GOODRICH, Circuit Judge.
The National Labor Relations Board in this case petitions for enforcement of an order made by it against both the employer United States Steel Corporation (American Bridge Division) and Local Union 542, International Union of Operating Engineers, AFL-CIO. There is no doubt about jurisdiction of the Board and the Court. The Board has found that the employer violated Sections 8(a) (1) and (3) of the National Labor Relations Act
The facts are fully stated in the opinion of the Board, 122 N.L.R.B. No. 155. We will summarize them very briefly here. There is no formal contract between American Bridge Division of the United States Steel Corporation and Local 542. But it was shown that the provisions of the area-wide contract between Local 542 and various contractor associations
One of the provisions of the area-wide contract requires the employer to employ a Master Mechanic whenever seven or more engineers are utilized on any one project. Hiring of operating engineers at the Morrisville plant was performed by the Master Mechanic (a union man) who is a "supervisor" within the meaning of Section 2(11) of the Act.
We think the Board was justified in concluding that, as a result of the Master Mechanic's dual capacity as agent for both American Bridge and Local 542, both employer and union were responsible for the hiring procedures employed. It was also justified in concluding that there existed a hiring arrangement which limited employment to union members in good standing with the union. Such a hiring arrangement has often been held to be a violation of the Act.
As for Russell himself, the evidence shows that, on three occasions, he was denied employment for which he was qualified. Russell was a member of Local 542 who had been involved in disputes with officials of the Local over the manner in which they conducted union affairs. He contended, and the Board so found, that the union opposed his employment because of these disputes and that he was denied employment on the specific occasions as a result of the operation of the unlawful hiring arrangement.
The trial examiner who heard the testimony recommended dismissal of the entire complaint for lack of evidence. But the majority of the Board, one member dissenting, reversed the trial examiner and held the testimony sufficient to uphold the charges made by Russell.
The order for the most part was in the usual form. It directed reimbursement to Russell for any loss of pay he may have suffered during the short period in which it was found that he was discriminated against, and directed the union to withdraw its objections to his employment. It required the posting of the usual notices. While the cease and
This brings us to the controversy presented by the final section of the Board's order. The Board applied what is known as the Brown-Olds formula for relief.
Following this line of thought, the order provided that the respondent employer and the respondent union:
One of the subsidiary attacks which the union makes on this order is that the Board refused to reopen the case and permit the union to offer testimony from employees that they were not coerced. Counsel for the Board, in argument here, says the reason for that refusal was that the evidence would be irrelevant. The union says that this shows that the Board's premise is that "no working man would join a labor union and pay dues to it unless he was compelled to do so by a closed shop agreement or practice." Counsel for the Board conceded that the presumption of coercion is a conclusive one once the unfair labor practice is shown.
We think it is helpful in the discussion of the question here to set aside one situation where it has been held that a broad dues-reimbursement order is proper. Where the unfair labor practice consists of employer-domination in the creation of a union, the imposition of such reimbursement has been approved by the Supreme Court. Virginia Electric & Power Co. v. N. L. R. B., 1943, 319 U.S. 533, 63 S.Ct. 1214, 87 L.Ed. 1568. In such a situation reimbursement is proper because the union is an illegitimate union from the beginning. Its existence is illegal. The dues themselves are the fruits of the unfair labor practice for, in the absence of the unlawful practice, there would have been no union; a fortiori, there would have been no dues paid to it. Reimbursement is simply a way of pulling the unlawful organization up by the roots. An analogous situation is the annulment of a marriage.
In a recent case,
In the case before us there was no evidence that any employee was coerced. Even Russell, around whom all the controversy centered, was not coerced into joining the union. Rather he was dissatisfied with the way the union was being run.
In this case, too, the suggestion of the Brown-Olds remedy was not made in the complaint. It was not advised by the trial examiner; he, having recommended dismissal of the complaint, never reached the question of the remedy. It was not noted in General Counsel's exceptions to the trial examiner's report nor presented by the General Counsel to the Board. In other words, the imposition of the reimbursement order was the Board's own idea.
In passing on the validity of any order of the Board requiring affirmative action, we must always bear in mind two basic propositions: (1) The Board can only order such affirmative relief as will "effectuate the policies" of the Act;
But to order a union to reimburse dues which it would have collected even if it had not committed an unfair labor practice appears to be nothing more than a fine which, in this instance, is paid into private, rather than public, coffers.
