NLRB v. STRONG

Transcript: 

Chief Justice Earl Warren: No. 61, National Labor Relations Board vs. Joseph H. Strong.

Chief Justice Earl Warren: Mr. Weinstein?

Argument of Harris Weinstein

Mr. Harris Weinstein: Mr. Chief Justice, and may it please the Court.

This is a labor case which comes to the Court on a writ of certiorari to the United States Court of Appeals for the Ninth Circuit.

The sole issue to go is to the scope of the remedial powers of the National Labor Relations Board.

The exact issue was this, once the Board has found an unfair refusal to execute a labor contract made include in its order a provision that requires the respondent to pay past fringe benefits that would have been required to pay, if it had executed the contract at the time we fashion.

The Court of Appeals said, No, the Board may not do this.

It may not direct payments required by a collective agreement and that the remedy is not a Board order but it must be by way of suit under Section 301 of the Act.

And this, as we have pointed out in our petition and in our brief is in conflict with the views expressed in several other circumstance.

The case arose in this way, the respondent Joseph Strong is in a roofing business in Los Angeles.

In 1963, when this critical series of begun, he was as he had been for many years before a member of a contractor's association that was a multi-employer bargaining unit.

He was contractually obligated to abide by the contracts of the association negotiated with unions including one that represented his employees.

He will also as obligated if he was going to stroll.

To do so, at least 60 days before the termination of the contract period.

The old contract, that is the one that's owed in the context of this case, was due to expire in the middle of August of 1963.

Negotiations took place during the first half of that year and on August 14, the union and the contractors association reached agreement on a new four year contract to take the effect the next day, August 15.

A year and a half before in 1962, respondent had written a letter stating his desire to terminate the non-agreement and nothing came about.

Then on August 20 in 1963, a few days after the new agreement was reached, he sent a letter to the Joint Industry Union Grievance Board, expressing a wish to become a non -- to withdraw to become a nonunion member, to terminate the new contract as to him.

Although the association, the contractors association changed its status on its books and refunded a security deposit and terminated the bond that was suppose to secure his payment of fringe benefits.

The union on three occasions approached him, beginning in October 63 and then again in November and fall in April and asked him to sign the contract which he refused to do.

Chief Justice Earl Warren: We recess now.

Mr. Weinstein, you may now proceed.

Rebuttal of Harris Weinstein

Mr. Harris Weinstein: Thank you, Mr. Chief Justice.

The Court pleases, as just before the recess, I've mentioned that on three occasions between October 1963 and April 1964, the union asked that respondent to execute the Bargaining Agreement and each time, he refused.

On the basis of these facts, the union filed unfair labor practice charges in the Board upheld and ruled that respondent had not under his duty to bargain.

On a petition for enforcement, the Court of Appeals upheld the substantive findings and last January, this Court denied respondents petition for certiorari.

So as the case stands, respondent has been finally adjudicated to have unfairly refused to bargain and the controversy goes to the Boards order.

That order is set out on pages 120 and 121 of the record.

It has in paragraph 1 some cease and desist directions which are not in controversy.

It directs in paragraph 2(a) that respondent execute and honor the Agreement that was negotiated and that is not in controversy.

The issue goes to paragraph 2(b) of the order.

Chief Justice Earl Warren: D?

Rebuttal of Harris Weinstein

Mr. Harris Weinstein: B, after A, which directs that respondent pay to the appropriate source any fringe benefits provided for in the above-described contract.

And also an issue would be a parallel part of the notice to employees that respondent was told to oppose and this is on page 122, the third indented paragraph and that would have set in the notice, We will make hold the appropriate sources for any unpaid fringe benefits provided in the above contract.

The Court of Appeals in holding that --

Justice Potter Stewart: I don't quite understand the-- what are the appropriate sources?

Mr. Harris Weinstein: These are set out in the contract, agreed in the contract itself which are on the record, Mr. Justice Stewart - I think on page 66 - and it sets up several funds to which payments are to be made, there is a health and welfare trust, there's an apprentice trust, there are two other funds then below, there is a roofer's fund.

And these are amounts measured by the hour of each employee that were supposed to be paid to provide for a variety of fringe benefits.

The basic one is the health and welfare fund and the Roofers fund.

And that the order, I am talking to the appropriate sources to [coughing] mean to whomever each particular item would have been paid if the contract had been executed at the time we fashioned.

Justice Potter Stewart: I see.

Mr. Harris Weinstein: In finding this paragraph of the order was beyond the Board's power.

The Court of Appeals analysis was, as I understand it, that the unfair labor practice was not the failure to pay these amounts but was instead just a refusal to execute the contract.

And it said that the order was, and I'm quoting from their opinion, An order to respondent to carry out provisions of the contract and it is beyond the power of the Board.

So the Court of Appeals ruled that if an order of the Board directs payment of a benefit required by a contract, whatever else the circumstance is the Board doesn't have power to do that.

The only recourse to the union or its memberships would be a suit against the employer under Section 301 of the Act.

Now, at the time that we filed our briefs here, I believe there had been eleven cases on this or related matters and this was the only one that found the Board without power.

There are since been another case that I would like to call to the Court's attention in the Fourth Circuit.

It is called NLRB against the Beverage Heir Company.

And it is --

Unknown Speaker: (Inaudible)

Mr. Harris Weinstein: Air, Beverages and Drink and air Company and it's reported at the 69 Labor Relations Reference Manual at page 2369.

And like several other cases in the Fourth Circuit and all the other cases but this one, it allows enforcement of an order such as we have before the Court in this case.

Justice Hugo L. Black: Page 1239?

Mr. Harris Weinstein: 2369, Mr. Justice Black.

Justice Potter Stewart: Is that a Board decision or is that a Court decision?

Mr. Harris Weinstein: That is the decision of the Fourth Circuit enforcing a decision of the Board.

Justice Potter Stewart: What circuit?

Mr. Harris Weinstein: Fourth, sir.

And then the Board, part of the order that is discussed and that is enforced is essentially similar to paragraph 2 (b) of the order here.

