Cases by Issue - Union or Closed Shop

Lehnert v. Ferris Faculty Assn - Oral Argument

Fri, 09 Jan 2009 14:49:44 +0000

Case:

Lehnert v. Ferris Faculty Assn

Media File:

89-1217_19901105-argument.mp3

Related Transcript:

transcript.xml

Transcript:

Argument of Raymond J. LaJeunesse, Jr.

Chief Justice Rehnquist: We'll hear argument now in No. 89-1217, Jones Lehnert v. Ferris Faculty.

Let's try to move along, Mr. Kneedler.

Mr. LaJeunesse, you may proceed whenever you're ready.

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

Professor Jim Lehnert and his fellow petitioners in 1981-82 were nonunion faculty members at Ferris State College, a 4-year institution of higher education in the State of Michigan.

They were compelled by the college to pay as a condition of their employment a service fee to their exclusive bargaining representative, the Ferris Faculty Association.

The lower courts, with Justice Merritt of the court of appeals vigorously dissenting as to all but one activity, held that Professor Lehnert and his colleagues' First Amendment rights were not violated when those service fees were used for certain activities of the association and at State and national affiliates, the Michigan and National Education Associations.

Two basic questions are before the Court.

First, may Professor Lehnert and his colleagues be required to subsidize financially activities which are not conducted on behalf of their bargaining unit but on behalf of individuals elsewhere in other bargaining units in Michigan and in other States, on behalf of employees who are not faculty members in higher education but teachers in kindergarten through 12th grade, educational support personnel, or nurses.

The second major issue is whether Professor Lehnert and his nonunion colleagues can be required to support financially political and ideological activities that are not part of the bargaining process anywhere.

What activities are we talking about?

Most of the activities at issue on this appeal both do not concern the Ferris bargaining unit and are not integral to the bargaining process anywhere.

For example, two of the primary expenditures at issue are the costs of millage campaigns to increase millage property taxes and lobbying against State legislation that would have provided property tax relief.

Ferris State College receives not one cent from millages or from property taxes, so therefore, Ferris State College was not affected by these activities at all.

The only effect on Professor Lehnert and his colleagues was as competitors for scarce public resources, and if they lived in the district where the taxes were raised, their taxes went up.

They're affected as taxpayers.

Another example of an issue or an activity in this category was the study that the National Education Association conducted of school finance in Arizona.

That had to be a political and ideological activity and it wasn't related to Ferris State College because Arizona did not even permit collective bargaining for educational employees at the time in question.

Unknown Speaker: Why do you say it had to be a political or ideological activity?

Mr. LaJeunesse: It could not be part of the political bargaining process in Arizona, because bargaining was prohibited by the State of Arizona for educational employees.

Unknown Speaker: Well, so, you define any political and ideological as meaning any activity that does not accrue to the benefit of the bargaining unit?

Mr. LaJeunesse: No, Your Honor, political and ideological is any public advocacy or dealing with Government outside the bargaining process, petitioning of government speech and association.

Unknown Speaker: Well, I thought this was just a study out in Arizona?

Mr. LaJeunesse: It was a study of school finance, and school finance in Arizona was accomplished only through legislation, not through bargaining.

Unknown Speaker: Well, I would think your argument would be, not that that was political or ideological, but since it didn't benefit the members of the bargaining unit it was no good.

I would think there's a category of things--

Mr. LaJeunesse: Our argument, Your Honor, is that it's both.

It neither concerned this bargaining unit nor was it part of the bargaining process anywhere.

Unknown Speaker: --But if, if one sets out to do a neutral study that just doesn't have much to do with what the person is at, I would not think that's political or ideological.

I think it's more better defined as something that is, is not perhaps germane to the bargaining process.

Mr. LaJeunesse: Your Honor, I think it related to the question of taxes and educational appropriations in the State of Arizona as well as being outside the bargaining unit in this case.

Unknown Speaker: May I, may I just ask you a little more about this millage point?

Supposing the lobbyists for the national union sought more money for faculty salaries in colleges.

They either wanted a minimum wage or just wanted more appropriations to expand the faculties and new curricula and so forth.

Would you say that was permissible or impermissible?

Mr. LaJeunesse: Impermissible, Your Honor.

Unknown Speaker: Because it's--

Mr. LaJeunesse: It's outside the bargaining process.

It's an activity which is at the core of the First Amendment as equally as the support of candidates for public office, as this Court said in Meyer v. Grant.

Unknown Speaker: --So, so you really don't rely particularly on the fact that the millage happened to be for grammar schools and so forth rather than colleges?

Mr. LaJeunesse: Well, Your Honor, I'm saying that there's a bright-line test--

Unknown Speaker: I mean, your argument... let me put this way.

Your argument on that point is much like your argument on anything outside the bargaining unit is impermissible.

I mean, you know, conventions and for the national organization and the like.

Mr. LaJeunesse: --Your Honor, I think there's a bright-line test.

There are two standards which this Court has consistently applied and which in fact are the... based on a statute, and that is if an activity is either outside the bargaining process or does not concern the bargaining unit then it's not within the governmental interest that this Court has found to underlie a constitutional agency shop.

The governmental interest which this Court found to underlie a constitutional agency shop in Abood, which involved the same statute that's at issue here, are the same interests that the Court has found with regard to the Federal labor statutes in the cases from Hanson through Beck and that is to advance labor peace within the bargaining units by having one bargaining agent to make... make and enforce a single contract for the employees in that unit to prevent the conflict which would arise if you had more than one representative trying to represent the employees in the same unit.

And secondly to avoid the risk of the free rider, the employee who doesn't join the union and is not paying his pro rata share of the costs of the statutory functions which the union as bargaining representative performs for the employees in that bargaining unit in making and enforcing the labor contract.

So both of those interests come back to that dual bright-line test.

Unknown Speaker: Well, Mr. LaJeunesse, I'm not sure that Abood drew a so-called bright-line test for public sector employees.

The argument made on the other side is that multi-unit unions effectively strengthen the local bargaining unit and that it's just like buying an insurance policy and spreading the risk that those expenses outside the bargaining unit can strengthen the local unit as the need occurs locally.

How do you answer that?

Justice O'Connor, two answers.

First, the argument that the local is strengthened by the activities elsewhere is the same argument the railway clerks' union made in the Ellis case for organizing... compelling support of organizing and compelling support of litigation concerning bargaining... other bargaining units, and the Court rejected it in Ellis.

The Court established a standard which says that what is chargeable is only those activities that are part of the performance of the statutory functions of representing the employees, in dealing with the employer on labor management issues.

Or germane... not part of.

It doesn't have to be part of, does it?

Mr. LaJeunesse: Germane... the definition of germane under both law and--

Unknown Speaker: But anyway it has to be germane--

Mr. LaJeunesse: --Germane is closely related, Justice White.

Unknown Speaker: --It has to be germane to the services under the particular bargaining contract.

Mr. LaJeunesse: That's correct.

Unknown Speaker: And the particular unit.

Mr. LaJeunesse: Germane and closely related, Your Honor.

And the second answer to Justice O'Connor's question is that affiliation is not an insurance policy.

It's not a service contract.

There is no legally enforceable contract between the local and the State and national organizations which specifies as service contracts do and as insurance policies do what services will be provided, what specific services will be provided.

Unknown Speaker: If there were--

Mr. LaJeunesse: The contingencies--

Unknown Speaker: --would it make a difference?

Mr. LaJeunesse: --If... if you had a legally enforceable contract spelling out the bargaining services that had to be provided and when they had to be provided, and you had the allocation necessary to separate... and this is the second distinction between the service contract and affiliation... if you had the necessary recordkeeping to separate out the nonbargaining functions of the union, then the answer might be that the costs would be chargeable.

But it would be costs that the union approved, actual costs that there was a basis in actual costs for the charge.

But this Court has said in the cases beginning with Street not that affiliation itself is a cost of collective bargaining that can be charged, but that there must be a breakdown of the services provided by the state or national affiliate that can be charged to the nonmembers.

Unknown Speaker: Going back to lobbying for a minute, I suppose in the public sector if the union is out lobbying to try to get increased health benefits, for example, for public employees including those in the bargaining unit or a tax increase to fund payment of teachers' salaries Statewide that would affect those in the bargaining unit as well.

Now you say none of that is chargeable?

Mr. LaJeunesse: That's correct, Your Honor.

I don't--

Unknown Speaker: And why not?

Mr. LaJeunesse: --I... because, number one, we're dealing with an activity which the state has excluded from the special bargaining process and has left in the normal political processes.

It's a matter of subject to decision of the State legislature.

In the case of millages, the electorate at large.

So the State has decided that it's not within that special process of collective bargaining and therefore as to that process, the employee must be treated not as an employee but a citizen, a taxpayer, a consumer, a competitor for scarce public resources, and in the case of some of these matters, as a parent.

That's how he's affected.

The in... when you get outside that narrow, special process which the State has set up for collective bargaining, you're infringing on core First Amendment rights, which this Court has said are the same as the rights that exist with regard to the support of candidates.

If... if you don't draw the line at the process, what are the limits?

The same thing could be said with regard to a private sector labor union that when it lobbies Congress for minimum wage legislation, that could be chargeable.

But this Court has said in Street and in Ellis and in Beck that can't be charged in the private sector, and the Court has said in Abood and in Keller that the First Amendment rights of public employees and private employees are the same.

So I don't think there's any place you can draw the line except at the process because it's a slippery slope.

If lobbying is chargeable, why shouldn't support of candidates be chargeable?

The election of a school member is probably more important to the education union than any other decision that occurs.

But it's in a process which the State has excluded from bargaining.

And I think we have to go back to the basic question of what type of scrutiny this Court applies when we're dealing with infringements on First Amendment rights.

The Court has said that even requiring the employee to pay for the costs of bargaining on his own behalf significantly impacts on his First Amendment rights.

Here we're talking about making him pay for bargaining on behalf of other employees.

Therefore, as to him those aren't his terms and conditions of employment.

Those are matters of industrial relations and in the public sector, politics.

Unknown Speaker: Mr.... Mr. LaJeunesse, what if there were pending in the Michigan legislature a bill that would have directed the 10-percent reduction in the appropriation for all colleges like Ferris State College?

Do you think the bargaining unit, the respondent here, could charge to the agency shop people the... whatever costs they spent in lobbying against that?

Mr. LaJeunesse: No, Your Honor, I don't believe so because it's outside the process.

It's still in the normal political processes.

If you say that they can lobby on that, then why can't they lobby against an increase in the budget for social welfare programs, because if those increase the amount of money available for education is decreased?

Why can't they lobby for increased in the income tax, because that money can be spent for education?

Unknown Speaker: Could... could the... the union--

--Also, what about a program to register and vote?

Mr. LaJeunesse: A program to register and vote, Your Honor?

Unknown Speaker: Uh-huh.

Mr. LaJeunesse: I think that clearly would be nonchargeable.

I think it is under this Court's prior decisions.

Unknown Speaker: You think it's what?

Mr. LaJeunesse: Not constitutionally chargeable to the objecting employee... program to register and vote, as I understood the Court's question.

Unknown Speaker: Could, could a union publish in its own publication the voting record of, say, the school board or state legislators with respect to issues that affect the bargaining unit?

Mr. LaJeunesse: Justice Kennedy, they could publish it.

We're not talking--

Unknown Speaker: Well, I mean with the fees of the dissenters?

Mr. LaJeunesse: --But I do not believe they could use the dissenters' dues for that, Your Honor.

No, I don't think so.

I think that answer is clear under Abood and this Court's decisions in the private sector.

That's not even as close as the question of funding of higher education.

Unknown Speaker: Mr. LaJeunesse, one category of charges that you say were improper really is quite different from the others in that you concede that they're... that they're not part of the legislative process and you can see that they do narrowly affect the particular bargaining in the bargaining unit.

But you nonetheless say they are not chargeable, and I'm referring to the costs of preparing for an illegal strike which never occurs.

Mr. LaJeunesse: Yes, Justice Scalia.

I--

Unknown Speaker: Now, why are they not chargeable?

Is it illegal to prepare for an illegal strike?

Mr. LaJeunesse: --I don't think the activity has to be illegal for it to be not chargeable.

The point is for an activity to be chargeable to the dissenting nonmember it has to be justified by a governmental interest.

And the State of Michigan has no interest in compelling nonmembers to make threats of an illegal act.

The fact that--

Unknown Speaker: Well, it... it has no governmental interest... I mean, it... by parity of reasoning you can say it has no governmental interest in paying higher wages to public employees.

Mr. LaJeunesse: --I think that's correct, Your Honor.

Unknown Speaker: So then nothing is chargeable, because--

Mr. LaJeunesse: No, what--

Unknown Speaker: --you don't want these bargaining units to be successful.

There's no governmental interest in having these--

Mr. LaJeunesse: --The governmental interest, Your Honor, is in reimbursing the employee... the union for its cost of performing its statutory functions.

If the State interest were in higher wages and benefits for public employees, it could accomplish that purpose without an agency fee.

It could simply pass legislation increasing wages and benefits.

Unknown Speaker: --But one of its statutory functions is conducting... conducting negotiations with all of the maneuvering and feinting and what not that negotiations entail.

Certainly if they walk out of a meeting 1 day, drag on the meeting for 5 days when it could have lasted only one, but that's part of their tactics, you say that's chargeable, wouldn't you?

Mr. LaJeunesse: But that's not--

Unknown Speaker: So what about this phony preparation for a strike which would never occur?

Why isn't that just part of... it's part of the negotiating process.

Mr. LaJeunesse: --Your Honor, I don't think it's part of the negotiating process any more than it would be if the Ferris Faculty Association had gone out and hired the Mafia to threaten Ferris State College that they would break the legs of the members of the Board of Control--

Unknown Speaker: Now you're making a different argument.

Now you're making a different argument.

Now you're saying it's illegal to prepare for an illegal strike.

Mr. LaJeunesse: --Well, I'm saying--

Unknown Speaker: Or illegal to threaten an illegal strike.

Mr. LaJeunesse: --The Michigan Court of Appeals and the Michigan Supreme Court have held in the Male case, which we cite in the briefs, that it was against the public policy of Michigan to require the nonmembers to contribute to a fund, a strike fund, which would in the future be used to fund strikes.

And the existence of that fund obviously threatens employers just as much as the threats in this case, yet it was held to be against the public interest of Michigan to require the nonmembers to support that preparation for a strike which would be illegal under Michigan law.

And I would also add, Justice Scalia, that the record directly contradicts... the record as to the... the internal union documents which are in evidence, directly contradict the testimony of the union witness who said that this was merely a bargaining employee.

If you read those documents which are cited in that part of our brief you will see that, when they are talking to each other in private, the union intended to go out on strike, that those were real preparations for a real strike which just happened not to occur.

Unknown Speaker: May I... may I... this... your asking us to look at the testimony and so forth, brings to mind this question.

To what extent do you think the question of whether an activity is germane is a question of law or a question of fact?

And the reason I ask that is I guess we have two courts who have wrestled with an awful lot of detail.

And as I understand... now maybe... maybe my recollection is incorrect, that with respect to the local union, you... about 80 percent or something like that of their activities were held okay to be charged, but as respect to the Michigan union and the national unit, something like 95 percent of those were held to be impermissible.

So you substantially won the case as to Michigan and any... is that... is my recollection right on that?

Mr. LaJeunesse: That's correct, Your Honor.

But the question of what kind of activity, whether a particular type of activity is a question of law.

In fact, is a content-based regulation of speech, as the Court said in Riley v. National Federation of the Blind, when you are making a decision as to whether somebody would be compelled to make a speech that they would not on their own make, that by definition is a content-based regulation of speech.

Unknown Speaker: But nobody is being compelled to make a speech.

They're being compelled to pay money to a union representative who primarily is representing their collective bargaining... interest and may incidentally say something that you disagree with.

Mr. LaJeunesse: But this Court held in Abood--

Unknown Speaker: Yeah.

Mr. LaJeunesse: --and in Elrod that requiring those financial contributions which are then used to speak on issues as to which the employee is in opposition is tantamount to coerce belief.

It is coerce speech.

The fact that it was done through... through a contribution makes it no less protected by the First Amendment, as the Court said in Abood.

Unknown Speaker: So you say it's a pure question... each of these issues is a pure question of law in your view?

Mr. LaJeunesse: That's correct.

Whether a particular expenditure fits within one of the categories, once the category are defined--

Unknown Speaker: Well, again, on this strike business, I mean, a lot of the money was in a pot there that they said might... might finance a strike and might finance negotiation.

It's kind of mixed the little bit, the use of that fund I think.

Mr. LaJeunesse: --Well, Your Honor, I don't believe it was.

I believe that the monies that are at issue here were used to pay for a strike headquarters which they didn't need to have union meetings.

Unknown Speaker: But they did have union meetings at the strike headquarters?

Mr. LaJeunesse: To discuss going out on strike.

Unknown Speaker: Well, and their bargaining position.

Mr. LaJeunesse: It was... the only purpose of having a separate strike headquarters instead of their normal meeting place was to threaten the college with what would be an illegal act had it occurred.

Unknown Speaker: Was there any finding one way or the other on whether they discussed informational picketing, which I take it is not unlawful, I would assume.

Mr. LaJeunesse: Your Honor, there was... there were expenditures on informational picketing.

Unknown Speaker: Was this part of the union hall meeting?

Mr. LaJeunesse: Those expenditures... we don't have the minutes of the meeting in the record, Your Honor.

There was informational picketing that went on during this period, but our... that informational picketing was directed at the general public.

And therefore, under this Court's decisions in Pickering and Madison Joint School District, is public discussion of matters of public concern as to which the nonmember must be treated for First Amendment purposes as a citizen, not just an employee.

In fact in Madison Joint School District the situation was essentially the same.

The employee wanted to... spoke publicly on an agency shop proposal then in negotiation.

And this Court held that he had an absolute right to make that speech, that it was a matter of public concern, not just a matter of employer/employee relations.

Unknown Speaker: Well, suppose there's informational picketing at the headquarters of the school board, is that... in front of the building.

It's obviously directed both ways, isn't it?

You don't just pick up the board members by going to their house, tell the public what your concern is with board members' policy.

That's not permissible in your view... with the public union?

Mr. LaJeunesse: I think not if they're picketing publicly, Your Honor.

And we're not just talking about that picketing here, Your Honor.

We're talking about buying ads in the local newspaper, as the record shows.

Unknown Speaker: Can I ask you--

Mr. LaJeunesse: It was not... it was advertising not just picketing at the school board meeting.

Unknown Speaker: --Could I ask you one other hypothetical?

Supposing your teachers' salaries were fixed by statute, would it be impermissible under your view to lobby for a change in the statutory provisions?

Mr. LaJeunesse: Your Honor, that's not this case--

Unknown Speaker: I know it isn't--

Mr. LaJeunesse: --I don't know the specifics of it--

Unknown Speaker: --but our salaries are fixed by statute and I can... if not--

Mr. LaJeunesse: --and I think the specifics of it might make a difference.

But if the unions--

Unknown Speaker: --Why would it make a difference?

Mr. LaJeunesse: --were merely involved in the technical process of providing testimony at a State legislative hearing--

Unknown Speaker: No, they do everything you object to.

Mr. LaJeunesse: --that might be one thing.

But if the union doing, as it was here, not just testifying at a hearing, but engaged in a grassroots lobbying campaign, putting together coalitions of citizens and teachers--

Unknown Speaker: Yes, that's exactly what I'm... that's my--

Mr. LaJeunesse: --buying advertising, that is core First Amendment activity and it can't be charged--

Unknown Speaker: --And you--

Mr. LaJeunesse: --to the dissenter.

Unknown Speaker: --Even in... even in my hypothetical?

Mr. LaJeunesse: Even in your hypothetical, Your Honor.

If I... if I may, I would like to reserve the balance of my time.

Unknown Speaker: Very well, Mr. LaJeunesse.

Mr. Chanin, we'll hear from you.

Argument of Robert H. Chanin

Mr. Chanin: Thank you, Mr. Chief Justice, and may it please the Court:

To help establish a context I would like to begin by very briefly commenting about the nature of the three unions that are involved in this case.

The first... and to clarify my acronyms also.

The Ferris Faculty Association, FFA, is the bargaining representative for a unit of 500 faculty members at the college.

It is a small local union which in the year in question, 1981 and '82, had a budget of some $18,000.

FFA is affiliated with two much larger unions with substantially greater and more diverse resources.

At the State level it's affiliated with the Michigan Education Association, MEA, which in that year had a budget in excess of $18 million; and at the national level, it's affiliated with the National Educational Association, the NEA, which had resources in excess of $70 million.

The courts below held that the petitioners may be charged for the course of certain activities engaged in by MEA and NEA.

Because these activities did not directly involve the collective bargaining process at Ferris State College, petitioners contend that they are in effect being asked to subsidize employees in other bargaining units represented by MEA and NEA to pay for services provided to these other employees which is of no benefit to the members in their own bargaining unit.

The petitioners are wrong.

That--

Unknown Speaker: They don't say as of no benefit.

They say does not pertain to their bargaining process.

Mr. Chanin: --They're wrong... they're wrong in that as well, Your Honor.

Their characterization--

[Laughter]

Their characterization fundamentally misstates the situation, and it totally misses the point of union affiliation and its purpose.

Affiliation is essentially a pre-paid delivery service by which larger parent organizations help its local affiliates to carry out their representational responsibilities, not in the sense that Justice O'Connor asked, not merely to strengthen the local unions in a general sense.

It is to provide them with resources and services in the collective bargaining area on an as-needed basis.

In Abood, this Court--

Unknown Speaker: Is that in the contract?

Mr. Chanin: --Which contract?

Unknown Speaker: Is that in the contract of association between--

Mr. Chanin: It's in the essence of affiliation, Your Honor, in three respects.

One, the contract of affiliation is indeed a contract between parent organizations and locals.

The guidelines and the policies of the parent organizations, many of which are in the record in this case, obligate the parent organization to provide assistance to the local in a variety of collective bargaining-related areas.

And the most important enforcement mechanism here is political reality.

If a parent organization failed to respond to one of our locals when it needed us in a collective bargaining crisis, we would not be the parent organization as soon as that crisis ended.

So we must indeed respond, and I think the answer to your question is, yes, it is built into the very nature of the affiliation relationship.

Unknown Speaker: --You don't assert it's a legal obligation.

You assert it's a practical obligation.

Mr. Chanin: That's... it's even questionable on legal.

I think it is unquestionably a practical obligation.

I am not sure that locals would not have a cause of action under State law to enforce the policies and guidelines of the parent organization.

It never comes to that, because it is overwhelmed by the political reality.

We must respond to those needs.

What this Court stated in Abood was that the designation of a union as an exclusive representative carries with it great responsibilities.

It referred to the difficult and continuing tasks and indicated that to carry out these functions a bargaining representative needs the service of lawyers, expert negotiators, economists, a research staff, as well as general administrative personnel.

What has happened here is by selecting as a bargaining representative a local union that was affiliated with larger parent organizations, the majority of employees in the Ferris College bargaining unit have chosen to provide and fund certain of those responsibilities on a unit... a cross unit basis with a sharing of the risks in which all of the people who benefit, the members and the feepayers, are charged a periodic uniform flat fee.

Unknown Speaker: You certainly make the union movement sound like a very business-like operation.

I've always heard it called the movement.

I thought that people in one union would contribute to the international because they believed in unionism.

They don't care whether they're getting back penny for penny an investment that they're making in the international.

There's none of that here?

Mr. Chanin: Your Honor--

Unknown Speaker: This is strictly a business operation?

Mr. Chanin: --It hurts me... it hurts me to say that--

[Laughter]

Unknown Speaker: Yes.

Mr. Chanin: --that is not the sole basis for affiliation.

It is partially there, and it is part of why people join unions--

Unknown Speaker: Of course it is.

Mr. Chanin: --But unionism is a competitive area.

There are unions competing on a day-to-day basis for the allegiance of employees.

The ones who get those employees, the ones who are voted in, are the ones who can deliver when they are called upon.

And delivery in a collective bargaining sense means when a local has a crisis, a crisis beyond its own means to deal with, the parent organizations are there.

They are there with what the Court referred to in Abood, the lawyers, the negotiators, and the research people.

Now petitioners contend--

Unknown Speaker: Mr. Chanin, can I interrupt for a second?

Your argument it seems to me would justify the total assessment of the dues, a portion of the dues that was charged to the MEA, and I understand the district court found about 97 percent was impermissible.

Mr. Chanin: --Well, the 97--

Unknown Speaker: Isn't that right?

Mr. Chanin: --Yes.

Unknown Speaker: And we're fighting about a little squib at the tiny end of the thing.

Mr. Chanin: Let me just clarify the factual finding of the court and then respond directly to your question, Justice Stevens.

The lower courts held we only could get 3 percent and made it perfectly clear that it was quite likely we put in substantially more in terms of chargeable activity.

The court's position was we blew it on the proofs, on evidence.

Unknown Speaker: You didn't meet your burden of proof.

Mr. Chanin: We didn't meet the burden.

The theory that you espouse, why don't we charge them 100 percent, breaks down for this reason.

The vast bulk of the affiliation fee is for this availability.

That's what it's mostly for, but we all know that is not the total of the affiliation fee.

In addition, a small portion of the affiliation fee pays for member-only benefits that the parent organizations provide.

It does pay for some ideological or political activity that is unrelated to collective bargaining.

If we charge the feepayers the full amount of the fee, they would be paying a disproportionate percentage for the availability component as compared to the members.

So what we need in essence is a pricing mechanism.

We need a discounting mechanism.

How do we take that affiliation fee to the parents and kick out that small portion that isn't for availability?

There is in fact no perfect way to do it.

What we have in essence done is taken the guidance that this Court has given us in a slightly different context of how you analyze out a union's budget.

And what we have said about the parent organizations is we will discount out those things that we really can charge for by looking at what activities are germane to collective bargaining in the generic sense.

In a conceptual way, Your Honor, what we say is this.

Those parent organizations constitute a pool of resources, a pool that this local or any other local can draw on in times of need.

And what we do is we say, in a generic way, what types of resources, what types of skills, what types of activities, fit within that resource pool, and that's why we make that kind of a deduction from the affiliation fee.

Unknown Speaker: Mr. Chanin, in the Ellis case this Court held, with most Justices joining the opinion as I recall, that objectors could not be charged for the costs of general litigation unless the local bargaining unit was directly involved.

It seems to me that your argument would lead one to conclude that that case was wrongly decided.

Mr. Chanin: No, Your Honor, not at all.

Let me say about that holding in Ellis.

That was a statutory holding.

The Court began by analyzing what of the activities in question were chargeable under the Railway Labor Act, and only as to those activities that it found met the standard under the Railway Labor Act did it address directly the constitutional issue.

The litigation never crossed that bridge.

So what we have with litigation then is basically a statutory holding.

But--

Unknown Speaker: Well, it was construed to RLA ever since Hanson very much in the light of the constitutional provisions, have we not?

Mr. Chanin: --Yes, you have, Your Honor.

And I have no question but that Ellis in many respects sets the basic test for First Amendment adjudication and indeed this Court recognized this last term in Keller when it applied it to a constitutional base.

But in Ellis itself, as far as not the test, but the application of that test to specific items, the Court only applied the constitutional test to those items it had found chargeable under the RLA and litigation of a general nature did not make it.

But having answered it that way and attempted to distinguish Ellis my answer to your question is yes.

Under... first of all, I believe litigation may have a different meaning in the public sector in any event.

But under our theory in which you are paying for the availability of this service, I do believe the litigation would be brought in.

Because it's not relevant whether the specific activity in the resource pool of the parent organizations is done on behalf of Ferris.

It is whether it is an activity in the generic sense that is germane to collective bargaining.

Unknown Speaker: But I'm really in doubt whether that rationale can be squared with Ellis on the so-called statutory ground.

It seems to me to go substantially beyond what the Court said there.

Mr. Chanin: Well, Your Honor, I don't think so.

But let me look at the other points of Ellis if I may.

What Ellis did, and I think the focus when we look at Ellis should be on the three items that the Court did indeed find chargeable under the Railway Labor Act and clearly within the constitutional range as well.

And there are three activities there.

One was a national convention, that is, a convention that dealt with all of the bargaining units represented by BRAC, not simply Western Airlines.

It allowed social activities.

These were not social activities that took place in San Diego, wherever Western Airlines is located.

These were social activities of the international union.

And it allowed chargeable... as chargeable the national publication which reported on a variety of activities engaged in by the International, many or indeed most of which had nothing whatsoever to do with the Western Airlines bargaining unit.

Now in the briefing, the petitioners attempt to distinguish that publication point.

What they say is the literal language of Ellis was you can only charge... you can only charge for writing up what you can charge for doing.

And therefore, to say they sustained a national publication doesn't make our point.

But it does, if you read the holding in the case.

Of course, at the very point where the Court in Ellis said you can only charge for what you have in that publication that you can actually charge for doing, it dropped a footnote.

And the footnote was, and therefore, you cannot charge for the litigation and the organizing, both of which it took out.

And the holding in the case was to remand to the lower court simply to excise out of chargeability to two activities it had incorrectly held chargeable under the RLA: organizing and general litigation.

The Petitioners contend in this case that this multi-unit cost-sharing system violates their First Amendment rights, and that they can only be required to pay their share of the actual services delivered by the parent organizations to them on a pay-as-you-go basis.

Whatever we have... may have put in in a particular year in dealing with their employer is all that they can pay.

Let me make clear here what the legal issue is.

The issue is not whether the type of pay-as-you-go delivery system that the petitioners urge is constitutional.

The question is rather whether the Constitution requires every bargaining unit to use that system or whether the State of Michigan can constitutionally conclude that it would like to reject that system and that a cross unit, a risk-sharing type of system as we have here fulfills or advances the State's interest in labor peace and stability.

We think that if you look at the purpose of affiliation, the answer to this question is clear.

The aggregated payments that MEA and NEA get are not used simply to defray the actual cost of providing services to the Ferris local or to other locals.

They are used to establish and maintain the type of institution with an expert staff of lawyers, of negotiators, and of researchers that is available when called upon by Ferris or any other local to provide these services on an as-needed basis.

Now, if in fact the petitioners simply paid for the services that they received in a particular year, they would really be freeloading or free riding on two specific values of affiliation.

They would be not contributing to the costs incurred by a parent union in assembling and maintaining the type of institution that is necessary to be available when called upon.

And indeed the mere fact that it has large affiliates and that it has resources to call upon is itself of present value to the union.

It affects its day-to-day operation.

We don't have to squirrel away money as a reserve fund for the year in which we may have catastrophic costs, a year we bargain a contract, a year we have major arbitrations.

We can do our day-to-day services knowing we have that to call on.

And the fact that we have that to call on has an impact on the employer.

Any prudent employer, knowing we are backed by the MEA and the NEA, will take that into account in its dealing with the local union.

We are aware, Your Honors, of no First Amendment principle which would require the State of Michigan to adopt a unit-by-unit pay-as-you-go-system.

We think it is a reasonable and constitutionally allowable judgment for the State of Michigan to conclude that a cross unit risk-sharing system of providing services through affiliation is constitutional.

And I would note to you that every other legislature which has looked at this question has made the same judgment, and that is why the overwhelming majority of employees and the overwhelming majority of bargaining units in this country have chosen to carry out their representational functions by an affiliation arrangement where they operate on a multi-unit cost basis and share the risk.

Let me turn now, if I may, to the second issue presented.

The specific activities that the court below charged the petitioners for.

Because this Court indicated that an agency shop has an impact on the First Amendment rights of objecting feepayers, petitioners argue that they can only be required to pay for those activities that are essential or necessary to the union's performance of its statutory functions.

Phrased otherwise, we can only charge them for things that the local union must do pursuant to a statutory obligation or its duty of fair representation.

But that argument, Your Honors, is squarely at odds with the position taken by this Court in Abood, in Ellis, and in Keller.

As those cases make abundantly clear, the test is not essential or necessary.

The test is as Justice White asked in the question, is it germane?

Is it reasonably related to the function of the bargaining representative in collective bargaining?

Unknown Speaker: So, it... what is your answer to the, to the hypothetical questions that Mr. LaJeunesse asked?

Specifically, can the union charge to nonunion members the funds necessary to mount a campaign against certain candidates for the school board?

The people that--

Mr. Chanin: No.

Unknown Speaker: --that they will be negotiating with.

Surely, that's germane.

I want, I want a real softy on the school board, so I mount, you know, a campaign to get that person elected.

Is that germane?

Mr. Chanin: It's germane, but the answer is still no.

It's the only one of your hypotheticals that it's no to, by the way, Justice Scalia.

The Court... this Court and the legislators have always treated campaigns for elective office differently.

Since the earliest railway labor cases right up through Keller, this Court has carved out electoral politics as a nonchargeable item.

Unknown Speaker: All right, now what do you mean by electoral politics?

Mr. Chanin: I mean--

Unknown Speaker: My next question was going to be what about a nonpublic union.

It's just a... it's not a school.

Nonpublic union and according to Mr. LaJeunesse, what if... can they be compelled to contribute to a campaign in support of minimum wage laws or an increased in the amount of the minimum wage?

Mr. Chanin: --Are you talking in the public sector or the private sector?

Unknown Speaker: As I said, it's a private sector union, not a public sector union.

Mr. Chanin: I think the question in the private sector is a more difficult one.

I could not answer it unless I was familiar with the industry and the particular legislation.

Unknown Speaker: It's not electoral politics.

It's just a--

Mr. Chanin: Well, but the test is--

Unknown Speaker: --supporting a particular statute.

--the test is it germane.

The electoral politics is indeed germane.

It is germane.

There's no question that if a school board candidate says to us, vote for me, I'll give you a 10 percent increase.

It is germane.

It is not chargeable for other reasons.

Because this Court has always treated campaigns for office differently.

There are other State interests involved in campaigns--

--Is that the reason?

It's different because we've always treated it differently.

I mean, we must have had some reason for treating it differently.

Mr. Chanin: --There are reasons.

Unknown Speaker: Okay, well, what are they?

Mr. Chanin: The reason it's been treated differently is because when I vote for a candidate, I don't vote on a single issue.

That person will sit in an office and will vote on a variety of other issues which may have no bearing whatsoever on collective bargaining for my position as a union.

Unknown Speaker: Why is that different, Mr. Chanin, from say a proposition on a ballot or a millage, a millage vote?

Is that any less free expression voting for a candidate than voting for an electoral proposition?

Mr. Chanin: Your Honor, it is not a manner of less or more free expression.

The test is is it germane to collective bargaining.

Unknown Speaker: The test is it's germane.

I mean, that really does not give a lot of answers.

Mr. Chanin: The... in this case, Your Honor, we have not taken the position that we can simply go out and become involved in any type of activity that may somehow improve the economic posture of the employer.

What we are dealing with here are with specific activities that relate to the funding of public education and educational employees.

Unknown Speaker: Yeah, well, let's get to some of the precise questions we have here.

Mr. Chanin: Okay.

Unknown Speaker: How about the lobbying on the millage elections?

Mr. Chanin: Yes, Your Honor, let me tell you why.

In Abood, this Court referred to some of the unique characteristics of public sector bargaining, and it stated in Abood that the bargaining representative is the public employer who sit at the table are not free agents economically.

It pointed out that they cannot make commitments and carry them out.

What the Court said in Abood is whether or not you can get benefits and salaries in the public sector is dependent upon tax rates and governmental budgets and I think the Court's phrase was on budgetary decisions by others.

Now the Court was not saying that simply as a unique characteristic of public sector bargaining.

It was saying that that is a factor that determines whether we will do what we're supposed to do in bargaining, whether we will achieve for the people we represent salaries and economic improvements.

If in fact the people who sit at the table cannot make those decisions without budgets, without money, without millage, we must participate in those activities to effectively carry out our job.

Unknown Speaker: Well, yeah, but it's apparently stipulated that millage has no direct effect on what happens to the budget of the Ferris College.

Mr. Chanin: Well, that's true, Your Honor, but we do not attempt... if I... you have to interplay here our parent organization availability theory with what the local does.

We do not seek to sustain the millage elections here because they will have a direct impact on Ferris.

We sustain them because they are germane to collective bargaining of the unions involved in this case and they are part of--

Unknown Speaker: Well, they're germane to the parent union.

Mr. Chanin: --That's right.

That's right, Your Honor.

Unknown Speaker: Well, does the parent union do collective bargaining or does it just support local unions which do collective--

Mr. Chanin: It supports the local unions that do it.

Unknown Speaker: --So the Michigan Education Association doesn't itself do any collective bargaining?

Mr. Chanin: No, it does not.

But--

Unknown Speaker: Well, I didn't realize that you're arguing that just as you sort of buy insurance for the expert negotiating skills needed and litigation skills, so also you buy assurance... insurance for millage elections--

Mr. Chanin: --No.

Unknown Speaker: --that since the... this millage doesn't relate to me, but it does relate to another union.

They pay for mine.

I pay for theirs.

It all comes out even.

Mr. Chanin: No.

Unknown Speaker: That is not the argument?

Mr. Chanin: No.

Let me try it again--

Unknown Speaker: All right.

Mr. Chanin: --if I may.

The argument is that like insurance, not exactly but like insurance, when I affiliate with these larger parent organizations I get something.

I know that in a year where I have very high bargaining costs, a year I negotiate a contract, a year I have major arbitrations, I can call on those parent organizations to help me.

In order to be there when I need them, those parent organizations must maintain themselves as an institution.

They must have a staff of lawyers, of negotiators, of research people, of whatever I need, they must have that staff and those resources available to provide to me.

Now taking Justice Stevens' point, in fact if I carry that through I should charge the people in Ferris, the objecting feepayers, the full amount of the affiliation fee, because that fee goes to maintain that institution.

But then we have the problem of a disproportionate charge.

So we have to come up with a pricing mechanism.

How do I discount the affiliation fee to reflect only the availability component?

There is no way to do that with absolute precision.

So I look at the budgets of the parent organization.

I say what should I take out?

I will certainly take out member-only benefits.

I will take out that portion of the parent organization budget that goes to political and ideological activity that has no relation to collective bargaining in the generic sense.

But as I try to construct a pool of resources, I say that what I will keep in are all of the resources that go from those parent organizations to do the kinds of things that would be germane to collective bargaining if done in any kind of a bargaining unit, if done in Ferris.

And they are.

The costs of negotiation, the costs of research, the costs of lobbying on funding public education and on terms and conditions of employment.

So we sustain those charges, not because I can take a particular activity of a State or national parent and say this activity had this direct benefit on Ferris college.

I keep it in because I say it is the type of activity that is in the resource pool that the local is paying for.

The only activities that I have to show under our theory have a direct impact on bargaining at Ferris are the expenditures of Ferris itself.

Unknown Speaker: Mr.... you're--

Mr. Chanin: Let me just take the millage if I may because you mentioned that, Your Honor.

In Abood, this Court stated that funding to... lobbying to fund agreements that were made to subsequently fund them is a chargeable expense and the petitioners concede that.

Millages in Michigan occur all through the year under law.

There is no principal reason we submit to allow the unions to charge for activities to improve funding that take place after bargaining to allow the public employer to fund contingently agreed-to economic items, as opposed to allowing the union to charge for activities that are designed to produce the funding before bargaining so that the public employer--

Unknown Speaker: --The millage... the millage doesn't produce any funding for Ferris.

Mr. Chanin: --It produces funding for public education generally.

Unknown Speaker: That's what you're arguing?

Mr. Chanin: Yes, I am.

In that sense, Your Honor, what I am saying is it is the type of activity that a parent organization legitimately can engage in in order to have the institution ready to assist--

Unknown Speaker: Because some--

--Because some say Ferris' turn will come.

They'll... they'll have a millage election.

Mr. Chanin: --Your Honor, just because the fact of the matter is, because I paid health insurance last year and did not have a major illness, I do not consider that premium to be wasted.

Unknown Speaker: So the further away--

Mr. Chanin: Unfortunately, my time will come.

Unknown Speaker: --Counsel, the further away the bargaining units gets from the employee, the less the First Amendment protection the employee has.

Mr. Chanin: No, no.

Unknown Speaker: It seems to me it should be the other way around.

Mr. Chanin: No, the First Amendment justifies our charging the parent organization expenditures because those... that expenditure, that affiliation fee is germane in the most direct sense.

It is a fee--

Unknown Speaker: Yes, but Mr. Chanin--

Mr. Chanin: --to provide something to help me when I need it in collective bargaining.

Unknown Speaker: --What you're really arguing is who has the burden of proof, because you're saying that everything is presumptively support function except those things you can identify as unrelated, and the stuff in the gray area just generally is supporting affiliation.

Mr. Chanin: Well--

Unknown Speaker: In the district court that was the... the burden was just the opposite.

Mr. Chanin: --No, the burden of proof is ours.

Unknown Speaker: Yeah, but you say you carry it when you've shown... when you've excluded A, B, and C, which are admittedly impermissible, everything else is presumptively necessary to show that the organization is available.

Mr. Chanin: No, we lost it in the district court, because we had an activity of the parent organization.

The district court did not say we did not sustain it because we did not show how it related to Ferris.

It said quite clearly we did not sustain it because we did not show how that activity related to collective bargaining in a generic sense.

Unknown Speaker: Thank you, Mr. Chanin.

Mr. LaJeunesse, do you have rebuttal?

Rebuttal of Raymond J. LaJeunesse, Jr.

Mr. LaJeunesse: Yes, I do, Your Honor.

One of the questions Mr. Chanin was asked was whether there is a contract which guarantees the services to the local affiliate.

He didn't answer that question.

The affiliation agreements, the contract... the constitutions of the Michigan Education Association and National Education Association are in the record.

They don't guarantee any services to this local, and in fact we know there aren't services to this local even where... a guarantee of services... even in the years where there is this crisis, this catastrophe that Mr. Chanin talks about.

Unknown Speaker: Well, certainly he suggested that it was by custom if not by law.

Would that make any difference if it were shown by custom they did all these things even though perhaps they could not have been compelled to in a court?

Mr. LaJeunesse: That doesn't make it analogous to insurance or a service contract, Your Honor.

There is no legally enforceable right to receive the services.

The only legally enforceable right that the local has is to participate in governance of the national and the State organization.

Unknown Speaker: So you object to charging any part of the affiliation fee to the nonmembers?

Mr. LaJeunesse: No, Your Honor, we do not.

As a matter of fact we stipulated that if the State and national organization provide services directly to the local--

Unknown Speaker: Well, you mean so it's--

Mr. LaJeunesse: --that a portion of the administrative--

Unknown Speaker: --so it's piece by piece.

You have to value each bit of service?

Mr. LaJeunesse: --That's correct, Your Honor.

I think that's the rule that this Court has laid down in the cases all the way through Hudson, saying that the union has to prove the chargeable cost.

Unknown Speaker: Do you, do you think the First Amendment draws that distinction between whether you have a contractual right to get that... you can pay out the money and charge the nonunion members if you have contractual right to get the assistance for it, but by reason of the First Amendment you can't pay it out if it's only very likely that de facto you're going to get the assistance.

That's a First Amendment line?

Mr. LaJeunesse: I'm saying, Your Honor, that the First Amendment requires a proven, compelling governmental interest to infringe on the nonmember's right not to associate with this union and in any way support any of its activities.

And the only compelling governmental interest that's been identified by this Court is reimbursing the union for its costs of performing its statutory functions as exclusive representative of the bargaining unit.

You talk about the hypothetical of a contract.

The question then becomes does this contract make rational sense?

Are there actual services that are being provided?

Is it a fraud and so on?

But that's not this case.

There is not contract in this case.

Unknown Speaker: But in this case isn't the actual thing we're fighting about is how much of this publication that they put out is useful to the local?

Isn't that what the big expense was?

Mr. LaJeunesse: That was the largest... one of the larger expenses.

There are others that are cited in the briefs, Your Honor.

Unknown Speaker: Was that... were the... all the expenses in... for lobbying that were charged to the nonmembers was all that lobbying done by the... by the parent or by the affiliated union, Michigan or national?

Mr. LaJeunesse: There was one payment by the local to send members--

Unknown Speaker: But most of it--

Mr. LaJeunesse: --to a conference held by the State.

Unknown Speaker: --But most of it was by the parent?

Mr. LaJeunesse: Most... all... except for that one payment, it was all at the State or national level.

And I want to point out that, in answer to Justice Scalia question, Ferris is never going to get its opportunity to get support from the State organization for a millage election, because Ferris never gets any money for millages under State law.

Chief Justice Rehnquist: Thank you, Mr. LaJeunesse.

The case is submitted.

Attribution:

The OYEZ Project

Featured:

Communications Workers v. Beck - Oral Argument

Wed, 13 Apr 2011 20:11:27 +0000

Case:

Communications Workers v. Beck

Media File:

86-637_19880111-argument.mp3

Related Transcript:

86-637_19880111-argument.xml

Transcript:

ORAL ARGUMENT OF LAURENCE GOLD, ESQ. ON BEHALF OF PETITIONERS

Chief Justice William H. Rehnquist: We'll hear argument first this morning in No. 86-637, Communication Workers of America versus Harry E. Beck.

Mr. Gold, you may proceed whenever you're ready.

Laurence Gold: Mr. Chief Justice and may it please the Court:

The Communication Workers of America, the petitioners in this case, are the exclusive bargaining representative of a group of employees who work for the American Telephone and Telegraph Company as it then was when this case began, and various of its subsidiaries.

The plaintiffs in this case, the respondents here, are a group of individuals who work for a Bell Telephone Company in an organized bargaining unit which is covered by a Union Security provision, namely a provision requiring that an amount equal to the dues charged by the Union to its members are paid by all employees in the bargaining unit thirty days after they become employed, as a condition of continued employment.

This case began when a group of twenty employees sued to invalidate that requirement and to limit the requirement to an amount equal to what the Union pays for what can be defined in various ways but can be said to be for activities germane to collective bargaining.

The District Court on constitutional grounds and eventually an en banc Court of Appeals by a vote of six of the Judges on different grounds held that the plaintiffs had stated a valid Federal cause of action, and that the relief prayed for should be granted.

The Second Circuit concluded to the opposite effect, holding that all of the Federal claims made by the plaintiffs, one of which is based on Section 8(a)(3) of the National Labor Relations Act, another which is based on the duty of fair representation, and the final one of which is based on the First Amendment to the Constitution, are without merit.

The case is here on our petition.

The National Labor Relations Act treats with the question presented here in terms, and I'd like to begin by directing the Court to the language of Section 8(a)(3) which is set out as an appendix to our brief on the merits, the blue brief.

Section 8(a)(3) of the NLRA prohibits in general terms discrimination on the basis of union membership and union activity.

Section 8(a)(3) then has two provisos, the first of which in essence was in the law in 1935, and the second of which was added in 1947.

The first proviso says in effect that nothing in this subchapter or in any other statute of the United States shall preclude the type of union security agreement at issue here.

And the second proviso in its second clause, the one labeled (b), which is on page 2-a of the Appendix, says that no employer may under these provisos discharge any individual if he has reasonable grounds for believing that membership in the union was denied or terminated for reasons other than the failure of the employee to tender the periodic dues and the initiation fees uniformly required as a condition of acquiring or retaining membership.

Unidentified Justice: The second proviso is then a proviso to the first proviso, so to speak?

Laurence Gold: I think both provisos are provisos to the basic prohibition.

I think the two provisos are intended to be read and have been read together, each one of the conditions stated in the two provisos have to be satisfied for the clause to be lawful and to impose the requirement.

And as this Court has concluded in both the Schermerhorn and the General Motors cases, what the provisos under the NLRA taken together mean, at the very least... and we're going to find out in this case whether they mean more... but what they mean at the very least is that an individual who says I am willing to pay the initiation fee charged by the Union which is the exclusive representative, and I am willing to pay the periodic dues uniformly charged to members, cannot be dismissed from employment by the employer without violating Section 8(a)(3).

So in terms of the plain language of Section 8(a)(3), it seems to us as we have argued throughout and as the Second Circuit held, that this case is an open and shut case.

Congress did not say simply that individuals covered by a collective bargaining agreement of this kind would be required to pay undefined dues leaving an ambiguity as the respondents claim.

Rather the statute imposes a clear requirement, namely, that to be lawful, these agreements can go no further than the dues and initiation fees uniformly required as a condition of acquiring or retaining membership.

Unidentified Justice: Mr. Gold, is there no ambiguity there?

Would you say that any charge is made for initiation is an initiation fee and any amount required as dues, no matter what it is devoted to, would come within this provision?

I mean, suppose a union decides that it's going to provide retirement benefits for its membership, and it's going to fund these not out of payments from their paychecks, but it's going to fund it out of union dues, and this retirement is only given to union members.

Now, can the union do that and charge very very high dues but the union members are willing to pay it because they can get retirement?

Laurence Gold: First of all on initiation fees, Congress did decide to regulate the amounts in part for the type of concern that you've stated.

Secondly, with regard to dues, in 1947, the House proposed to regulate dues to assure that they were reasonable, they weren't too high, they were used for purposes that are called proper under the circumstances, and the Senate refused, saying there should not be such regulation.

It seems to us that putting aside the illumination one gets from the evolution, that when you talk about the amount uniformly required to maintain your good standing membership in the organization, it's the amount uniformly required without regard to how it is thereafter used.

That is the amount that each person who is a member and chooses to continue to be a member is charged.

Unidentified Justice: But if that's what Congress intended, it could simply have said, instead of the failure of the employee to tender the periodic dues and the initiation fees uniformly required, it could have simply said the failure of the employee to tender any amount of money uniformly required as a condition of acquiring or retaining membership.

Congress had to use the words, dues and fees.

Laurence Gold: For a good reason, and certainly would have preferred the language you just articulated.

Congress took away from unions, not only the closed shop, but also took away from unions the ability to charge as a condition of continued employment those who didn't want to be voluntary members assessments and fines and non-periodic payments of those kind.

Unidentified Justice: But they wouldn't have been uniform anyway, so you didn't have to use.

Laurence Gold: Sure.

Of course they would have been uniform.

Unidentified Justice: Uniformly required as a condition of acquiring?

Laurence Gold: Yes.

If everybody, in other words, it is normal and the language of the Railway Labor Act to which we will get in a minute is different in this regard.

It is normal for unions to charge assessments in addition to dues.

For example, some unions have a practice of charging each member two dollars a month to be a member.

In addition, there is a once yearly charge of three dollars which is payable only once a year to fund a convention.

In the language of the trade, that's an assessment, and assessments are uniform, but they are not periodic in the sense that the Statute has been understood.

And therefore, an individual in a position of the objecting payors in this case cannot under the NLRA be required to pay the assessment.

Unidentified Justice: But if you eliminated that and put it in the dues, it would be okay, which the union could do, I presume?

Laurence Gold: That's right.

Unidentified Justice: We're not going to have any more assessments, we're just going to raise the dues three dollars a year.

Laurence Gold: If the union can, and the Landrom-Griffin Act provides that you have to get membership approval, as opposed to the situation of public bodies where the representative can act, provide that where the union goes to its members and says we want x dues and makes the case to them, and then each month or each quarter someone has to pay that, that is dues.

Unidentified Justice: So your answer to my question is, no matter what they use it for, including retirement benefits available only to union members, so long as they do it through dues, they can get it from the non-union members.

Laurence Gold: That's correct.

Unidentified Justice: No matter what?

Laurence Gold: No matter what.

Unidentified Justice: Annual party or anything at all?

Laurence Gold: Having a party?

Unidentified Justice: Yes?

Laurence Gold: Yes.

Yes.

That is this statute.

And that was the understanding of the time.

In terms of the understanding of the time, let me also point out that at the very time Congress was dealing with this question, it passed what is the precursor of the present Federal Election Campaign Act, which applies to unions and corporations, and prohibited unions from using any portion of their dues or initiation fees or assessments for the purpose of making political expenditures and contributions in Federal elections as those terms are defined in those Acts.

So Congress understood quite well that unions use dues for a variety of purposes, and have traditionally funded their activities from dues.

Unidentified Justice: Mr. Gold, what about Judge Murnaghan's argument that the duty of fair representation as regards these non-union members should lead to the result for which he argued.

You dealt with that only in a footnote, but really didn't address the substance in the brief of Judge Murnaghan's position.

Laurence Gold: I had hoped we had dealt with it more, but let me go back to the language of the first proviso of 8(a)(3).

The proviso says that nothing in this subchapter or in any other statute of the United States shall invalidate the kinds of agreements that are permitted under this section.

Our position on the duty of fair representation is the following:

That the duty of fair representation as implied from Section 9(a) and from the NLRA as a whole, to read the duty to invalidate that which Congress chose after the most careful consideration and heated debate not to invalidate would be contrary to all the theories of statutory interpretation and of elaborating the meaning and purpose of the statute of which we are aware.

We do not believe that you can take the duty of fair representation and say that union activity, which Congress decided expressly to permit, is invidious or improper under a judge-made rule using the general terms of the duty.

The duty it seems to us has its metes and bounds delineated by that which Congress specifically decided in this statute to permit as a matter of Federal law, while not prohibiting the States, I would add, from reaching a contrary conclusion.

At the time of the 1947 Act, twelve States made it unlawful to have any form of union security, and at the present time, the number is 20.

But it is a Federal question here.

Unidentified Justice: But certainly the language very similar to that in 8(a)(3) is found in the Railway Labor Act, and this Court has said it just doesn't include collection of dues of that kind against non-members.

And I think that's your biggest hurdle to overcome, obviously.

Laurence Gold: The Court, as Justice O'Connor just stated, does not write on a blank slate here.

This is an issue which has been visited from the Hanson case on through the Hudson case most recently, both under the Railway Labor Act, and under the NLRA.

It seems to us that with regard to the NLRA, there are two critical differences that explain why this case is to be decided differently from the RLA case.

First of all, as we develop at length in our brief, the starting point for legislative consideration was at the exact opposite ends of the spectrum in this Act, and in the RLA.

In this Act, Congress approached the problem against a background where, as I say, except for twelve States in 1947, all forms of union security including the closed shop which required that an individual in order to get a job in the first place be a full member of the labor organization which had negotiated the agreement were lawful.

And there were many who believed that the Federal law should not invalidate even the closed shop.

It was the view of the majority in Congress at that time who were operating against the fact that the President of the United States did not agree with then and had vetoed legislation in '46, and had said he would veto it again, that union security should be regulated to some extent.

And as I said, and if you'll look at the Senate report, the section dealing with union security begins with a phrase to the effect that this is a most contentious issue to which we've given the most mature consideration.

And the conclusion of the sponsors and leaders of the Republican party in the Congress was that the closed shop should be invalidated and that the union shop which provided for dues should continue to be permitted as a matter of Federal law, but not required as a matter of Federal law.

And should continue to be subject to regulation by the States.

And I would like in particular we lay out a good deal of the legislative history but in terms of the sense of what that Congress believed was fair and proper under the circumstances, taking all the realities into account, I think that Senator Taft's statement, which we reproduced on page 33 of our brief, is a particularly succinct summary of the feeling at the time.

He said,

"the great difference between the closed shop and the union shop is that under the union shop in the first instance, a man can get a job without joining the union or asking favors of the union. "

"The fact that the employee will have to pay dues to the union seems to me to be much less important. "

"The important thing is that the man will have the job. "

Now, different people can reach different conclusions about whether that went far enough.

But that was the view at the time.

The closed shop which gave the union authority over jobs was to be ended.

The union shop which had always required an equality of sacrifice, financial sacrifice by all in the shop ought to be continued.

Unidentified Justice: Mr. Gold, can I ask you a question that Justice Scalia's question raises in my mind.

Supposing that a District Judge held in this hypothetical example that the amount the excess part of the dues that was used to fund pensions for union members only should not really be considered dues within the meaning of the statute, and therefore enjoined collection of the excess.

Would you say that such a holding was tantamount to holding the union shop unlawful.

See, you're arguing that the union shop is definitely lawful, and I'm just wondering whether that really addresses the question that Justice Scalia asked.

Laurence Gold: I think there are two questions in terms of what you've asked.

The first would be, is that a fair construction of NLRA Section 8(a)(3).

Unidentified Justice: Right.

Laurence Gold: It is our submission that it is not a fair interpretation of the Statute.

I do not believe that such an interpretation is in the strict sense invalidating the union shop in the sense of overturning, while admitting that it is being overturned.

But I do believe that the task of statutory construction, in Judge Learned Hand's phrase, is to recreate the gamut of values at the time and the gamut of values at the time was to preserve that which had been in existence up through 1947, which did not permit that kind of limitations.

Unidentified Justice: But it's conceivable... I don't know as much history as you do in this area... but it's conceivable that what was known in 1946 was a form of union dues which was used exclusively for things like collective bargaining, and that premiums for the benefit of the membership only and not for non-members would not be treated as union dues within the meaning of the Statute.

Laurence Gold: I can only in that regard since I'm hardly a dispassionate observer, refer you to Justice Frankfurter's dissenting opinion in Street with regard to the facts of the matter.

Unions have always funded a variety of activities out of dues.

Nobody understood that better than Senator Taft the reason the Corrupt Practices Act is in the NLRA is that the CIO made it its endeavor to attempt to defeat Senator Taft and they failed.

There was a general understanding that these were used for a variety of purposes.

Unidentified Justice: Including the purposes at issue in this case, Mr. Gold?

Laurence Gold: Yes.

Unidentified Justice: So that, I'm really troubled by the prospect that I gave you in my hypothetical, and what you're saying is that in order to decide this case, we really don't have to decide that hypothetical.

We could just say that certainly anything that dues were used for in 1946 dues can be used for today.

Laurence Gold: Yes.

Unidentified Justice: And if some particular union should come up with the kind of scheme I just described, which I take it you're not familiar with anywhere, are you?

Laurence Gold: No.

Unidentified Justice: Retirement system funded out of dues.

We can decide that case when it arises.

You'd rather have the whole loaf, I understand.

Laurence Gold: Well, it isn't rather I'd rather have the whole loaf or not.

I believe that what Congress had in mind as a referent was what is uniformly charged to people to be a member of the union and that Congress has regulated how unions spend their monies other ways than this.

But I want to if I can advance to the difference between what I've just described since my time is running out and the situation in 1951.

In 1951, when Congress amended the Railway Labor Act to put in similar language, the situation was that as a matter of Federal law, all forms of union security were unlawful.

And Congress again made a compromise, but it was moving from the other side.

And this Court was convinced from the history of the RLA that it was fairly possible to read the RLA as only permitting the collection of an amount of money equal to the amount expended for collective bargaining.

Even more important in our view, in the RLA this Court had determined in the Hanson case that since Federal law preempted all State law which would limit union security and had created a Federal scheme that each union security provision was imbued with Federal law and was the action of the Government.

Under this Court's decisions, the most recent of which is San Francisco Arts and Athletics all you have here is a governmental permission, a permission no different than the permission given to the Olympic Committee there or permission of the kind at issue in Jackson v. Metropolitan Edison to in private parties unions and employers to reach these kinds of agreements.

Thus, this is not a case in which there is any substantial constitutional issue, and that being so and given the language and the legislative history of 8(a)(3), both parts of the language of 8(a)(3), the second proviso which we've discussed, and the proviso saying notwithstanding any other law, we believe that this agreement which requires each individual in the bargaining unit to pay the same amount is indisputably lawful as a matter of Federal law.

Chief Justice William H. Rehnquist: Thank you, Mr. Gold.

We'll hear now from you, Mr. Vieira.

ORAL ARGUMENT OF EDWIN VIEIRA, JR., ESQ. ON BEHALF OF RESPONDENTS

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

The argument we've just heard from Mr. Gold is very interesting as a matter of policy considerations, but I believe it's somewhat anachronistic as a matter of law.

As Mr. Gold himself said, we are not writing on a clean slate.

We are not back in 1947 or 1948, interpreting Section 8(a)(3) as if we've never heard anything about it before from the Courts or even from Congress.

Forty years have passed, a number of decisions have been rendered by this Court and there was an amendment of the Railway Labor Act in 1951 to give us an equivalent provision in Section 211.

And all of this material I believe, and we have argued, tends rather strongly, if not compellingly, to put to one side the policy judgments that Mr. Gold is urging, and to come to something of a different conclusion.

Now, if you'll look at the statute, Mr. Gold says, well, the plain language makes it an open and shut case.

Of course, according to his theory, the plain language of the statute would allow full-fledged membership in a labor organization to be required by an employer and a labor organization under Section 8(a)(3).

Well, very early on in the history of Taft-Hartley Act interpretation, this Court in Radio Officers Union case in the early 50s, the Court said in fact that wasn't the situation.

The purpose of putting in the amendments to 8(a)(3) was not to allow the type of full fledged membership control that I think would be required by Mr. Gold's interpretation, but to force employees to pay a monetary sum to the union.

Monetary sum for what purpose?

I get back then to the question of dues and fees, the purpose of dues and fees.

Obviously, we can't interpret this statute in the hyper-literalistic way that Mr. Gold suggests, because the Court hasn't interpreted the statute that way.

The language of 8(a)(3) talks about dues and fees uniformly required as a condition of membership.

What kind of membership are we talking about here?

Pattern Makers' case, a couple of years ago, this Court referred to voluntary unionism as the thrust of the National Labor Relations Act.

An employee could not be required to become a full-fledged member of the union and he could resign if he had become a member of the union voluntarily.

He could not be forced into membership through an 8(a)(3) agreement.

What can an employee be forced into with respect to a union with respect to an 8(a)(3)-type agreement?

It is the status of accepting the union as the employees' exclusive representative.

An 8(a)(3) agreement can be negotiated only by a Section 9(a) labor organization.

What is a Section 9(a) labor organization?

It is an organization that has been certified by the NLRB as the majority representative for the purpose of collective bargaining, grievance adjustment, and administration of collective bargaining agreements, and no other purpose.

That's what Section 9(a) says.

And that's what Section 8(d) tells us about collective bargaining where it defines it rather specifically.

So we're talking about what I would think, and certainly suggest, is a very tightly woven set of provisions.

Collective bargaining and the majority representatives through 9(a).

Section 8(a)(3) agreements when a 9(a) labor organization has become the representative of the employees.

And decisions of this Court saying that the membership requirement so called is a requirement solely directed towards compulsory payment of dues and fees.

Now, this makes rather operationally good sense.

An employee who is not a union member and who cannot be required to be a union member lawfully nevertheless can be required to pay dues and fees to the labor organization that has been selected, ostensibly in this case by others because we're talking about a non-member, by others, to represent him for the purpose of collective bargaining.

And from that seems to follow very nicely, at least as an equitable judgment, that the dues and fees should be limited to the costs that that union incurs in performing that service.

Now, once again, the statute sets up a mutual system of liabilities and rights.

Unidentified Justice: Strange way to say that, isn't it?

I mean to say dues and initiation fees if what you're talking about is the costs of collective bargaining?

Mr. Vieira: Well, Justice Scalia, they said that in the Railway Labor Act in 1951.

Congress retrospectively--

Unidentified Justice: It's strange there, too.

Mr. Vieira: --Your Honor, this Court has held in Street, in Allen, and in Ellis that that somewhat strange, at least as we're using the term now, use of terminology leads to the conclusion in Section (2)(4) that only collective bargaining costs can be charged.

In fact, the question that you raised to Mr. Gold about the retirement benefit program of the types that were union, I recall in Ellis there was not a retirement program, but there was a death benefit program.

And I think the Court said that if that death benefit program inured only to the benefit of union members, it couldn't be charged.

So we had a situation there where unions, at least in that case it was the Brotherhood of Railway Clerks, did in fact set up out of dues payments a similar type of benefit situation which it did not extend to the non-member.

Let's put ourselves in the position of Senator Taft.

Does anyone here today really believe that if we had Senator Taft in this room, and we said, Senator, did you write Section 8(a)(3) and then (2)(4) of the Railway Labor Act, and really intend that a union that had been selected as the majority representative of dissenting employees could collect any amount of money from those employees for any purpose whatsoever as long as the voluntarily union members agree, does anyone in this room really think he would say, yes?

Unidentified Justice: I think he might have.

He might well have said, it's the best I could do.

Mr. Gold is nodding his head.

Mr. Vieira: Mr. Gold agrees that he comes to this not in a position of objectivity.

Unidentified Justice: Mr. Gold's position is that it's better than what the pre-existing situation was where you could be compelled to pay the full dues and also be compelled to be a full-fledged union member.

Mr. Vieira: Well that's an interesting question as to what was required under Section 8(a)(3).

We have rather a question begging interpretation from Mr. Gold, because I don't recall any decision of this Court, certainly, that ever held that 8(a)(3) would have validated the type of thing that CWA has required in this case.

In fact, I recall in the Jones and Laughlin decision in 1937, that in fact, it was held that employers could continue to deal with individual employees, notwithstanding the existence of majority representative in the unit.

So we probably have a situation that was quite a bit closer to common law under that Jones and Laughlin interpretation.

So I'm not so sure that we can simply take it for granted that 8(a)(3) would have been interpreted to allow at least what Mr. Gold is suggesting CWA is demanding in this case.

In fact, if you took that position, you'd come rather rapidly to an interesting constitutional question, perhaps deeper and murkier than the one we have here.

Let me address that for one moment, because Mr. Gold makes the argument that the interpretation of Section (2)(4) of the Railway Labor Act was somehow impelled by a constitutional consideration which he finds in pre-emption under Hanson.

As I recall, Mr. Justice Brennan's opinion said that it was not merely a fairly plausible interpretation, but a quite reasonable interpretation of Section (2)(4) that limited dues, fees, and in that particular statute, assessments to the costs of collective bargaining.

So if that interpretation was reasonable in the RLA context, I don't see why the same language is not capable of that interpretation in the National Labor Relations context, especially when you go back and look at the statements that were made by Senator Taft as well as others that they were attempting to do in the 1951 Amendment to the RLA, essentially the same thing they had done in the '47 Amendment, or at least put the Railway Labor Act unions in the same position, as the National Labor Relations Act unions.

And what was the burden of the testimony that had been given by the Rail Union leaders to Congress cited and quoted.

In the Street opinion, it was we need these monies to pay the costs of the exclusive representational services that we are required by law to provide to the non-union member.

And there's the balance in the system.

The unions are required by law, once they obtain exclusive representational status, to provide certain benefits to non-union employees within those bargaining units.

What benefits are those?

The benefits of collective bargaining.

That's what they can't withhold.

They don't have to provide political representation.

They don't have to provide social representation.

They don't have to provide union-only retirement funds.

They have to provide collective bargaining representation.

That the employee must accept, and he can demand.

And because he can demand it from the union, Congress believed it only fair that he could be required by the union to pay some commensurate cost.

And what is the argument, then, that makes--

Unidentified Justice: That makes a lot of sense and the States can do that under the current law, if they want to, can't they.

Whereas under the Railway Labor Act, that eminently sensible disposition could not be required by any State, could it?

Unless the Federal law required it, nothing could require it.

Whereas here, it makes sense, as you say, but the States can do it, if they want.

Mr. Vieira: --Well, that's true.

Unidentified Justice: And that's a big difference between this and the Railway Labor Act.

Mr. Vieira: Well, it's a big difference in the sense that the States have the ability to interfere in this Act, and therefore we don't have a primary jurisdiction problem that we might have otherwise, but I'm not sure it's so important in terms of the effect between the employee and the union, for instance, in a State like California, which doesn't have such a provision, doesn't have a Right to Work law.

