act, 61 Stat. 136, 141, as amended, 29 U.S.C. § 158, 29 U.S.C.A. § 158, in maintaining and enforcing an agreement which established closed-shop preferential hiring conditions and in causing the Company to refuse to hire the two applicants. 122 N.L.R.B. 396.

After granting other relief the Board said:

'(A)s we find that dues, nonmembership dues, assessments, and     work permit fees, were collected under the illegal contract      as the price employees paid in order to obtain or retain      their jobs, we do not believe it would effectuate the      policies of the Act to permit the retention of the payments      which have been unlawfully exacted from the employees.' It added that the remedial provisions 'are appropriate and necessary to expunge the coercive effect' of petitioners' unfair labor practices.

On application of the Board, the Court of Appeals enforced the order. 273 F.2d 699. The case is here on a writ of certiorari, 363 U.S. 837, 80 S.Ct. 1610, 4 L.Ed.2d 1723, in which petitioners challenge no part of the Board's order except the refund provision.

The provision for refund in this case is the product of a rule announced by the Board in the Brown-Olds case, 115 N.L.R.B. 594, which involved the use of a closed-shop agreement despite the ban in the Taft-Hartley Act. In that case a panel of three members of the five-member Board found a violation of the closed-shop provision of the Act. Two of the three agreed to an order of reimbursement to all employees for any assessments collected by the union within the period starting from six months prior to the date of the filing of the charge. One member, Ivar H. Peterson, dissented, saying that the reimbursement was inappropriate since there was an absence of 'specific evidence of coercion and evidence that payments were required as a condition of employment.' Id., 606. Later that remedy was extended to hiring arrangements, which though not operating in connection with a closed shop, were felt by the Board to have a coercive influence on applicants for work to join the union. Los Angeles-Seattle Motor Express, Inc., 121 N.L.R.B. 1629.

In neither of those cases nor in the present case was there any evidence that the union membership, fees, or dues were coerced. The Board as well as the Court of Appeals held that fact to be immaterial. Both said that the case was governed by Virginia Electric & Power Co. v. National Labor Relations Board, 319 U.S. 533, 63 S.Ct. 1214, 87 L.Ed. 1568; and the Court of Appeals added that coercion was to be inferred as 'there was present an implicit threat of loss of job if those fees were not paid.' 273 F.2d at page 703. The Board argues, in support of that position, that reimbursement of dues where hiring arrangements have been abused is protective of rights vindicated by the Act and authorized by § 10(c).

We do not think this case is governed by Virginia Electric & Power Co. v. National Labor Relations Board, supra. That case involved a company union whose very existence was unlawful. There were, indeed, findings that the union 'was not the result of the employees' free choice' (319 U.S. at page 537, 63 S.Ct. at page 1217), and that the employees had to remain members of the union to retain their jobs. Id., 319 U.S. 540, 63 S.Ct. 1218. Return of dues was one of the means for disestablishing an unlawful union. Id., 319 U.S. 541, 63 S.Ct. 1219. Cf. National Labor Relations Board v. District 50, United Mine Workers, 355 U.S. 453, 458-459, 78 S.Ct. 386, 389-360, 2 L.Ed.2d 401.

The unions in the present case were not unlawfully created. On the record before us they have engaged in prohibited activity. But there is no evidence that any of them coerced a single employee to join the union ranks or to remain as members. All of the employees affected by the present order were union members when employed on the job in question. So far as we know, they may have been members for years on end. No evidence was offered to show that even a single person joined the union with the view of obtaining work on this project. Nor was there any evidence that any who had voluntarily joined the union was kept from resigning for fear of retaliatory measures against him. This case is therefore quite different from Radio Officers, Union of Commercial Telegraphers Union, A.F.L. v. National Labor Relations Board, 347 U.S. 17, 48, 74 S.Ct. 323, 339, 98 L.Ed. 455, where, discrimination having been shown, the inferences to be drawn were left largely to the Board.