Justice Potter Stewart: So presumably, undue course had been reported in the Federal Circuit?

Mr. Harris Weinstein: I would presume so.

Now in the final analysis, the resolution of this case depends on the construction as placed upon Section 10 (c) of the Act.

That tells the Board what to do once it finds an unfair labor practice and as the source of the Boards remedial authority.

Now, essentially, that tells the Board to do two things, First, to enter a cease and desist order which it did here; and then, it tells the Board to take such affirmative action including reinstatement of employees with or without back pay as well effectuate the policies of this Act.

A long line of cases, going back to the inception of the Wagner Act, this Court has looked at this language and it is considered what it allows the Board to do and perhaps the most recent summary of the authorities is in the five aboard decision in 379 U.S.

But the thrust of it is simple.

The Board is directed to take affirmative action and that action should be whatever is needed to restore things to what they would have been without the unfair labor practice.

And that serves two functions: First, it restores the bargaining process.

It let's operates it operate as it would have without the unfair activity; second, it takes the profit out of unlawfulness.

It takes away any hope of gain through refusing to bargain.

It deters the particular respondent and other people from illegal conduct and encourages them to voluntarily perform their duties under the Act.

Now, we would think that under this analysis, there's extremely strong case for our decision without looking further.

The Board has an affirmative duty to provide relief, to restore the status quo ante the violation.

The cases, the 11 unsolved cases that have been reported in the Court of Appeals on this subject show that basically there are two patterns.

Either as in this case, the employer has refused to execute a contract that has been negotiated by him or on his behalf and the Board, among other things, says to the employer, Pay whatever you would have had to pay if you would executed the contract in a timely fashion.

Justice Byron R. White: Does that the respondent concedes that there was an anti-practice?

Mr. Harris Weinstein: As of this moment, yes.

I think this was litigated all through petitions.

Justice Byron R. White: What specifically is the anti-practice, refusing to sign the contract or the bargain about the fringe benefits or both?

Mr. Harris Weinstein: No, it is refusing to sign the contract.

There was no -- the other line of cases --

Justice Byron R. White: Why is that an anti-practice?

Mr. Harris Weinstein: Refusing to sign a Contract?

The duty to bargain, I think, has been interpreted as requiring that ones a contract is bargained for and all the (voice overlap)

Justice Byron R. White: -- in moving employer bargaining?

Mr. Harris Weinstein: Yes, I think the authorities are set out in the examiner's opinion here which the Board accepted.

Unknown Speaker: And you say that issue is not here?

Mr. Harris Weinstein: It is not.

Justice William J. Brennan: Why is it not here?

Mr. Harris Weinstein: I don't think that there's ever been any dispute about the duty to sign (voice overlap).

Justice William J. Brennan: I thought you said something earlier, Mr. Weinstein that that issue had been resolved by the denial here set unsolved and some other case however?

Mr. Harris Weinstein: No, Mr. Justice White asked me if it was conceded here that there had been an unfair labor practice which I took to mean is the respondent is still arguing that he didn't violate the Act.

Justice William J. Brennan: That is he is never been attempted -- nobody has attempted to bring that issue here?

Mr. Harris Weinstein: His defenses were first that this unfair practice was not thought within first month of the violation of the Act; that the union, by its conduct, had waived it's right to have Mr. Strong sign the agreement.

I think those are basically the issues that we presented in this Petition for Certiorari a year ago and that the refused (voice overlap).

Justice William J. Brennan: Well, you tried to bring it here and we refused service, is that it?

Mr. Harris Weinstein: Yes, Mr. Justice Brennan, last January.

Justice William J. Brennan: And then how did this get back to the Court of Appeals now?

Mr. Harris Weinstein: Now, we had our time for petitioning.

It was not the same as the respondents because we had filed the petition for rehearing on bank in the Court of Appeals.

And our petition for certiorari was, therefore, not do until, I believe, that April and that's when we filed it.

Justice Byron R. White: If he had sign the contract, and then refused to pay the fringe benefit and refused to talk about at us those, that agreement to have been anti-practice too.

Mr. Harris Weinstein: I imagine that might be depending on the circumstances, Mr. Justice White.

For example, one of the case --

Justice Byron R. White: But here you say, it's a refusal to sign the contract?

Mr. Harris Weinstein: Yes, and what is the consequence of that?

The other line of cases, I think, falls on the category of just refusing to pay after the contract is executed.

For example, in the Stam (ph) case, which I think was in the Seventh Circuit, the employer had unilaterally amended the health program and it refused to bargain over.

And there, the amendment itself to the health program, the unilateral amendment without bargain was both a violation of the contract and a refusal to bargain.

But in either instance whether the case is like that one or this one, the Board has entered in order requiring that the employees be made whole for what they have been deprived of.

Certainly, in this case while the payment -- a mere refusal to pay fringe benefits might not have been an unfair labor practice if the contract had been sagged.

The fact that this weren't paid is a consequence of the unfair practice.

Justice Byron R. White: You say you might have been able to refuse to pay but not --he might have been able without committing an anti-practice to refuse to perform his contract but it's an unfair practice to refuse to sign it.

Mr. Harris Weinstein: I think it's certainly an unfair practice to refuse to sign.

Now whether refusal to pay is itself an unfair practice depends.

For example, if he hadn't paid because he was bankrupt.

I imagine that wouldn't be an unfair practice --

Justice Byron R. White: But I suppose that if it were an unfair practice to refuse to pay, simply you might think more -- the remedy question might be easier.

Mr. Harris Weinstein: Oh!

I think the Court of Appeals analysis would fall apart because they were alive and part on the fact that that in itself on this record wasn't the unfair practice that was found.

Justice Byron R. White: Incidentally, could the union -- I gather that these fringe benefits are payable of this fund whether jointly administered by unions so far?

May be that's not the point but (voice overlap) 301 have been maintained for these unpaid fringe benefits?

Mr. Harris Weinstein: I have some problem with that.

Certainly --

Justice Byron R. White: Is that the ground in the most Court of Appeals rely?

Mr. Harris Weinstein: I think it's the implication of what they said.