California was the source of the Ellis case.

I think on CWA's interpretation that pre-emption somehow has the controlling force over whether the statute should be interpreted to limit dues and fees to collective bargaining costs, one would seriously question whether the statute would have been interpreted that way in a California case.

I mean, why doesn't the statutory interpretation change under the Railway Labor Act depending on whether you're in a right to work or a non-right to work State?

That brings us back to this Hanson point that Mr. Gold made.

I don't think the statutory construction in Street depends upon the exclusive reading of Hanson that Hanson was a preemption case.

Hanson talks about preemption because that was the argument raised by the Nebraska Supreme Court, the exclusive argument, I take it the Nebraska Supreme Court raised was they had to decide that case because there was Federal preemption.

Hanson talks about Federal preemption and Mr. Justice Douglas goes on in his typically terse way and gives two or three other bases.

He cites Shelly v. Cramer and he cites something that's much more important, he cites Steele v. Louisville & Nashville Railroad.

Mr. Gold didn't mention Steele v. Louisville & Nashville Railroad.

Maybe he will when he gets back up.

That has to be the key to the entire State action problem.

You go back to Steele v. Louisville & Nashville Railroad, the Court was very concerned there that a union with exclusive representational status could use that status through collective bargaining to discriminate against non-union employees.

In that case, it was a racial situation.

Unidentified Justice: In cooperation with the employer.

Mr. Vieira: Absolutely.

It was just the kind of case theoretically that we have here, cooperation between the union and the employer to do something to the non-union employee.

In that case, it was a racial discrimination case.

The Court took one look at that and said, this union has been empowered by Congress with a quasi-legislative status.

And if some limitation is not put on the exercise of power pursuant to that status to prevent this type of discrimination, arbitrary, discriminatory or in bad faith, is the rubric, the jargon, constitutional questions would arise.

Not constitutional questions about the status of the representative.

That was obvious and clear.

Constitutional questions as to the validity of transferring that kind of power to a labor organization.

Now, the structure of the National Labor Relations Act, and the structure--

Unidentified Justice: Yes, but that doesn't mean that everything the union does is required by law.

Mr. Vieira: --Excuse me?

Unidentified Justice: Well, that doesn't mean that the union is always in the status of exercising official power.

Mr. Vieira: Only when it's exercising its 9(a) power.

And the problem of the 9(a) power exercise has been solved in essence by the duty of fair representation, that is, the quid pro quo then again for the union to have this quasi-legislative power was that it would exercise it within the bounds of the duty of fair representation.

So we don't have the horror that Mr. Gold raises in his brief.

Unidentified Justice: What's Steele got to do with this particular case about the right of the union to charge dues equal to the dues charged union members?

Mr. Vieira: The union cannot make--

Unidentified Justice: Why is that a State action?

Mr. Vieira: --The union cannot make a Section 8(a)(3) agreement unless it is a 9(a) representative, so says the statute.

The 9(a) representational status is the infusion of governmental action.

That is what gives the union its quasi-legislative power over these employees.

Otherwise, it would have no power over them at all.

It couldn't require them to pay dues, it couldn't require them to accept and terms and conditions of employment it might make with an employer.

Unidentified Justice: I suppose if the union didn't negotiate this kind of an agreement, and just didn't charge the non-members anything, I suppose the union could be sued by its members saying you're not fairly representing us.

You're just not collecting from the people you're serving.

And that also would be official action, I take it?

Mr. Vieira: Well, it would be an interesting situation for the voluntary union members to sue their own union.

Unidentified Justice: It might be very interesting, but not unheard of.

They do it all the time.

At least those kind of cases seem to seep into this Court every now and then.

Mr. Vieira: So the question you're positing would be would governmental action be infused in an internal union decision because the union is exercising some powers as a 9(a) representative.

And I take it we have the case in which some members of the union were black and some members of the union were white, and the union hierarchy made a collective bargaining agreement which discriminated against all blacks in the bargaining unit, would some of those union members be entitled to sue that union in a duty of fair representation case or a quasi-constitutional case.

And the answer is, yes.

If they didn't use EEOC or some other equivalent, the answer is, yes.

If the union is exercising its 9(a) authority in an invalid way, the answer is, yes.

Unidentified Justice: Because they're violating the equal protection clause, they are in effect the government of a government action?

Mr. Vieira: Well, we go back to the duty of fair representation.

What Steele did was to say all of those constitutional questions which might arise in the invidious use of this 9(a) status will be lumped together and treated by this thing we call the DFR.

That's the solution to the constitutional problem.

We're not going to have a constitutional conundrum come up every time a union negotiates some provision of a collective bargaining agreement.

Unidentified Justice: What was involved with Steele was only the cooperation of the Brotherhood and the Railroad in refusing to promote negro firemen, period.

That was all that was in that case.

Mr. Vieira: Well, they created the duty of fair representation in that case.

Unidentified Justice: They did?

Mr. Vieira: Oh, yes.

Unidentified Justice: I thought the statute did.

Mr. Vieira: Well, let me put it this way.

They found it in the statute.

Unidentified Justice: It was always there, wasn't it?

Mr. Vieira: Well, if they found it there, it must have been there.

Unidentified Justice: Right, right.

Mr. Vieira: At the time that Congress created the statute.

Unidentified Justice: Exactly.

Mr. Vieira: The impetus for finding it, the light by which they found it was the recognition that if they couldn't find it, they had another problem.

Unidentified Justice: Well, you don't have any mediation board here, do you?

Mr. Vieira: Excuse me, sir?

Unidentified Justice: You don't have the mediation board involved in this case, do you?

Mr. Vieira: Well, we didn't have it there.

Unidentified Justice: You didn't.

Mr. Vieira: Yes.

Their problem was that there wasn't a judicial remedy for what had happened for the discrimination.

Unidentified Justice: Wasn't that case, didn't that case say that the members of the mediation board cooperated with the Brotherhood in discriminating against the negro firemen, period.

Mr. Vieira: Forming the original discriminatory agreement, yes.

They wouldn't hear any--

Unidentified Justice: So you don't have the mediation board here, do you?

Isn't that the difference between the two cases?

Mr. Vieira: --No, I don't think so.

Unidentified Justice: One's the railroad and the mediation board, and this is a non-railroad and no mediation board.

Mr. Vieira: Well, the Court in Steele came back to powers of the union.

I think the problem that you're discussing was that if they hadn't created a judicial remedy, there would have been no remedy available for this discrimination.

That was the difficulty.

If there hadn't been a judicial forum, it couldn't have been redressed at all.

Now, that brings us, I supposed, to the primary jurisdiction question with the National Labor Relations Board, which the Court asked us to address, and no one has addressed it here.

I think that's a very simple question, because Congress has already determined that these 8(a)(3) agreements are not within the primary jurisdiction of the Board.

That's what 14(d) seems to tell us.

Let the States do it if they want.

Let State courts become involved, State legislatures, State administrative agencies, for that matter.

It's not exclusively a question of the NLRB.

So we do have a judicial approach but it was a judicial approach that was created in Steele or found in Steele, the duty of fair representation approach.

And it solves all the possible constitutional difficulties because if a union is exercising its 9(a) authority within the boundaries of the duty of fair representation, there is no further constitutional inquiry.

Unidentified Justice: Under more recent cases, is just governmental permission to engage in a course of conduct, does that make the person who engages in that conduct, is he wielding official power?

Mr. Vieira: Well, it's not simply governmental permission.

There's governmental permission for the employer and the union--

Unidentified Justice: Well, the government says, you may extract these membership fees from non-members if you want to, but you don't have to.

Go ahead if you want to.

That's what the Act said, isn't it?

Mr. Vieira: --Well, they have disabled the non-union employee from doing anything about that.

He had a previous set of rights prior to the Wagner Act that would have enabled him to take certain kinds of action directly or with the employer.

Most of these agreements--

Unidentified Justice: So it's only because of the position the union has a collective bargaining agency that permits negotiating anything on behalf of a non-union member.

Mr. Vieira: --True.

But it's putting the union in the position of being the coercive elected bargaining representative of these employees, and completely disabling them from taking any route to their employer--

Unidentified Justice: So if you decide to do it, you can do it over the objections of the non-member because we say so, because the law says so.

Mr. Vieira: --That's right.

And we have stripped the non-member of any rights that he may have previously had.

Let's recall that.

Allis Chalmers and Vacca, he's been stripped of the previously existing rights, Allis Chalmers, he's been stripped of his previously existing remedies, Vacca.

Now, I don't know what governmental action means if it doesn't mean a situation where someone has been stripped of his rights and remedies.

If that's not governmental action, what the heck is it?

Unidentified Justice: Which of our cases comes closest to agreeing with you on this?

Mr. Vieira: In terms of whether 9(a) is governmental action?

Unidentified Justice: Yes.

Mr. Vieira: Steele.

Unidentified Justice: But how about the Railway Labor Act cases?

Do any of them come close to this?

Mr. Vieira: Well, Street in terms of the interpretation of the language of (2)(4), the exact parallel language to 8(a)(3).

Unidentified Justice: Well, Street was really a statutory case, I guess.

Mr. Vieira: Even better for us.

Unidentified Justice: Well, I know, but a statutory case really doesn't--

Mr. Vieira: I agree wholeheartedly with the opinion that that was a reasonable construction of the statute.

And it's just as a reasonable here.

The language is the same.

The only difference in the Railway Labor Act is the word Mr. Justice Douglas said, well, if assessments are used for improper purposes, they'll be treated the same way as dues and fees.

Unidentified Justice: --Well, I know, but if it's a statutory case, whether it's State action or not really doesn't make any difference.

Mr. Vieira: Excellent.

If it's a statutory case, we forget about State action.

We have presented to us from CWA, a very insistent argument that this is not a statutory case, to which I say, fine, we'll do the constitutional side of the argument.

You can have one side of the record or the other, it goes both ways.

But it can be treated very simply as consistent with a whole line of things.

We're not simply talking about the Railway Labor Act, public sector collective bargaining.

In Abood, this Court looked at the precedents under both the National Labor Relations Act and the Railway Labor Act, and then said, we have a consistent pattern here.

Exclusive representation, these fees being paid for the cost of collective bargaining.

So we had a coherent labor relations structure seen in Abood, and now we have a discordant note being put in by CWA saying, well, let's go back to 1947 and remake everything.

It's 1988.

I don't think it can be remade.

It can't be remade without creating quite an anomaly.

Certainly in the Administration law, here you have a union that represents employees in the public sector, it represents employees under the National Labor Relations Act, it represents employees under the Railway Labor Act.

You can have employees represented by CWA working within a block of each other under the public sector acts and the Railway Labor Act.

They're being charged only dues and fees for collective bargaining costs.

Across the street, employees performing the same functions are being charged anything CWA wants to charge on the same language in these statutes.

Is this a sensible way to run a railroad?

I don't think it's a sensible way to run national labor policy.

I think the simple answer to this case has been the course of history in the past 40 years.

Whatever might have been a reading of the 1947 Act in 1947 or 1948, we've gone beyond that.

This Court has gone beyond it.

Unidentified Justice: Well, now, but that doesn't make much sense as a matter of statutory construction to say that whatever Congress may have intended when it passed this in 1948, it's too late for us to do anything about because we've already made so many mistakes in the past.

Mr. Vieira: Well, number one, I don't think that you've made a mistake.

As I say, I think the interpretation of the Statute given in Street was perfectly reasonable.

And number two, there has been a tremendous amount of reliance on these interpretations.

If you're going to go back now and say, oh, we were wrong, if you want to say you were wrong, I can't stop you.

If you want to go back and say, we were wrong, you open up not only some interesting statutory questions, but you open up some very deep and dark constitutional waters in these cases.

And I'm saying that what happened in Street was a perfectly reasonable interpretation of the statute that fits what I think is the primary intention that you can read out of the structure of the Act.

Make the employee who is not a member pay for the services he receives from the union, and we know that the statute limits the services that can be forced on that employee to the 9(a) representational services that the union performs as a collective bargaining agent.

So it all works operationally, it follows Street, Allen, Ellis, the public sector cases.

Unidentified Justice: Mr. Vieira, could you talk about how practically feasible that is?

The union contends that it's a real knotty problem to separate out from union dues that portion that is part of the collective bargaining function.

That seems to me to make a lot of sense?

This tends to be a litigious field, anyway, and you can litigate from now'til doomsday over what particular portion of the union dues goes to collective bargaining.

Mr. Vieira: Not if they keep their books straight.

I think the record in this case shows that what happened with this particular union was it was not keeping its books in a manner that allowed it to make these segregations, whereas CWA, itself, now tells us that it has a new system in this case that will allow it to do that, and it is solving this knotty problem in the public sector.

It certainly has to do it in the public sector, it certainly has to do it under the Railway Labor Act.

Why can't it take those same books and records and apply them to the National Labor Relations Act?

I don't see the difficulty.

Well, it's living up to Abood, it's living up to Street.

Unidentified Justice: Yes.

Mr. Vieira: And I think as soon as this Court rules that it has to live up to Beck, it will do the same thing here.

Thank you, Your Honor.

Unidentified Justice: Well, what happens if an employer refuses to collect this fair fee from non-members and says, I won't fire... I know that John Jones isn't paying, but I won't fire him.

Is he committing an unfair labor practice?

Mr. Vieira: Well, he's arguably committing an unfair labor practice, but under those two provisos in 8(a)(3), if he's correct, if the union has not in fact charged John Jones.

Unidentified Justice: Yes, but there's no argument but what the union wants to collect from him is fair.

The employer just says, sorry, I don't believe in this law.

Mr. Vieira: All right.

So we're taking the case where there's no question of the legality of the fee?

Unidentified Justice: Exactly.

Mr. Vieira: It's the employer has violated.

Unidentified Justice: So he is required to collect.

Mr. Vieira: Oh, Yes.

That's our problem here.

He's required... we accept that... he's required to collect.

Unidentified Justice: And that's only by virtue of the coercive nature of the Federal law?

Mr. Vieira: Well, he has a collective bargaining agreement he made with the union that was imposed on him through a 9(a) representational arrangement.

Unidentified Justice: Yes.

Mr. Vieira: Thank you.

Chief Justice William H. Rehnquist: Thank you, Mr. Vieira.

Mr. Gold, you have three minutes remaining for rebuttal.

ORAL ARGUMENT OF LAURENCE GOLD, ESQ. ON BEHALF OF PETITIONERS -- REBUTTAL

Laurence Gold: Thank you, Your Honor.

In terms of the parallel between these statutes, it seems to me is rational to say that because under the NLRA, you have the right to strike, that ought to be read into public sector law where it doesn't fit, or because you have the secondary boycott under the RLA without regard to what Congress did in 1947, NLRA unions ought to have the right to a secondary boycott.

The point of the matter is that these statutes are related to each other, but they're not identical to each other.

Second, the reference that Mr. Vieira makes to Section 9(a), the fact that only a 9(a) union can make a union security agreement that's lawful under Federal law that isn't prohibited by Federal law again is a total red herring.

That language was in the '35 Act at which time unions had the right to secure as a matter of Federal law, a closed shop, and you had to be a full member, you were subject, if you were discharged by the union for any arbitrary reason, could also be discharged from your employment.

And that's what Congress wanted to stop.

Third, as Justice Marshall pointed out, it is not the law in this Court that everything an NLRA union does in negotiating a collective agreement is State action.

If it were, then Webber would have had to have been decided the other way.

The fact of the matter is, unions, like public utilities, like the Olympic Committee, are a bundle of rights and powers, but insofar as the Government has no close nexus with the private decisionmaking, this State action cases make it absolutely plain that the union is a private party and that--

Unidentified Justice: But how do you reconcile that with Street and Hanson?

Laurence Gold: --Well, on Street and Hanson, let me refer you back to the materials.

In Hanson, at pages 231 and 232 of 351 U.S., the Court said, the Supreme Court of Nebraska took the view that justiciable questions under the First and Fifth Amendments were presented since Congress by the union shop provision sought to strike down inconsistent laws in 17 States.

The Supreme Court of Nebraska said such action on the part of Congress is a necessary part of every union shop contract.

We agree.

And then in Street, the portion of the opinion which introduces the constitutional element of the case is entitled "The Hanson Decision".

So the difference between these two statutes, which we think is determinative with regard to whether you look at this through a constitutional lens is the preemption of State law in the Railway Labor Act, and the lack of preemption here.

Chief Justice William H. Rehnquist: Thank you, Mr. Gold.

The case is submitted.

Attribution:

The OYEZ Project

Featured:

Teachers v. Hudson - Oral Argument

Fri, 09 Jan 2009 14:48:34 +0000

Case:

Teachers v. Hudson

Media File:

84-1503_19851202-argument.mp3

Related Transcript:

1985_84_1503_argument.xml

Transcript:

ORAL ARGUMENT OF LAURENCE A. GOLD, ESQ. ON BEHALF OF THE PETITIONERS

Chief Justice Burger: We will hear arguments first this morning in Chicago Teachers Union against Hudson.

Mr. Gold, you may proceed whenever you're ready.

Mr. Gold: Thank you, Mr. Chief Justice, and may it please the Court.

This case concerns the validity of a system for effectuating an agency shop agreement, such agreements as the litigation to this point in this Court shows are those that provide that, where a majority of an appropriate collective bargaining unit has selected an exclusive bargaining representative, all the employees within the bargaining unit are required to pay a sum equal to a percentage of union dues.

The litigation in this Court to this point demonstrates that the requirement of support of all of the employees for the representative is constitutionally appropriate so long as the union uses the money of individuals who file objections only for matters relating to collective bargaining and attendant activities.

And in the Ellis v. Railway Clerks case in 1984, the Court began the process, at least under the Railway Labor Act, of specifying which of the union's costs are chargeable to such objectors and which are not.

In this case, the Seventh Circuit confined itself to a procedural issue, and indeed the Seventh Circuit remarked in its opinion that the plaintiffs below, the Respondents in this Court, had predicated their challenge on procedural due process issues.

The Seventh Circuit ruled that a system such as the one here, whereby the union calculates and, as the district court's uncontested findings state, carefully documents the portion of union dues that represents the... and here I quote the state statutory language...

"the cost of the collective bargaining process and contract administration. "

and provides an advance reduction from regular union dues based on that calculation, and that furthermore places the payments of objectors who pay in this reduced amount into an interest-bearing escrow account pending the objector's use of either an internal review proceeding within the union which ends before an arbitrator selected from a list maintained by the state by the union, or through judicial review, does not accord the objector due process of law.

In other words, the court held that, even though the union makes the calculation and provides an advanced reduction and backs up that advanced reduction by an interest-bearing escrow account into which is placed the money of objectors while they pursue their challenges to the union's calculation, the objector is not given due process of law.

Now--

Unidentified Justice: Would you say the Court of Appeals said that, even though the substantive result reached was right, there still was a procedural component that was separate from that?

Mr. Gold: --Yes, indeed, Justice Rehnquist.

The Seventh Circuit said that it needn't get into the substantive issue, that it could assume that the calculation was correct and that not a penny of the objector's money would be spent for an impermissible purpose, and nonetheless there would be a constitutional violation in this case.

Unidentified Justice: Well, Mr. Gold, I thought that the Court of Appeals did indicate, though, that some... give some opinion as to what could be included in the share that the employee would have to pay?

Mr. Gold: The Court of Appeals noted in passing that the objector's rights included not only a right not to pay for political and ideological activity, but also a right not to pay for any activity which is not germane to--

Unidentified Justice: That's pretty substantive, isn't it?

Mr. Gold: --It is substantive, but it isn't presented in this case, and the court indicated as much, because the state statute--

Unidentified Justice: Don't you think that was just gratuitous dicta?

Mr. Gold: --I would hate to use the word "gratuitous", but I certainly believe that the way the Seventh Circuit approached the case, it was dictum, not only because of what it--

Unidentified Justice: But some arbitrator, if this procedure holds, would probably follow it, wouldn't he?

Mr. Gold: --Hopefully, the arbitrator wouldn't be faced with that because the decision ought not and we hope will not--

Unidentified Justice: Be affirmed.

Mr. Gold: --hold.

But the Seventh Circuit's position as it articulated it is that a procedure with the safeguards I've just outlined nonetheless works a deprivation of the objector's liberty interest, which that court noted are taken to or determined by the objector's right of non-association.

And it is our position that that ruling of the Seventh Circuit is erroneous, that it is contrary to the method of approach this Court stated in Abood versus the Detroit Federation of Teachers in 431 U.S., which is the other public sector agency shop case in this Court, and flatly contrary to what the Court had to say in Ellis versus Railway Clerks, a 1984 decision, albeit one arising under the Railway Labor Act.

In determining what due process is required in this case, and as I think the Court of Appeals recognized, the beginning point has to be the nature of the objector's liberty interest, the nature of his right of non-association.

And this Court has spoken to the nature of that interest and that right in the Abood case.

And in Abood... and this was foreshadowed in earlier cases as well... the Court defined the objector's interest and his right as not being required to provide compulsory subsidization of union ideological and political activity not related to collective bargaining.

And the Court has at every point phrased its holdings as being that the First Amendment does limit the uses to which the union can put funds obtained from dissenting employees.

That was the phrase used in the most recent case, in the Ellis case.

And the Court throughout has made it plain that the union shop and the agency shop concepts themselves are constitutional and that, as the Court put it in one of the earliest cases, that the mere collection of an amount equal to or a proportion of union dues does not work any unconstitutional deprivation of the objector's rights, that because of the weighty interests of the Government in industrial peace and the governmental determination that equal support of all employees in the bargaining unit of the exclusive representative, insofar as the exclusive representative is engaging in activities that are related to or germane to its functions as an exclusive representative--

Unidentified Justice: Mr. Gold, may I inquire of you.

I suppose the Court has recognized a First Amendment interest in non-members for use of their money for political purposes.

And normally we would approach the problem by saying that there can be a burden placed on them, all right.

They'll have to contribute, but it should be by the least burdensome method.

Now, would it be a less burdensome method here to have an independent determination ahead of time of the amount that should be withheld, as opposed to the method used here, which is placing it in escrow and then giving the non-member a right to challenge it later?

Would it be in your view possibly less burdensome if there were some mechanism for an independent determination ahead of time?

Mr. Gold: --That approach would be less burdensome on the individual, but--

Unidentified Justice: On the First Amendment right.

Mr. Gold: --I don't believe that it is fair to say that it would be less burdensome on the First Amendment right than the escrow system, because the First Amendment right is the right not to subsidize a First Amendment activity with which one disagrees.

There is another aspect to this case, albeit one not treated below, which the Respondents' brief is devoted to, namely a claim that there's a burden on the individual's property right, the right to uncontrolled dominion of the $16 and I think it's 84 cents per month that is in issue here.

But I don't think that the requirement that the individual paid the money into escrow can properly be said to be a burden on that individual's First Amendment rights.

The burden comes if the individual's money is appropriated to the union's activities.

Unidentified Justice: Well, exactly.

And so perhaps an independent determination at the outset of what amount ought to be withheld is the most effective way and the least burdensome way of meeting that obligation.

Mr. Gold: It isn't... in our view--

Unidentified Justice: There would still be the question of whether the individual has to pay anything while that determination goes on.

And if he has to pay anything, what would it be?

If he pays the full amount that the union tells him to pay, you haven't solved a great deal.

Mr. Gold: --You've solved several different--

Unidentified Justice: Not pending the decision as to how much you should pay.

Mr. Gold: --Justice White, you've solved several interests.

The Government's interest is that everybody in the bargaining unit pay the amount required by the union month-in, month-out, to meet its collective bargaining and representational responsibilities.

If there has to be a determination before the individual pays anything in--

Unidentified Justice: Anything at all?

Mr. Gold: --Yes.

If that is the requirement, then all the governmental interests are heavily and adversely impacted during the time the determination--

Unidentified Justice: And the union's interests.

Mr. Gold: --That's right.

And it is... the governmental interest is to permit the union to fulfil the functions in the industrial relations system that the Government has laid out.

So if the individual, simply by making an objection, can trigger a prior hearing, then all the interests on the other side of the equation are sacrificed.

Unidentified Justice: And you may never be able to recover it, because you may not be able to go back, go back and collect what you--

Mr. Gold: That's right, and that's why, as I was going to note, in Abood the Court said that the proper approach here was to prevent compulsory subsidization of ideological activity by employees who object thereto, while not restricting the union's ability to require every employee to contribute to the costs of collective bargaining activities.

And in furtherance--

Unidentified Justice: --Let me just ask at this point, doesn't the escrow, which you seem to be satisfied with, doesn't that also frustrate the governmental interest during the period required to make the determination?

Mr. Gold: --It does in part.

In the conclusion of our brief, we note that at least an approach where there is a prior calculation and once there is experience, an escrow of a limited amount based on the experience, one that will give a cushion, while permitting the union to use the money, the percentage of money, that in past years had been devoted to properly chargeable activities, strikes the best balance between the competing First Amendment rights on both sides of the equation and the Government interest.

Unidentified Justice: Do you agree that the objector has the constitutional right to have the determination of the fair, whatever the allocation may be, at some point be made by an independent decisionmaker?

Mr. Gold: We do.

Unidentified Justice: But you take the position that that could be just the state judicial system that if you put everything in escrow and then waited whatever time it takes the Illinois courts to decide the case, that would be--

Mr. Gold: Yes, that here, as in any other area that I know of where someone is making a First Amendment claim, if the states... if the state provides an access to the judicial system--

Unidentified Justice: --Say the Illinois courts take five or six years to run the route of going through the circuit court, the court of appeals, and all the rest, and all the money sits in escrow for six years.

Every year you have to do this.

Would that still be constitutional?

Mr. Gold: --As the district court pointed out, at the beginning of the process there is going to be some fair room for dispute about whether this category is chargeable or another category is not.

Thereafter, the likelihood of the type of protracted proceeding you're talking about is at least less likely.

But I do have to point out that if the money is in escrow or if any substantial part of it is in escrow, both sides are paying a price.

The majority has First Amendment rights, too.

There are governmental interests quite aside from those First Amendment rights on the majority's side.

While the money is sitting in escrow, those rights are being limited in the same way that the objector's rights are.

Unidentified Justice: Would you say that system would be constitutionally sufficient even if the union provided no internal mechanism whatsoever for review, if they just off the top of their heads said, we'll take 98 percent this year, we won't have any review, you just have to sue us in court and we'll hold all the money in escrow?

Is there any constitutional obligation to do anything except respond to litigation and hold money in escrow?

Mr. Gold: I would think that so long as the union on objection holds the money in escrow, both the objector's liberty interests and the objector's property interests are fairly protected.

Let me say in that regard that we are not dealing here with the situation in which the state says to the union, you can take from the individual whatever amount strikes you.

The state has placed a limit on what the union can seek, both by saying that it cannot be more than the union dues and by setting out a definition of what it is, what type of costs there are that the union can charge the objector for.

In those terms, you have the state limiting in very sharp degree the area that is open to fair dispute, and that area, as the district court pointed out, will continue to narrow once we know more about what the nature of the law is here.

Unidentified Justice: Mr. Gold, at the beginning of this the question that the Justice gave you said that you pulled this off the top of your head, and you agreed to that, do you?

Mr. Gold: No, I was going to finish my answer, and I thank you, Justice Marshall.

I was going to say that, if an objector sued and was able to prove that the union in Illinois made no effort to limit the amount sought to that which the statute permits, namely the proportionate share based on the cost of the collective bargaining process and contract administration... that's the state's statutory standard.

If an objector proved that, I would think that he would be entitled to an injunction against the collection of some or all of what was being sought.

The union's obligation is to seek and to certify, as it did here, to the employer making the deduction no more than the state permits.

The reason that a union that does that is not violating any of the due process rights of the individual, at least so long as the union's calculation is backed up by a reasonable escrow--

Unidentified Justice: Mr. Gold.

Mr. Gold: --Yes.

Unidentified Justice: Excuse me for interrupting, but it would help me if you would clarify a response you made to Justice Stevens, that you agreed that there must be an independent determination of an issue that may be raised by a non-union member as to the use of his or her dues.

What is the present independent agent to which the non-member could take his or her complaint?

Mr. Gold: The courts of the state of Illinois.

Unidentified Justice: But there's nothing... well, I suppose they could go to arbitration and grievance procedure, but you don't suggest that's independent?

Mr. Gold: I'm not arguing here that the union's internal system is one which can replace the individual's right to go to court.

Unidentified Justice: Would there be any duty to exhaust that possible remedy before going to court?

Mr. Gold: That would seem to us to be in the first instance a question of state law.

There are sound arguments, at least so long as the union's process is expeditious... and the district court noted here that it can move in 75 days... there are sound considerations that might lead the state court to say that the case will be more rationally litigated if this process has been used.

Unidentified Justice: Well, what if the Illinois courts give the same sort of deference to an arbitrator's decision that the federal courts under the Labor Act do?

Would that still amount to access to a judicial officer for purposes of your answer?

Mr. Gold: I would have to say that I think a substantial question would be raised if the objectors could not get a de novo determination, at least on the category questions, namely what categories of union activity is chargeable.

And we make it plain that we believe that objectors do have that right.

The issue here is really whether the rights that the objector has, given the nature of this liberty interest, which is not to subsidize and which is protected by the escrow feature and the right not to have property taken without due process, which we think is protected by the limit, the outer limit that the state puts on the amount that can be taken, and which, when you run through the Eldridge test, shows that there is no denial of--

Unidentified Justice: Of course, the state's outer limit isn't much of a limit.

It's 100 percent of union dues, and by hypothesis some of that percentage is used for non-union purposes.

Mr. Gold: --No, I don't believe that by hypothesis some of it is used for non-collective bargaining purposes.

Each union differs in the way it approaches its task.

This union, for example, has a completely separate voluntary fund from which it pays for all--

Unidentified Justice: Oh, I see.

Mr. Gold: --political activities.

Unidentified Justice: Right, I see.

Mr. Gold: And the union has no organizing expenses because it has one employer and that's the only employer it deals with.

Unidentified Justice: Well, Mr. Gold, how do you differ with what the Court of Appeals held?

Mr. Gold: We differ with the Court of Appeals in validating this system, which provides every protection that this Court in Ellis said is required.

Unidentified Justice: What did it invalidate?

Mr. Gold: It invalidated a system whereby the union makes this initial calculation and certification and provides escrow, a union escrow system.

It said that's not good enough.

Unidentified Justice: But didn't the union just put in the escrow arrangement after the case started?

Mr. Gold: It did indeed, but--

Unidentified Justice: But did the Court of Appeals invalidate that?

Mr. Gold: --Yes.

Unidentified Justice: But it didn't give it much attention?

Mr. Gold: Well, no, it said it wasn't... we don't believe that the escrow system changes our conclusion, it said.

It said the escrow system was insufficient because it was under the union's control and the union created it.

Unidentified Justice: But you don't... you wouldn't say that... did you answer Justice Stevens that you think the escrow arrangement is constitutionally required?

Mr. Gold: I answered Justice Stevens by saying that where the union makes a prior calculation that it is our judgment that some cushion has to be provided to take care of the eventualities of what the union is actually going to do.

Unidentified Justice: Well, that may be so, but suppose the union purported to establish a cushion.

Do you think that there has to be an escrow arrangement to make it constitutional?

Mr. Gold: No.

It seems to us that in Ellis this Court said that there are two different alternatives.

Unidentified Justice: That's right.

Mr. Gold: All we're saying is that we approach... this union approached this matter in a suspenders and belt style.

It has both a prior reduction and an escrow.

Unidentified Justice: But as I understand you, maybe I'm wrong, Mr. Gold, but I think you in effect have not challenged the analysis of the Court of Appeals if there were no escrow agreement.

It seems to me you have more or less assumed there must be either an independent decisionmaker or an escrow if the objector's money is to be used pending the determination of how much should be used.

Say we had no escrow in this case.

Would you still challenge the Court of Appeals' analysis then?

Mr. Gold: If there were no escrow arrangement and all there was was the union's initial sole determination of the amount due without any background of prior experience or prior decisions, we wouldn't challenge the Court of Appeals' determination.

But this is a first... I want to emphasize in answering that this is a first, what I would call and what the district court called a first year case, a case where there isn't prior experience.

Unidentified Justice: Well, I understand that the practicality, I suppose, is because of the problem of collecting from people who don't pay their share, is that you have to make the 95 percent.

You have to have a figure that you're going to be reasonably sure you're going to get your money from the objectors.

Mr. Gold: Well, that's right.

The governmental interests here are that if you don't... and the union interests the... that if you don't get the money month-in, month-out, in the same way you're getting it from members, A, all the friction created by the free rider syndrome, which is what the Government is seeking to alleviate, continues month-in and month-out; and secondly, all the costs of collection are increased enormously, particularly if the individual leaves or if you have to sue to get a big chunk of money way after the fact.

Unidentified Justice: All of which... I don't mean to retrace ground, but all of which comes back to a question Justice O'Connor asked earlier.

Not only might it be in the objector's interest, but it may also be in the union's interest to have an independent audit or whatever you want to call it as early as possible.

Mr. Gold: Well, I don't think that anybody looking at this from the union perspective is interested in delay.

The question is whether the individual can say I object and by doing so set a train in motion whereby he doesn't pay at all for weeks, months, or years.

And we say nothing in the Constitution, no interest that the individual has, can possibly justify that.

Chief Justice Burger: Mr. Vieira.

ORAL ARGUMENT OF EDWIN VIEIRA, JR. ON BEHALF OF RESPONDENTS

Mr. Vieira: Thank you, Mr. Chief Justice, and may it please the Court:

I came here and I remain somewhat perplexed in attempting to determine for myself what the utility is of viewing this case as a First Amendment case that involves the uses of fees that a union is collecting.

We're not dealing at this stage with uses, except in an abstract definitional sense that they are entitled to money only that will be eventually used for collective bargaining.

And no money here has been used because, as Justice White suggested a moment ago, during the course of litigation the union introduced an escrow procedure where it segregated the moneys in a separate account.

So all of this First Amendment analysis and discussion of Abood and such cases seemed to me to be beside the point.

Unidentified Justice: Well, the Court of Appeals didn't think it was beside the point.

Mr. Vieira: Well, I think the Court of Appeals has--

Unidentified Justice: Well, are you defending the Court of Appeals' opinion or not?

Mr. Vieira: --Yes, Your Honor.

But I think they--

Unidentified Justice: Are you?

Mr. Vieira: --Yes, Your Honor.

They've needlessly complicated this problem, and let me explain why.

I'll take a minute to explain why.

Unidentified Justice: Do you defend needless complications?

Mr. Vieira: Well, I wasn't responsible for writing the opinion.

Unidentified Justice: Sometimes judges talk too much?

Mr. Vieira: Well, it seems to me this case would have been approached simply by saying, money is being taken for legitimate purpose; is the procedure involved in the taking constitutional?

What does the Seventh Circuit tell us?

It says, well, there's a liberty interest involved in the taking of this money because the money will be used by a union and therefore it arguably infringes freedom of association to take it, but that liberty interest is not unconstitutionally infringed, per Abood.

Fine.

You can deprive a person of liberty and of property and even of his life, if you give him due process of law.

That's the question: Is this money that eventually causes a justifiable infringement on freedom of association being taken with due process of law?

And I think the very simple answer... and that's why I'm perplexed... the very simple answer is there is no constitutional procedure in this case.

There's no procedure that meets any standard, it seems to me, that this Court has ever suggested is applicable, except in some extraordinary emergency situations, which we do not have here.

Unidentified Justice: Even if... and I take it then we should just... you suggest we just analyze it as a property case?

Mr. Vieira: Well, I think you can do that without ever getting into any--

Unidentified Justice: Well, you say the First Amendment issues are all beside the point, so it's a property case.

Well, then you certainly don't need a neutral decisionmaker to make the decisions if it's just a property case, I would think.

Mr. Vieira: --Well, I think you need the neutral decisionmaker.

You need the governmental decisionmaker to justify the taking.

It's the Government that's taking his money.

It's the Board of Education that's deducting these fees from the salaries of the employees simply on the say-so of the union.

And I think before that step is taken, some decisionmaker has to have some type of factual presentation at least at the level of probable cause, at least at the level of rationality, to suggest that this figure that's being given has some connection with the reality of the collective bargaining activities of the union.

Now, in the first year, I agree with Mr. Gold, it's a more difficult problem because we don't know precisely what the union is doing.

In fact, in this case we don't know anything about what the union is doing.

Unidentified Justice: Well, Mr. Vieira, I have a difficult time understanding how there could be a due process issue here that's independent of the First Amendment concern.

And it would certainly seem to me that whatever procedures are required for determining the amount to be withheld are required by the First Amendment itself and not the due process clause.

I really don't understand your analysis at all.

Mr. Vieira: Well, the First Amendment comes into this, Justice O'Connor, if we look at the use.

That is, we obviously want to prevent the union from getting control of the money to expend that money until we determine that that money will be spent only on First Amendment allowed activity.

We never want the union to obtain control of any money--

Unidentified Justice: That's the whole underlying purpose of the protections in the scheme that we're reviewing.

So it's a little hard to separate it out.

Mr. Vieira: --But what I'm saying is I don't think that that question would be relevant to the taking issue.

That is, if this money were being taken to pay some other debt that these people owed the union, not a payment that implicated associational interests, we'd still be worried about the collection procedure.

We're going to be worried about this collection procedure in any kind of a creditor-debtor framework.

There's a secondary problem that not only are we worried about the initial taking, but we're also worried about the transfer to the union.

Now, what I'm saying in this case is the union has precluded any difficulty with the use question through an escrow, and I think a procedure... and now we're talking about a procedure that the state will have to devise.

I don't think it's for this Court to tell us what that procedure should be in every permutation and combination.

It's for the state also to devise a procedure whereby the union does not obtain possession, is not allowed to use that money, until there's a final determination that precludes First Amendment violations.

But what I'm getting at here is, at this stage of the case we have a procedural due process problem pure and simple because the taking is effective without any submission to any governmental agency of a rational basis that the figure the union gives has some connection with its real collective bargaining costs.

What they do is they take the union dues, an arbitrary figure, no necessary connection with the collective bargaining there, they subtract what they admit they're not entitled to have, and they say: Aha, the answer is collective bargaining costs.

That's not rational on its face.

Unidentified Justice: You, I take it you are saying that you must have a prior hearing or some prior participation in the procedure before they could take a nickel?

Mr. Vieira: I think there has to be some pre-taking process.

Now, we use the word "hearing".

That word is used in the brief, but I think it's used in an extensive sense.

Unidentified Justice: I suppose you would say that, until that... until you have exhausted all of your rights, they can't take a nickel.

If you wanted to take it to court, you could keep them from taking a nickel from you until the court procedures are through?

Mr. Vieira: No, in theory not necessarily, Your Honor.

Unidentified Justice: Well, not necessarily.

I would suppose that that must be the logical bottom line for you.

Mr. Vieira: No, I don't think so, Your Honor.

I mean, look at a case--

Unidentified Justice: Well, they have some internal union procedures in which non-consenting employees can participate and those procedures are exhausted, and you just disagree wholly with whatever the decision is.

Mr. Vieira: --Oh, I don't think these employees can be required to exhaust any internal union procedures whatsoever.

I don't think the union procedures have anything to do with this case.

The union is coming to the Government saying: Take these people's property, we have a claim of right to it; we're not going to tell you the factual basis for that claim; we're going to give you some non-rational facts over here that have nothing whatsoever to do with the final figure.

Unidentified Justice: Well, then you say that you should be able to go to court and have, pending trial, you should have an injunction against collecting any money?

Mr. Vieira: Well, I don't think in this case that it's the burden on the employee to have to initiate a court suit.

I think that the procedure that should be followed in broad outline is that the union should be required to come to some agency of the state... not saying it's a court; it could be an administrative agency, a labor board, what have you; we just don't have a procedure down there in Illinois... come to some agency of the state with some certifiable facts as to what the collective bargaining costs are.

At that stage, if that agency determines as a factual matter that there's a need for these collections prior to a final judicial determination, prior to the exhaustion of all of the legal remedies, fine.

We don't have any determination of that at this stage.

We don't have any submission of any rational--

Unidentified Justice: And until that agency decided, they couldn't collect anything?

Mr. Vieira: --That's right.

But I think that that could be done relatively quickly.

Certainly in later years it could be, after that agency had had some experience dealing with this particular union or other particular unions as to what their cost structure was, their organizational structure was.

Unidentified Justice: You're really opposed to paying dues at all, aren't you?

Mr. Vieira: Excuse me, Your Honor?

Unidentified Justice: Your clients are really opposed to paying dues at all?

Mr. Vieira: Well, I don't know particularly what the personal preference of my clients are, but they're required to pay these dues under Abood to the extent that the dues meet collective bargaining costs.

Unidentified Justice: Well, you said that the union should have to go to court before collecting any dues?

Mr. Vieira: Who should have to go, Your Honor?

Unidentified Justice: The union.

Mr. Vieira: Oh, no, no.

The union should have to come to some governmental agent.

Unidentified Justice: In order to collect dues?

Mr. Vieira: In order to begin this collection process.

Unidentified Justice: What's that?

Mr. Vieira: In order to begin this collection process, yes, they should have to--

Unidentified Justice: In order to collect all dues?

All dues or some dues?

Mr. Vieira: --To collect the fee to which they're entitled under this statute.

They don't have to go to an agency to collect dues from their own members.

Unidentified Justice: That's what I thought you were saying.

Mr. Vieira: No, not from their own members, only from their non-members.

Unidentified Justice: Mr. Vieira, supposing they went to the state legislature in springfield and said, we have an expense... a free rider problem, we have an expense of representing non-members as well as members, and we can demonstrate to the legislature that substantially all of the dues is required for this duty, an amount roughly equal to that, and the legislature, say it made an express finding... they didn't here... that we think generally speaking the dues is a fair summary of what the costs are involved, so we'll make an initial payment of dues, and that's just your contribution, subject to some right to recoup if it's misspent in some way.

Why can't the state legislature be the very agency that you're saying has to play a part in that?

Mr. Vieira: Because I think that brings you into Justice O'Connor's problem.

I don't think the legislature can preclude discussion of the First Amendment question.

I don't think a legislature can determine--

Unidentified Justice: Well, now you go back to the First Amendment, and they say, yes, that's exactly right, and we'll hold the money in escrow until we resolve the First Amendment issues.

And supposing they, instead of having an internal procedure, they agree to an audit by Price Waterhouse or some independent auditing firm who is acceptable to your clients.

Mr. Vieira: --Who's the "they", Your Honor?

Unidentified Justice: The union, the union agreed with your clients that they would do it, and then they would refund the parts that--

Mr. Vieira: Well, I'm not sure what the statute is that you're proposing.

The legislature passes a statute--

Unidentified Justice: --The statute's already been passed.

It's on the books.

Mr. Vieira: --The statute says that the employer and the union can agree to an agency fee, the outer limit of which will be the dues.

It doesn't say that the dues will be--

Unidentified Justice: But doesn't that represent a legislative finding that substantially all of the dues probably are required for this purpose?

Mr. Vieira: --No, I think it represents a legislative finding that it would be rather ridiculous for the union to claim that it was spending more money on non-members than it was spending on members, in the extreme case.

Unidentified Justice: Well, supposing they had preceded the statute with a legislative finding at the committee hearings that said, we find, based on testimony before the legislature, that most of the dues... that dues fairly represents an approximation of what's needed for this purpose.

Mr. Vieira: 100 percent of the dues?

Not mostly, 100 percent of the dues?

Unidentified Justice: Yes, or 95 percent.

In the range of 80 to 90 percent is required.

Mr. Vieira: Every union, every year?

Unidentified Justice: Yes.

Mr. Vieira: Well, I'd say that would be non-rational.

I'd say you have a big First Amendment problem there.

That kind of a statute couldn't possibly stand up.

Unidentified Justice: Well, supposing after five or six years of the sort of hearings that you propose, in each of which it has come out that, in one year it was 89, the other year it was 91, the next year it was 90, so that you have a five or six-year experience that shows you're within a range of 90 percent, varying by only one or two percent, then could the legislature enact the sort of statute that Justice Stevens says?

Mr. Vieira: Well, it could, and I think that that statute would still be subject to judicial challenge on the facts.

Unidentified Justice: Well, what sort of challenge?

Was there evidence to support the conclusion that 90 percent is a fair--

Mr. Vieira: Well, in the particular year, for instance.

It could be in a particular year they didn't spend 90 percent.

Now, if you put that scenario into a procedural context, I can imagine a situation where, after three or four years, whatever this agency is that makes the initial determination had seen these figures... 89 percent, 90 percent, 91 percent, coming every year... there would be really no problem in it more or less mechanically allowing these collections of say 88 percent after some experience has been developed.

Unidentified Justice: --And why couldn't the legislature make the same judgment as the agency did?

Mr. Vieira: Well, I don't know how a legislature can make a judgment about the future.

Are you going to hold a legislative hearing every hearing every year to determine what the union does?

Unidentified Justice: No, but they can make the judgment that there's no reason that we think the future will be any different than the past, so there'll be at least a presumption that the same amount will obtain.

Mr. Vieira: All right.

Well, I'm willing to live with the presumption concept.

Unidentified Justice: Well, a presumption which would entitle the union to deduct that amount of dues.

Mr. Vieira: And put it where, in escrow?

Unidentified Justice: Put it in escrow.

Mr. Vieira: All right.

Well, when we see that kind of a statute passed we can discuss it.

But that's not what we have here.

Unidentified Justice: I thought we just were discussing--

Mr. Vieira: No, no.

I was saying if we had that type of a statute we would have a First Amendment problem if they let the union have that money.

There's no question about that.

I don't think that the legislature can foreclose the challenge to how the union is spending the money.

You're now posing the question, if the legislature says X percent of a union's dues is presumptively going to be the collective bargaining cost, subject to being held and to being challenged on the facts of a particular year, would that escrow be legitimate?

Well, I think if you have a legislative determination based on their finding of a necessity for that kind of a procedure, that is the taking of the money, it might very well be.

The problem I have with it is that if you look at cases that this Court has decided in the procedural area, there tends to be a great deal more factual basis for the necessity of getting the taking into operation than we have in this case.

What are we talking about here?

We're talking about 160-something dollars a year.

I cannot see that the union is going to suffer some great financial detriment by these moneys being deferred to some time in the future because they're not collected.

In this particular case, the moneys are collected and put in escrow.

The union never seems them until when, five years from now, ten years from now.

How long do you think the judiciary is going to deal with this question in the state of Illinois before those escrowed moneys finally come into the possession of the union?

Besides, from the union's point of view, if they have such a good case, if these fees that they are charging actually represent their costs, they should have no problem borrowing this small amount of money and then charging the interest on that to the agency fee-payers as a legitimate cost of collective bargaining.

I just see no problem on their side.

Now, the employee's problem is always the same: Are they entitled, as a matter of constitutional law, to the interim possession and use of their own wages, absent some very strong governmental interest in taking that money out of their possession and putting it in a segregated account?

Unidentified Justice: --Well, the odds are, though, that the amount the union wants to collect, well, almost all of it or at least a majority of it they will be entitled to in the long run.

Mr. Vieira: Oh, even they question that, Your Honor.

There's a footnote in their brief where they admit that as a matter of state law and federal constitutional law the parameters of these collective bargaining charges are all up in the air.

We're talking about years and years of litigation when we go to that question, as to what's a legitimate collective bargaining cost under the Illinois statute, what's a legitimate collective bargaining cost under the federal Constitution.

I don't believe for one instant that the majority of these moneys are going to end up in the union's possession.

Unidentified Justice: Well, let's assume that that would be the case.

Mr. Vieira: Okay.

Unidentified Justice: Let's assume that there's a perfectly legitimate basis for saying that 75 percent, 80, 90 percent of it's going to end up in the union's hands.

Mr. Vieira: Okay.

Unidentified Justice: All I'm suggesting is that the burden on the individual employee is not very substantial, either.

Mr. Vieira: Well, in this particular case the burden on the individual--

Unidentified Justice: He's going to have to pay 75 cents out of every dollar anyway.

Mr. Vieira: --Your Honor, in this particular case the burden on the employee to determine for himself whether or not these fees are accurate is wholly disproportionate to the amount of money.

The union is saying, we're going to take $164 from you and if you want to challenge this bring a court suit.

How much do you think it's going to cost to bring a court suit to determine the validity of these fees, when the union has all of the evidence, has presented none of the evidence, when it's all a matter of statutory interpretation, constitutional interpretation?

How many people are going to bring a court suit in the Illinois courts to contest $164?

Unidentified Justice: May I ask this question--

--Well, somebody did.

I'm sorry.

Would you have the same constitutional objection if the procedure were one that the union financed an audit by an independent arbitrator?

You didn't have the selection procedure now.

Say you had an independent decisionmaker and the cost was entirely borne by the union and they had some kind of procedure where they could get a decision in three months or something.

I should think the audit could be done in a reasonable period of time if it were done by an independent auditor.

What would be the constitutional objection to such a procedure?

Mr. Vieira: The money having been collected before the determination was made?

Unidentified Justice: It would be in escrow until whatever it would take to complete the audit, and then they divide it up, whatever the auditor said.

You'd always have a chance to litigate later on, I suppose, whether--

Mr. Vieira: Your Honor, at this stage I'm not interested in litigating.

All I'm saying is, before they're allowed to take the money they have to present to someone some rational facts.

Unidentified Justice: --Well, assume for the moment that they did present to the legislature a fairly strong showing that a substantial percentage of the money would be used for collective bargaining.

And they say, pending the decision by an independent decisionmaker what percentage is appropriate, we'll collect it so we're sure we'll get it, that these people won't lose their jobs or die or something and they have trouble collecting.

And we'll put it in escrow and leave it there for 90 days while a decision is made, and then we'll divide it up.

What would be the constitutional objection to that?

Mr. Vieira: Assuming that the legislature makes that finding, based on its determination of the need for this collection and escrowing of the moneys, I guess we'd have to live with it.

Unidentified Justice: Well, you would concede that the auditor could do it just by himself, wouldn't you?

He wouldn't have to talk to you about it.

He wouldn't have to have a hearing.

There wouldn't be any procedures.

The auditor just decides.

Mr. Vieira: Well, Your Honor, we have the great difficulty here that, as the union itself admits--

Unidentified Justice: Take Justice Stevens' example.

Would you say that there would have to be a... the auditor would have to take your input to it and have a hearing, with witnesses?

Mr. Vieira: --Well, let's not say witnesses.

The problem I have with Justice Stevens' suggestion is, until the statutory and constitutional questions of the definition of collective bargaining services have been settled at least in large part, what is this auditor going to do?

Is he going to make legal determinations?

Is he going to look at a list of union activities and say, yes, this one is inside of Abood, no, that one's outside of Abood?

And then what's the value of that type of determination?

Unidentified Justice: Well, let's suppose that the union said, look, we're going to have a procedure here where we're going to end up with an arbitrator, an independent arbitrator, as to how much the employee should pay, and pending that decision he doesn't have to pay anything.

And then the arbitrator decides.

Is that all right?

Mr. Vieira: And that figure they bring to the board.

Well now, that's getting to what I was suggesting.

Unidentified Justice: Well, I know, but the Court of Appeals for the Seventh Circuit doesn't seem to accept that system.

Mr. Vieira: No, Your Honor, I think--

Unidentified Justice: Because it's under the control of the testimony.

Mr. Vieira: --Well now, wait a minute.

That's after the collections, the determination after the collections of the validity of the uses of the money.

I'm talking about the pre-collection.

If the union came to the board and said, we had our own--

Unidentified Justice: I would think the due process employee of the Court of Appeals--

Mr. Vieira: --Excuse me?

Unidentified Justice: --The due process theory of the Court of Appeals would apply whether the money is collected before or after.

Mr. Vieira: No, I don't think so, Your Honor, because when the union comes--

Unidentified Justice: Well, that's all right.

You've answered my question.

If that's what the Court of Appeals said, you don't defend it, I take it?

Mr. Vieira: --Well, it's not directed towards this question.

I think when the union comes to the state agency, the board, let's say, and what it has as the evidence for its fee request is some sort of determination made by an independent accounting firm or arbitrator or whatever you want to call this, now, that's some probative evidence.

Whether it rises to the level of what I would call probable cause is another question, and you have to look at the evidence.

But that isn't what happened here.

The independent determination, the basis for this claim, was not made before the taking.

It was made after the taking, or to be made after the taking, because actually no one went through that internal union procedure.

I'm not saying that the union can't generate these figures initially.

I'm saying that it should generate the figures initially.

It should be required to take it to some responsible official in the state and justify this with some minimal level of factual and legal basis, and then that agency can say, all right, now we're going to collect this money, and maybe then it can be put into escrow, so we don't have the problem Justice O'Connor discussed of impermissible uses.

But first let's have some rational basis for this thing.

We have no procedure now.

We have a union coming to a Government official and saying, we want those people's property and we're really not going to tell you why, because as they say and admit at every level in this litigation, they calculate the fee by subtracting an arbitrary number from an arbitrary number.

And if that doesn't come up with an arbitrary number, I'm not too good at arithmetic.

They simply have not documented the actual services they've performed or the costs of those services.

Now, I don't think that's a great deal of documentation, really.

If they've done these things, they have a record of it.

If they plan to do them, they have a proposed budget.

And I don't see why they can't do the same thing that's been required in Sniadach, Fuentes, North Georgia Finishing, Mitchell versus W.T. Grant... some kind of factual evidence presented to a neutral government official.

I don't think it has to be a judicial, full-blown judicial evidentiary hearing.

It probably doesn't even have to be a full-blown administrative evidentiary hearing.

But it has to be something more than nothing.

It has to be something more than a naked demand for the money, backed up by a bluff, because that's what we have here.

It has to be a rational calculation on paper.

Look at it and see that it's rational, that you could get from A through B to C.

And we have no check in this present case against erroneous determinations whatsoever.

The check comes after the fact, either before the union's internal arbitrator or in some protracted judicial proceedings.

Heaven knows how long they'll take and how complicated and how expensive.

Unidentified Justice: Mr. Vieira, you use the term "irrational".

Don't you have a check of a mind because at least you have the union membership agreeing to pay certain dues periodically?

And presumably they're not just throwing their money away.

They must think they get something for their dues.

Mr. Vieira: But it's not necessarily collective bargaining they're paying for, Your Honor.

Unidentified Justice: Well, presumably a significant part of it must be, because isn't that the principal function that a union performs for its membership?

Mr. Vieira: I have no idea what the principal function this union performs.

Unidentified Justice: Don't you have any idea what they do?

Is that a total secret?

I mean, this is a fairly well-known union.

They're in the newspapers a lot.

Mr. Vieira: Well, for instance, Your Honor--

Unidentified Justice: They do represent the teachers of Chicago.

Mr. Vieira: --Sure.

If we want to speculate, because none of this is in the record, some of this money, a significant amount of this money goes to the national level of this union, the American Federation of Teachers.

I'm pretty sure the American Federation of Teachers doesn't do much collective bargaining in Chicago.

I think they have national concerns, maybe even international concerns.

Unidentified Justice: What proportion of it goes to the national?

Is that in the record?

Mr. Vieira: Yes, it is, but it escapes me now.

Unidentified Justice: It's in the record?

Mr. Vieira: A little more than one-third, I believe.

Mr. Gold might have that figure.

It's a sizable amount of money.

And again, I don't think the amount of money... well, let's look at the Carey case.

What did you say in the Carey case?

There's an absolute right to procedural due process.

It doesn't make any difference whether you win or lose, ultimately.

You have absolute right to procedural due process.

That's all we're asking for here.

Before they take the money, at some stage the government receives some factual basis for saying the figure is reasonable.

Afterwards, there can be an argument about exactly how much.

Unidentified Justice: Could it be a school official?

Mr. Vieira: Well, I suppose abstractly it could be, Your Honor.

But I really don't like that idea.

They don't have any expertise in these matters.

You're putting a burden on those people that they're really not capable of meeting.

Unidentified Justice: Well, I would think the school board which bargains with the union might have as good at least a way of getting knowledge as any other governmental agency.

Mr. Vieira: That's right.

I think if you put it that way, if you look at the activities of the union that are done in conjunction with the school board, there you would have a case in which the government official who was reviewing the request actually had its own independent knowledge of the facts.

And that might be workable with respect to the activities of the union in the local.

I'm not so sure of the extent that that would be workable with respect to the activities that the union conducts at the state and national level that the local charges for.

That's the only reason I have a problem with it.

There are some levels of activity of the union in which there is no interaction with the board.

If we were talking about a local union only or the local proportion of the dues, which I imagine is the largest proportion of the Chicago Teachers Union section of this in any event, it might very well be possible for the state to work out a system.

But we don't have the state.

And to be honest with you, Your Honors, I'm not asking you to give us a system.

It's the state of Illinois' problem.

The only thing I'm asking for here is first a determination that there has to be some injection of fact and review by a government official before the taking, and secondly--

Unidentified Justice: Do you think that the Court of Appeals held that?

Mr. Vieira: --Yes, I think that they sent this thing back, they threw it in the lap of the board and they said: You work out a procedure, you work out a procedure.

Unidentified Justice: I didn't think they said that there had to be a procedure before any money could be taken from them, did they?

Mr. Vieira: Well, they left it rather open.

In fact, I think that they may have been telling the board, too, that they had to make almost a final determination of the figure.

Unidentified Justice: Well, you're asking for an affirmance on a ground that perhaps goes beyond what the Court of Appeals decided.

Mr. Vieira: Well, I think it's a lesser included.

I'm not going to require the board to make the final determinations on the size of the fee.

I'm saying that the agency that does the checking off, the agency that does the deducting, has to have something before it beyond just a naked demand.

After that, if you go into an administrative agency, which I think is the way these things will end up, the state of Illinois will fashion some sort of an administrative procedure for handling this.

And probably that's the way it will end up ultimately, that the union will have to come to that agency, present its facts, the agency will certify it, and the checkoffs will be made.

But they'll have the facts on the record, and if there's some gross problem with the facts presented by the union then the dissenting employee can put his challenge on the record with the agency at that point, right at the beginning.

Otherwise, this thing will go along rather mechanically, any challenges to be brought up later on.

Our problem here is that we're at the initial step in the whole procedure.

We have no rational involvement by the state other than the seizure of the money.

Chief Justice Burger: Thank you, gentlemen.

The case is submitted.

Attribution:

The OYEZ Project

Featured:

Ellis v. Railway Clerks - Oral Argument

Thu, 30 Aug 2012 22:14:07 +0000

Case:

Ellis v. Railway Clerks

Media File:

82-1150_19840109-argument

Related Transcript:

82-1150_19840109-argument

Transcript:

ORAL ARGUMENT OF MICHAEL E. MERRILL, ESQ., ON BEHALF OF THE PETITIONERS

Chief Justice Warren E. Burger: We will hear arguments next in Howard Ellis against Brotherhood of Railway, Airline, and Steamship Clerks, Freight Handlers, Express and Station Employees, et al.--

Mr. Merrill, I think you may proceed whenever you are ready.

Michael E. Merrill: Mr. Chief Justice, and may it please the Court, a familiar presence is in the Court today, the Brotherhood of Railway and Airline Clerks.

It was here in Street.

It was here in Allen.

And it now commences its thirty-third year of litigation against employees whom it represents, disputing the use of compulsory fees obtained from those employees.

The Ellis and Failes cases before the Court today--

Unidentified Justice: Do the other unions just defer to you, or--

Michael E. Merrill: --It is sometimes not pleasant to be special, Your Honor.

The Ellis and Failes cases present the record which has eluded this Court in the past, and permit the Court to issue rulings upon these vital issues: first, the extent of the union's entitlement to the use of compulsory dues and fees obtained from dissenting employees; second, the standard of proof the union must meet to justify those charges; third, the remedy for dissenting employees whose fees have been or will be misspent.

In this case, we have a hierarchy of interests, that of the petitioners, the fundamental individual First Amendment rights of free speech and association.

Those rights have existed since the Republic was founded.

On the union hand, we have a recently enacted statutory privilege.

The union's interest is a monetary interest only.

When those two rights are juxtaposed, it is clear that the First Amendment interests of the petitioners must override, absent a compelling governmental necessity for giving sway to the union's property interest.

Unidentified Justice: --Mr. Merrill, are you saying that any time the individual says something that is done to him violates the First Amendment and the person who is violating the First Amendment or alleged to is interested primarily in the financial outcome, that that automatically decides the case?

Michael E. Merrill: Justice Rehnquist, I do not make that assertion.

We do assert, consistent with Abood, that when a union obtaining money under the force of federal statute uses that money in a way that would otherwise impinge upon associational or expression rights, that that must be... must uphold... that use must meet constitutional standards of the First Amendment.

Interpreting the statutory scheme here, the Railway Labor Act, must be done from the standpoint of viewing it with strict scrutiny.

We must ascertain what Congress sought to accomplish in passing this statute.

We have dependable guidance in making that journey in the decisions of this Court, in the Street case, in the Allen case, and in Abood.

In the latter case, this Court has ruled that the First Amendment sweeps broadly in a context of compulsory dues litigation, that it extends to encompass social interests, economic and philosophical interests, literary interests, and, of course, political and ideological interests of employees.

As noted, there must be a compelling justification to intrude upon those rights and those interests.

In addition, using established First Amendment principles, the means selected by Congress to accomplish the governmental purpose must impose the minimum burden on plaintiff's constitutional freedoms.

Now, the specific Congressional purpose authorized and not commanded in the 1951 amendments to this statute was that of obtaining payment for specific services.

It was to pay a union representing employees in a specific collective bargaining context for the acts of the union as a negotiating agent, and for its services in administering that contract, and in handling and prosecuting grievances of employees arising under that contract.

Again, we have many decisions of this Court which make it plain that the procedure used to protect the union's interests in this case, that of obtaining money from the plaintiffs, must be drawn in such a fashion so as not to sacrifice the overriding constitutional interests of the petitioners.

As the Court analyzes this case, it is of extreme importance to remember that the union wears two hats.

The first of those hats, which existed long prior to the occurrence of the statute giving rise to this controversy, is that of a voluntary fraternal organization.

As a fraternal organization, BRAC can do anything it chooses.

It can engage in ideological activity, religious activity, sociological, economic, political activity.

There is no limit other than law upon what it chooses to do, and we note that this Court recognized in Street that unions are inherently ideological and political organizations.

Surely no one would argue that a private citizen can be compelled, consistent with the exercise of his First Amendment rights, that one must support the activities of a fraternal organization in that light.

So, we turn then to the second hat warn by BRAC, and it is wearing that hat when it sought the Congressional purpose, the Congressional permission to obtain money from dissenting employees.

It is the collective bargaining representative hat, and when the unions went to Congress in 1950 seeking permission to compel the payment of dues, they stressed that they were required to perform duties with respect to dissenting employees.

They already enjoyed excellent success in generating voluntary membership support.

As the Court noted from the legislative history, voluntary membership levels of 75 to 80 percent were commonplace by the late 1940's.

Nevertheless, the unions stated to Congress that they were required to provide the duty of fair representation to those who chose not to support the unions, who disagreed with their policies, who wished not to be a part of those organizations.

On the limited basis that those functions had by law to be performed, Congress was persuaded to authorize compulsory payment for those services only.

Unidentified Justice: Weren't there closed shops in the railway industry before the early fifties?

Michael E. Merrill: There were not, Your Honor.

In the 1934 Act, no form of union security was permitted, so it was strictly voluntary unionism from 1934 until 1951.

Unidentified Justice: So this Act didn't follow the same path as the National Labor Relations Act.

Michael E. Merrill: That is correct, and I might point out that the railway unions had never found compulsory unionism to be essential to their well-being because at the time of the 1934 statute, only one such organization had compulsory membership provisions in it.

So, we see that the collective bargaining representative hat is that which Congress addressed in the statute, and it is a confusion of those two roles that BRAC urges upon this Court and successfully urged upon the Ninth Circuit.

I point out that not only did BRAC provide a limited statutory role with respect to petitioners, it did so grudgingly, treating them as objectives of collective bargaining.

Petitioners were not entitled under this union's constitution and practices to attend meetings, to vote for officers, to serve as grievance representatives, to vote for grievance representatives.

Even with respect to the fraternal activities, which this union seeks to compel payment for, petitioners were excluded.

Agency fee payers did not receive union publications.

They were expressly made inelligible for death benefit fund participation.

Only at a later time, when it became apparent that the union might not be able to continue collecting for those functions, after plaintiff's motion for summary judgment had been filed, did this union generously say, oh, well, we meant to make these benefits available to all.

So, we see that petitioners were treated in a very limited sense by BRAC, just as they were viewed by Congress in a very limited sense.

The Ninth Circuit majority decision has interpreted this statute from the perspective of a financially acquisitive union, not from the perspective of Congress, and not from the perspective that this Court described in the Street case.

If one is to read the statute as did the Ninth Circuit majority, Congress' objective was to maximize union power in general, and to legitimize charges for any union fraternal activity bearing any conceivable, arguable relationship to the function of the union in the realm of collective bargaining.

Unidentified Justice: That is really not the test they stated, is it, any conceivable, arguable relationship?

Michael E. Merrill: Their test is stated that it is anything that is done by the... the work of the union that is germane to the realm of collective bargaining, a test we have not seen in any other case before or since.

Unidentified Justice: But it is quite a different test than the one you just stated.

Michael E. Merrill: In practice, Your Honor, I believe that it is exactly the test that I stated.

If one looks closely at the range of activities supported through the compulsory fee by BRAC, one finds no limits other than partisan political activity.

That is the only sphere safeguarded by the trial court judgment as modified by the Ninth Circuit majority.

If one is to take this expansive statutory interpretation, it assures us that we will run roughshod over constitutionally guaranteed rights, and destroy the painstaking efforts of this Court to save the constitutionality of the statute.

Such a construction also runs counter to Congress' intent, because Congress did not favor unions over employers.

Unidentified Justice: Well, you don't think we've decided this issue before, do you?

Michael E. Merrill: The issue before this Court has not been decided other than to the extent--

Unidentified Justice: We have left it open.

Michael E. Merrill: --Except to say--

Unidentified Justice: These kinds of things.

Michael E. Merrill: --The antecedents of the decision are certainly present in Abood, Justice White, when it found that the use of dissenters' dues over their objection for ideological--

Unidentified Justice: Well, we couldn't have left it open if it is so obvious that it is unconstitutional.

Michael E. Merrill: --I am prepared to agree.

Unidentified Justice: Well, I know.

We left it open.

Michael E. Merrill: Well, certainly the issues before the Court are presented on the appropriate record for the first time today.

As I mentioned, in 1951, Congress did not enact a statute to favor unions over employees, except in a very limited sense.

It did not favor strong unions over weak unions.

It did not favor unions over employers.

The Railway Labor Act, neither in the 1951 amendments nor in its other provisions, does not allow, does not protect, and does not regulate union activities in general.

Unidentified Justice: Mr. Merrill, are you going to address yourself to the so-called Paragraph 22 items one by one at some point during your oral argument?

Michael E. Merrill: Time does not permit me to address them individually.

I will be happy to respond to any questions.

If there is one or more in particular that Justice Rehnquist inquires about, I would be pleased to address that.

Unidentified Justice: What about the annual meeting?

Michael E. Merrill: That would be the quadrennial convention, Justice White?

