LABOR BOARD v. ERIE RESISTOR CORP.

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Argument of Norton J. Come

Chief Justice Earl Warren: Number 288, National Labor Relations Board, Petitioner, versus Erie Resistor Corporation et al.

Mr. Come.

Mr. Norton J. Come: Mr. Chief Justice, may it please the Court.

This case is here on certiorari to the Third Circuit, which denied enforcement of the Board's order against the respondent, Erie Resistor, a manufacturer of electrical components and plastics in Pennsylvania.

The Board found that Erie violated the National Labor Relations Act by awarding in the course of an economic strike, 20 years additional seniority to replacements for strikers and also to strikers who return to work during the strike.

So that in a subsequent layoff, strikers who did not return to work until after the strike terminated were laid off as junior employees.

And the question presented in this case is whether the grant of a seniority advantage to employees who go to work during a strike was the concomitant reduction in the seniority's standing of those strikers who elect to remain out on a strike, discriminates an employment and restrains and coerces the exercise of the right to strike in violation of Sections 8 (a) (1) and (3) of the National Labor Relations Act.

Now the underlying facts that give rise to this problem are these: On March 31, 1959, Local 613 of the International Union of Electrical Workers, the certified representative of the company's production and maintenance employees called a strike when the parties were unable to agree upon the terms of a new contract.

The strike was joined by all of the approximately 478 employees working in the unit.

In addition at that time, there were about 450 employees in the unit or in a layoff status.

Throughout April, the Company operated on a reduced basis by transferring about 140 clerical and nonunit employees to the production and maintenance unit.

On May 3rd, however, the Company notified all members of the Union by a letter that it intended to hire replacements and its strikers would retain their jobs until replaced.

In accordance with that --

Justice William J. Brennan: (Inaudible)

Mr. Norton J. Come: No, Your Honor.

Under Mackay, which I'll come to in greater detail, the Company had a right to do that, to replace the strikers.

In accordance with this notice, the Company began to hire replacements.

It picked up one new hire and 23 from the layoff status.

It assured them after they were accepted for employment, that they would not be discharged or laid off upon settlement of the strike.

Justice Arthur J. Goldberg: (Inaudible)

Mr. Norton J. Come: Well, it depends upon what we mean by that which I would like to get to when I get to the discussion of the Mackay case.

Justice Arthur J. Goldberg: (Inaudible)

Mr. Norton J. Come: Yes, Your Honor.

Justice Arthur J. Goldberg: (Inaudible)

Mr. Norton J. Come: Yes, Your Honor.

Justice Potter Stewart: Does the evidence show that they wouldn't have been able to hire these people without making such assurances to them?

They wouldn't be laid off as soon as the strike is over?

Justice William O. Douglas: 365?

Mr. Norton J. Come: The trial examiner found that the employer was motivated by economic considerations in making this offer.

Justice Potter Stewart: Can't you give a little more precise answer than that?

Mr. Norton J. Come: Well, the record does not clearly show that -- it does not show that they could not get these employees without making this offer to them because as a matter of fact, the town of Erie at this time happened to be one of deprived -- depressed unemployment.

There were 300 applications that the Company had from new employees that they hadn't acted upon.

Justice William J. Brennan: Well, would --

Mr. Norton J. Come: So --

Justice William J. Brennan: -- the Board think this was a different case if the record did show that it could not have hired without making this offer?

Mr. Norton J. Come: No, Your Honor.

In the Board's view of this case, I've merely indicated that the trial examiner had found that the Company was economically motivated.

In the Board's view, this type of a super-seniority arrangement is violative of the statute irrespective of the employer's good motive for the action.

Justice Potter Stewart: Is it in the Board's view violated the statute irrespective whether only new employees are involved or whether as in this case, it involved both new employees and employees out on strike?

Mr. Norton J. Come: I believe it is, Your Honor.

The reason I say I believe is that the Board has yet -- has never had a case where it has been offered only to new employees and as I'd like to develop later, I think it's a practical matter if it would be impossible to have such as it sounds.

Because if you're going to have some old employees that are going to go to work as you're likely to have, it would be impossible not to -- not to extend the benefit to them.

As a matter of fact, that has been the case in every one of the cases that we've had so far.

Now, on a bargaining session held on May 11th, the Company told the union that it was promising replacements job security and that in order to implement this promise, it would be necessary to accord them some form of super-seniority.

Now, you had about five bargaining sessions that were held between May 11th and May 28th.

The Company proposed several alternative forms of super-seniority offering to negotiate the precise nature of it, but insisting in each case that it had to have super-seniority in some form.

The management people --

Justice Potter Stewart: It didn't use that word, I presume, did it?

The management didn't use that word, that word that you put (Inaudible), “super-seniority”.

It simply said, it had to have some provision to see to it that these people would be more than temporary employees --

Mr. Norton J. Come: No, Your Honor.

Justice Potter Stewart: -- isn't it?

Mr. Norton J. Come: I think that the testimony in the record shows that they did use that word.