They didn't spell that out that way.

I suppose before the Boards action here, a suit had been brought under 301.

I assume that defense would have been there's no contract.

Now, if the Courts have found there was a contract, then I imagine of -- they could have directed payment of the fringe benefits.

Now, what the respondent is saying here is there must be a two-step proceeding.

First, you go to the Board to determine whether there is a contract.

If the Board says there was a contract and orders its execution, well that execution is retroactively valid but the Board can't order the payment of the benefits then you got to go to arbitration or to a 301 suit.

And it's this analysis that we are saying simply doesn't comfort with what was wrong.

Justice Abe Fortas: Well, it doesn't hurt your case if the court doesn't?

Mr. Harris Weinstein: No!

Justice Abe Fortas: If that they could bring that one under this 301, you would still be making argument you are now.

Mr. Harris Weinstein: The basis of our cases is that there are concurrent evidence.

Justice Byron R. White: Instantly, has they seen sign the contract in response to the decision system?

Mr. Harris Weinstein: I'm not sure.

I don't think that he would get being contempt if he hadn't since the order is still subject to litigation.

I don't know whether he has.

Well, the reasons -- the basis for the view that the Court of Appeals to abide, I think there are two-folds, and they find the root in legislative inaction and action.

One is that there is Section 301 which confers jurisdiction on the Courts.

The other is that Congress declined to make breach of a contract by itself in unfair labor practice.

It's a pretty weak reads but the inference of the Court of Appeals through is directly refuted by the Act because Section 10 (a) of the Act says that.

The Boards power to remedy on unfair labor practices shall not be affected by any other means of adjustment or prevention that has been established by agreement law or otherwise.

And, the interesting thing is, that Congress don't seem to get any thought that there was any possibility that it was the best thing the Board of jurisdiction to act in a case like this.

It did express some concern that Section 301 could be limited to situations where there was no unfair labor practice and the Committee report recognizes that possibility and expressly says that when there are two remedies - one before the board and one before the Courts, they are cumulative and not mutually exclusive.

Now, this Court also have to say it's not riding on a thin slake.

If my count is correct, this is the 7th time in 7 years that the Court has had occasion to comment on this particular problem.

The first three cases involves the problem that was predicted by the Congress.

Are the Courts in some manner preempted the one case, Lucas was questioned as our state courts preempted of jurisdiction by Section 301 without regard to the Board.

The next two cases, the Smith against Evening News Case in 371 U.S., Carrie against Westinghouse in 375 U.S, the question was whether the Board had exclusive jurisdiction to the delegation of the courts when there was both an unfair practice and a violation of contract.

Now, the issue wasn't before the Court in those cases but in each of the opinions, the Court took care to say that it was not suggesting that the Board was without jurisdiction and expressly said in each instance that there were dual remedies available.

The next two cases, were companion cases in 385 of US reports, C & C Plywood case and the Acne Industrial Case - and then each of those, the contention was that the Board was without jurisdiction in matters that could be adjudicated before the Courts in a 301 suit.

And in each instance, this argument was rejected.

And then, in the Great Dane case later in the same term, a similar argument had been made in the Court of Appeals but was dropped when this case reached this court.

But the Court's opinion again points out that the fact that there is jurisdiction in the courts under 301 does not deprived a Board of jurisdiction.

Now, I suppose that these cases could be distinguished from C & C Plywood and Acne Industrial on the ground that those cases involve the subject matter of the Labor Board; in this case involves its power authority where its subject matter of jurisdiction is not in issue.

But we would suggest that these cases an easier one for finding Board jurisdiction.

In those instances, the problem was there were matters in dispute that might have been resolved or left through litigation in the courts.

Here, the disputed matters at least, as the contentions have been framed, are not things that are ordinarily decided in the Courts in Section 301 (6).

The contract has been used [coughing] simply as the measure of the remedy.

It's just the same, I would think, that if the Board in ordering back pay as used in oral rate established by a contract in so many art today.

I suppose if we follow through the Court of Appeals' analysis to its logical conclusion, [coughing] the Board can no longer order back pay if the back pay is based on a rate established in a contract.

There's nothing in controversy here on what the contract means in terms of the fringe benefits.

They set out their numerical -- there's just a calculation to be made.

And all the reasons alluded in this Court's opinion in C & C and Acne would seem to require the same result here.

For example in Acne, the Court discussed the difficulties that would arise from having two proceedings and matters of that sort.

There's no reason to put the union or its members to a duality of proceedings.

There's no reason to think that the Board is devoid of jurisdiction, wants it to act to cure a violation that it's found.

I think there's one other point that requires brief mention.

Much of the respondent's brief on the merits is devoted to an argument that the grievance and arbitration provisions of this particular contract forbid the Board's action.

As I understand that they are saying that whenever there is an arbitration and grievance procedure, the Board can't make any order that could have been entered by an arbitrator.

Well, first, I think this is the first mention of arbitration in this case.

I'm familiar with no request for arbitration nor suggestion that this matter could have been arbitrated and I would assume from the way the arbitration clause is worded, it's should question whether the arbitrated would speak to the existence of the contract.

But all this isn't really pertinent because I think the Court again has disposed of the contention both in the case of Carrie against Westinghouse and the Acne Industrial case.

Each time the Court had occasion to discuss the interrelationship between arbitration and the Board's activities, in Carrie the claim was that the Board's jurisdiction excluded arbitration; in Acne the claim was the presence of an arbitration clause for the Board to act in each time the Court held that there was a duality of jurisdiction and pointed out that the reasons that were applied in Steelworkers trilogy to require the courts to defer arbitration didn't apply in a Board proceedings.

No doubt the Board here could have, if the matter warranted it send them direct arbitration.

It could have deferred to arbitration.

But there's absolutely no reason why it had to withhold its hand and instead rely on some other internal inter-party process.

Thank you.

Chief Justice Earl Warren: Mr. Bakaly?

Argument of Charles G. Bakaly

Mr. Charles G. Bakaly: Mr. Chief Justice, may It please the Court.

