National Labor Relations Board v. Lion Oil Company/Opinion of the Court

In this case we are called upon again to interpret § 8(d) of the National Labor Relations Act, as amended. See Mastro Plastics Corp. v. National Labor Relations Board, 350 U.S. 270, 76 S.Ct. 349. In particular we are concerned with s 8(d)(4), which provides that a party who wishes to modify or terminate a collective bargaining contract must continue 'in full force and effect, without resorting to strike or lockout, all the terms and conditions of the existing contract for a period of sixty days after * *  * notice (of his wish to modify or terminate) is given or until the expiration date of such contract, whichever occurs later.' Since § 8(d) defines the duty to bargain collectively, a violation of § 8(d)(4) constitutes a refusal to bargain, an unfair labor practice for employers, § 8(a)(5), and unions, § 8(b)(3). The last sentence of § 8(d) contains an additional sanction: an employee who strikes within the specified 60-day period loses his status as an employee for the purposes of §§ 8, 9 and 10 of the Act. The sole question presented by the petition for certiorari is:

Whether the requirement of this Section is satisfied where a     contract provides for negotiation and adoption of      modifications at an intermediate date during its term, and a      strike in support of modification demands occurs after the      date on which such modifications may become effective-and      after the 60-day notice period has elapsed-but prior to the      terminal date of the contract.

We are told by the Solicitor General that the question is of major importance in the negotiation and administration of hundreds of collective bargaining agreements throughout the country; that there is a decided trend among unions and employers to execute contracts of longer duration than formerly and to include provisions for reopening to negotiate changes during the contract term. Because of the importance of the question, we granted certiorari, 350 U.S. 986, 76 S.Ct. 471, to review a decision of the Court of Appeals for the Eighth Circuit to the effect that § 8(d)(4) bans strikes to obtain modifications of a contract until the contract by its terms or by the action of the parties has terminated.

On October 23, 1950, respondent Lion Oil Co. and the Oil Workers International Union, CIO, entered into a contract which provided:

'This agreement shall remain in full force and effect for the     period beginning October 23, 1950, and ending October 23,      1951, and thereafter until canceled in the manner hereinafter      in this Article provided.

'This agreement may be canceled and terminated by the Company     or the Union as of a date subsequent to October 23, 1951, by      compliance with the following procedure:

'(a) If either party to this agreement desires to amend the     terms of this agreement, it shall notify the other party in      writing of its desire to that effect, by registered mail. No     such notice shall be given prior to August 24, 1951. Within     the period of 60 days, immediately following the date of the      receipt of said notice by the party to which notice is so      delivered, the Company and the Union shall attempt to agree      as to the desired amendments to this agreement.

'(b) If an agreement with respect to amendment of this     agreement has not been reached within the 60-day period      mentioned in the sub-section immediately preceding, either      party may terminate this agreement thereafter upon not less      than sixty day's written notice to the other. Any such notice     of termination shall state the date upon which the      termination of this agreement shall be effective.'

On August 24, 1951, the union served written notice on the company of its desire to modify the contract. Negotiations began on the contractual changes proposed by the union. The union members voted for a strike on February 14, 1952, but the strike, thrice postponed as negotiations continued, did not actually begin until April 30, 1952. The union never gave notice to terminate the contract as contemplated by the quoted contractual provision. Therefore, at all relevant times a collective bargaining agreement was in effect. On August 3, a new contract was executed, and the strikers began to return to work the following day. Certain actions of the company during the strike were the basis of unfair labor practice charges by the union upon which a complaint issued.

The Labor Board found that the company was guilty of unfair labor practices under § 8(a)(1), (3) and (5) of the Act. The company defended on the ground that the strike, because it occurred while the contract was in effect, was in violation of § 8(d)(4). A majority of the Board rejected this defense, holding that

'The term 'expiration date' as used in section 8(d)(4) * *  *      has a two-fold meaning; it connotes not only the terminal      date of a bargaining contract, but also an agreed date in the      course of its existence when the parties can effect changes      in its provisions.'

The Board held that since, under the contract in dispute, October 23, 1951, was such an 'agreed date,' the notice given August 24 followed by a wait of more than 60 days satisfied the statute. The company was ordered to cease and desist and, affirmatively, to make whole employees found to have been discriminated against. 109 N.L.R.B. 680, 683.

On the company's petition for review, the Court of Appeals set aside the Board's order. 8 Cir., 221 F.2d 231. The court held that the 'expiration date' of the contract was the date on which all rights and obligations under it would cease; that the second notice required to bring about this termination not having been given, the strike violated § 8(d)(4) and the strikers therefore lost their status as employees entitled to the protection of the Act.

In Mastro Plastics Corp. v. National Labor Relations Board, supra, we had before us another provision of § 8(d). What we said there in ruling out a narrowly literal construction of the words of the statute is equally apropos here. 'If the above words are read in complete isolation from their context in the Act, such an interpretation is possible. However, 'In expounding a statute, we must not be guided by a single sentence or member of a sentence, but look to the provisions of the whole law, and to its object and policy.' United States v. Boisdore § Heirs, 8 How. 113, 122, 12 L.Ed. 1009.' 350 U.S. at page 285, 76 S.Ct. at page 359. Moreover, in Mastro Plastics we cautioned against accepting a construction that 'would produce incongruous results.' Id., 350 U.S. at page 286, 76 S.Ct. at page 360.

That § 8(d)(4) is susceptible of various interpretation is apparent when § 8(d) is read as a whole. Its ambiguity was recognized by the Joint Committee of Congress created by the very act of which § 8(d) was a part to study the operation of the federal labor laws. Members of the National Labor Relations Board, the agency specially charged by Congress with effectuating the purposes of the national labor legislation, have expressed divergent views on the proper construction of § 8(d)(4); none of them has taken the position adopted by the court below. In the face of this ambiguity it will not do simply to say Congress could have made itself clearer and automatically equate the phrase 'expiration date' only with the date when a contract comes to an end.