We take page 120 of the record, which is the testimony of Gordon Farrell, the Company's Industrial Relations Director, and 128 of the record.

And he states that we would -- talking about on May 11th, that we would have to accord them some sort of super-seniority.

And then when we get down to the meeting on May 28th, he gets more specific and points out that the -- it looked as though the super-seniority would have to be in the neighborhood of 20 years.

So that I think it is quite clear from the (Inaudible) -- from the record that the company officials themselves characterized this thing as super-seniority, but whatever it was characterized as, it was quite clear that the arrangement that they had in mind was an arrangement that would give to those employees who went to work during the strike whether they were new hires, employees from the layoff status, or strikers who left the picket line, they had to be given, if they went back to work before the end of the strike, a seniority advantage that would put them ahead of those employees who remained out on strike.

Justice William J. Brennan: Well, I think, in that way they had the decision as if they had (Inaudible) in the employ of the employer for 20 years.

Now, was that for all purposes are only for layoff and --

Mr. Norton J. Come: It was only for layoff and recall for layoff.

Justice William J. Brennan: Not for transfers up to the --

Mr. Norton J. Come: No, Your Honor, and I'd like to return to that a bit later on when we talk about Mackay.

But the proposal recited on its face and the testimony bears it out, that this 20-year seniority was to apply only in the event of layoff and recall for layoff.

It was not to be use for bumping from one job to another or for determining vacations or other benefits that turned upon seniority.

Justice William J. Brennan: (Inaudible)

Mr. Norton J. Come: Yes, Your Honor.

Now on May 28th, the Company, as I've indicated, specified that the kind of plan that they had in mind would have to be in the neighborhood of 20 years additional seniority.

Now at a Union meeting on May 29, the strikers, when acquainted with this proposal, unanimously resolved to continue striking until the Company abandoned its insistence on super-seniority, which it never did.

As although there were subsequent bargaining meetings at which the seniority question was discussed, the Company still insisted upon some form of super-seniority.

Chief Justice Earl Warren: We'll recess now.

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Argument of Norton J. Come

Chief Justice Earl Warren: --versus Erie Resistor Corporation, et al.

Mr. Come.

Mr. Norton J. Come: May it please the Court.

I indicated at the conclusion of the argument yesterday that a bargaining meeting of May 28th, the Company had indicated to the union that the superseniority that they thought they needed would have to be in the neighborhood of 20 years.

Well, in ensuing weeks, this superseniority plan, this 20-year plan, was announced to the employees.

There was, first a letter by the Company on June 10 to all the employees and members of the union indicating that 20 years additional seniority would be given to employees who went to work during the strike.

After that announcement, the number of returning strikers drastically shot up.

Up to that point, there had only been about eight strikers who had returned.

With the June 10 announcement, the number shot up to 87, and the next week there was a further announcement and the number shot up to 125.

At that point, which is about June 25th, the union capitulated and decided that it would have to call on to strike.

A contract was entered into reserving the superseniority question for a further litigation before the Board and the courts.

Chief Justice Earl Warren: Was that -- was that made open to outsiders also or just to the members of the union that were on strike?

Mr. Norton J. Come: The superseniority was offered to outsiders as well.

It was offered to new hires, to employees who returned to work, who were in the layoff category as well as to employees who were on strike.

So it was --

Justice William J. Brennan: [Inaudible]

Mr. Norton J. Come: Yes, a 125 came back who were striking.

Justice William J. Brennan: Out of how many?

Mr. Norton J. Come: There were 478 on strike --

Justice William J. Brennan: How many -- how many strikers came back before the announcement of the seniority?

Mr. Norton J. Come: Before the announcement of the seniority, you had about eight strikers who had returned.

Justice William J. Brennan: [Inaudible]

Mr. Norton J. Come: That is correct, Your Honor.

Justice William J. Brennan: [Inaudible]

Mr. Norton J. Come: About that, yes, sir.

That would be 125.

The Company then began to recall the strikers who had not been replaced in order of seniority and built up its workforce gradually back to about 450 levels.

This was around June and July.

However, in September and May into the next year, it was necessary to layoff, and as a result, a substantial number of strikers were laid off who were reduced to junior status solely as a result of this 20-year superseniority program.

Justice Arthur J. Goldberg: Theres no attempt to strike in the labor contract as [Inaudible] testified, isn't that correct?

This is a strike over the contract, is that correct?

Mr. Norton J. Come: Yes, Your Honor.

Justice Arthur J. Goldberg: What is the theory as to what obligations the employer has for contract [Inaudible] with respect to seniority?

Is there any move that Congress [Inaudible]?

Mr. Norton J. Come: Well, I think certainly he cannot unilaterally alter the existing condition without bargaining with the union.

It was at all --

Justice Arthur J. Goldberg: [Inaudible] based on the character or no opinion?

Mr. Norton J. Come: Well, of course as you appreciate, Your Honor, that is a problem that is being litigated in the -- in the courts right now.