At the outset, I would like to emphasize four questions of facts that would -- should keep on mind.

First, Mr. Strong was bound by the industry contract as a matter of law at the time that it was negotiated in August of 1963.

The bylaws of the association so provided, the Board's brief, page 2 concedes the record 35 and sets out the bylaws.

Under Wylee vs. Livingstone in this Court's decision, Section 301 action that appellee arbitration would certainly have been proper in Wylee as you recall.

The employer, who was held to be bound to arbitrate that was not a party to the Contract as predecessor company was a party and this Court held that he must arbitrate.

Furthermore, that the failure to pay fringe benefits was not alleged that's an unfair labor practice.

So either the complaint or found by the Board or the Court of Appeals.

The order finally is to pay to the appropriate source any fringe benefits provided for in the above-described contract.

We feel that this case presents for the first time a conflict between a national labor policy preferring arbitration and the position of the Labor Board that it has the power to decide whether we have breached the contract by the failure to pay fringe benefits.

Chief Justice Earl Warren: Is that the gist of your argument?

Rebuttal of Charles G. Bakaly

Mr. Charles G. Bakaly: Yes, sir.

That is basically, Your Honor.

A similar conflict, the course has been resolved by this Court, a conflict between Courts and arbitrators had been resolved by this Court in the now famous trilogy wherein the policy was set that in labor management matters it is for the arbitrator to decide that a Collective [coughing] Bargaining Agreement is not a contract and from our law, it says it's a code of conduct and that the arbitrator should be free to imply provisions that may or may not exists.

Now, the same reasons apply that to keep the Court out of such disputes, to keep the board out of such disputes.

As this Court said, the ablest judge cannot be expected to bring the same experience and competence to bear on the determination of agreements.

Similarly, the Labor Board, just as the Court, does not have the competence.

The Labor Board has been given by Congress competence in its field to determine whether the Act has been violated.

It is not, we submit.

With all due respect, they've given the Labor Board competence to decide breaches of the contract.

The Labor Board interestingly enough in several very recent cases, we respectfully submit it as demonstrative and it is not so competent.

And Adams Jerry this case is we have not cited in our brief.

They are Labor Board cases but in a series of Labor Board cases commencing with Adams Jerry, including the CNS Industries, the Labor Board has held that if the contract is silent about a particular provision, then the employer or the union, whoever it may be, is not bound or arbitrate or the Labor Board can interpret that provision in a way it wants.

Now, that is a strict disagreement with the decisions of this Court and the Trilogy that holds that where a contract is silent, an arbitrator might well imply a restriction or a right from the conduct of the parties or from other source.

The reading case, the Warrior case in this Court was a subcontracting case.

Here, in Adams Jerry the Labor Board held that you shouldn't have to go to arbitration because the only thing the arbitrator can do was to interpret the contract under its provision.

This, to me, shows that the Labor Board does not competence of the trilogy and the arbitrator has more power than to just interpret the contract.

He has the power to regulate parties from all of --

Chief Justice Earl Warren: Suppose in this case a Labor Board or the respondent in this case had, in addition to refusing to sign the contract that fired all the employees, could the Board then find that that was an unfair labor practice in order to be restored?

Rebuttal of Charles G. Bakaly

Mr. Charles G. Bakaly: Or the employees restored, yes.

Chief Justice Earl Warren: They could have?

Rebuttal of Charles G. Bakaly

Mr. Charles G. Bakaly: They could have ordered the employees to be reinstated --

Chief Justice Earl Warren: With back pay?

Rebuttal of Charles G. Bakaly

Mr. Charles G. Bakaly: And they could have ordered back pay and that's specifically provided for under the statute.

Chief Justice Earl Warren: Why couldn't the fringe benefits go with it?

Rebuttal of Charles G. Bakaly

Mr. Charles G. Bakaly: Well, that's the very hard question in this case, Mr. Chief Justice but --

Chief Justice Earl Warren: (laughter)

Rebuttal of Charles G. Bakaly

Mr. Charles G. Bakaly: The reason, I think, first of all goes to the fact that if they had discharged the employees, they would have done so with an Anti-Union Analyst and I do think that it could be a distinction between the employer acting with the Anti-Union Analyst and an employer acting mistakenly but in good faith.

And here, this employer, it was so found with an honest belief that he had withdrawn from the association.

He has not done so but he was not engaged in trying to destroy the union.

And that itself facts, I would not say that the Board could not, as a question of power for the fringe benefits.

That is not in this case and I would say that it's a question of policy.

A Board should not order fringe benefits even in back case.

The Board should reach the threshold question.

If I may say, it has the Act been violated.

And then as the Court so required to do, leave to an arbitrator that he cite what the provisions are, what the employer should do and then what the union should do of them in the threshold question.

In your case, Mr. Chief Justice, reinstate the employees and Labor Arbitrator decide the fringe benefits.

To me, a question of policy is among orally ways to effectuate policies of the Act which are to have the parties decide through a system of arbitration under Section 203 (d).

Justice Byron R. White: What was the Unfair Labor Practice Union?

Mr. Charles G. Bakaly: (Voice overlap) was refusing to sign the contract --

Justice Byron R. White: Which is a violation of what?

Mr. Charles G. Bakaly: Section 8(d).

It's A5 but also it's 8(d) of the Act specifically states that they signed the contract that has been agreed to.

I know if you will agree with the Board that they were bound of this association and it was agreed to under 8(d) of the Act, the employer was (voice overlap) to sign the contract.

Excuse me.

Justice Byron R. White: Your argument then doesn't rely at all on whether or not there was an action under 301 available to the union?

As I heard you so far, your emphasis has been that there was a contract.

The bylaws of this association made it so even though they haven't signed it but under the circumstances, the arbitration probations were enforced and this is only a dispute arbitrable under the arbitration clause.

And that's, as I understand, your argument.

Mr. Charles G. Bakaly: That is correct.

And that the union could have brought the 301 action --

Justice Byron R. White: So you're relying on that also.

Mr. Charles G. Bakaly: We're relying on that but obviously under (Voice overlap) the Evening News there is contract jurisdiction.