Unidentified Justice: Yes.

Michael E. Merrill: I can address the convention, and I think my comments will apply to the other Paragraph 22 activities in question.

The statute was intended to and must be construed to compel payment only for union functions which the union must provide, which the union has a duty to provide as the collective bargaining representative.

There is nothing in the Railway Labor Act and nothing in Section 211 thereof that requires the union to hold a convention.

It chooses to do so as a fraternal organization.

It does so in part because of an extraneous federal statute which does require the election of officers.

Unidentified Justice: Part of your response to Justice White suggests to me that you view our previous cases in the Railway Labor Act as saying that the union has to justify any charges it makes to your members, rather than saying that your members must make some sort of a showing to avoid paying what is otherwise the normal agency fee.

Michael E. Merrill: I believe that I agree with the gist of Justice Rehnquist's remarks.

The requirement remains that dissenting employees voice an objection to the payment of compulsory dues and fees, and they did in this case.

Each petitioner registered a specific written objection to the use of any dues and fees, but particularly for anything other than direct collective bargaining expenses with Western Airlines.

Unidentified Justice: What about social activities?

Now, I can see your point that they probably have virtually nothing to do with collective bargaining activities, but I can't for the life of me think why they involve any First Amendment considerations either, so it seems to me there the question is pretty clear.

On whom do you put the burden of the argument, so to speak.

Michael E. Merrill: Well, certainly the Court in Abood recognized that the First Amendment freedoms encompass union social activities.

It is the functioning of a fraternal--

Unidentified Justice: In Abood, how did it recognize that?

Michael E. Merrill: --It recognized that when it listed... when it rejected the union argument that only political and ideological activities of the union were safeguarded by the First Amendment, and the Court said, we have never held that the First Amendment does not also cover social, literary, artistic, philosophical, and religious activity.

Unidentified Justice: Well, you think the Court in Abood meant that the First Amendment covers a dance in the union hall?

Michael E. Merrill: I certainly do.

To the extent that the statute authorizes this union to establish a fraternal organization which undertakes activities of a fellowship nature and a direct association of persons which is not favored, which is opposed by petitioners, I think that the First Amendment certainly does encompass that type of activity.

Unidentified Justice: Just how would you go about connecting up the First Amendment with what you say are your clients' rights here?

Michael E. Merrill: I would do that by saying, as the Court did in Street, when it placed a strained construction, according to one Justice, upon the statute, and it said only those duties under the Railway Labor Act can be the subject of charges.

There is no duty of an exclusive bargaining representative to hold the dance--

Unidentified Justice: Okay.

That is a permissible argument from the point of view that Congress intended only very narrow things to be permissible under the agency fee, but you are saying that there is a First Amendment argument in support of that exemption, that somehow your clients' First Amendment rights are impinged on when they are required to put a part of their agency fee to support a band at a union hall dance, and I can't for the life of me see how any case we have ever decided supports that proposition.

Michael E. Merrill: --I believe that the antecedents of that proposition are present in Abood when it said that there must be a governmental necessity for the extraction of the fees.

Unidentified Justice: That isn't necessarily a constitutional argument.

You could win your case without even mentioning the Constitution.

I mean, logically you could.

It would be a question of statutory interpretation.

Michael E. Merrill: That is true.

Unidentified Justice: You could say that in order to justify any fee, you must show... somebody must show that Congress anticipated that the non-union employees could be charged this much to cover these things.

Michael E. Merrill: That is correct.

Unidentified Justice: And it wouldn't have to be anything to do with the Constitution.

Michael E. Merrill: We can win the case, but we cannot obtain the appropriate remedy, because the use of these dissenters' fees has been expended on activities of the union which violate their First Amendment rights, so the remedy cannot--

Unidentified Justice: Does it violate their rights in the sense that they pay for it but they are not permitted to take part?

Is that your thesis?

Michael E. Merrill: --It is not.

That is not my thesis.

It is incidental that they were excluded from those things.

It is that they may not be forced to support them under any circumstances.

Unidentified Justice: What if the statute didn't contemplate your clients being charged for these kinds of things?

Why couldn't they have a remedy for it?

The union extracts from them something that the statute does not authorize.

Now, what is... why do you need the help of the First Amendment?

Michael E. Merrill: Because the use by the union inflicts more than a monetary injury.

There is the intangible injury to constitutional rights which cannot be unspent, if the Court will.

If the union extracts--

Unidentified Justice: Well, what kind of a remedy do you want?

Michael E. Merrill: --We want--

Unidentified Justice: Do you want somebody to be whipped, or what?

0 [Generallaughter.]

Michael E. Merrill: --Given the history of intransigence of this union and its approach to the plaintiff's clients--

Unidentified Justice: What do you want?

What kind of a remedy do you want?

Michael E. Merrill: --We would like--

Unidentified Justice: Let's assume you get your money back because of a statutory violation.

Then what do you want?

Michael E. Merrill: --We would like to have the Ninth Circuit's delineation of chargeable activities set aside--

Unidentified Justice: Well, you could do that under the statute if you are--

Michael E. Merrill: --That is correct.

Unidentified Justice: --Then what?

Michael E. Merrill: The case is to be remanded to the trial court, and in the trial court BRAC should be required to prove for the first time its costs of collective bargaining with Western Airlines, and to prove those costs by clear and convincing evidence.

Unidentified Justice: So what you want as some remedy for the future, some clear, sharp remedy for the future.

Michael E. Merrill: We can only have a remedy for the future.

Of course, petitioners would be entitled to their damages for amounts paid in the past, in accordance with the proof to be shown at trial.

Unidentified Justice: Well, I don't know why you couldn't get all that under the statute, if you are right in your construction of the statute.

Michael E. Merrill: Well, in addition, we would request that this Court instruct the District Court to enter a judgment declaring that the union's rebate procedure is constitutionally inadequate.

Unidentified Justice: Mr. Merrill, since the respondent union was decertified in 1980, why is the issue concerning the rebate plan not moot?

Michael E. Merrill: The issue is assuredly not moot.

No proof was presented as to union expenditures after December 1st... I'm sorry, December 31st, 1977.

The union collected full dues following that date until late July, 1980, which was following the trial and following the judgment.

So there is unquestionably a period of time during which the only supposed remedy is the operation of the dues rebate procedure prescribed by the union, and I point out that it is a rebate procedure.

In the AFL-CIO's brief, the terminology is used for the first time that it's a dues deduction procedure.

It is not.

It is a rebate procedure.

Unidentified Justice: Well, don't you have a statute of limitations problem?

Ten years?

Michael E. Merrill: I believe that there is no statute of limitations problem at this time.

Unidentified Justice: Well, you said you wanted a rebate.

That means money, doesn't it?

Michael E. Merrill: The damages claim was brought virtually contemporaneously with the extraction of the funds.

Unidentified Justice: Back into 1970?

Michael E. Merrill: It was brought... the cases were first filed in March, 1973.

Unidentified Justice: Well, it would be all right then.

Mr. Merrill, was there any issue in the District Court as to what portion of the publication expenses were chargeable to the dissenters?

Michael E. Merrill: In the motion for summary judgment which led to the Paragraph 22 ruling, we pointed out that not all publication expenses were per se deemed to be non-chargeable.

But the union never attempted at any point to establish the amounts of money attributed to publications which were claimed to be collective bargaining expenditures.

That is the simple reason for the inclusion of publications, that and the fact that the trial court had an extensive stack of union publications to review, and they are indeed, as this Court may know from its review of the record, overwhelmingly political and ideological.

Unidentified Justice: Mr. Merrill, was the union decertified entirely?

Michael E. Merrill: It was.

Unidentified Justice: It is now not the collective bargaining agency for any Western employees?

Michael E. Merrill: I believe that to be true.

It is certainly not the collective bargaining representative for any of the craft or class which included petitioners.

That decertification occurred post-judgment, and of course the union could be recertified if it were to conduct another campaign and be voted in by a majority of the employees there.

If I may, Mr. Chief Justice, I will reserve the remainder of my time for rebuttal.

Chief Justice Warren E. Burger: Very well.

Mr. Gold.

ORAL ARGUMENT OF LAURENCE GOLD, ESQ., ON BEHALF OF THE RESPONDENTS

Laurence Gold: May it please the Court, I think it would be helpful in light of the discussion to this point to state our understanding of the holdings of this Court on this issue to this point and our understanding of the issues that those holdings leave open.

The issue presented here has been before the Court in one form or another four times, in the Hansen case, the Street case, the Allen case, and the Abood case.

Those cases in our judgment establish one point in favor of the petitioners.

That point is the following, and I would like to quote the Court's opinion in Abood at 431 U.S. 234.

"The appellants argue that they fall within the protection of certain cases because they have been prohibited not from actively associating, but rather from refusing to associate. "

"They specifically argued that they may constitutionally prevent the union spending of a part of their required service fees to contribute to political candidates and to express political views unrelated to its duties as exclusive bargaining representative. "

"We have concluded that this argument is a meritorious one. "

Thus, what has been established to the objecting employee's or petitioner's benefit to this point by the cases decided by this Court is that on statutory grounds under the Railway Labor Act and on constitutional grounds with regard to public employees, unions may not spend exacted fees for contributions to political candidates and to express political views unrelated to the union's duties as exclusive bargaining representative.

Nothing more has been established in the cases to the petitioners' benefit.

Of equal importance, it seems to us, the Hansen Court upheld the constitutionality of the union shop as such, and that holding was reaffirmed again in Street and in Allen and in Abood, and while Mr. Merrill says that the Ninth Circuit created a new standard for determining the scope of the union shop and of required payments to unions, again, I beg your indulgence to quote two short passages from Hansen which are set out at Pages 23 and 24 of our brief, the red brief, and appear in the original 351 U.S. at 234, I believe, and 238 1st.

The Court in the Hansen opinion said the following:

"The financial support required relates therefore to the work of the union in the realm of collective bargaining. "

That is exactly the phrase decried by Mr. Merrill as no standard at all.

And the Court continued,

"No more precise allocation of union overhead to individual members seems to us to be necessary. "

Then, on 238, the Court stated its holding--

"We hold that the requirement for financial support of the collective bargaining agency by all who receive the benefits of its work is within the power of Congress under the commerce clause and does not violate either the First or the Fith Amendment. "

Now, to this point, the Court has not stated what is encompassed in the area germane to collective bargaining or germane to the work of the union in the realm of collective bargaining, nor has it defined in particular terms what it is that is political activity or political or ideological activity unrelated to collective bargaining, and the phrase "unrelated to collective bargaining", a conditioning of the protection accorded to petitioners herefore, would hardly have been necessary if every political and every ideological act of the union was unconstitutional if support under the union shop.

And this case, we believe, is a case which on certain basic categories of union expenses, particularly the expenses of national unions, does present the occasion for the Court to answer that question, and to draw or at least to begin the job of drawing that line.

In doing so, we would begin by stressing the following point.

Both of the courts below, the District Court and the Court of Appeals, concluded that the union for the years in question here, 1975 and forward, has met its obligations stated in Street and Allen and Abood to identify and to free objecting employees from any obligation to support the union's political and ideological activity unrelated to collective bargaining.

The District Court's findings to this effect are set out in our brief at Pages 9 to 10, again, the red brief, in full.

We would also call the Court's attention to the joint appendix, Pages 345 to 358 and 421 to 459, which are the trial... which are portions of the trial proceedings and the union's internal documents establishing the system of identification and of deduction.

It provides that all direct and indirect partisan political expenditures are not charged to an objecting employee.

All direct and indirect legislative lobbying expenditures are not charged to an objecting employee.

All dues to affiliated organizations, such as the AFL-CIO and the Canadian Labor Congress, are not charged to objecting employees, and all contributions to other organizations, such as the Red Cross, the NAACP, and other organizations in the examples given in the union's internal documents are not charged to objecting employees, and the union has gone to the extent of requiring a detailed contemporaneous accounting of time and effort that goes into these activities.

We believe that the District Court was not only right in this, but that the union has gone well beyond the requirements of law in this area of defining political and ideological activity.

Unidentified Justice: You haven't mentioned the social particularly.

Laurence Gold: No, Your Honor, because the union defends its right to charge for social activity as that term is used here.

As the Court of Appeals points out, the social activities are activities either open to members or anyone else who comes in connection with meetings or open to the union's employees, and are a normal expense of the same kind that any organization undertakes--

Unidentified Justice: What about chartering a steamer on the Mississippi for $5,000 the week before the union elections?

Where do you think that falls?

Laurence Gold: --If it were chartered by one candidate or the other, it would be--

Unidentified Justice: No, the union, the union is paying the bill.

Laurence Gold: --It would be... and the union paid the bill, it would be a violation of the Landrum-Griffin Act, but putting that aside, we believe first of all, and I will turn to this... I will turn to this by way of responding to your question, we believe first of all that the statute contemplates at least normal union expenditures for such social expenditures, and that as Justice Rehnquist said, we cannot understand an argument based on the Constitution insofar as limits on the statute are concerned.

Unidentified Justice: Mr. Gold, my recollection is that Abood expressly left open the question as to social activities of the union.

Laurence Gold: It did indeed, Your Honor.

And I believe that the question is entirely open.

We are arguing here that on analysis, as a matter of statutory interpretation, such expenditures are within the area permitted to be charged.

At least the kinds of expenditures which are on the record here, which as the Court of Appeals noted are de minimis and are part and parcel of the union's activities either in connection with collective bargaining or union meetings and the like.

We simply don't have any expenditures, we want to make it plain, of the kind that the Chief Justice was interrogating me about.

Unidentified Justice: I suppose they are de minimis, but if you did have that boat chartered to go down the river, would non-union members be invited to go also?

Laurence Gold: The union's position in this case is that objecting employees cannot be charged for activities that are closed to them.

Unidentified Justice: So they could go if they wished to?

Laurence Gold: Yes.

Unidentified Justice: They may not be welcome.

Laurence Gold: No, they are welcome.

0 [Generallaughter.]

Unidentified Justice: What about the quadrennial meeting?

Laurence Gold: The quadrennial meeting, Justice White, was one of the expenses that the proponents of the union security provision said expressly would be covered by the union's security provision.

The language of the statute was changed to assure--

Unidentified Justice: That is one of the activities, though, that is not open to--

Laurence Gold: --Well, it is not open to anyone who isn't elected.

One point I ought to make in terms of my response to that question is that under the statute that Congress wrote, no employee can both be barred from the union under equal and objective standards of admission and charged under the union shop, so what you have is individuals who make a judgment that they do not want to participate in the union.

What Congress was doing in the union shop provision was taking away the economic incentive to opt out in that way.

Congress was saying, if the union will permit you in, and if the union represents you, then you have to bear your proportionate share of the costs, and Congress added a proviso that said, if the union won't let you in in the first place, then you can't be charged.

Unidentified Justice: --Well, non-members can't vote at this point.

Laurence Gold: No, but they can be members.

The choice--

Unidentified Justice: They can be members, but if they aren't members, they nevertheless can be charged--

Laurence Gold: --That's--

Unidentified Justice: --even though they can't take part in it.

Laurence Gold: --Even though they have made the choice not to--

Unidentified Justice: So it is different from the river boat.

This is one activity that they can be charged for but they cannot participate--

Laurence Gold: --That's correct.

Unidentified Justice: --They are not even eligible for the election.

Laurence Gold: They are not eligible to engage in the political life of the union if they choose--

Unidentified Justice: So in general you think that employees can be charged the expenses that a union finds necessary for it to stay in existence as a union, wholly aside from whether they do any collective bargaining.

Laurence Gold: --No, the--

Unidentified Justice: I mean, if you decide whether these expenses are remotely connected to collective bargaining?

Laurence Gold: --No, I--

Unidentified Justice: Other than through the fact that the union has to spend this kind of money to even stay in existence.

Laurence Gold: --Well, Congress took a very practical judgment.

Unidentified Justice: Well, Mr. Gold, wasn't that all wrapped up in the so-called free rider concept?

Laurence Gold: Yes--

Unidentified Justice: What are the limitations on that?

Laurence Gold: --To us, the limitations on the free rider concept are the limitations the court stated in Hansen, and stated again in Street, and stated again in Allen and Abood.

The record, and I don't want to say who has to establish it, because that's a separate question of by what standard, the record has to show that the union activities are germane to its role as an exclusive bargaining representative, and we have on certain items, we have Congress's judgment on what Congress believed was germane or not, and in one of those specific enlightenments, Congress... it is plain from the legislative history that Congress believed that the expenses of a union to govern itself, a union which has been selected as a collective bargaining representative to govern itself, and to continue its activities, is an expense that would be covered by the union shop provision.

Unidentified Justice: So how often does a union have a meeting?

I suppose it differs.

Laurence Gold: Different unions--

Unidentified Justice: They may have them every month, and the expenses of doing that... and I suppose unions pay the expenses of having their own elections.

Laurence Gold: --Yes, Your--

Unidentified Justice: And all of those expenses you say Congress specifically anticipated could be allocated in part to non-members.

Laurence Gold: --That's right, and Congress made that judgment, as Justice Brennan has stated.

Congress was seeking to eliminate the problem of the free rider, and certain representations were made to Congress about what the nature of that problem was.

The nature of the problem was that individuals at that point could choose not to become members, and then not to pay the costs of the union.

The union, on the other hand, could not discriminate against those individuals in employment, could not get preferences by reason of other Congressional enactments, could not have those individuals removed from the job, nor could the union negotiate terms and conditions of employment which were less beneficial to those employees.

Unidentified Justice: What about death benefits?

Laurence Gold: Death benefits are a substitute for and a part of the collective bargaining system.

Some unions go to the employer and they sit down at the collective bargaining table and they say, we want you to provide each individual a $200 benefit or $500 mortuary benefit to help defray the costs of a funeral.

Other unions have historically bargained for an extra two or three cents in the individual's pocket, and also provided out of dues that death benefit.

Unidentified Justice: So these death benefits apply to everyone, not just union members.

Laurence Gold: They have to, we believe, to be chargeable to the objecting employee.

In other words, the political life of the union, someone either is in or he's out, but for--

Unidentified Justice: Why isn't that a discrete benefit, that if somebody who is not a union member objects to being covered could be left out and not charged for it?

It just doesn't make sense.

Laurence Gold: --It is discrete in the sense that you can, and I would say in contrast to governance expenses, to expenses of internal communication and so on, imagine a union which is a functioning national union and that meets Congress's purpose in enacting the union shop, which was to provide for self-adjustment of disputes between two well organized forces.

You can imagine a union which did not provide death benefits, and that would be able to function as a union in that system.

On the other hand, we do know again from the give and take in the legislative process that Congress was specifically told that certain unions provide a death benefit system rather than negotiating for the death benefits directly with the employer, and that Congress indicated an intent to include death benefits.

Finally, it seems--

Unidentified Justice: Well, certainly not by any very clear language, Mr. Gold.

Laurence Gold: --Justice O'Connor, in those terms, the language is extraordinarily clear, because it requires the payment of dues by everyone, whether or not they are a member, and it was against a background where Congress was very fully advised of how unions were going to use that money.

So, if this were not a case which arises against the background it does, and the only issue this morning was who wins under the clear language, I think we would be in a very strong position, but we do see this case as one where the indications are that Congress intended to include death benefits, and that there is sound reason for believing that the provision of death benefits is part of the union's activity in dealing with the wages, hours, and terms and conditions of employment of workers.

It is one of several ways it could be done, and we believe that it is in that sense germane to collective bargaining.

Secondly, here, as opposed to the situation where you are talking about union political activity, there simply does not seem to us to be any constitutional counterweight on the other side.

We find ourselves with one strong point for us and one point which is weaker.

One, in no sense is this integral to collective bargaining as internal governance and communication and organize.

Secondly, it nonetheless seems germane to collective bargaining.

The legislative history indicates that Congress intended it to be included in the union shop obligation, and the petitioners are bereft of a constitutional argument in this regard in our judgment.

So--

Unidentified Justice: Well, Mr. Gold, is there some item that you can imagine other than the direct support of candidates or paying for literature or other kinds of support for purely political activity?

Is there any kind of a union expenditure that you would say couldn't be charged to non-members?

Laurence Gold: --Well, we say--

Unidentified Justice: Can you think of one on your position, or is it just that bright line, politics... if it is politics, no; anything else, yes?

Laurence Gold: --No, there is a... we recognize the cases to this point as stating a second limitation.

There's politics and there's also ideological activity unrelated to collective bargaining.

Unidentified Justice: Name one.

Laurence Gold: Forwarding a program in favor of the Equal Rights Amendment.

Unidentified Justice: Get out the vote drive.

Laurence Gold: Activities of that kind.

And unions do engage in such activities, and as we understand the Court's cases to this point, it is already established that we can charge for that.

Unidentified Justice: What if the union runs a... likes to make money on the side, so it has got some money, and it goes into the real estate business, or it goes into the insurance business, and it needs to... and it uses the dues in part to pay the expenses of a losing business venture?

Laurence Gold: I would think that is not germane to collective bargaining.

Unidentified Justice: Yes.

So it is just not politics.

Laurence Gold: Well, it is... we know that it is politics, and we know that it is ideological activity unrelated.

We are not contesting that.

With... Aside from that, what we are arguing is that the test is germane to collective bargaining, and not everything unions do are germane to collective bargaining.

Unidentified Justice: For example, Mr. Gold, I take it the purchase of an automobile with a local's funds for the use by the president and union business would be germane, would it?

Suppose it was a Rolls Royce.

Laurence Gold: I... One of the issues before Congress by... created by the opponents was that there ought to be a system of limiting union expenditures within the proper area.

Congress didn't agree with that.

After all, unions have to go and get dues from their members.

Very few members are willing to pay for Rolls Royces, and in that sense it seems to me that Congress made both a proper--

Unidentified Justice: What if it were bought over the objection of a single non-union member, and it was a Rolls Royce?

You say he should lose?

Laurence Gold: --I am forced to say that under the statute he loses, and that he doesn't have any possible constitutional argument.

Now, whether Congress was wise in that regard--

Unidentified Justice: Mr. Gold, wouldn't he at least have the same argument that a member might have to extravagant use of union funds to take river boat--

Laurence Gold: --Oh, yes, there's Title 5 of the Landrum-Griffin Act, which provides that union officers must hold union money as a fiduciary, and--

Unidentified Justice: --So he would be a fiduciary in the same sense that a member would in that kind of challenge?

Laurence Gold: --Congress didn't write the statute to give people who choose not to be members that cause of action, but the cause of action is there if Justice Brennan's example is changed in one respect, that the union does it over the objection of one union member.

Congress has provided a cause of action.

Congress could provide a cause of action to everyone who is represented if Congress chooses to do so.

Unidentified Justice: Well, you acknowledge that a non-member would have a cause of action if they gave money to a political party?

Laurence Gold: Yes.

Unidentified Justice: Why wouldn't they have precisely the same cause of action for wasting union funds?

Laurence Gold: They could in theory, and Congress could provide it to them, but my argument, Justice Stevens, is that the statute doesn't give it to them, and Congress is not constitutionally compelled to give it to them.

Congress to this point has given two different remedies, depending on membership status.

I would like to--

Unidentified Justice: Mr. Gold, may I interrupt?

Laurence Gold: --Yes.

Unidentified Justice: With respect to the publications of the union, am I right that the union does not charge for the contents of publications that relate to political activities?

Laurence Gold: That is correct, Your Honor.

Unidentified Justice: I think your brief states that.

Laurence Gold: That is correct, Your Honor.

While--

Unidentified Justice: How does the union go about making the accounting judgment as to what the cost of political activities of--

Laurence Gold: --By the process of counting lines and dividing the cost of the publication, and if--

Unidentified Justice: --It is a mechanical process?

Laurence Gold: --Yes.

If the article is an article to get out and vote for the union's endorsed candidate, the union counts the lines of... devoted to that versus the lines in the total issue and divides the total cost.

That is what this union does and what the lower courts approved.

Unidentified Justice: A minor question, but how do you deal with advertisements, just... where there are no lines?

Laurence Gold: I am not positive what is true here, but most union publications either do not accept advertisements or have a rule like Layman versus Shaker Heights, and they don't take ideological advertisements, one or the other.

In whatever time remains to me, I do want to stress the point that what Congress was doing in adopting the union shop was not, as Mr. Merrill says, providing a system whereby the unions would provide a certain narrow service and then bill people in the union unit.

Rather, Congress understood, and everything in the legislative history shows that Congress understood that the free rider problem was the refusal of objecting members after the majority had selected a representative to support, in George Harrison's words, the primary union spokesman, the collective bargaining agency from whose existence and activities they derive great benefit.

Unidentified Justice: Mr. Gold, let me ask you one... Do you think there is a rebate issue left in this case?

Laurence Gold: No, Your Honor.

We argue that there is no rebate issue left, not for the reason that Justice O'Connor gave, which I must say I just hadn't thought of, but because the District Court in this case didn't simply approve the union's rebate plan.

The District Court required that based on Year 1, the union deduct--

Unidentified Justice: It's a deduction, yes.

Laurence Gold: --deduct from the next year--

Unidentified Justice: Probably inexact.

Laurence Gold: --It has to be inexact, because one can never foretell the future, but the point is that the union cannot simply take the money and use it.

The union must under the District Court's order after it figures, say, the 1975 rebate, which was 4.68 percent, must deduct for 1976 4.68 and then make up any difference.

Unidentified Justice: Well, the union didn't... Assume you lose on these items.

You don't object independently to the District Court's way of solving the problem?

Laurence Gold: No, Your Honor, we do not, and we did not appeal from that part of the order.

We do not object.

Unidentified Justice: Well, Mr. Gold, the Court of Appeals said that judgment would be entered in favor of respondents.

Now, did that vacate the District Court modification of the rebate plan?

Laurence Gold: No.

We didn't appeal from that aspect.

The District Court... In other words, the District Court ruled that insofar as we had provided an internal system for segregating, allocating, and accounting for political and ideological activities, we had met our obligations, and then added this additional condition.

We didn't appeal from that.

And we accept that part of the District Court's opinion, and we told the Court of Appeals we didn't think that was in the case.

We are saying that here, and we are ready to abide by that, because we think what the District Court did in that regard was correct.

Unidentified Justice: Mr. Merrill, do you have anything further?

You have seven minutes remaining.

ORAL ARGUMENT OF MICHAEL E. MERRILL, ESQ. ON BEHALF OF THE PETITIONERS -- REBUTTAL

Michael E. Merrill: May it please the Court, I would point out with great emphasis that Congress was not importuned by the unions because... to grant a privilege to obtain moneys from dissenting employees because of its fraternal activities.

It complained of free riders in the collective bargaining sense.

It did not complain that they were free riders because of its fraternal organization.

And the authority for the petitioners' point of view is contained in the Street decision at Page 767, when it is stated that it is abundantly clear that Congress did not abandon the policy of full freedom of choice embodied in the 1934 Act, but rather made inroads on it for the limited purpose of eliminating the problems caused by the free rider.

Now, it is without question, we submit, that Congress could not command private citizens to belong to a privately administered welfare program, which is what the BRAC death benefits program is described as by BRAC officers, a welfare program.

Furthermore, we can establish that the union was a free rider on the petitioners in this case, not the converse.

The petitioners in the Ellis case were charged 100 percent of voluntary dues, and were told they were ineligible for death benefits, ineligible for publications, ineligible for the collective bargaining activities for which payment was extracted and for which payment is still sought.

So, if there is an equity at work in the--

Unidentified Justice: Mr. Merrill, let me just be sure I understand.

Do you now contend that the death benefit and the publications are administered in a discriminatory fashion?

Michael E. Merrill: --Not presently.

It was following our filing of the motion for summary judgment that the union modified its policy.

However, it is questionable as to what the modification consisted of, because the 1975 quadrennial convention that followed this particular issue having come up in the trial court again specifically raised agency fee payer eligibility for death benefit, and they were again found to be ineligible.

It was a contrary--

Unidentified Justice: But you are not now challenging it?

I mean, you say maybe you should have challenged it, is what I gather you are saying.

Michael E. Merrill: --Well, it truly wasn't important, because we contend that--

Unidentified Justice: I mean, it seems to me it is a very great difference between an issue as to whether death benefits can be charged when they are administered in a non-discriminatory neutral fashion, and all you have to do is be an employee on the one hand, whereas one that said you have to be a union member would raise quite a different question.

Michael E. Merrill: --It is our primary position that the death benefits program is not chargeable.

Incidentally, we have pointed out--

Unidentified Justice: Even if neutral?

Michael E. Merrill: --That's correct.

Unidentified Justice: And it is neutral, isn't it?

Michael E. Merrill: It is presently neutral.

Unidentified Justice: Yes.

Michael E. Merrill: And I might point out, Justice Stevens, in response to your question about waste, as to whether or not a petitioner could file a claim under Title 5 of Landrum-Griffin, Mr. Gold misinterpreted the statute.

Non-members of a labor organization have no standing to file such a claim.

Now--

Unidentified Justice: I think that's exactly what he said.

Michael E. Merrill: --Then I misunderstood him.

No one has commented at any length about organizing, but we see that as one of the most fundamental injuries worked upon plaintiffs as having had their wages extracted for use in that totally ideological program of the union.

Here we have the marketing of the union as a fraternal organization and as a collective bargaining representative when the petitioners don't want to be represented by this union.

Why ought they to pay for this union to foist itself off on other groups of employees?

The harder question comes when we look at the full gamut of organizing expenses, rating expenses, which are present in the record in this case, and the Constitution say that petitioners who do not wish to be represented by this union ought to be made to pay for this union to weaken and then oust another union, which was attempted in this case, and the amounts of money are most significant.

Unidentified Justice: How does that hurt the individual that puts the money up?

Michael E. Merrill: Well, it takes his funds and expends them--

Unidentified Justice: It is paying for his political beliefs, doesn't it?

Michael E. Merrill: --Well, it certainly--

Unidentified Justice: Isn't that about all it does?

Michael E. Merrill: --It is a sweeping ideological intrusion.

If he does not believe in being represented by BRAC, it can scarcely be imagined that he ought to pay for them to force themselves on other groups of employees, which is what organizing has accomplished.

Unidentified Justice: And that hurts him?

Michael E. Merrill: It hurts him very deeply, as the records in this case--

Unidentified Justice: It hurts him--

Michael E. Merrill: --point out.

It hurts him in the pocket.

Over $100,000 was spent in three years, and they did not produce one new member by the union's own admission.

Now, I might point out that contrary to what--

Unidentified Justice: --Well, it would be even worse if they had, I gather.

0 [Generallaughter.]

From your point of view.

Michael E. Merrill: --The point is--

0 [Generallaughter.]

--that he is swept up financially and ideologically if he is forced to pay for union organizing activity, whether it be a rate or straight out organizing.

Thank you very much.

Chief Justice Warren E. Burger: Thank you gentlemen.

The case is submitted.

Featured:

Abood v. Detroit Board Of Education - Oral Argument

Sun, 08 Aug 2010 17:07:47 +0000

Case:

Abood v. Detroit Board Of Education

Media File:

75-1153_19761109-argument.mp3

Related Transcript:

75-1153_19761109-argument.xml

Transcript:

Argument of Sylvester Petro

Chief Justice Warren E. Burger: We will hear arguments next in 1153, Abood v. Detroit Board of Education.

Mr. Petro, you may proceed whenever you are ready.

Mr. Sylvester Petro: Mr. Chief Justice and May it please this Court.

I represent the appellant, dissident school teachers in Detroit, who have declined willingly to pay dues to the appellee Union.

The appellee, Board of Education of Detroit empowered by the Michigan Public Employment Relations Act had agreed with the appellee, a Federation of Teachers to forge the union henceforth to discharge the appellant teachers if they refuse to pay agency fees to the Union.

In other words, what we have here is what is known as an agency shop contract; a contract which makes the payment of fees normally equivalent to Union dues, a condition of employment.

The extraordinary aspect of this case of course is that this condition of employment is a condition not of private employment, but of public employment, an employment by a subdivision of the state of Michigan.

The teachers brought suit in the Michigan courts contending that the Board’s continuing threat of discharge if they fail to pay dues to the Union, constituted an outright per se indefensible violation of their rights under the First and Fourteenth Amendment.

They went further and alleged that the Michigan statute empowering the Board to reverse to condition employment was constitutionally overbroad as well.

The case is here because the highest Michigan court to pass on the issue, the Supreme Court of Michigan having denied an appeal.

While indeed it handed down a decision which is not very easy to state clearly, nevertheless seem to have dismissed out of hand.

No question whatsoever about it; those aspects of the complaint which alleged per se an indefensible unconstitutionality.

In what maybe the one clean-cut holding of the case, the Michigan Court of Appeals did say that the Michigan Para, Section 10, authorizing the agency shop was overbroad, in so far as it had to be construed according to the Michigan Court of Appeals as authorizing the Appellee Union to use the agency fees, let us say, in anyway the Union saw fit, subject of course to its own constitution and bylaws.

There is language in the opinion of the Michigan Court of Appeals to the effect that it is well recognized that the Union, in this case, engages in political action.

The statute does not confine the Union’s use of the exact of agency fees to only those things which we may call collective bargaining, but permits the use of the fees for the times of political conduct in which the Union normally engages.

Now, while holding that the statute did permit the Union to use the agency fees for purposes other than collective bargaining, including political purposes, the truth of the matter is that the court did not say that the statute was in consequence thereof unconstitutionally overbroad.

It is virtually impossible to avoid drawing the inference that if say we had unable to obscure the court to the wall and force it to make a comment one way or the other on this issue, it would have said, yes, the statute is unconstitutionally overbroad.

As a great judge once said of another case, the opinion is instinct with that commitment from the Michigan Court of Appeals.

Still in the face, there is broad suggestion of unconstitutional overbreadth.

The Michigan Court of Appeals affirmed the dismissal of the teachers’ petition for injunctive relief.

It affirmed the dismissal of the teachers’ case completely for that matter.

Its idea seem to be that if somehow the teachers managed to get it to commit itself on the unconstitutionality of the statute, they should proceed by an action of one kind or another thereafter to recover from the Union the monies previously exacted and used by the Union unconstitutionally.

Justice William H. Rehnquist: Well, it said in so many words the teachers would have such an action, did it not?

Mr. Sylvester Petro: I do not think you can say that, Mr. Justice Rehnquist.

What it said is that the statute could violate the teachers’ rights.

Justice William H. Rehnquist: I thought it said if the Union choose to spend monies that it had collected for political activities, the Court of Appeals described political activity, then an action would lie in Michigan Courts against the Union to recover.

Mr. Sylvester Petro: That is what makes the case so extraordinarily difficult to deal with.

When the Court says it is not, that this statute is unconstitutionally overbroad, but says instead the statute could violate the teachers’ rights, all it has given as is another lawsuit.

Justice William H. Rehnquist: Well, if they thought that they are giving you another lawsuit was a sufficient cure of the over breadth, if there was any, I take it?

Mr. Sylvester Petro: We have to win on the over breadth argument all over again.

Justice William H. Rehnquist: I would not think so.

You are talking mostly just about nomenclature rather than about the actual issues.

Mr. Sylvester Petro: Well, our problem is that we were dismissed and we think that we were dismissed in spite of the fact that we have what the Michigan Court of Appeals very largely implied was a good constitutional claim.

Now, if you are correct, Justice Rehnquist, in suggesting that we won on that point then of course, the denial of release is inexplicable and plainly incompatible with everything this Court has had to say about violations of First Amendment rights.

Unknown Speaker: Was it a denial based upon the statement of the Court that your clients made no allegations at any event, specifically protested the expenditure of their funds for political purposes to which they objected?

Mr. Sylvester Petro: Well, that is what it is based on, but this is not, I mean, there is no way to ground this holding and the decisions of this Court.

Unknown Speaker: Therefore the plaintiffs are not entitled to relief on this basis.

Mr. Sylvester Petro: The Michigan Court of Appeals demanded of our clients, a kind of conduct preparatory to action that has not been required in any First Amendment case that I have ever encountered and I believe that I try to read them all.

Justice William H. Rehnquist: But you were attacking a brand new statute, were you not, where nothing had ever been exacted?

Mr. Sylvester Petro: Well, there are all sorts of people paying agency fees under that statute.

It is only our clients who had refused for a good long while to pay the agency fees.

Still some have refused, but others under protest have because of the continued threats from the Detroit Board of Education to discharge them, they have now been paying agency fees.

As a matter of fact, the other side makes a great deal of this, acting as low, our clients have disqualified themselves from this suit because they have paid the fees under protest.

Now, this is perfectly understandable that they should do so.

Many of them have been Detroit school teachers for a good long while.

They are not about to give up their jobs even though maybe they will get reinstatement at some future time, but they have preserved their rights; their payments have been under protest.

There has been no deliberate waiver.

Justice Byron R. White: One of your points here I take it is whatever the Union uses the money for; they may not collect the dues from your clients over their objections?

Mr. Sylvester Petro: At the farthest breach….

Justice Byron R. White: That is one of your issues presented here, is it not?

Mr. Sylvester Petro: We insist that compelling these teachers to pay $0.01 to the Union for whatever purpose is a per se violation of the rights of freedom of association and that this stand is made, and a fortiori one, because it is inconceivable in view of what it is that public sector unions actually do.

By the common consent of every qualified person who has ever said a word on this subject, everything that public sector unions do is political and ideological and character.

Now, we have presented….

Justice William H. Rehnquist: It did not get your answer to Justice White’s question?

Mr. Sylvester Petro: Well, the answer was yes.

It was an emphatic yes.

Justice Byron R. White: Now, let us assume we disagree with you on that.

Your point is that at least they cannot collect if they are going to use that for political purposes?

Mr. Sylvester Petro: Well, as I see things, Justice White, you see that would not be any concession on my part because everything…

Justice Byron R. White: Well, I understand, but what if we disagree with you on that.

Suppose they are using part of the money for medical benefits or legal benefits or some service to their members and we just disagreed with you that that is political?

The other point is that they are using some of it for political purposes.

Mr. Sylvester Petro: Well, the essential function of a union is to engage in these negotiations of one kind or another with their opposite numbers.

Now, it is true I suppose, I should certainly have to withdraw the suggestion that there is no conceivable way in which the union could spend money non-politically.

I said, well, they have backed for the teamsters used to spend teamster money on trips to Europe and it would be hard put to establish this as a political expenditure.

Justice Byron R. White: Well, it is quite who he had (Inaudible)

Mr. Sylvester Petro: That is true qualification except --

Unknown Speaker: Let us suppose they had a party every Friday night, just a pure social event?

Mr. Sylvester Petro: Well, once again the question is….

Justice Thurgood Marshall: What about the health facilities that unions have?

What is wrong with that?

Mr. Sylvester Petro: Let me say Justice Marshall that all the activities --

Justice Thurgood Marshall: All is that there.

Mr. Sylvester Petro: I am ready now to concede that all of the activities other than those that the union refers to as collective bargaining may putatively be non-political in character.

One would have to make an examination of instance after instance to determine but as far as those activities which the union has generally been characterizing by the words collective bargaining.

Unknown Speaker: You said bargaining for a contract, bargaining about wages would be categorized as political, when you are bargaining with the public parties?

Mr. Sylvester Petro: That is correct and I think that this Court’s decision last term, in the National League of Cities case puts this proposition beyond any further doubt.

If it is true as was held in the National League of Cities case that the determination and administration of the state or locality’s employment practices is a fundamental aspect of a state’s sovereignty and sovereignty is of course the political principle by its alliance.

Then public sector collective bargaining which is explicitly designed to influence and effect, rearrange and displace the sovereign decisions of the states and localities in respect of their employment must of necessity also be political in character.

Justice William H. Rehnquist: Well, suppose given the Michigan legislature which presumably exercises the sovereign power of Michigan along with the governor has passed a statute saying there shall be public sector collective bargaining?

Mr. Sylvester Petro: Yes indeed and I suppose the Michigan legislature has in that for the first time engaged in a constitutionally dubious piece of conduct.

Justice William H. Rehnquist: But you say that violates the National League of Cities principle?

Mr. Sylvester Petro: The National League of Cities principle, I think you wrote that opinion.

Justice William H. Rehnquist: I did.

Mr. Sylvester Petro: The National League of Cities case said that the determination of the wages, hours and other conditions of employment is an integral aspect of the sovereignty of a state.

Now, if we have a state of Michigan which proceeds to give away this sovereign authority, what is the situation we find ourselves in, are states permitted in light of their duties to their constituents to the people to whom they owe their ultimate power and position?

Are states permitted thus to dispense with, to disperse, to share out, to give to this or that private agency pieces of the state’s sovereign powers?

I should point out that we are getting into very deep water here.

Justice William H. Rehnquist: The question is singular, right?

Mr. Sylvester Petro: Some of us, one of us; for it is not I who raised the question whether the state of Michigan in passing the Para into conflict with the League of Cities case.

What I have suggested is that in passing Para, Section 10, authorizing the agency shop, the Michigan legislature was in trouble with the National League of Cities case as well as with a number of other decisions handed down last term, most notably Elrod v. Burns.

I think Elrod v. Burns is a case which is virtually indistinguishable from this one.

May I proceed, Mr. Chief Justice?

Chief Justice Warren E. Burger: You have only a minute or two left to the end of your rebuttal time now, if you wish to save any?

Mr. Sylvester Petro: My instincts do not permit me to end this abruptly so I must point out that there are some features about this case that need emphasis and need emphasis in connection with the discussion that we have just been having.

I shall go over them very rapidly because I do wish to save ten minutes for rebuttal.

Now, the first and I believe the most profound element in this case lies in the distinction between the activities of government and the activities of private persons.

Government is one thing and private persons and their activity are strictly another.

There is a great deal made by the other side of the fact that collective bargaining, while collective bargaining in the private sector is the same thing as collective bargaining in the public sector, I believe that this lacks as much discernment has would be lacked by a person who said that all of the Fords that roll of a Ford assembling line are the same; it does not matter that one is driven by Sylvester Petro, a private person and the other is driven by a policeman and is owned by a police force.

They look alike, but they are different.

The same thing is true, say, of the jet engines that are produced in such numbers.

Some go into passenger commercial flights and others go into B1 bombers or B52.

You take that same engine, take it out of a passenger plane, put it into a bomber and you have got a different animal.

In the same way, that activity of collective bargaining which looks as though it is exactly the same in the public sector as it is in the private sector is a different animal entirely.

It is an animal that participates of the political character of a government that constitutes the employer and when that collective bargaining thus becomes political in character to ask or to insist that a public employee against his will, finance it, it is the same as forcing upon that public school teacher, political and ideological objectives which quite obviously cannot be squared with the First Amendment of the Constitution of the United States, a clear compromise of the dissident teachers’ political associational and speech rights is present in the case of this kind.

Thank you.

Unknown Speaker: Did you write this brief?

I am afraid to acknowledge and that is why I am sure every member of this Court feels it has been greatly imposed upon by its language.

Would you think that this case needs 216 pages plus 53 of responsive brief of 269 pages?

We do have a lot of cases here.

Mr. Sylvester Petro: I am sorry, I made my apologies.

Unknown Speaker: Another question I want to ask was, you do not have to answer this one, but you might reread the summary of the argument and my question is whether it complies with our rules as to being a summary of your argument?

Mr. Sylvester Petro: I shall do so.

Chief Justice Warren E. Burger: Mr. Sachs.

Argument of Theodore Sachs

Mr. Theodore Sachs: Thank you, Your Honor. Mr. Chief Justice and May it please the Court.

Perhaps in the remaining few minutes before the recess it would be profitable to indicate what this case does not involve.

Clearly, I would suggest on state of the record and as the case comes before the Court, there is not a political expenditures issue dealing with the question that Mr. Justice Rehnquist asked.

The Lower Court in fact decided favorably to the contention of appellants as to the use of agency shop monies for political purposes and made clear that where such money is to be expended.

Over their objection, they would indeed have a cause of action.

The complaint was dismissed in the instant case because in fact they had never made any appropriate protest on any timely fashion.

It should be recalled if the Court please, that this complaint that is the initial complaint in Warczak of which Abood is virtually a carbon, was filed prior to the effective date of the Act.

In that circumstance, it was virtually identical to the Hanson case.

Not withstanding which, the plaintiffs alleged although not one penny had been collected from anyone, nor of course therefore, nor have one penny been expended that the Union was somehow using the money for political purposes unspecified as to which the plaintiffs objected and they sought on that account not some remedy, discrete and referable to expenditures or alleged expenditures of a political nature, but they sought as in Hanson to avoid the obligation of the Agency Shop Clause entirely.

They sought no relief whatsoever as to the claimed expenditures and they did not itemize or specify any specific compliant if any which they had.

They incanted their phrasing which presumably was intended to invoke a remedy which would set aside the clause entirely.

Moreover during the entire pendency of the litigation, they have been excused from enforcement of the clause.

There has been no discharge of any plaintiff appellant.

There has been no other enforcement.

The fact of the matter is then that the Lower Court after first saying that the statute did not admit, as this Court had interpreted the Railway Labor Act within it, of the possibility of expenditure or non-expenditure over objections of dissenters.

After saying that could present a constitutional dilemma, avoided the problem entirely by then agreeing with the contention of the plaintiffs and saying yes were that to happen, there would indeed be a remedy.

We did not cross appeal on that ruling.

That is the fashion in which the matter comes before the Court in addition as we have pointed out in our brief.

The Union complied with….

Justice John Paul Stevens: Under your understanding of the Court of Appeals ruling, would a particular member of the plaintiff group have to object to particular expenditures or would it be sufficient for him generally to object to expenditure of any money for any political purpose?

Mr. Theodore Sachs: Mr. Justice Stevens, I think under the holding of the Court, there would have to be a specific objection just as this Court stated in the Lathrop case in the context of constitutional adjudication, such a requirement would be necessary, at least it was necessary in the context of the complaint there, but I would respectfully suggest that is academic now because the Union has adopted the remedial process which was recommended by this Court in the Allen case as a means of facilitating ready restitution of the proportional payments in so far as they might be applied.

Justice John Paul Stevens: What happens to the union member who does not particularly want to disclose his disagreement with particular union policies or political policies advocated by the union, but just does not his money spent for any particular political, activity in time?

Mr. Theodore Sachs: No Your Honor.

Under the internal remedy, he need not to disclose anything specific, leave going beyond the appellate decision.

Justice John Paul Stevens: But can he then, I will go back to my first question; can he then simply say I do not want you spending my money for any political purpose?

Mr. Theodore Sachs: Yes sir, he can.

Justice John Paul Stevens: And what happens then, does he get all his money back or…?

Mr. Theodore Sachs: No, he would get in accordance with the remedy of this Court and as provided by the…

Justice John Paul Stevens: …by this Court in this Court in this case here.

Mr. Theodore Sachs: He would get a proportional refund in so far as any payments expended by the Union for political purposes are involved, has -- total expenditure.

Justice John Paul Stevens: How is that total computed, how you are going to compute that?

Mr. Theodore Sachs: We are going to compute it in the best of good faith and accordance with the suggestion of the Allen case, Your Honor.

Justice John Paul Stevens: Just tell me in dollars and cents.

Say there is this $50, how much do they get back if he says I do not want you spending my money for political purposes?

Mr. Theodore Sachs: Well Your Honor, that would involve…

Justice John Paul Stevens: Say 40% of your budget is political; does he get 40% then?

Mr. Theodore Sachs: Your Honor, under your hypothetical for 40%, there will be 40% refund.

It obviously involves the determination and as the procedure is set out in the appendix, there is a procedure for determination, there is disinterested review, there is an opportunity to make precisely those formulations and there was a deliberate intent to make the remedy as expensive and as generous as possible.

So there would not be problems of this sort.

So the fact is then I think I can fairly state to the Court as the matter comes before you, it does not involve political issues in the sense that the Court dealt with them in the Street or dealt with them in Allen.

What it seems to me is presented by this case, and the only appropriate question presented by the case is whether the rulings of this Court which seems to me are quite clear in Hanson, Street and Allen and Lathrop are equally applicable or are no less applicable in the instance of a public employer with respect to its own employees.

The case does not involve contrary to suggestions of appellants, a coerce membership of any kind that that is not the nature of the obligation.

It does not involve coerce effort of any views or positions of the Union.

It does not involve ideological conformity in any fashion.

It does not involve suppression of dissent.

It does not involve censorship of any dissidents or dissenter’s views.

None of those matters are involved and as I have already indicated, it does not involve, under the posture of the case, any of the political expenditures questions.

Unknown Speaker: But it does involve, however, compulsory financial tribute to the Union, does it not?

Mr. Theodore Sachs: It involves compulsory…

Unknown Speaker: Or by the state as a condition of governmental employment.

Mr. Theodore Sachs: I would respectfully differ with the term tribute; there is a compulsory obligation of financial support, Your Honor.

Unknown Speaker: Well, but it is not then dictionary meaning of the word tribute?

Mr. Theodore Sachs: Well, sometimes it has a pejorative sense than I would think that inappropriate in this context, Your Honor.

There is no question but there is an obligation of financial support.

Chief Justice Warren E. Burger: We will resume there at 1 o’clock.

Mr. Theodore Sachs: Thank you, Your Honor.

Chief Justice Warren E. Burger: You may continue.

Mr. Theodore Sachs: Thank you, Your Honor and May it please the Court.

Appellees would suggest that an appropriate evaluation of the central issue which is tendered, necessarily involves a consideration of the general Michigan Labor Code which is involved here.

Michigan, like many other states in extraordinary number has adopted a comprehensive Labor Relations Code which, in central and significant aspects, parallels the National Labor Relations Act.

And there are numerous decisions of our own State Supreme Court which have indicated as much and have indicated that the teachings of the Federal Act and indeed this Court’s interpretations of that Act are persuasive in terms of determining the significance and system of the State Act.

Part of that system includes not only the disciplinary measures and procedures which were before this Court in the last term in the Crestwood case involving anti-strike provisions, but involved affirmative features dealing with a process of collective bargaining, and in that respect, the Michigan statute like the federal, like the Nation Labor Relations Act, provides that where employees, in an appropriate bargaining unit have by democratic vote of majority of them, selected a representative.

The public employer, basically in the local sector, has responsibility to bargain in good faith with respect to wages, hours and conditions of employment.

The elements of those concepts are, of course, entirely familiar to this Court and they are essentially of the same meaning in the State Court.

An aspect which is critical to an understanding of the state system and indeed of the issues in this case, is the proposition that the representative chosen under the Michigan scheme is the exclusive representative, but the exclusive representative based upon majority rule.

As such, as this Court has said several times, the organization is not a “private organization.”

It is an organization which is clothed with certain legislative authority in the context of what is involved here as stated in Steele and Tunstall, it is an organization which has the authority that creates and extinguishes certain rights from the bargaining unit generally.

Unknown Speaker: Am I mistaken in my recollection that the federal labor legislation excludes governmental employers?

Mr. Theodore Sachs: No, you are quite correct, Your Honor.

Unknown Speaker: Does the legislative history of that legislation show why?

Mr. Theodore Sachs: I do not believe so Your Honor and I really cannot answer the Court’s question.

Unknown Speaker: But it does clearly exclude?

Mr. Theodore Sachs: Yes sir and that, of course, I think is complementary to leaving such matters to the states.

Presumably that was at least the essential congressional intent.

Unknown Speaker: Well, it excludes any kind of federal governmental employers also then.

Mr. Theodore Sachs: That is correct and of course, the federal governmental employees have an substantial measure been covered by various executive orders which have provided similar bargaining though not precisely the same as is involved here.

The corollary it seems to me, which is critical to again, the understanding of what is essentially here to the proposition of exclusive representation, is that there is a duty, a fair representation on the part of the exclusive bargaining representative to all members of the bargaining unit.

It is perhaps not by accident that in appellant’s entire brief, there is not an acknowledgement of the concept of the duty of fair representation or a citation of Baker or Humphrey or Hines or any of the cases in which this Court has annunciated those familiar doctrines.

Unknown Speaker: Are those cases applicable here?

Mr. Theodore Sachs: They are by borrowing by the state Courts, the Michigan Court --

Unknown Speaker: Well, it is not directly.

Mr. Theodore Sachs: Not directly, no Your Honor.

Justice William H. Rehnquist: Has the Supreme Court of Michigan ever adopted that rule?

Mr. Theodore Sachs: Yes Your Honor, in a case called Lowe against the Restaurant Workers, it has essentially adopted the authorities expressed by this Court and indeed in a more recent case, by the State Court of Appeals called Handwerk.

The Court has said that the requirements of the state statute maybe perhaps are more strict than those imposed by this Court, and allow less discretion perhaps in terms of the bargaining agents’ authority to discontinue a grievance short of arbitration then this Court might permit.

In any event, the significance is that there is a very serious burden and a very serious responsibility imposed upon the bargaining agent to represent all, including the plaintiffs in this case.

There has been no challenge in this complaint or in this argument by appellants and indeed there is a disclaimer to the concept of exclusive representation.

So that is not an issue before the Court.

Therefore, I would suggest that an appropriate corollary of the authority of the bargaining agent, indeed this Court has said virtually there is such a corollary in the part of the bargaining agent to speak for all, is to represent all fairly.

Therefore that means that those, who whatever their exposition here, challenge the procedure of the statute, nevertheless have called upon the services of the organization which is required fairly and without any discrimination to render services and no claim has been made.

Unknown Speaker: Who determines in this context what is political and what is non-political?

Mr. Theodore Sachs: In this context Your Honor?

Unknown Speaker: Yes, well under this, who would determine that what portion of the union’s expenditures were for political purposes and what the subject to refund?

Mr. Theodore Sachs: Well, under if Your Honor is inquiring as to the internal procedure, the procedures established in the first instance by the union, subject to review by a disinterested panel.

Unknown Speaker: Who was that?

Mr. Theodore Sachs: To be appointed by the organization by definition required to consist of disinterested citizens.

Unknown Speaker: But the applicant for a refund would have no voice in choosing that panel?

Mr. Theodore Sachs: Not under the procedure constituted Your Honor.

Obviously, if the procedure is defective --

Unknown Speaker: How is that procedure constituted; just by the union or by statute or by Court’s interpretation or what?

Mr. Theodore Sachs: Now that procedure, Your Honor was adopted internally by virtue of union resolution, the union thought following the recommendation --

Unknown Speaker: What does it include within the term political?

Mr. Theodore Sachs: The term, Your Honor, I think is broadly defined to refer to political issues and ideological issues of controversial nature.

The only incident I would relate to is collective barganing.

Unknown Speaker: But does everything fall within political other than the services of the union in negotiating and administering the collective bargaining contracts?

Mr. Theodore Sachs: Your Honor there has not been an application yet.

There has not been any instance for its explications would come at the conclusion of the calendar year.

The intent certainly from the language is to be expensed as I stated earlier in answer to Mr. Justice Stevens’ question to be generous in that regard, so that there would not be any bona fide question as to matters which are appropriately categorized as political would be subject to appropriate refund.

There is no dispute in that regard.

Unknown Speaker: Assume the member or the applicant does not get what he thinks he is entitled to and disagrees with the union’s determination of what is political, may he go to Court?

Mr. Theodore Sachs: I would presume so, Your Honor.

The procedure does not say so, but I would presume so.

Unknown Speaker: Would there be a cause of action formed in state Court?

Mr. Theodore Sachs: Yes sir.

Justice William H. Rehnquist: The Court of Appeals said so.

Mr. Theodore Sachs: Yes, that is my understanding.

Unknown Speaker: Mr. Sachs, what about those non-political expenditures that are also non-beneficial to the appellants, I am thinking of social expenditures or conventions and publication expenditures and travel to expense and, if you will, organization elsewhere?

Mr. Theodore Sachs: Your Honor, those matters are really not tendered by this record and I would suggest just as this Court felt it appropriate in Street and Lathrop to indicate that there ought to be an appropriate record to determine where the appropriate line is to be drawn so it ought to be here, the rebate procedure does not speak to the points which Your Honor speaks, nor do I understand the Lower Court’s decision to do so, but on the other hand, I do not understand that issue really too have been tendered and seems not to have been a focus of the litigation at any stage.

Justice John Paul Stevens: Mr. Sachs, I am not really pointing.

I understand you generally are taking the position that the rebate procedure is not right for decision in the state.

Mr. Theodore Sachs: Yes sir.

Justice John Paul Stevens: Is it not also perhaps true that the statute itself is not really before us because the Court of Appeals, as I read the opinion, held that it did not apply to existing contracts, it did not have retroactive effect and though we have a prior contract involved in this litigation?

Mr. Theodore Sachs: In a technical sense, that is true, Your Honor though in turn as I must say that there have been a sequence of contracts which in general tender -- have repeated the same thing because the contract which was initially involved here was a contract of many years ago.

Justice John Paul Stevens: But the litigant before us does not have standing to attack the statute as I piece it all together, am I right in that?

Mr. Theodore Sachs: Well, I have to say again in fairness that that point as such has not been raised but Your Honor as the lower court --

Justice John Paul Stevens: Well it is a jurisdictional point.

Mr. Theodore Sachs: Yes sir.

Justice John Paul Stevens: Would it not require us to dismiss this appeal and have the case come up where someone else was involved?

Mr. Theodore Sachs: I would think so, Your Honor, I think it is not appropriately here but again I do not want to miss --

Justice John Paul Stevens: Well, I understand, you are not relying on it, but we have a duty to satisfy our --

Mr. Theodore Sachs: We did not raise the point, but the contract is long since gone although there were successions of later contracts.

Justice John Paul Stevens: And the Court of Appeals did hold that the statute did not apply to the contract in this record?

Mr. Theodore Sachs: That is correct, and remanded in that respect and that aspect of the case has not been brought here by anyone and does not remotely involve any issues which have been tendered here by either side.

Justice John Paul Stevens: So we are really being asked to review some dictum in the Court of Appeal’s opinion?

Mr. Theodore Sachs: I think that might very well be the case, Your Honor and especially dicta which under the view of the appellees’ comports very carefully with prior pronouncements of this Court.

Unknown Speaker: May I ask -- not that I completely follow by Brother Stevens’ suggestion, it is that since the Court of Appeals held that the statute did not apply to the contact in effect, is that it?

Mr. Theodore Sachs: That is correct.

The Court of Appeals --

Unknown Speaker: Under those circumstances, there is no standing in this.

Mr. Theodore Sachs: A standing question Your Honor, and again we have not raised the point that I understood Justice Stevens to cast in turns of a jurisdictional question and I had not addressed that --

Unknown Speaker: Well, jurisdictional understanding sense is not -- as I understand it?

Mr. Theodore Sachs: Perhaps, Your Honor but the point is, again, none of the parties have addressed it and the Court has not addressed it as such that what the decision in this respect of the Lower Court was, that the statute did not have retrospective application.

Unknown Speaker: And therefore it did not apply as a contact in this record, is that it?

Mr. Theodore Sachs: Yes, Your Honor.

Unknown Speaker: Certainly in case of controversy between the employees and the Union, I mean this cause of action was or his claim was that the agency shop clause and collective bargaining agreement was invalid.

Mr. Theodore Sachs: That is correct.

Unknown Speaker: So there is certainly -- he has got to think of a controversy.

He does not want to pay over the fee, isn't that right?

Mr. Theodore Sachs: Yes sir.

Unknown Speaker: You would not say it is a Article 3, case or controversy point.

Mr. Theodore Sachs: Your Honor again I have not raised the issue, the only point --

Unknown Speaker: Well, that is jurisdictional.

Mr. Theodore Sachs: Yes sir.

Unknown Speaker: But just whether he has standing to attack the statute?

Mr. Theodore Sachs: We have not raised a standing defense.

Unknown Speaker: I know you have not, but suppose that he refused to pay under this collective bargaining agreement, would he be fired?

Mr. Theodore Sachs: After the conclusion of this litigation, presumably he would be.

Unknown Speaker: Let us suppose the statute is never been passed?

Mr. Theodore Sachs: Yes sir.

Unknown Speaker: Would he have been fired?

Mr. Theodore Sachs: I do not know because in light of the prior adjudication Your Honor, the State Supreme Court had held that there was not an appropriate statutory basis for the establishment of an agency shop clause, and therefore presumably there would not had been one and therefore there would not have been a firing clause?

Unknown Speaker: Well, I take it then that you were defending; you are the one who is relying on the statute?

Mr. Theodore Sachs: Yes Your Honor.

Unknown Speaker: Not the plaintiff.

Mr. Theodore Sachs: That is correct.

Unknown Speaker: So you are the one who raised the statute.

Mr. Theodore Sachs: That is correct.

Unknown Speaker: Otherwise you would have lost under the prior trial?

Mr. Theodore Sachs: That is correct, Your Honor.

Unknown Speaker: Thank you.

Justice John Paul Stevens: It is the federal statute, but you now concede in view of the holding of the Court of Appeals that the statute does not apply?

Mr. Theodore Sachs: I concede that the Court indicated that the statute did not have retroactive application.

Justice John Paul Stevens: So it does not apply to this case.

So you have no defense on the statute, there is no statutory question before us?

Justice William H. Rehnquist: But the statutory question was based on one of state law.

We would not interpret the Michigan statute.

Their claim, as I understand to your opponent’s claim, is that the compelled deduction of dues violates their First Amendment rights under the Federal Constitution.

Mr. Theodore Sachs: Yes sir.

Justice William H. Rehnquist: Your response is that it does not.

The way it came up to the Michigan State Courts was that the Michigan Court said yes, there is sufficient statutory authorization for you to do that and in addition, we find there is no constitutional violation.

Mr. Theodore Sachs: That is correct.

Justice John Paul Stevens: Well, but Counsel, is that not true that the compulsion for the deduction as to this contract is solely based on the contract, there is no statutory authorization for deduction?

Mr. Theodore Sachs: There was no deduction in that respect, Your Honor.

I have to indicate that both parties sought rehearing below and then clarification as to what the purpose of the remand was with respect to the retroactive period since there had been no compulsions, since there had been no collection, we could not understand what the point of it was.

I, to this date, do not understand what issue remained on that score, but it was not framed in the terms that Your Honor is now questioning me.

Justice John Paul Stevens: Let me put it this way.

If the Court of Appeals had said the statute is totally void, it never been passed or something like that, it has hed that it does not apply to this contract, then you would not have been able to compel the deduction because of an independent state ground reason, is it not that correct?

Mr. Theodore Sachs: It is totally independent.

Justice John Paul Stevens: So there is really no federal question before us as what I am saying is there is no compulsion now for a deduction as to these particular litigants?

Mr. Theodore Sachs: As to that past period that would be so subject to the point that Mr. Justice White has raised and that we acknowledge fairly.

Unknown Speaker: Part of the plan of the plaintiff was not in his complaint that was unconstitutional for the collective bargaining agreement with the state to compel and to contribute to the union activity?

Mr. Theodore Sachs: That is correct.

Unknown Speaker: That claim did not depend on whether there is a statute or not?

Justice John Paul Stevens: But as to this claim, did not the Michigan Court hold that he was right apart from this later statute?

Mr. Theodore Sachs: Now, the Court said that the contract and the statute I think were essentially one issue.

I do not think plaintiffs attempted to disassociate the contract from the statue.

Their First Amendment claim was that there was statutory action involved.

Unknown Speaker: But you relied on the statue and say that the reason that is now valid is because there is a right to a refund.

Now, whether or not that the Michigan statue was in existence or not, this petitioner’s claim was rejected and part of his claim was that collecting a fee to support union activities was unconstitutional?

Mr. Theodore Sachs: That clearly was the claim, Your Honor.

Unknown Speaker: And it still is claim right here, the number one claim.

Chief Justice Warren E. Burger: Without regard to what gives, it maybe upon --

Unknown Speaker: Statue or not, that is part of his claim right now.

Mr. Theodore Sachs: I presume that is so, Your Honor.

Justice William H. Rehnquist: Is it not that the Detroit School Board that is making the deduction to bring in to play at least of the claim of the First and Fourteenth amendment?

Mr. Theodore Sachs: The fact of the matter is, Mr. Justice Rehnquist, the Detroit School Board asked the appellants before you is not making a deduction, there has been no deduction because there has been a stay of the enforcement as to all of these appellants.

Justice William H. Rehnquist: Well, but the fact that something as stay pending review here it does not moot it for that reason, as I take it?

Mr. Theodore Sachs: No, but I want to be clear.

State in a contractual sense not by virtue of any Court action, the contract itself provided that during the pendency of litigation there would not be enforcement and therefore the plaintiffs have not been under any compulsion and they have not as I sought to state in my opening remarks, did never sought to challenge the expenditures as such, they sought to address as plaintiffs did in Hanson, the collection as such.

Unknown Speaker: Mr. Sachs, I still do not follow you colloquy with my brother White.

Didn't you tell us that Michigan Supreme Court said that this very contract between the school board and its union was invalid under the statutory authority?

Mr. Theodore Sachs: Your Honor, the Court I think in its opinion did not distinguish speak to this contract as such.

Unknown Speaker: No, I thought you referred to some earlier opinion.

Mr. Theodore Sachs: There is an earlier case not involving these parties, Your Honor.

Unknown Speaker: Alright, not involving these parties, but a contract between a public party and the labor union?

Mr. Theodore Sachs: Yes Your Honor.

Unknown Speaker: With an agency clause in it?

Mr. Theodore Sachs: Yes.

Unknown Speaker: And there held that the agency clause was unenforceable, invalid whatever?

Mr. Theodore Sachs: Of course, fairly statutory reasons.

Unknown Speaker: Alright, and it would not have applied if this statute is not applicable to the particular contract which got involved here then where is the First Amendment issue?

Unknown Speaker: The petitioner’s claim was overruled though.

It was rejected by the Michigan Supreme Court or by the Michigan Court, was it not?

Mr. Theodore Sachs: Yes sir.

Unknown Speaker: And that included the rejection of his First Amendment claim with or without a statue?

Mr. Theodore Sachs: That is correct.

I hope I have answered the Court’s questions.

Unknown Speaker: Well, at least federal question here, doesn't it?

Unknown Speaker: I am not sure it does.

Mr. Theodore Sachs: Well, Your Honor I am not sure. I do not know what time is now left.

Justice William J. Brennan: There are certain questions involved in the case of -- this contract contains an enforceable provision that must be, as if, there never was such a provision on some state law ground?

Unknown Speaker: It does not make an issue here.

Unknown Speaker: The petitioner should have won that, but he did not, did he?

Mr. Theodore Sachs: Your Honor, on that point the Court did remand with respect to an appropriate remedy as to the retroactive period.

That is not a piont in Court.

Justice William J. Brennan: Was it in Intermediate Appellate Courts?

Mr. Theodore Sachs: Yes Your Honor.

Justice William J. Brennan: I take it it could not have overruled the prior Supreme Court’s decision?

Mr. Theodore Sachs: No, of course not.

It did not presume to do so, but it was acting not in the basis, Mr. Justice Brennan, of the earlier opinion or on the basis of the intervening statute, it enacted I think in 1973 which at that point sanctioned such agreements as this and did so expressly.

So there was no longer a question of a statutory basis for the action which was taken.

Justice William H. Rehnquist: On both parties' petition to Supreme Court of Michigan for review and it was denied?

Mr. Theodore Sachs: That is correct.

The appellant’s petition on the grounds which they would bring here, we petitioned because we simply could not understand the purpose of the remand since there really was nothing that was not moot.

Since there had been no compulsion, we could not understand what was viable for purposes of any remand and indeed the appellants seem to join with us in that quandary as to what the purpose of the remand was.

