National Labor Relations Board v. Metropolitan Life Insurance Company/Opinion of the Court

On petition of Insurance Workers International Union, AFL CIO, and over the protest of respondent, Metropolitan Life Insurance Company, as to the appropriateness of the bargaining unit, the National Labor Relations Board, in a proceeding under § 9(c) of the National Labor Relations Act, 49 Stat. 453, as amended, 29 U.S.C. § 159(c) (1958 ed.), certified the union as the bargaining representative of all debit insurance agents, including all canvassing regular and office account agents, at respondent's district office in Woonsocket, Rhode Island. Respondent deliberately refused to bargain with the union in order to challenge the appropriateness of the employee unit certified by the Board. See Pittsburgh Plate Glass Co. v. National Labor Relations Board, 313 U.S. 146, 61 S.Ct. 908, 85 L.Ed. 1251. The union thereupon filed unfair labor practice charges with the Board. The Board, adhering to its prior unit determination, held that respondent violated §§ 8(a)(1) and (5) of the Labor Relations Act, 49 Stat. 452, as amended, 29 U.S.C. §§ 158(a)(1) and (5) (1958 ed.), and directed respondent to bargain with the union. 142 N.L.R.B. 491. The Court of Appeals for the First Circuit refused to enforce the order on the grounds that in light of the 'Board's failure to articulate specific reasons for its unit determination,' 327 F.2d 906, 909, the Board's apparently inconsistent determinations of appropriate units of respondent's employees in other cities or regions, see 138 N.L.R.B. 565 (Delaware); 138 N.L.R.B. 734 (Sioux City); 144 N.L.R.B. 149 (Chicago); 138 N.L.R.B. 512 (Cleveland), its failure to discuss in these cases what weight, if any, it gave to the factor of the extent of union organization, and the fact that in these cases the Board consistently certified the unit requested by the union, the Court of Appeals could 'only conclude that the * *  * Board *  *  * has indeed *  *  * (regarded) the extent of union organization as controlling in violation of § 9(c)(5) of the Act.' 327 F.2d, at 911. We granted certiorari because of an aparent conflict between this decision and the decisions of the Court of Appeals for the Third Circuit in Metropolitan Life Ins. Co. v. National Labor Relations Board, 328 F.2d 820, petition for certiorari pending, No. 56 this Term (granted, 85 S.Ct. 1325), which sustained the Board's determination in the Delaware case, 138 N.L.R.B. 565, and the Court of Appeals for the Sixth Circuit, Metropolitan Life Ins. Co. v. National Labor Relations Board, 330 F.2d 62, petition for certiorari pending, No. 229 this Term (granted, 85 S.Ct. 1326), which sustained the Board's determination in the Cleveland case, 138 N.L.R.B. 512. See also National Labor Relations Board v. Western & Southern Life Ins. Co., 328 F.2d 891 (C.A.3d Cir.), petition for certiorari pending, No. 91 this Term (granted, 85 S.Ct. 1326).

Section 9(b) of the National Labor Relations Act, 49 Stat. 453, as amended, 29 U.S.C. § 159(b) (1958 ed.) provides:

'The Board shall decide in each case whether, in order to     assure to employees the fullest freedom in exercising the      rights guaranteed by this subchapter, the unit appropriate      for the purposes of collective bargaining shall be the      employer unit, craft unit, plant unit, or subdivision thereof      *  *  * .'

This broad delegation of authority, see Pittsburgh Glass Co. v. National Labor Relations Board, supra, was limited in 1947 by the enactment of § 9(c)(5) of the Act, 61 Stat. 144, 29 U.S.C. § 159(c)(5) (1958 ed.), which provides that '(i)n determining whether a unit is appropriate for the purposes specified in subsection (b) of this section the extent to which the employees have organized shall not be controlling.'

Although it is clear that in passing this amendment Congress intended to overrule Board decisions where the unit determined could only be supported on the basis of the extent of organization, both the language and legislative history of § 9(c)(5) demonstrate that the provision was not intended to prohibit the Board from considering the extent of organization as one factor, though not the controlling factor, in its unit determination.

The Court of Appeals here properly recognized this effect of § 9(c)(5), but held, in light of the unarticulated bases of decision, and what appeared to it to be inconsistent determinations approving units requested by the union, that the only conclusion that it could reach was that the Board has made the extent of organization the controlling factor, in violation of the congressional mandate. We agree with the Court of Appeals that the enforcing court should not overlook or ignore an evasion of the § 9(c)(5) command. We further agree that in determining whether or not there has been such an evasion, the results in other recent decisions of the Board are relevant. We cannot, however, agree that the only possible conclusion here is that the Board has violated § 9(c) (5). Cf. Metropolitan Life Ins. Co. v. National Labor Relations Board (Cleveland), supra; Metropolitan Life Ins. Co. v. National Labor Relations Board (Delaware), supra.

On the other hand, due to the Board's lack of articulated reasons for the decisions in and distinctions among these cases, the Board's action here cannot be properly reviewed. When the Board so exercises the discretion given to it by Congress, it must 'disclose the basis of its order' and 'give clear indication that it has exercised the discretion with which Congress has empowered it.' Phelps Dodge Corp. v. National Labor Relations Board, 313 U.S. 177, 197, 61 S.Ct. 845, 854, 85 L.Ed. 1271. See Burlington Truck Lines v. United States, 371 U.S. 156, 167-169, 83 S.Ct. 239, 245-246, 9 L.Ed.2d 207; Interstate Commerce Comm'n v. J-T Transport Co., 368 U.S. 81, 93, 82 S.Ct. 204, 211, 7 L.Ed.2d 147. Although Board counsel in his brief and argument before this Court has rationalized the different unit determinations in the variant factual situations of these cases on criteria other than a controlling effect being given to the extent of organization, the integrity of the administration process requires that 'courts may not accept appellate counsel's post hoc rationalizations for agency action * *  * .' Burlington Truck Lines v. United States, supra, 371 U.S. at 168, 83 S.Ct. at 246; see Securities & Exchange Comm'n v. Chenery Corp., 332 U.S. 194, 196, 67 S.Ct. 1575, 1577, 91 L.Ed. 1995. For reviewing courts to substitute counsel's rationale or their discretion for that of the Board is incompatible with the orderly function of the process of judicial review. Such action would not vindicate, but would deprecate the administrative process for it would 'propel the court into the domain which Congress has set aside exclusively for the administrative agency.' Securities & Exchange Comm'n v. Chenery Corp., supra, at 196, 67 S.Ct. at 1577.

Accordingly, the judgment of the Court of Appeals is vacated and the case remanded to that court with instructions to remand it to the Board for further proceedings consistent with this opinion. It is so ordered.

Judgment of Court of Appeals vacated and case remanded with instructions.

Mr. Justice DOUGLAS, dissenting.