I believe in that case, if I'm not mistaken, the Court said there will going to be problems over the fact.

There's concurrent jurisdiction and this is one of those problems but we're accepting that.

We're not suggesting this meant where as the Evening News goes.

You overruled by any means and there is contract jurisdiction in the case like this.

Unknown Speaker: That's between what is it?

Mr. Charles G. Bakaly: Between arbitration and the Labor Board or Court to compel arbitration to go to the Labor Board.

The arguments against?

Unknown Speaker: Well, why doesn't the idea of Evening News answered this question?

Mr. Charles G. Bakaly: Well, Evening News merely decided that a Section 301 action would lack and did not decide the question of the power of the Labor Board to interpret the breached contract and Congress had before to see when the Taft–Hartley Act was passed the proposal.

But the Labor Board being given the power that the breach of a contract was an unfair labor practice, Congress refused to pass that portion of the statute and we think that is evidenced of a Congressional purpose not to give the Board jurisdiction over matters like this where they have to get into and I -- just a moment.

I get to the items that they are going to have into this.

This is not just the question of calculating benefits.

They're going to have to interpret this agreement.

And we submit that that's for an arbitrator to do.

Now, let's get to the arguments that the Board had made that it is a windfall here to the employer.

That is not correct, may it please the court as we read the Enterprise case which was one of the trilogy and which the Collective Bargaining Agreement had expired, which agreements or disputes had arose at these employers obligated to arbitrate today; obligated to arbitrate now the question of fringe benefits.

And the only reason the employer has not signed the agreement the employer has not yet signed the agreement if they could have offered to and the Regional Director said,Well, why don't you wait until that Supreme Court decides and then we'll give in the compliance.

The employer is ready to sign and will sign yes, sir.

Unknown Speaker: Does the record show a dispute as to the fringe benefits not as to whether they should be paid but as to how they should be paid.

Mr. Charles G. Bakaly: This matter, of course, tell that employer was found obligated to the contract, had never reasoned.

That was the employer's first assessment.

But right now, under the contract --

Unknown Speaker: As I recall, all they had to be done is to calculate the hours that it should be reflect on employees work, is that right?

Mr. Charles G. Bakaly: No, sir, that is not correct.

Let me first draw the, starting on page 62 and 63 of the record, list the fringe benefits.

They might be subject to cut duration although it's a fairly complicated Collective Bargaining Agreement as I'm sure you realize.

But on page 71, this is the first place, it lists a series of penalties that will happen to an employer if he does not pay the fringe benefits.

And there it says, paragraph f, A contract here may be absorbed of any or all foregoing liabilities if he satisfies the trustees if he has failed to pay any contributions or to report because of honest mistake in the contribution's, clerical error, or other reasons satisfactory now.

The labor Board shouldn't decide whether under these circumstances the employer should not have to pay these penalties because of honest mistake that he was obligated.

The Labor Board should not decide that.

The arbitrator opt to decide that.

The arbitrator might well decide here.

Excuse me.

Justice William J. Brennan: First thing has to be done, and this is how I read it, is that they submit it to the trustees.

Mr. Charles G. Bakaly: It's Correct.

Justice William J. Brennan: And the trustees, are trained that -- I don't know.

What is this set up here.

The trustees opponent by the both union and management?

Mr. Charles G. Bakaly: Yes, sir.

Justice Abe Fortas: Industry why the Collective Bargaining Agreement?

Mr. Charles G. Bakaly: Yes, sir.

Justice Abe Fortas: So the right, so the trustees representing the unions and some trustees representing management throughout the industry, at least cited industry, covered by this Supreme Court.

So what they would do under the Board order, I think, it is to go to trustees and the employer would say, Well, we calculate that this is X and here's what we owe you?

And if the union disagrees, that would say no.

He would say to the trustees that we think the company owes us more?

Mr. Charles G. Bakaly: I don't think that's what the Board has in mind at all, Mr. Chief Justice Fortas.

The Board has in mind going to the compliance officer in Region 21 of the National Labor Relations Board and letting him decide whether we have a good faith in that.

They don't have in mind going to the trustee?

Justice Abe Fortas: -- and what it says the Board order -- I assume that the Board order was phrased or a peculiar way it is just to provide for payment to the trustees and the submission in matter to the trustees as if it worked than made under the Bargaining originally.

Would you mind telling us, I've forgotten the exact language of the Board order if they shall pay the fringe benefits or what?

Mr. Charles G. Bakaly: Pay to the appropriate source any fringe benefits provided for in the above-described contract?

Justice Abe Fortas: -- phrase appropriate source just to mean the trustees under the Collective Bargaining Agreement, am I wrong about that?

Mr. Charles G. Bakaly: As far as the appropriate source under the direction of the compliance officer of the Board, I don't believe they are going to permit the trustees or an arbitrator to this stage or leave us of the payment again in these benefits if they find for example that we should have to --

Justice Abe Fortas: Benefits are not payable to the individual and employee directly, was it?

Mr. Charles G. Bakaly: Oh!

No, it's paid to the --

Justice Abe Fortas: It goes to the trustees?

Mr. Charles G. Bakaly: It's paid to the appropriate source of a trust fund.

Justice Abe Fortas: Meaning the trustees?

Mr. Charles G. Bakaly: The trust fund.

Justice Hugo L. Black: The trustees?

Mr. Charles G. Bakaly: That's right.

But their different --

Justice Hugo L. Black: In the order it does not fix them out.

Mr. Charles G. Bakaly: I'm sorry, Mr. Justice.

Justice Hugo L. Black: In the order it does not fix them out?

Mr. Charles G. Bakaly: What it says is in accordance with the agreement.

Justice Hugo L. Black: So that has to be determined later by somebody.

Mr. Charles G. Bakaly: That's right and I'm sure --

Justice Hugo L. Black: You haven't reached that point yet?

Mr. Charles G. Bakaly: I think we have if I now in practice one of -- I've never heard of anyone other than the Board compliance officer having anything to do with disputes as to the meaning of the Board order in any other back pay proceeding.