In any event that is not before this Court, is not been presented.

I would simply want to emphasize that it seems that in the light of the precedence of this Court, there are no bases considering the parallel pattern of the Michigan statute to that of the federal statute if any genuine First Amendment issue or speech or association involved.

We are really back to the initiative, if the questions are here, we are back to those initial questions and it seems to me that the issue is what this Court characterized in the last term in the black lung benefits case; Usery v. Turner, Elkhorn as a legislative act adjusting the burdens and benefits of the economic life and that is all that is involved in this.

Such a statute, it seems to me, comes to this Court with a presumption of validity and it is for the plaintiffs not for the defendants to justify it.

There are no First Amendment implications involved.

Thank you.

Chief Justice Warren E. Burger: Mr. Petro, do you have anything further?

You have six minutes left.

Rebuttal of Sylvester Petro

Mr. Sylvester Petro: Mr. Chief Justice, Honorable Associate Justices, I think thoroughly without any intention Mr. Sachs has completely misled us all concerning the posture of this case.

It all goes back to the Smigel decision by the Michigan Supreme Court holding that in the absence of an authorizing agency shop provision in the Michigan Para, no public employer could as a matter of statutory power enter a union or agency shop contract.

Now after that decision, the Michigan legislature proceeded immediately to pass the statute wanting as of the time of the Smigel decision.

Now, observe very carefully Honorable Justices, it was after the passage of that enabling agency shop provision that the contract in issue in this case was entered by the parties.

If this does not establish a federal question, then I do not know what a federal question is.

The contract involved in this case was entered by the parties after the passage of 1973 Michigan Para, Section 10.

Now, since I have only three minutes left, let me proceed immediately.

Justice John Paul Stevens: Well, Mr. Petro, may I just ask why then in the Court of Appeals’ opinion did they discuss the issue of retroactivity?

Mr. Sylvester Petro: This was involved in the question whether or not a contract then existed.

A contract prior to the one sub judice should be applicable to the plaintiff in that case, not this one.

This is a new bargain.

Justice John Paul Stevens: It means in other words if the contract in the record before us is different from the contracts in the record before the Court of Appeals and where you nevertheless were reviewing that decision?

Mr. Sylvester Petro: No, an aspect of that contract involved in the Warczak case was controlled by force of precedence not by force of judgment in the Smigel decision.

This Court held only that as to that period, all these people were employees throughout that period, throughout that period they are involved in the Smigel case, throughout the period involved in this Abood, Warczak case.

Now, the question was whether or not they were going to be affected by the Michigan Para’s Amendment 1973, which -- the language of it is relevant here.

The Michigan Para speaks in terms of reaffirming its favoring an agency shop.

It is a sort of, if I may say so without antagonizing the Court, a kind of shelving used by the Michigan legislature designed to establish retroactively the validity of the Agency Shop Para passed in 1973.

Then the only thing that this Michigan Court of Appeals, from which we are appealing, did with respect to that was saying no, there cannot be no --

Justice Thurgood Marshall: Was this case filed in 1969?

Mr. Sylvester Petro: Pardon me.

Justice Thurgood Marshall: Is this case filed in 1969?

Mr. Sylvester Petro: This particular case?

Justice Thurgood Marshall: Yes sir.

Mr. Sylvester Petro: In 1969, yes.

Justice Thurgood Marshall: So the 1973 act applied in 1969.

Mr. Sylvester Petro: No, it applied as of the time when the case came back up to us, a contract, the contract of these parties are bound by, if they are bound at all, is a contract entered by the parties after 1969 -- 73.

Justice Thurgood Marshall: What was the date?

Mr. Sylvester Petro: October --

Justice John Paul Stevens: Is that contract in this record, the 73 contract in this record?

Mr. Sylvester Petro: Yes, it is in the record, let us see.

See the record brief in support of claim of appeals, the Michigan Court of Appeals, April 11, 1974 at 5:12 appendices D and G.

Letter from Theodore Sachs to Honorable Charles Kaufman of Michigan Circuit Court, October 19, 1973, enclosure.

Mr. Justice Marshall there cannot be any doubt whatsoever that the contract involved in this case is a contract postdating the Michigan Para Amendment the constitutionality of which we are challenging.

No doubt whatsoever this is the contract in issue in this case, not the one that was the subject of the Smigel decision and which by virtue of this Smigel decision --

Justice Thurgood Marshall: What did he have to with it, did Smigel name it?

Mr. Sylvester Petro: Smigel is the decision in which the Michigan Supreme Court stimulated the legislation that is involved here.

Had this Michigan Supreme Court not decided in Smigel that the state local authorities were without power to enter agency shop agreements we should probably never have had this statute.

Justice Thurgood Marshall: Did you prove Smigel up here?

You can (Inaudible) do a decision.

Mr. Sylvester Petro: Well, Smigel is not my case.

Justice Thurgood Marshall: How does it get into this?

Mr. Sylvester Petro: Well, it provides the background for the Michigan Para Amendment.

The Michigan agency shop statute was passed because the Michigan Legislature found that it could not have agency shops and public employment without specifically authorizing that.

I beg the Court for two minutes in order to make what I think is the final point that must be made.

May I have them, please?

Chief Justice Warren E. Burger: Go ahead and respond as to further response to Justice Marshall.

Mr. Sylvester Petro: The fundamental deficiency from the point of view of the First Amendment in this case is that the Union intends to have to put it most mildly forced loans from the teachers, in order to use those forced loans to promote political causes to which the teachers must be presumed in view of their general objection, the features are opposed to them.

Now, there is no way that forcing people to support political causes to which they are opposed can be squared with either the First Amendment or this Court’s uniform decision there under.

Chief Justice Warren E. Burger: Now, you are restating the arguments you made before us so we have that argument.

Mr. Sylvester Petro: Well, it goes to the rebate procedure.

The rebate procedure is nothing but --

Chief Justice Warren E. Burger: You have covered that sufficiently counsel.

I want to add something to what my brother Blackmun said about this case.

You filed a 216 page brief here and I address this not as a criticism to you primarily, but as an observation to the Bar.

In this case there are 600 pages of material filed with us which means that if every case heard today had been treated the same way, the members of this Court would have had 2,400 pages to read not including the cases and other authorities cited which we do read, and I think in a sense you may have done a favor to the Court to furnish an exhibit A for why we should activate a rule limiting the briefs in this Court to 50 pages unless the Court grants special leave.

Mr. Sylvester Petro: I pray the Court’s indulgence for just one word.

Chief Justice Warren E. Burger: I know, I need no response to that.

I am simply making an observation to Bar generally as well as to you because you have filed at 216 page brief when 75 pages easily would have done it.

Thank you gentlemen.

The case is submitted.

Attribution:

The OYEZ Project

Featured:

Retail Clerks v. Schermerhorn - Oral Argument

Tue, 25 Sep 2012 22:35:00 +0000

Case:

Retail Clerks v. Schermerhorn

Media File:

368_19630418-argument

Related Transcript:

368_19630418-argument

Transcript:

Argument of S. G. Lippman

Chief Justice Earl Warren: No. 368 Retail Clerks International Association Local 1625, AFL-CIO, et al., petitioners versus Alberta Schermerhorn et al.

Mr. Lippman.

Mr. S. G. Lippman: Thank you sir.

Mr. Chief Justice and may it please the Court.

We have a related problem to the one that was just argued before this Court.

In our situation, the local union and Food Fair negotiated a collective bargaining contract which contained a panoply of many benefits to the employees and Florida being one of the Like to Work states which prohibits the entry into a contract requiring membership in a union pursuant to 14(b).

Justice Potter Stewart: How many such states are there, about a dozen?

Mr. S. G. Lippman: There are 20 at the moment sir.

Justice Potter Stewart: Twenty.

Mr. S. G. Lippman: We negotiated what I think could be correctly characterized as a service fee arrangement.

In that service fee, and it is set forth on page 9 of the record, although it's called agency shop, I think the Court will recognize that it has substantial differences from the agency shop in the GM case just argued.

In that service fee arrangement, we provide that under the law of the State of Florida the employees have a right to join and not to join the union.

However, the union is the exclusive bargaining agent.

It's been certified, chosen by the employees, and the union has the obligation under the law to represent all the employees equally and impartially.

The union incurs many expenses in connection with this representation and therefore we say in so many words to defray the cost of the union as a collective the bargaining agency, the employees who determine that they do not wish to join the union would be required to pay a service fee.

In a subsequent notice which we posted, after reiterating the language, we said that the service fee would be the equivalent of the monthly dues and the initiation fee.

I might point out that the issue before this Court and the issue before the Florida Supreme Court was not the amount of the service fee or the reasonableness of the service fee, but was whether or not one penny could be charged as a service fee arrangement.

The rationale if it may please the Court is this.

A union has the obligation under the law, and the Court has spelled out that obligation, to represent all employees, union and nonunion alike, and to represent them impartially.

All employees receive these benefits and the record of contract is in the record indicates the substantial benefits involved.

Being a collective bargaining agency requires a great deal of expenditures.

I think that is clear and it's spelled out in the brief, one has to hire attorneys and negotiators and fulltime representatives.

Committees have to be paid, records have to be kept, contracts have to be administered, cases have to be taken to arbitration.

And so we say that if you want the benefits and you have chosen us to obtain benefits for you, we believe that you should pay a prorated cost of carrying on as the collective bargaining agent not as a member of the union, but as a member or an employee within the bargaining unit.

Now, how do we differ from the agency shop?

The sums which are paid can only be used to defray the cost of collective bargaining.

None of the money could in any way be used for institutional or labor union objectives unrelated to the collective bargaining function of the particular union involved.

Justice Byron R. White: Which I suppose leads to objective employee pay a greater proportion of the collective bargaining costs?

Mr. S. G. Lippman: No sir.

Justice Byron R. White: Why is that?

Mr. S. G. Lippman: Because the costs of collective bargaining are ascertainable just as in the hiring-hall arrangement --

Justice Byron R. White: But he's going to be paying monthly the same dues, the same amount?

I mean, as a matter of fact that's one of his -- that was true in this case.

Mr. S. G. Lippman: In this case, but there is no demonstration --

Justice Byron R. White: And we are talking about this case.

Mr. S. G. Lippman: Right sir, in this case, but there is no demonstration in the record that this particular union did not use all of its funds for collective bargaining purposes.

This is actually one of the other small unions, it's rather unusual, but this case does not present the question of the reasonableness of the sum.

Now, it could very well be that in a subsequent action, in a subsequent proceeding, the reasonableness of the sum could be questioned.

Justice William J. Brennan: Well, are you saying now Mr. Lippman that as far as this record is concerned, we have to treat the case as if all union revenues were expended for purposes in carrying on collective bargaining.

Mr. S. G. Lippman: That is correct sir.

Justice William J. Brennan: Was there a finding to that effect?

Mr. S. G. Lippman: There was never any trial.

The case was decided on the pleadings.

For the purpose of this case, it must be so treated because this is a sole issue and this is the sole issue which the court, which lower courts addressed themselves to.

Justice Potter Stewart: Were the pleadings alleged this, you said it was decided on the pleadings?

Mr. S. G. Lippman: Yes, the pleadings point out that the employees that do not want to be members of the union.

They do not want to pay any fees, they do not want to pay any service fees, and this constitutes a violation of the Florida Right to Work Law and of course, constitutes a violation of Section 14(b).

Now, I was about to point out and I think I did point out that in no sense can any of the moneys be used for any institutional purposes, that it can only be used for collective bargaining functions, and that the relationship is the relationship between a union and the employees in the bargaining unit and not between a union and its membership.

Involved here is the question of Section 14(b).

Chief Justice Earl Warren: We'll recess now Mr. Lippman. [Recess]

Mr. S. G. Lippman: Yes, may it please the Court.

I sought to develop forenoon the argument that the contract that we have before us, the particular clauses, we call a service fee arrangement.

It's drafted in the since, requires specifically that employees in a bargaining unit who choose not to be members of the union must pay a service fee to defray the union's ordinary costs in connection with collective bargaining.

We also tried to make it clear that in issue, is not the amount of the fee, but the principle as to whether or not such a clause in a contract can be nullified by the State of Florida operating under Section 14(b).

I would like now to discuss the requirements and the limitations of 14(b) as it impinges on the – and raises the Federal preemption problem.

14(b) is quite clear, in that it is an exception to the general pattern of the Labor Act and provides in substance that the states are permitted to pass laws specifically prohibiting membership in a labor organization.

Now Congress knew quite well what is meant by membership in a labor organization.

It is not a difficult ambiguous word and if there is any uncertainty about the matter, I believe a reference to the legislative history would demonstrate what Congress was concerned with in 8 (a) (3) when they abolished the closed shop and in 14(b), Congress was concerned with the evils of compulsory membership in a union.

They were concerned with the Cecil De Mille where an employee or a person had to pay assessments for political purposes.

They were concerned with a situation where an employee was expelled from the union for doing unionism or an employee was -- and lost his job, or an employee who testified against another employee in a Court proceeding was expelled from the union, they were concerned with the abuses of internal unionism.

In no sense do I find anything in the legislative history, which indicates that Congress was concerned with the payments to the extent that Congress did have such a concern.

It did have an amendment, it does have an amendment in the law prohibiting excessive initiation fees.

Beyond that, there was no concern with that problem.

On the other hand, Congress did throughout manifest a concern about a fee right.

Now, since we have this exception, since the language of 14(b) is so clear, is a State justified in taking the position that 14(b) goes beyond what it says, that is a validation of its Right-to-work laws.

What the states do is they interrupt their own laws and then they say this stems from 14(b) we have the authority to do so under 14(b).

Now what abuses have we seen?

We have cases coming from the Supreme Court of South Carolina and Arkansas outlawing the hiring-hall based upon the presumed authority under 14(b).

We have a case in the Supreme Court of Georgia where they took the position, where the Court took the position that an exclusive bargaining contract could not stand in face of its Right-to-work law again stemming from the authority of 14(b).

And we have the opinion of the Attorney General in South Dakota to the same extent.

The states do not look to the language of 14(b) to its intent, but they look to their own Right-to-work laws and under the guidance of that, they believe 14(b) is a license for them to regulate all aspects or many aspects of labor relations.

In this respect, I raise the question of preemption, clearly where a State were to go outside the authority of 14(b) and say that you cannot negotiate on a particular subject, that you cannot negotiate a hiring-hall or that you cannot negotiate a contract benefiting employees and seeking a service fee in return, where it is not clearly covered by the language and where quite arguably it is covered by the provisions of the Federal Act and actually protect it and where it is not clear at all that the states have such authority, it seems to me, if we are going to obtain any kind of uniformity in the first instance, it should be the Labor Board, which would have primary jurisdiction to determine whether or not the particular subject matter folds within the scope of 14(b) and is subject to regulation by the states.

Otherwise, we will have at the moment 20 different states each interpreting 14(b) and carrying rights under the Labor Act.

Justice Byron R. White: [Inaudible]

Mr. S. G. Lippman: Mr. Justice White, in my judgment it would be an unfair labor practice.

Justice Byron R. White: [Inaudible]

Mr. S. G. Lippman: Well, there may be an element of concurrent jurisdiction.

Justice Byron R. White: [Inaudible]

Mr. S. G. Lippman: I don't concede it, but I raise the problem.

One Court, the Supreme Court of Colorado took the position, the case which we cite in our brief and discuss, took the position that the State merely have the authority to declare the law and by declaring the law, it could very well nullify to provisos of Section 8 (a) (3).

But --

Justice Byron R. White: [Inaudible]

Mr. S. G. Lippman: Yes.

We raise that question because we said number one, a service fee arrangement or even an agency shop is not within the scope of 14(b) and is covered by the general provisions of the Labor Act and therefore of course, the entire area would be controlled by the Labor Act, and under this should we take the position that where there was an arguable question, the State should not be in a position to sit and determine its own jurisdiction.

In this respect, the situation is not entirely dissimilar from the case which this Court decided last June, the MEBA case on the Great Lakes, which opinion written by Justice Potter Stewart.

There a state sought to determine its own jurisdiction by seeking to interpret what is meant by a labor organization within the meaning of the act, by seeking to interpret what is meant by supervise the employees within the meaning of the act.

But this Court held that in the first instance even there it is for the Labor Board to determine and I contend for the proposition that under a situation where a clear question is raised as to whether or not the states have this authority and where it's also clear and the question raised and this comes within the purview of the Labor Board that in the interest of uniformity and the interest of the preemption principles which have be so thoroughly explored and articulated by this court, it is only the Labor Board which has primary jurisdictions.

Otherwise, we will have the most terrible kind of hodgepodge, we will have the most terrible kind of impairment of rights, states interrupting their laws and saying the authority comes from Section 14(b).

Now we could have a situation of this sought, the State -- the State of Florida could adjoin the operation of this clause.

We could turn around and seek to negotiate a similar clause with the employer.

The employer might take the position as it did in the GM case that it's -- I can't do that, it's outside of the law.

The Labor Board might issue a complain saying that this is outside of the scope of 14(b) and the employer is under an obligation to negotiate on this matter.

14(b) is as much a part of the Labor Act as any other provision.

It is a limitation on the Board where the states act properly, but the Board cannot carry out its functions unless it carries out its functions in light of an interpretation of 14(b) and it is also important that 14(b) be given a uniform interpretation so that all states will interpret an act on the 14(b) in the same way.

Justice Potter Stewart: But don't you think that we have a progress to that end, it might not be possible in this very case?

Why should the Board have to do it in every case, this is one of those reasons that this Court is here?

Mr. S. G. Lippman: Well, because the Court --

Justice Potter Stewart: What we are dealing with is a meaning of a Federal Statute?

Mr. S. G. Lippman: But it's a Federal Statute over which the Board is given exclusive jurisdiction, if the Federal and the Board is given the primary responsibility of protecting rights under the law and caring of the policies.

If the State interprets or passes a law in the 14(b) which impairs any rights under the statute, the Board is surely concerned with that.

Justice Potter Stewart: But right here in this case we have now before us, the question of what does Section 14(b) mean and it's -- certainly there is an opportunity is there not, to contribute to uniformity by deciding this case.

Mr. S. G. Lippman: I would say that it would be of great aid to the Labor Board to interpret 14(b) and give it some definitive meaning, but I would also say that in the final analysis the determination of whether a service fee arrangement comes within 14(b) or the outside of scope of 14(b) and therefore, a protective kind of activity should be made by the Labor Board which is expert not only in the conduct presumably but also in the interpretation of a statute; 14(b) has to be accommodated to the rest of the act.

Justice Potter Stewart: Well, let's assume a State has a law prohibiting the union shop in the purer sense to that word, I choose whatever the language you want for the statute, and that the highest court of the state says this is all it means.

It means this and nothing more and nothing less.

Do you think it's up to the -- do you think the Labor Board then have the power of saying, well, --

Mr. S. G. Lippman: I would say and certainly --

Justice Potter Stewart: Do you think that means something else and you have to --

Mr. S. G. Lippman: I would say sir if I understand your question correctly, in a situation where it is absolutely clear beyond any arguable reason.

Justice Potter Stewart: That's my assumed case, yes?

Mr. S. G. Lippman: That there I believe a State could outlaw or could prohibit the enforcement of that particular clause, but by an injunction, but where there is -- but where there is a great deal of doubt as to whether or not, I mean taking the reasoning of the Colorado Supreme Court, but where there is substantial doubt of substantial uncertainty where the law has been undeclared, then I think only the Labor Board can make that determination.

I don't believe that the principle differs markedly from the principle in any other preemption case.

If it is the preemption doctrine that even where the law is well established where the Labor Board has set it down as well established that the federal government does not have jurisdiction, then the State has jurisdiction.

It would not be necessary to go to the labor board.

I'm endeavoring to apply the same principles which this Court would apply in any other kind of a preemption case.

Now it seems to me that this Court has in a number of cases indicated that 14(b) does not stand in the way of the application of the preemption doctrine.

It's done so recently in the Curry case, which came before this Court where the state of Georgia sought to enjoin activities seeking to obtain a closed shop.

This Court held the application of the preemption doctrine and cited Garmon.

This Court in --

Justice William J. Brennan: Mr. Lippman, I really don't understand that in light of your reliance on Curry, while you conceded with Justice White with even in the crystal clear case, State Court granted an injunction against the enforcement of the act.

Mr. S. G. Lippman: Well --

Justice Byron R. White: Does the conduct certainly have been unfair labor practice in that attempt?

Mr. S. G. Lippman: Well, the conduct is an unfair labor practice with – I frankly -- I don't think anything anyone knows except as we have learned from this Court as to whether or not there is any kind of jurisdiction --

Justice William J. Brennan: Do you find anything in Curry which suggests that we should have made that confession?

Mr. S. G. Lippman: No sir I find nothing in Curry which indicates that.

As a matter of fact, based on all the indications that I know of, it appears that the State has no authority at all to act in that field except to declare the law.

Justice William J. Brennan: Well, I didn't mean to put words in your mouth.

Mr. S. G. Lippman: Yes, but I was -- I just wondered whether or not if there was to be any area -- if there was to be any area, it is in that area in which there would be no doubt at all, but even there I speak with uncertainty as to just what the authority of the State Court is, but surely I don't have to go that far and I only contend to this proposition surely in a situation of this kind where there is substantial doubt.

Justice Byron R. White: About what?

Mr. S. G. Lippman: As to whether or not a service fee arrangement comes under 14(b).

Justice Byron R. White: Or under the State Law.

Do you think there is any doubt in this case that this kind of arrangement is barred by the Florida Law.

Mr. S. G. Lippman: By the Florida Law itself; well, the Supreme Court of Florida said it was barred by [Inaudible]

Justice Byron R. White: And you conceded it in moving to dismiss.

Mr. S. G. Lippman: No, we didn't concede that moving to the --

Justice Byron R. White: Well, I think for the purpose of your motion to dismiss it.

But --

Mr. S. G. Lippman: Well, we filed a -- we filed a motion.

Our motion to dismiss was also that our conduct did not come -- would not prohibited by the State Law.

It was a matter of interpreting the State statute too, but the question is not so whether or not our conduct to be condemned by the State Law but the question is whether our conduct would be condemned by Section 14 (b) because whatever validity that State Law may have in the field of interstate commerce is dependent on Section 14 (b).

Justice Hugo L. Black: Suppose 14 (b) had never been adopted what would you say then?

Mr. S. G. Lippman: If 14 (b) had never been adopted again I would say in my judgment there would not been any doubt that appeal was completely preempted.

Justice Hugo L. Black: Why?

Mr. S. G. Lippman: Because –-

Justice Hugo L. Black: Preempted –-

Mr. S. G. Lippman: Yes the appeal would be --

Justice Hugo L. Black: What would you say about the legality of the agreement as far as federal law is concerned -- [Inaudible] had not been adopted –-

Mr. S. G. Lippman: It would appropriately lawful agreement.

Justice Hugo L. Black: [Inaudible]

Mr. S. G. Lippman: Yes, if I understand your question whether or not an agreement for a service fee arrangement whether or not that that would have been --

Justice Hugo L. Black: If you are making service free arrangement with the employer that might be one thing, making a service fee employment for employee who do not belong your union might be another.

Mr. S. G. Lippman: Well in case sir, we have a service fee arranged with the employer I --

Justice Hugo L. Black: Which is to be paid by the employee who does not want to pay it?

Mr. S. G. Lippman: -- which should be paid employee sir in order to defray the cost of collective bargaining.

There isn't any doubt about its validity under the Federal law.

The only question which is raised there, was a question of 14 (b) because quite clearly if one could justify under it Section 8(a)(5) because the union is a bargaining agent has the power and the authority to provide for its own operations as exclusive bargaining agent and in any event it would undoubtedly be saved by Section 8 (a) (3), which is a much lesser kind of an arrangement, which 8 (a) (3) contemplates.

So I would have no doubt that the service fee would be lawful as a matter of Federal Law.

I might say however that the only question under the Federal Law would be as to whether or not in fact the service fee was a sincere effort to defray the cost of collective bargaining or whether or not it was an effort of coerce employees into union, but this is a question of fact which the labor board would have to make a determination.

Justice William J. Brennan: Well, suppose you had a record here that told us [Inaudible]

Mr. S. G. Lippman: Sorry sir.

Justice William J. Brennan: Suppose we had a record here and you told us we don't, showing that union revenues was spent for other purposes beside those that [Inaudible] to collective bargaining.

Mr. S. G. Lippman: In that case sir there would be a surcharge, there would be a violation of a fiduciary relationship, violation of trust, the money could be recovered.

This money can only be used for collective bargaining purposes and not for any institutional purpose.

Justice Potter Stewart: You call this a, very carefully a service fee provision or a service fee arrangement all the way through.

Let's assume that it was not that, but that it was an agency shop clause as it would be is titled of the jurists in most obvious kinds similar to the General Motors post provision.

What do you think, do you think that would, a State could prohibit that under 14 (b)?

Mr. S. G. Lippman: At this point I part to company with the Solicitor.

I do not believe the State would the authority to bar that under Section 14 (b) and the reasons are these.

I believe that Section 8 (a) (3) meant what it said that the -- it is perfectly lawful and permissible for the union to enter into a contract requiring membership in a union and that 8 (a) (3) is a lot more than agency shop.

We have thousands of contracts throughout the country requiring a union shop arrangement, requiring employees to join union after 30 days of employment.

Now, the only problem we have there is that the union shop cannot be enforced in such a way as to jeopardize the employee's job rights, so long as he continues to pay his union dues, but that does not mean that he does not have the obligation that the employer does not have the obligation to see to it that the employee joins the union otherwise Congress just did not say what it meant.

One cannot read 8 (a) (3) except by being impressed as if that he permeated with the idea of membership in the union as a condition of employment, or the base indicate that this is a compromise between a closed shop and a union shop.

Now the argument that 14(b) therefore is also an agency shop prohibition, stems from that kind of a fallacy, that 8 (a) (3) is nothing but an agency shop, but if 8 (a) (3) were in fact as I believe it to be a union shop, but with qualifications as to how you can administer it, then the entire argument would fall because then you could read 14(b) in it's exact language namely giving the state's authority only to prohibit membership in the union and not to prohibit any kind of a fee payment.

I believe the mistake has been made as result of the misinterpretation of the Union Starch case and Radio Officer decided by this Court, because in all of those cases you had no problem at all about the employee being a member of the union.

In my judgment, in my judgment an employee who says I refuse to join the union, but I would pay you dues, that employee can be discharged under 8 (a) (3) because he does not have a willingness to join.

Justice Potter Stewart: He can be.

Mr. S. G. Lippman: Yes sir.

Otherwise 8 (a) (3) is going to be completely emasculative, but you cannot impose conditions beyond that.

There are two conditions you can impose.

One, he must show willingness to join the union, which is basic, and thereafter he must pay his union dues and initiation fees.

To read an agency shop out of 8 (a) (3) means that Congress just did not know how to state its simple principle and I believe this is the error which people are falling into.

Justice Byron R. White: Mr. Lippman you said that there was nothing in the record indicating what the amount of these payments were to be?

Mr. S. G. Lippman: No I said there was nothing in the record sir, I ought to say which in anyway raised the question of the reasonableness of the fee, that the only question which was raised is whether or not one penny could be obtained.

Justice Byron R. White: But we are I suppose free to consider the allegations of the complaint which you didn't controvert in this respect as to -- that these payments would be equivalent to initiation fees and monthly dues.

Mr. S. G. Lippman: That's correct sir.

Justice Byron R. White: And so we can accept those facts anyway.

Mr. S. G. Lippman: Yes sir you can accept those facts, but whether or not the initiation fees or the equivalent would be used for any other purpose, there you have -- there you must also be faced with the proposition --

Justice Byron R. White: Well there's nothing in the record either way on that, whether the union spent -- they did or did not spend any money for other than collective bargaining.

Mr. S. G. Lippman: Yes you do have a record if my may say so sir, because the contract itself says it can only be used for the purpose of defraying costs in connection with collective bargaining.

And there is no allegation that the money could be or was used in any other respect, and this is the only way in which the union can use the money.

Justice William J. Brennan: That is the only way it can use to sue.

That's the question I put to you is whether there is anything in this record regarding the expenditure of union revenues and growth, is there anything which indicates that all of the union revenues and growth whether service fee or otherwise are all expended for collective bargaining purpose?

Mr. S. G. Lippman: There is nothing in the record in that respect sir.

Justice William J. Brennan: Well you've asked us I understand it, to consider this record as if all union revenues, inclusive of the service fee revenues, are all used for collective proper bargaining purpose and nothing else.

Mr. S. G. Lippman: That's right and surely.

Justice Potter Stewart: But there is nothing in the record to show that, is there?

Mr. S. G. Lippman: Well there is nothing in the record to show the contract.

Justice Potter Stewart: Well, we know the facts of life though.

Mr. S. G. Lippman: Well but we say though -- but we say so sir with respect to the particular sums collected as service fees; there, there is -- there if I that only leave one thought it is this; that, that money can only be used for collective bargaining purposes.

Justice Potter Stewart: Well this means then that these people are paying a larger than their proportionate share of their collective bargaining expenses.

Mr. S. G. Lippman: No sir, it does not mean that, because if they were in that position, they would be in the same position that the Board was in the Holman case.

They could then come in and object and enjoin the collection of the fund and make sure that all employees were paying the same sums of money for collective bargaining purposes.

This is another question entirely, this is a question of the administration to think, but the sole question we have and we must assume that the sums are reasonable and that the sums are only to be used for service fee arrangements and nothing else.

Justice Byron R. White: [Inaudible] do establish that the member and the non-members in equivalent position insofar as his – the financial charge to him is concerned.

Mr. S. G. Lippman: Insofar as the charges concerned to him, but not as to the purpose for which the money could be used.

The non -- the member paying money sir, is money to be used for institutional purposes.

There would be no restriction, but the nominee member, his money could only be used for collective bargaining purposes.

Justice Byron R. White: Well this may mean that this is even more burdensome than the union shop, I think?

Mr. S. G. Lippman: I don't think so, because he is getting, he is paying -- he is paying only what he should pay as a member of the bargaining unit.

Justice Byron R. White: In any event, the same money comes out of the pocket of the member and the non-member.

Mr. S. G. Lippman: Well the same sum, but the purpose --

Justice Byron R. White: All right, that's all.

That was my only question.

Mr. S. G. Lippman: Yes, sir.

Chief Justice Earl Warren: Mr. Weksler.

Argument of Bernard B. Weksler

Mr. Bernard B. Weksler: Mr. Chief Justice and if the Court please, in the course of this case which I have handled from the inception down in Miami, I have heard two startling propositions advanced by the union.

One was advanced just before this Court a moment ago, the effect that Congress did not know how to state a simple principle.

The second startling comment was in the brief that was filed before this Court seeking the writ of certiorari when the union boldly stated in labor relations as in all other aspects of political life, the power of the purse strings is the power to control.

That was stated in the petition for writ of certiorari, where the question that was presented to this Court and the Court considered in granting the writ of certiorari, was not a question pertaining to a service fee arrangement, as the union is now seeking to name this particular device or stratagem or gimmick to try circumvent Section 14(b) and the right-to-work laws of the State of Florida.

The question presented to this Court in the petition for the writ of certiorari was whether the Florida Supreme Court misconstrued Section 14(b) of the Taft-Hartley Act in holding that it authorizes the states both to prohibit and to regulate an agency shop clause in an interstate labor contract.

After this Court granted certiorari, and as I understand the rules of this Court, the certiorari is to be limited to the questions presented in the petition for writ of certiorari, then the union switched its attack and now refers to a service fee arrangement, which is supposed to be something separate and distinct from an agency shop.

And I will quote the eminent Solicitor General when he before referred to a question from Mr. Justice Brennan that there is no difference between an agency shop and an union shop and I believe he labeled it in Latin as “Tweedledum, Tweedledee.”

I will say that a service fee arrangement is the same thing as an agency shop for arrangement on the basis of the record that was presented to the Florida Court and the record that is before this United States Supreme Court.

The record clearly shows, as Mr. Justice White observed the complaint.

All we have before this Court and all we had before the Florida Supreme Court was a complaint, wherein the complaint referred to an agency shop provision, wherein the complaint had affixed to it as exhibits, a so-called important notice to employees which is on page 7 of the record, and also had affixed to it as an exhibit on page 8 of the record, the particular provision in the union contract referring to an agency shop clause.

Nowhere in the contract is there a reference to a service fee clause, but only a reference to an agency shop clause and the petition for writ of certiorari to this Court in 19 places in the petition for writ of certiorari and the brief they referred to an agency shop.

Now, what has the union asked for non-union employees of Food Fair to do?

They have told these employees that you do not have to belong to union if you want to work here for Food Fair.

We very graciously say you don't have to belong to union, but if you want to keep on working here as a condition of employment, you must pay to the union the same amount of money that the union member will pay.

And because some of the employees of Food Fair may not be too literate, the union very graciously posted an important notice to the employees to explain the agency shop to these employees and stated, because many of you, which notice is page 7 of the record, because many of you may not be too familiar with the meaning and purpose of an agency shop, a few words of explanation may be in order.

And they explained that under an agency shop that even though the Union and the Company have agreed that you may not have joined the union, you are obligated under the provisions of the agency shop to pay an initial service fee, which is the equal of the initiation fee for union members and a monthly service fee, which is equal of the monthly dues for those who voluntarily become union members.

This is the same provision that is in the General Motors case.

They are asked to pay the same amount of money as union members, which is more onerous than the situation that you have with a person who voluntarily becomes a union member.

Now many people, the majority of the people in the State of Florida and in 19 other right-to-work states, have by election determined that they do not wish to be members of the union.

That unionism is a matter of voluntary choice, is a voluntary freedom.

I believe if a person wants to join the union, they have all the right in the world to join the union and they should be able to join the union if they so desire, but if at the same time, if a person wishes to refrain from being a member of the union, that person should also have that right.

However, what is being proposed actually by the union in this particular case is that after the Supreme Court in three cases has upheld the constitutionality of the right-to-work laws of states, has now said that your efforts, you work has all been in vain, because even though states may have right-to-work laws and even though it was the intent of Congress in Section 14 (b) to permit states to continue to have right-to-work laws, the union has now said you can forget those right-to-work laws, you can forget the congressional intent, because now we have come up with a new arrangement, a service fee arrangement whereby, we might say to the union member or to the employee, you don't have to pay the same amount of money as a union member, you just have to pay a service fee.

Maybe the service fee might be ten cents less than what a union member would have to pay.

Maybe we can setup an elaborate bookkeeping or accounting system, whereby we will say the money that came from employee X, who is a non-union member, will be used to pay the cost of collective bargaining.

The money that comes from employee Y, who is a union member that money we will use for political contributions, we will use it to pay nice big salaries, we'll use it to buy a building, we'll use it, we will use it for contribution to some worthwhile charity.

How is the average union employee or the average non-union employee able to determine what portion of this so-called service fee which is being exacted from him or her without her concern, how can they determine whether or not that is being used for collective bargaining purposes.

Justice Hugo L. Black: May I ask you a question?

Mr. Bernard B. Weksler: Yes Mr. Justice.

Justice Hugo L. Black: Let us assume as I understand your challenges, the challenges on the basis of this statement and everything else, let us assume they had provided in the contract that they must pay the cost of collective bargaining when they are representing it and they had figured out from last year [Inaudible] was so much that they would be required to pay that as a fee only for collective bargaining, what would you say to that?

Mr. Bernard B. Weksler: I would say sir that they cannot do that.

I --

Justice Hugo L. Black: What would be the argument on that?

Mr. Bernard B. Weksler: The argument on that is the fact that the State has enacted a right-to-work law, which says if a person does not have to be a member of the union, and which would also mean that the person does not have to financially assist the union if that person does not wish to.

I say that the unions have been entrusted by Congress with being the exclusive bargaining agent of all the persons in the bargaining unit that that is something that the unions themselves have sought and asked by Congress that the unions in becoming the exclusive bargaining agent for every employee who is in the bargaining end and has actually now deprived the non-union employee of the right to be able to contract and bargain for himself, for herself, and in this particular instance, even in the contract which is affixed to the complaint, we have a situation, one of my clients is a woman who has been working for Food Fair for over eight years who would have a certain amount of substantial seniority.

This contract, which they allege gives people many benefits, this contract specifically provides in Section 3, page six of the contract which is on page 13 of the record, specifically provides that on layoffs and transfers, stewards, union stewards shall enjoy super seniority.

The chief steward in each store shall be the last employee to be transferred or laid off.

I don't know how many stewards, if a Food Fair store has 30 employees and 20 of them are union employees and ten are non-union, maybe the 20 will be designated as stewards, the other --

Justice Hugo L. Black: Does that have any relevance to the [Inaudible]

Mr. Bernard B. Weksler: No, it has a relevancy in this sense sir, only in the sense, and they talk about benefits that are being given by a contract and as a result that anybody who benefits by it should pay for it.

I would dispute the fact that it necessarily means that there is a benefit to the non-union employee by virtue of a collective bargaining agreement having been entered into.

Justice Hugo L. Black: It is your position that get the issues a little more confused than they have been, what was the -- you have a situation where its agreed that Congress has selected for its own purpose one reason, the majority of unions, if they are majority that represent all the employees as bargaining agents.

I suppose there was a -- figured out exactly what the cost of that bargaining union would be and that would you say that the National Labor Relations Board did not approve such a provision on the contract?

Mr. Bernard B. Weksler: Yes sir, under the National Labor Relations Act, because now is the only obligation that can be made upon an employee, is the obligation to pay periodic dues and initiation fees.

This would not -- that is provided for in Section 8 (a) (3).

Now this would not come within that particular provision, and I can refer the Court to a case decided by the National Labor Relations Board called the Hughes II Company case, wherein you had several locals within a union, one was a white local, one was a colored local.

The white local was paying regular dues and fees into the union.

The colored local was not paying any dues and fees, and the union said that it costs us so much money to take care of grievances and arbitration, we are now going to setup a $15 fee for grievance and we are going to setup an arbitration expense of $400 and those of you who are non-union members will have to pay that money into the union.

The National Labor Relations Board almost revoked the certification of the union and did not do it only because of the fact that they revoked the certification of the union for seeking to get this type of an assessment; that, that would have the effect of putting the colored local, deprive the colored local of the certification, so they gave them a warning and told him that they could not have that.

Justice Hugo L. Black: [Inaudible]

Mr. Bernard B. Weksler: Yes sir.

This case fits -- there is a case that came out of the Third Circuit involving oddly enough the National Labor Relations Board and Food Fair wherein the union went to the Food Fair employees and asked all Food Fair employees to come up with a $15 strike assessment, this was not a period due, it was not an initiation fee.

Some of the employees at Food Fair refused to come up with a $15 strike assessment and the union sought to have them discharged.

The National Labor Relations Board held that this was an unfair labor practice, that the union has no right to obtain any sort of an assessment or charge any assessment, because under 8 (a) (3) they are only able to seek to collect periodic dues which are periodic membership dues and an initiation fee which applies to initiation as a member.

Justice Hugo L. Black: I'm pursuing this inquiry for this reason, there is a question of preemption.

Mr. Bernard B. Weksler: Yes Mr. Justice.

Justice Hugo L. Black: If you are wrong with reference to the fact that your argument, that such an agreement could be held valid under the National Labor Relations Act by the National Labor Relations Board, that would be a serious, more serious question here of preemption that you have assumed, would there not?

Mr. Bernard B. Weksler: Yes sir, if the National Labor Relations Board would feel that this came within their jurisdiction that certainly would be a credit.

Justice Hugo L. Black: That is one of the questions raised.

Mr. Bernard B. Weksler: As far as we are concerned Your Honor, it has not been raised by the record.

It has been raised in the brief after this Court granted the petition for writ of certiorari.

And the Solicitor General of the National Labor Relations Board have already stated not only before this Court orally today, but also in their brief filed in the General Motors case, that the board is of -- and I quote from page 13 of their brief that in preferring to an agency shop that the board is of the view that such an arrangement meeting an agency shop could be regulated by the states under Section 14(b) of the Act.

Now I do not see any type of a difference, frankly between the so called service fee and the agency shop because Congress.

Justice Potter Stewart: [Inaudible] exhibits next to them show that the payments here were exactly the same as initiation fees and dues.

Mr. Bernard B. Weksler: Yes sir, I very gladly not even have to discuss anything relative to a service fee.

Justice Potter Stewart: And a service fee might or might not be an entirely different case.

Mr. Bernard B. Weksler: That's right it is not -- and well, I certainly hope that it would not be necessary --

Justice Potter Stewart: I mean the service fee where it was shown, where it was shown or whether it was not shown that this was for collective bargaining purposes only and it wasn't tantamount to membership.

Your point is that, your case is that I gather that the payments here were the same thing as initiation fees and dues.

Mr. Bernard B. Weksler: Yes I would say this was an agency shop.

Justice Potter Stewart: Therefore they come under the meaning of the word membership in 14(b).

Justice Hugo L. Black: My question is mainly this.

It's doesn't make it what they call this or what you call it, if it's within the ambit of what the board will have jurisdiction to determine is a valid arrangement, I would assume that its pretty well settled by some of our cases that they would be ones that pass on the bona fide of the claim and as to the service fee.

Mr. Bernard B. Weksler: Mr. Justice Black that raises a question in my mind because as you will recall the 1946, this Court in the case of AFL versus Watson pertaining to the same constitutional provision that we have here in the State of Florida, stated that it is up to the state, that the state Court must first interpret and construe its own constitutional provision, so I would humbly submit to this --

Justice Hugo L. Black: Well, I agree to that.

We are bound by what the State of Florida says this does insofar as Florida is concerned, but not insofar as the powers of the National Labor Relations are concerned in connection with the scope that Florida gives this Act.

Mr. Bernard B. Weksler: Well it might come up Mr. Justice Black, but the question as to whether or not a service fee arrangement is embraced within the Florida, right to work provision and I believe that possibly under the construct --

Justice Hugo L. Black: Suppose it were, suppose it were.

Mr. Bernard B. Weksler: Yes, sir.

Justice Hugo L. Black: Suppose Florida had attempted to forbid a service fee arrangement and suppose it would be held that under the National Labor Relations Act that power, the [Inaudible] of the kind is in the board, what would go with your Florida Act in that respect?

Mr. Bernard B. Weksler: I would say that the board would still have to ask the Florida Court or hold off until such time as the Florida Court has determined whether or not the service fee arrangement came within the proscription of the --

Justice Hugo L. Black: Suppose It does, suppose it comes within the prescription of that -- proscription of that constitutional provision, but comes within the allowable limits of the jurisdiction of the board to approve it is right, what would you say there?

Mr. Bernard B. Weksler: I would say then that the board would go ahead and act and I would say also like Mr. Justice Stewart commented on the Indiana thing, that maybe the Indiana Court was wrong.

I think that the NLRB would be wrong.

And then it would just be a situation of going up to the appropriate circuit and determining whether the National Labor Relations Board was right.

I don't believe that the Act permits or authorizes a service fee arrangement, but as pointed out by Mr. Justice Brennan, it actually is not -- Mr. Justice Stewart, it actually is not in this appeal, although it has been argued.

I say to conclude very, very briefly that what has happened over here is that the unions now are seeking to usurp the powers of government by taxing people who don't wish to belong to a union or finance or assist a union by taxing them with the cost of the union.

And this was never the intent of Congress, this is not to be permitted by the unions, and that a person has a voluntary choice to be member of the union and that the slogan, “The land of the free” is not to be substituted by the unions to be called the “Land of the fee.”

Featured:

Railway Clerks v. Allen - Oral Argument

Tue, 25 Sep 2012 22:34:43 +0000

Case:

Railway Clerks v. Allen

Media File:

316_19630325-argument

Related Transcript:

316_19630325-argument

Transcript:

Argument of Milton Kramer

Chief Justice Earl Warren: Number 316, Brotherhood of Railway and Steamships Clerks, Freight Handlers, Express and Station Employees, Petitioners versus, Anna Mae Allen et al.

Mr. Kramer.

Mr. Milton Kramer: Mr. Chief Justice, may it please the Court.

This case arises from a number of employees of the Southern Railway, suing that Railway and its non-operating unions to enjoin the enforcement of a union-shop agreement entered into by the railroad and the unions.

The unions that was sued, the railroad and the union-shop agreements are the identical unions, railroad and agreement that were involved in Street -- in International Association of Machinists against the Street which this Court decided a year and a half ago.

Justice Arthur J. Goldberg: [Inaudible]

Mr. Milton Kramer: The AFL-CIO is asking you to reconsider Street, and I think you might well do so.

We have not asked the Court to reconsider Street because it is not necessary to do so.

The decision below, we say is inconsistent with Street, taking Street as it is.

Although, we concur with the AFL-CIO that the Court might well be considerate and state that no cause of action was shown in this case.

But taking Street as it is, the plaintiffs in this case have not shown a cause of action under the Street case and even if they had, the relief that was given them is inconsistent with the relief that this Court said could be given when there is a cause of action.

In fact, the relief given here is precisely the relief that this Court said could not be given.

Justice William J. Brennan: [Inaudible]

Mr. Milton Kramer: Pardon?

Justice William J. Brennan: The case -- only inconsistent?

Mr. Milton Kramer: Well, it is at least inconsistent.

It is in direct violation.

Justice William J. Brennan: The proviso does say, it's directly to the contrary.

Mr. Milton Kramer: It is directly contrary.

The plaintiffs below chose not to comply with the union-shop agreement.

Instead, they sued to enjoin its enforcement saying that they were not members of the union, did not pay it any money, did not want to pay it any money, and that to enforce the agreement against them would be unlawful.

Now after this Court decided the Hanson case that was a case that came from Nebraska in which this Court upheld the validity of the union-shop agreement and reversed the Supreme Court of Nebraska which had set it aside on the ground that the money might or might not be used in accordance with the individual's view.

This Court in this Hanson case said that wasn't enough; might or might not and therefore, reversed.

This is exactly the Hanson case.

The case was tried before a jury.

14 of the plaintiffs testified and their counsel stated that of the others, two were no longer employees, one was in a position exempt from the union-shop agreement, and that the remainder if they testify, would testify the same way that the 14 did.

Justice William J. Brennan: This is not a class action?

Mr. Milton Kramer: And this was brought as a class action but the trial court did not sustain that it's a class action.

Justice Byron R. White: [Inaudible]

Mr. Milton Kramer: That is correct Mr. Justice.

Now, all the plaintiffs who testified stated that they were not members of the union and were opposed to union-shop.

Now, we have some -- their testimony is summarized on pages 7 to 11 of my brief.

All that they testify to was that they were opposed to a union-shop and that they were opposed to unions engaging in political activities.

Not one of them, although asked, could name a single political cause supported by the unions contrary to their views.

None of them testified that he or she had advised the union of his views or indeed had advised the union of anything.

Justice Potter Stewart: Was there any showing that the union had publicized the political causes and candidates of -- which it had supported?

Mr. Milton Kramer: There was not.

Justice Potter Stewart: So how did they know?

How could the plaintiffs know?

Mr. Milton Kramer: These plaintiffs aren't even members of the union.

Now what the union does is not a secret.

They could ask.

The union has publications and under the Street case, this Court held that the individual must let the union know what he opposes.

In this case, he couldn't even name anything that the union did that it opposed and was asked, name a single candidate that the union supported to whom you're opposed and none of them could do it.

Name a single piece of legislation that the union supported to which you are opposed and none of them could do it except that two of them said, “He was opposed to the enactment of Section 2 Eleventh of the Railway Labor Act.”

Justice Potter Stewart: Well, and a couple of others or more referred to the state right to work (Voice Overlap) --

Mr. Milton Kramer: But they didn't know whether the union supported or opposed it.

Justice Potter Stewart: Oh, was there any way they could have found out?

Mr. Milton Kramer: They could have asked.

Well first, fundamentally under the Street case, these people haven't paid any money to the union.

The union wasn't spending their money whatever it was doing.

And this Court held that it's the spending of their money for causes they opposed which is unlawful, but they haven't paid anything.

Justice Hugo L. Black: [Inaudible]

Mr. Milton Kramer: Pardon?

Justice Hugo L. Black: They will lose their position if they didn't know [Inaudible].

Mr. Milton Kramer: Well that's right.

But until they have paid some money, they have no grievance.

Until the union does something with their money contrary to their views then under the Street case, they have no act -- cause of action.

This Court said specifically that the union-shop is lawful and that the plaintiffs in the Street case said, “The plaintiffs therefore remain obliged to pay the sums hold for by the union-shop agreement,” in practically those words, that they remain obliged to pay and the opinion of the Court that was stated that there was nothing unlawful about the union-shop, there was nothing unlawful about collecting the money.

If there is any illegality involved, the illegality would be spending their money contrary to their views.

That was explicit in Mr. Justice Brennan's opinion.

Well, the other one --

Justice Potter Stewart: Will they have to wait -- they'd -- they have to wait until the money has been spent before they can check?

Mr. Milton Kramer: Well I have to wait until they paid it.

And then they may seek to have it spent for purposes which they opposed.

Justice William J. Brennan: No, not to which they opposed.

Mr. Milton Kramer: They may seek to prevent this expenditure for purposes which they opposed.

Now, the other evidence in this case --

Justice Tom C. Clark: Suppose the evidence [Inaudible]

Mr. Milton Kramer: If they had an agreement?

Justice Tom C. Clark: No, if when a -- the union must -- they have an agreement [Inaudible]

Mr. Milton Kramer: Well that, of course, would be illegal that the union gave money to cope.

Justice Tom C. Clark: But they gave any [Inaudible]

Mr. Milton Kramer: Yes.

Justice Tom C. Clark: They have to wait before they take the money although the union had that understanding (Inaudible)?

Mr. Milton Kramer: They could say under the Street case -- I'm just arguing this under the Street case, not the way I argued the Street case, but assuming the Street case to pronounce the law as it is today, they could either insist -- they could insist either on the union not spending a portion of their money force up to contribution, or, I think the alternative was that they could be relieved of a portion of the dues -- the Court indicated those two alternatives.

Justice Tom C. Clark: You're in effect could object those [Inaudible]

Mr. Milton Kramer: None of these unions have.

I --

Justice William J. Brennan: [Inaudible]

Mr. Milton Kramer: Pardon?

Justice William J. Brennan: Some of the unions have?

Mr. Milton Kramer: In this industry, I think only one union does.

The Brotherhood of Railroad Trainmen, I think, is the only one that had a check off agreement and they're not in this case.

Justice William J. Brennan: How about [Inaudible]

Mr. Milton Kramer: Oh, very common outside the railroad industry.

It is lawful under the Railway Labor Act but the unions just haven't been able to get it.

Now the other evidence in this case consists of a showing that the AFL-CIO engages in certain legislative and other activities.

There is no evidence that those activities of the AFL-CIO with which these unions are affiliated and to which it makes payments, there is no evidence that anything the AFL-CIO does is contrary to the views of any plaintiff.

Justice William J. Brennan: Does the -- the primary [Inaudible]

Mr. Milton Kramer: Oh, very extensive.

Justice William J. Brennan: It relates to precisely where the money went and how much is spent, was there?

Mr. Milton Kramer: No.

It just says substantial amounts.

The precise amounts were not stipulated.

Justice William J. Brennan: If it was a stipulation, they [Inaudible] --

Mr. Milton Kramer: Yes, that's right.

Justice William J. Brennan: Is that it?

Mr. Milton Kramer: That's right.

And it did say there contrary to the views of the plaintiff, there was no evidence of anything that any of the unions do or anything that the AFL-CIO does is contrary to their views.

Justice Potter Stewart: Well, they testified as I understand it that that was contrary to their views to have the Brotherhood spend any money for political purposes.

Mr. Milton Kramer: That's right.

One of these --

Justice Potter Stewart: They -- if they wanted their money spent for political purposes, they wanted to spend it themselves for the --

Mr. Milton Kramer: That's right.

Justice Potter Stewart: -- for the causes in candidates in which they believe.

They didn't want --

Mr. Milton Kramer: That's right and under --

Justice Potter Stewart: -- somebody taking their money away from them which is -- it was necessary for them to pay out of the statute in order to keep their jobs and then spending that money for causes and candidates of a political nature at all.

That's what they're opposed to, isn't what the record shows?

Mr. Milton Kramer: That's right.

And under the Street case, and under the Hanson case, both, that is not enough.

That is exactly what was shown in the Hanson case.

That is exactly what was shown in Lathrop against Donohue.

Justice Potter Stewart: No, no, in the Hanson case, as you told us this morning, it was -- the record there was that the money might or might not be spent for political --

Mr. Milton Kramer: Oh no, it would be spent for political purposes which might or might now coincide with their views.

Justice Byron R. White: [Inaudible]

Mr. Milton Kramer: That's right.

Justice Byron R. White: [Inaudible]

Mr. Milton Kramer: That's right.

Justice Byron R. White: Because they are saying, “You're not opposed to any [Inaudible]?”

Mr. Milton Kramer: At all, exactly.

Justice Byron R. White: [Inaudible]

Mr. Milton Kramer: That's right.

Justice Byron R. White: Even if they come in and say, use that 35% of your income [Inaudible]?

Mr. Milton Kramer: Under both the Street case and the Hanson case.

That was exactly what the Hanson case was.

It was shown that they do spend money for political purposes, but all that was shown and all the Supreme Court of Nebraska found was that those purposes might or might not coincide with the plaintiffs' views.

That was -- this is exactly the Street v. Hanson case and this is exactly Lathrop against Donohue which was --

Justice Byron R. White: So, your position is that the [Inaudible]?

Mr. Milton Kramer: That's right.

No one has such a cause of action and that's what this Court held in the Street case and in the Hanson case that they must show support of a specific cause, of a specific candidate which they opposed and off which they notified the union they opposed before they have a cause of action.

And then when they have a cause of action, they cannot get an injunction against the collection of all money which is exactly the relief given in this case.

This union-shop agreement has been in effect with over 10 years now and these people haven't paid a dime under a preliminary injunction and the permanent injunction.

Now, when this case was appealed to the Supreme Court of North Carolina, first, that court reversed by a 6 to 1 vote.

But after the decision of the trial court and what later became the Street case, they granted a rehearing and our rehearing divided evenly and said the even division does not leave in effect their first opinion but leaves in effect the trial court's opinion.

Oh, one other thing -- one other --

Justice Arthur J. Goldberg: [Inaudible]

Mr. Milton Kramer: It is in effect today.

Justice Arthur J. Goldberg: [Inaudible]

Mr. Milton Kramer: Well, I think so.

Justice Arthur J. Goldberg: [Inaudible]

Mr. Milton Kramer: That's right.

Justice Arthur J. Goldberg: [Inaudible]

Mr. Milton Kramer: Mr. Justice, I don't have information that remains in effect in the Street case too, today.

Justice Arthur J. Goldberg: Why do you say that?

Mr. Milton Kramer: I know, I had to locate, it's in effect today.

Justice Arthur J. Goldberg: [Inaudible]

Mr. Milton Kramer: I know.

I asked this Court to a writ of mandamus which the Court denied me, but the Street case today, the injunctions in effect.

That was not the mandate of this Court.

And this injunction is in effect today, although the language is explicit in the Street opinion that an injunction against the collection of all funds is not a proper remedy, -- that's exactly those words.

It's not a remedy appropriate to.

The -- I had the words in the reversed order.

Now, the only other evidence to support their cause of action is that the -- is at COPE, The Community on Political Education of the AFL-CIO and railway labors politically makes contributions to campaigns of particular candidates.

The uncontradicted evidence not a word to the contrary is that every cent of that comes from voluntary contributions and not one cent comes from dues.

In addition, there was no evidence that any candidate supported by COPE or RLPL was opposed by any of the plaintiffs.

Justice Potter Stewart: Well, I'll ask you first as to your first point that the jury found otherwise.

Mr. Milton Kramer: No.

Justice Potter Stewart: Looking as page 22, the first -- the first [Inaudible] for example.

Mr. Milton Kramer: The jury found -- the jury found that the unions contribute --

Justice Potter Stewart: Dues and fees which they collect from railroad employees --

Mr. Milton Kramer: Yes.

Justice Potter Stewart: -- in support of or opposition to legislation and that's a -- you see -- say that there's --

Mr. Milton Kramer: But they're not talking about RLPL and COPE.

Justice Potter Stewart: No, they're talking about the Union.

Mr. Milton Kramer: That's right.

And of course, there's not a word of evidence to that effect.

Justice Potter Stewart: Well, did you file a motion for judgment notwithstanding the verdict?

Mr. Milton Kramer: No.

Justice Potter Stewart: Well you do have jury findings contrary to what you're telling us.

Mr. Milton Kramer: That's right, there's not a word in the record to support that because -- and there wasn't any point --

Justice Byron R. White: [Inaudible]

Mr. Milton Kramer: No.

Justice Byron R. White: [Inaudible]

Mr. Milton Kramer: Oh, yes.

Justice Byron R. White: [Inaudible]

Mr. Milton Kramer: Oh, -- certainly, because none of the money that is paid to the AFL -- AFL-CIO by the unions goes to COPE for political expenditures, none of it.

The evidence is uncontradicted that every cent of the money that they pay comes from voluntary contributions, because it would be a violation of the Corrupt Practices Act or otherwise, in all probability.

COPE and RLPL were established after the Corrupt Practices Act was amended which prevented unions for making contributions to campaigns of candidates for federal office.

Justice Arthur J. Goldberg: [Inaudible]

Mr. Milton Kramer: It would not and perhaps the jury had contributions to State candidates in mind.

But more significantly, none of the plaintiffs said that he was opposed to any candidate that COPE or RLPL supported.

Justice Hugo L. Black: They did say they were opposed to having their money used for political purposes, didn't they?

Mr. Milton Kramer: For political purposes at all regardless of what they were.

Justice William J. Brennan: But your point is that in any event there was no evidence that anything [Inaudible] where in fact [Inaudible]

Mr. Milton Kramer: No, there is not one word of evidence and indeed with respect to COPE and RLPL there is a stipulation that none of the -- none of those contributions came from either of these unions.

Justice Hugo L. Black: Was there such a stipulation in reference to the finding number two of the jury?

Mr. Milton Kramer: I don't recall what's number two --

Justice Hugo L. Black: Does an independent union used dues and funds which they collect from railroad employees influenced vote in elections to public officers, the answer, “Yes.”

You challenge that --

Mr. Milton Kramer: To influence votes?

No, I would, I would not challenge that they tried to influence votes.

I do challenge that they made contributions to campaigns.

Justice William J. Brennan: Well, what do you mean by that --

Mr. Milton Kramer: Well, they have public --

Justice William J. Brennan: [Inaudible]

Mr. Milton Kramer: That's what I'm talking about, yes.

That -- in their other periodicals, they sometimes announce the candidates they support and urge their members then the --

Justice Byron R. White: [Inaudible]

Mr. Milton Kramer: Of course, that's the -- dues money is used for that.

Justice Byron R. White: [Inaudible]

Mr. Milton Kramer: Well, I -- Mr. Justice White, many people do.

I distinguish between political and legislative.

Justice Byron R. White: Don't you think -- you want to call [Inaudible]?

Mr. Milton Kramer: Well, I call it legislative activity.

It can be called political but the unions are --

Justice Byron R. White: [Inaudible]

Mr. Milton Kramer: No, its legislative when you're before a legislative body.

Justice Byron R. White: [Inaudible] submitted this for [Inaudible] candidate?

Mr. Milton Kramer: Yes.

Justice Byron R. White: Then that's it.

Mr. Milton Kramer: Oh, yes.

Justice Byron R. White: So, that is a [Inaudible]

Mr. Milton Kramer: Oh, for political, I haven't questioned that there was evidence that they used money for political purposes.

I challenge that they contribute money to campaigns.

Justice Hugo L. Black: Well what about number four?

It says that the defendant unions used dues and fees that they collect from railroad employees to make contributions to the campaigns of candidates for election to public office.

Mr. Milton Kramer: There is not a word of evidence to support that.

But even if there were, Mr. Justice Black --

Justice Hugo L. Black: But it was that challenge that (Inaudible) --

Mr. Milton Kramer: We asked the judge not to submit such a question.

Justice Hugo L. Black: Well after he did submit it, did you move to set it aside?

Mr. Milton Kramer: Oh, yes.

Justice Hugo L. Black: On the ground that was not supported by evidence?

Mr. Milton Kramer: No, we moved to --

Justice Potter Stewart: So you didn't?

Mr. Milton Kramer: On the ground that it was not supported by evidence?

All the argument took place before it was submitted.

Before it was submitted the Court -- we argued before the judge that there was -- there's no evidence on that.

Justice Potter Stewart: Well, then you had a finding by the jury that there was -- that these facts did occur?

Mr. Milton Kramer: I -- yes, but you can't find a word of evidence in the records to support a contribution to a campaign, except these long lists of contributions by COPE and RLPL --

Justice Byron R. White: [Inaudible]

Mr. Milton Kramer: What?

I'm sorry.

Justice Byron R. White: That they paid contributions in the campaign?

Mr. Milton Kramer: Yes.

Justice Byron R. White: [Inaudible]

Justice Hugo L. Black: Page 22.

Mr. Milton Kramer: 22, item 4.

Justice Hugo L. Black: [Inaudible] used dues and fees as such?

Mr. Milton Kramer: Yes.

Justice Hugo L. Black: And you did not present as one of the questions presented that you -- the question of whether the findings were supported by evidence?

Mr. Milton Kramer: Not -- not in this Court because it isn't necessary because for two reasons, none of these dues or -- no dues or fees came from any of these plaintiffs.

There is no evidence that the plaintiffs object to any of the candidates the union supported if they supported them, whether through contributions or otherwise.

Justice Hugo L. Black: Well, have they paid any dues and fees?

Mr. Milton Kramer: They have not paid one cent.

Justice Hugo L. Black: They've been going to keep it from -- keep you from collecting them --

Mr. Milton Kramer: That's right, we haven't --

Justice Hugo L. Black: That's the reason.

Mr. Milton Kramer: Pardon?

Justice Hugo L. Black: That's the reason there is but that doesn't -- that doesn't answer the problem, does it?

They enjoined you to keep you from collecting them on the ground that they didn't want them used for political purposes?

Mr. Milton Kramer: Yes.

Justice Hugo L. Black: You say they do not have standing to raise that that way?

Mr. Milton Kramer: That's right.

I say they don't have no standing until certain things happened.

One, that they have paid some money.

Justice Hugo L. Black: But they -- they come in and say we don't want to pay it because it's illegal and we don't want to pay it and the Court enjoins.

Mr. Milton Kramer: But in Street, this Court specifically --

Justice William J. Brennan: Your point -- your point is that Street, we held could not have enjoined the payment of the dues under the union establishment?

Mr. Milton Kramer: If the Court decided anything in that case they certainly decided that.

Justice Hugo L. Black: Is that the part that you are asking us to overrule?

Mr. Milton Kramer: Oh, no.

I'm asking you to overrule that there was a course of action at all.

Your Honor, even in your opinion, even in, even in your partially dissenting opinion, you repeatedly stated that the objection must be to a specific cause and he must notify the union what it is and because you said --

Justice Hugo L. Black: Well this -- according to this as far as specific cause they don't want their money used for political purposes.

Mr. Milton Kramer: Well, you spoke about specific candidates --

Justice Hugo L. Black: I didn't say that they had to.

I -- the idea that I was -- I'm sorry of it?

Mr. Milton Kramer: No.

Justice Hugo L. Black: If I indicated there's a difference between making a man -- freeing a man from having his money extracted from him to support one candidate and extracted from him to support a group of candidates in political causes.

Mr. Milton Kramer: Well, you certainly, repeatedly said a particular candidate or a particular cause and in addition you repeatedly said --

Justice Hugo L. Black: That wouldn't be one of the reasons that for a particular candidate or particular cause.

Mr. Milton Kramer: But I -- it --

Justice Hugo L. Black: My thought -- my (Inaudible) -- my objection was on the ground that the union didn't have a right have the -- half of the law to force people to pay dues to it and it's going to be used for political purposes --

Mr. Milton Kramer: To which --

Justice Hugo L. Black: -- one way or the other.

Mr. Milton Kramer: Oh, no.

But you specifically said to which they object, the cause to which they object --

Justice Hugo L. Black: That's what they object.

Mr. Milton Kramer: And -- but a particular cause you said and of which --

Justice Hugo L. Black: Well, I didn't mean by that, that they had to go and look at each particular candidate to see whether that was the particular one.

Mr. Milton Kramer: And you also --

Justice Hugo L. Black: That would put a burden, I never would have thought of putting on you.

Mr. Milton Kramer: You also said they have to notify the union of the cause to which they object.

Justice Hugo L. Black: Well they did by enjoining them, didn't they?

Mr. Milton Kramer: Well, they haven't notified them of any particular cause of any particular candidate.

Justice Hugo L. Black: You said the objective, their money being used for political purposes.

Mr. Milton Kramer: Yes, and they didn't say that, Your Honor.

Justice Byron R. White: And that's by all political causes, all political causes?

Mr. Milton Kramer: And all legislative activity.

Justice Byron R. White: They have in every single political cause --

Mr. Milton Kramer: That's right.

Justice Byron R. White: [Inaudible]

Mr. Milton Kramer: All.

If they -- they couldn't engage in any political or legislative activity and as Your Honors know, I'm sure.

Justice Byron R. White: No, it is -- there's no implication they took their money.

Mr. Milton Kramer: But they haven't given them any money.

Justice Byron R. White: [Inaudible] you still have to pay [Inaudible]

Mr. Milton Kramer: That's right.

That it would have to be a particular cause and also that they must notify the union what it is.

Even in your opinion, Mr. Justice Black, you repeatedly said, “Of which they have notified the union.”

Justice Hugo L. Black: I meant as I gather this, they say they have notified them.

Mr. Milton Kramer: They did not notify --

Justice Hugo L. Black: They notified them by an injunction and got an injunction to keep them from still using their money for that purpose.

Mr. Milton Kramer: Well, this is an -- this is a theory of all law I find difficult to understand.

Justice Hugo L. Black: Well, I find it difficult to understand why you don't argue it on the merits.

Mr. Milton Kramer: And you argued to speak --

Justice Hugo L. Black: There's a difference -- there's a difference, a vital difference between those who think they have a right to spend their money for political purposes by forcing it from them and those who think if they have all the right in the world if they've take up contribution, that's your issue.

Mr. Milton Kramer: Well --

Justice William J. Brennan: Well this is the difference.

Mr. Milton Kramer: Pardon?

Justice William J. Brennan: I just -- I don't want to --

Mr. Milton Kramer: No, it --

Justice William J. Brennan: I don't want to get to a controversy with my Brother Black, but if I understand your position you don't have to reach any of these -- any question in this case beyond [Inaudible] of the law they get on to be overruled [Inaudible] still law.

What Street held was that you just can't bring an action like this into the type of money.

Mr. Milton Kramer: That's right.

Your --

Justice William J. Brennan: Oh, if that's so, the case is over.

Mr. Milton Kramer: That's --

Justice William J. Brennan: [Inaudible] case overruled.

Mr. Milton Kramer: That's right.

Justice William J. Brennan: Is that right?

Mr. Milton Kramer: That's right and Mr. Justice Black, Mr. Blakeney is going to make an argument similar to what you're suggesting and that is that they notified them by suing them.