The Board has broad discretion to adapt its remedies to the needs of particular situations so that 'the victims of discrimination' may be treated fairly. See Phelps Dodge Corp. v. National Labor Relations Board, 313 U.S. 177, 194, 61 S.Ct. 845, 852, 86 L.Ed. 1271. But the power of the Board 'to command affirmative action is remedial, not punitive, and is to be exercised in aid of the Board's authority to restrain violations and as a means of removing or avoiding the consequences of violation where those consequences are of a kind to thwart the purposes of the Act.' Consolidated Edison Co. of New York v. National Labor Relations Board, 305 U.S. 197, 236, 59 S.Ct. 206, 220, 83 L.Ed. 126. Where no membership in the union was shown to be influenced or compelled by reason of any unfair practice, no 'consequences of violation' are removed by the order compelling the union to return all dues and fees collected from the members; and no 'dissipation' of the effects of the prohibited action is achieved. National Labor Relations Board v. District 50, United Mine Workers, supra, 355 U.S. 463, 78 S.Ct. 392. The order in those circumstances becomes punitive and beyond the power of the Board. Cf. Republic Steel Corp. v. National Labor Relations Board, 311 U.S. 7, 10, 61 S.Ct. 77, 78, 85 L.Ed. 6. As judge Pope said in Morrison-Knudsen Co. v. National Labor Relations Board, 9 Cir., 276 F.2d 63, 76, 'reimbursing a lot of old-time union men' by refunding their dues is not a remedial measure in the competence of the Board of impose, unless there is support in the evidence that their membership was induced, obtained, or retained in violation of the Act. It would be difficult, even with hostile eyes, to read the history of trade unionism except in terms of voluntary associations formed to meet pressing needs in a complex society.

Reversed.

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

Mr. Justice HARLAN, whom Mr. Justice STEWART joins, concurring.

While I agree with the Court that Virginia Electric & Power Co. v. National Labor Relations Board, 319 U.S. 533, 63 S.Ct. 1214, 87 L.Ed. 1568, does not justify the Board's 'Brown-Olds' remedy as it has been applied in this and other cases, I think the Board is entitled to be informed more fully why that should be so, since it may fairly be said that Virginia Electric could be taken as having invited the course the Board has been following. In joining the Court's opinion I shall therefore add some further views.

The Brown-Olds remedy is an order made under § 10(c) of the National Labor Relations Act which authorizes the Board, after finding an unfair labor practice, not only to issue a cease and desist order but also 'to take such affirmative action * *  * as will effectuate the policies of this Act *  *  * .' The remedy, which seems only to be applied if the unfair labor practice amounts either to employer domination of a union (§ 8(a)(2)) or discrimination in favor of union membership by an agreement between employer and union (§ 8(a) (3); § 8(b)(2)), typically requires that either the union or the employer reimburse all employees in the amount of all moneys paid in dues, assessments, etc., since six months before the unfair labor practice charge was filed. The Board does not admit defensive evidence that some employees voluntarily made such payments. An illegal closed shop or discriminatory hiring practices create an irrebuttable presumption of coercion. See, e.g., Brown-Olds Plumbing & Heating Corp., 115 N.L.R.B. 594; Saltsman Construction Co., 123 N.L.R.B. 1176; Nassau & Suffolk Contractors' Assn., 123 N.L.R.B. 1393; Lummus Corp., 125 N.L.R.B. 1161.