This is another policy, the reason why we suggest that the -- ought to be the law.

This is not the end of this matter.

There's going to be some disputes here.

I think what will happen (Inaudible) indication is if we don't agree with the compliance officer, we will go to a back pay hearing.

Justice Hugo L. Black: I suppose you went to fix it.

Mr. Charles G. Bakaly: Before the Board; that's before the Board.

Justice Hugo L. Black: (Voice overlap) and you found a protest, who would determine that?

Mr. Charles G. Bakaly: A back pay?

Let the Board speak but my practice has been that a trial examiner on the Labor Board will be heard.

Justice Hugo L. Black: Did you demand an arbitration on the agreement?

Mr. Charles G. Bakaly: I don't think so.

That is as long as this order is in effect --

Justice Hugo L. Black: (Inaudible) of the amount.

Mr. Charles G. Bakaly: As long as this order is in effect, it's within the jurisdiction of the Board and the compliance practices of the Board.

Justice Hugo L. Black: Are they taking the place?

The trustees has taken the place of those workers, was it?

Mr. Charles G. Bakaly: Has taken the place?

Justice Hugo L. Black: Who is getting to be paid concern, the trustees has taken the place of the worker.

Mr. Charles G. Bakaly: That's correct.

Justice Hugo L. Black: I suppose that the dispute between the company and the workers (Inaudible) backpay, would you have a right to have that right on arbitration?

Mr. Charles G. Bakaly: I don't --

Justice Hugo L. Black: You have to have it for the Board and accept that position --

Mr. Charles G. Bakaly: That's their position as my understanding, Mr. Justice Black.

They can speak to that but that's my understanding that it will be the Board, in any wage case, as Mr. Justice Warren stated, an ordinary discharge for union activity case and you have a dispute with the Board about how much you owe that person, that dispute is solved.

And a back pay here before another representative of the Labor Board and you have another case.

That goes up now.

That's why, we say that right now is the time to not enforce this portion of the order at this time but leave the parties to enforce it either themselves.

May be the parties will get together and agree how much is do and resolve this whole thing.

Justice Hugo L. Black: When do you expect to get back?

Mr. Charles G. Bakaly: Well, what we expect to get by an (voice overlap) arbitrator is just this kind of back pay, Mr. Justice Black.

This is a small employer.

He thought he could not compete and meet the union wage scale.

And that's exactly the story and we tried to get out of the union and he got jobs that he probably wouldn't have gotten, wouldn't have obtained if he had to pay all the conditions and so forth.

Now, we think that is a factor that an arbitrator would take into consideration that?

Unknown Speaker: Did the arbitrator was left to get off a lesson on the fringe benefit?

Mr. Charles G. Bakaly: Might well here because his employees were not union employees.

Chief Justice Earl Warren: Was he allowed to use equitable fringe benefit?

Rebuttal of Charles G. Bakaly

Mr. Charles G. Bakaly: Yes, sir.

As we stated -- And an arbitrator you can look at production, productivity.

He can look at all sorts of things that a Court and a Board can.

That's the purpose for the trilogy as Mr. Justice Douglas brought it.

That was the purpose of it.

An arbitrator, in the rule of common law, in the rules of the (Inaudible) so far to arrive at the decision that the court or the Labor Board would not arrive at.

And then this is what we think.

Here there's an equitable argument here.

This man would not have hold these fringe benefits if he had gotten the jobs and the only reason he got to work, put on the rules, was because he didn't have to pay these fringe benefits.

Chief Justice Earl Warren: And so you mean he got them on a lower price?

Rebuttal of Charles G. Bakaly

Mr. Charles G. Bakaly: That's right.

Chief Justice Earl Warren: And now, an arbitrator might say, Well, under all these circumstances, he thought he was out from under the agreement and therefore he ought not have to pay more than the fringe benefits less access.

Rebuttal of Charles G. Bakaly

Mr. Charles G. Bakaly: That's right.

Now, this penalty they might issue and have to pay this because it was an honest fall, that is not a false act to try to destroy the union a little of what it was and some other and further operation.

Justice Hugo L. Black: Well, I cannot under this --in compliance proceedings on the Board, may the Board make a similar determination?

Mr. Charles G. Bakaly: I've never known that, Mr. Justice Black.

(Voice overlap) I've never known that the Board in compliance proceeding doing anything but determining the matter for themselves in the Board and can speaks for itself.

Justice Hugo L. Black: Well, I mean, I've certainly have back pay orders or adjustments to back pay depending on whether or not the affected employees have really tried to get other work in that sort of thing.

So the non-familiar would adjustments to that sort.

Mr. Charles G. Bakaly: Well, its' normally done in the context of the back pay hearing without official --.

Justice William J. Brennan: My question really was, in a back pay hearing it might not be a determination of the amount do in a way of fringe benefit which might take into account some of the things which you think an arbitrator will?

Mr. Charles G. Bakaly: I don't have that confidence in the Board, Mr. Justice Brennan when in these cases like I just read Adams Jerry and so are they, they looked at the agreement.

They say, If the Collective Bargaining Agreement does not contain a subcontracting clause, then there's nothing to arbitrate.

That is directly contrary to that, Mr. Justice Douglas.

This decision in the trilogy directly contrary to it.

The Labor Board, in all due respect, is competent in determining whether unfair labor practice is, it has very little competence and has evidence to it by these recent cases in one of breach of contract is in this area.

Excuse me, sir.

Justice William J. Brennan: No, I just asked you what you said by a little contract?

Mr. Charles G. Bakaly: A very low competence in interpreting competence, in interpreting Collective Bargaining Agreement.

Justice Hugo L. Black: Is that command which trying to shift himself from a judge to the jury in order to appeal to the equitable (Inaudible)?

Mr. Charles G. Bakaly: Well, this is the system that we are under, Mr. Justice Black.

When you have a contract that has a monetary arbitration clause, you're under the system and I guess it's been very few times that an employer stood before this Court and contended for arbitrability.

But were here and were so contending because we are accepting the principle.

We shouldn't have to have two proceedings; we're going to have another proceeding.