Well, this isn't a peculiar --

Justice Hugo L. Black: I mean, -- maybe the Court did hold that, I didn't so read his opinion.

Mr. Milton Kramer: No, I thought that they --

Justice Hugo L. Black: You just said that you couldn't notify him by -- and then file a lawsuit, enjoin it and if that would --

Mr. Milton Kramer: But -- I find it --

Justice Hugo L. Black: -- keep it from doing anything.

Mr. Milton Kramer: I find it difficult to understand how somebody -- let's say he needs -- he has to notify him to have a cause of action.

So somebody who doesn't have a cause of action against somebody else acquires a cause of action against that somebody else by suing him.

Now that's a theory for -- a document of jurisprudence I can't grasp.

Justice Byron R. White: But I suggest -- you assume what you're arguing on the merits [Inaudible]

Mr. Milton Kramer: I have about one minute left, Mr. Justice White.

I think -- oh, no, you started five minutes late.

I have about six minutes left.

The merits of course were fully argued in the Street case and the Court divided five ways. Basically, it is if that all -- well, there were several propositions.

First, there is no government action here.

All that Congress has done is to repeal its own prohibition against the union-shop, and secondly, to say that state law shall not apply to union-shop agreements in the railroad industry.

And that's all its -- that -- that's all the federal action there is.

Now there were those who say superseding state law makes it federal action and therefore the unions -- in getting a union-shop agreement are bound by constitutional limitation.

I think that's wrong.

I think that repealing your own law, repealing your own prohibition is clearly constitutional and superseding state law and what is the most essential of interstate activities, the railroad industry is not unconstitutional.

And so therefore, it shouldn't reach any constitutional question but if we do reach the constitutional questions, then I think this act -- this conduct is lawful.

There is no right of the plaintiffs that is being in no constitutional right being infringed, I know Mr. Justice Black disagrees with me.

Justice William J. Brennan: [Inaudible]

Mr. Milton Kramer: And Mr. --

Justice William J. Brennan: [Inaudible]

Mr. Milton Kramer: Oh, I certainly do.

I think that was the only fully sound opinion of the five. I think the opinion of Justice Frankfurter in which Mr. Justice Harlan concurred was the sound view and expresses the view that I would now expound that no rights are being infringed because these people are not being prevented from saying anything or writing anything or supporting or opposing anything.

They are not being ordered or made to say anything except in the very indirect sense to which Mr. Justice Black referred in his opinion that using their money to publicize certain ideas this in effect making them say it.

Justice Hugo L. Black: Isn't it?

Mr. Milton Kramer: No.

I think not.

I think it is not any more, Your Honor -- well, I think -- one of the examples I gave in the Street case was that, the Federal Government certainly takes tax money that is exacted and it uses some of that money to employ [Inaudible] of various states which preached their faiths.

Justice Hugo L. Black: What would you say if the Federal Government took their money to support the Republican Party, your tax money, how do you feel about it?

Mr. Milton Kramer: Well, the suggestion has been made.

Justice Hugo L. Black: And maybe -- maybe I'll better put in the Democrat.

Mr. Milton Kramer: No.

Yes, in my case make it a Democrat.

I would object, but I don't think I would have any constitutional right.

The suggestion has seriously been made that the Federal Government financed the presidential campaigns.

Justice Hugo L. Black: That‘s right, the presidential campaigns but that's quite human and that's what -- the Federal Government doing something in connection with regulating election.

Mr. Milton Kramer: That‘s right.

But --

Justice Hugo L. Black: But your argument is that a man who wants a job, the only way he can get it by -- a reasonable closed shop is to join the union or pay dues.

They -- the union then as to the Federal Governments say, you have to do that and take his money and spend it for political purposes when he is supposed to.

Mr. Milton Kramer: Of course the Federal Government didn't say he has to join the -- it has to join the union.

Justice Hugo L. Black: No, but they give you -- they fix the power that way so that when you come -- turns out and spend it he has to if he gets his job.

Mr. Milton Kramer: Well, if the union is successful in negotiating --

Justice Hugo L. Black: Yes, that's right.

Mr. Milton Kramer: -- union-shop agreement and it doesn't even have -- doesn't have them all over yet.

So --

Justice Hugo L. Black: No, it doesn't have them all.

Justice Potter Stewart: Does in this case --

Justice Hugo L. Black: And that's --

Justice Potter Stewart: It does in this case.

Mr. Milton Kramer: And does in this case.

Justice Potter Stewart: That's what we're talking about.

Mr. Milton Kramer: But it's not because of the Federal Government except in the sense that the Federal Government repealed this prohibition.

Justice Byron R. White: [Inaudible]

Mr. Milton Kramer: And I would submit, Mr. Justice White, that it didn't have to preempt.

I would suggest that the state laws couldn't have --

Justice Byron R. White: [Inaudible] they did have to be [Inaudible] held what it did?

Mr. Milton Kramer: It‘s been held that it preempted in so many words, it has not been held that it had to.

Justice Byron R. White: [Inaudible]

Mr. Milton Kramer: Well, it's not a federal contract except --

Justice Byron R. White: [Inaudible]

Mr. Milton Kramer: No, the fede -- the -- all that federal law does with effect to that contract has put certain limitations on it.

Justice Byron R. White: Do you say that -- would you say that the union-shop is an agreement [Inaudible]?

Mr. Milton Kramer: The limitations are controlled.

Justice Byron R. White: [Inaudible]

Mr. Milton Kramer: That's right and I would suggest the state law couldn't prevent it anyway because it would interfere with interstate commerce to have a union-shop agreement, say, on the Southern Railroad with subways in 13 states legal in some states and illegal in others.

But the Supremacy Clause of the Constitution is an article of the Constitution.

When Congress exercises a power specifically conferred on it by the Constitution, it cannot be acting unconstitutionally.

Justice Arthur J. Goldberg: Mr. Kramer, [Inaudible]

Mr. Milton Kramer: That's right and that was a com -- that was very common before we had the federal legislation on the subject, very common.

Justice Arthur J. Goldberg: [Inaudible]

Mr. Milton Kramer: It does not show up yet --

Justice Byron R. White: [Inaudible]

Mr. Milton Kramer: Three of them had.

It was a -- it's a silly situation.

The injunction is still in effect as to all six who put up a bond.

Three have always been members; one is retired and one is in an accepted position not subject to the union-shop.

But the injunction is after all six of them, three of them have all -- have been members all along.

Justice Arthur J. Goldberg: [Inaudible] Do you think that an injunction restraining [Inaudible]?

Mr. Milton Kramer: I could stop with that, Mr. Justice Goldberg, so far as the remedy is concerned.

I would not want the Court to stop with that.

I want the Court to say that under Street case, these people have not proven a cause of action so they for -- for both reasons.

First, they haven‘t proven a cause of action, and secondly, even if they have, the remedy was the wrong remedy.

Justice Potter Stewart: Well you, you speak as though the only remedy was that paragraph which appears at the top of page 23 in the record.

Part of the remedy is -- and a very important part of it is the following paragraph, is it not?

Street had nothing to do with the -- it didn't concern itself with this kind of a remedy.

Mr. Milton Kramer: That proviso you're talking about?

Justice Potter Stewart: Yes.

Mr. Milton Kramer: Provided however as of today, the unions are completely enjoined from collecting anything from these plaintiffs.

They can't collect anything.

Now there is a proviso that if the unions come back and prove what portion of their dues they spend for collective bargaining, plus collective bargaining, then that portion of their dues with respect to all of them, with collection of that portion would not be enjoined.

Mr. Blakeney will argue that that means they are not enjoined, but they are today enjoined and have been for 10 years enjoined from collecting anything and if only if they come back and make certain showings that injunction may or may not be modified, and that showing is -- would excuse these people from paying anything for anything other than collective bargaining.

Justice Potter Stewart: It's not a matter of modifying the injunction at the -- this is a very term of the decree?

Mr. Milton Kramer: Yes, it was not applied to such portion as they proved to the Court is used only for collective bargaining.

In other words, if the unions go to Congress --

Justice Potter Stewart: Well, it will be reasonably necessary and related to collective bargaining --

Mr. Milton Kramer: Yes.

Justice Potter Stewart: -- between the defendant unions --

Mr. Milton Kramer: Yes.

Justice Potter Stewart: -- and the plaintiff's part.

Mr. Milton Kramer: They couldn't go to Congress under that and as to an increase and the benefits of the -- under the Railroad Unemployment Insurance Act or under the Railroad Retirement Act.

Justice Hugo L. Black: Suppose you're -- suppose you're going to the Court and say we've decided that we're not going to try to force people to pay dues in the long run which will be used for collect -- for supporting candidates or political causes, would this injunction still work against him?

Mr. Milton Kramer: It would.

Justice Hugo L. Black: Have you asked him to change it on that basis?

Mr. Milton Kramer: I have not asked him to change it, I appealed it.

Justice Hugo L. Black: But you didn't want that?

You have -- you‘re not ready to say that you will not use money collected from them, force them to pay it and then use it for political purpose.

Mr. Milton Kramer: Because we never could agree on whatever their political purpose is.

No, I've -- I've not asked for that.

Justice Hugo L. Black: Well, I think both of us could agree that when you spend money to support candidates, political purposes --

Mr. Milton Kramer: Yes.

Justice Hugo L. Black: -- or parties?

Mr. Milton Kramer: I'm not sure we would agree whether seeking an amendment of the Railroad Unemployment Insurance Act is a political purpose.

Justice Hugo L. Black: Well, that's not -- that -- I doubt if you've had any trouble with the Court on that.

Mr. Milton Kramer: Well, we certainly have because the Court has said we could claim --

Justice Hugo L. Black: But your main trouble is, isn't it -- why not face it, that your main trouble is that you think if we were wrong in holding that the union which has a close shop is not free to force its people to pay dues to use for political purposes.

Mr. Milton Kramer: I -- I didn't --

Justice Hugo L. Black: Ordinary everyday political purposes like supporting parties or candidates.

Mr. Milton Kramer: I think you were wrong in that respect, yes.

I think that the opinion of Mr. Justice Frankfurter, Mr. Justice Harlan was right that that is lawful and that -- but the Courts says -- I'm not asking the Court now to reconsider it.

I'd be happy to have the Court reconsider it and set a time for argument because I think it was wrong when it went that far, but to decide this case you don't have to go that far.

In this case, under the Street case, under its unequivocal language, they have not proven a cause of action and the relief granted is expressly contrary to the relief which the Street case said could be given when there is a cause of action.

Justice Potter Stewart: Just before you sit down, Mr. Kramer, I have a question.

In Great Britain, as I understand it, there is a specific provision that employees who are under like the bargaining agreements like this can “contract out” as they call it there.

Now, they had trouble in defining what is and what is not political activity?

Mr. Milton Kramer: No, the contracting out there -- you see in Great Britain, one of the political party is this --

Justice Potter Stewart: Is the Labor Party.

Mr. Milton Kramer: Is the Labor Party itself.

Justice Potter Stewart: I understand that.

Mr. Milton Kramer: Now, they use the money to support their own candidates and they have different rates of dues for those who do not want to have their money used for political purposes, but that's by statute.

Justice Potter Stewart: I'm just asking you that -- how -- whether it's difficult or has been -- has proven difficult to do --

Mr. Milton Kramer: Oh, but that's --

Justice Potter Stewart: -- doing it?

How about the lobbying activities?

Mr. Milton Kramer: I know of no trouble about lobbying activities.

Unions are not restricted to lobbying activities.

Justice Potter Stewart: In Great Britain --

Mr. Milton Kramer: What --

Justice Potter Stewart: I'm talking about Great Britain.

Mr. Milton Kramer: Yes, in Great Britain, because they are not restricted because they don't need lobbyist.

The members of the legislature themselves are their lobbyists.

They don't have much in the way up lobbying except by the members of the House itself.

And incidentally, Mr. Justice Stewart, it would --

Justice Potter Stewart: It's not a comparable situation (Voice Overlap) --

Mr. Milton Kramer: Not a comparable situation.

Justice Potter Stewart: -- your point?

Mr. Milton Kramer: And incidentally, the amount that's contracted out is about -- is usually one shilling per year, sometimes two shillings per year.

Justice John M. Harlan: Are you going to say anything about the welfare funds and the insurance funds?

Mr. Milton Kramer: I'd like to but I see two lights here.

I --

Chief Justice Earl Warren: You have a moment to do it.

Mr. Milton Kramer: Yes.

Another one of the things that you -- that that -- in other words, the grounds of the injunction is that one of these two unions, all unions but two were dismissed from the case because none of the plaintiffs was represented by any of the others.

One of these unions had a death benefit fund and they are -- the unions could not collect anything from the plaintiffs, so long as they have this death benefit fund.

Now, this death benefit fund is a fund that varies in amount depending on how long a person has been a member.

And when he dies, his wife or estate, is given the amount of -- it goes up as high as $250.

Now it also -- it isn't just how long you've been a member, it's how long you have continuously been a member and so it serves two functions.

First, it serves a function of having some quick money readily available for the family of a railroad employee who dies and secondly, it reduces the expenses of collecting dues because there's an inducement for people to keep their dues current because the longer they are continuously been a member, the more their death benefit will be.

Now it is held that this is an improper expenditure of union dues under a union-shop.

These are things that unions have done since time immemorial.

In fact, some of the unions were organized with a very first as paternal beneficial associations to have death benefits for the families of employees who died.

There was a reason that some of the unions were created and they only at later engaged in collective bargaining.

This held that this is not a proper union activity for people who don't want to belong to the union.

This is something unions have done and since they were established, it is not taking away; it's not depriving anybody of any constitutional right.

Nobody said he objected to death benefits.

It was put to them in terms of, do you want to be ordered to take insurance with so and so -- that company and they said, “No, I'd like to pick my own company to buy insurance.”

That's the only evidence that this is opposed by any of the plaintiffs.

None of them said they were opposed to union paying death benefits to the families of deceased members.

And if any of them did -- if any of them felt that way, none of them advised the union that he didn't want his money spent that way and he couldn't advice the union that he doesn't want his money spent that way because he hasn't given any -- the union any money to spend.

Chief Justice Earl Warren: Very well.

Argument of Whiteford S. Blakeney

Mr. Whiteford S. Blakeney: Mr. Chief Justice --

Chief Justice Earl Warren: Mr. Blakeney.

Mr. Whiteford S. Blakeney: -- may it please the Court.

I would first like to summarize briefly, if I may, just what it is that the record in this case establishes.

It's clear first that these plaintiff employees have been notified by the defendant unions and by their employer, the Railway Company that they will be discharged from their jobs of long standing unless they pay money to the defendant unions.

It's further established that this money will, in part, be used for political purposes unrelated to collective bargaining.

The plaintiff employees have gone upon the witness stand and have stated that they are deeply opposed to money being taken away from them by compulsion against their will and used for political purposes as to which they have no opportunity of choice or decision.

Now this, we submit to this Court, is a double wrong of major import, the taking of money from people against their will as a condition of working and the using of that money to put men into the offices of Government.

Justice Arthur J. Goldberg: [Inaudible] is this, one candidate says, “I believe it is compulsory arbitrations upon the railroads, the only way you could [Inaudible] -- that have a political interest.

Now, another candidate says, “I believe in free collective bargaining.”

Is that the political purpose under [Inaudible] collective bargaining in that campaign?

Mr. Whiteford S. Blakeney: I must admit, Mr. Justice Goldberg, that there is of course often difficult question as to what is political in nature.

However, this Court in the Street case used the phrase political purposes throughout and certainly to contribute money directly to the campaign of a candidate to get him elected to office is a political purpose and it is established in this case that that is what is done with this money.

Justice Arthur J. Goldberg: What was your answer be directly to the question that I have put?

Mr. Whiteford S. Blakeney: If one candidate is [Inaudible]

Justice Arthur J. Goldberg: Let's assume [Inaudible] campaign was [Inaudible] arbitration was the -- voluntary arbitration to your collective bargaining.

Mr. Whiteford S. Blakeney: And one candidate espoused it and --

Justice Arthur J. Goldberg: One candidate espoused that and [Inaudible]

Mr. Whiteford S. Blakeney: My position, sir, would be that if the unions took money involuntarily from the employees and said, “We are going to put your money on this candidate, not that candidate.”

And the employee has no opportunity to dis -- to express or decide which candidate he wants it on and the union officials put it on one, that is an expenditure of political purposes condemned by the Street decision.

Chief Justice Earl Warren: Supposed I'd say ma -- Suppose -- oh, pardon me, pardon?

Unknown Speaker: Excuse me.

Chief Justice Earl Warren: I'm just going to say, suppose that same issue was before the Congress and some money was spent to support the free bargaining, would that be political?

Mr. Whiteford S. Blakeney: Not in electing a Senator or a --

Chief Justice Earl Warren: No, but no.

Mr. Whiteford S. Blakeney: -- or Congressman.

Chief Justice Earl Warren: Appearing before the Congress and advocating free and collective bargaining as opposed to compulsory arbitration.

Mr. Whiteford S. Blakeney: This would be a closer question, I think, Your Honor.

A closer question and might have to be as Mr. Justice Frankfurter once expressed it, decided by litigated elucidation.

But at any rate sir, there are unquestionably in this case expenditures undeniably political, undeniably so.

The jury --

Justice Hugo L. Black: But I suppose that this one man -- this man who said, I will vote this way on this one issue.

He's running for an office, there's many other things, he shouldn't have -- doesn't express himself on that, the --

Mr. Whiteford S. Blakeney: That's true, sir.

Justice Hugo L. Black: And the man might be against -- I've had that extreme that of myself and realize it, a man might be -- for a man's expression of views on labor one way or the other and yet be against him strongly.

Mr. Whiteford S. Blakeney: Indeed, sir.

Justice John M. Harlan: I have the experience that.

Mr. Whiteford S. Blakeney: Indeed, sir, but the point is that the jury found and it is established here that that money was used to elect certain candidates to influence elect -- influence elections to public office and also to effect certain legislation and defeat other legislation and at least some of that is political purposes.

That I think it cannot be denied.

Now --

Justice John M. Harlan: Well, I always have and I do when I was engaged in political -- in a campaign for office, I was engaged in what most people thought about as a political campaign.

Mr. Whiteford S. Blakeney: That certainly the general idea, sir.

Justice Hugo L. Black: [Inaudible]

Mr. Whiteford S. Blakeney: Yes, sir.

Now, I was saying that to take the money by compulsion, to use it for such purposes, is a major erosion both of individual liberty and a free government, and it is therefore indeed an import of area.

Justice William J. Brennan: Now, you – [Inaudible] the injunction is [Inaudible] an injunction against -- based on such a party, an injunction by way of remedy against the payment of dues.

What do you do with what we said in Street about that?

Mr. Whiteford S. Blakeney: I recognize that I must come clearly to that and I will in detail, Your Honor, but at this moment may I simply say there is indeed language in Street that looks in the direction of refusing such injunction as we have here.

There is other language in Street that looks in favor of what we have here and most important of all, Your Honor, each and every defect that you pointed to for reversing the Street judgment is corrected in this judgment, each as I will try to show.

Now, the jury in this case and has already been noted, this case unlike Street, was not litigated upon stipulations of evidence but upon the presentation of evidence and testimonies subject to examination and cross examination in the ordinary manner.

And the issues therefore were decided not by the Court but by a representative jury upon issues submitted to them by ordinary procedure.

I've mentioned that merely in passing.

The evidence consisted of both testimony and the exhibits.

The exhibits for example, Your Honors, included many pages setting forth by date, by name, by amounts, hundreds of thousands of dollars contributed by agencies of the unions to political candidates.

And it includes for instance --

Justice Byron R. White: [Inaudible]

Mr. Whiteford S. Blakeney: By these petitioners directly to the candidates, the evidence does not so show rather it --

Justice Byron R. White: [Inaudible]

Mr. Whiteford S. Blakeney: For publications, indeed sir for candidates through other agencies and that's what I was about to call your attention to in response to your question.

Through these unions, put money into the AFL-CIO which in turn put money into COPE, the Committee for Political Education so called.

These unions also put money into --

Justice Byron R. White: What you're saying is -- are you sure you're talking about money and either these petitioners or the AFL-CIO is not dues?

Mr. Whiteford S. Blakeney: All through dues I'm talking about, Your Honor, compulsory dues, nothing else.

Justice Tom C. Clark: Mr. Blakeney, you're talking right about the capital contributions, these railroad contributions made to the AFL-CIO for their affiliations.

Mr. Whiteford S. Blakeney: I am sir, so far as AFL-CIO is concerned which AFL-CIO in part took and gave to COPE which COPE in turn took and gave to political candidates.

And also to RLPL through RLEA which are railway labor organizations, Railway Labor Executive's Association, Railway Labor's Political League, likewise made these contributions these exhibits here in the back of my brief, lists these expenditures by RLPL.

Justice Byron R. White: [Inaudible]

Mr. Whiteford S. Blakeney: They were except that my adversaries still contend, as Your Honors note, not formally because they are too late to contend it formally.

It's settled by a jury verdict and by lower court --

Justice Byron R. White: [Inaudible] that's direct contribution to a candidate.

Mr. Whiteford S. Blakeney: Yes, sir, pardon?

Justice Byron R. White: [Inaudible]

Mr. Whiteford S. Blakeney: That's true, sir, but the jury filed against him on that.

He's at war with the record.

Yes, sir.

Justice Byron R. White: Was that [Inaudible]

Mr. Whiteford S. Blakeney: The other admits he did pay money to print its publications for political purposes.

I mean, direct out of his treasury, direct.

But the candidates for political office got it, so the jury found through these other agencies and believe me it was the most difficult matter to trace.

And -- but all that is resolved by the trial, if the Court please, he argued to the judge before it went to the jury that the evidence wouldn't sustain such a finding.

After the jury -- he argued to the jury they shouldn't find it after the jury verdict he contented it should be set aside.

He argued then to the Supreme Court of North Carolina that the evidence didn't sustain it.

All those courts went against him on that subject.

All those tribunals went against him and that's settled.

He cannot herein this Court, I take it, argued that the evidence doesn't sustain the verdict.

Rather we've got two questions before us now as I understand.

His first point is that our cause of action is defeated any how, no matter the finding, defeated because we have insufficiently advised the unions as to what causes our candidates they espoused and we opposed.

Now, the first answer to that, Your Honors is that in Street, the plaintiffs were found to have a valid cause of action and they made known their opposition in no different sense than what these plaintiffs here have.

Furthermore, if the Court please as Mr. Justice Stewart mentioned, how can these plaintiffs, how could they have made known their opposition any more specifically because the record is replete that these unions don't even notify their own local officials as to who they support and what causes they support and these local officials testified.

Again and again, I don't know what they do with the money, whom they support and whom they oppose, how then could our class, adversary litigants have known?

And what must we do about notifying them other than as this Court said in a Street, through this litigation let them know that we oppose and they went on the stand and they said, “We oppose”, we've got their testimony quoted considerably in our brief and I submit it is pointed, positive, repeated and rather eloquent.

They say, when we -- when money of ours is used to elect people to government, we think we ought to say, “Do we want our money to go to this man or to that man,” and not somebody else make that decision for us.

Justice Arthur J. Goldberg: Mr. Blakeney, are you relying solely here to have it on political grounds the abandonment that you present -- which you made below unless there are [Inaudible] to the jury findings that upon the -- these contributions for legislative purposes [Inaudible] the collective bargain and used the money [Inaudible]?

Mr. Whiteford S. Blakeney: No, sir.

I contend that --

Justice Arthur J. Goldberg: Could you say a few words about that, in efficient to political matters with justifications.

Mr. Whiteford S. Blakeney: Well, Your Honor, I don't know that those can be excluded from being political matters.

I don't know that the -- that the pushing for a legislation is not a political matter.

The jury found --

Justice Arthur J. Goldberg: I thought you [Inaudible]?

Mr. Whiteford S. Blakeney: No sir, no sir.

I say that I don't try to define what all is political matter.

Justice Arthur J. Goldberg: Under the special powers [Inaudible]?

Mr. Whiteford S. Blakeney: Yes, sir.

Justice Arthur J. Goldberg: The jury means special findings [Inaudible]

Mr. Whiteford S. Blakeney: Yes, sir.

Justice Arthur J. Goldberg: And those special findings were made with three or four subjects.

One is the opposition for legislation.

Mr. Whiteford S. Blakeney: Yes, sir.

Justice Arthur J. Goldberg: Now, you would say that that's political and unrelated [Inaudible].

Mr. Whiteford S. Blakeney: I do now so contend.

Yes, sir.

Justice Arthur J. Goldberg: What if the legislation for a full proof [Inaudible] related to collective bargaining in your State?

Mr. Whiteford S. Blakeney: I do not -- to seek to pass the law on that it seems to me would not -- would be political matters.

Now I can --

Justice Arthur J. Goldberg: [Inaudible] which is passed on some of them [Inaudible] definitely to collective bargaining?

Mr. Whiteford S. Blakeney: I do not know that that could be said to be unrelated to collective bargaining.

The jury found, Your Honor, not about this and that hypothetical case, they said its been shown in this case to us that this unions take this money and they do seek legislation which is unrelated to collective bargaining and this Court said the same in Street.

Justice Arthur J. Goldberg: But your position [Inaudible].

Mr. Whiteford S. Blakeney: Yes, sir.

Justice Arthur J. Goldberg: Your position would be, I take it, the question that I asked you was the -- would you [Inaudible]?

Mr. Whiteford S. Blakeney: I do not say that, sir necessarily --

Justice Arthur J. Goldberg: Do you --

Mr. Whiteford S. Blakeney: I say that --

Justice Arthur J. Goldberg: [Inaudible]

Mr. Whiteford S. Blakeney: I did not, sir.

That particular legislation was not up in this case.

Justice Arthur J. Goldberg: Is the [Inaudible]?

Mr. Whiteford S. Blakeney: No, sir.

They use it as an argument just as Your Honor is now suggesting.

The jury said in effect their verdict dismissed certainly it is, whatever may be cases of particular pieces of legislation whether they are political or not at any rate in this case there has been shown matters that are political, that money is being used for and these matters that have been shown to us are unrelated to collective bargaining and --

Justice Hugo L. Black: Suppose they are related to collective bargaining, are you saying that because political matters' legislations are related to political -- collective bargaining, are you agreeing that that couldn't be political?

Mr. Whiteford S. Blakeney: No sir, I'm --

Justice Hugo L. Black: [Inaudible] political part, we've had in this country from the beginning have been over that issue.

Mr. Whiteford S. Blakeney: I do not say that, sir.

All I say is what this Court said in Street.

I merely use this, as far as this Court win.

This Court did go so far as to say that political matters that are unrelated to collective bargaining, it cannot take money from a man and spend it on and against his will.

Now, we're --

Justice Hugo L. Black: Suppose -- suppose this law was one which provided that members of the Chamber of Commerce couldn't get a job unless he paid dues to the courts of Chamber of Commerce dues, there's a lot of members of the Chamber of Commerce [Inaudible].

What would you say about that law?

Mr. Whiteford S. Blakeney: I think it'd be political.

Justice Hugo L. Black: Do you?

Mr. Whiteford S. Blakeney: Now, if the Court please though --

Justice Tom C. Clark: Exactly what's political about death benefits?

Mr. Whiteford S. Blakeney: About death benefits?

Death benefit is a corner of this case as a case that has never been much argued or discussed.

Then I rest nothing upon that sir.

Justice Arthur J. Goldberg: [Inaudible] as the basis to justify the injunction?

Mr. Whiteford S. Blakeney: If this Court should come to the conclusion that that portion of the ca -- of the judgment should be eliminated, I say that it can be eliminated without any effect upon the real thrust of this judgment.

Now may I come quickly to the judgment because as Mr. Justice Brennan has suggested, that is what I must meet.

I do say first about this business of notifying the unions.

We did -- what was done in Street and they had a valid cause of action and our notification couldn't go beyond that as a factual matter, but now on the judgment, what does this judgment do?

This judgment does not enjoin the union-shop generally at all.

Here are the defects in the judgment that the Court found in Street, the Court said first it's defective because it's a class judgment.

Here, there is no element of class judgment.

It was rigorously eliminated by the trial court.

Nobody purports to benefit from this judgment except people who are active litigants.

What else did the Court say was wrong with the Street judgment?

And I'm quoting now from Mr. Justice Brennan's opinion, page 18 of my brief, I will read just a sentence, “Restraining the collection of all funds, sweeps too broadly,” that on down, “the prohibition is absolutely against the collection of all funds.

The complete shut off of this source of income defeats the congressional plan and so forth.”

We also think that a blanket injunction against all expenditures of funds for the disputed purposes and so forth would not be proper.

Now, Your Honors, the judgment before you does none of those things.

This is not a judgment restraining the collection of all funds from these plaintiffs.

It is not a prohibition absolute against the collection of all funds from these plaintiffs.

There is no complete shut off of union funds from these plaintiffs and there's no injunction against expenditure of anything.

In other words, under this judgment, the unions are left free to collect any and all amounts authorized by the union-shop agreement from voluntary employees and they are left free to collect any and all sums related to collective bargaining from all employees covered by the contract voluntary and dissenting alike.

Justice William J. Brennan: [Inaudible] -- I gather this is before the [Inaudible].

Mr. Whiteford S. Blakeney: Yes, Your Honor.

Justice William J. Brennan: [Inaudible]

Mr. Whiteford S. Blakeney: That's true but the --

Justice William J. Brennan: [Inaudible]

Mr. Whiteford S. Blakeney: Surely.

Justice Byron R. White: [Inaudible]

Mr. Whiteford S. Blakeney: That's right.

Justice Byron R. White: [Inaudible]

Mr. Whiteford S. Blakeney: That's true, sir.

That's part of the judgment.

That, Mr. Union, if you will come and show what part is related to collective bargaining, what parts you use for political purposes, and you alone know, you alone have the facts and information necessary to --

Justice William J. Brennan: Now, do you think that is -- do you think that – is that [Inaudible]?

Mr. Whiteford S. Blakeney: Your Honor, all the phrases that I just quoted you which this -- which Your Honor mentioned as being the vice of the Street judgment, each and everyone is absent in this judgment.

Now the dividing -- let me touch this.

The dividing of what's related to collective bargaining and what's political, the unions in the first instance must do that.

They only -- they alone know what they do with the money, they have the facts and the information as to how they use it, what part they use for political, what part they use for collective bargaining.

They should make a showing on that in the first instance.

As Mr. Justice Brennan writing in the case of United States-Campbell said, it is a general principle based in fairness that the law does not place upon a party the burden to proving facts which are peculiarly within the knowledge of the his adversary and our North Carolina decisions are positively to the same effect.

And this dividing of what is related to bargaining and what isn't, were suggested by this Court in the United States against CIO which as Your Honors will remember was a case involving union publications for political purposes.

And there, this Court said, if minority or dissent of protection is intended to be sufficient for securing this to permit the dissenting members to carry the burden of making known their position and to relieve them, relieve them of any duty to pay dues or portions of them to be applied to the forbidden uses.

And the United States Government Industry case filed a brief in which it approved the same idea.

Justice Arthur J. Goldberg: Mr. Blakeney, [Inaudible] it enjoins them on collective bargaining which is [Inaudible], isn't that the words of the injunction (Voice Overlap) --

Mr. Whiteford S. Blakeney: As (Inaudible) -- as defined by the jury issues the judgment says.

Justice Arthur J. Goldberg: Does the judgment -- however does not in its [Inaudible].

Mr. Whiteford S. Blakeney: No, it refers to the issues which do talk in terms of politics.

Justice Arthur J. Goldberg: Now, looking to the records, I think that issue [Inaudible].

I figured that was [Inaudible] as you often have this problem, [Inaudible] based on contributions involving the party.

And I'd like to ask if you whether -- do you regard that as the -- involves this injunction.

This public [Inaudible] we're referring to is broad [Inaudible] --

Mr. Whiteford S. Blakeney: I --

Justice Arthur J. Goldberg: [Inaudible] under this injunction what have you, enjoining [Inaudible] is unrelated to collective bargaining.

Mr. Whiteford S. Blakeney: I think it must be determined in closed cases, Your Honor.

In difficult cases, it must be determined by a court.

I know no other way to determine it whether that falls within what the jury decided here.

Justice Arthur J. Goldberg: What would you refer in the cases often [Inaudible]?

Mr. Whiteford S. Blakeney: That some of it was indeed remote from collective bargaining.

They spend it for TVA, juvenile delinquency, Hells Canyon, disclosure of inmate of FBI files, enemy alien assets, and pay television etcetera.

Justice Arthur J. Goldberg: And this would be if what I think [Inaudible]

Mr. Whiteford S. Blakeney: Yes, sir.

Justice Arthur J. Goldberg: And would you [Inaudible] general characterization, the expenditures are not based under your [Inaudible]?

Mr. Whiteford S. Blakeney: Some of it certainly would, Your Honor.

But political purposes and whatever is to be comprehended within that has got to be worked out of course in each case.

All I am saying Your Honors is, that money here was used for political purposes undeniably to some degree.

Now let the union show to what degree.

The burden should be on them.

Now, just one more word if the Court please, this Court, of course, has no solicitude or concern for the union-shop agreement insofar as it accomplishes as this Court itself held insofar as it accomplishes an unlawful purpose.

That is the taking of money against an employee's will and using it for political purposes.

What this Court was concerned about in the Street, as I understand it, and the reason this Court set the Street judgment back as I understand it was this.

That in working the unlawful operation of the union-shop agreement, there must not be interference with the union-shop agreement functioning in its collective bargaining area, in its proper spheres.

There, in other words, the Court considered that the judgment there perpetually enjoining, sweeping broadly, denying all collection of any nature was an interference with the bargaining function of the union.

And therefore, sent that -- reversed that judgment and undid it.

And I am saying Your Honor, that the judgment here touches and inhibits the union-shop agreement only in its unlawful sphere, and not at all in its other operations.

Now suppo -- our adversaries, Your Honor, would apparently have these plaintiff employees bring suit against these unions, apparently which they term, if the Court please, sometimes, somewhere, someday by protected litigation, any expenditure of a thousand times what's involved, you may restrain the expenditure of some part of this or you make it restitution, but the compulsion, you must now submit to though it'd be unlawful.

It's held unlawful, nevertheless submit to it.

Pay all, now.

This, I submit to the Court, it should not be.

If a judgment is worked out so that the unlawful part is separated from the lawful part, then the unlawful part can and should be restrained.

And if we have to sue every time Your Honor, that would be perpetual litigation.

Each case would resolve nothing except the amount of money involved in that case only.

And the employee in order to maintain the right of keeping his money from going for political purpose would have to sue again and again renewed, successively, perpetually to maintain that right.

Now, this Court has said that this area is one of the utmost gravity.

The issues underlying here are indeed important ones.

They are vital, not only to individual liberty, if the Court please, they are crucial to the integrity of the Government itself for if arrangements are established by which collective representatives can require employees to pay money as a condition of working and can then take that money and elect whom they wish to public office and enact laws as they will, then we may be on the road toward distinction of important individual liberty and free government as well.

It may -- it serves not, if the Court please, to declare this taking and using for political purposes to be unlawful.

It avails not to declare it unlawful, if no meaningful, practical remedy is granted.

And its purpose can still be accomplished and it can be still accomplished and will be accomplished unless injunction avails.

And the injunction here, we do submit to Your Honors, is one that is shaped to avoid the very difficulties that this Court observed and pointed to in the Street case.

Justice Arthur J. Goldberg: Did the Street say the exemption [Inaudible]

Mr. Whiteford S. Blakeney: No, sir.

Justice Arthur J. Goldberg: [Inaudible] reconsidered?

Are you asking -- are you asking the Court now that we consider opposing about the remedy that should be provided that [Inaudible]?

Would you then on that extreme?

Mr. Whiteford S. Blakeney: I am not, sir.

Justice Arthur J. Goldberg: How do you read the language [Inaudible] the court has said flatly, “We think that injunction was mainly enforcement [Inaudible] and therefore plainly not [Inaudible] appropriate in violation of the Act expressly on the Government.

There was a [Inaudible] remedy.

Mr. Whiteford S. Blakeney: But here, Your Honor, we are not restraining the collection of all funds.

What the Court was inveighing against was restraining the collection of who owe funds from these appellees.

What the Court was inveighing against is the prohibition absolute against the collection of all funds.

The complete shut off of income from these plaintiffs.

We don't shut you.

This judgment doesn't shut off income from these plaintiffs.

Justice Arthur J. Goldberg: Wasn't the Court dealing with the -- restraining the enforcement of the union-shop agreement with plaintiffs' [Inaudible]?

Mr. Whiteford S. Blakeney: No, sir.

That's -- I wanted to advert to that for just a moment.

Your Honor raised that earlier in Mr. -- with Mr. Kramer. Nothing except monetary payment is involved here at all.

The Railway Labor Act, the statute, the union-shop agreement both have to do only with monetary payment compulsion, no other kind of compulsion.

This is treated in a -- on the other last of my brief.

They conceded in the Supreme Court of North Carolina in their brief, which I there refer to that they make no complaint about anything here and we make no complaint about anything here except the monetary matters.

That's only compulsion involved.

Justice Hugo L. Black: If it -- does injunction run against the payment of dues by anyone except this individual people --

Mr. Whiteford S. Blakeney: No.

Justice Hugo L. Black: -- who had expressed the opposition to having their money used for this purpose.

Mr. Whiteford S. Blakeney: Injunction runs in behalf of no one else.

Justice Hugo L. Black: How many are they?

Mr. Whiteford S. Blakeney: Some 20 odd, sir.

Justice Hugo L. Black: It doesn't run against all.

It's not a blanket running against all.

Mr. Whiteford S. Blakeney: It is not -- it is not for all employees nor for a class.

It is only --

Justice Hugo L. Black: And even -- and even as to them, as I understand it, it is provided that if the Court – if the union developed and shows the Court how much they're spending for political purposes, they let them pay the rest?

Mr. Whiteford S. Blakeney: That is right, sir.

Justice Tom C. Clark: How much for the dues amount?

Mr. Whiteford S. Blakeney: The dues, sir, have varied.

I do not actually know the amount now but I believe it's in the neighborhood of $5.

It amounts to $8 million per year, their record shows in the case of one of this union.

Justice Tom C. Clark: [Inaudible]

Mr. Whiteford S. Blakeney: Months, sir.

Justice William J. Brennan: [Inaudible]

Mr. Whiteford S. Blakeney: Yes sir, that's what (Inaudible).

Justice Byron R. White: [Inaudible]

Mr. Whiteford S. Blakeney: The injunction here, Your Honor, I'm not sure I understood you; the injunction here does not restrain anything about expenditure or whatever.

The unions are totally free under this order to spend the money they get for any purpose they may see fit to as long as they don't run afoul of some law like Federal Corrupt Practice Act, not relevant here.

Justice William J. Brennan: [Inaudible]

Mr. Whiteford S. Blakeney: Your Honors eliminated the class aspect.

Justice William J. Brennan: Well -- no, that is not the sentence, the [Inaudible] to that opinion has to be read in the context [Inaudible] -- exactly like this with a few plaintiffs involved and where -- what you said that related to the remedies that those few plaintiffs in their individual interest would be entitled.

Mr. Whiteford S. Blakeney: True, Your Honor, that's one of the defects you find in the judgment, class action.

Then you went on to enumerate the other defects about the injunction sweeping too broadly and (Inaudible) --

Justice William J. Brennan: Well, you dissent -- are you suggesting that the opinion [Inaudible] are you suggesting of the opinions are -- absolutely reject the class action, aspect of them, that both of the injunctions [Inaudible] class action rather than as individual plaintiffs?

Mr. Whiteford S. Blakeney: Oh, no, sir.

I'm not saying that at all.

I say that you first refer to the class action defect and you send it back, item one on that account.

Then you referred to the aspect that it restrained all collections from the plaintiffs.

Justice William J. Brennan: That's right, [Inaudible]

Mr. Whiteford S. Blakeney: Yes, sir.

And you send it back for that reason and I'm saying this judgment has none of those defects.

Justice William J. Brennan: Well, except for the injunction, [Inaudible]

Mr. Whiteford S. Blakeney: But the second part --

Justice William J. Brennan: [Inaudible] it does have the state court --

Mr. Whiteford S. Blakeney: Your Honor, the sec --

Justice William J. Brennan: [Inaudible] but nevertheless the practical --

Mr. Whiteford S. Blakeney: Your Honor, the second paragraph is as much a part of the judgment as the first paragraph.

And the second paragraph says that if a union would tell us what parts, the collective bargaining, we must pay it and will pay it.

Justice William J. Brennan: I appreciate that argument but the fact is nonetheless [Inaudible]

Mr. Whiteford S. Blakeney: They have put up bond and have said to the union, “Now, tell us what you want for collective bargaining and we'll pay it.”

Justice William J. Brennan: [Inaudible]

Mr. Whiteford S. Blakeney: No, sir we're not paying dues but we're ready to pay.

Justice Hugo L. Black: They're not getting --

Mr. Whiteford S. Blakeney: Collect --

Justice Hugo L. Black: They are not getting any protection that they would get from having their money used for political purposes they're against either, are they?

Mr. Whiteford S. Blakeney: No, sir.

Justice Hugo L. Black: The only way they could get it is the way the Court did it, isn't it?

Mr. Whiteford S. Blakeney: There is no other way.

As a practical matter, there is no other way.

Featured:

Typographical Union v. Labor Board - Oral Argument, Part 1

Tue, 25 Sep 2012 22:34:50 +0000

Case:

Typographical Union v. Labor Board

Media File:

340_19610301-argument-1

Related Transcript:

340_19610301-argument-1

Transcript:

Argument of Gerhard P. Van Arkel

Chief Justice Earl Warren: Number 340, International Typographical Union, AFL-CIO, et al., Petitioners, versus National Labor Relations Board.

Mr. Van Arkel.

Mr. Gerhard P. Van Arkel: May it please -- please the Court, Your Honor.

The issues in this case are very similar to the issues which were involved in News Syndicate in which Your Honors have just heard argued.

In November of 1957, after some years of efforts to obtain a satisfactory agreement, the members of the Worcester and Haverhill Typographical Unions went on strike.

At the time of the strike, the parties were barred on a great many issues concerning most of which no legal issue was ever raised.

After charges have been filed by the publishers and after the usual proceedings before the Board, the Board found that the commands of the union were unlawful in five respects.

They held unlawful a Jurisdiction Clause what the Board characterized as the apprenticeship and priority systems of the agreement, the so-called General Laws Clause and the “foreman clauses” of the agreement.

The Board entered its usual cease-and-desist orders and directed the usual affirmative action.

And on petition to review and cross petitions to enforce, the Court of Appeals for the First Circuit set aside the Board's order insofar as it was found unlawful the jurisdiction clause and the apprenticeship and priority systems.

But the court below did sustain the Board involving illegal or General Laws Clause and the “foreman clause”.

The Board did not seek certiorari with respect to the first three issues.

The only two issues before the Court therefore or the two principle issues before the Court relate to the validity of the General Laws Clause and the “foreman clauses.”

Before getting to these specific clauses, I would like to sketch before Your Honors a little background.

In 1957, the Board had before it a report of a trial examiner which found that a contract substantially similar to the contract proposals made by the unions here was lawful and that the practices under that contract had been lawful.

The Board at that time took no issue with this holding of the trial examiner.

In 1950 -- that was in 1957.

In 1959, the Board decided matter of Honolulu Star Bulletin.

In that case, the Board did not decide that the practice is under a substantially identical agreement were unlawful.

It did, however, set the contract aside as being an unlawful close chart.

Now in that case, the contract contained on its face a provision which said that the term journeyman and apprentice has used herein, that is in the agreement, shall not be taken to refer exclusively to members of the International Typographical Union.

Now manifestly, the parties are not required as a condition of maintaining lawful agreements to negative on their face and intention to discriminate.

This would be tantamount to saying that every commercial agreement violates the antitrust acts which fails to state on its face that the parties do not intend to violate the Sherman and Clayton Antitrust Acts.

But in this case, the parties had taken this additional step which we think is not required by the statute.

There was a showing that a substantial number of nonunion men had actually been hired.

The Board nonetheless treated it as a closed-shop agreement.

And the case is instructive, I suggest, is demonstrating the way in which the Board is prepared to toss the epithet closed-shop around as a substitute for evidence and findings.

The Court of Appeals for the District of Columbia had no trouble with the case.

They found the contract to be lawful on its face.

The Board did not seek certiorari.

And as Your Honors have just heard after the most careful scrutiny, the Court of Appeals for the Second Circuit in News Syndicate found that contracts which have been in effect for some years substantially identical with the proposals herein made by the local unions, had been lawfully administered.

Now, I stress that this is a completely random sample.

These cases came up only by virtue of the fact that at these particular places, some employees had happened to file charges.

And I suggest to Your Honors further that these cases are dispositive of this case.

Because if there is a rule of law that is well said, it is that if it can be shown that a contract can be lawfully administered as these three cases demonstrate.

It is to be presume that it will be lawfully administered unless the contrary clearly appears and in this case, there is nothing whatsoever to the contract.

The local negotiators at all times insisted that their contract proposals were lawful and that they intended that they'd be lawfully applied.

The significant difference obviously between these three cases and the case that bar here is that here we deal with proposals made in the course of collective negotiations rather than with agreements which had been in effect for some years so that actual practices under those agreements could be reviewed.

The Board and the court below were therefore constrained to indulge in some extremely freewill in speculation as to how these contract proposals might have been lawfully -- unlawfully applied if they had been found acceptable by the publishers.

And for present purposes, I am concerned only with their speculations with respect to the General Laws Clause and the foreman clause.

The General Laws Clause reads that the General Laws would be ITU in effect at the time of execution of this agreement, not in conflict with federal or state law shall govern relations between the parties on those subjects concerning which no provision is made on the contract.

Now, it is not disputed that certain General Laws of the ITU contemplate closed-shop conditions.

It is equally undisputed that each of those laws has a valid field of application in enterprises not affecting interstate commerce of which there are many in the printing industry and in Cannon where the ITU has many local unions.

And it is --

Justice Charles E. Whittaker: (Inaudible)

Mr. Gerhard P. Van Arkel: Pardon, Your Honor.

Justice Charles E. Whittaker: (Inaudible) that all use the same form?

Mr. Gerhard P. Van Arkel: I -- I would say not, Your Honor.

I've seen agreements in Canada which do not contain this language not in conflict with federal or state law.

It is not disputed that that phrase “not in conflict with federal or state law” was introduced into this traditional clause immediately after passage of the Taft-Hartley Act.

And the testimony in this case is entirely clear that it was designed to have precisely the effect which one would gather from its language.

Namely, to exclude from the agreement any general law in circumstances in which its enforcement would lead to a violation of federal law.

Now the finding of the -- or I should add further that in 1951, the General Laws themselves were amended to add Article 14 which provides that the general -- that in circumstances in which the enforcement or observance of any General Law would lead to a violation of federal or state law, such General Law is suspended.

And though this Clause has been in use since passage of the Taft-Hartley Act, the Board has never yet alleged or proved that any general law has, in fact, ever been unlawfully applied despite the amount of litigation that there has been involving these agreements.

Now, in finding of the trial examiner which was adopted by the Board was that there is no evidence in the record remotely suggesting that the respondent unions were not seeking to incorporate in their agreement all of the General Laws including those found illegal herein.

That is to say those which would provide for closed-shop conditions.

The finding of a trial examiner thus directly at variance with the clear language of the clause and with the testimony explaining its purpose for inclusion in the agreement.

Now an essential qualification to become a printer is that one be able to read.

And if as I think we can and must, we assume a higher degree of literacy on the part of employees in this industry that is represented by this finding which the Board adopted.

This case will give Your Honors a little trouble.

Needless to say, the court below did not adopt so palpably erroneous finding that went almost as far, however, by saying that this proviso obviously designed to exclude language from the agreement was in fact language of incorporation by reference.

Chief Judge Prettyman on a Honolulu Star-Bulletin gave we think the clear answer to this.

He said in speaking of this clause that it clearly provided that the General Laws of the union in conflict with either federal law or the contract itself were not included in the contract.

A closed-shop provision would have been in conflict with the federal law and also in conflict with Section 2 (a) of the contract.

Any such provision in the General Laws was accepted from inclusion in the contract.

We do not see how language could have been clearer.

Now, I suggest to Your Honors that this is not only the lawyer like but the common sense way of reading the language of this clause.

The real thrust of the Board's opinion in this case and of the court below has been the assertion that because employees might be in -- uncertain as to which of the General Laws were included and which were not included, that this uncertainty is the equivalent is illegality.

Now, Your Honors, in the case last year, Steel Workers case, developed at great length the reasons why collective agreements of necessity contained large areas of uncertainty and why provisions for arbitrating them are therefore essential.

I put it to Your Honors in all seriousness that nothing could be more destructive of the institution of collective bargaining and nothing could be more productive of industrial strife than the adoption of the rule here put forward by the Board.

If the parties to collective agreements are required to draft them with such specificity that not only the Board and not only the courts, but a group of unidentified, illiterate, suspicious employees must be satisfied that their rights can under no circumstances be infringed under such an agreement, then collective bargaining becomes a manifest impossibility and when on top of that, when the penalty for leaving any lingering uncertainty on the agreement is the application of the Brown-Olds remedy as the Board has proposed in these cases.

Collective bargaining then, becomes a means of soliciting a fine unless the parties can anticipate all the myriad situations which may arise under the agreement, may supply answers, so clearly lawful that no employee can possibly have any doubts that this is the correct answer.

Chief Judge Prettyman on this and Honolulu Star-Bulletin said some -- used language which we think is fundamentally important not only to this case but to all collective bargaining he said.

The Board says that since the contract mentions the rules of the union, employees would have the impression that the rules were incorporated in there entirely and would not differentiate those contrary to law or to the contrary.

From that premise, the Board reasons that the contract is per se a closed-shop contract.

This conclusion is a complete known sacred.

An erroneous impression of plain terms does not change the meaning of the plain terms.

Furthermore, assumptions that employees will not understand a lawful contract cannot be the basis for holding the contract illegal.

What would be the justification for emphatic insistence upon formal collective bargaining as to terms of employment if the conduct of the parties thereafter is to be judged by speculative, uninformed impressions of those terms instead of by the terms themselves has hammered out at the negotiation table.

I put it to Your Honor that this is the way a lawyer -- this is the lawyer like approach to this problem.

Indeed, in its brief here, the Board appears to concede that lawyers and judges would read this agreement to be lawful.

I will not conceal my hope that at least five judges and preferably nine, will read it to be lawful.

I repeat.

That is impossible for the parties to meet the standard which they say collective bargaining requires if agreements are to be lawful.

I turn them to the speculations concerning the foreman clauses in this agreement.

The clauses as proposed below, proposed in the negotiations read as follows.

The operation authority hiring for and control of each compulsory rule shall be vested exclusively in the office through its representative the foreman who shall be a member of the union.

The union shall not discipline the foreman for carrying out written instructions of the publisher or his representatives authorized by this agreement.

The holding of the Board on this issue was that these clauses, well in effect “create a closed-shop” because they say it is to be presumed that the foreman would consider himself bound by the rules of the union calling for a closed-shop agreement and that these are therefore illegal.

We say there are the most compelling reasons for making the directly opposite presumption.

But first and most important and we suggest dispositive is the presumption that the citizen will obey the law since the statute forbids discrimination higher, it is to be presumed that the foreman, whoever he may be, union or nonunion, would place the statute above any union rules.

Second with almost equal importance is the agreement itself.

The agreement as proposed by these local unions would have setup standards that were higher which were completely none discriminatory, which were based solely on competence and experience, which had no relation whatsoever to union membership or non-membership.

The laws clause which I read to Your Honors makes it entirely clear that the contract prevails over any inconsistent general law, so if the publishers had accepted these proposals, the foreman would have been told directly on the face of the agreement by which of course he would be bound but he was not expected to follow discriminatory methods higher.

We have set forth in our brief the four separate occasions and methods by which the ITU has notified those of its members who are foreman that they are not expected to discriminate them higher.

The Board seems to fill that four times is not enough whether its 6', 8', 10' would or would not be, we don't know.

Apparently, they consider such a declaration effective only if it is compelled by a Board order.

The most significant aspect of the Board's brief on this problem is that they failed even to mention the amendments to the Act in 1947 in Sections 23 -- 211 and 14 (a) by which the Congress made it entirely clear that foremen were no longer employees under the Act, that the employer was free to discriminate as he like with respect to the union membership or nonmembership of his foremen.

The Congress at that time made it entirely plain that a requirement that a foreman be a union member was not discrimination within the meaning of the Act and it is therefore irrelevant as the court below found that the effect of this clause might be to encourage aspirins for the foreman job to join the union.

Since in Radio Officers, Your Honors made it entirely clear that it is not enough to show encouragement but that this encouragement must be achieved by discrimination.

And this requirement is not discrimination within the meaning of Section 8 (a) (3).

Indeed, if I may digress for a moment, Your Honors, I suggest that in all of the cases presently before Your Honor -- Your Honors, a misreading by the Board of Radio Officers lies at the heart of all the difficulties.

They have attempted to read out of the statute the words by the discrimination to find that anything which encourages union membership is per se a violation of the Act and that therefore there is no longer any need to find discrimination.

Your Honors made it entirely clear in Radio Officers and the whole history of the Act bears it out, that the first essential is to find discrimination and if that is lacking then the question of discouragement or encouragement of union membership does not arise.

For these reasons, we say that those clauses were lawful.

I will leave to our brief the question whether or not the Board and the court below properly held that both the International Typographical Union and the local unions could at one in the same time be the exclusive representative of these particular employees.

In order to say a word about Board's order in this case.

The Board's order here forbids the respondents to insist on a laws clause.

Your Honors will, I hope find instructive Appendix B to our principal brief in this case.

On this and the following pages, we have set forth in tabular form, the General Laws which have been attacked in all of the various cases which have been brought involving this issue.

Your Honors will observe that those attack range from zero to 37 plus, but the significant thing is that no two of them ever agreed.

The Board personnel constantly varies its positions as to what's lawful and what's unlawful.

Significantly, however, this chart shows that the great bulk of the General Laws have not been attacked in this or any other proceeding.

Now, we say that in saying that we may not use the laws clause, it is therefore entirely clear that the Board is trying to throw out lawful conduct as well as conduct which they say unlawful.

Your Honors' opinions make it entirely clear.

We think that this is something which the Board may not do.

We have set forth in our briefs in this case and in Number 339, the numerous additional reasons for objecting to the decisions and order of the Board in this case.

For the reasons I have stated here and for the reasons stated in that brief, we urge that the judgment of the court below be reversed.

Thank you.

Chief Justice Earl Warren: Mr. Manoli.

Argument of Dominick L. Manoli

Mr. Dominick L. Manoli: May it please the Court.

The issue which lies at the heart of this case as I have said during my argument in the preceding one is the same as indeed Number 339, namely -- namely whether the savings clause in a contract of this kind does effectively neutralize or suspend the otherwise illegal closed-shop provisions of the General Laws.

Now if we prevail, if the Board should prevail upon that issue, then there is the ancillary question of it with respect to the foreman clause whether the foreman clause which requires that the foreman be a union member, that he is given exclusive authority to hire, whether that clause also is in violation of the statute since as a union member, presumably, he would be required under -- he would be under an obligation to observe the union's laws, the union's General Laws.

Now, the issue in this case arises in a slightly different context and it did in the case preceding this one.

In the case preceding this one, the party did enter into an agreement and the Board found that the agreement and the practice they're under, constituted a closed-shop or an illegal union preferential hiring system.

Here -- here, the publishers resisted, resisted these clauses despite the union's insistence.

In fact, the union went out on strike in support of these clauses.

The Board found that these clauses that they had been accepted, as in the preceding case, would have also violated the closed-shop brand of statute and that therefore, the union by insisting upon these as there was a basis as -- as a term of the contract and going out on strike in support of them, not only violated the statutory duty to bargain in good faith but also violated the statutory prohibition against attempts to cause an employer to discriminate against -- against employees.

Now, the validity of these findings depends upon the legality of the savings clause and the so-called foreman clause.

If the Board is right in holding that the savings clause and the foreman clause do violate the statute, then I think there can be a little disagreement, little serious disagreement that the union's conduct is always a violation of both the statutory duty to bargain in good faith as well as the statutory prohibition against attempts to cause discrimination.

Now, I have already discussed the Board's position with respect to the savings clause, the General Laws Clause and the savings clause there and I shall not repeat what I have already said.

I therefore turn to the foreman clause.

Now, the Second Circuit in the preceding case did not reach this issue because having settled, having resolved the threshold question with respect to the savings clause adversely to the Board.

It said that the ground had been cut out from under the Board's position with respect to the “foreman clause”.

Now, the proposal or the foreman clause here require the foreman to be a union member and vested him exclusively with control over employment hiring in the composing room of these two newspapers.

The -- one of the publishers in this case, I think it is significant.

One of the publishers in this case suggested to the union that union membership be made optional and thereby minimize, thereby minimize the union's control, the union's control over the foreman, but the union refused to -- refused to agree to that proposal.

Now, as a member of the union -- as a member of the union, the foreman would have been under an obligation to respect the union's rules at least to the extent that they were not inconsistent with the specific terms of the contract.

And the ITU General Laws as I have already stated, contained numerous provisions, numerous provisions which call -- which -- which would effectuate or put into effect -- establish closed-shop -- closed-shop conditions.

Now the vesting of exclusive authority or hiring authority in a foreman who had to be a member of the union has been an important aspect of the closed-shop policy of the ITU.

The foreman has served as the watch dog and as well as the -- for the union as well as the enforcer of its closed-shop policy.

And the union, the union has been able to keep tabs on him, has been able to keep tabs on him because it controlled his employment as a foreman.

He could not be a foreman unless he was also a union member.

Now, against this background, against -- against this background, we submit that the Board was entitled to say that the “foreman clause” was an additional device, an additional device for maintaining closed-shop conditions.

In fact, the employers opposed -- opposed the foreman clause precisely for that reason -- precisely for that reason, because they could foresee -- they could foresee that a foreman required to be a union member vested with exclusive hiring authority that it would be only natural -- it would be only natural for him to favor union members and certain the employees, the employees would have no less reason for thinking so.

Now, we say that at the company -- the companies and the union subscribed to this kind of contract having these foreseeable consequences, it would have been just exactly as though they had included closed-shop conditions or union preferential hiring system in the contract itself and that this is a violation of the statute.

Now, one of the arguments that is made here that there is no basis for the Board to draw an inference, that the foreman who is an arm of management in one sense, that he would give precedence -- give precedence to his duty to the union, namely, to prefer union members over his duty to the employer to a hire or fire on the basis of competency alone without regard to union membership or the lack of it.

Now, we don't believe this argument really very scrutiny.

Under this contract, had it been signed, the employer would have divested himself of control over employment.

It would have been turned over to the union.

The employment in the composing room would no longer be a prerogative of the employer, but it would have been primarily a union concern.

The contract itself prescribed no con -- no requirements with respect to the exercise of the foreman's exclusive hiring authority other than the hired journeymen and apprentices.

The foreman was left entirely free.

He was left entirely free to prefer union members and indeed we think he was under a compelling -- compelling -- there were compelling reasons that would have prompted him to prefer union members because his job as a foreman depended upon his maintain -- maintaining himself in the good places of the union, because he could be a foreman only as long as he remains a union member.

Now, it's been suggested here -- it has been suggested here that the employer -- that the union could not grieve over the failure or he could not grieve if the employee -- if the employer disciplined the foreman because it failed to issue instructions -- because he had failed to abide by his instructions.

Now, there were -- there was nothing in the contract -- nothing in the contract which were permitted to the employer to tell this -- to tell this foreman to disregard the union's rules when it came to exercising of his exclusive power to hire and fire because although the contract said was that he was to hire -- he was to hire a journeyman or apprentices.

He was completely free -- completely free to prefer union members and there would have been no basis -- no basis for the employer to complain insofar as the contract was concerned to complain --

Chief Justice Earl Warren: We'll recess now.

Featured:

Typographical Union v. Labor Board - Oral Argument, Part 2

Tue, 25 Sep 2012 22:34:51 +0000

Case:

Typographical Union v. Labor Board

Media File:

340_19610301-argument-2

Related Transcript:

340_19610301-argument-2

Transcript:

Argument of Dominick L. Manoli

Mr. Dominick L. Manoli: -- if the Court please.

When the Court arose, I was addressing myself to the argument that this contract had it been signed, would have contained a provision which prohibited the union from disciplining a foreman for following the written instructions of the employer.

And that this provision would have -- for the safeguard -- the safeguard against the foreman misusing his hiring authority to prefer union members.

I think the short answer to that argument, Your Honor is that under the contract, the employer retained no control with respect to the foreman's exercise of the hiring authority, that he was free to hire -- to exercise that hiring authority to favor union members and there would have been no basis -- no basis since there was no reservation of any right with respect to this -- that matter.

There would have been no basis for the employer to have issued written instructions to the foreman concerning that sort of thing.

Now, this concludes my argument on the foreman clause as a violation of the closed-shop provisions of the statute.

And essentially, as the Court undoubtedly has recognized, our argument with respect to the foreman clause is very much like the argument which underlies our position with respect to the General Savings Clause.

That these provisions create a situation that were foreseeable, the employees will act as though there were closed-shop conditions in effect that they had been put into effect by the parties and that therefore the parties must be held accountable for those foreseeable consequences just as though they have written closed-shop provisions in the agreement.

Before I sit down, however, I do want to address myself to another aspect of this case, an aspect which was not present in the other case because of the posture in which this case arises.

As I said earlier, the employers here did not agree to the proposals.

They resisted and the union went out on strike in support of those demands.

Section 8 (b) (1) (B) of the statute makes it an unfair labor practice for union to restrain or coerce an employer in the choice of representatives for purposes of collective bargaining or the adjustment of grievances.

Now here, the union by virtue of this clause was attempting to restrict the employer's choice with respect to the foreman and the foreman is conceded on all sides.

It would have been management representative for the adjustment of grievances that it's optimistic, the employer's choice of representatives for purposes of grievance to employees who either were union members because that was a necessary qualification of holding the job of foreman, who either were union members or would be -- would be willing to become union members.

Now, we think that this clearly falls within the literal proscription of Section 8 (b) (1) (B) that they were circumscribing the employer's choice of his representatives for purposes of adjusting grievances and as the court below properly held -- properly held this constitutes the violation of that section of the statute.

With respect to the Board's order, I -- I think that the Board's order does not -- does not as suggested here preclude -- preclude the union from incorporating into its contracts, provisions of the General Laws which are valid, and the Board's decisions in these cases have sustained, was well afford adequate guides, adequate guides to the union as to which provisions are to be -- can be included in the contract lawfully, including the contract, and those which may not be.

Thank you.

Chief Justice Earl Warren: Mr. Van Arkel.

Argument of Gerhard P. Van Arkel

Mr. Gerhard P. Van Arkel: The Court please.

What Mr. Manoli has said with reference to the foreman issue makes it necessary, I think, to review somewhat the actual facts with reference to that matter.

That both Worcester and Haverhill had not been for some years any collective agreement in effect.

The employer by his unilateral choice had a union foreman and he delegated to that union foreman exactly the powers which the contract proposals asked that foreman exercise.

Now, the union's proposals, as I have said, called for nondiscriminatory standards of hiring.

What the union was therefore proposing was that though there had been up to that time a complete delegation of authority to the foreman by the employer's unilateral act, the union was proposing in the contracts which it presented the setting up of nondiscriminatory standards for hire which would be, as I have suggested binding on the employer.

This we say is clearly in aid of the statutory purpose.

There was no effort here at all to influence in any way let alone restrain or coerce the employer in his selection of representative for collective bargaining.

The employers of both Haverhill and Worcester has union foreman.

At Haverhill there was not even an objection to this clause being -- going into the agreement.

And in both cases, therefore, the union made no objection to the foreman of whom the employer then had, and therefore there was no effort to influence let alone restrain or coerce the employer in the selection of his representative to represent him.

Now with respect to the laws clause, the uncertainty argument, there is one additional point which I would like to draw to the Court's attention.

The Board's traditional technique and the notices which it directs to be posted, always declare that the parties are not to violate the Act, not to discriminate “except to the extent permitted by Section 8 (a) (3) of the Act.

Now, in that single phrase, the Board subsumes all of the doctrinal law with reference to dual union membership, payment of dues, check off arrangements, and the myriad other subjects with which the Board is dealt.

The Board is entirely satisfied with this kind of an arrangement and we have suggested that the words not in conflict with law in the laws clause are at least as reassuring to employees as technical language such as except to the extent permitted by Section 8 (a) (3).

As Chief Judge Prettyman noted in the Honolulu Star case, the Board twice in a notice to all employees which it required to be posted, directs the company to recite adjuration of certain activities “except to the extent permitted by Section 8 (a) (3) of the Act”.

Counsel pointed the queries whether the latter quoted expression is less confusing than the phrase “not in conflict with law”.

We suggest to Your Honors that in the drafting of a contract, we're within our rights in using a shorthand device, precisely the kind which the Board itself uniformly uses in the notices to employees which it directs to the posting.

Your Honors have had represented to you here in the course of the argument in the Local 357 case that the Mountain Pacific doctrine is applicable solely to exclusively union operated hiring halls.

Now, in the News Syndicate case, the hiring in that case was done by a foreman on the employer's premises.

There was no hiring hall exclusive or non-exclusive.

The Board nevertheless attempted to apply its Mountain Pacific doctrine in that News Syndicate case to a case where there was no kind of hiring hall whatsoever.

And despite the representations which were made in the courts below and in this Court that Mountain Pacific is a doctrine which is limited solely to hiring halls.

We have suggested in our brief that the only conclusion that can be drawn from this is that the Board is unable to distinguish between a foreman and the hiring hall.

I suggest to Your Honors that in the cases you have heard here in the last days, there is one common thread which runs through them all and which we think is dispositive of all.

And that is the question whether or not unions and union members are entitled to the normal presumption of law that if they have a power, they will exercise it lawfully.

The Board's approach in all of these matters is to start with the assumption that if a union is given a power whether it is a power over seniority, over apprenticeships, over methods of hire, over a hiring hall, over a foreman, that those powers will probably be exercised in unlawful fashion, that therefore the Board can assert a right to strike down these powers in the hands of the union.

For example, if we had undertaken to follow the technique which the Board used here in its hiring hall cases, we would have searched the Board's records for 300 or 400 cases in which nonunion foremen have discriminated against nonunion members.

We would then add an elaborate tribute to our own expertise and we'd say that this demonstrates conclusively that the only reason that employers hire nonunion foremen is in order that they may discriminate against union members and hiring.

We would then use this as a basis for asserting that we had the power to forbid the employer to hire a nonunion foreman and having the power to forbid him to do so, we could impose any conditions that we like on the employer's hiring of a nonunion foreman.

Once you start with the presumption that unions and union members are as intent on obeying the law as employers are, then the resting of power in unions to control certain industrial matters presents no further problem.

We say that as citizens, we are entitled to the benefit of this presumption as much as an employer, a nonunion foreman or anyone else.

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Labor Board v. News Syndicate Co. - Oral Argument

Tue, 25 Sep 2012 22:34:50 +0000

Case:

Labor Board v. News Syndicate Co.