The provision that the Board was to be allowed 'to take such affirmative action * *  * as will effectuate the policies of this Act *  *  * ' did not pass the Wagner Act Congress without objection to the uncontrolled breadth of this power. See Hearings before Senate Committee on Education and Labor on S. 1958, 74th Cong., 1st Sess. 448-449. This Court's construction of the scope of the power has reflected a similar concern. The Board has been told that it is without power to 'effectuate the policies of this Act' by assessing punishments upon those who commit unfair labor practices. Republic Steel Corp. v. National Labor Relations Board, 311 US. 7, 11, 12, 61 S.Ct. 77, 79, 85 L.Ed. 6. The primary purpose of the provision for other affirmative relief has been held to be to enable the Board to take measures designed to recreate the conditions and relationships that would have been had there been no unfair labor practice. Consolidated Edison Co. of New York v. National Labor Relations Board, 305 U.S. 197, 236, 59 S.Ct. 206, 219, 83 L.Ed. 126. Thus in Phelps Dodge Corp. v. National Labor Relations Board, 313 U.S. 177, 61 S.Ct. 845, 85 L.Ed. 1271, this Court reversed the Board for refusing to allow an employer to show in mitigation of a back-pay order that the employee unjustifiably refused to take desirable new employment during the period. In Republic Steel, supra, the Court refused to enforce an order requiring the employer to pay the full amount of back pay to an employee who had been paid to work for the Work Projects Administration in the meantime. In National Labor Relations Board v. Seven-Up Bottling Co., 344 U.S. 344, 73 S.Ct. 287, 97 L.Ed. 377, the Court indicated that even an otherwise sensible procedure for computing back pay of an employee discriminatorily discharged must provide exceptions where the scheme would more than compensate the employee because of the seasonal nature of the employer's business.

The Board now emphasizes that its Brown-Olds remedy has a substantial tendency to deter employer-union encouragement of union membership in violation of §§ 8(a)(3) and 8(b)(2). But it also correctly recognizes that in light of the Republic Steel case, supra, it must show more than that the remedy will tend to deter unfair labor practices. The Board must establish that the remedy is a reasonable attempt to put aright matters the unfair labor practice set awry. As I understand its contentions, the Board attempts to make this showing by arguing that wherever there has been a not insignificant unlawful encouragement to union membership all members should be taken to have been under the influence of coercion, whether or not they were aware of this influence or would have acted differntly without it. The employees are said to have been coerced in much the same sense that a man contentedly sitting in the living room of his house may be said to be imprisoned by the barring of the doors whether or not he wants to leave. Accordingly, the Board has considered unnecessary an actual showing of employee unwillingness to belong to the union.

What we must decide, then, is whether it is within the power of the Board to provide dues-reimbursement relief for this type of imputed coercion, or, as the Board alternatively states its case, for the employee's loss of his statutory right to decide freely whether or not he shall be a union member. This issue is not satisfactorily resolved by simply pointing out that there has been no showing of forced payment of dues an employee was unwilling to pay, for unless I misunderstand the Board, it is arguing that even a willing union member loses something when there is a violation § 8(b)(2), namely the freedom of choice which the statute assures him. Nor, once we have recognized that a tendency to deter unfair labor practices is not alone sufficient justification for a Board order of affirmative relief, does the concept of punitiveness really advance a solution. Deterrence is certainly a desirable even though not in itself a sufficiently justifying effect of a Board order.

I think the Board should be denied the use of its Brown-Olds remedy in situations where, as here, it is not unlikely that a substantial number of employees were willing to pay dues for union membership because, as I see it, the amount of dues or other exactions paid is not a tenable way of estimating the value a willing union member would place on his right to choose freely whether or not he would be or remain a union member-as it were, on his right to change his mind. The amount of dues paid does perhaps provide a means of estimating the value of benefits received from the union. Or the amount of dues paid does perhaps measure the cost coercion imposes upon an employee who, if free to choose, would be unwilling to join the union (although even in this case a proper adjustment might have to take some account of the union benefits the employee would not have received had he been merely a nonunion employee in a unionized bargaining unit). But I can find no rational relationship at all between the amount of dues paid and the value an employee who is willing to join a union would place on his freedom to change his mind. In the absence of a showing of such a relationship, the Board's Brown-Olds order can no more be sustained than could its orders in the Phelps Dodge or Republic Steel cases.

A different result might follow in this case if Virginia Electric had held that such a relationship exists. But I think that case held only that, as a matter of statutory policy, an employee could not ever be deemed a willing member of a company-dominated union, cf. Matter of the Carpenter Steel Co., 76 N.L.R.B. 670, and that, on considerations of practicality, the employer who had violated the Act should bear the unapportionable costs of sustaining a union that served the employer's forbidden purposes at least as much as it served the employee's legitimate ones.

Mr. Justice WHITTAKER, dissenting.