That was in the Glidden case, it's been in the Ross Gear case and we're at the threshold of answering that question.

In this case, however, since they did enter into a new contract which continued the seniority provisions of the -- of the old contract, I think you had the two superimposed, one upon the other so quickly that -- that we don't have that gap here.

The only new thing that was added was this superseniority program which favored those who had returned to work during the strike for purposes of future layoffs.

Justice Arthur J. Goldberg: The contract itself does not resolve as to that specific requirement, is that correct?

Mr. Norton J. Come: That is correct, Your Honor.

Justice Arthur J. Goldberg: [Inaudible]

Mr. Norton J. Come: That is correct, Your Honor.

Now a complaint was issued --

Justice Potter Stewart: This -- this was add -- this superseniority, as you call it, was added at a time as Justice Goldberg has pointed out when there was no collective bargaining agreement in effect between the representatives and the employers, isn't that right?

Mr. Norton J. Come: That is correct.

Justice Potter Stewart: And that it's also represented in the briefs for the -- for the respondent that continual efforts were made to bargain about this during that period, during that interim period.

Mr. Norton J. Come: That is correct, Your Honor, but the Board found that although the company was willing to bargain about the number of years or the form of the superseniority, at all times it was insisting that it had to have some kind of an arrangement which would give a preferential seniority advantage to those employees who returned to work during the strike.

So that I think that, although the number of years might have been left open, there was no question that at all times the Company was taking the position that it had to prefer those who went to work during the strike ahead of the strikers.

Justice William J. Brennan: Mr. Come, I gather there's no doubt the union -- there's no question that the union status has exclusive representative, was it?

Mr. Norton J. Come: There was no question, Your Honor.

Justice William J. Brennan: Well is it -- is it the Board's position then that notwithstanding there was, of course, no agreement than existing, nevertheless, even though there was a strike going on, this was a subject matter of mandatory bargaining?

Mr. Norton J. Come: Well, I think that the Board's position is that, whether there was a contract in effect or not, this kind of a seniority clause is illegal and that the company could not insist upon it.

Justice William J. Brennan: But what I'm trying to get at -- what I'm trying to get at is why is illegal --

Mr. Norton J. Come: Well I'm --

Justice William J. Brennan: Because they couldn't unilaterally adopt it that is the subject matter of bargaining or --

Mr. Norton J. Come: No, I want to -- I want to get to that right now.

It was illegal because the Board found that such a clause is inherently discriminatory and restrains the exercise of the right to strike in violation of Sections 8 (a) (1) and Section 8 (a) (3), and I'd like to turn to that right now.

Section --

Justice William J. Brennan: There was no -- there was no 8 (a) (5) charge here.

Mr. Norton J. Come: There was an 8 (a) (5) charge here but the 8 (a) (5) charge flows from the finding that the clause is violative of Section 8 (a) (1) and (3) because it --

Justice William J. Brennan: What's the case we had last year?

I wrote it, I can't think of the name of it.

Mr. Norton J. Come: The case that you had, Your Honor, was the Katz case.

Justice William J. Brennan: Katz.

Mr. Norton J. Come: In which it was held that it was a violation of Section 8 (a) (5) to grant a unilateral wage increase in the course of negotiations.

Justice William J. Brennan: Does that -- does that have any relevancy to this present case?

Mr. Norton J. Come: It has only a tangential relevance in that it shows that if you -- there are certain kinds of conte -- conduct which might be so inconsistent with the provisions of the Act that it could be a violation in a per se sense, let us say without necessarily finding that the company had a bad motive here.

Justice William J. Brennan: But in any event, for the purposes of this case, the Board's position is only that this is an 8 (a) (1) case.

Mr. Norton J. Come: It's an 8 (a) (1) and an 8 (a) (3) case.

Justice William J. Brennan: Yes.

Mr. Norton J. Come: The Board found that it violated both sections and if the Board is sustained on that, then there's no question that the 8 (5) would follow because it's an 8 (5) to insist upon in the illegal clause.

Now, I'd like to address myself to the 8 (a) (1) aspect of the -- of the case for us.

Now, Section 8 (a) (1), as the Court is well aware, makes it an unfair labor practice for an employer to restrain or coerce employees in the exercise of Section 7 rights.

Now, a normal strike for economic objective is of course, a concerted activity protected by Section 7.

Now, a seniority program that prefers nonstrikers to strikers, which is what this program did, manifestly restrains and coerces employees in the exercise of the right to strike irrespective of what the company's ultimate motive may have been.

Now, the worker who accepts employment during the strike and the employee who returns to work are rewarded.

They get their seniority standing boosted.

Well, the employee who stays on strike is penalized solely because he has elected to continue to exercise his right to strike and the reward and the penalty are inextricable.

They're like a double-edged sword because seniority is, by its very nature, a relative thing, and if you're going to boost up one person's seniority, you're necessarily going to reduce the relative seniority advantage.