Media File:

339_19610301-argument

Related Transcript:

339_19610301-argument

Transcript:

Argument of Dominick L. Manoli

Chief Justice Earl Warren: Number 339, National Labor Relations Board, Petitioner, versus News Syndicate Company, Incorporated.

Mr. Manoli.

Mr. Dominick L. Manoli: Mr. Chief Justice, may it please the Court.

This case is here on writ of certiorari to the Second Circuit.

The Labor Act forbids the conditioning of employment upon union membership.

An employee may not be required to join a union in order to obtain employment.

Broadly stated, broadly stated the question in this case that threshold question in this case is whether certain contract arrangements between the respondent, Mailers' Union and various newspaper publishers in the New York area covering the employment of mail-room employees at these newspaper publishers whether this contract arrangements violates the closed-shop ban of the statute.

Without going into a detail for the moment, the contract limits employment to journeymen and apprentices.

It does not have any specific provision that membership on a union or the lack of it is a condition of employment.

However, the contract does have a provision which provides that the General Laws of the International Typographical Union, commonly referred to as the ITU, which is the parent organization of the respondent, Mailers' Union.

At the General Laws of the ITU to the extent that they are not inconsistent with the specific provisions of the contract and are not in conflict with federal or state law shall govern the relations of the parties with respect to conditions not specifically enumerated in the contract.

Now, the General Laws, in turn, contained a number of provisions which comprehensively provide that all employees performing work which falls within the jurisdiction of the ITU, and the Mailers' are among them, that all such employees must belong to the union.

I shall in a moment explain in greater detail, the provisions of the contract, the provisions of the General Laws and also the hiring practice which were pursued by the parties under the agreement, but I think what I've said suffices to pose the question which is at the heart of this case as well as the heart of the case which follows it, namely, whether this savings clause -- whether this savings clause in the contract suffices for purposes of the statute, can neutralize or suspend the otherwise illegal provisions of the -- illegal closed-shop provisions of the General Laws.

Now, the Board held that the savings clause did not have that effect, it did not effectively suspend the otherwise illegal closed-shop provisions of the General Laws.

The court below, on the other hand, held that they -- it did and the First Circuit in the case which follows this one, although not entirely free of doubt as endorsed the Board's position.

I shall sketch briefly the facts which give rise to this controversy.

The Mailers' Union is an affiliate of the ITU, and it represents mailing -- the mail-room employees of all newspapers in a New York City area including the Daily News and the Wall Street Journal.

In 1954 and again in 1956, the union ordered the contracts with the Daily News and the Wall Street Journal covering the employment of mail-room employees and the charges which initiated this case before the Board challenged the legality of those contracts and also the operation of the hiring system under those contracts.

The contract, which appears at page 527 of the record, Section 4 of the contract, which is on page 528 requires that the superintendent or the foreman or the assistant foreman in charged of the mail-room must be a union member.

Section 5 of the contract, which appears on the following page 510 -- 529, limits employment to journeymen and apprentices, and Sections 20 (a) and 20 (b), and I'm merely paraphrasing these because they're rather lengthy, and which appeared at page 532 and 533, Sections 20 (a) and 20 (b) vest exclusive control over the mail-room employment, over mail-room hiring, in the foreman who, under Section 4 of the contract, is required to be a union member.

And finally -- finally, on the following page, 534, there is Section 24 -- Section -- Section 24 of the contract which provides that it is understood and agreed that the General Laws of the International Typographical Union in effect in January 1955, not in conflict with this contract or with federal or state law shall govern relations between the parties on conditions not specifically enumerated herein.

Now, the ITU General Laws, in turn, as I stated briefly, first of all, require that all employees performing work falling within the jurisdiction of the ITU must be union members.

The General Laws also have a provision which, like the contract, require that the foreman in charge of the mail-room or composing room, as the case may be, that he must be a union member.

The General Laws also require the locals -- require the foreman to follow a priority system prescribed by the local.

And finally -- finally, under the Constitution of both the Mailers' Union, as well as the ITU, every member is under a duty and, of course, this includes the foreman who, under the contract, is required to be a union member, he's under an obligation to observe the union's rules.

Now, in practice, in practice, the hiring of employees from the -- for the Daily News, mail-room employees of the Daily News and the Wall Street Journal went something like this.

The work of the mail-room employees consist of bundling and tying newspapers and putting them on trucks for delivery to their destination.

And the foreman selects the employees for each evening's work and the number of employees may vary depending upon the size of the paper.

It may vary from 50 to 200, we are told.

He selects the employees from list which are furnished to him by the union steward who was called the "chapel chairman".

The first list consists of full-time employees who are called situation holders.

The second list consists of regular substitutes who, either as the name -- as the name indicates, either substitute for the regular situation holders or supplement them in case there was extra -- there was extra work.

All of those -- all of the employees who appear on these two lists are union members and the foreman hires them on the basis of a priority determined by the date on which they have deposited their union card with the chapel chairman or union steward.

Now, if, if, after these two lists are exhausted, additional workers are needed, then the foreman will hire union work -- workmen who may work for some other newspaper, but who are available for work either of the Daily News or the Wall Street Journal on that particular occasion.

If more workers are still needed, then the foreman will hire the -- from nonunion extras who, in the parlance of the -- of the shop, shape the shop.

Now, despite occasional protests, despite occasional protests, none of these nonunion extras, whatever their competence, whatever their experience, are hired, until all of the union people have been taken cared of including those who may have never worked either for the Wall Street Journal or -- or the Daily News.

And they say that none of these are hired until all of the union people are taken cared of.

Now, on these facts, which I have sketched rather briefly, the Board found that the savings clause in the contract did not effectively neutralize or suspend the closed-shop provisions of the General Laws.

And it found that the contract and the practice pursued thereunder, including the foreman clause, which vested exclusive hiring authority in the foreman, who is required to be a union member and including -- including the General Laws provision which required the locals to prescribe a priority system for its members that the contract and all these things here established an unlawful closed-shop and union preferential hiring system in violation of the statute.

Now, in relevant part -- in relevant parts, the Board ordered the parties to refrain from the unfair labor practice which have been found and in accordance with the steps prescribed in the Board's order to specify in the contract which provisions of the General Laws were incorporated into the contract and also, also to make clear, to make clear that the closed-shop provisions of the General Laws were not binding either upon the employees or the foreman who was vested with exclusive hiring authority.

The Board also, I might add, had a Brown-Olds problem -- a Brown-Olds remedy in the case, but I believe that we don't reach that issue in this case.

We deal what the court below did.

The court below refused to enforce the Board's order.

It made the initial critical threshold finding that the savings clause -- that the saving clause in the contract was sufficient, was sufficient to neutralize the closed-shop provisions of the General Laws.

And having made -- having made this initial critical threshold finding, the Board -- the Court rather, the Court said aside the Board's ancillary findings of unfair labor practice on the ground that the record failed to disclose that there had been an unlawful discrimination in the operation of the hiring system.

And as I say, the Court did not reach the Brown-Olds problem, of course, it set -- set aside the Board's order -- set aside the Board's unfairly practice findings.

Now, as I have said, the critical threshold issue in this case is whether the contract, despite the savings clause which purports to suspend, which purports to suspend whatever laws are in conflict with the federal -- with federal law, whether the contract, nevertheless, imposed upon the employees a closed-shop.

Now, the argument against us, the argument against us is, in essence, in essence that the savings clause must be taken at face value and hence, must be deemed to negative, must be deemed to suspend the closed-shop provisions of the General Laws.

Now, viewed nakedly, viewed nakedly without the gloss of history or practice and perhaps, it's clearly as a matter of private contract law, the savings clause might perhaps be deemed to negative the closed-shop provisions of the General Laws.

But we submit, we submit that sole view of the clause is to engage in a dry syllogistic exercise that's wholly devoured of any meaningful insight in the problem that we have before us.

In order to appraise the significance of the saving clause, its effectiveness or it's ineffectiveness, we think, we must look not only to the bare words of the contract, but we must also look to the history behind it as well as the meaning, as well as the meaning which the employees as well as the hiring foreman were likely to attach to that savings clause.

Justice John M. Harlan: Your argument assumes the complete bona fide list of the contract in any given situation.

Mr. Dominick L. Manoli: I'm not --

Justice John M. Harlan: Isolated contract.

Mr. Dominick L. Manoli: We don't -- that -- that's right, we do --

Justice John M. Harlan: You don't -- you --

Mr. Dominick L. Manoli: We -- we -- the -- the counsel representing the general counsel in this case did not challenge the good faith of the parties in -- in arriving at this contract.

In other words, we -- there was no claim that this was a subterfuge --

Justice John M. Harlan: Yes.

Mr. Dominick L. Manoli: -- subterfuge and, of course, I am precluded by that concession from arguing that this was a subterfuge.

But we do say, it is our position, it is our position, Your Honor, that in the light of the ITU's traditional historic closed-shop policy, the role which the General Laws have played in implementing, in implementing that policy and the persistent efforts which the ITU made even after the closed-shop had been outlawed in 1947 to preserve that traditional close policy, we say that the parties, without having specified which provisions of the General Laws were included in the contract and which were not included in the contract that they could foreseeably, foreseeably see that the employees would give those significance, would give those significance in the saving clause, that they would continue to regard the closed-shop provisions of the General Laws and continue to be operative and that therefore, therefore, the savings clause, having those foreseeable results, consequences that the parties must be deemed to have intended, to have intended to include their closed-shop provisions in the contract, that's --

Justice John M. Harlan: Another way of putting it is within the context of this past history of the contract of this kind perceive that, is that a fairway of putting that?

Mr. Dominick L. Manoli: That's right.

That's right.

Now, for nearly a century, for nearly a century, prior to 1947, the ITU has avowedly followed a closed-shop policy.

This has been in the historic, traditional policy of the ITU.

And the General Laws which the ITU has insisted on incorporating by virtue of these incorporation clauses, the -- the General Laws which the ITU has insisted in incorporating in collective bargaining agreements, have played a significant role in insuring and preserving that closed-shop policy.

As I said a moment ago, the closed-shop requires that all people performing work following the jurisdiction of the ITU must be union members.

They have a clause that requires a foreman to be a union member and have -- and have exclusive hiring authority, they provide for union control over apprentice system.

They provide for union control over a competency test, but 100-year old policy is not easily abandon and, of course, the ITU is not an exception.

Is not -- or did prove that you bid any different in this respect because both before, both before and after 1947, when Congress outlawed the closed-shop, the ITU gave notice that it would not abandon its historic and traditional closed-shop policy and the overt steps, the overt steps which the ITU took after 1947, after the closed-shop was outlawed by Congress, the overt steps which the ITU took in -- in relation with publishers to preserve and maintain the closed-shop are a matter of judicial record.

They are set forth in our brief, and I will not attempt to recapitulate them here.

Now, following these unsuccessful efforts, the ITU then pursued the policy of incorporating its general -- the General Laws, the General Laws in the -- in the collective bargaining agreements but added the savings clause.

And they added a comparable proviso to their General Laws, but other than that, they made no significant change in their General Laws.

At no time, at no time has the ITU given its membership for its locals, a list of the laws which were suspended because they were in conflict with the federal statute.

And although in 1953, the ITU did amend its oath of membership, so as to delete a provision in there, which required union members to prefer fellow union members in employment, no instructions have ever been issued to foreman generally, as to which of the laws were no longer binding upon them in the exercise of their exclusive hiring authority.

Indeed, as a record in the case which follows (Inaudible) when publishers have sought to persuade the ITU to specify which laws were deemed to be operative and which were not deemed to be operative, the ITU has refused to do so and instead, it has insisted upon this vague exclusionary clause.

Justice John M. Harlan: Is this formal contract phenomenon is peculiar to this trade?

Mr. Dominick L. Manoli: As far as I know, yes.

Justice John M. Harlan: Well, what I was wondering was whether its Board's position would have application in other trade for --

Mr. Dominick L. Manoli: Oh, we --

Justice John M. Harlan: -- there have been no practice.

Mr. Dominick L. Manoli: Oh, we've had cases, Your Honor, which have -- which have had contracts containing an illegal union security clause with some kind of a suspension clause.

We've had that.

But I think this is one of the few cases that we've had with this tremendous history impact of the contract.

I mean the ITU's traditional closed-shop policy, that's a rather unique sort of situation.

But we have had cases, we have had cases which involved the effective suspension of the suspension clause in the contract, there's a number of them.

Now, the Act guarantees to employees the right to obtain employment without being union members.

And a contract which imposes that condition infringes upon that right.

Collective bargaining contracts have an impact beyond the parties -- the immediate parties to the contract.

They do have a significant impact upon the employees.

And it is our position, it is our position that a contract of this kind, contract of this -- that -- that in interpreting a contract to this kind, we must take into account what the employers are likely foreseeably to read into a savings clause of the kind that we have here.

We say that if it was -- if it is foreseeable that the employees will pay -- give low -- intentionally give low significance to the savings clause and that they will continue to regard the closed-shop provisions of the General Laws as being -- as continued to be operative, then we say that the parties here must be deemed to have been intended that arrangement.

We believe that the Board is entitled to make that judgment in this case.

The savings clause shifts from the employee -- shifts to the employers the duty, the duty of forecasting which of the laws are in conflict with the federal statute and which are not, which are incorporated in the contract and which are not incorporated in the contract.

The General Laws themselves certainly give them little guidance because, as I said a moment ago, all of the General Laws have is a savings clause comparable to the one in the contract here.

And moreover, curiously enough, curiously enough, the General Laws continue to assert, continue to assert that various unspecified provisions of the Taft-Hartley law are either invalid or unconstitutional.

And the contract itself gives the employees no guidance either because it just simply has this vague exclusionary clause that whatever provisions of the General Laws that are not in conflict with the federal state -- that those provisions which are in conflict with federal -- with federal state law are not incorporated in the contract.

Now, if the parties themselves were either incapable or unwilling to specify, what provisions of the General Laws were suspended and what were not, how much more difficult a task could have been for the employees as well as the foreman who was vested with exclusive hiring authority.

Surely, they cannot be expected to pay the part of the lawyers.

We think, we think that the result would be that they would regard the savings clause as either of little significance or is merely signifying that perhaps, in some future date, there might be some judicial determination that some of the laws were no longer applicable.

Now, the consequence of that kind of a situation would be that the foreman, in order to hedge, the foreman has to be a union member in order to be able to hold his job, that the foreman in order to hedge against possible disciplinary action of the hands of the union, possible loss of employment as a foreman, that he would continue to abide by the closed-shop provisions of the General Laws.

Secondly, that the employees too would play it safe, would play it safe, and they too, as a hedge against the laws of employment, would either maintain their membership in the union in good standing or be encouraged to join, to join the union.

In a very real, in a very real in the practical sense, we think that the parties here are created a situation, have created a situation were the employees will act as though the closed-shop provisions of General Laws had been specifically included in the contract.

And we say, we say that the Board is entitled -- is entitled to say that the vague savings clause does had that foreseeable consequence and with the employees will act as though the closed-shop provisions of the contract had been specifically inserted in the contract and that therefore, the parties here are just as legally at fault, as though they have specifically included the closed-shop provisions of the General Laws into the contact itself.

Now, Your Honor, I don't believe with -- what I'm saying, as to the foreseeable consequences of this kind of a clause, is mere speculation.

Because the record in this case -- and the record is -- makes -- makes it clear that those who were in charge of hiring, superintendent and foreman who were in charge of hiring in the mail-room of the Daily News in the Wall Street Journal, that they deemed themselves bound by the ITU rules.

One of them testifies that he saw no conflicts, they saw no conflict between the ITU rules and the Taft-Hartley statute and finally, one of them said that, If he had a choice to make as between two equally competent people, two equally competent journeymen, he would select the union member.

And finally, let me add this, let me add this that as the record in the case which follows this, shows it was precisely for this reason that the publishers, in succeeding case oppose, oppose these General Laws clause because they felt, they felt that the employees would continue to regard the closed-shop provisions as being operative and binding upon them.

And for these reasons, we believe that the Board's position on this issue should be sustained.

Justice Hugo L. Black: May I ask you about one sentence in the Court's opinion below --

Mr. Dominick L. Manoli: Yes, sir.

Justice Hugo L. Black: -- whether or not it's correct.

The contract was made nothing which on its face which has said the violation of the Act, the general counsel so conceded with the juries that the Board does not contend otherwise.

Mr. Dominick L. Manoli: That's true, Your Honor.

The --

Justice Hugo L. Black: (Voice Overlap) --

Mr. Dominick L. Manoli: -- that the contract, the contract does not have any provision saying that, saying that union membership is a condition of employment.

But we do say, we do say that the vague savings clause has the foreseeable effect of including, of including in the eyes of the employees, of including the illegal closed-shop provisions of the General Laws, and that, therefore, therefore, even though there's nothing on the face of the contract that says Closed-shop provisions are in effect, that therefore, the parties must be deemed in view of those foreseeable consequences as though they had expressly included the closed-shop provisions of the General Laws into the contract.

Justice Hugo L. Black: But then I don't quite understand.

Is this correct or not that the Board's general counsel conceived that there's nothing in the contract on its face which can be violative of the Act?

Mr. Dominick L. Manoli: Well, Your Honor, I think that all that means, all that means that there is no specific closed-shop provisions in the contract itself.

There is no provisions saying that --

Justice Hugo L. Black: But is there any other language that on the face of the contract, you could say violated the Act?

Mr. Dominick L. Manoli: We -- we take the position not that this -- it's a savings clause -- the savings clause, that because of what we deemed to be is its ineffectiveness.

Justice Hugo L. Black: You think it can?

Mr. Dominick L. Manoli: To suspend the General Laws.

Now, that -- that suit was foreseeable to the parties who entered into this contract.

Justice Hugo L. Black: You think they could utilize it as a vehicle from putting over a closed-shop contract --

Mr. Dominick L. Manoli: That --

Justice Hugo L. Black: -- and the facts could show that?

Mr. Dominick L. Manoli: That is the foreseeable consequence of this kind of a clause.

That is our position, Your Honor.

Justice William O. Douglas: Now, on page 834 of the record, Judge Hanks' opinion, he -- he says, We find a dirt of evidence, either the union journeyman was ever hired with preference to a nonunion journeyman or that the qualifying standards for the examination of the two groups are different.

Mr. Dominick L. Manoli: Yes.

Justice William O. Douglas: Do you quarrel with that?

Mr. Dominick L. Manoli: Well, Your Honor --

Justice William O. Douglas: Are -- are you talking about the potential in this type of arrangement for discrimination?

Mr. Dominick L. Manoli: We -- we -- the Board found here, the Board found here that there had been actual discrimination.

Justice William O. Douglas: Well, the Court disagreed on that?

Mr. Dominick L. Manoli: The Court disagreed on that, but we think, Your Honor, we think, Your Honor, that the Court in reaching that conclusion was largely influenced by the fact that he had rejected the Board's original position.

It's the threshold, the threshold proposition of the Board that this contract, this contract, in effect, included the closed-shop provisions of the General Laws.

Had the court below agreed with us on that, I think that there is a serious question, a serious question whether the Court would've looked to the actual operations of the hiring system as being an innocent non-discriminatory one.

Justice William O. Douglas: Do you, in your brief, point out instances where a union man was hired in preference to a nonunion man?

Mr. Dominick L. Manoli: Yes, we do.

Yes, because, Your Honor, as I indicated or perhaps, I didn't indicated here, in practice, in practice here, the union foreman and the union's admission committee, they administer the competency test.

And then they selected that members from those whom they had found qualified.

And -- but these employees and then these employees once they had been admitted into the union, once -- then they enjoyed priority over the non -- the nonunion extras, the nonunion extras.

Now, in 1956, when the union decided to enlarge its membership, it took in some 31 out of a 60 nonunion extras in the mail-room of the Daily News.

Thereafter, those 31 employees who were inducted in the union, they enjoyed priority over all the nonunion extras, all over all the nonunion extras, including one of the charging parties in this case, Randall, even though prior to their induction into the union, Randall had had seniority over 30, over 30 of the 31 men who had been taken into the union.

Justice Hugo L. Black: Are you asking us -- I don't quite -- are you asking us to review the holding of the Court that the record is varying that even in the slightest answer, there has been discrimination in the conduct of these examinations?

Mr. Dominick L. Manoli: No --

Justice Hugo L. Black: Are you asking us?

Mr. Dominick L. Manoli: We did not --

Justice Hugo L. Black: Is that the question presented as it must (Voice Overlap) --

Mr. Dominick L. Manoli: We did not preserve that question, Your Honor.

But as I say, I think that the -- those that -- at the basic issue, the threshold issue in this case is so intertwined, is so intertwined with the operation of the -- of the -- the actual practical operation of the hiring system, that you really can't divorce it to.

And that there is nothing, it seems to me, that precludes this Court from looking at the objective facts but the objective facts relating to the hiring system has practiced both by the Daily News and the Wall Street Journal.

Justice Hugo L. Black: I still don't quite understand that.

Mr. Dominick L. Manoli: Yes, sir.

Justice Hugo L. Black: If we're not asked to upset what the Court found, how could we consider and in connection with what the contract -- whether the contract, on its face, is vague?

Mr. Dominick L. Manoli: Well, Your Honor --

Justice Hugo L. Black: I mean the particular facts of this case.

Mr. Dominick L. Manoli: It seems to us that you can still look at what the objective facts were as to the how the hiring did -- did proceed.

Now, it's true, it's true that the court below disagreed with the inference that the Board drew, as to whether or not there was illegal discrimination.

Now, but I don't think that that precludes this Court, however, from looking at the objective facts.

Justice Hugo L. Black: Certainly it wouldn't if you presented it as a question, but should we do it if you do not present it as a question?

Mr. Dominick L. Manoli: Well, otherwise, Your Honor, if it seems that the Court doesn't look to the background, to the -- to the background here.

There will be -- that you would just simply have an abstract question and it's important, I think, in order to appraise the situations, you'll look to that.

And we say that it's important because in large measure, at least it's our view, in large measure, the court below found that non-discriminatory operation of the hiring system largely because of its rejection of the Board's position with respect to the savings clause.

Thank you.

Justice John M. Harlan: You made a very sweeping finding on page 42A --

Mr. Dominick L. Manoli: 42A?

Justice John M. Harlan: -- which includes the record does not warrant the finding if the hiring system in general is not merely this contract or the competency system in particular, by its discrimination against nonunion applicants incur his union membership.

Mr. Dominick L. Manoli: Well, Your Honor, once -- once they had decided, once they had decided that the -- that the closed-shop provisions of the general laws were not incorporated in the contract or that there was no reason to attribute to the parts that they could have foreseen that the employees would've acted as though they were closed-shop provisions.

Once the Court had made that critical threshold finding, he could very -- he'd very easily came to the conclusion that the -- that the hiring was done in a very benign non-discriminatory fashion.

But had they agreed with us, had they agreed with us on our threshold proposition, I venture to say that the Court might have had a different view of the actual operation.

Justice John M. Harlan: Well, I understand.

Chief Justice Earl Warren: Well, I wonder why you didn't raise it in -- in -- on your petition.

Justice John M. Harlan: Well, I suppose that we didn't raise it because we had so many other issues in the case and that we felt that unless we could win upon these threshold questions that we'd never be able to get to that last one.

Chief Justice Earl Warren: Mr. Schoemer.

Argument of John R. Schoemer, Jr.

Mr. John R. Schoemer, Jr.: Thank you, Mr. Chief Justice, may it please the Court.

I'm appearing in this case on behalf of the employer which is one of the daily newspapers of New York, which for a number of years has had collective bargaining agreements with the union represented here by Mr. Van Arkel, a local of the International Typographical Union.

Mr. Van Arkel and I are appreciative of the Court's allowing us to divide the argument time between us, since sometimes happens in the case of labor and management refinery and not fully in agreement with each other's position in all respects.

I think, if I may, I would like to point out as a starter, some of the points of difference between this case and the ones which have preceded it and the one which follows it.

In the first case which Your Honors heard yesterday, the hiring hall case, it was made quite plain that in that kind of situation where alleged discrimination against employees, because they elect union membership occurred, took place off the employer's premises at a hiring hall represented by the union.

We have no such question as that here.

The Board does say here that, in effect, this operated is a kind of de facto hiring hall because the union -- the foreman who actually did the hiring had to be member of the union.

But, in fact, he did it at the employer's shop and as the proof is abundantly clear, many of the employees hired were, in fact, nonunion men.

A point of difference between this case and the one which immediately preceded it is that in that case, the hiring system was conceded by the union to be illegal, as I understood it.

And the union therefore is attacked on the whole theory of the mass dues reimbursement order which the Court had directed against it.

Again, that is something quite different from our case where there is anything but a concession that the actual hiring practices were illegal and in fact, until this Court rules otherwise, on the basis of existing positions by the Courts of Appeal.

It appears that the hiring practices were quite legal.

Finally, in the case which follows us in which Mr. Van Arkel would represent the petitioner, the employer, in that case, was the -- was the charging party and no application of Brown-Olds against the employer was involved there.

Now, as we understand the argument or the position that is taken by the Board here, it is basically that this collective bargaining agreement which is one applicable to a local of the International Typographical Union and to all of the New York City newspapers, in effect, constituted a per se violation of the Act because it provided for a closed-shop.

As we understand it further, the Board has purported to go farther and to find that these respondents, both the union and employer, maintained and enforced an illegal, unlawful union security system and a preferential hiring practice.

As members of the Court have already observed all of the significant findings by the Board, have been reversed by the Court of Appeals in what, although my motives maybe suspect I say, it's an unusually well-written and recent opinion showing very careful study of the rather complicated record -- facts in the record here.

As we, the respondents, stand before you now, we thus have two issues to present to the Court, recognizing that the Board's declination of our invitation, if we can put it that way, to argue Brown-Olds in the context of the present case, is understandable and must presumably be accepted by us.

We have, nevertheless, made the argument in our brief on the point of view of an employer who, I think, has an even stronger story to tell than the presentation made yesterday on behalf of the union, which had been visited with the Brown-Olds remedy.

But so far as this argument is concerned and in order not to foreclose Mr. Van Arkel from his argument, I would like to confine myself to the actual mechanics of the hiring system and whether, in fact, a violation of law took place and whether the Board was correct in finding that such a violation took place or conversely, whether the Court of Appeals correctly found that the system was perfectly legal, understandable and in no sense operated as one design to encourage union membership.

Justice Charles E. Whittaker: The first thing the legal system as it is actually operated for has delineated in the contract.

Mr. John R. Schoemer, Jr.: This will be the system, Mr. Justice, as it actually operated as found by the -- as found by the Court of Appeals.

There is not too much to deal with the operation of the system in the contract itself.

There was, of course, many relevant provisions dealing with seniority and things like that.

But the basic problem here is, as -- as we understand it and this is the charge with which we have been confronted for nearly five years now, that you go out and you hire people to work in the mail-room of your newspaper and if you have two people in front of you, one of whom has a union card and one of whom doesn't, you hire the union cardholder and not the nonunion man.

That is basically the charge that's made against us, and we would like to explain why, in a sense, that happens to be true, but why it happens to be true and why we think it leads to no illegal results.

In the operation of a manufacturing business, which, in a sense, the production side of a newspaper is, the manpower requirements vary very considerably from one day to the next on a quiet night when the papers is small when you only need, perhaps, 50 men, but when you get to the Sunday paper, where there is one of bigger size and wider circulation and you perhaps need four times as many.

Now, in order to meet the shifting demands for manpower, a system, such as I will now describe you, has grown up over the years.

Initially, we start off with the hardcore or calvary of individuals who work each night, they are called in the trade regular situation holders.

They are the persons who come to work, go to the locker room, change their clothes and report immediately for work without having to see the foreman first.

The next group is called regular substitutes.

Now, these are journeymen also.

These are the individuals who fill in for the absent regular situation holders, who are away because of vacations or illness or the like.

Now, everybody in these first two groups, the record shows in this case, is a member of the Mailers' Union, which is not too surprising considering that the union has had a contract with the New York City newspaper publishers for, I suppose, more than half a century.

Now, we get down to the third group which really divides into two classes, and these are the people who are known as ?extras.?

And for the most part, they are needed on Friday and Saturday night when these -- the Sunday newspaper is being produce.

There are two types really of extras.

The first extra -- extras are the men who come, who are working regularly at other shops, but who want to have an extra shift of work because of the extra income involved during the week.

So consequently, they come around to a particular newspaper, let us say, the news, and as a result, they are put to work before the last group of extras who are known as the nonunion extras, the casuals, a term descriptive of the group in which the charging party in the case now before Your Honors fell.

The man who filed the charge was named Burton Randall.

His livelihood was earned in the fish business in New York City.

He worked five days a week at Fulton fish market starting at 5 o'clock in the morning.

But for a number of years, he had followed the policy of coming around to the Daily News to work in its mail-room on Friday and Saturday nights.

And he would get off work at 2 o'clock in the afternoon or something and would shape, as it has been called, which means to apply for work in the trade regularly on those nights.

Now, he was never a member of the Mailers' Union.

And he never had the slightest difficulty for many years in obtaining employment on those nights.

When -- in 1956, the Mailers' Union, the other respondent here inaugurated a further program of modifying its traditional hiring practices because of the impact of the Taft-Hartley Act and so forth.

And came forward to the publishers in New York City with the scheme under which certain of the men, who fell in this last group of nonunion extras, could convert themselves and be promoted to regular substitute status, that being the highest step on the ladder as you would recall.

In order to decide who of the nonunion extra group would be eligible to apply for passing the competency test so that he could move up the step, the arbitrary, but I submit entirely reasonable requirement was laid down that the individuals who, during the previous year, had worked an average of not less than three shifts per week would be eligible to take the examination.

Now, this was a test that Randall couldn't make.

Randall being nothing but a moonlighter as he is called, working -- working weekends was not able to take the competency test because he couldn't meet this three-shift requirement.

Justice Charles E. Whittaker: Not just to weigh it down, not by whom.

Mr. John R. Schoemer, Jr.: By the union initially with the agreement of the employers.

The employers were consulted in their agreement obtained before such a scheme was put into effect.

As a result of the --

Justice Potter Stewart: What kind of an examination is this?

Mr. John R. Schoemer, Jr.: Well, I believe it's both written and practical, Mr. Justice Stewart.

I'm not entirely sure, but there is a method described in the record by which the individuals' competency is determined, that is they --

Justice Potter Stewart: (Voice Overlap) to wrap newspapers?

Mr. John R. Schoemer, Jr.: Well, there is -- there is a little more to it than that.

I -- I wouldn't want to concede that it was two highly skilled a job, since we still have to bargain collectively with this union from time to time.

But I would -- I would honestly concede that there is more to it than simply tying a string around the bundle of newspapers.

The record does contain evidence of the type of the examination that was administered, and --

Justice Charles E. Whittaker: Does this involve (Inaudible)

Mr. John R. Schoemer, Jr.: Well, most of that is done by machine, but not all of it, Mr. Justice Whittaker, and I can't answer question.

I'm sorry, I just don't know enough about the mechanical side of it.

In any event, as a result of the examination, 30 people who were junior to Randall in the sense that they had been working for many years at the news -- been working for less years at the news than Randall had, were moved up to this regular substitute status.

And thereafter, because they were in that status which is the higher rung on the ladder than the extras, when they came to work, they were hired ahead of Randall.

Now, coincident -- coincidentally with that move, they became members of the union.

Now, the Board finds very sinister motives in this in regard to this a highly suspicious circumstance, but I submit that there is no basis for that because the union as part of this arrangement had agreed that it would throw open its membership list and would take in additional members, those who met this competency availability requirement.

Those persons who, having shown over a period of years their willingness to earn their primary livelihood at this trade by working at least three weeks, were found -- three shifts a week, excuse me, were found acceptable by the union as -- as members, and the fact that they -- when they became union members, they, thereupon, went ahead of Randall in hiring is, to our mind, no reflection at all of the fact that Randall was being discriminated against because he was not a union member.

Now, basically, that is the -- the factual background of this case as a result of Randall's charge, protracted hearings were held before the Board, extending over a long period of time, as besides the record before you will attest, throughout these hearings.

Well, I should say that in the course of the hearings, it soon became apparent that the -- the woes of Mr. Randall were lost in sight of and this case became another battleground between the Labor Board and the International Typographical Union with the employer again in the unhappy position of being an unwilling participant in the (Inaudible).

During the course of the hearings, general counsel's representative made what we have always regarded to be a very significant concession in this case in terms of the liability thereafter sought to be imposed upon the employer.

It appears at page 129 of the record, and he said, May I state for the record that we don't question the good faith of the parties in trying to deal with this problem.

What we do allege here is that the conclusions they've reached or the practice that resulted and the contract that resulted, unfortunately, ran afoul of the provisions of the Taft-Hartley Act.

Now, notwithstanding that concession, notwithstanding that throughout the subsequent proceedings in this case, no claim had, at any time, been raised that some liability should be imposed on the employer in terms of a payment of back pay, union dues, initiation fees or the like.

The Board, on its own motion in the -- as a result of inquiry made by a member of the Board during oral argument of the case, nobody having said a word about Brown-Olds that Your Honors have already heard how this Brown-Olds' thunderbolt was forged in the construction and trucking industries and so forth, but unfortunately it was hurled in our direction without the slightest warning that it was coming, as a result of the oral argument in the case, we find ourselves in the position of having a tale added by the Board to the order recommended by its trial examiner, in which the employer and the union are ordered jointly and severally to reimburse members, all employees in the mail-room for dues and assessments and initiation fees paid to the union over period of time, which extends back to Christmas day, 1955 at this point.

This is a relatively small unit.

They're only something over 200 employees involved, but our potential liability under that order at this moment is in excess of $350,000.

I would close --

Justice Hugo L. Black: Do you think they wanted -- wanted you to replenish all workers in that --

Mr. John R. Schoemer, Jr.: All -- all employees in the mail-room, Mr. Justice Black, yes.

Regardless of when they became union members whether it was long before Taft-Hartley or anything like that.

Regardless of whether the individual member was coerced in anyway, there is no proof of coercion.

We have instead been given the -- the same argument of inevitable coercion.

In order not to preempt Mr. Van Arkel's time entirely, I would just like to close by noting three ironic twists to this case, which I think are -- are relevant to this question of -- of Brown-Olds and to the question as to whether or not, there was actual discrimination here.

If instead of, as the Board says we did, encouraging union membership, we had discouraged union membership, I would not have the pleasure of standing here today because under those circumstances all that happens to us, if we send the foreman out to tell everybody in the shop, "This union is no good, get out of it," all that happens to us is that we get hit with the cease and desist order, which we can live with and in fact that the earlier stage of this case, when a cease and desist order was recommended by the trial examiner, we filed no exceptions because we have no great problem with that.

Now, our --

Justice Hugo L. Black: (Voice Overlap) why does that distinction appear in the --

Mr. John R. Schoemer, Jr.: Well, we --

Justice Hugo L. Black: (Inaudible) of the Board?

Mr. John R. Schoemer, Jr.: I'm sorry, I'm afraid I don't understand that, Mr. Justice.

Justice Hugo L. Black: Do you say that the rule wouldn't -- you wouldn't have this liability of tax to you if your offense was discouraging (Voice Overlap) --

Mr. John R. Schoemer, Jr.: Discouraging, I say, yes, because the normal remedy there the cease and desist order with back pay for discharged employees.

In my hypothesis, we have -- we have discharge nobody, we have simply gone around and said, Get of this union.

Nobody is --

Justice Charles E. Whittaker: (Inaudible) got out.

(Inaudible) hypothesis, nobody got out.

Mr. John R. Schoemer, Jr.: But on my hypothesis, nobody got out.

So, it causes us nothing.

You see, under those circumstances, I know of no case where any -- anymore -- any broader remedy than the payment of back pay to discriminatorily discharge employees has been ordered.

But this way, you see, having supposedly by the Board's hypothesis told them to, Come on, everybody get in to the union, we are ordered to pay $350,000 that we've never ever seen, it never even been passed through our hands to a check off scheme.

We've never had anything to do with that at all.

If this is not a fine, I really can't imagine what one is.

There are other circumstances which have also made it impossible -- possible for us to avoid the unfortunate situation which we find ourselves.

If, for example, this man Randall had decided to give up the fish business and go into the newspaper business, we'd have no problem at all.

He wanted to join the union.

The union would've taken him if he could've met the required number of shifts requirement, but no, he decided to just remain a weekend worker in the business.

Finally, if the International Typographical Union which, as has already been stated here, is not known for its devotion to the Taft-Hartley Act, had relented in its opposition and had met the filing requirements of the Act so that a lawful union security provision under Section 8 (a) (3) of the Act, could've entered into, we'd have no problem here.

All full-time employees within 30 days after employment would have joined the union.

Unfortunately, none of these came about.

Thank you very much.

Chief Justice Earl Warren: Mr. Van Arkel.

Argument of Gerhard P. Van Arkel

Mr. Gerhard P. Van Arkel: May it please the Court, Your Honor.

The Board's order in this case rests on a single undisputed fact, namely, that all journeymen mailers hired by the New York publishers were members of the union.

Your Honors will agree with me that this is a completely neutral fact, that is, to say it is, of course, consistent with the closed-shop agreement or practice.

It is equally consistent with the perfectly lawful right of all of these employees to join the union if they wish.

It, therefore, becomes necessary to look further to ascertain the significance of this fact and happily on this record, we need not look far.

There is, in this record, notes until I have evidence that any employee was restrained or coerced or was persuaded or induced or was even asked to become a union member.

The rest of the contrary, if massive evidence from a many witnesses including the charging parties themselves, that all of the employees who were eligible to union membership were not only willing, but eager to join.

So, if we put aside the Board's unwarranted assumption that it is unthinkable that all of the employees in a bargaining unit would desire to become a union members and look instead at this record, this quest -- the significance of this fact, the want of significance of it, immediately appears.

But says the Board, Union men were hired before nonunion men, so they were, and this statement is as grossly misleading as half truths normally are.

Had the Board desired to be candid with Your Honors, they would have said that pursuant to be expressed provisions of the agreement between the parties.

Journeymen, all of whom had lawfully undertaken to become union members, were hired before casual extras, none of whom were union members because the union had lawfully undertaken to admit none of them to membership.

That is what the findings of the fact -- the fact to the Board amounted to.

They were set aside in their entirety by the court below.

I suggest to Your Honors that a reading of Judge Hanks opinion will demonstrate that he saw complete through the verbal trick by which the Board attempted to fasten on the parties here, in assertion of unfair labor practices.

Your Honors, therefore, have before you a case in which it was conceded that the hearing below that this contract is lawful on its face.You have findings which were not challenged here because the Board did not seek certiorari, that the practices under this contract were entirely lawful.

We say to Your Honors that your opinions have made it entirely clear that the entire reach of the Board's powers has been reached when it has once been found that the contract is lawful and that the practices under it have been lawful.

There is only one ground for asserting the contrary that is a reliance on certain decisions of the Court of Appeals for the Second Circuit, epitomized by the Red Star Express line of cases, which hold that where an agreement is unlawful on its face, a savings clause will not cure the defect.

Now, we have set forth in our brief our reasons for questioning the -- those holdings of the Court.

But accepting them as a correct statement of the law, it must be entirely clear that where a contract is lawful on its face as this one is conceded to be, that there is no meet for any savings clause, there is nothing to say, there is therefore in this contract no savings clause and this line of case is, therefore, has absolutely no application.

The court below in this case, the Court of Appeals for the District of Columbia and the Honolulu Star-Bulletin case, the Court of Appeals for the Six Circuit in the Fentress Coal & Coke case, the Court of Appeals for the Seventh Circuit in the Quality Coal and Perry Coal cases, have all distinguished the Red Star Line of authority on this very ground.

We suggest to Your Honors that this is the appropriate reading of the statute that therefore the holding of the court below is correct, and we urge that Your Honors affirm the judgment below.

Featured:

Teamsters Local v. Labor Board - Oral Argument, Part 1

Tue, 25 Sep 2012 22:36:50 +0000

Case:

Teamsters Local v. Labor Board

Media File:

64_19610228-argument-1

Related Transcript:

64_19610228-argument-1

Transcript:

Argument of Herbert S. Thatcher

Chief Justice Earl Warren: Number 64, Local 357 International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, Petitioner, versus National Labor Relations Board and number 85, National Labor Relations Board, Petitioner, versus Local 357 and so forth.

Mr. Thatcher.

Mr. Herbert S. Thatcher: May it please the Court.

The first issue in this case is whether the traditional employee referral agreement, sometimes referred to or called the union hiring halls, under which an employer agrees to obtain his workforce exclusively through the union, violates the Taft-Hartley Act and this, even though the agreement is non-discriminatory on its face, unless the parties to the agreement include in the agreement certain safeguards which are -- which had been prescribed by the Board and which I will indicate later.

A second issue is whether, assuming this agreement to be invalid, the Board, in framing a remedy, can require the union to return to all its -- its members hired under the referral agreement, their dues and initiation fees during a term of the agreement and for a period of six months prior to the filing of the charges.

That issue is also involved in case number 68, Local 60, Brotherhood of Carpenters which follows this case and which has been consolidated with this case for purpose of argument by arrangement of counsel and consent of this Court, Mr. Dunau will argue that issue in the next case which is in both these cases.

The sections of the law which are claimed to be violated by the referral agreement in this case are Sections 8 (a) (3) and 8 (b) (2) which forbid an employer or a union to discriminate employ -- in employment so as to encourage or discourage union membership.

The Board says the referral agreements, any referral agreement, any hiring hall inherently and ipso facto, operates to encourage union membership.

The hiring hall or referral system which -- under which employment is channeled exclusively through the union has, as this Court is undoubtedly aware, been and used in operation for many years in such industries as the building trade, maritime, stevedoring and some aspects of transportation where -- where the employment conditions are transitory -- transitory or irregular and the -- where in the absence of a central referring -- referral place such as the union hall or the hiring hall, the workers involved, usually craftsmen have to spend their time haphazardly searching for employment.

And the employer who needs a qualified workforce, a skilled workforce has to have an equally or has an equality haphazard search for that working force.

The salutary effects of the hiring hall in solving the employment problems peculiar to these particular industries had been noted by leading economists, by the members of management and labor, by members of Congress, by the courts and indeed by the Labor Board here itself, the Board's brief had meant as much.

Now, the issue of the legality of the referral agreements in this case arose in the following factual posture which is not in dispute.

In 1955, the petitioning union here, Local 357 of the Teamsters, along with some other 15 locals in the Southern California area entered into a three-year collective agreements with a trucking association, California Trucking Association, representing some 1000 carriers in the Southern -- Middle California and Southern California area.

And the particular employer, respondent in this case, Seattle or Los Angeles-Seattle Motor Express Company, is one of those carriers which is -- who was a member of the Carriers Association and which is a member of this referral, which is a party to this referral agreement.

Now, this referral agreement applies only to casual employees employed by these carriers and employed by Seattle Motor Carriers, not the regular drivers, just the casual drivers employed by these companies.

And the referral clause which is set forth on page 4 of our brief and page 62 of the record, states expressly that dispatching through the union in a hall located some three miles from a union headquarters was to be done exclusively on a basis of seniority in the industry.

In the entire industry covered by the contract, seniority became applicable after three months of employments and seniority was absolutely determinative regardless of whether any applicant was or was not a union member, that's expressly written into the contract.

If a union couldn't supply the necessary casual help, the employer was free to hire his own and as I indicated, the employer hired all his own regular employees.

Lester Slater, the individual involved in this case, was a member in good standing of the petitioner union for some two years prior to August of 1955.

And during that two-year period, he had obtained casual employment through the referral system set up in the contract.

In that -- at that time in August, through some mistake that's not relevant here, he obtained employment with Seattle Motor Express without going through the referral system under the contract.

When the union learned about this it asked the employer to let Slater go unless he went through the provisions of the -- unless he followed the provisions of the contract and the employer did let Slater go at the union's request.

Thereafter, Slater filed charges with the Labor Board and the Board issued its complaint against the union and the employer, Slater -- Los Angeles Seattle Motor Express alleging that the -- Slater's discharge operated to violate Sections 8 (a) (3), 8 (b) (2) as well as 8 (a) (1) and 8 (b) 1 (a) under the referral agreement.

The trial examiner dismissed the complaint in its entirety, finding that there was no evidence of any discriminatory application of the agreement, either at Slater or generally, and finding further that the agreement was valid on its face.

An appeal to the Board, the full Board reversed in a very short opinion in which the issues weren't discussed, but the Board did rely and referred to its recent decision in Mountain -- in the Mountain Pacific case, the infamous Mountain Pacific case, in which for the first time the Board had held that the union hiring hall or a referral system or agreement was invalid or operated to violate the law on its face and would be held violative of the provisions I just mentioned, unless a clause that contained express provisions prescribed by the Board which are as follows.

First, the agreement has to expressly disclaim any intent to discriminate and has to expressly state that it will not be applied discriminatorily as between union members and non-union members.

Second, it had to state expressly that the employer was free to reject any applicant for any clause at the employer's sole discretion.

And third, it had to require that either the referral agreement with these clauses in it be posted in places where it would be seen and read by applicants.

Justice William O. Douglas: Does -- does the union object to those --

Mr. Herbert S. Thatcher: Yes, Your Honor.

Justice William O. Douglas: -- provisions?

Mr. Herbert S. Thatcher: I will tell you by shortly.

The union does object to -- particularly to the clause which says that the employer has a completely free hand to reject applicants.

We feel that many collective agreements state that the union at least should have say on that and it maybe a matter for grievance procedure or arbitration if the union thinks that the rejection is arbitrary.

Justice John M. Harlan: Could I ask you a question?

Mr. Herbert S. Thatcher: Yes, sir.

Justice John M. Harlan: The effect of this, I want to make sure I understand you, does that mean under the Board's (Inaudible) specific that any union who does not comply with these conditions has such an agreement automatically (Inaudible) --

Mr. Herbert S. Thatcher: That is correct, Your Honor.

Justice John M. Harlan: -- irrespective of the administration of the agreement?

Mr. Herbert S. Thatcher: Irrespective of the administration generally or in respect to a particular individuals and also, the employer (Inaudible) the same unfair labor practices that are applicable as in employers, the 8 (a) sections.

Justice William J. Brennan: And now, this had not been the interpretation before (Inaudible)

Mr. Herbert S. Thatcher: No, Your Honor.

Prior to that, as I will indicate shortly, the Board had upheld these agreements.

Chief Justice Earl Warren: Was there any challenge to the finding of the examiner to the effect that there had been no actual discrimination in this operation of this hiring hall?

Mr. Herbert S. Thatcher: None -- none whatsoever.

The Board simply says that's irrelevant for reasons which I say that the agreement on its face must be held to inherently encourage membership.

Now, as -- as I've -- and as we've just been discussing, I -- the importance by the important here to note that there was no evidence whatsoever, none -- none in slightest that Slater here had lost his job because of his union membership or lack of it or -- or because of his activity in the union or lack of activity in the union.

As a matter of fact, he was a good member and standing at -- a member in good standing at the time of his discharge.

The Board so held in spite of the fact that it would have been a contract breach had any applicant been referred by -- on the basis of his union membership or lack of that and on a criterion other than his seniority.

And finally, as I indicated the Board it completely immaterial and irrelevant that there was no discrimination as to Slater or that there was no evidence whatsoever as to any discriminatory application of this referral agreement during its term.

The Board reasoned that under -- in Mountain Pacific and it applied the doctrine here that any agreement under which a union had exclusive control of hiring or referral will inherently operate to encourage union membership of the employees or the applicants being put in position where they feel that they must either cater to the union or become a union member in order to get referred and the Board concluded by saying that the inference of encouragements of union membership is inescapable for the mere existence of a union -- union referral agreement.

And this, even though the referral agreement itself has no discriminatory clauses in it such as that only union members will be referred or that union members exclusively have access to the agreement.

The union appealed to the Courts of Appeals here in the District of Columbia and in our brief and argument there and our -- in our first brief here.

I'm mentioning this because the Board has somewhat changed its position in its reply to our brief but in our argument before the Court of Appeals below and in our first brief here, we argued simply that the -- the Board in so inferring an unlawful act was basing its -- but it was concluding on a basis of mere inference and speculation that it was attempting to shift the burden of proof that it was -- or there was this duty and function to specifically prove by some credible evidence that there was a discriminatory application either as Slater or generally and that the Board was avoiding this burden.

Two of the judges below, Justices Miller and Danaher affirmed the Board in a per curiam without discussion.

Judge Edgerton dissented following with the arguments that we had made in the brief and at oral argument.

All judges however disagreed with the Board as to the remedy which had been adopted all holding that the Board had exceeded its powers in -- in requiring return of the dues and -- and initiation.

Now, the Board here in its reply brief has taken a somewhat different position to what it – it took below and from what the Board itself took in the Mountain Pacific case.

The Board now argues that Section 8 (a) (3) can be broken down into two parts.

The first part which deals with the discrimination in regard to hire, the word discrimination in that part of 8 (b) (8) and 8 (b) (3), 8 (a) (3) can be equated with the term difference or disparity so that if any difference or disparity has been brought about in hire, the first part of Section 8 (a) (3) is applicable and then the Board says that one fact difference is established even though it has no relation to union member -- membership as such, the Board then has a body of experts isn't -- is permitted or is to be permitted to look into the practical, practicalities of the situation and see whether the difference that had been created does operate in its judgment as experts to encourage or discourage union membership.

The difference --

Justice John M. Harlan: Mr. Thatcher, do you say that was in the government's reply brief?

Mr. Herbert S. Thatcher: That's in the government's brief.

Justice John M. Harlan: Now, is it in brief --

Mr. Herbert S. Thatcher: Brief.

Justice John M. Harlan: -- and not the reply brief (Inaudible)

Mr. Herbert S. Thatcher: No, in their brief which was in reply to our principal brief, we filed the first brief and the government filed its brief.

Justice John M. Harlan: Yes.

Oh, I was looking (Inaudible)

Mr. Herbert S. Thatcher: I'm sorry, Your Honor, the government's brief.

Now, the difference or disparity or discrimination here, says the Board, is the -- and as created by this hiring arrangement as by any hiring arrangement is found to exist in the creation of two classes of jobseekers, those who must apply through the union and those who must not.

By having found this alleged discrimination, the Board calls, it's a discrimination, the Board then with its special knowledge in the field concludes that these systems inevitably operate to encourage jobseekers either to become members or ingratiate themselves with the union so that the Board can reasonably conclude union encouragement and the Board need not demonstrate further that there was any actual discrimination because of union membership or any actual encouragement of union membership other than the mere existence of the union of referral agreement and the need for employees or applicants to go through that agreement to obtain their employment.

This -- this reasoning, we believe to be utterly places, a foul that would commit the Board to inquire into and imperil the whole fabric of collective bargaining.

All collective bargaining agreements as I will indicate shortly do create similar differences.

The term "discrimination" as used in Section 8 (a) (3) we say must necessarily have some reference or relationship to union membership or to union membership as such or some aspect of it and that the mere creation of two classes is not sufficient, which had nothing to do with union membership is not -- is not enough.

Now, before discussing this reasoning and our disagreement with it, I think it's important to point out to this Court that in all the years that this issue has been before the Board in previous cases, and there have been some seven-and-a-half years the Board has had various aspects of the hiring hall before it, all previous Boards have, without any difficultly, found the hiring agreements valid on its face and not violative of the Act on its face.

And in each case, the Board would find a violation of the Act only if it was shown there was some actual discrimination regard to union membership practiced under the agreement or as applied to particular individuals.

Chief Justice Earl Warren: Mr. Thatcher, is there -- are there any statistics to show how extensive the hiring-hall practice is in the country?

Mr. Herbert S. Thatcher: We have -- we have references in our brief to the practices in the different industry.

I don't think we have in our brief though actual statistics as to the how many hiring halls are in existence in each of these industries but the fact is and economic writers all indicate that the practice is quite extensive in the maritime and stevedoring and in building trade, less in transportation which we're involved with here, except in the casual part of transportation, (Inaudible) transportation which we have in this case where there are -- a similar agreements.

Justice William J. Brennan: Well, Mr. Thatcher, doesn't Landrum-Griffin give some statutory sanction hiring involved?

Mr. Herbert S. Thatcher: It does in the building trades field, it's --

Justice William J. Brennan: Only the building trades?

Mr. Herbert S. Thatcher: Only the building trades field so Landrum-Griffin amendments don't affect this case except in the building trades field.

Similarly, the courts, all the courts that have considered the question prior to the Board's decision in Mountain Pacific, all the courts, the Circuit Courts of Appeals that have considered the question of -- of each of them upheld the hiring hall as such as long that it didn't contain in it an -- a discriminatory clause or as long as there was no discrimination in practice under it or a discriminatory application under the agreement.

This is the first case, Mountain Pacific was the first case and it's the first case in which it was -- was applied to the (Inaudible) remedy in which it has been held invalid on its face.

The Circuit Courts have splits and to whether the Board's Mountain Pacific doctrine is proper under the Act and that's why the case is here.

Two circuits have held with -- with the Board and two and perhaps three have held against the Board, usually in spilt decisions.

Further, the legislative history of the 1947 Amendment indicates quite clearly that there was no intent by Congress to outlaw the hiring hall at such -- as such but only discriminatory practices under it.

Senator Taft, our brief page 23 quotes two excerpts from statements by Senator Taft.

One --

Justice Charles E. Whittaker: They didn't outlaw it?

Mr. Herbert S. Thatcher: Pardon?

Justice Charles E. Whittaker: Was the Board's view would outlaw --

Mr. Herbert S. Thatcher: The Board's view would outlaw the union referral agreement unless it contained these three proscriptions.

Justice Charles E. Whittaker: Yes.

(Voice Overlap) --

Mr. Herbert S. Thatcher: It would outlaw the agreement in this case because it does not have these three conditions.

Justice Charles E. Whittaker: But arguably, you do (Inaudible) --

Mr. Herbert S. Thatcher: Well --

Justice Charles E. Whittaker: (Inaudible)

Mr. Herbert S. Thatcher: Well, that is right Your Honor but I will tell why it doesn't satisfy the union shortly.

So as far as legislative history is concerned, it's quite clear and I don't think the Board argues to the contrary that Congress intended to outlaw the hiring hall as such which -- which on its face was not discriminatory or which is not discriminatory in application, just quite clear.

Now, turning to the Board's rationale which would mechanically apply to Section 8 (a) (3) and -- and use the Board's alleged expertise to infer or preclude that the inevitable result of hiring halls was to encourage union membership.

We say, first of all that the Board has failed adequately to define a relevant class.

The relevant class in this case and in other hiring hall cases is not those who must go through the union form plummet or not at all anymore than it would be, all that have to go through an employer or not at all.

The relevant class, the only irrelevant class which the Board should consider is the class the employees or all employees or applicants who seek casual employment, all applicants who seek casual employment.

Now, as to this class, it's quite clear that there is no discrimination all in that class, all seeking causal employment are dealt with evenhandedly on an equal basis.

All are referred for employment regardless of membership or non-membership and solely on the basis of seniority.

What the Board is really saying is -- here as in their attempted classification is that to enforce a uniform standard applicable to an entire class is to discriminate against those who disregard it.

It's like saying that people who try to get into a restaurant before or after closing hours and are excluded because the restaurant has a rule that you can't get in or out the restaurant before or after closing hours are discriminated against as distinguished from a -- a discrimination which might result from their race, religion or union affiliation, the same sort of analogy, the Board is -- is -- in dealing with here.

Now, we say this, if the creation of a class of those who have to go through the union for employment constitutes discrimination that that really can constitute discrimination that their creation of that class of those who have to go through the union for employment then under all collective agreements, many similar classes of alleged discriminations are created.

The most obvious example of course is the fact that the union under -- under a type of bargaining agreement is the exclusive bargaining representative and employees have to look to the union to protect their rights under a collective bargaining or not at all.

So therefore, they -- the Board could reasonably infer I suppose that the -- that union membership is encouraged.

And even more striking usual clause is the grievance clause in most union contracts under which the union handles grievances exclusively.

There again, this creates a class that go through that -- go through the union and those who do not and it could reasonably be said by the Board that the employees are subtly – subtly encouraged to be friendly with the union or to join the union or to ingratiate themselves with the union just as they do because of the existence of the hiring hall and there are more -- even more barring examples.

The one before this Court, in Aeronautical Industrial Lodge versus Campbell, 337 U.S. 2 – 521, there the collective agreement provided that union stewards be accorded seniority -- super seniority even beyond war veterans solely on the basis of their being union stewards.

This Court upheld that alleged discrimination in that case although the NL -- the National Labor Relations Act was not directly involved there.

However, later, when this Court did consider a similar type of seniority clause in Ford Motor Company versus Hoffman, it reverted back to the Industrial Lodge case and held -- and then indicated by way of dictum at least that the seniority clause in Aeronautical Lodge versus Campbell would not violate the National Labor Relations Act.

We submit that's most obviously, if that clause would not violate the Act then certainly, the mere existence of a referral agreement would not violate -- violate the Act because of a tendency or some sort of an -- tendency to encourage union membership.

What the Board forgets is that the union -- all unions are service institutions and the more and the better they service, the more they are likely to encourage membership.

So, all of union functioning could be drawn into possible violation of the Act by virtue of some inherent tendency to encourage membership.

I don't think the Board is going to argue that but it's the -- it follows from what they are trying to assert here in hall and –the hiring hall inherently unlawful.

Similarly, employers have many occasions to affect employment rights in their discharges, layoffs, promotions and demotions where a discrimination I suppose is created but where of course the Board is required to show that there was an actual intent to discriminate because of union membership or a lack of it by reason of the demotion or layoff.

Justice Charles E. Whittaker: May I ask you Mr. Thatcher, would the Board to have the right to lay down general rules found in its experience to be needed in order to make hiring halls better?

Mr. Herbert S. Thatcher: We believe not for these reasons, Your Honor.

In the first place, the -- the hiring hall agreement of clause is a subject matter, a very important subject matter of collective bargaining.

In these industries in particular, it is probably one of the most important portions of the collective agreement.

We feel the party should be free to negotiate their own clauses without interference from the Board particularly where as I will indicated shortly that there's -- if these causes are not in themselves and cannot in themselves be called illegal.

We -- we resent suggestions from the Board, let alone mandates from the Board, as to what should be put in to collective agreements before we can use them, before we can agree to particular clauses.

And we say that if these clauses are valid without these conditions that the Board seeks to impose, there is no reason in law or in policy why we shouldn't be permitted to make our own agreement the employer and the union and enforce them according to their terms.

Now, in addition as I will show shortly, the -- the particular clauses are -- the particular conditions which the Board seeks to impose upon us are objectionable, in particular the one which says that we have -- we have no right to have any voice in rejections of applicants.

But apart from that, I think it's very important that -- but we think it important that we be permitted to -- to maintain the rights and negotiate our own contracts if they're legal, free from Board interference.

Chief Justice Earl Warren: We'll recess --

Featured:

Carpenters Local v. Labor Board - Oral Argument, Part 2

Tue, 25 Sep 2012 22:36:59 +0000

Case:

Carpenters Local v. Labor Board

Media File:

68_19610301-argument-2

Related Transcript:

68_19610301-argument-2

Transcript:

Argument of Norton J. Come

Chief Justice Earl Warren: -- United Brotherhood of Carpenters and Joiners of America, AFL-CIO, et al., Petitioners, versus National Labor Relations Board.

Mr. Come, you may continue your argument.

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

As I concluded yesterday, I was -- I had finished outlying -- outlining the practical problem that the -- that the Board had before it, which prompted it to device the Brown-Olds refund remedy.

The practical problem being that despite the fact that Congress had 10 years ago outlawed the closed-shop, those practices were continuing to persist in industry's short-term employment for the union controlled the hiring process, such as in industries like the building construction industry and the trucking industry.

The Board believes that such a remedy is authorized by Section 10 (c) of the Act and by the holding, although concededly the facts here are different, by the holding of this Court in the Virginia Electric Power case, sustaining a Board refund remedy, the Board's power to order refund of dues and fees.

The majority of the Court there, in sustaining that remedy, enunciated this test, namely, that such a remedy should stand unless it can be shown that the order is a patent attempt to achieve ends other than those which can fairly be said to effectuate the policies of the Act.

Now, I'm going to try to show if I can that this refund remedy in situation such as we have in -- in these cases falls within that test.

Now, one of the declared policies of the Act is to protect the exercise by workers of full freedom of association, self-organization and this policy is reflected in the guarantee of this right in Section 7 of the Act, which specifically guarantees these rights to employees and adds that they include the right to refrain from any or all such activities.

And this Court made clear in the Radio Officers case that one of the corner stones of the Section 7 right to refrain from assisting the union was the right to get a job without having to be a union member or in full conformity with union policies.

Now, there can be no more flagrant impairment of this freedom and the type of practice which is conceded in Number 68, the closed-shop practice.

The Board found and the court below agreed that mechanical handlers, the employer and Local 60 entered into an agreement whereby the Company would obtain all their millwrights from Local 60 and abide by its rules and under the rules of the union, only members of Local 60 and those who are obtaining work permits from it, could get a job.

And as a result, two employees were referred -- were denied the jobs because Local 60 did not give them work permits.

Similarly, the hiring arrangement in the preceding case, under the Board's view of it, likewise, unlawfully encourages union membership, albeit and not as traumatic or fashion as a closed-shop.

Now, a refund of dues and fees paid to the union by employees as a price for getting jobs under these illegal hiring arrangements, in the Board's view, vindicates the policies of the Act which have been negated by -- by that arrangement for this reason.

The question is why has the union been willing to persist in maintaining a hiring arrangement such as we have in Local 68, a blatant form of closed-shop practice that is clearly outlawed by the Act.

The reason, it is fair to say, is because it assures that a regular flow of dues and fees will come to the union.

It maybe that these employees would have paid anyhow, but the union certainly has not been willing to risk that chance because they have continued to maintain the closed-shop practices for years after Congress outlawed them in the Taft-Hartley Amendments.

Now, a refund of dues and fees, in the Board's view, removes the incentive for continuing these illegal closed-shop practices.

And it differs from a jail sentence or a fine in that it is commensurate what the incentive for maintaining the illegal arrangement.

It is not some figure picked at -- picked at random, it is measured by what the union is benefiting as a result of continuing these closed-shop practices.

This Court said in the Virginia Electric Power that an order such as this, of course, they were talking about a different set of facts, which deprives an employer of the advantages accruing from a particular method of subverting the Act, is a permissible method of effectuating the statutory policy.

We think that a refund of dues and fees in the circumstances that we have here does no more than that.

And the Board has been careful to restrict the refund remedy to just situations where it would have the effect of removing the incentive for violating the Act because it has not applied this remedy in situations where a union security provision has been illegal for only technical reasons such as a failure to comply with Sections 9 (f), (g) and (h) or where employees were not required to be a union a member in order to get a job, but instead of giving them 30 days, as the statute requires, they were given only 29 days, let's say.

Moreover, the Board has not applied the remedy in cases where the parties have cleaned up their agreements during the moratorium period provided by the General Counsel, which was in March 1st to November 1st, 1958, as a recent case.

It makes that clear, which I do not think is cited in our brief, namely, Booth & Flinn Company, 129 NLRB, Number 89.

Now, we believe that if we have shown that the refund order meets the test in Virginia Electric Power, the fact that it was devised as a more effective means of deterring illegal hiring arrangements, does not impair its validity.

We think that purpose of a -- of a refund -- of a -- of a Board remedy, if otherwise, appropriate, is a measure of -- of deterrence under the -- for the Board to look around to modify its -- its remedies in order to -- to make them more effective, is not in its itself -- does not in itself, make the remedy invalid.

We think that the Seven-Up case before this Court indicates that.

This Court will recall, that was a situation where the Board found that as a result of computing back pay over the entire period between discharge and offer of reinstatement, it found that the employers were tending to delay offers of reinstatement and the hope that the employee would get a better paying job and thus, reduce its back pay liability.

As a result of its experience, whit this situation, the Board found that it would have to take a step in order to make the -- the reinstatement remedy more effective.

That it was not having its full effect and therefore, it devised the procedure of computing back pay on a quarterly basis.

And this Court sustained that, though in some cases, it might have resulted in an employee being made more than whole or putting in another way, and the employer having to pay more back pay than he would had to pay had the employee remained on the job.

It was sustained because that modification in the remedy was reasonably related to effectuating the statutory policy which was to ensure that employees that had been unfairly discharged would be promptly reinstated.

Now, the big argument that -- that petitioner advances is that we cannot show that the dues were coerced here.

These are union members longstanding -- belong to the union before they were subjected to this particular unlawful hiring arrangement.

And there's no reason to believe that they wouldn't have continued to pay dues even without the arrangement.

Well, that maybe so, although one wonders is that, if that is so sure, why, as I indicated earlier, unions, particularly in the building trades, would continue to take no chances and persist in their closed-shop practices.

My opponent pointed out that the building trades industries are very highly unionized industry.

That's very true.

It also has been the leading practitioner of the closed-shop.

And it has continued to engage in those practices long after Congress outlawed them.

And Congress in 8 (f), I might point out, although it did permit the building trades unions to enter into pre-hire contracts, it did not give them the closed-shop.

It limited them to a union shop and although it cut down the time from the 30 days to 7, it still did not authorize or sanction, even in that industry, a closed-shop.

But beyond that, we submit that a showing of -- of coercion is not necessary to sustain the refund remedy as we read Virginia Electric Power.

Indeed, as we read it, we think that was the issue which divided the Court in that case.

As this Court may recall, there were three sets of opinions in Virginia Electric Power.

It was the opinion of the three dissenters who did not sustain the refund remedy on the ground that was no showing, no proof that the employees were actually coerced in the payment of dues.

Mr. Justice Frankfurter wrote a separate opinion concurring with the majority of the Court sustaining a refund remedy.

He did so on the ground that he agreed that coercion had to be shown but that sufficient coercion was shown by the fact that there was a closed-shop contract in that case, which required the employees to join the union.

They had no choice about whether they wanted to join or not.

The remaining five members of the Court, however, in an opinion by Mr. Justice Murphy, sustained the refund remedy on the ground under -- under the test that I enunciated earlier.

They did not rest the holding, as we read it, upon a showing or requirement that you show that the dues were actually exacted under coercion.

Now, I should like to say a word about petitioner's reading of the Virginia Electric to limited -- limit it to a company-dominated union situation.

It is true that the -- that the union in Virginia Electric was company-dominated.

Since the closed-shop, however, was legal under the Wagner Act, you had to have something more than the closed-shop to give the Board any predicate for finding an unfair labor practice.

Company domination was the particular predicate in Virginia Electric Power.

The Courts, however, have not viewed Virginia Electric as limited to the company-dominated union situation.

We have had refund orders sustained by many of the same courts, which have not sustained them in this particular case, in situations where you had nothing more than a grant of recognition to a minority union with a union security clause and the unions were -- such unions as the Teamsters and the machinists, which were not in the company-dominated union character, our pledge.

We have set forth those decisions in our -- in our brief and I'd like to call the Court's attention particularly to the Revere Metal Art case, which is set forth at page 33 of our brief.

I could take the Court's time for a moment to just read a moment briefly from that case.

The Court in sustaining the refund order in that situation, which was a minority union which had been granted exclusive recognition in the union's security clause, sustaining the refund of dues there, even though there had been no proof that the employees had -- had paid the dues under coercion.