Now, there are --

Justice Hugo L. Black: (Inaudible)

Mr. Charles G. Bakaly: I was about to say there are -- Excuse me, sir?

Justice Hugo L. Black: Suppose this fringe benefits, the amount of these fringe benefits was just a mathematical question of that so many mandates, would your argument be the same?

Mr. Charles G. Bakaly: Well, no it would not because an arbitrator still could be able to say, as I mentioned under this circumstances, I'm going to say that equity dictates at the employer not have to pay even though it was trickily calculated.

You see, before the trilogy.

Justice Hugo L. Black: Your argument would be the same then as well, that is this.

Now.

Mr. Charles G. Bakaly: Yes, it would be the same.

Excuse me, I must have misspoke that.

Our argument would be the same as it is now.

Justice Hugo L. Black: It would be the same.

And would you think an arbitrator could completely excuse you from any favor?

Mr. Charles G. Bakaly: Yes, sir.

And this Court has so held.

This Court and nothing down the Cutler Hammer doctrine which said that you couldn't arbitrate a dispute if the language was clear and unambiguous.

This Court knocked that doctrine down and correctly so even though the language is clear and unambiguous.

Justice Hugo L. Black: (Voice overlap) pretty clear?

Mr. Charles G. Bakaly: The parties have contracted even though the language is maybe clear and unambiguous.

The parties have contracted to have an arbitrator decide this.

Justice Hugo L. Black: Have an arbitrator which decide the equity of?

Mr. Charles G. Bakaly: Yes, sir.

Justice Hugo L. Black: Just kind to review it if they accept the agreement?

Mr. Charles G. Bakaly: Yes, sir.

That's right.

That's entirely possible, Mr. Justice Black, entirely possible on the Labor context.

Entirely possible and yet it's not clear here.

Let me say that --

Justice Thurgood Marshall: Well, I understand that originally, they took the position that the respondent did not design the contract because he didn't recognize this bonding?

Mr. Charles G. Bakaly: That is correct, that position was there.

Justice Thurgood Marshall: And then, nothing would gone until this action went into the NLRB?

Mr. Charles G. Bakaly: That is correct.

Justice Thurgood Marshall: And then, it was found that it was a contract.

Mr. Charles G. Bakaly: That's correct.

Justice Thurgood Marshall: And now, you shift your position in saying that you want to operate under the contract which still are the same.

Mr. Charles G. Bakaly: Well, we've offered the same, Mr. Justice Marshall.

Somebody had to decide.

There is a serious question here in the statute's limitation.

Justice Thurgood Marshall: The fact that you didn't sign it is a reason that the NLRB took jurisdiction?

Now, you want to oust to my jurisdiction, right?

Mr. Charles G. Bakaly: It was up to the expert.

Justice Thurgood Marshall: Is that right?

Mr. Charles G. Bakaly: That is correct.

But it's up to the union, Mr. Justice Marshall.

They could have filed a grievance and they could have gone to arbitration and they could have compelled us to do so.

We had, as I said earlier, the Labor Board decide, can decide here the threshold question.

Was there an unfair labor practice by refusing to sign the contract?

That doesn't mean they have to take the case for all purposes.

Fabricated proceedings are nothing new to this Court.

That's what is count by the trilogy.

Justice Hugo L. Black: Well, I gather it sensually that your argument law is that, are the Board simply has no authority, power, whatever words you want to use to enter the kind of order they did here as to the fringe benefit, am I right?

Mr. Charles G. Bakaly: Correct.

Justice Hugo L. Black: And this is on the ground that this is a contract matter and that section dealing with sanctions has to be interpreted as not authorizing a sanction which goes to the interpretation to the agreement itself that that must either be a matter for the arbitrator because this arbitration provision here or in any event for the Courts since there is no arbitration proceedings, is that it?

Mr. Charles G. Bakaly: Yes, sir.

Justice Hugo L. Black: You have the proceeding divided up in two parts?

Mr. Charles G. Bakaly: Yes, sir.

Justice Hugo L. Black: The Board to determine one part and an arbitrator will know it.

Mr. Charles G. Bakaly: Nothing unusual about that.

That's correct.

There's nothing unusual about that.

That what happens if an employer contends a dispute is not subject to arbitration.

Under the agreement, the Court first determines whether it is and if it determines that it is, you don't have an arbitration.

There's nothing unusual about that.

We're going to have that hearing, Mr. Justice Black, because I'm sure there's going to be a back pay hearing in this case because there are questions in the Collective Bargaining Agreement as to meaning and intent.

It says there are certain penalties for the non-payment of health and welfare benefits yet it says a contract too an important and may be absorbed if he is in good faith.

And, somebody is going to determine whether we have to pay these penalties or not.

There are provisions here about hours of work.

That may well be a fringe benefit.

Well, I don't know what a fringe benefit is and I'm sure you can make a good argument that hours of work is a fringe benefit.

What about if it says work must be done outside the regular working hours for the protection of life or property?

The Labor Board cannot decide that back pay here?

Chief Justice Earl Warren: Well let me tell you would be very happy of what the Labor Board says of what it means that you were to pay whatever is to be determined and that the determination is to be made pursuant to the contract including (Inaudible) up to the extent available arbitration then you'd be happy.

Rebuttal of Charles G. Bakaly

Mr. Charles G. Bakaly: If the Labor Board permits the arbitrator to determine this, yes, sir.

Justice Abe Fortas: Now, apart from what the arbitrator will determine on what your construction of the trilogy, which you call it trilogy, if the Board says that our opinion, our order means that you have to pay what you're obligated under the contract and that's to be determined in accordance with the provisions of the contract.

I don't know whether it will or not but it says here that (Inaudible) of you could be very happy.

Mr. Charles G. Bakaly: I think that's what law would be.

In arbitration there's no misunderstanding.

In that arbitration, we would contend that even though it says 7 cents an hour, the health and welfare because of this equitable considerations which shouldn't have paid any.

Justice Abe Fortas: I know you say that and then the arbitrator may or may not allow it and if he does agree with you, the Court may or may not overrule.