Justice William J. Brennan: Well suppose -- suppose -- suppose instead of offering superseniority, the employers said they will pay 10 cents or 15 or 25 cents more an hour than we've been paying so anyone would take employments.

Would that be the same case?

Mr. Norton J. Come: That might be a different case, although I --

Justice William J. Brennan: It would have the same effect, wouldn't it?

Mr. Norton J. Come: Well, superseniority has a much more pervasive effect and as I'm going to try to show you, this is a question of balancing competing interests here and the superseniority clearly tips the scales.

My own view is that at the offering of the additional wage incentive would also tip the scales and I think that you have cases that would support them, although, an argument could be made in the other direction.

Not --

Justice Arthur J. Goldberg: [Inaudible]

Mr. Norton J. Come: Well, I think that that is exactly what we have to get down to and I'm going to try to show the Court that the effects of -- of this superseniority policy are much more drastic and pervasive than the kind of replacement that was permitted in Mackay.

But the thing that I wanted to point out before I get to Mackay is that the key to these cases is not merely, whether or not, the employer has an ultimate business motive for what he has been doing here.

Now, it's true that not every interference with Section 7 activity amounts to a violation of Section 8 (a) (1) of the Act or 8 (a) (3) of the Act.

It's been recognized by the Board and the courts including this Court that the National Labor Relations Act has to be read in such a way as to accommodate other competing legitimate interests.

And for that reason, for example normal business decisions such as granting a wage increase or reducing wages even though it may have an incidental consequence of affecting union or concerted activity may be privileged if motive is a legitimate one and you lose that privilege if the motive is not legitimate.

By the same token, however, there are -- is a class of activity and that's usually the situation where union or concerted activity is singled out as the basis for discrimination where the effect on the exercise of the Section 7 right is so drastic that it cannot be -- it is not privileged even though the employers' ultimate objective may be a business one.

Now, in Mackay, the Court held, and that was in 1938, that in economic strike, the employer in the interest of continuing his business could hire replacements for the strikers and give them permanence.

That was an accommodation that was made in the interest of enabling the employer to run his business.

Justice Byron R. White: Well, isn't that -- doesn't granting seniority rather pay in comparison to people losing jobs?

Mr. Norton J. Come: Well I think, Your Honor, that when you look at the way it works, it is not held.

I appreciate you -- you can view it as something lesser because after all you are taking the employee back and he doesn't -- he doesn't lose a job, but let me try to show you what does happen and in the Board's view, this is -- this is far worse.

Justice Byron R. White: Well, a fellow who comes back -- the union member who comes back after the strike with standing behind 20 years of seniority, but he certainly is standing -- at least he's standing there in the plant.

And then some of his friends, they aren't even back to the plant.

Mr. Norton J. Come: Well, let me make clear first of all that the Company here did not need this superseniority plan in order to guarantee the permanence which Mackay is talking about.

Mackay says that if you replace a striker with a replacement permanently, that striker is not entitled --

Justice Byron R. White: This isn't really an important issue of that point.

Is it that you would make the same argument whether it was or it wasn't, because it may have been -- I'm assuming you're arguing the case on the assumption that, that it was necessary to give the superseniority, to get the fellow in at all, and in that sense, it was essential in order to give -- in order to give him permanence --

Mr. Norton J. Come: And was there --

Justice Byron R. White: And by you wouldn't have given -- you wouldn't have even the plan at all.

Mr. Norton J. Come: It was not essential for him to retain that job vis-à-vis the striker that he replaced because this superseniority policy, as I pointed out yesterday, apply only in cases of future layoffs.

It could not be used for bumping and the testimony in the record makes it quite clear that if you put into a job, let us say a replacement and the striker who had that job at 30 years seniority came back, he couldn't claim that job even without this 20-year superseniority.

The only thing that the 20-year program did was to guarantee that the replacement, not only would be able to oust the striker who he replaced which is what Mackay says, the employer can do, but that repla -- but that replacement would, in the event of layoffs at sometime in the future, also have the additional advantage of being able to bump out other strikers who were not replaced during the strike and had returned for work.

Justice Arthur J. Goldberg: [Inaudible]

Mr. Norton J. Come: Well, I think it is, Your Honor, and I think that demonstrates the very serious impediment that is imposed upon employees who have exercised their lawful protected right to engage in --

Justice William J. Brennan: Well your point, Mr. Come, I gather is that, this gives the new employee a preference not only to the fellow who's left out in the street because he takes his job, but also in the event of layoff, it gives him a preference over someone who actually had come back to work after the strike, but who now, by reason of this 20-year, has lesser seniority in the --

Mr. Norton J. Come: That is correct, Your Honor and for that reason, we submit that the Board correctly concluded that this was far different and far more serious than the right to permanent replacement that is recognized by --

Justice Byron R. White: Mr. Come, isn't this just a rule of permanency?

I mean that the thing is that the time it's really going to operate, is raised in the time of layoff, the fellow seniority doesn't get laid off and seniority has the more permanent job than the fellow without seniority.