The Second Circuit in an opinion by Judge Friendly said, "For the courts to require a determination of the attitude of each employee in every case would impose impossible administrative divergence."

"We've been admonished that although orders requiring reimbursement to employees for dues paid to unions unlawfully forced upon them, both somewhat resemble compensation for private injury, we must not consider them solely in that light seems they vindicate public not private rights," quoting from Virginia Electric Power.

The fact the union imposed in Virginia Electric was company-dominated, does not appear to be a valid distinction here.

Now, to be sure, the facts even in these cases that I'm referring to where a refund order has been de-sustained, even though there has been no company domination, differ from the situation that we have here, because they did not involve old-time union members in an inference of coercion as possible from the -- form the union security clause.

I think they illustrate, however, that Virginia Electric Power cannot be put to one side, simply on the ground that it involved a company-dominated union.

I think that they indicate that there is more to Virginia Electric in this factor and that the decisive consideration that Virginia Electric leaves you with is the test that I alluded to at the outset, namely, whether or not, the refund order can be shown to be a patent attempt to achieve ends other than those which can fairly be said to effectuate the policies of the Act.

And I have tried to -- to indicate why the Board believes that a refund order in the circumstances here satisfies that test and fall short of a penalty, a jail sentence or an arbitrary fine.

In conclusion, I would like to give the Court one more citation, if I may, which I find is not in our brief.

Yesterday, Mr. Justice Black asked for decisions in which the Board's rationale in Mountain Pacific had been set forth.

Now, of course, there is the Mountain Pacific case itself which is cited in our brief.

I find it there has -- is some discussion of the basis for the safeguards at 123 N.L.R.B. at page 1887.

Unfortunately, that case was not cited in our brief, it is the concurring opinion of Mr. -- of Board Member Jenkins in one of these Mountain Pacific cases, which sets forth, I think, better than our brief does, the rationale for the safeguards.

I would like to call that to the Court's --

Justice Hugo L. Black: Is that named the Mountain Pacific case?

Mr. Norton J. Come: No, it is a case called the Boilermakers case.

Justice Hugo L. Black: Boilermakers case.

Mr. Norton J. Come: Boilermakers case.

That is 123 N.L.R.B. at 1887.

Thank you.

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

Argument of Bernard Dunau

Mr. Bernard Dunau: May it --

Chief Justice Earl Warren: Mr. Dunau.

Mr. Bernard Dunau: May it please the Court.

We are told that the reason for a closed-shop practice is to compel payment of dues which would otherwise not be paid.

This is a novel reading of industrial history.

The reason for a closed-shop practice is to safeguard for members of the unions, the available work opportunities.

It -- in the competition forward between members and nonmembers, members are favored.

This is a wrong, but the wrong is not one which is designed to collect dues.

We would -- to follow the argument that a closed-shop practice has for its purpose to collect the dues and if closed-shop practices were only eliminated, the conclusion we would have that there would be no building and construction trade unions in this country.

If only building -- if only closed-shop practices were eliminated, the 2.3 million people who are now members of building and construction trade unions, which ceased to be.

Now, if the purpose, as we are told, of this refund remedy is to restore dues that would not have been paid, there would be not the slightest reason for having that remedy run for a period in excess of 30 days.

Because with respect to any union which has not assisted or company-dominated, there is the power legally to compel the payment of dues once the 30-day period has passed.

So in all these cases, if the collection of dues were the truly the objective of this refund remedy, the refund should be limited to a 30-day period that the employee was on the job.

Justice Potter Stewart: Under the Brown-Olds remedy, when is the starting point?

Is that the time the charge is filed or the time of --

Mr. Bernard Dunau: Six months preceding the filing of the charge.

Justice Potter Stewart: Six months preceding the filing of the charge.

Mr. Bernard Dunau: That is correct, sir.

Justice Potter Stewart: Thank you.

Mr. Bernard Dunau: Now, it is actually, of course, untrue that the refund remedy is confined to situations were you have closed-shop agreements.

The preceding case illustrates this precisely.

In the preceding case, there was no invalid closed-shop agreement.

There was a hiring hall agreement.

There was a separate union security provision which required the payment of dues, but that separate union security provision was entirely valid.

It left a 30-day period.

And in fact that separate union security provision in Number 68 -- in the preceding case, could not have compelled the payment of any dues because what the Board in that case requires is the refund of dues to casual employees.

They never work a period of 30 days.

Their payment to dues never could have been coerced even by a valid union security agreement.

So, it is utterly inaccurate to say that the remedy is designed to compel the return of dues which otherwise would not had been paid.

We are told that Virginia Electric says, "It doesn't matter that dues were not coercively paid:" On page 30 to 31 of the Board's brief, there is a quote from Virginia Electric.

I think it suffices to read from that quote, one part of it, on page 30."

The reimbursement order does restore to the employees in some measure what was taken from them because of the Company's unfair labor practices.

The heart of the vice of the remedy in this case is that though a wrong exists, the Board cannot show that the payment of dues was because of that wrong.

In the absence of a connection between the wrong and the payment of dues, there is no valid basis for a requirement of a refund of dues."

Featured:

Teamsters Local v. Labor Board - Oral Argument, Part 2

Tue, 25 Sep 2012 22:36:50 +0000

Case:

Teamsters Local v. Labor Board

Media File:

64_19610228-argument-2

Related Transcript:

64_19610228-argument-2

Transcript:

Argument of Herbert S. Thatcher

Mr. Herbert S. Thatcher: Just before the recess, we were discussing the reasons why the unions object to the Boards attempting to condition their union rapport.

I think -- I don't think I have pointed out in this case as yet, however that here, the Board assumes in illegal agreement of some sort before it even attempts to impose a condition, it attempts to impose a condition only as a means of achieving -- of eliminating what it thinks is illegal about the agreement.

So under the Board's own rationale if as I've indicated, the agreement is -- and must be considered legal on its face because not discriminatory on its face or an implication, then the Board's right even to impose conditions is lost.

Now, obviously, if the agreement were legal without these conditions, the Board would have no right to impose these three conditions because it would be a direct intrusion on the collective bargaining process which this Court in the Oliver case and in American National Insurance and the many other cases that says, "It's not the Board's function."

It is commerce's function to impose conditions like that if it thinks the hiring hall in some way should be tampered with or if it thinks the unions and the employers should not have a right to make their own agreements.

That's for Congress to -- to do, not for this Board.

And so, on any other postulate but -- that the agreement itself on its face is illegal, the Board would have no power to impose these conditions, I think that's clear.

Now, turning to the specific conditions once more --

Justice Hugo L. Black: How are they promulgated?

Mr. Herbert S. Thatcher: Just by an edict to Mountain Pacific, we -- we hereby state that you can't have a union referral agreement which we find on its face to be illegal which -- which in all such agreements, we -- we conclude are illegal because they encourage membership unless, you put in one, two, three.

Justice Hugo L. Black: Did the action rest on -- or purport to rest on any specific provision of the act of the law itself --

Mr. Herbert S. Thatcher: None --

Justice Hugo L. Black: -- authorizing the Board --

Mr. Herbert S. Thatcher: None, Your Honor the Board --

Justice Hugo L. Black: -- promulgates the rules or --

Mr. Herbert S. Thatcher: No promulgates the rules --

Justice Hugo L. Black: -- regulations.

Mr. Herbert S. Thatcher: -- no provision of the law, no legislative history, merely something which the Board in its expertise deemed -- this Board at least deemed was necessary in order to have a proper union referral agreement under the Taft-Hartley Act.

All previous force just as expertise did not have this dealing but this Court has imposed these three conditions.

Justice William J. Brennan: Any division in the Board in Mountain Pacific?

Mr. Herbert S. Thatcher: There was when -- when Senator Murdock was on the Board, he dissented the Mountain Pacific.

The present Board, there is no -- no dissent.

Now, on the three conditions, the unions object very strongly to being required to expressly include the provisions which says that they aren't going to discriminate because that adds a -- a contractual obligation not to discriminate, in addition to the statutory obligation not to discriminate.

Thus giving -- thus, if there is a violation giving two remedies, thus the remedy of a contract violation being available in whatever form someone might be able get into.

And if there is any discriminate, we'd rather have the Board and look rather than some course.

We think this is a matter primarily to the Board to worry about --

Justice Hugo L. Black: Is there are any other -- pardon me but is there any other N.L.R.B. case besides the one you were -- in which you refer Mountain Pacific chapter that --

Mr. Herbert S. Thatcher: Well, there's dozens of them.

Justice Hugo L. Black: -- discuss it because I'm not talking about the (Voice Overlap) --

Mr. Herbert S. Thatcher: Mount Pacific is the only --

Justice Hugo L. Black: -- questions --

Mr. Herbert S. Thatcher: -- is the only case where the rationale --

Justice Hugo L. Black: -- explained it.

Mr. Herbert S. Thatcher: -- will be discussed.

I think that's a correct statement.

Mount Pacific is the only case where they really discuss the rationale.

That's set forth --

Chief Justice Earl Warren: What was the date of that -- what was the date of that opinion?

Mr. Herbert S. Thatcher: Of the --

Chief Justice Earl Warren: Mountain Pacific Chapter.

Justice William O. Douglas: March -- March 1948?

Mr. Herbert S. Thatcher: 1950 -- 1958, March, 1958.

Chief Justice Earl Warren: 1958?

Mr. Herbert S. Thatcher: March, 1958, I think 1958 or April 1, 1958.

Justice William O. Douglas: March, 1958?

Mr. Herbert S. Thatcher: April 1, 1958.

April 1, 1958.

Justice William O. Douglas: What -- I've been reading this Board opinion in that case.

They apparently go on the theory that they need the -- these protective provisions because they say as respects the non-union members that may be hired, they will be -- instead their concern is and must be, "What about themselves?"

will probably please the union or their agents.

How can they conduct themselves best to conform with such rules and policies as unions are likely to enforce?

In short, how to ingratiate themselves with the union regardless of what the employer's desires and needs maybe?

That was their (Voice Overlap) --

Mr. Herbert S. Thatcher: Well, that's their rationale.

Justice William O. Douglas: But what do you say to that?

Mr. Herbert S. Thatcher: Well, that same rationale as I said implies to all collective bargaining agreements where the union is the -- is the exclusive representative and pretty much ingratiate themselves to use the Board's phrase or where the union has to do with the grievance settlement or where -- where if you're a union steward, you can get super seniority.

All sorts of conditions in collective agreements might give unions -- might bend the employees under the agreement to get in good with the union but that doesn't -- is not enough.

There has to be an encouragement or a discrimination based on union membership which we haven't got here anywhere.

The Board merely assumes -- infers that there -- that there is some inherent encouragement in -- in hiring halls.

Congress didn't find so, Congress didn't think it's necessary to legislate on it.

All previous Boards didn't think so.

This particular Board has relied on some or mostly about 12 cases in which this had the hiring hall actually before it and from that assumes this.

We have -- if -- if that assumption is to be made in the case of the union where the employment is channeled through the union then the Board should make the same assumptions when the employment is channeled to the employer because employers, the -- the statistics show are 10 times discriminatory as unions when they have a chance to reject or not reject on their own.

So by the Board's same reasoning, these standards and -- and these three conditions should be a test to the employer's right to hire on his own when he is the exclusive source of employment, the employer because the record show, experience shows that employers are much more discriminatory than unions.

So, the whole -- that that I grab will be ridiculous but that is the Board's reasoning in this case.

And that -- that that's why we say, you have to show some actual intent as in the case of Slater here get after Slater because he didn't abide by some union rule before he could be discharged.

In this case, Slater was discharged not because he was a good, bad or in different union member at all.

He was discharged solely because he didn't do what all other employees in industry or other casual employees in the industry do go through the contractual provisions for employment.

And accordingly, all he was discharged for was for failure to comply with the proper collective agreement before the Board to -- to seek to reinstate in a given back pay as to afford the protections of the Act to deliberate contract breaker.

That's all Slater was.

Justice Hugo L. Black: Suppose he had come to the hiring hall of the union, what would have been his --

Mr. Herbert S. Thatcher: He was been referred.

Justice Hugo L. Black: -- what have been his rights?

Mr. Herbert S. Thatcher: He would have an absolute right to be referred on the basis of his union seniority for two years prior to when he was fired, he was -- he had gone through the hall and had been referred on each and every occasion --

Justice William O. Douglas: Was he --

Mr. Herbert S. Thatcher: -- based on his seniority and he was a member of good standing.

So, how could there be any union encouragement?

There's no point and he was a member in good standing of the union when he was discharged at the request of the union for not going through the procedures set forth in the contract not because he was not a good union member or bad union member or he was in bad with the union, not bad at all simply as refusal to go through the hiring procedure which been set -- had been set up by the employer and the unions in the whole Southern California area, many thousands of employees involved to regularize and channelize employment.

Justice John M. Harlan: Does the record show why he went through the -- why he refused to go through the hiring?

Mr. Herbert S. Thatcher: Yes, it's not material here but there was -- he went under the mistaken belief and didn't have to at one point.

He's had a letter from someone not authorize to give a letter saying he could get the job without going through it, this particular job.

And it was a -- there was -- letters shouldn't have been given, it was given by an unauthorized representative.

The Board doesn't claim that that amount to referral, proper referral, so the situation is -- is exactly as if he never went through the hiring procedure at all which he didn't.

Justice Hugo L. Black: What was his status after the union took the matter after his employer and he was denied the place?

Mr. Herbert S. Thatcher: Then he -- well, I don't think (Voice Overlap) --

Justice Hugo L. Black: What about his status with reference to it?

Mr. Herbert S. Thatcher: The record doesn't show whether there was any disciplinary action taken by the union against him.

Justice Hugo L. Black: Well --

Mr. Herbert S. Thatcher: That is --

Justice Hugo L. Black: I --

Mr. Herbert S. Thatcher: That's (Voice Overlap) --

Justice Hugo L. Black: I understood you to say that he was -- that he was discharged?

Mr. Herbert S. Thatcher: He was discharged at the union's request because he had failed to comply with the contract referral.

Justice Hugo L. Black: And that's what's found to be unfair labor practice?

Mr. Herbert S. Thatcher: The Board found that to be violation of 8 (a) (3) by the employer and 8 (b) (1) or 8 (b) (2) by the union.

Justice Hugo L. Black: Now, after he was discharged, what was his status with reference to future employment?

Mr. Herbert S. Thatcher: Well, if he went through the hiring procedure, he was free to get another job.

Justice Hugo L. Black: Automatically?

Mr. Herbert S. Thatcher: Automatically.

He chose to go to the Labor Board and file charges.

Chief Justice Earl Warren: His discharge would have no effect on his subsequent right to go through the hiring hall the regular way --

Mr. Herbert S. Thatcher: Not --

Chief Justice Earl Warren: -- and (Voice Overlap) according to similarly?

Mr. Herbert S. Thatcher: Not --

Justice William O. Douglas: Suppose, I was a --

Mr. Herbert S. Thatcher: I don't think the record showed either way but I -- I know, it wouldn't --

Chief Justice Earl Warren: Yes.

Justice William O. Douglas: Suppose, I was a non-union member, a non-union employee, I'm not a member of the union, how would I work -- how does it work in the hiring hall as respects me?

Mr. Herbert S. Thatcher: You -- it makes no difference at all whether you're union member or a non-union member or a union officer or non-union officer or anything to do with the union.

If you have seniority in the industry and as the whole Southern California --

Justice William O. Douglas: But I -- I have to go through the union?

Mr. Herbert S. Thatcher: You'd have to go through the union, show your seniority, they keep records as to your work with the different employers, to see it's an intermittent scattered thing for -- one day at a time.Here, there with a thousand different employers.

They keep records and that's maintained in the central hall, the union -- the union referral hall and then they look at the record to see, "Well, what's your seniority in the industry?"

And then you're referred on the basis of that seniority, you got the most seniority, you're the first outs.

The Board disclaims any intent to discriminate on the basis of union membership as such here at all.

That isn't in this record.

Board thinks it's immaterial.

The Board simply said that the mere fact that you have to go the union at all --

Justice Charles E. Whittaker: Well, is the --

Mr. Herbert S. Thatcher: -- makes to the thing illegal.

Justice Charles E. Whittaker: Does the Board concede that it's immaterial or you may say they could prove it, but they need not?

Mr. Herbert S. Thatcher: They concede that it's immaterial.

They say that's irrelevant.

Justice Hugo L. Black: Is that the --

Mr. Herbert S. Thatcher: I'll reserve the remaining time --

Justice William O. Douglas: Where is the provision in the contract on promising no discrimination?

I don't see that in those -- in those terms.

Mr. Herbert S. Thatcher: Page 4 of the brief, here.

On the page -- on page 4 of the blue brief, the second paragraph of the -- the second sentence of second paragraph, no casual employees have employed by the employer with prior to disagreement in violation of senior -- seniority status is such employers are available then it says further commitment.

Justice John M. Harlan: It's a preceding (Voice Overlap) paragraph, isn't it?

Mr. Herbert S. Thatcher: (Voice Overlap) -- preceding.

Yes, and the preceding sentence says, “Seniority rating preceding" -- at the bottom of the preceding paragraph.

“Seniority rating of such employers shall begin with a minimum --

Justice William O. Douglas: I think by three.

Mr. Herbert S. Thatcher: On service.

Justice William O. Douglas: Thank you.

Mr. Herbert S. Thatcher: Thank you.

Chief Justice Earl Warren: Mr. Come.

Argument of Norton J. Come

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

As Mr. -- Mr. Thatcher has indicated, this case involves the validity of the Board's so called Mountain Pacific doctrine which has been approved by the court below and by the First Circuit and rejected by the Ninth Circuit and to some extent by the -- by the Sixth Circuit.

Now, in the Mountain Pacific case which was the basis for the decision here, the Board -- there's a combination of its more than 10 years experience with union control hiring hall arrangements.

Concluded that an arrangement between an employer and a union which gives the union exclusive power to clear applicants for an employment, in short, an exclusive hiring hall arrangement.

In conditions the employment upon such clearance, violates the provisions of the Act, Sections 8 (a) (3) and 8 (b) (2) which ban discrimination in employment to encourage union membership.

Absent, adequate assurances that job applicants will be referred without regard to union membership considerations.

Now, the basis for the -- for the Board's conclusion is briefly this, “That an exclusive hiring arrangement, even if not in terms restricted to union members, affects a discrimination in employment by treating employees differently who seek employment directly, what the employer is distinguished from those who go through the hiring hall.

The -- the experience of Slater here indicates that.

By going to the employer directly for this job instead of through the union hall, he suffered discharge.

He -- he was able to get a job but he wasn't able to keep it.

There could be no clearer discrimination in employment.

However, that isn't enough to establish a violation of Section 8 (a) (3), 8 (b) (2).

The discrimination in employment has to encourage union membership and that is where the front of our case calls occurrence.

I'm -- I'm showing that the Board had a reasonable basis in its experience for concluding that a contract arrangement that require the employees to clear through the union before they could get a job, could reasonably tend to encourage union membership adherence to union policies and practices, absent -- the safeguards which the Board has promulgated in which I will get to in a moment.

Now, the Board found that the hiring provisions of the contract here required the Motor Carrier of Los Angeles and Seattle to obtain casual employees solely through the dispatching service operated and controlled by the Union and that Slater was discharged for failure to follow this procedure.

And that the hiring procedure was invalid because it did not contain the Mountain Pacific safeguards.

There's no question, I might add to these safeguards are three fold.

In the first place, it must provide that -- that the basis for referral will be without regard to union membership or compliance with union rules.

The employer shall have a right to reject applicants referred.

And thirdly, that the standards for operating the hiring hall should be posted so that the employees will know what they are.

Now, there's no question that this contract here did not contain a posting requirement nor did it provide for a right to reject on the part of the employer.

Furthermore, the Board found that the unequivocal assurance that hiring would be without regard to union membership considerations was also lacking here in that although, the contract does provide that seniority shall govern dispatch.

The gap in there is that you can only get seniority after you've worked for three months in the industry and there is no assurance in this contract that in inquire -- in acquiring the three months seniority that you will be dispatched without regard to union membership considerations and you can lose seniority if you are discharged by an employer.

And that apparently is what happened to Slater here that he had lost his seniority because when he went out on a job, he wasn't able to -- to perform it.

And as a result, he had difficulty getting the union to refer him which resulted in this effort to get an authorization from the International Representative of the union that would permit him to work without going through the hiring hall.

And when the union learned of that, they said, “That's no good,” and procured his discharge for not getting through the hall.

So that you could lose seniority under this arrangement very readily and there was no assurance that you could build it backup without regard to your adherence to union rules.

Justice Hugo L. Black: Did you admit the statute defer on that?

I asked you the question as to what was the man has stated after the action authority is taken (Inaudible) what precisely had been thorn and he -- and he gone there for referral and he would've been referred for seniority?

Mr. Norton J. Come: Well, there is no specific finding on -- on that, Justice Black.

There -- the only thing that the record shows is that Slater had difficulty getting a job through the union hall because of the fact that he had been discharged by an employer after being referred on one occasion.

As a result of that difficulty, his landlady tried to patch things up and got this letter from the International Representative of the Union that said it would be okay for him to -- to work without going through the hall.

Justice Hugo L. Black: That -- that -- as I gather it, filing -- no filing or it means no more than this from what you say.

I'm -- I was wrong that he didn't want to go there to be referred, he didn't go.

He went to the employer and they discharged him, then he wanted to still continue to want to go get a job without referral.

He got a -- tried to get a national officer to get him there.

But do you have any --

Mr. Norton J. Come: I am not -- I am not suggesting that the Board has found that this hiring hall was operated discriminatorily.

That is not the basis for the -- for the Board's decision I will get --

Justice Hugo L. Black: Your basis is as I understand it, it's inherently by --

Mr. Norton J. Come: That is -- that is --

Justice Hugo L. Black: -- the Board has found, it's so inherently susceptible of abusive --

Mr. Norton J. Come: That is correct --

Justice Hugo L. Black: -- by the Union that it is an unfair labor practice for them to put that on the contract.

Mr. Norton J. Come: That is correct, without the -- without the safeguards.

Chief Justice Earl Warren: I understood Mr. Thatcher to say that -- that there was an express finding by the examiner that -- that there was no discrimination in this situation and that that was not challenged.

Mr. Norton J. Come: I do not find that there was such an express finding.

There is no finding that there was discrimination, let me -- let me put it that way because this case was tried before the examiner on a -- on a slightly different theory and that's the reason why there was an affirmative finding as -- as Mr. Thatcher has -- has suggested.

The theory on which it was tried was that Slater was a regular employee and not a casual.

Therefore, he wasn't required to resort to the contract procedure which was applicable only to casuals and the examiner found that in fact he was a casual employee and that he was properly discharged for not resorting to the contract procedure and ended the matter at -- at that point.

He didn't go on to find whether the hiring hall was discriminatory thoroughly operated or not.

The Board in its -- in its decision however, in applying the Mountain Pacific principle did not find that the hiring hall was discriminatorily operated because the Board's position is that that factor is irrelevant, the mere existence of an arrangement that require as an employee to clear through the union to get a job without warrant inherently encourages union membership.

It's an analogous to a -- a closed-shop contract which unquestionably standing alone, inherently encourages union membership and affects a discrimination which is violative of the Act.

Chief Justice Earl Warren: How about a union shop?

Mr. Norton J. Come: A union shop does not for the specific reason that the proviso, the Section 8 (a) (3) has a specific provision that permits such an arrangement and that is all of it if it permits.

That is the sole exceptions of the general ban against discrimination in employment to encourage union membership which is set forth in the Section 8 (a) (3).

Chief Justice Earl Warren: But I -- I was just thinking about the policy of -- of the union shop as compares with the policy of this kind of a -- of a hiring hall, wouldn't it be far more encouragement to join the union, to have a union shop agreement than to have an agreement of this kind?

Mr. Norton J. Come: Well, there's one big difference, Your Honor and that is the --

Chief Justice Earl Warren: Well, there's a different alright but --

Mr. Norton J. Come: There, the difference is that in this kind of a set up as with the closed shop.

If the Board's promise is correct, the employee is not going to get a chance to get to that job without being encouraged to become a union member and that is at that the threshold of the protection that 8 (a) (3) of the Act was supposed to give the employer.

The union shop doesn't come in to play until after the employee has gotten a job.

He doesn't have to be a union member or he isn't supposed to be influenced towards becoming a union member until he gets on that job.

And then he's given 30 days to make up his mind as to whether he wants to join or not assuming that the union has some adjourn.

Under the closed shop, he can't get to that job without being a union member and under the Board's view of an exclusive hiring arrangement without the Mountain Pacific safeguards, the impact on the employee is the same.

Chief Justice Earl Warren: But wouldn't you say that that as the approach that 30 days as a non-union member with the thought that he was about to lose his job permanently at the end of the 30 days unless he joined the union that there would be some encouragement offered by such an agreement to -- to join the union?

Mr. Norton J. Come: There is no question that it would Your Honor --

Chief Justice Earl Warren: But what did that --

Mr. Norton J. Come: -- but the point of -- but the point is, Congress in -- in balancing the respective interest here realized that the Union in certain circumstances might have a right to force the employee to make -- make the decision but they wanted to make sure that he had the right to get to the job without being unduly influenced.

Justice Hugo L. Black: Well, how could you guarantee that with the second provision of the Board's holding unless, you assume that the employer never wants to encourage him either to belong or not to belong to a union?

As I understand it, the Board is here because I thought you said that whether this contract bears three reasons.

One of which is that even though a union selects the man on the basis of seniority, in fact sent to the employer, the employer must be left with the right to reject him contrary to the contract he made.

I don't understand the -- the reason for that.

Mr. Norton J. Come: Alright, we'll let me --

Justice Hugo L. Black: And then in connection with the arguments you're making --

Mr. Norton J. Come: Well -- well, let me -- let me try to amplify that if I may, Justice Black.

And I -- I'd like to begin back a little ways if I -- if I may.

As I said at the outset as the -- as the Board views Section 8 (a) (3) and we believe that this Court's approach to that Section and its counter part 8 (b) (2) and the Radio Officers case supports that.

There are two elements to the violation.

You have to have a discrimination in employment and the discrimination in employment must encourage union membership.

Now, in Radio Officers, this Court held that you either -- that you didn't have to -- that you didn't have to prove a purpose to encourage, although you I believe dissented from that holding, Your Honor.

If it was reasonably foreseeable from the nature of the discrimination, if it was then you could impute the intent to encourage under the common law of principle that one is presumed to intend the reasonable consequences of his acts.

Justice Hugo L. Black: Either to the employer or the employee?

Mr. Norton J. Come: Now, the -- that is correct.

So, that you need your discrimination in employment and it must be of such a nature that it would reasonably tend to or the foreseeable consequence of that is to encourage union membership and Radio Officers holds that union membership means not only to become a union member but to be a good union member.

In other words, comply even if you are a union member or with the -- with the union rules.

Now, the discrimination, the Board finds in the despair treatment between the employee who has to go through the hiring hall and the employee who tries to get the job directly.

Now, so, you have -- you have the discrimination in employment in the Board's view and the question is, "Can it be said that a foreseeable consequence of -- of requiring employees to go through to the union in order to get a job is that they will be encouraged if they're not union members to become union members or if they are a union member to make sure that they're in good standing?"

Now, the Board, as a result of its experience with these hiring hall cases in the 10 years that they lived with them since the enactment of Taft-Hartley, found that despite the -- the ban on -- on closed shops that Taft-Hartley was supposed to have imposed, the closed shop continue to exist and by enlarge, it was present in the situations of intermittent employment where the hiring hall was the -- was the basis on which employees had to get jobs.

The Board concluded that in the light of what the employees in these industries knew about the way the hiring hall was operated.

It was reasonable to infer that they would tend to be encouraged for union membership if all that you said was, “You had to go through the union in order to get a job.”

In other words, that discrimination tended to encourage union membership as the First Circuit summed up in the case in which they held with this which is referred to in our brief and if I may quote for a moment.

"In our opinion, the Board could well conclude that an applicant who must be cleared for a job by a union hiring hall will fear that his opportunity of selection will be small if he does not become a union member in view of the widely accepted belief often encouraged by unions themselves that hiring halls do operate in a discriminatory nature."

So, the basis of the Board's Mountain Pacific decision is not that the union would necessarily discriminate in referring but that the employees would reasonably tend to believe that if they were a union member, they would stand a better chance of getting a job.

Justice Hugo L. Black: Do you think could be in a different with these conditions entirely?

Mr. Norton J. Come: The Board believes that that encouragement, that unlawful encouragement would be minimized substantially by the conditions which the Board has enunciated in the -- in the Mountain Pacific decision.

Justice Hugo L. Black: Suppose they don't put that in, wouldn't it be an unfair labor practice for them to operate their hall --

Mr. Norton J. Come: It would be --

Justice Hugo L. Black: -- should we ask to discriminate?

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

I'm sorry.

Justice Hugo L. Black: Wouldn't it be an unlawful -- wouldn't be an unfair labor act from -- to discriminate against the non-union man even if this is not in the contract?

Mr. Norton J. Come: Well, if I understand --

Justice Hugo L. Black: I thought it -- I thought it would have, I'm -- I'm just asking when (Voice Overlap) --

Mr. Norton J. Come: If -- if despite these conditions --

Justice Hugo L. Black: No, forget the conditions --

Mr. Norton J. Come: Yes.

Justice Hugo L. Black: -- it's not in the contract but they do discriminate and decline to let a union man go -- non-union man do that who has seniority, wouldn't that be of unfair labor act?

Mr. Norton J. Come: That would be an unfair labor practice, yes, Your Honor.

Justice Hugo L. Black: Well --

Mr. Norton J. Come: But --

Justice Hugo L. Black: That's what -- what this is doing in effect one, is simply to get them to say they won't violate the Act.

Mr. Norton J. Come: Well, the Board feels that there is an inherent encouragement in the -- in the contract provision standing even apart from the -- its discriminatory operation.

There's no question that a closed shop contract for example, standing alone without regard to its application violates the Act because on its face, that has an inherent -- well, it -- it affects a discrimination and it has an inherent encouraging effect.

In the Board's view, an exclusive hiring hall contract without the safeguards has the -- has the same effect and we submit that the Board could reasonably make that judgment in the light of its experience with hiring halls.

But the point that I want to make is that the safeguards go to cure the unlawful encouragement.

They do not bear on the discrimination because in the Board's view that exist from the fact that the hiring hall sets up this arrangement, whereby you're going to be fired if you don't go through the union to get a job.

The mere fact that that rule was applied uniformly isn't enough to save it from being discriminatory if it has the encouraging effects that are prescribed by -- by 8 (a) (3) as this Court pointed out in Shelley against Kraemer, the indiscriminate application of -- of a -- of an -- of any qualities doesn't -- doesn't make it proper.

I mean, the mere fact that -- that this hiring hall is -- is applied to all casual employees doesn't assure the defect in it if the Board is correct in saying that it has this inherent encouraging effect.

And the safeguards that the Board has promulgated go toward mitigating the unlawful encouragement and if it is viewed in that light, then I think much of the union's argument as to how could they conceivably have any reasonable relationship to the problem disappears because they are not addressed to the presumption that the union is going to discriminate.

They're addressed to the dissipating of the beliefs of the employees that they will be better treated if they adhere to union policies and -- and union rules because --

Justice Hugo L. Black: Why would the union man think he's going to get better treatment merely because you left the employer with the right to refuse him even though he had seniority?

How could he anticipate that the employee was treated better because he was a union man?

Mr. Norton J. Come: Well, the right to reject bears on the point that the Board judgment is that the employee will feel that if he has to go to the union in order to get a job, the question that is going to govern the union in referring him is not necessarily what skills does he posses but how well has he complied with union policies and how good standing is he in union affairs.

If the employer is given the right to reject, the Board believes that --

Justice Hugo L. Black: You mean if the employer has taken away from him the right to follow a procedure where he selects the man who has seniority, that's what it is, isn't it?

Mr. Norton J. Come: Well, the point is that just because seniority is -- is made the basis, that doesn't necessarily end it if there is -- if the Board is correct that requiring the union to be the exclusive operator of this arrangement has an inherently encouraging effect.

The mere fact it's put in a contract doesn't establish the legality of the -- of the procedure.

The union for example, couldn't agree to a contract provision that made seniority depend upon when an employee became a union member.

We have to look to more than the fact that seniority here is made the basis for the -- for the referral.

I've pointed out that you may never get enough service to acquire seniority here under this arrangement.

There is no --

Justice Hugo L. Black: And in the -- that's -- that's an argument against employer and employee having the right to make an agreement.

They will apply according to seniority, they're two separate things.

One is that and the other is where the union should be allowed to administer to the extent that it's allowed under the contract.

Mr. Norton J. Come: Well, the Board feels that if you're going to give the union the exclusive power to clear people for employment without any safeguards --

Justice Hugo L. Black: But even there are safeguards, they discriminate.

Can't the Board hold them guilty with unfair labor practice?

Mr. Norton J. Come: Well, there's no question that the Board could do that, Mr. Justice Black, they could also hold a union and an employer liable if they should require an employee to join a union as a condition of getting employment.

In other words, a closed shop arrangement but you have an additional violation from the mere fact that this contract is standing there over the heads of the employees if the type of provision and in the Board's view, this hiring hall arrangement is such is of such a nature that it would discourage them or encourage them before they ever get to -- get the first base.

Justice Hugo L. Black: Well, I can understand your argument or the Board's argument that hiring halls are inherently beneficial to unions and that means on the question, "What Congress done about it, has it said anything or declined to say anything or taken any action or refuse to take any action?"

Mr. Norton J. Come: Well, let me tell you what Congress says as gone here.

In the first place, with respect to the Taft-Hartley amendments which banned the closed shop, the classic example that was given of a closed shop was in the context of the hiring hall arrangement.

Senator Taft pointed to the case of the maritime industry.

You had the closed shop going hand and hand with the -- with the hiring hall.

However, in enacting the Taft-Hartley amendments, they did not specifically outlaw the hiring hall as such.

Justice Hugo L. Black: Was there any effort made to outlaw?

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

To my knowledge, there was -- there was not but --

Justice Hugo L. Black: Was there any effort made to make it legal?

Mr. Norton J. Come: Well, let me -- let --

Justice Hugo L. Black: The specific terms.

Mr. Norton J. Come: -- let me tell you what -- what happened.

We have the Taft --

Justice Hugo L. Black: Well, did anybody ever have an amendment in connection with it or did anybody ever have anything for Senate in connection with it?

Mr. Norton J. Come: Well, I -- I'd like to -- to cover that if I may.

You have the 47 situation where Senator Taft talks about the hiring hall going hand and hand with the closed shop and one of the vises that he pointed out about the hiring hall was the employer had no right to select the people who he would employ.

In other words, the employer had had no right to reject.

He had to take whoever the -- the union referred.

Justice Hugo L. Black: Well, did he do that in connection with an amendment where he was going to live the employer with that right --

Mr. Norton J. Come: Well what can you --

Justice Hugo L. Black: -- on hiring hall?

Mr. Norton J. Come: What -- what you had was the amendment of the proviso to 8 (a) (3) which banned the closed shop.

In the next session of Congress, which was in 1949, you had the Thomas Bill which would have restored the closed shop.

And Senator Taft proposed an amendment which would have returned to the Taft-Hartley union shop provision and he tapped on a proviso to that that said that the employer provided however, that the employer should have the right to call upon the union to refer people provided that the employer had the right to reject them because if they didn't have the right to reject then that would be a violation of -- of present law.

That provision passed to Senate but it died in the House.

It was -- it was not enacted.

In the next session in 1950, you had a proposal by Senator Magnusson to authorize the hiring hall in the closed shop in the maritime industry.

That provision was not enacted.

Thereafter, you get nothing until -- to my knowledge until you get to the Landrum-Griffin amendments in 1959 and this is what you get there and I think this is addressed to a question that -- also that Mr. Justice Brennan mentioned.

In 8 (f) of the Landrum-Griffin amendments, Congress gave special treatment to the building trades and in this 8 (f), they provided that it would not be an unfair labor practice for the building trades to enter into so called “free hire agreements,” that is a contract between a union and an employer that would recognize the union as the bargaining agent before any employees had been hired which would ordinarily be an unfair labor practice.

Furthermore, they could provide in that contract without permitting an unfair labor practice that the employees could be required to join the union seven days after employment as distinguished from the 30 days in the 8 (a) (3) proviso.

And furthermore, it would not be unlawful for the employer and the union to incorporate in -- in such an agreement a provision that would require that the union be given an opportunity to refer applicants according to objective criteria such as length of time in the area and things of that sort.

Now, that proposal when it was introduced and was ultimately enacted was criticized on the ground that it would permit hiring hall arrangements without regard to the safeguards that the Board had in its Mountain -- had enunciated in its Mountain Pacific decision.

And when this was enacted, you have a specific provision in the House conference report which is referred to on our briefs that specifically says that nothing in this 8 (f) shall be construed to affect the applicability of the Board's Mountain Pacific decision, citing the decision and the -- and the citation.

Justice Hugo L. Black: What page is that on -- on your brief?

Do you remember?

I don't -- take your time if you take the --

Mr. Norton J. Come: Well, I think I can find it fairly quickly, Your Honor.

It's on Pages 44 and 45 of our brief, footnote 23.

Now, to the best of my recollection, that is the extent of the congressional history of this -- of this problem.

The Board feels that the grant in Section 8 (a) (3) and in Section 8 (b) (2) to prohibit discrimination in employment which tends to encourage union membership is sufficient to enable it to cover a situation such as we have here without a specific provision in the -- in the Act.

This was one of those problems that Congress left to the administrative agency to work out on the basis of its experience as it did with respect to balancing the interest of employers and unions and with respect to no -- the solicitation of union membership and analogous of problems of that sort.

Chief Justice Earl Warren: Where does that leave us, Mr. Come?

Was this -- was this kind of an arrangement for a hiring hall legal and within the scope of collective bargaining prior to the Mountain Pacific case?

Mr. Norton J. Come: I think that the -- that the -- the Board would have probably treated it as -- as legal.

Yes, Your Honor.

But I think that this is one of those problems like with respect to the -- like the Hot Cargo Clause problem for example, where the Board as a result of its continued experience with the problem has decided that they were wrong the first time and the experience has shown that the -- that the hiring hall itself, an exclusive hiring hall I'm talking about, not a -- a non-exclusive one where the employer would be free to -- to hire on his own but an exclusive hiring hall that requires that the employee come through that union hall before he can get a job.

At that standing alone without the safeguards is inherently encouraging to union membership adherence the union rules and at it -- this inference an incur of -- that it has this effect is a reasonable one that the Board was entitled to go out based on its -- on its experience and that the --

Chief Justice Earl Warren: Well, what I'm trying to get at is, is this -- is this a rule that the -- that the Board lays down for us or is this an interpretation that all previous Boards who are wrong and that it always has been illegal to have such -- such kind of arrangements even though they've been recognized and used for many years in the industry, which of the two is it?

Mr. Norton J. Come: I think it represents the Board's judgment that 8 (a) (3) outlaws these arrangements.

Most -- most of them have been operated in conjunction with the closed shop.

It's only been since Taft-Hartley that -- where -- which specifically banned the closed shop that you would get a union reporting to operate a -- a hall without specifically imposing a closed shop and the Board's experience in these cases since Taft-Hartley found that even those cases were relatively few, that most of the cases show that the -- that the hiring hall continued to be operated in conjunction with the -- with the closed shop.

But the Board has determined that whether you can show that it has been operated that way or not standing alone without the safeguards, it violates the Act.

The only thing I'm trying to point out is that although this is the Board's interpretation of 8 (a) (3), it's been the kind of problem that the Board could understandably come to this view only after some experience because it hasn't been the traditional way in which these hiring halls have operated historically and operated as an adjunct of the closed shop.

That part has been kicked out by Taft-Hartley and it's only been since Taft-Hartley that the Board has had to face up to the problem of, "Well, what about the hiring hall standing alone?"

And it has come to the conclusion that that standing alone without the safeguards violates 8 (a) (3) as well as one that would be discriminatorily operated for the reasons I've indicated.

Justice Hugo L. Black: As I understand your answer, it would be means that -- that does not what it means as I like to know.

It means that this contract was interpret to them even as it is without these conditions if the employer had left him set free to accept or not to accept the Board's assignment (Voice Overlap) --

Mr. Norton J. Come: Well, I think -- I think that the contract would have been valid if it had three conditions.

It doesn't have any of the -- of the three conditions that the Board laid down in Mountain Pacific and not only does not leave the employer the right to reject.

It does not provide or posting of the conditions under which the hiring hall are going to be operated so that the employees can see what those objective criteria are and thirdly, they guarantee that the hall was going to be operated without regard to union membership considerations that is set forth in the contract is not an adequate one because it does not cover the period during which seniority status is going to be acquire.

Justice Hugo L. Black: Would the -- would the unfair labor practice are discriminating without this clause if at you say, would be any greater and would if it's in or any greater unfair labor practice if this is in that what if he's out, if the act to discriminate him?

Mr. Norton J. Come: If they actually discriminated, it would not be Justice Black but you have those cases where you may not get the employee complaining to you.

He might have been detoured by -- if the Board is correct by this inherently encouraging system and thereby comply with the union rules and to that extent in that hall area, you would be having a -- an impairment of the -- of the congressional policy here.

Justice Hugo L. Black: Well, is it correct to say that the whole argument that boils down to this if this is a bad practice which inherently bad, it ought not to be allowed, can't the -- Congress has not barred by itself by anything specific, did not acted on it at all as to Board now has acted itself and it is question is whether the Board has the power to do this?

Mr. Norton J. Come: Well, we think that the -- of course the question is whether the Board has the power to do it.

We think that we have a specific grant of authority adequate to handle the problem in 8 (a) (3).

Congress --

Justice Hugo L. Black: Well, is that the one that you never found again until 1958?

Did you -- did you question that and the Board changed any during those days?

Mr. Norton J. Come: Well, yes it did, Your Honor but we also gained experience in the -- in these cases in that time too.

Justice Hugo L. Black: Well, then your man didn't gain much experience, isn't it?

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

Justice Hugo L. Black: Well, your man didn't gain much experience from what the others have gained?[Laughter]

Mr. Norton J. Come: Well, you needed awhile for these cases -- cases to build up --

Justice Hugo L. Black: Let me ask you --

Mr. Norton J. Come: We've -- we've tried to list this in appendix to our brief, a sample of the -- of the Board's experience in this -- in this area.

And we submit that the --

Justice Hugo L. Black: But all the experience of the Board up to this time had been the other way, I understood you to say and they hadn't -- hadn't thought it wrong?

Mr. Norton J. Come: Well, I -- I --

Justice Hugo L. Black: With all the members (Voice Overlap) --

Mr. Norton J. Come: -- I also tried to indicate that we had relatively few cases that presented the naked problem.

Most of the cases up until then had been ones where you had had discrimination in addition.

You had the hall operated discriminatorily.

And there were relatively few cases in which you had merely a hiring hall and nothing more and in those cases, you do have an indication that the -- that the Board would not have considered that enough.

But as a result of its further experience with the problem, the Board did change its view but it has only been after considerable experience with the problem that you begin to get cases in the naked form, I mean at least in considerable quantity that you're having them in -- now and that are exhibited in -- in this case.

Chief Justice Earl Warren: How is it -- how is that doctrine being administered Mr. Come?

Is -- are they all automatically banned now and proscribed by the --

Mr. Norton J. Come: No, in -- in --

Chief Justice Earl Warren: -- or do you wait for discrimination in some case -- in cases to take it up?

Mr. Norton J. Come: Well, we have to wait for a charge Your Honor and I mean the Board is not free to -- to act unless -- unless a charge is -- is filed.

As a matter of fact, I --

Chief Justice Earl Warren: There's no way the Board, you know where -- where things of this kind or inherently illegal, there's no way that the Board can -- can get into the case?

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

As for that reason that the Board has tried to engage in prevented medicine as it were by enunciating what the standards are which they believe would cure the illegal encouragement in the hiring hall problem.

And I further believe that most of the unions have conformed their contracts to the -- to the Mountain Pacific requirements.

Thank you Your Honor.

Chief Justice Earl Warren: Mr. Thatcher.

Rebuttal of Herbert S. Thatcher

Mr. Herbert S. Thatcher: If -- if they did so Your Honor, it was under threat of having to return all dues in the -- initiations fees collected during the period of the unlawful referral, so I don't think that denotes its union acceptance for the Board's proposition at all.

I think the more one listens to the Board's argument here, the more obvious it becomes that the Board is trying to do Congress' job.

I'll just read two excerpts from legislative history.

Here is Senator Taft's in answer to the Thomas Bill of 1959 on page 23 of our brief.

He states, “In order to make clear the real intention of Congress, it should be clearly stated that the hiring hall is not necessarily illegal.

The employer should be able to make a contract with union as an employment agency.

Neither the law nor the decisions forbid hiring halls, even hiring halls operated by -- operated by unions so long as they are not so operated as to create a closed shop.”

Then in 1959 was the Landrum-Griffin, this is on page 4 of the brief for petitioners in the following case, Number 68, and commenting upon the hiring hall provisions of the Landrum-Griffin Section, 8 (f) ongoing construction.

This is both the Senate and the House reports.

“These provisions are not intended to diminish the right of labor organizations and employers to establish an exclusive referral system of the type permitted under existing law.”

This Court, I'm afraid will have to determine what is existing law.

At that time, the law was that they were legal under Mountain -- under all decisions prior to Mountain Pacific.

Thank you Your Honor.

Justice Hugo L. Black: Up to the time of the Mountain Pacific case, had there been anything court that it indicated that this kind of contract would be illegal?

Mr. Herbert S. Thatcher: None.

On the contrary, all courts affirmed the validity and required the Board to make a positive proof of discrimination.

Justice Hugo L. Black: How did this method of determination -- how was it suggested first to the Board, does the record show?

Was it in the brief or what was it in?

Mr. Herbert S. Thatcher: I think it's -- in what Your Honor have mentioned a minute ago, they changed in personnel.

Justice Hugo L. Black: There was -- it must have been something that preceded the Board's finding in the way of an argument, was it not?

Was it?

Mr. Herbert S. Thatcher: There wasn't any --

Justice Hugo L. Black: The brief?

Mr. Herbert S. Thatcher: -- nothing in --

Justice Hugo L. Black: How had the examiner decide it?

Mr. Herbert S. Thatcher: The examiner had decided along the line of the -- well, the Board decided that the -- the charges were in the line of the Board's new theory.

The trial examiner rejected the Board's -- the -- the general counsel's theory and decided in -- in line of the previous decisions, all which upheld --

Justice Hugo L. Black: Was this proposed in by the general counsel?

Mr. Herbert S. Thatcher: This was a general counsel proposal.

Justice Hugo L. Black: That's why it originated?

Mr. Herbert S. Thatcher: That's -- or must have originated there under the charges in Mountain Pacific specifically.

Thank you.

Featured:

Carpenters Local v. Labor Board - Oral Argument, Part 1

Tue, 25 Sep 2012 22:36:58 +0000

Case:

Carpenters Local v. Labor Board

Media File:

68_19610228-argument-1

Related Transcript:

68_19610228-argument-1

Transcript:

Argument of Bernard Dunau

Chief Justice Earl Warren: Number 68, Local 60, United Brotherhood of Carpenters and Joiners of America, AFL-CIO, et al., Petitioners, versus National Labor Relations Board.

Mr. Dunau.

Mr. Bernard Dunau: May it please the Court.

The question in this case is whether predicated exclusively upon a finding that the employment of workers is based upon a discriminatory hiring procedure.

The Board may require the refund to those workers of the union dues and fees they pay to the unions which represented them and of which they are members.

The refund order may, as in this case, run against the unions alone.

It may, as in the preceding case and the case which follows, run against the employer and the union.

It may, as in other cases, run against the employer alone, whether it runs against the union alone, the employer alone or both together, depends upon the fortuity whether the person filing the unfair labor charge has filed it against the union alone, the employer alone or both together.

In all these cases, we deal with unions which are freely chosen by the employees to represent them in collective bargains.

It is unquestioned and unquestionable that the Teamsters Union, the Carpenters Union, the Typographical Union are the rightful representatives of the employees for whom they act and to whom the dues and fees were paid.

Now, the question in this case arises in these circumstances.

The United Brotherhood of Carpenters, the International Union, has an agreement with an employer called Mechanical Handling Systems by which the employer agrees to work the hours, pay the wages and abide by the rules and regulations established by the local union of the carpenters and employ members of the United Brotherhood of Carpenters and Joiners.

This employer, Mechanical Handling Systems, started a construction job on the premises of the Ford Motor Company in Indianapolis.

A few days after the job was started, the business representative of the district council came to the job and met with the superintendent of the Company on the job.

They agreed that the wages, hours and other working conditions on that job were to be governed by an agreement between the local construction association, the local employer construction association and the district council.

They also agreed that the millwrights and carpenters that the employer would need on the job would be obtained by referral from either the district council or Local 60, which is a constituent local of the district council.

Now, by the rules of the district council and Local 60, referral was restricted to union members, nonmembers would not be referred on the job.

In practice, the millwrights and carpenters working on this job were restricted to those who were union members.

There were two applicants for employment who came to this job seeking work.

They were members of a local union of the carpenters in Louisville, Kentucky.

They travelled to Indianapolis, they applied for work at the job, they were denied work because they could not get a working permit from the district council and they could not get a working permit from the district council because unemployment in the Indianapolis area was widespread and the union's policy was not to refer persons from out of the area, if there were unemployment within the area.

Now, the Board found that the union and the employer were operating under a closed-shop preferential hiring system and this was illegal.

We do not contest that finding.

The Board also found that the two applicants for employment were discriminatorily denied work.

We do not contest that finding.

The Board ordered the unions to cease and desist from this activity including execution of such agreements.

We do not contest that part of the order.

The Board ordered that the two workers who were denied employment are to be made whole.

We do not contest that part of the order.

But the Board went further and said that the unions were to return to the employees who have worked on the job, all the union dues and fees they had paid beginning with a period of six months preceding the filing of the unfair labor practice charge, it is that part of the order which is an issue in this case.

Now, the Board supports this kind of a refund order on two theories.

Both are essential to its reason for imposing a refund order.

The first is what I think we can call the notion of inevitable coercion.

Now, I think it can be fairly paraphrased in these sentences.

Given a discriminatory hiring procedure, employees are inevitably coerced to pay moneys to the union.

The existence of an unlawful contract is sufficient in and of itself to establish the element of coercion.

The refund remedy is, therefore, without more applicable to all closed-shop and exclusive hiring agreements, whether or not proof of actual exaction of payments is established.

The only operative fact in the Board's thinking is a finding of a discriminatory hiring procedure.

I think I can show -- I shall try to show in a moment that this is the rationalization for the order, that the real reason for the order is something else.

The real reason, I think, was expressed by the Board in these words, “We believe that a mere cease and desist order will have little impact in an industry where illegal hiring practices are widespread.

The reimbursement order more properly effectuates the purposes of the Act because it provides not only a deterrent to future violations, but an incentive to future compliance."

In our view, the heart of the refund remedy, as currently used, is to coerced compliance with the Board's conception of a valid hiring agreement.

Let's begin with the notion of inevitable coercion.

I think the Board's argument can be reduced to two sentences.

Men on the job must be union members.

Therefore, men on the job were forced to join the union against their will.

This is like saying that men who practice law must have LL.B. degrees.

Therefore, men who practice law went to law school against their will.

Now, the fallacy is obvious.

The premise is simply inadequate to support the conclusion.

The conclusion states, but the premise does not establish that the only reason employees join unions is to escape the discrimination presumably exercised by unions against nonmembers.

Now, most of us have thought that the reason that employees join unions is somewhat different.

Most of us have thought that the reason was properly identified in the preamble to the statute, stating the policy of the statute, in which the condition which the statute identifies as the reason for union membership, is the inequality of bargaining power between employees who do not possess full freedom of association or actual liberty of contract and employers who are organized in the corporate or other forms of ownership association.

And the policy continues that the statute is designed to promote union organization and collective bargaining for the purpose of restoring equality of bargaining power between employers and unions.

And what the statute identifies as the reason for union membership was given expression by this Court almost 40 years ago.

And at that time, this Court was stating what was already been a commonplace.

Labor unions were organized out of the necessities of the situation.

A single employee was helpless in dealing with an employer.

Union was essential to give laborers opportunity to deal on equality with their employer.

Now, if it is true, as I think it demonstrably is, that people join unions in order to have the strength that comes from group action.

It is also demonstrably true that they pay and willingly pay union dues and fees to the organization.

Everyone knows and employees know that no organization can exist without money.

If you want a union, you have to have dues in order to run a union.

And what everybody knows was proven beyond cavil during the four-year period between 1947 and 1952.

During that time, there was a provision in the Taft-Hartley Act which stated that before an employer and a union could validly enter into a union shop agreement, there must first be an election among the employees at which the employees were to decide whether or not, they wish to authorize the union to enter into a union shop agreement, an agreement which would obligate the employees to pay union dues and fees.

During this period, the provision was repealed 1952, during this period, 46,119 elections were conducted.

In 44,795 of them or 97% of the cases, the employees authorized unions to enter into union shop agreements obligating the payment of dues.

In those elections, about 5,300,000 employees were polled, 4,800,000 of them or 91.5% authorized the union to negotiate union shop agreements obligating the payment of dues.

So it seems to us that the premise upon which the Board starts, that union dues and fees are involuntarily paid, unwillingly paid, is in defiance of what everybody in this field knows.

And it's a particularly odd assumption when it is entertained, as in this case, in the building and construction industry.

Because if the building and construction industry is and has been highly unionized for a long time, in 1927, well before the Wagner Act either, a careful study in this field stated that in many large cities, the building construction workers are, for all practical purposes, completely organized.

In other cities, their claim to an organized strength varying from 60% to nearly 100% of building workers cannot seriously be disputed.

In 1958, the Bureau of Labor Statistics reported that 2.6 million workers in the building and construction industry, 2.3 million of them were union members.

And yet we have in this case, a refund order predicative on the notion that the workers on this job were inevitably coerced into paying dues to the union.

Interestingly, what the Board disregards, Congress in 1959 recognized.

In 1959, Congress enacted Section 8 (f) which in the building and construction field validated what we call a pre-hire agreement.

A pre-hire agreement is one which authorizes an employer and a union to enter into an agreement, covering employment on a particular job, before any employees are hired for work upon that job.

Absent 8 (f), it has been the Board's view and is the Board's view, that you cannot validly enter into a collective bargaining agreement before a representative number of employees have been hired, because in the absence of a representative number of employees, you cannot know whether a majority within the unit choose union representation.

This rule was eliminated by Congress in Section 8 (f) and one of the important reasons supporting the elimination was recognition that in this industry, there was no question but that the people working on construction jobs would be union men who had chosen the union to represent them.

The Senate Report put it this way.

A substantial majority of the skilled employees in this industry constitute a pool of help centered about their appropriate craft union.

If the employer relies upon this pool of skilled craftsmen, members of the union, there is no doubt under these circumstances that the union will, in fact, represent a majority of the employees eventually hired.

Now, what is there in this case to suggest that the employees on this job were not part of this long standing voluntary tradition of union membership in the building and construction field?

And the answer is nothing.

All these employees were members of the union before they began working on the job.

There is no evidence that a single one of them joined for the purpose of seeking or securing work on this job.

For the all the Board knows or cares, they could all have been union members, members of the Carpenters Union, for every single day of their working life.

The Board says, "Well, even assuming that they weren't -- they were all voluntary union members when the job began, they couldn't leave the union during the period that the job was going on and still continue to work on the job.

And so their continuance in the membership was coerced and hence, their payment of union dues and fees is coerced."

Now, this is a pretty silly argument because it requires us to believe that if there hadn't been a closed-shop agreement on this job, these employees after they began working on the job would've all left the union for the period of this job and would've all ceased paying dues.

Well, as I say, this is silly.

People in the building and construction industry are union members by tradition.

What is unthinkable to them is leaving the union, not being coerced into the union.

The conception that a closed-shop agreement coerces employees in the building and construction trade is simply not responsive to what employees in this industry themselves feel for they regard a system of employment based on union membership as a service to them, not coercive of them.

It seems to us fair to say, that if we are talking about exaction of payments in any realistic sense, the Board is simply without -- the beginning of a solid foundation upon which to predicate an argument that the fees and dues were unwillingly paid.

And that the fees and dues were not -- if the employees were not coerced in paying them, there is obviously no basis for requiring a return of moneys which were voluntarily paid.

I think it is fair to say what the Board has itself said.

It doesn't really care about exaction of payments.

It imposes this remedy as it says whether or not proof of actual exaction of payments is established.

Justice John M. Harlan: Do they allow proof to find it there?

Mr. Bernard Dunau: No, sir.

They will not allow a proof.

They have, in more than one case, rejected an offer of proof by which the union proposed to show that each of the employees paid union dues and fees willingly and that the payment was unrelated to the hiring procedure found by the Board to be discriminatory.

The Board said, “We are indifferent to that offer of proof, given the discriminatory hiring procedure that is all we care about."

Now, if one reads the Board's decisions in this field and if one knew nothing about labor unions and how they work, one would not have the least idea that union dues and fees do not repost in depositories accumulating compound interest.

If one came down from Mars and read the Board's decisions, one wouldn't have the least idea that dues and fees go to pay the cost of negotiating agreements.

They go to pay the cost of arbitrating grievances.

They go to pay for lawyers, economists, actuaries and other professional personnel.

They go towards maintaining a staff.

They go towards paying intra-union benefits.

If you read the Board's decisions, you would not know that this was a factor which existed.

The Board requires the refund of union dues and fees utterly and different to the fact that those fees and dues paid for services.

Now, it is not enough to say that the Board would give these employees the benefit of union representation which we -- without requiring a contribution to defrayal of the expense.

It goes beyond that.

Because if it is true, as it is, that the fees go towards payment of the expenses for services, the moneys have been spent.

If you require a refund of moneys, where do you get them?

Money has to come from somewhere.

So what reimbursement really comes down to at least and so far as unions are concerned, is that the employees on this job will have the benefits they receive from union representation paid for by the fees and dues paid by employees on other jobs.

We find it hard to believe that this effectuates any policy of the Act.

We find it hard to believe that draining the union's treasury and to the extent of the drain, detracting from its capacity to function in collective bargaining, in adjustment of grievances, in administering intra-union benefit programs, effectuates any policy of the Act.

Now, we have to assume, I think, that the Board must know all of these.

It must know that you -- people join unions because they need the bargaining power that come from unions.

It must know that services are gotten from union dues.

It must know that union dues and fees, once they are spent that you require them refunded, have to come from the coffers of other employees.

What then if it knows all these is the actual reason for this refund remedy?

And the actual reason, it seems to me, is what I have quoted before.

This is an in terrorem device by which the Board would compel unions and employers to acquiesce in its version of what constitutes a valid hiring agreement.

The thing which makes this an in terrorem device, which makes it coercive, is the staggering financial liability which is entailed in such a remedy.

In the employer's brief in the next case, on page 3, we are told, "The potential liability of this respondent under the Board's order now exceeds $350,000 and it's growing at the rate of close to $7000 as each month passes.”

This already staggering liability is fantastically multiplied where a union is a party to a multi-employer agreement.

For the Board tells us this when a union is a party to a multi-employer agreement in cases involving multi-employer contracts, in which the contracting union and one or more employers are named respondent parties to the contract, the union's liability for reimbursement of sums unlawfully exacted, all social extend to all the employees covered under such contract found unlawful.

So that if the union should be administering a multi-employer contract of 10 employers or 100 employers, according to the Board, it should read from the dues and fees paid by the employees, working for those 10 employers or 100 employers, based exclusively upon a finding that the Board find something in this agreement which constitutes it says a discriminatory hiring procedure.

Now, we can trace the actual purpose and the actual use to which this remedy has been put in relationship to the history of a preceding case, Number 85, the hiring hall case.

The Board's refund remedy in its current posture was enunciated in the case called Brown-Olds and that's the name by which this remedy now goes.

That case came down in February of 1956.

About two years later, the General Counsel, the then General Counsel of the Board, sent an open letter to employers and unions in the building and construction industry.

He said to them, "You have three months within which to collect -- in which to correct your hiring agreements.

If you correct them within the three months, we will not impose this refund remedy.

If you do not correct them within these three months, we will impose this remedy."

Justice Hugo L. Black: Is that in your brief, Mr. Dunau?

Mr. Bernard Dunau: Yes, sir, this is on page 35 of our brief and we trace this history from page 35, Rule 40 of our brief, Your Honor.

Now, after this letter would come out, the Board decided the Mountain Pacific Chapter case on April 1st, 1958.

That is the case in which for the Board for the first time said that in order to validate an exclusive referral system of employment, you have to incorporate into the agreement, these three magic requirements.

Three weeks later, the Board -- the General Counsel of the Board sends another letter, open letter to the employers and unions in the building and construction trade.

He says, “Well, now, you know that the Board has decided Mountain Pacific Chapter and you know you have to include in your agreements these three requirements.

To give you a chance to negotiate into your agreements these three requirements, I will extend the deadline.

I will give you now until September 1st, 1958 to fix up your agreements.

If you do it within that time, no refund remedy.

If you don't, a refund remedy will be imposed.”

Then the last open letter was sent by the General Counsel.

This time on August 19th, 1958, in which he said, “I'm not going to extend this deadline any further except to this extent.

If employers and unions are currently in the process of making genuine efforts to correct their agreements and if they had consummate their efforts by November 1st, 1958, no refund remedy.

If you fail to do so by November 1st, 1958, a refund remedy will be imposed.”

Justice John M. Harlan: What determined as to whether the remedy is applied against the union or against the employer?

Mr. Bernard Dunau: Nothing determines it except whether the person filing the charge --

Justice John M. Harlan: Charge against.

Mr. Bernard Dunau: -- has happened to file it against one or the other or both.

That's the only thing.

If the charge is filed against both, the Board will impose it against both.

Justice Charles E. Whittaker: Well, I suppose the Board controls that because if not, should've been the judges (Inaudible) be bound to sign in against the union simply because the conflicted values, (Inaudible) would it?

Mr. Bernard Dunau: It would not in law, be required to say that it must run against both.

It could, if it had sound reasons to choose one against the other.

But what it does do is have it run against both, simply upon the finding that both were parties to the procedure.

Justice Charles E. Whittaker: What have you to say upon the question of whether (Inaudible)

Mr. Bernard Dunau: Well, I can say that, I think in -- in -- very briefly, Virginia Electric pertained to a case in which the finding was that the company -- that the union was company-dominated and that the union dues and fees paid to this company-dominated union were paid pursuant to a closed-shop agreement.

The order required the dissolution of that union and in conjunction with the dissolution of that union, it required the refund of dues and fees.

Now, it seems to us that day, one can say that the Teamsters Union or the Carpenters Union or the Typographical Union is a company-dominated union on that day Virginia Electric would be relevant to our problem.

On the day that the Board could validly enter an order requiring the dissolution of the Teamsters Union or the Carpenters Union or the Typographical Union, on that day, Virginia Electric would become relevant to our problem.

But until that day comes, if the distinguishing characteristic of lawyers and law is the capacity to draw relevant distinctions, it seems to us that one mark of the invalidity of the refund remedy in this case, is that the fact that the Board draws on Virginia Electric to support it.

It seems to us to be poles apart to have an order requiring the refund of dues in conjunction with a union which is not a fit representative and is ordered dissolved, that seems to us to be of the opposite extreme from a refund order running against -- pertaining to a union whose right to exist and to function and to represent employees is altogether unquestioned.

Now, going back to this open letter, this last one --

Justice Charles E. Whittaker: May I ask you, Mr. Dunau.

Mr. Bernard Dunau: Yes, sir.

Justice Charles E. Whittaker: If the company union situation in Virginia Electric & Power case (Inaudible)

Mr. Bernard Dunau: That's correct, sir.

Justice Charles E. Whittaker: Here, you agree that your hiring hall (Inaudible) this is likewise a need, but you don't defend it.

Mr. Bernard Dunau: That's correct, we do not defend it.

Justice Charles E. Whittaker: Now, then, do you, at the same time, say that, nevertheless, the Board impotent to impose sanctions --

Mr. Bernard Dunau: We --

Justice Charles E. Whittaker: -- that would be effective to eliminate that evil?

Mr. Bernard Dunau: We agree that the Board can require a cessation of this kind of an activity, require the employer and the union to stop entering into such contracts.

We agree that anybody who's lost a job by virtue of the operation of this kind of a system, may have -- may be made whole for the loss of moneys.

What we do not agree here, is that the sanction can go so far as to require a refund of union dues and fees because, as we see it, the only valid foundation for requiring a refund of union dues and fees would be a solid finding that those fees and dues were involuntarily paid.

The existence of a discriminatory hiring procedure does not establish a solid basis for finding that the dues and fees were involuntarily paid.

In other words, as we see it, the wrong exists, but the remedy is totally unrelated to the wrong.

It is not enough to -- to say that the Board should not be impotent, is to say that the Board has been given by Congress the power to impose fines, money fines to deter violations or to compel compliance.

If the Board had been given the power to impose fines, there would be more to be said on behalf of this remedy, but we have to take it, and I think the Board would agree, that the Board were to say, upon a finding of a discriminatory hiring procedure, the employer and the union are fined $1000, $10,000, $100,000, the Board would have no power to say that.

That the Board has done just that in this type of case, the Board imposes a fine and it measures the fine by the number of employees subject to procedure and it multiplies that number by the dues they have paid and the initiation fees they have paid.

Justice John M. Harlan: You would not quarrel with this remedy, I suppose, if it were applied on an individual basis after finding X, Y and Z employees have been misled or coerced into joining the union because of the improper agreement.

Mr. Bernard Dunau: A -- a finding based on substantial evidence that a particular employee made him -- coerced onto paying dues --

Justice John M. Harlan: You say he doesn't fit the crime.

Mr. Bernard Dunau: Is a -- an order based on such a finding is one we would not contest.

We think that would be within the Board's power.

What we -- what we say here is the findings that were made are simply not commensurate with the order that was (Inaudible).

There is no relationship between the two.

This -- what the Board is -- in -- in terms of the Board's justification, it says, it wants to deter violations.

Fine.

You can deter violations too, I presume, if the Board were to enter an order requiring that employer and union representatives that engaged in discriminatory hiring were to be flogged.

This, I presume, would deter violations.

People don't like to be flogged.

Well, the Board wouldn't have any power to enter that kind of an order and it seems to us, it has no more power to enter an order which requires financial flogging, rather than physical flogging.

It seems to us that the history of the use of this remedy discloses precisely that the purpose of it is not to make employees whole for dues which they unwillingly pay.

The purpose rather is to compel unions and employers to do what the Board wants them to do with respect to their hiring procedures.

Justice William J. Brennan: How the Circuits work (Inaudible)

Mr. Bernard Dunau: Except for the court below, every Court of Appeals, which has considered this remedy, has denounced it.

Justice William J. Brennan: How many of those?

Mr. Bernard Dunau: The Second, the Third, the Fifth, the Sixth, the Ninth and the District of Columbia Circuits.

The Tenth has not had it.

The First has had it in equivocal postures.

The Seventh Circuit, the one we have here in a subsequent case, it seems to us, to have already began to withdraw from what it said in this case.