Mr. Charles G. Bakaly: It would be very surprised, Mr. Justice Fortas, that the Court will overrule an arbitrator.

If he rules on our favor, we would have to take what is the decision.

Justice Abe Fortas: That's because of what Justice Douglas wrote in the trilogy.

Mr. Charles G. Bakaly: Of what this Court said.

There's some other provisions but from Labor Board he's going to in this case after interpreting this Collective Bargaining Agreement.

We think that that is for the arbitrator to do and it would be an orally procedure.

There's not going to be unneeded bifurcation.

The policy of the Act as counsel here has said [coughing], also as a section in Section 203 (d) the final adjustment by a method agreed upon by the parties is hereby declared to be desirable method for settlement/agreement of disputes.

And, we submit that a threshold question?

Fine, but the Labor Board decides or a court concurrent jurisdiction.

Once the Labor Board has decided there's a contract, then let's have all of the contract be applicable including the grievance and arbitration provisions of the agreement.

Thank you.

Chief Justice Earl Warren: Mr. Weinstein?

Rebuttal of Harris Weinstein

Mr. Harris Weinstein: If, Mr. Chief Justice of Court pleases, I simply suggest that all the arguments that have been advanced in this court, in that arbitration which were not advanced before the Labor Board and the Court of Appeals are all disposed of by Mr. Justice Douglas as an opinion for the Court in Carrie against Westinghouse where the Court discusses the considerable length of the relationship between arbitration and Board proceedings, makes clear that these are alternatives available to the complaining party and goes so far to say that in the event of conflict, the Boards ruling would have coursed to take precedents.

Now, as that opinion points out, the Board may and has in a variety of occasions deferred or invoke the arbitration of a circumstances seems appropriate and the parties asked for it in a timely and proper way with three simple grounds for doing it.

But that has to be done in a timely way before the Board.

It has nothing to do with the Boards power and that is the only issue here.

The Board can, if it wishes use arbitration, if the disputes develops in calculating what is due under this order here.

The Court can, if it wishes, go to the trustees under this agreement.

It can call them in, it can invoke arbitration.

Justice William O. Douglas: Well, let me see of (Inaudible) statute.

What you are saying is that the way this agreement would work would be that the company would be required to withdraw that.

What you said, I don't understand how this agreement would work.

The Board says, you must pay whatever you owe under the contract.

Company says, Alright, here's what we calculated.

We owe $25 under the contract and we pay that to the trustees.

And if there's no objection on that, that ends the matter, alright?

Mr. Harris Weinstein: Yes, sir.

Justice Abe Fortas: Then they say that to the Board, they will report to the Board that the compliance officer will pay $25 to the trustees.

But suppose the union comes in and says, that isn't correct.

They owe $2500 and now what happens?

There are two possibilities; one is the determination of that amount would be made by the contract machinery; the other possibility is that the Board itself would undertake to determine the amount which means that would have to construe the Collective Bargaining Agreement.

Now, what is the Board's position?

Mr. Harris Weinstein: Mr. Justice Fortas, the Board's decision is that it has the option.

If there was a dispute, the Board would hold a proceeding to resolve the dispute.

Justice Powell would hold the proceeding to determine whether there's been an unfair practice.

Unknown Speaker: I don't say it has the option because the Board issued an order.

The question is what does the order mean if you ordered these people to pay pursuant to the contract?

If you order them to pay pursuant to the contract, the next question is whether that is to be determined in accordance with the machinery provided by the contract or has the Board pro tanto displays that machinery of the contract.

And those are the questions that are right here right now.

Mr. Harris Weinstein: I think the fair answer to that was that because there was no suggestion before that anything other than a mathematical computation was required.

The Board, in writing its order, didn't consider whether pursuant to the contract incorporated submission to the trustees under what I told the state clause of the agreement.

It seems to me that if that contention is really to be brought in that there would so equitable grounds that would require a lesser payment that the mathematical computation calls for that the burden would be on the employer, dwell into the Board and request elaboration of its order.

It seems to me that the Board has the authority to do it either way.

And in this case, what's been brought into oral argument here is a matter that was not brought to the Board itself in a timely fashion.

I don't think it was controverted.

Unknown Speaker: May be that's your answer.

May your answer is that we are not to consider the question of how the amounts to be computed because you went to raise below.

Mr. Harris Weinstein: It wasn't raised below?

Unknown Speaker: (Voice overlap) consider it but if on the other hand you are giving us what you should take an official answer from the Board, that is to say that the Board can determine how these amounts can be computed, the Board can determine that the contract machinery will be used or won't be used.

If that's your position, the letter is your position and I confess I have some problems.

Mr. Harris Weinstein: I think I would start by saying that because of the ordinary course of Board proceedings disputes over computation would be resolved after the order becomes final that the issue wasn't before the Court.

I would suggest though that if the Court would going to decide that issue against the Board, it would require considerable back tracking on the analysis on the Carrie opinion and the Acne opinion.

That it would require what we would suggest this an inconsistency with Section 10 (a) of the Act which says that the private --

Unknown Speaker: (Voice overlap) but let me answer you.

It takes additional time here but let me see if I put it this way.

The question here is doest the Board have power under the Act to order the payment of fringe benefit provided for in a contract?

The objection is, as I understand it, that would amount to the Board interpretation and enforcement of a contract.

Now, do you tell me that the Board has merely ordered the payment to be made the amounts had been determined in accordance with the contract by the contract machinery?

That gives this question more in particular case.

If on the other hand, you tell me that the Board has in effect going to supplant the machinery provided them in the contract.

Insofar as the determination of the amounts all that it concern that to my mind make give this legal problem we have before is a very different case.

Mr. Harris Weinstein: I would think that as the case is framed and as -- because of the arguments had been made earlier.

What you've stated as your second reading of the issue isn't in the case.

It's not.

I think that the -- again, I would refer the Court to the matters discussed in the Carrie decision which showed the way, the Board decides whether to defer to contract machinery.

Thank you.

Chief Justice Earl Warren: Very well.