Mr. Norton J. Come: But look to what it --

Justice Byron R. White: That is the -- that's the only way it operates, isn't it, in terms of permanency?

Mr. Norton J. Come: But, Your Honor, look also what it does to the exercise of the right to strike.

I've shown you on the facts of the --

Justice Byron R. White: Well, I'm sure I gather you're really saying that Mackay was wrong.

Mr. Norton J. Come: No, Your Honor, I'm not saying that Mackay is wrong.

I'm saying that Mackay rests upon a balancing of the conflicting interest.

The interest of the employer in running his business as against the impairment to the right to strike, and at some point, you go too far and the question is whether the Board was reasonable in concluding that the way this superseniority policy operates, that the gain, the possible gain to the employer is so outweighed by the detriment to the employees and the impairments of the right to strike that on balance it is not privileged by the Act.

We submit that the Board was reasonable --

Justice Hugo L. Black: You mean on this particular case?

Mr. Norton J. Come: What is that, Your Honor?

Justice Hugo L. Black: You mean on balance on this particular case under the circumstances of this particular case or you're saying always that way?

Mr. Norton J. Come: I think the Board's position is always that a -- that any plan which would discriminate on the basis of whether the employee remained out on strike or not in terms of seniority, by its -- by its--

Justice William J. Brennan: I mean what -- if what -- this does come down to this that Mackay said that an employer may displace a striker if it's an economic strike, but Mackay did not say that it may also displace a striker who returns to work at some later date when a later layoff comes along.

Mr. Norton J. Come: Yes, Your Honor.

Justice William J. Brennan: And your position is that to the extent that it gives the employer not only the right to displace a striker, but also gives him the right to oust on a later layoff someone else that that is an interference and made a -- with the right to strike which goes too far.

Mr. Norton J. Come: Yes, Your Honor, and it also violates Section 8 (a) (3) for reasons that I've set forth in my brief.

Justice Arthur J. Goldberg: [Inaudible] Suppose that the job that was replaced is on the production job, suppose that under [Inaudible] labor board or that he have to yield to the striker who comes back?

Mr. Norton J. Come: He may have to yield to the striker who comes back, Your Honor.

I'm not familiar that -- with any particular case on that point but --

Justice Arthur J. Goldberg: [Inaudible]

Mr. Norton J. Come: That may well happen.

Thank you.

Chief Justice Earl Warren: Mr. Wayman.

Argument of John G. Wayman

Mr. John G. Wayman: Mr. Chief Justice, Honorable Justices.

The sole issue in this case is the Board's declaration of what it calls superseniority is per se unlawful in violation of Section 8 (a) (3) and derivatively of 8 (a) (1).

Because when I say derivatively of 8 (a) (1) because at the very beginning of this case, counsel for the Board said he was not claiming any violation of 8 (a) (1) aside from this so-called superseniority.

And there is not a word of evidence in this case unlike almost every other case that we have seen, that could support a finding of violation of Section 8 (a) (1).

Put another way, in the absence of the illegality, the per se illegality of what the Board called superseniority, Erie Resistor was found guilty of no unfair labor practice.

The affirmative findings are that it was not guilty of an unfair labor practice, that it did bargain in good faith, that it had a lawful, legitimate, economic motive for what it did.

Up until the day, I have not heard the word per se mentioned in this case from the time of the original hearing.

This suggests to me as I suggested to the Circuit Court, that perhaps the Board is not proud of its doctrine, I think it should not be proud of its doctrine per se.

Furthermore, as it clearly appears here from the argument made by my worthy opponent, the Board wants us to argue every case of superseniority, as they call it.

They want us to say that superseniority is absolutely privileged, that it matters not what the circumstances.

Under Mackay, any employer can grant superseniority just as he can replace employees.

We have never said that.

We do not say that now.

It is not the theory of this case.

It is not even in the Court with the facts of this case, it never has been.

This case, however, was selected by the Board as a vehicle to establish a per se illegality doctrine.

The Board's counsel said so at the outset of the hearing.

It upset my client a good deal to be in the middle of defending himself against this charge.

At the very time, the General Counsel issued a ruling, SR 509, in which on identical facts, General Counsel found another employee not even required to answer a complaint on the proposition that he had a lawful economic motive and that this was in accord with Mackay Radio and Olin Mathieson.

We didn't think that was the way a board ought to operate, because this is a serious matter to the smaller company.

It involves something over a million dollars in back pay and that's not a small amount of money to a company that employs 450 people or so.

This is a threat to every man in that plant.

Not just to replacements, but the strikers who have returned who incidentally are all working today, thanks to the fact the company has recovered from this strike after about two and a half years of struggle.

The complaint against Erie Resisor had a number of counts.

One of them was this per se illegality, which was the real reason for the case.

Another was that in adopting the policy of superseniority, as they call it, their purpose was not to save the plant but to punish the strikers.

This count was completely disapproved.

There is not a word of evidence to support it in the record.