I should say that the --

Justice William J. Brennan: Will not pass on only one Circuit Court (Voice Overlap) --

Mr. Bernard Dunau: At past, there's only one Circuit as we see it which has approved the Board's refund remedy in this part of a situation when it has had it on the merits.

Now, as I said, November 1 was the deadline that the General Counsel imposed for getting these agreements in the compliance.

Then, on October 31st, 1958, one day before the expiration of the deadline, down comes the order in Number 58, the preceding case in which a refund remedy is imposed.

The first time that a refund remedy is imposed based upon a finding that a hiring hall provision is illegal because of the failure to improve these three requirements.

The Board (Inaudible) point to which General Counsel's threat, “If you don't put your agreements into the shape that we think they ought to be in, you're going to pay by the refund of dues and fees.”

We don't even have to infer this from these, the course of these letters and what happened.

The General Counsel and board members have been quite open about what they were doing.

I read from page 40 what had then General Counsel of the Board have said, “The subsequent history of the Mountain Pacific decision."

That's the hiring hall decision.

Justice Potter Stewart: 40 -- 40 of what?

Mr. Bernard Dunau: At page 40 of our brief, Your Honor.

Justice Potter Stewart: Of your brief, thank you.

Mr. Bernard Dunau: The subsequent history of the Mountain Pacific decision has been, in large part, a concerted program by this agency to encourage appropriate affirmative action by the contracting parties to conform their collective agreements and hiring practices to the requirements of Mountain Pacific.

In this respect, the major spur has been the so-called Brown-Olds remedy.

They identified the spur as imposing a liability which may involve substantial sums of money.

He stated deterrence as the underlying consideration and did this.

And he described the period of the moratorium as a period of reprieve.

In another instance, he spoke of this remedy as a sword of Damocles, which hung over the heads of employers and unions.

And he said in using the sword of Damocles, mixing a metaphor somewhat, we paid he to the only adage of one of our very own citizens, who practiced what he preached at the turn of this 20th century.

I refer to President Teddy Roosevelt.

He carried a big stick and with it, he went far.

We spoke softly and carried a big sword and the results to date had been heartily.

A board member described this remedy as putting teeth into the law.

I read from page 42 in -- of our brief.

We refer to it as the stinger.

Another board member said, "We use this remedy to interest companies and unions in the problem of observing the law."

They said, “We want them to pay some attention to what we are saying.”

Justice Charles E. Whittaker: Don't you -- they -- they should pay for?

Mr. Bernard Dunau: I think they should pay attention to the law which is frequent to something very different from what we believe the Court expounds it to be.

Justice Charles E. Whittaker: You do not think it should be done by a slap on the wrist?

Do you think the same kind which you relate to eliminate this type of a reason that it took to eliminate the reason of company unions?

Mr. Bernard Dunau: The basis for a refund remedy in a company-dominated union situation was that the employees unwillingly pay their moneys to the company-dominated union.

When such a finding can be made in the case of the kind that we have here, which is typical of these kinds of cases, then one can make a finding on a record that will stand that the dues and fees were -- willingly paid, then the remedy that was appropriate in the company-dominated union situation, would be appropriate here.

But until one can equate the two, until one can say that dues and fees paid under a closed-shop agreement to a company-dominated union are the same as dues and fees paid by employees to freely chosen unions, there is no parallel between the two situations.

I would like to mention this.

The notion that the Board should not be impotent, assuming that its present remedies make it so, is something that ought to be, it seems to us, addressed to Congress.

The Board ought to go to Congress and say, "Cease and desist orders and make whole orders are just not enough."

We ought to be able to fine employees.

These things ought to be made criminal for violations of criminal laws, so we can put some people into jail.

But the Congress has not doubt in that.

The remedial scheme under this Act is just that, remedial.

The only justification for reimbursement orders under this statute is to make somebody whole, to give him back that which was wrongfully taken from him, unless that precondition can be established.

Unless a finding on substantial evidence can be made that something was taken from another which he would not have given up but for the unfair labor practice, there is no basis within the limitations of this remedial scheme for a reimbursement order.

As Judge Goodrich put to the Third Circuit, "Imposition of fines or jail sentences upon employers and unions would also be a deterrent so far as such sanctions can act as a deterrent.

But a fine is clearer than the imposition of a penalty and the Labor Board is not authorized to impose penalties."

Chief Justice Earl Warren: Mr. Come.

Argument of Norton J. Come

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

The question presented is whether the Board is a remedy for a hiring arrangement which is illegal.

Either because it requires union membership as a condition of employment as in Number 68 here or because it leads employees to believe that this is so as in the preceding case.

They order that the parties to the arrangement not only cease and desist from giving effect toward in the future, but also to refund to the employees dues and initiation fees paid to the union under that arrangement, the purpose of maintaining or acquiring membership in good standing.

It is the Board's position -- I should like to make clear at the outset that on this issue, I speak only for the Board and not for the Solicitor General.

Chief Justice Earl Warren: Not for what?

Mr. Norton J. Come: Not for the Solicitor General.

Justice William J. Brennan: Does he disagree or I noticed that the Solicitor General merely approved the filing of your petition for certiorari.

Mr. Norton J. Come: That is correct.

Justice William J. Brennan: Well, what's that -- what's that reflect?

Disagreement or just not taking a position?

Justice John M. Harlan: It's probably a privilege of communication.

[Laughter]

Justice William J. Brennan: I think that you could infer disagreements.

It is the Board's position that this reimbursement remedy, the Brown-Olds remedy, is an allowable exercise of the power conferred on the Board by Section 10 (c) of the Act, to take such affirmative action including reinstatement of employees with or without back pay as will effectuate the policies of this Act.

Now, I recognized that I have a heavy burden to sustain.

As my adversary has pointed out, the question in the posture in which it is presented in the two cases now before the Court, namely, where the employees involved where union members before being subjected to the illegal arrangement, has been considered by a number of Circuits and the Board's position has been rejected except in two instances.

One is by the Seventh Circuit in this case and the First Circuit as indicated that it would not reject the Board's position in the said posture in which it arises in this case, namely, where there are closed-shop practices.

However, the other Circuits which have considered the problem have rejected the Board's position.

I shall, nevertheless, attempt to persuade this Court that the Board has not exceeded the limits of its remedial authority for the reimbursement remedy was devised to meet and it has been successful in alleviating a serious problem in the administration of the Act.

Chief Justice Earl Warren: Mr. Come, before you get in to that, may I ask you, if under your theory, the -- the Board would've had the power in the cases that have just been argued prior to this one to do the same thing --

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

Chief Justice Earl Warren: -- because of the illegal --

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

I think -- I think, to be candid with you, that that is a weaker case than -- than this one, but I think that the principle would cover both cases.

Chief Justice Earl Warren: And -- and in that case because there were a thousand employers that were -- were a party to this hiring hall agreement, they could have required all the -- the union dues of that entire thousand to -- to turn --

Mr. Norton J. Come: Had we got the charges against them.

Chief Justice Earl Warren: Beg your pardon.

Mr. Norton J. Come: All that's it turned out, we only -- they're actually involved in that case.

There is only one employer and the union.

Chief Justice Earl Warren: Yes.

But you found -- you found that the entire thing was wrong that all the -- all the procedures that all the thousand employers had engaged in were really -- didn't you?

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

Chief Justice Earl Warren: And wouldn't the same -- couldn't the same sanctions be applied to them?

Mr. Norton J. Come: It -- it could -- it could be in -- in their issue.

Chief Justice Earl Warren: And do you think that's clearly given to the -- that power is clearly given to the Labor Board?

Mr. Norton J. Come: The principle that I am arguing for would sustain it in -- in that situation.

However, we do not have that before the Court in this case nor do we actually have it in the -- in the preceding case.

In this case, you have one employer and one union and you have concededly closed-shop practices.

I should like to concentrate on this factual situation because if I can't make out here, I obviously cannot sustain it in the other case.

Justice Hugo L. Black: You startle -- just sought to it.

How many people are affected by this?

(Inaudible)

As I see it, for only two years?

Mr. Norton J. Come: As I say, there -- in this particular case, the Number 68, the closed-shop practice --

Justice Hugo L. Black: Yes.

Mr. Norton J. Come: -- involves Local 60 and mechanical handlers who were engaged in putting in a conveyer system for the Ford Motor Company and they used millwrights from Local 60.

And they are the ones that are involved in this thing and according to the record, the job lasted about a sixth-month period and there were some 25 millwrights involved.

So in this particular case, it's a relatively small amount that -- that would be involved.

Justice Hugo L. Black: In order to refund dues to, as I understand you, 25 members --

Mr. Norton J. Come: As --

Justice Hugo L. Black: -- covering the sixth month period.

That's the scope of this?

Mr. Norton J. Come: Yes.

Yes, Your Honor.

Justice Charles E. Whittaker: There's some place in the brief, I recall, seeing figure of $525, is that right?

Mr. Norton J. Come: That's as nearly as I could figure out what it would amount to in this case.

Assuming that the assumption that there were that many employees involved in -- on petitioner's premise that they were old-time union members, who had already paid initiation fees.

So the only thing would be involved the -- would be the dues payments during the period that they worked on the job.

And in this industry, of course, they probably didn't even work for a full six months.

I mean, the nature of construction projects is such that you will these men in and out, they don't keep -- keep listed in.

Justice William J. Brennan: Well, Mr. Come, could you -- do you now say what's in the next case, you said involved with the (Voice Overlap) --

Mr. Norton J. Come: Well, that is correct in the -- in the News Syndicate case.

Now, I have no way of knowing whether that is true or not.

But we won't be able to ascertain that until we get to -- to compliance proceeding.

I -- it -- it may be theoretically possible, however, that is due to the fact that the company and the union preferred to take the chance of maintaining what the Board found to be a closed-shop contract.

That they cleaned up that contract at anytime within the moratorium period or even after the moratorium period.

It would have at least told the -- the running of the --

Justice William J. Brennan: Well, I am correct though that you said --

Mr. Norton J. Come: That is correct.

Justice William J. Brennan: -- that about $350,000.

Mr. Norton J. Come: That's what he said in -- in that case, but I would like to -- like to --

Justice Hugo L. Black: What -- what union is that?

Mr. Norton J. Come: That was the International Typographical Union.

That will be involved in the next case.

Chief Justice Earl Warren: I thought you told me in the -- in the prior case, Mr. Come, that there was no administrative procedure that could be used to -- to bring this Mountain or Pacific Mountain doctrine to bear on everybody in the industry.

And you say in this case that the General Counsel merely told these people that if you don't do it by such and such a time, we're going to do so and so to you.

Mr. Norton J. Come: Well --

Chief Justice Earl Warren: And you -- you call that -- you, yourself, call that a moratorium.

I'd -- I was thinking of something like that when I asked you the question.

Did you -- did you -- did the Board apply any such pressure to -- to the industries that used the hiring hall in those other cases?

Mr. Norton J. Come: Well, I -- I misunderstood your question, Mr. Chief Justice.

I answered it from this point of view and I think that my answer is still correct, namely, that -- assuming that there had been no cleaning up of the contract within a moratorium period, there is nothing that the Board could do about any particular employer or -- or union arrangement, unless the Board got a charge filed by somebody alleging that there was an illegal arrangement.

That was what I thought you would have in -- in mind.

And that would still hold even with this moratorium.

I mean we couldn't go out and -- and pick up any arrangement at -- at random, whether they had complied or not complied.

We have to have a charge and whether you do or not, remains problematically, of course, but --

Chief Justice Earl Warren: Now, could I ask you one more question --

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

And I'll --

Chief Justice Earl Warren: -- and I hope not to bother you.

Mr. Norton J. Come: Well, I -- I --

Chief Justice Earl Warren: Could they instead of -- of requiring the payment of these dues just assessed the fine against -- against the union and a fine against the employer?

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

I think that this refund remedy is different from applying --

Chief Justice Earl Warren: That's what I would like to get (Voice Overlap) --

Mr. Norton J. Come: Well, I -- I realize that I also have to try to show that in order to stay on my feet and I shall try to do so.

I hope you'll pardon me, however, if I defer that, though I --

Chief Justice Earl Warren: Oh, oh, you don't -- take your time in your own -- we don't have reach that now.

Mr. Norton J. Come: I -- I wanted to say that the reimbursement remedy was devised to -- to meet and has been successful in alleviating what has been a serious problem in the administration of the Act.

The Board found, and it isn't only the Board, there have been numerous impartial students in this field.

Some of whom we have quoted in our brief, that that covers the -- the Board's conclusion.

That 10 years after Congress had outlawed the closed-shop, it was still rampant in industries of short-term employment such as the building and construction industry, where the union controlled the hiring process.

The Board had some of these cases that imposed cease and desist orders.

And they were just not affecting the situation at all.

You had closed-shop practices continuing in these industries.

As Haber and Levinson pointed out in their study in 1956, which is set forth at the bottom of page 18 of our brief, in all of the strongly unionized areas studied during the summer of 1952, employment arrangements equivalent to those under a closed-shop were in effect.

Membership in the union was almost universally regarded as a prerequisite for obtaining employment.

Both parties viewed this as standard practice and showed little or no concern for the illegality of the arrangement.

Petitioner says if that was the situation, well then the Board should have gone to Congress.

The Board felt, however, that the remedial power that it had under Section 10 (c) of the Act, which as I have indicated to Your Honors, empowers it to provide such remedy as would effectuate the policies of the Act, was adequate to cover the problem.

Whether the Board has overstepped the bounds, of course, is the question that we have in this case.

And I shall try to demonstrate that we have stayed under remedial side of the line, although we may have gotten pretty close at the edge.

Chief Justice Earl Warren: We'll recess now.

Featured:

System Federation v. Wright - Oral Argument

Tue, 25 Sep 2012 22:35:47 +0000

Case:

System Federation v. Wright

Media File:

48_19601205-argument

Related Transcript:

48_19601205-argument

Transcript:

Argument of Richard R. Lyman

Chief Justice Earl Warren: Number 48, System Federation Number 91, Railway Employees' Department, AFL-CIO, et al., Petitioner, versus O.V. Wright et al.

Mr. Lyman.

Mr. Richard R. Lyman: Mr. Chief Justice, if the Court please.

I represent the petitioners in this case who are a group of railroad labor organizations, commonly referred to as shop craft unions as well as some of their subsidiary component local unions who were enjoined along with the respondent Louisville & Nashville Railroad Company some 15 years ago from discriminating against a group of non-union plaintiffs with respect to affording those plaintiffs' full and equal enjoyment of all of the rights given to them and other employees in their respective crafts, under collective bargaining agreements that were negotiated between this petitioner organizations in the railroad company.

We are now here seeking for reversal of decisions of the courts below which refuse to modify that old injunction to the extent of permitting us to ask the railroad to execute a union shop, union security agreement with this petitioner labor organizations as bargaining representatives.

The type of agreement we sought to negotiate of course is the type that was authorized by the 1951 amendments to Railway Labor Act which came along some six years after this old injunction was issued and which subject to enumerated safeguards, did authorize union security agreements in the railroad industry which had previous had been an open shop industry.

And this Court is very familiar with that in view of the decision in the Hanson case which was the first time that those 1951 amendments had been held to be constitutional.

We petition for modification of this injunction in accordance with Rule 60 (b) subparagraph 5 under Federal Rules of Civil Procedure, which authorizes modification of an injunction in its prospective application when circumstances have so changed as to make it inequitable for the injunction to be continued in an effect -- in effect in its original form.

What we --

Justice Hugo L. Black: Is that rule printed in your brief?

Mr. Richard R. Lyman: It appears at page 14 of our brief Your Honor, our original brief.

Justice Hugo L. Black: Thank you.

Mr. Richard R. Lyman: What we asked the Courts to do was not to vacate the injunction, not to open the door to any unlawful discrimination against these original plaintiffs and members of their class, but simply to give us a pro tanto modification.

So that the injunction which at time of its issuance had declared and protected plaintiffs' rights under the Railway Labor Act as it existed at that time would now be modified so that it would protect the rights of these plaintiffs and their class under the Railway Labor Act in its present form.

And we sought and obtained a review by this Court on three questions that we urged that were involved, three points in which we stated that the courts below aired in the decision that they reached.

First of all, the Courts concluded, both the District Court and the per curiam opinion of the Court of Appeals which was primarily a paraphrasing of the decision and reasoning of the District Court, the Courts concluded first that the amendment of the Railway Labor Act is so as to permit union shop agreements, which had previously been unlawful, was not a sufficient change in circumstances as to justify removing this injunctive prohibition against our negotiating such agreements.

Then they also ruled that in view of the fact that the original decree of an injunction had been a consent decree rather than a decree written by the Court following a complete trial and litigation of the old suit.

Therefore, we must be deemed to have agreed with this original plaintiff's and their class that never at anytime in the future would we ever negotiate a union shop agreement.

So the courts below both fell into the error that this Court come in to (Inaudible) Swift case of treating the consent decree as a contract rather than as a judicial act.

And third, both courts --

Justice Charles E. Whittaker: (Inaudible) decree, there's a contract did you say?

Mr. Richard R. Lyman: Yes Your Honor, and of course in the Swift case, this Court discussed that concept in considerable length.

And third, both of the courts below give such comments in their opinions to evidence submitted over the objections of the moving parties, the petitioners here that -- that we must consider that they give weight to it and -- and give it effect in refusing to modify injunction.

That evidence was to the effect that as a result of an economic strike on the Louisville & Nashville Railroad in 1955, they remain a great deal of bitterness and hostility among the employees of the railroad and the evidence showed that these petitioner organizations had find and expelled members who worked during the strike.

The L & M claim that 2500 of these employees stayed at work during the strike.

And now, they came in this proceeding to modify the old injunction to permit us and negotiate a union shop and urged that because there was this antipathy among the employee groups, which had nothing whatsoever to do with the original injunction against discrimination in the enjoinment of contract rights, had nothing whatever to do with this union shop agreement but was simply bitterness in strike out of -- between strikers and strike breakers that this should be construed as holding us without clean hands and hence not entitled to negotiate the union shop agreement.

Justice John M. Harlan: Is the District Court opinion printed in the record on page --

Mr. Richard R. Lyman: Yes Your Honor that -- Judge Sherburne's opinion appears at page 69 of the record.

It's -- it goes from page 69 to page 80.

Justice John M. Harlan: Oh, yes.

Mr. Richard R. Lyman: Now, I think it's important to have in mind the nature of the discrimination that was charged in the original complaint, it illustrates that I have nothing to do with this so-called bitterness or hostility.

What these plaintiffs originally complaining about was the fact that the non-union employees they alleged had been -- had been denied equal opportunities for promotions from one category of employment to another, had been denied their fair share of overtime assignments, and had been denied certain attributes of their seniority status, all claim to be governed by the contracts between the company and the organization in certain matters such as picking man to be temporarily upgraded from helper to a temporary mechanics job or in assigning men to be called for overtime in particular jobs.

There is discretion that's exercised by a local foreman and a local union committee in deciding who they think to be the best man to be upgraded.

And that was the gist of this original action.

There was no question of a union shop agreement back in 1945.

But this Court just prior of entry of this consent decree, had decided the landmark Steele and Tunstall cases which contained a complete and new to all of us exposition of the statutory fiduciary duty of bargaining agents and the carriers under the Railway Labor Act not to join in discriminating against members of the class representative.

Now up until the Steele and Tunstall cases were decided of course the -- as this Court knows from having reversed both the Supreme Court of Alabama and the Court of Appeals for the Fourth Circuit, there was a quite a body of authority relied upon by many course to the affect that you couldn't maintain a lawsuit based on discrimination which was joined in by the company and the union.

But, when these cases were decided, there was no longer any point in litigating this lawsuit on the original complaint for the purpose of trying to create any precedent.

The precedent was there for us, this Courts opinion in the Steele and Tunstall cases practically wrote the form of our consent decree force.

But then when we came along after the Railroad Labor Act was amended as to permit a union shop agreement, the railroad suddenly said, "Do as, well, we won't sign that agreement with you because somebody is going to hold us some contempt of this old decree that says we can't discriminate based on non-membership in the union."

So, that's was this case is about and that's what precipitated this motion to modify the injunction.

Now, probably one of the most basic concepts on modification of injunctions is it in -- in injunction does not create a right but simply furnishes the protection, a remedy for the protection of a right which must find its source some place else.

In this case, the source of the right asserted in the original complaint was the Railway Labor Act.

It was the statutory fiduciary duty defined by this Court in the Steele and Tunstall cases.

Now, our position to support of the modification and the injunction is quite simple, these rights stems from the statute.

The statute has now been amended so as to change the nature of the right.

And if we don't have the injunction modified to conform to this change, we're confronted with the situation of these petitioners continuing under threat of this injunction, under panic contempt proceedings for violating it, continuing to be prohibited from negotiating agreements which Congress has said in these words, "They shall be permitted to negotiate."

And the original plaintiffs and the people that have been intervened in these more recent proceedings would be continued to be protected, would continue to have this injunctive remedy for the protection of a right which is no longer in existence.

And of course aside from the inequity of being prohibited from engaging in con -- conduct which is lawful and which Congress said it is desirable now for national public policy in the railroad industry to prevent free riders to require employees to bear their fair share or the cost of burden -- the cost in the burden of collective bargaining.

In addition to -- to just the inequity of being prohibited from doing something that you have a legal right to do, there is of course the additional very substantial financial consideration that's involved in which these petitioners are seeking the right to enjoy.

We have by railroads argument in this brief, I believe this claim that 2500 employees work during the strike and that everybody that work doing the strike was expelled from the union or was not a member of the union to begin with.

But we took a very small figure for the amount of dues income that would be lost by these organizations as a result of being kept under this injunction.

I suspect a very conservative estimate what the dues lost would be if you would assume 1% of an employer's monthly earnings for -- for his monthly dues.

I suppose you have between $100,000 to $200,000 to this lawsuit dues to these group of petitioners so, this is not a situation where the petitioners are not suffering any particular inequity or in any particular wrong or not hurting from the continuously injunction.

Justice Charles E. Whittaker: Mr. Lyman, may ask you please?

Are the types of employees dealt with the Steele and Tunstall eligible for membership now in (Inaudible)

Mr. Richard R. Lyman: I don't know what Your Honor means, but -- but types ---

Justice Charles E. Whittaker: Steele -- Steele and Tunstall (Voice Overlap) --

Mr. Richard R. Lyman: That was a racial discrimination case.

Justice Charles E. Whittaker: I beg your pardon?

Mr. Richard R. Lyman: That was a racial discrimination case.

Justice Charles E. Whittaker: Steele and Tuns -- Steele and Tunstall dealt with --

Mr. Richard R. Lyman: Yes.

Justice Charles E. Whittaker: -- with racial --

Mr. Richard R. Lyman: And assuming in that they were a members of different crafts, they were operating crafts and the shop crafts.

Justice Charles E. Whittaker: They couldn't be members of the union but nevertheless what members of the bargaining union.

Mr. Richard R. Lyman: Well they -- they are -- sorry, the answer to your question Your Honor is yes.

Justice Charles E. Whittaker: They can be.

Mr. Richard R. Lyman: They can be.

And we would very much like to be able to require them to join and to make their contributions to the overall cost to collective bargaining.

Now, there is one point that and one only that runs through all of the briefs of the respondents, both the respondent, Railroad Company and the individual employee response.

That is this idea of an agreement, an agreement to the agreement.

They don't speak of the decree.

They speak of the decree and the agreement.

And they give the impression they try to give the impression in their briefs as they seem to have succeeded in doing with the District Court that this was not an ordinary kind of a consent decree of injunction but it was something a little unusual.

The say that we agreed in some kind of a tripartite agreement between the plaintiffs, the company and the unions that there would be never be a union security agreement negotiated on this property.

The fact is there is no such agreement and we challenge counsel in the District Court and the Court of Appeals and we've done it here to point to any place in the record where there is such agreement.

We have further demonstrated that by reference to their own briefs, that when press, what they say is that the decree was the agreement.

And they say that by the act of settling the case by a consent decree therefore, we must by some magical method be assumed to have entered into some implied agreement.

We would not ever negotiate the union shop agreement.

Justice Charles E. Whittaker: Did the District Court take the position that he did not have the power?

Mr. Richard R. Lyman: No, the District Court said he had power to modify the injunction but then he cons -- construed this consent decree as I've said as being a contract, an agreement, strictly contradiction to what this Court has so plainly and clearly stated in the Swift case.

Justice Hugo L. Black: You mean as being an agreement that you would never seek a modification on the decree?

Mr. Richard R. Lyman: Yes -- yes Your Honor.

Justice Hugo L. Black: Where is it -- why did he say this?

Mr. Richard R. Lyman: Not that we would never seek a modification.

He said that we must be held to have agreed that we would never attempt to negotiate a union shop.

Justice Hugo L. Black: Well that would be the same thing, isn't it?

Mr. Richard R. Lyman: And we didn't agree to that.

What we did, we agreed to an injunction to the entry of a consent decree of an injunction enjoining us from this broad range of discrimination.

There is no side agreement.

There is no covenant undesirable.

Justice Hugo L. Black: The language of the injunction permanent or did the court retain jurisdiction?

Mr. Richard R. Lyman: The Court retain jurisdiction expressly in the injunction.

Justice Hugo L. Black: Well, what purpose?

What page is that?

Mr. Richard R. Lyman: Page 36 of the record Your Honor.

Page 38, the bottom of the page, the Court says, "The Court retains control of this act to the purpose of entering such further orders has may be became necessary or proper."

And of course as we have pointed out, under Rule 60 of the Federal Rules, the Court expressly possesses that far with or without reservation, it's also part of the general principles of equity to jurisprudence even before the Rule was spelled out and that clearly, the Court does posses its power.

Justice Hugo L. Black: Unless suppose that you had -- I don't -- I don't know, but I suppose if you had made a contract based on the valuable consideration which was valid that you would never seek a modification, it might be that the rule was not popular.

Mr. Richard R. Lyman: Well, Mr. Justice Black if -- if such a contract rather than the Railway Labor Act were the basis for the Court's order of injunction, the Court would have no jurisdiction under the Norris-LaGuardia Act.

He -- he couldn't base his -- his decree on a contract.

He had to be enforcing the obligation of the statute because under this Court's decision in the Graham case, this was made very clear that this discrimination case didn't wipe out Norris-LaGuardia and that unless the plaintiff were speaking to enforce some positive mandate of the Railway Labor Act in one of these injunction suits.

The Norris-LaGuardia Act would prevent the issuance for an injunction.

Justice Hugo L. Black: Was there any effort made -- or was any evidence open to show that there was a contract?

Mr. Richard R. Lyman: No, Your Honor.

Justice Hugo L. Black: Despite of the fact that it's simply been sent decree here?

Mr. Richard R. Lyman: That is all the evidence through this.

The parties entered into a release or by the plaintiffs released their claims for back damages upon the payment by defendants of $5000 and second, the defendants agreed to the entry of a consent decree which decree appears at page 36 and that is all or there is.

There is no other agreement.

There's been no effort made.

The point to any other agreement --

Justice Hugo L. Black: (Voice Overlap) --

Mr. Richard R. Lyman: -- except to say that this must be construed as cascading one.

When they argued for it, they don't say here's the agreement at page such and such of the record.

They simply argue in this very well.

This decree of injunction didn't come from the air.

It had to come from some place so therefore there must have been an agreement and yet, they and the Court of Appeals below said that the decree wasn't -- the decree became the agreement.

So, what they're doing, they're electing the -- to the decree as the source for some implied agreement.

Justice Hugo L. Black: What is the exact language where the Court said that?

Mr. Richard R. Lyman: At page 152 on the --

Chief Justice Earl Warren: 152 --

Mr. Richard R. Lyman: -- sentence of sentence of the -- the next to the last paragraph.

Justice Charles E. Whittaker: (Voice Overlap) --

Mr. Richard R. Lyman: The Court says, "When the injunction was issued?

The parties herein by their consent thereto provided that no such requirement of union membership should there have to be in effect in any bargaining agreement."

They're looking to the consent decree as to the description and definition and source of this theoretical outside -- side separate covenant or agreement.

And the fact of course is that the procedure that was followed in settling this lawsuit by the answer that consent decree was precisely the same as you will find in any case where there's a consent decree of an injunction.

And if we hold that under those circumstances, the consent natures the decree bars us on some agreement theory then it would be equally -- it would equally bar modification of an injunction in any case where the injunction was by consent.

Justice Hugo L. Black: In perpetuity -- in perpetuity?

How long?

Did the Court say?

Mr. Richard R. Lyman: The Court of Appeals as they have a counsel for response and as I recollect, he said he did claim it was in perpetuity.

Justice Charles E. Whittaker: Where is that record -- the record with reference to the $4000 -- $5000 payment that you referred too?

I notice the -- decree does not resided?

Mr. Richard R. Lyman: No, it was the separate release but I don't recall whether that release was ever entered into the record in this case.

It's referred --

Justice Charles E. Whittaker: (Voice Overlap) --

Mr. Richard R. Lyman: -- to in the brief for respondents so that other than L & N, however and I have no -- no particular quarrel with their statement of facts as to the nature and scope of -- of what the settlement consisted of it.

It starts at page 5 and goes around page 6 of the brief of counsel for respondents other than the L & N.

Justice Hugo L. Black: Well, did the Court, which decided the case have agree before it?

Mr. Richard R. Lyman: There was no agreement but they could have referral.

Justice Hugo L. Black: But, I'm talking about the one that's now in the brief.

And the Court decided on the basis of that agreement, this is now put into briefs.

Mr. Richard R. Lyman: What is in the brief is not an agreement Mr. Justice Black.

Justice Hugo L. Black: Oh, whatever it is.

Mr. Richard R. Lyman: It is -- it is a release.

Justice Hugo L. Black: Well, is the -- was the release (Voice Overlap) --

Mr. Richard R. Lyman: The Court -- the Court did have that before --

Justice Hugo L. Black: -- or it did have so it's -- it's really part of the record (Voice Overlap) --

Mr. Richard R. Lyman: Not and -- I don't believe he did in 1945.

He did in our 1958 motion of my advisory (Voice Overlap) --

Justice Hugo L. Black: So it is to be considered as a part of the record then you say.

Mr. Richard R. Lyman: If it's reproduced here, I -- I don't find it in here so I -- I guess we can't consider it part of the record except that I have no quarrel with the statement of counsel that that is what took place.

Justice Charles E. Whittaker: Now, what is what took place?

That's why I'm not sure off.

Mr. Richard R. Lyman: It's recited at page 5 and 6 on the brief for counsel other than the respondent now and then.

The parties agreed to one, the entering of the consent decree going on to describe what the decree would be.

Chief Justice Earl Warren: What page is that?

Mr. Richard R. Lyman: Page 5 of the brief -- the green brief for respondents --

Chief Justice Earl Warren: Oh green brief?

Mr. Richard R. Lyman: -- other than -- other than Louisville & Nashville Railroad Company.

The parties agreed to one, the entering of the consent decree two, the waiver and release by the plaintiffs, the law claims against the defendants for damages and three, the payment of the sum of $5000 by the defendants to the plaintiffs.

That is your settlement of the lawsuit and then the Court entered the decree -- the consent decree which the parties had written up, that -- that is the agreement.

So that there -- there is no agreement separate in the parts from the decree.

We just get together and said, "We'll settle this lawsuit by getting with -- agreeing and stipulating if the Court may sign this decree, let me paying you some money and you get him your release."

That -- that is the agreement -- and that is the only agreement that there is and it's -- it's about the most minimal kind of a -- an agreement you could ever have in any consent decree of injunction.

So that if the Court post that such a settlement of a case bars subsequent modification when the facts clearly demand the modification, the equities demanded, then I don't see how we can ever modify any consent --

Justice John M. Harlan: What is your -- I suppose what the technical issue is, is to whether this is an abusive discretion when the Court begun.

Mr. Richard R. Lyman: We have --

Justice John M. Harlan: -- that it isn't a (Voice Overlap)--

Mr. Richard R. Lyman: We have mentioned that on our brief Your Honor.

There is no right of the Court to exercise discretion in the ordinary sense, one of the questions before purely a matter of law.

We file this motion solely on the basis of the change in the statute.

There's no issue of burden of proof there or anything.

We say that the statute was change -- was completely eliminated, pro tanto, the right that the injunction previously protected and the Court has no discretion to misapply the law, if it were request of weighing evidence or having at some appraisal as to what the effect of this modification might be for factual point of views and to review the discretion.

Thank you Your Honors.

Chief Justice Earl Warren: Mr. Eldred.

Argument of Marshall P. Eldred

Mr. Marshall P. Eldred: Mr. Chief Justice may it please the Court.

At the outset, let me call the Court's attention to the fact that the release which counsel mentioned as being not sure whether it was in the record is in the record.

It begins at page 138 and continues through -- through page 144.

As you were allude to that release in a few moments from now, if I may proceed with what I deemed to be -- should be said first to this Court and an orderly presentation of the reasons the respondents have for affirmance of the decisions below.

In the first place, I think we should determine what requirements for modification of an injunction are, necessarily saw in order to determine whether the facts in this case bring us within permissive modification.

Well, of course the leading case on that subject is the case decided by this Court, the Swift case, and this Court has clearly said in the Swift decision that the requirement for modification is that there must be a clear showing of grievous wrong that must be shown by the movement evoked by new and unforeseen conditions.

Secondly, we wished to point out that the courts have held at modification must effectuate and not what the purpose of the original decree.

In the next place, we desire to call the Court's attention to the fact that, as already mentioned, that modification under Rule 60 (b) is addressed to the sound legal discretion of the Court and is not to be disturbed except for an abuse of that discretion.

It is our position that in this case, the petitioners have failed to show any abuse of the discretion of the District Court.

In order to point that out, I think we should briefly analyze what the District Court held when he denied the motion to modify the injunction in this case.

The District Court recognized his continuing authority to modify the injunctions not withstanding the consent nature of the decree.

He recognized that authority -- his authority continuing to modify under the formulae setup by this Court in the Swift case.

The District Court concluded that the 1951 amendment, which is the sole reliance of petitioners in this case for modification for 1951 amendment to the Railway Labor Act which is Section 211 of that Act was permissive only and the District Court concluded that on the basis of this Court's decision in the Hanson case.

Secondly, the District Court concluded that the Railway Labor Act leaves the railroad and the unions at liberty to agree that a union shop shall not prevail.

He concluded that there was such an agreement in this case namely that a union shop should not prevail and that that agreement underlie the decree issued originally in this case.

Justice John M. Harlan: Where -- where is that agreement now?

What was the -- oh, I'm meant you say an agreement?

Mr. Marshall P. Eldred: Yes.

Justice John M. Harlan: You're talking about something underlying the decree that --

Mr. Marshall P. Eldred: That is the agreement, that's the parties reach -- the understanding that the parties reached when this case will settle.

Justice John M. Harlan: Before the decree.

Mr. Marshall P. Eldred: Yes sir.

Justice John M. Harlan: Now, where is the -- what -- what is there to show that underlying agreement?

Mr. Marshall P. Eldred: That is shown in the release which the 28th named plaintiffs executed on December the 1st, 1945.

Justice John M. Harlan: Where -- what could you --

Mr. Marshall P. Eldred: That appears on page 138 of the record.

Justice John M. Harlan: What could provision of that release?

Mr. Marshall P. Eldred: This provision if Your Honor please, the premises refer to the filing of the suit.

Then it refers to the fact that it is the mutual desire of all the parties to the action to settle and dispose of all the issues in dispute.

Justice Felix Frankfurter: Where you reading at?

Mr. Marshall P. Eldred: In the -- of page 138 of the record.

Justice Felix Frankfurter: Yes.

Mr. Marshall P. Eldred: They agreed to settle and dispose of all the issues and dispute in the following manner, one, the entering of a consent decree and the forth said actions, the purpose of which will be to protect the undersigned against any future acts of practices of or by the defendants which will deny to the undersigned any of their rights and benefits under the collective bargaining agreements now in effect are which may hereafter be entered into, in accordance with the Railway Labor Act find between the L&N and System Federation 91 a copy of which consent decree is a test here too.

Justice Hugo L. Black: May I ask you that?

Mr. Marshall P. Eldred: Yes, sir.

Justice Hugo L. Black: You said which was denied of the undersigning of their rights and benefits, at that time, they had a right not to be asked by reason of a union shop agreement, doesn't it?

Mr. Marshall P. Eldred: Yes, sir.

Justice Hugo L. Black: And the 1951 Act changed it, doesn't it?

Mr. Marshall P. Eldred: The 1951 Act merely made it permissive.

Justice Hugo L. Black: Yes, but it made it permissive for them to negotiate further.

Mr. Marshall P. Eldred: Yes, yes, sir.

Justice Hugo L. Black: As I gather, you're real disputed whether this denies to them the right to negotiate which was granted absence agreement under the Act of 1951.

Mr. Marshall P. Eldred: We say that since the amendment is permissive only that an agreement now not to have a union shop is legal under the amendment.

Justice Hugo L. Black: It's legal but --

Mr. Marshall P. Eldred: It was legal

Justice Hugo L. Black: -- it would not be illegal if they have one, would it?

Mr. Marshall P. Eldred: If they have an agreement not to have a union shop?

Justice Hugo L. Black: If it would not be illegal if they would have an agreement now to have that kind of a union shop?

Mr. Marshall P. Eldred: Oh no, no it would not be illegal.

Justice Hugo L. Black: So it wouldn't deprived anybody of any right --

Mr. Marshall P. Eldred: Well, then --

Justice Hugo L. Black: -- the employee of any right unless they have it under a contract.

Mr. Marshall P. Eldred: Exactly.

Precisely.

Justice Felix Frankfurter: And at the -- at the time of the contract, could an agreement had been entered into for -- for a union shop on the label?

Mr. Marshall P. Eldred: No sir.

Justice Felix Frankfurter: Well then that which stay -- that's what you rely on as having been a consensual arrangement.

Mr. Marshall P. Eldred: And contractor.

Justice Felix Frankfurter: But in that, I can set you a contractual arrangement, wasn't really a contractual arrangement because they weren't free to have the opposite arrangement.

Mr. Marshall P. Eldred: It was in this sense of the word.

The unions did not -- did not have to go to the extent of agreeing that there would be no union shop because the law for better union shop, the Railway Labor Act did that at that time.

All that was necessary for the unions to have done in this consent decree since evidently, they did not want to take the issues to the Court in the trial, was simply to do what is done in -- for example Fair Labor Standard Act cases.

Simply consent that they will not violate the law, consent that they will no longer discriminate against the non-union employees.

Justice William J. Brennan: But, that you go further here Mr. Eldred, in effect, aren't you saying what this agreement says, this agreement, the -- without preferring the release, you can't, by law, have a union shop agreement, if ever the day comes when you may negotiate for one, we now say we'll not exercise our right to negotiate (Voice Overlap) --

Mr. Marshall P. Eldred: Precisely.

Justice William J. Brennan: That's what you're saying?

Mr. Marshall P. Eldred: Exactly.

Justice William J. Brennan: And you read all of that into this?

Mr. Marshall P. Eldred: Yes, because the unions went farther than they were -- were required to go.

They had a choice in this matter.

They had -- they could've said, "We will no longer discriminate against non-union employees in connection with seeing that they get their employment benefits."

But they went farther than that and they said that now are in the future.

Now, if you will look at the injunction --

Chief Justice Earl Warren: Well, before you get to that, I wonder if they did go that far in this -- this paragraph that you have just written -- or just read.

They said that the entering of a consent decree in the force of action the purpose of which will be protect the undersigned against any future acts or practices, however, by the defendants which will deny to the undersigned any -- any of their rights benefits under the collective bargaining agreements.

Now, in effect, all which may hereafter be entered into -- in accordance with the Railway Labor Act.

Now, we're talking -- you're talking there are you not about consenting to an injunction which would prevent them from denying to the undersigned any of their rights?

Mr. Marshall P. Eldred: By reason of their failure to join or maintain membership in the union, at that time of course, the Railway Labor Act forbad the union shop.

Now, they're saying here that in view of giving up certain rights than we have in this lawsuit and in order to settle all our issues, we agree that the non-union employees on the L&N Railroad in the six shop crest shall not be required to join or maintain membership in the union under any bargaining agreement now in effect, of course you didn't need it because the Act forbad it then are hereafter in effect in accordance with the Railway Labor Act.

Now, that could only mean one thing --

Justice Hugo L. Black: (Voice Overlap) do you think --

Mr. Marshall P. Eldred: -- no matter how much the amended here.

Justice Hugo L. Black: Either one of the parties contemplated at that time the Act of 1951, sir?

Mr. Marshall P. Eldred: Yes.

Justice Hugo L. Black: But that's --

Mr. Marshall P. Eldred: And I'll (Voice Overlap) --

Chief Justice Earl Warren: Well, why wouldn't they've -- couldn't they have said that very well and very easily if that's what they intended?

Mr. Marshall P. Eldred: I think they said it very well indeed if you will look at the language of the decree and you remember that a copy of this degree -- decree was attached to the release, a week before the decree was ever entered.

Justice Felix Frankfurter: Would you agree Mr. Eldred (Inaudible) questions come to my head namely, would you agree that you have to show that at the time of this release, it's the time of the injunction, the import is going to have -- or the amendment of the Railway Labor Act goes to allow union shop, was an active issue in the railway -- in the railroad world or in the part of the railroad and in part of the Brotherhood.

Would you --

Mr. Marshall P. Eldred: I'm not --

Justice Felix Frankfurter: Would you agree that you have to find out that it had that kind of reality or -- or immediacy rather that to say that by just general language, they foreclose themselves against calling and unanticipated legislation.

Mr. Marshall P. Eldred: I'm not that all sure that was necessary to show in the action.

What we do know as a matter of fact that it was --

Justice Felix Frankfurter: I don't mean in the action but in the -- in the word -- in the world that which they were moved.

Mr. Marshall P. Eldred: It was well.

It was because two years before this suit was filed in 1945 and in 1943, the unions had made a demand upon the L&N and other railroads for a certain wage increases and a union shop not withstanding the fact that it's Railway Labor Act at that time for better union shop.

The dispute was so serious that it was referred to a presidential emergency board.

The Mulholland Firm of Toledo, Ohio which is the firm representing the unions today, participated in that hearing before the emergency board.

And Mr. Willard H. McEwen was before that board.

He was also one of counsel for the unions when we filed this case in 1945 and took discovered deposition before this decree was agreed upon.

Before the emergency board, Mr. McEwen and other counsel representing the unions advanced the contention that even then, under the Railway Labor Act as it existed, the unions were entitled to a union shop but they made the argument that it more expedient that the emergency board should recommend to the Congress that the Railway Labor Act be amended so that they could have a union shop.

And that the fact the notice given to the carriers was to grab a union shop, and that was two years before this suit, and two years before this agreement was entered into by the very counsel who was representing the -- these unions before the presidential emergency board.

Justice Felix Frankfurter: That wasn't the only -- that wasn't the only thing.

The Act of 1951 wasn't an overnight measure.

Mr. Marshall P. Eldred: No, sir.

It has been contemplated by the unions for heaven knows how long.

And it was only after building pressure up constantly against Congress that Congress finally made up its mind, "We will permit.

We will never require.

We will permit to carry within the unions to enter into a union shop brief."

Justice William O. Douglas: I thought you're arguing it was that that this -- that this conflict that there wasn't any today, 1960 under these facts that existed at the time of his conflict in this record.

The Court today has been authorized to issuance kind of an injunction.

Mr. Marshall P. Eldred: I'm not sure if I understand Your Honor's question.

Justice William O. Douglas: I -- it's been assumed that there's -- that the injunction was issued under the -- on the facts existing prior to the 1951 amendment under a law that was different form the 1951 amendment, is that right?

Mr. Marshall P. Eldred: It was issued, Mr. Justice, because --

Justice William O. Douglas: Yes.

Mr. Marshall P. Eldred: -- there was discrimination which the Railway Labor Act forbade under this Court's --

Justice William O. Douglas: I -- I thought that your argument was that if there was a -- the conflict, an intense conflict disturbing the railroad management for rolling of the -- of the -- by this -- by the stop, the movement of train because of a union disputed this character that today, a District Court could enter precisely this kind of a decree in spite of the 1951.

Mr. Marshall P. Eldred: It could do so.

Suppose now, this Act -- the -- I mean this suit, the original litigation had arisen after 1951, which was the date of the amendments.

Pick out a railroad, said the XYZ railroad where no union shop prevail.

Suppose as in this case, the union in that case was not permitting non-union employees to get fair share of employment, rights and benefits.

Suppose the suit had been filed asking for declaration of rights and for an injunction against that discrimination and for damages for the loss of wages that the non-union employees had suffered.

Suppose the parties had gotten together and said, "We will settle all the issues in this litigation."

And among other things, we're going to agree that there will be no union shop now, under the -- under the provision for the Railway Labor Act as it exist or in the future under the Railway Labor Act as it may then exist.

That agreement could be executed.

Justice John M. Harlan: (Voice Overlap) said that this doesn't say that though, this -- this agreement, does it?

Mr. Marshall P. Eldred: Yes.

I was -- I'm going to get to that a moment ago --

Justice John M. Harlan: Perhaps, there are extra words in there why -- [Laughter] alright.

Mr. Marshall P. Eldred: That maybe zeal of advocacy --

Justice John M. Harlan: Well, --

Mr. Marshall P. Eldred: -- but Mr. Justice --

Justice John M. Harlan: Undoubtedly, that goes with the heart of the case, wasn't it?

If you will look at page 37 of the record, this is the consent decree, and mind you, this is the consent decree that was made part of the release a week before the decree was entered.

Mr. Marshall P. Eldred: First, on the middle paragraph of page 7, we have the declaration of rights that the non-union employees be entitled irrespective and without regard to whether said employees or any of them were members or join or retain membership in any of the defendant labor organizations or in any labor organization.

Chief Justice Earl Warren: What page is this?

Mr. Marshall P. Eldred: 37 Mr. Chief Justice.

Chief Justice Earl Warren: 37.

Justice John M. Harlan: That “They would be entitled to these employment benefits as provided for in such agreements now in effect or that may hereafter be in effect in accordance with the Railway Labor Act.

And then even more strongly, it seems to me, in the injunctive phase which begins in the next paragraph.

At the union defendants and the union railroad, be enjoined from requiring that the plaintiffs and the classes represented by them, and this action join or retained membership in any of said dependent labor organizations as a condition to receiving these benefits.

And any other rights or benefits which may arise out of or be in accordance with, regularly adopted bargaining agreements in effect between the defendant railroad and the defendant unions or that may hereafter be in effect between the defendant railroad and the defendant unions in accordance with the Railway Labor Act.

Justice Hugo L. Black: May I ask you a question there (Voice Overlap) --

Mr. Marshall P. Eldred: Yes, Mr. Justice Black.

Justice Hugo L. Black: -- by Justice Harlan.

You referred first to that and you said in such agreement now in effect or that may hereafter be in effect.

Mr. Marshall P. Eldred: Yes, sir.

Justice Hugo L. Black: To be deprived if any rights.

But short after is to bar -- is to bar them by keeping this injunction from entering into a new agreement as a -- as a part of the Act.

Mr. Marshall P. Eldred: That's right.

Justice Hugo L. Black: Well, how do you get benefits then from this statement that the reference referred such agreements now in effect or that may hereafter be in effect?

Mr. Marshall P. Eldred: Bargaining agreements.

Justice Hugo L. Black: But does it say anything about they're not entering into one hereafter in accordance with the Act?

Mr. Marshall P. Eldred: Yes, because they are not -- they will -- the unions and the railroad are not to require union membership as a tradition preceding to employment benefits under a bargaining agreement which was then in effect are which may hereafter be in effect in accordance with the Railway Labor Act.

Even though, and it's implied in there until notice bailed out, even though the Railway Labor Act be subsequently amended to permit a union shop.

Justice Felix Frankfurter: Are you saying the Railway -- the Act of 1951 doesn't create an agreement that -- so that the agreement must come from the parties, the parties must make an agreement.

In 1945 -- when was it?

In 1945 --

Mr. Marshall P. Eldred: 1945.

Justice Felix Frankfurter: -- they were disabled from a having a union shop.

In 1951, they are able to have a union.

Mr. Marshall P. Eldred: They're able to have it.

Justice Felix Frankfurter: And you're saying is, they can now enter into an agreement which they could enter as this injunction were limited to -- lifted from your point of view.

Mr. Marshall P. Eldred: Right.

Justice Felix Frankfurter: If this injunction were lifted, that would authorize them to enter into an agreement which you say would have a clause in it which is prohibited by the decree.

Mr. Marshall P. Eldred: Correct.

Now, there must be a grievous wrong which results -- now, simply, a change in the law which permits a union shop agreement is not sufficient, because the unions have not shown under your Swift formula that this decree results in a grievous wrong to them, nor have they shown that that grievous wrong was evoked by new and unforeseen circumstances.

I think I've already pointed out to the Court that the -- it was not a new and unforeseen circumstance, the amendment to the Railway Labor Act because the unions knew two years before and were trying their best to get a union shop on a railroad and had sought to have a recommendation come from a presidential emergency board that Congress amend the Act and forbid a union shop agreement.

Justice John M. Harlan: Did the -- did the District Court in its memorandum interpret the settlement as you're interpreting it?

Is there a language in the District Court's opinion that --

Mr. Marshall P. Eldred: Yes.

Justice John M. Harlan: -- says that's the effect to it.

Where -- where is that?

Mr. Marshall P. Eldred: On page 77 of the record.

The Court concluded that the Railway Labor Act leaves the railroad and the unions at liberty to agree that a union shop shall not prevail, and then immediately after that that there was such an agreement which underlay the decree of December the 7th, 1945.

And the Court further, on page 78 of the record, concluded that, "Under the Railway Labor Act as it then existed forbidding a union shop, it was not necessary for the unions to agree to that but that they went farther than they were required to do in order to agree that no union shop would prevail."

Then the Court -- District Court goes on to find that the change of law alone is not sufficient, because it does not result in any grievous wrong to the unions, resulting for new and unforeseen circumstances.

The unions have not met the burden of proof which this Court, in the Ford case, said, "is upon the movement in an effort to modify an injunction."

Now, the only thing the -- the union has shown is simply on a member of the Railway Labor Act which permits the parties but doesn't require it."

The unions in effect, argue that the amendment to the Railway Labor Act compels a union shop agreement.

Justice Hugo L. Black: Were there any hearings on that amendment?

Mr. Marshall P. Eldred: Any hearings?

Justice Hugo L. Black: Any hearing when they passed that amendment to the Act.

Mr. Marshall P. Eldred: Oh, yes.

Extensive hearings in the --

Justice Hugo L. Black: Did the railroads appear did the unions appear?

Mr. Marshall P. Eldred: I know the -- I -- I'm sure the unions appeared and I -- I'm not sure about the railroads.

Justice Hugo L. Black: You know whether any -- anything came up about the reason for passing it, was -- was this particular matter referred to them?

Mr. Marshall P. Eldred: No.

Of course, this was -- well, of course it was after.

This particular -- you mean this particular case?

Justice Hugo L. Black: No, I'm not talking about the case, I'm talking about the L&N strike and the trouble they had about it.

Mr. Marshall P. Eldred: Well, the strike occurred in 1955, Mr. Justice, after the amendment occurred in 1951, that occurred later.

Justice Hugo L. Black: So, when -- when was the contract entered in to?

Mr. Marshall P. Eldred: 1945.

Justice Hugo L. Black: 1945.

Mr. Marshall P. Eldred: 1945, the amendment was in 1951, the strike occurred in 1955.

Justice Hugo L. Black: And when was it -- when was it they had the controversy where the -- you said to the board that -- that the railroads in 1951 --

Mr. Marshall P. Eldred: 1943.

Justice Hugo L. Black: -- that is amended?

When?

Mr. Marshall P. Eldred: 1943.

Justice Hugo L. Black: 1943.

Mr. Marshall P. Eldred: Presidential Emergency Board was in 1943.

This suit was filed in 1945.

In the summer of 1945, it was settled in December 1945.

The amendment was pushed through Congress in January of 1951.

Strike occurred in 1955.

In 1957, the unions filed their motion to modify.

That brings us down today.

Justice Felix Frankfurter: Mr. Eldred, I think you said a few minutes ago that you thought that you attribute it to the admission as the argument that the 1951 Act is a compulsory act, were they?

Mr. Marshall P. Eldred: Well --

Justice Felix Frankfurter: I didn't follow you there.

Mr. Marshall P. Eldred: Well, we can't come to any of the conclusions.

Justice Felix Frankfurter: (Inaudible) I think they would argue tat because --

Mr. Marshall P. Eldred: We can't come to any of the conclusion because that is the only reason at best by them --

Justice Felix Frankfurter: No, they were --

Mr. Marshall P. Eldred: -- to show that the decree is a grievous wrong.

Justice Felix Frankfurter: Well, it may simply say that a decree in 1945 in the context of law which prohibits an arrangement which is now permissible.

Thereafter, by law, is allowed to be submitted or to lift that injunction against entering into a voluntary arrangement to avail themselves of the right under the 1951 Act.

Mr. Marshall P. Eldred: Well, you say voluntary arrangements.

The parties who benefits, this agreement was made, gave up substantial rights.

There were 28 plaintiffs for example who alleged damages in the sum of $5000 each, for a total of $145,000 which they gave up for a forfeit settlement of $5000 --

Justice Felix Frankfurter: (Voice Overlap)

Mr. Marshall P. Eldred: -- as part of this overall settlement.

Justice Felix Frankfurter: Under the 1951 -- of the 1951 Act certainly didn't speak inquiry, Steele and Tunstall, did it?

Mr. Marshall P. Eldred: No, sir.

It did not.

Justice Felix Frankfurter: And therefore, they could not make an arrangement, disadvantages nor -- and whatever the difference were, which did not give fair protection to your (Inaudible).

Mr. Marshall P. Eldred: They could know -- they couldn't continue to discriminate, that's true.

They could not discriminate.

Justice Felix Frankfurter: It couldn't harbor -- it couldn't harbor and switch them into union responsibilities under the 1951 Act.

Mr. Marshall P. Eldred: Well, they have union responsibility whether they have a union shop or not.

Justice Felix Frankfurter: Well, but a -- but they -- it would be a union shop that if with all the consequences, I believe it was.

Mr. Marshall P. Eldred: Yes, yes.

Justice Felix Frankfurter: That's what I'm --

Justice William J. Brennan: But only if they have the employers agree --

Justice Felix Frankfurter: Yes.

Justice William J. Brennan: -- to such an arrangement.

Mr. Marshall P. Eldred: That's of course the position we take it, we have this right.

Justice William J. Brennan: And as I get it, what they -- what they insisted that this ought to be reluctant at least to the extent of submitting them to negotiate with the railroads --

Mr. Marshall P. Eldred: Correct.

Justice William J. Brennan: -- to such an arrangement.

Mr. Marshall P. Eldred: That is right.

Justice William J. Brennan: Whether they succeeded getting it to something else.

Mr. Marshall P. Eldred: Right.

But we can --

Justice William J. Brennan: The fact the matter, they'll get it.

Mr. Marshall P. Eldred: Of course.

No railroad today can withstand the economic sanctions of the strike.

Railroads are having difficult time enough as it is.

It certainly could not withstand that.

The point that I want to make is that this agreement and I do emphasize because there was an understanding.

And the consent decree which had been worked up referring to bargaining agreements in effect now or which maybe in effect under the Railway Labor Act hereafter.

That agreement was lawful then it's lawful today.

Now, the only reason that the unions advanced to modify the injunction is that they're now permitted to do it but they can't by their own agreement.

We do not say that the injunction in this case can never be modified.

We say that the question whether it can ever be modified is not before the Court on this record.

Justice Felix Frankfurter: Would you mind just in the interest of making the thing more concrete at least to one member of the Court, indicate what the practical reasons of resistance by the -- by your clients with having a union shop agreement.

Is -- is that a fair question to you?

Mr. Marshall P. Eldred: Yes.

Yes, sir.

In the first place, my clients, when this suit was originally filed and when we settled the issues, gave up rights to prove substantial damages.

All of the members of the class represented by the named plaintiffs could have under procedure, appropriate procedure, have intervened and proven damages to a large extent.

It became generally known among the classes represented by the 28 named plaintiffs in the original action that this agreement had been reached, that no union shop would be required --

Justice Felix Frankfurter: Alright.

Mr. Marshall P. Eldred: -- then or in the future.

Five years statute of limitations applies to a contract not in hiding.

So they have -- they lost all those.

Now, this is an agreement fairly reached and until the railroad -- I mean, until the unions prove that it's an instrument of oppression to them and they haven't shown that in this case.

They -- they refer to the pro rata arguments.

Justice Felix Frankfurter: Well, I don't mean to suggest that I --

Mr. Marshall P. Eldred: They referred to laws or revenue which had no equitable reason.

Justice Felix Frankfurter: I don't mean to suggest because I believe the contrary that fixing an agreement isn't in and out of itself and enforcing consideration (Inaudible).

But I wonder what other things except that they made a bargain and which they now insist.

What consequences disadvantageous to them would follow an anticipated union strike?

Mr. Marshall P. Eldred: In addition to what I have said, they are opposed --

Justice Felix Frankfurter: Yes.

Mr. Marshall P. Eldred: -- to compulsory unionism.

Justice Felix Frankfurter: Well, why?

Mr. Marshall P. Eldred: Because they feel that it's against their principles.

They believe that a union should carry its own weight that if it properly represents the employees, its own persuasion will lead to union membership, that they should not -- the -- the employees should not be compelled against their will, particularly when they took pains to agree with these unions 15 years ago, that they would not be compelled against them.

Justice Felix Frankfurter: Well, isn't it more than enough that I don't expect, so called abstract principles but doesn't this -- doesn't this -- that it is translated into some practicality which beyond the opposition to -- to unions as such, I know a lot of people had that.

Mr. Marshall P. Eldred: Well, they -- they could --

Justice Felix Frankfurter: Haven't they got some special reasons or rather, I mean particular reasons?

Or maybe I'm asking questions I shouldn't ask.

Mr. Marshall P. Eldred: No.

That's -- that's alright Your Honor.

It's -- it's a matter of principle with them.

It's a matter that they do not want to be members of the union.

They do not want to have to pay tribute to a union --

Justice Felix Frankfurter: That means --

Mr. Marshall P. Eldred: -- and have that money used for purposes to which they are opposed.

Justice Felix Frankfurter: That means they have to pay union dues and in return, they wouldn't get what they regard as -- as advantages for substantive matters.

Mr. Marshall P. Eldred: Well, that maybe part of it or -- but it's not the whole picture.

Justice Felix Frankfurter: No, I mean --

Rebuttal of Richard R. Lyman

Mr. Richard R. Lyman: Mr. Chief Justice, I wanted to state that particularly with respect to this agreement argument.

I want to call the Court's attention to the fact that Mr. Eldred, when called upon to read the agreement, turned to page 36 to 37 of the record and what he read was the course decree which -- which simply serves to emphasize a -- a statement that what Mr. Eldred and the Court -- and the District Court and the Court of Appeals in the language which he read to you held that that decree was an underlying agreement.

That would -- the decree itself that they said was the agreement.

And of course, we argue here and it is our position that it was error where the Court too so hold and it was directly contrary to the Swift case.

And one -- one further point I would like to finish was --

Justice Charles E. Whittaker: I thought he was reading record on 138.

Mr. Richard R. Lyman: -- he turned -- he read the -- from the release for a while and then we he got down to the declaration of rights, he was reading from page 37 of the record, the decree.

He says that when -- when Your -- Your Honors pressed him for more language as to what the obligations and what the prohibitions were, where was the agreement that said, what they were prohibited from doing, what he read was the decree and that of course is what we're here seeking to modify.

Justice Felix Frankfurter: May I ask you this question and -- these 28 plaintiffs, the original plaintiffs for the class which they represent, do they -- was there any -- any differentiation between them and the other members of your -- the members of your unions except for these people have principles regarding union empathy?

Mr. Richard R. Lyman: Well, I think that 28 people were just a -- a group that claimed they could show some wage loss or (Inaudible) missed out on some overtime assignments or promotions and --

Justice William J. Brennan: Were there -- were there any racial problems about this?

Mr. Richard R. Lyman: No, this is not --

Justice William J. Brennan: Were they colored or white?

Mr. Richard R. Lyman: This is not a racial case.

Justice William J. Brennan: I mean what the -- what were these plaintiffs?

Colored or white?

Mr. Richard R. Lyman: I think there are probably some of both.

I would guess that a majority would be white.

I think Mr. Eldred could --

Rebuttal of Marshall P. Eldred

Mr. Marshall P. Eldred: There were both.

Rebuttal of Richard R. Lyman

Mr. Richard R. Lyman: -- correct me on that.

I think there were some both.

Justice Felix Frankfurter: Those 28, about some of total of those who were (Voice Overlap) --

Mr. Richard R. Lyman: That's all that there were in the original action and I might say that -- I propose Your Honor's question to Mr. Eldred down the consideration concept and settlement of this thing for $5000.

The -- the Swift case would seem to say that the fact that 28 people might have entered into such a contract if there were any contract, wouldn't justify preventing a union shop agreement to be negotiated for anybody else except for those 28 people.

Justice Felix Frankfurter: What they did -- the settlement or the claim which was settled in there and something for them, was a claim of discrimination, wasn't it?

Is it claimed that the union didn't -- this bargaining agency didn't do well about it, is that right?

Mr. Richard R. Lyman: Well, we learn as we go along.

The claim was really a -- a claim of agreement violations.

This case was decided before this Court decided the cases Local against Steele and W. which created the concept of exclusive jurisdiction in the National Railroad Adjustment Board and I think where we going back to retry this lawsuit, we might well have had quite a hassle as to whether these men wouldn't have had to file their claims for deprival of overtime under the overtime rule with the National Railroad Adjustment Board.

Justice Felix Frankfurter: All I'm suggesting --

Mr. Richard R. Lyman: But they -- they argued that they had gotten deprive over fair share because they were not members of the union.

Justice Felix Frankfurter: They have a grievance, didn't they?

Mr. Richard R. Lyman: Yes, it was a grievance based under the language of the collective bargaining agreement.

Justice Felix Frankfurter: And -- and that is under the agreement itself they --

Mr. Richard R. Lyman: Yes.

Justice Felix Frankfurter: -- their claim was recognized --

Mr. Richard R. Lyman: The agreement --

Justice Felix Frankfurter: -- and if maybe --

Mr. Richard R. Lyman: -- is called for equal distribution of overtime.

Justice Felix Frankfurter: -- (Inaudible), maybe that's -- maybe they -- they had from experience.

I'm trying to find out what the human beings are instead of these abstract so-called principles.

I should find it there.

Justice Hugo L. Black: One -- I've just had one other question, is the injunction against you are entering into open sub-agreement under the new Act with reference to everybody, the employees now or is it limited to these 28?

Mr. Richard R. Lyman: It's not limited to the 28.

Justice Hugo L. Black: A general blanket.

Mr. Richard R. Lyman: It's a blanket injunction against the railroad and the --

Justice Hugo L. Black: Injunction that you have upon the obligation under --

Mr. Richard R. Lyman: Yes.

Justice Hugo L. Black: -- whether the person (Voice Overlap) --

Mr. Richard R. Lyman: And of course in the Swift case, the Court clearly pointed out that so far as the interveners were concerned, people other than the original parties to that case, they couldn't take advantage of the thing if it were contractual (Inaudible) because they weren't parties that running contractual undertake.

Justice Felix Frankfurter: Was there a -- was the -- was the (Inaudible) hearing before to Judge Sherburne joined in -- in entering the decree which is not on the record?

Mr. Richard R. Lyman: I wasn't there Your Honor.

There was --

Justice Felix Frankfurter: Which is not in the record?

Mr. Richard R. Lyman: But I don't believe there was --

Justice Felix Frankfurter: (Voice Overlap) --

Mr. Richard R. Lyman: -- any hearing -- you're talking about the 1945 decree.

Justice Felix Frankfurter: That's what I'm talking about.

Mr. Richard R. Lyman: The decree was drawn up by the parties in conferences between the parties to the lawsuit and exchanged drafts and proposals as to what the decree are to recite and then it was --

Justice Felix Frankfurter: And before (Voice Overlap) --

Mr. Richard R. Lyman: -- stipulated that it would be submitted to the judge for a signature.

Justice Felix Frankfurter: Before it was submit -- when it was submitted to him?

Mr. Richard R. Lyman: It was explained to him I'm sure.

Justice Felix Frankfurter: And before it was done, were there any arguments (Inaudible)?

Mr. Richard R. Lyman: I don't believe there was argument --

Justice Felix Frankfurter: From the lieu that I know of Judge (Inaudible) satisfied himself as (Inaudible).

Mr. Richard R. Lyman: I'm sure you wanted to know what the case all about.

Justice Hugo L. Black: What percent of the total employees are members now?

Mr. Richard R. Lyman: Well, that's a subject to disputed propaganda claims.

The -- at the hearings on this motion to modify, it was argued that -- or suggested that maybe the -- might be about a 50% proposition of that whole in view of this alleged bitterness.

Justice Hugo L. Black: 50% what?

Mr. Richard R. Lyman: 50% members and 50% non-members in the classes.

There has been no attempt to precipitate a representation dispute before the National Mediation Board in this property.

Justice William J. Brennan: I suppose, over 15 years, it's been turnover in person now or union officers and the like have --

Mr. Richard R. Lyman: Yes, there has been considerable turnover in the officers.

I would say more than --

Justice William J. Brennan: All the 28 --

Mr. Richard R. Lyman: -- happy to the general chairman --

Justice William J. Brennan: -- plaintiffs, are they still employed?

Mr. Richard R. Lyman: No.

I think there were about 15 -- is that right Marshall?

How many plaintiffs are still left?

Rebuttal of Marshall P. Eldred

Mr. Marshall P. Eldred: Original plaintiffs left?

Rebuttal of Richard R. Lyman

Mr. Richard R. Lyman: (Inaudible) originally, yes.

Rebuttal of Marshall P. Eldred

Mr. Marshall P. Eldred: About eight of the 28 but we had a great many interveners.

Rebuttal of Richard R. Lyman

Mr. Richard R. Lyman: There would be eight of the original plaintiffs initially imposed in which to modify and then a number of other employees came in and joined with them in imposing that.

Chief Justice Earl Warren: But how many employees are there all total, you said 50% -- 50% of about what?

Mr. Richard R. Lyman: It's between 4000 and 5000 in the shop crafts group.

Chief Justice Earl Warren: 4000 to 5000.

Justice Hugo L. Black: Where were these employees?

Mr. Richard R. Lyman: They are all over the system of the Louisville National Railroad Company in the (Inaudible).

I mean the employers in the crafts, most of the employers that Mr. Eldred represents are in the Louisville area.

I think he has some putative come in and join --

Justice Hugo L. Black: I mean these 28, where were they from?

Mr. Richard R. Lyman: They were all from around Louisville.

Unknown Speaker: They were all over the system?

Mr. Richard R. Lyman: Were they?

I'm sorry.

Unknown Speaker: The plaintiffs.

Mr. Richard R. Lyman: I misunderstood you.

Unknown Speaker: They were picked all over the system.

Chief Justice Earl Warren: We'll recess now.

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