National Labor Relations Board v. Natural Gas Utility District of Hawkins County

In this unfair labor practice proceeding under the Labor Management Relations Act respondent contended that it was not an "employer" but came within the "political subdivision" exemption in § 2 (2) of the Act. The National Labor Relations Board (NLRB) had found that respondent met neither of the tests to which it held that exemption was limited, viz., entities that are either (1) created directly by the State, so as to constitute governmental departments or administrative arms, or (2) administered by individuals who are responsible to public officials or the general electorate. The Court of Appeals upheld respondent's contention, viewing as controlling a Tennessee Supreme Court decision construing the State's Utility District Law under which respondent had been organized. A District organized under that statute is a "'municipality' or public corporation," has eminent domain powers, is exempt from state, county, or municipal taxation, and whose income from its bonds is exempt from federal income tax. The officers who conduct the District's business receive normal compensation, are appointed by a public official, and are subject to removal by statutory procedure applicable to public officials.

Held:


 * 1. Federal, rather than state, law, governs the determination whether an entity is a "political subdivision" of a State within the meaning of § 2 (2) of the Labor Management Relations Act. NLRB v. Randolph Electric Membership Corp., 343 F. 2d 60. Pp. 602-604.


 * 2. While the NLRB's construction of the statutory term is entitled to great respect, there is no "warrant in the record" and "no reasonable basis in law" for the NLRB's conclusion that respondent was not a political subdivision. In the light of all the factors present here, including the fact that the District is administered by individuals who are responsible to public officials (thus meeting even one of the tests used by the NLRB), respondent comes within the coverage of that statutory exemption. Pp. 604-609.

427 F. 2d 312, affirmed.

BRENNAN, J., delivered the opinion of the Court, in which BURGER, C.J., and BLACK, DOUGLAS, HARLAN, WHITE, MARSHALL, and BLACKMUN, JJ., joined. STEWART, J., filed a dissenting opinion, post, p. 609.

Dominick L. Manoli argued the cause for petitioner. With him on the brief were Solicitor General Griswold, Peter L. Strauss, Arnold Ordman, and Norton J. Come.

Eugene Greener, Jr., argued the cause and filed a brief for respondent.

Charles F. Wheatley, Jr., and Jerome C. Muys filed a brief for the American Public Gas Association as amicus curiae urging affirmance.