The Board did not find out to be the fact.

The trial examiner found that not to be the fact.

Consequently, if motive be the test, Erie Resistor is not guilty.

There were many counts for refusal to bargain in various ways.

After all the hearing that we went through in the trial examiner's report and Board's decision, we were found not guilty of any of those charges.

This is an extraordinary thing in a case where an employer is charged with the violation of 8 (a) (3), because it leaves standing naked and alone this per se illegality of what the Board calls superseniority.

We have referred to the trial examiner's findings, page 59-a of the record and page 64-a of the record.

Yesterday, I believe the question was asked whether or not there was a finding that this so-called superseniority was necessary to get replacements to come to work, and that's a rather extraordinary example of the treatment the Board has given to this case.

Perhaps 350 or 400 pages of these thick books are devoted to prove that it was necessary to give what they call superseniority to the replacements to get them to come to work not simply because it's obvious that every man wants a permanent job and not a temporary one, but because we had extraordinary violence on the picket line here.

And as you will see if you read the record, I believe it's the testimony of Mr. Burton that many people who were hired didn't come to work.

They were afraid to come to work.

We had 300 applications, yes, but you can't run a plant with applications.

You have to have people and we couldn't get the people because they would not risk crossing the picket line and risk the censure of these neighbors of theirs unless they were assured of a permanent job.

It was necessary.

This is a finding of the trial examiner.

The Board did not reverse that finding.

Instead, on page 19 and not 29, the Board said it refused to consider this fact.

It would not pass upon it because in the Board's view, any superseniority is illegal per se.

They didn't use the words per se, of course, but any superseniority is illegal and therefore they didn't even consider this fact.

And now when we come before the Supreme Court, I heard the argument made and it was not necessary to have this additional seniority for replacements in order to get them to come to work.

We could only wish that that was so, but it is not so and the record will not support such a statement.

Now, we have to suggest that, and I think we have in our briefs suggested that the Board hasn't defined what it means by superseniority except to indicate that in its eyes it's something pretty bad.

After about 20 years of dealing with labor unions, big ones and little ones, and negotiating many contracts, I don't know what the word means.

Justice Arthur J. Goldberg: Well, Mr. Wayman, [Inaudible]

Mr. John G. Wayman: Indeed you have, sir, in fact, you and I on occasion.

Justice Arthur J. Goldberg: [Inaudible]

Mr. John G. Wayman: I will certainly do, Your Honor.

Justice Arthur J. Goldberg: [Inaudible]

Mr. John G. Wayman: That is sir, Your Honor, but seniority itself means nothing unless it's more than someone else has, so the term -- the term superseniority to me is meaningless unless it is defined in context and in the circumstances of a particular case and contract and this is my point exactly.

I can't defend the term superseniority and I don't intend to.

Justice William J. Brennan: It doesn't it mean to credit for service not served?

It's an artificial and synthetic seniority, is that right?

Mr. John G. Wayman: It could.

It could mean that.

I don't know what the Board has in mind.

Justice Potter Stewart: Well, that's what it means in this case.

That's what it means in this case.

You're getting somebody credit for 20 years that is not on payroll.

Mr. John G. Wayman: In respect we gave them credit for 20 years but not in the respect that you use seniority generally because he is limited in his ability to use it.

All this so-called superseniority did was to give him the right to stay in the plant.

It did not fix a term.

In other words, it didn't say this superseniority will go on for a year or a day, although in the settlement agreement, they did said, “It would continue until decided by the courts,” but had the union been willing to bargain on the matter, perhaps, we could have done something with that.

Mackay Radio doesn't fix the term either.

Under the circumstances of this case, there was no way at all for this company to assure these replacements of permanence of tenure and to keep the promise, which I suppose everybody would want them to do, unless they either gave these people some additional seniority beyond the date that they were hired, the artificial credit that mentioned, or made some other arrangement with the union.

Because we had on the date the strike began, about 450 people on layoff and under the contract that was in effect when the strike began, there was no terminal point for this seniority.

It just went on and on.

As Mr. Justice Goldberg would agree, I think, this is an unusual feature in a contract that there it was.

We had 450 people with no prospects of reemployment but having seniority.

As a practical matter, certainly it would make no sense to replace people on layoff because nobody would take a job simply to be laid off.

We had to replace people that were working and if we did and if we give the replacement seniority just from the date they started to work, as soon as the strike ended, they would go to the bottom of that 450-man layoff list and there would be no permanence of employment the fact that might just as well find.

This was a problem that faced this Company, unlike many companies it's an unique situation.

Justice Arthur J. Goldberg: What was the -- what was the Mackay Radio problem [Inaudible], is that correct?

Mr. John G. Wayman: That is certainly my understanding in Mackay, Your Honor.

Justice Arthur J. Goldberg: [Inaudible] are you arguing that for each case the Board would have to make a determination that where there's the order of superseniority that [Inaudible]?