We find our guide to the general context of the statute in Mastro Plastics. In that case we recognized a 'dual purpose' in the Taft-Hartley Act-to substitute collective bargaining for economic warfare and to protect the right of employees to engage in concerted activities for their own benefit. 350 U.S. at page 284, 76 S.Ct. at page 358. A construction which serves neither of these aims is to be avoided unless the words Congress has chosen clearly compel it. The restriction on employees' concerted activities which would result from the construction placed upon § 8(d)(4) by the Court of Appeals is obvious. Too, we think it would discourage the development of long-term bargaining relationships. Unions would be wary of entering into long-term contracts with machinery for reopening them for modification from time to time, if they thought the right to strike would be denied them for the entire term of such a contract, though they imposed no such limitations on themselves.

We do not believe that the language used by Congress requires any such result. Section 8(d)(1) provides that no party to an existing collective bargaining contract 'shall terminate or modify such contract, unless the party desiring such termination or modification-(1) serves a written notice upon the other party to the contract of the proposed termination or modification sixty days prior to the expiration date thereof * *  * .' The phrase 'expiration date' is repeated in § 8(d)(1) and again in the 'whichever occurs later' clause of § 8(d)(4) upon which this case turns. The use of the three words 'termination,' 'modification' and 'expiration' is significant. We conceive that a notice of desired modification would typically be served in advance of the date when the contract by its own terms was subject to modification. Notice of desired termination would ordinarily precede the date when the contract would come to an end by its terms or would be automatically renewed in the absence of notice to terminate. Therefore we conclude that Congress meant by 'expiration date' in § 8(d)(1) to encompass both situations, and the same phrase in § 8(d)(4) must carry the same meaning. 'Expiration' has no such fixed and settled meaning as to make this an unduly strained reading.

Our conclusion is buttressed by a provision of § 8(d) which was added by the Conference Committee.

'(T)he duties * *  * imposed (by subsections (2), (3) and (4))      shall not be construed as requiring either party to discuss      or agree to any modification of the terms and conditions      contained in a contract for a fixed period, if such      modification is to become effective before such terms and      conditions can be reopened under the provisions of the      contract.'

The negative implication seems clear: Congress recognized a duty to bargain over modifications when the contract itself contemplates such bargaining. It would be anomalous for Congress to recognize such a duty and at the same time deprive the union of the strike threat which, together with 'the occasional strike itself, is the force depended upon to facilitate arriving at satisfactory settlements.'

Although a 1948 committee report is no part of the legislative history of a statute enacted in 1947, we note that the Joint Committee on Labor-Management Relations, made up of members of the Congress which passed the Taft-Hartley Act, in its final report reached the same conclusion we do:

'Reading section 8(d) as a whole seems to lead to the     conclusion that the act permits a strike, after a 60-day      notice, in the middle of a contract which authorizes a      reopening on wages. Use of the words 'or modify' and 'or     modification' in the proviso, and use of 'or modification' in      section 8(d)(1), and the statement in the final paragraph of      the section that the parties are not required to agree to any      modification effective before the contract may be reopened      under its terms, all seem to contemplate the right of either      party to insist on changes in the contract if they have so      provided. The right of the union would be an empty one     without the right to strike after a 60-day notice.'

The contemporary legislative history manifests no real recognition of the problem before us. A reading of the committee reports and the floor debates alone could well lead to the conclusion that both the sponsors and the opponents of the bill saw in § 8(d)(4) no more than a means for preventing 'quickie' strikes by requiring a 'cooling-off' period which would not in any circumstances exceed 60 days. But the language used in the statute goes beyond this limited purpose. Significance must be given to the clause, 'or until the expiration date of such contract, whichever occurs later.' We believe our construction gives meaning to the congressional language which accords with the general purpose of the Act.

Applying that construction to the facts of this case, we hold that the notice and waiting requirements of § 8(d) were fully satisfied. October 23, 1951, was the first date upon which the contract by its terms was subject to amendment. Notice of proposed amendments was served 60 days in advance. The strike did not occur until long afterward. The fact that on October 23 the contract became terminable upon further notice by either party is immaterial. One thing the most authoritative legislative gloss on § 8(d), the report of the Senate Committee, makes clear is that the statutory notice requirement operates wholly independently of whatever notice requirement the parties have fixed for themselves. The situation here is not different, so far as the applicability of the statute is concerned, from that of a fixed-term contract with a clause providing for reopening at some specific time.

Nor can we accept respondents' alternative contention that, even apart from § 8(d), the strike was in breach of contract and the strikers were for that reason not entitled to relief at the hand of the Board. Respondents rely upon National Labor Relations Board v. Sands Mfg. Co., 306 U.S. 332, 59 S.Ct. 508, 83 L.Ed. 682. In Sands, as in this case, the contract did not contain an express nostrike clause. Employees there refused in the course of the contract to continue work 'in accordance with their contract.' Id., 306 U.S. at page 344, 59 S.Ct. at page 514. The refusal occurred midway in a fixed-term contract which did not provide for modifications during its term. This Court sustained the propriety of the employer's action in discharging the employees. Here the strike occurred at a time when the parties were bargaining over modifications after notice and in accordance with the terms of the contract. Where there has been no express waiver of the right to strike, a waiver of the right during such a period is not to be inferred. We do not believe that the two-phase provision for terminating this contract means that it was not within the contemplation of the parties that economic weapons might be used to support demands for modification before the notice to terminate was given.

The judgment below is reversed and the case remanded for proceedings in conformity with this opinion.

Reversed and remanded.

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