Mr. John G. Wayman: That is certainly a part of our argument because that's the holding of all the circuit courts which have dealt with the subject of superseniority.

Justice Arthur J. Goldberg: [Inaudible]

Mr. John G. Wayman: I would say that in determining whether or not there was a violation of the Act by granting additional seniority under the circumstances, it was reasonably necessary for the employer to grant this or to use this tactical device in order to obtain the replacements and this is what the Courts of Appeal have said.

They have never said there's an absolute privilege to grant superseniority.

I wouldn't expect them to.

We didn't expect them to.

The Company in this case complied religiously with those decisions.

It followed them exactly.

They had good counsel, Mr. Murphy.

He told them they should follow the law and they did follow the law.

And this is why they were so distressed when after the matter was all over having followed the law conscientiously, they find themselves accused of a violation of the law and not permitted to make any defense at all.

This is the thing that shocked us.

This is the narrow point in this case; not whether or not the Board correctly found facts because it didn't find any facts.

It said it didn't have to consider the facts.

All additional seniority for replacements is unlawful.

That's the proposition.

The Court of Appeals would not accept that proposition.

The Court properly said, in violation of 8 (a) (3), motive is an indispensable factor and so it is under every case that has been decided in the Courts of Appeal or in the Supreme Court.

Let us consider now what the Company might have done in this situation.

It might have simply replaced these people, said nothing at all to the union, and gone ahead and kept them out after the strike.

It could have replaced every one of the strikers, which would have broken them.

It could have simply not negotiated a contract containing seniority because the contract had expired and after the expiration of that contract, there was no seniority.

To the company's everlasting credit it did none of these things.

It never ceased to try to make a contract with the union.

It never refused to sit down with the union and try to make a contract that had some usually satisfactory seniority arrangement.

It is not true that the Company insisted on superseniority.

The word “superseniority” was put into Mr. Farrell's mouth, but if you look at page 156-a of the record and 161-a of the record as examples of Mr. Farrell's efforts to make this clear, he said, “We took a positive position where we're going to have to have some sort of protection for these people in the way of giving them job assurance that we have told them they would have.”

He did not say superseniority and at page 161-a, he was asked about superseniority by General Counsel and he said, “I object to superseniority per se because my company said the Company consistently evidenced its willingness to negotiate with the union as to the form of the assurance would take.”

In this particular case, what we are talking about is the Company's effort to keep a lawful promise to the replacements that they would not be discharged when the strike was over.

Now, they could have done this with -- excuse me sir.

Justice Arthur J. Goldberg: [Inaudible]

Mr. John G. Wayman: If they did, Your Honor, the Board did not consider it an unfair labor practice because this promise was made before May the 28th and the Board said there was -- there was no unfair labor practice up to that time.

Justice Arthur J. Goldberg: But in our case, putting aside [Inaudible]

Mr. John G. Wayman: I would say, sir, that that is correct in any case in which you replace employees with permanent replacements.

This is always true.

It makes it much more difficult to bargain.

There's no question about it.

But this is not due to the particular case we have here.

This is true of every case in which you have permanent replacements because the union's ultimate position was all the replacements have to be discharged.

Well that made it very difficult to get a contract, but again, to the company's credit, they did get a contract.

The strike did end and strangely enough, well, they're criticized for it, the record shows clearly that they hired only so many permanent replacements as they absolutely had to have in order to survive.

When this college let out in June, they hired college boys and told them, “This is temporary.”

They used clerks who make awfully poor production people, I might say, and sometimes labor relations men who are worse.

And they try to get by with any method they could without displacing any of their striking employees, but if this plan didn't operate, it would die and it almost did die.

This was no question of just building up the profit.

This was a question of surviving.

What was done here was purely defensive, but really no choice.

And yet in spite of this dreadful fact, the Company still tried to bargain with the union, it never took the position that the union is out or break the union.

It wouldn't make the contract of the union exactly the contrary is true.

Instead of condemning a company like this, it should be commended.

This is not to say there was no problem.

Indeed, there was, and there still is, but I do believe it's a kind of a problem that could have been solved by collective bargaining as the union had been willing to bargain.

I want to say one word too but the emphasis that's been placed on the additional seniority granted.

My friend, Mr. Come suggests in his presentation that perhaps the purpose of this grant of additional seniority was to entice strikers to come back.

That is absolutely unsupported in this record.

The record shows that the contrary is true.

This Company carefully avoided an invitation or enticement to the strikers to return, but when they did or if man who wanted to come back to work, the Company didn't say, “No, you can't do it,” but the need for replacements was not to get the strikers to abandon the strike, it was to get strangers and outsiders to come in to work and this was the only reason that this policy was adopted.

Furthermore, the policy was adopted only after about 11 unsuccessful negotiating meetings in which it appeared that there was no chance of getting the union to agree to any arrangement that would allow the replacements to stay at work.

Chief Justice Earl Warren: There's a notice in the record, the notice that they -- they put out concerning the reemployment of strikers.

Mr. John G. Wayman: It is, sir.

The notice itself or several notices on May the 3rd, the company sent a letter to all its employees, strikers, and others, telling them that on May the 6th or 7th, they would begin to hire permanent replacements and that anybody who is replaced could have his job only to that point then he'd have no job.

Then they began to bargain with the union on the very first day they hired a replacement, suggesting different ways of handling this but not getting any where.

On May the 28th, they handed this so-called 20-year proposal to the union.

The union, of course, rejected it along with everything else, but oddly enough on May the 30th, the union got on the television station and broadcast this all over Erie.

The Company has -- had said this is confidential, we're trying to bargain on, but the union got on the television and said, “This is the company's policy.”

So on that day, the union broadcasted and then people did indeed began to come in, not by any announcement on our part, but by an announcement on the union's part.

Finally, on June the 10th, a letter was sent out and published, saying that the policy had been adopted and on June the 15th, a notice was posted on the bulletin board.

Those, I believe, are the notices concerning the policy.

No special letter, which I am aware of, was sent to the strikers, but if the striker came in and said, “I want to go to work”, we said, you can go to work.

We would be glad to have them of course.

It's not by any special inducement.

In this respect, I should like to answer one other question that was asked, whether or not, this differs from offering say replacement, an additional 10 cents per hour.

Yes, it does in our view because offering a replacement an additional 10 cents per hour has nothing to do with his permanence of tenure.

There is a vast difference between a permanent replacement and a strike breaker.

We do not believe we have no favor for strike breakers.

If I want to hire a strike breaker, this is the way I would do it.

I would offer him a big bonus to come in and work during the strike with the understanding that he can get out as soon as the strike is over.

This is a strike breaker.

But if I want --

Justice Arthur J. Goldberg: [Inaudible]

Mr. John G. Wayman: Well it's a distinction that Congress made.

I think it's a very real one, Your Honor.

Justice Arthur J. Goldberg: [Inaudible]

Mr. John G. Wayman: I think it is, Your Honor, and I think there are two keywords in what you said to do what is necessary.

In other words, I think that the decisions of the Courts of Appeals have said that you must demonstrate a need not simply that you -- I thought it was a good idea but you had a genuine need, not something subjective but objective through.

And this we offered and this was never refuted.

Justice Arthur J. Goldberg: [Inaudible]

Mr. John G. Wayman: If that's the definition that's put on it, yes, but whenever you say do what is necessary, then I think you come back into the definition of these various Courts of Appeals.

If your purpose is simply to punish the strikers, it's unlawful.

If your purpose is solely to operate the plant, and I think you ought to demonstrate a need to do it, then it's lawful.

Justice Arthur J. Goldberg: [Inaudible]

Mr. John G. Wayman: He has that right.

Justice Arthur J. Goldberg: Did he have a record?

Mr. John G. Wayman: Indeed he does.

Justice Arthur J. Goldberg: [Inaudible]

Mr. John G. Wayman: I don't think it's irrelevant.

I think that there is a difference between a man who operates because he has to, to survive and here I'm talking about defensive as opposed to offensive weapons, economic weapons, there is a difference.

Justice Arthur J. Goldberg: [Inaudible]

Mr. John G. Wayman: It has nothing to do with or under Mackay.

Justice Arthur J. Goldberg: [Inaudible]

Mr. John G. Wayman: I don't believe that that's the kind of weighing that the Board ought to do whenever they declare something per se unlawful.

This is balancing for Congress, not for the Board.

However, I do say this that there is a distinction between operating the plant and hiring replacements, a distinction made in Mackay.

You may operate your plant even though it's an unfair labor practice strike, but you may not hire permanent replacements in an unfair labor practice strike and this is a very significant difference, but we met the test in Mackay, every one of them.

We satisfied them all on this record.

Unless this is per se unlawful, we were guilty of no wrong.

Justice Byron R. White: Well, would you in Mackay, would you say that -- would you say that at the moment the strike started, the company offered jobs to permanent replacements or look suddenly for permanent replacements and at that moment offered superseniority, I take it, you would almost think you'd have to try first to get replacements without superseniority.

Mr. John G. Wayman: I do believe that is correct, Your Honor.

I think you must.

Justice Byron R. White: And you must -- you must -- you would think they offered superseniority at the very outset then you might be in more trouble than you think you are now.

Mr. John G. Wayman: Well, I think we are not in trouble now.

We would be then, yes Your Honor.

Justice Byron R. White: But -- if you try to fail the -- then succeeded with superseniority, I take it, you think you are on -- in the preferential right.

Mr. John G. Wayman: I believe that is entirely within the law, Your Honor, yes sir.

Justice Byron R. White: Then that's what you think these facts are.

Mr. John G. Wayman: Indeed they do.

There can be no other conclusion drawn from this record.

Justice Byron R. White: And in that sense, you've demonstrated need.

Mr. John G. Wayman: Yes, sir.

Chief Justice Earl Warren: Thank you, Mr. Wayman.