Argument for the Board urges that the imposition of this reimbursement remedy will serve as a deterrent against unfair labor practices by both employer and union. That well may be; when one looks at the constitution of the union and sees what it costs to join it, reimbursement of dues and fees could well be a terrific deterrent if this is a union where members are frequently initiated. It appears in one of General Counsel's exhibits that the initiation fee into Local 542 is $200.00 "plus any and all fees or tax required by the Local or the International Union." Imposition of fines or jail sentences upon employers or unions who are guilty of unfair labor practices would also be a deterrent, so far as such sanctions can act as a deterrent. But a fine is clearly the imposition of a penalty and the Labor Board is not authorized to impose penalties. "The Act does not prescribe penalties or fines in vindication of public rights. * * *" Republic Steel Corp. v. N. L. R. B., 1940, 311 U.S. 7, 10, 61 S.Ct. 77, 79, 85 L.Ed. 6. "[I]t is not enough to justify the Board's requirements to say that they would have the effect of deterring persons from violating the Act. That argument proves too much, for if such a deterrent effect is sufficient to sustain an order of the Board, it would be free to set up any system of penalties which it would deem adequate to that
The reimbursement order here was a very broad one. It was not limited to employees who had been coerced. Nor was there any coercion shown against anyone. The order was not limited to the employees at the Morrisville plant of the American Bridge Division where the alleged unfair labor practices occurred. It ran as to all members of Local 542 employed by American Bridge, providing for reimbursement of initiation fees and dues dating back six months before the complaint was filed. The record is devoid of any information as to how many members there are in Local 542, when they joined and how many are employed at the Morrisville or other American Bridge Division plants. This shows, we think, that the reimbursement order was a shotgun blast, and not related to any aspect of this case. That is not the way equity acts in moulding relief to fit the situation before Court or Board.
We think that the reimbursement order in this case is characterized the way Judge Staley characterized a similar order in N. L. R. B. v. American Dredging Co., 3 Cir., 1960, 276 F.2d 286, 288, where he said:
The problem of Brown-Olds reimbursement has occupied attention of the courts in the various circuits a great deal during the last few months. We recognize the existence of a recent view contrary to that which is expressed here in N. L. R. B. v. Local 60, United Brotherhood of Carpenters, 7 Cir., 1960, 273 F.2d 699. But, opposed to the Seventh Circuit view, there is a growing body of authority, some of it very forcefully and clearly written, supporting our views. See N. L. R. B. v. Local Union No. 85, Sheet Metal Workers, 5 Cir., 1960, 274 F.2d 344; Local 357, Teamsters etc. v. N. L. R. B., D.C.Cir., 1960, 275 F.2d 646; Morrison-Knudsen Co. v. N. L. R. B., 9 Cir., 1960, 276 F.2d 63; Morrison-Knudsen Co. v. N. L. R. B., 2 Cir., 1960, 275 F.2d 914; Building Material Teamsters, Local 282 v. N. L. R. B., 2 Cir., 1960, 275 F.2d 909.
For a summary of the cases in the various Courts of Appeals involving this remedy see appendix attached hereto.
The order of the Board will be enforced but with deletion of the paragraph quoted above relating to the reimbursement order.
Since the Supreme Court decision in Virginia Electric, supra, numerous cases have arisen in the several Courts of Appeals involving the question of the validity of a broad dues-reimbursement order in fact situations other than the type found to be present in that case. The decisions seem to be hopelessly in conflict. A court-by-court analysis indicates the following:
The eleven cases decided prior to Virginia Electric are listed in a footnote to that opinion. 319 U.S. at page 534, 63 S.Ct. at page 1215, note 1.
BIGGS, Chief Judge (concurring in part and dissenting in part).
The facts in this case as developed by the Board and by the majority opinion demonstrate circumstances under which preferential hiring of union employees could be and probably was effected by the Union and the Company. But the record is devoid of evidence which shows that such preferential hiring did take place. The Board and this court have substituted a plausible assumption for proof of preferential hiring. It is not sufficient to prove, as the Board has done here, that a facile arrangement existed whereby the Union and the Company could have effected preferential hiring of the Union's members. For this reason I dissent from that portion of the majority opinion which supports the Board's order respecting the alleged preferential hiring. But had preferential hiring been proved I would concur in the majority view as to the application of the "Brown-Olds" remedy.
I agree with the majority's conclusions as to the relief to be granted to Russell.
The National Labor Relations Board has submitted a form of decree carrying out this Court's decision in the above entitled case in which the opinion was filed on April 13, 1960. Since our opinion was filed the United States Supreme Court has entered its decision in the case of Communications Workers of America, v. N. L. R. B., 1960, 362 U.S. 479, 80 S.Ct. 838, 840, 4 L.Ed.2d 896. In that decision the Supreme Court held that it was proper to eliminate from a decree enforcing a Board order against a union broad terms like "in any manner" and "or any other employer" when the complaint was directed against the union's conduct with respect to one employer and one type of unfair labor practice.
We think the objection of both union and employer to the decree submitted by the Board is well taken in view of this Supreme Court decision. The decree as entered will delete from both the required notice and the order the terms "or any other employer over whom the Board will assert jurisdiction," "or any other labor organization," "or any other employee or applicant for employment," "or by discriminating in any other manner in respect to the hire or tenure of employment, or any term or condition of employment."
The sections of the decree affected by this opinion are as follows: I(a) (1), I(a) (2), I(a) (3), II(a) (1), II(a) (2), and II(a) (3). Also affected are paragraphs (2) and (3) of the Notice required to be posted by the employer and paragraphs (1) and (2) of the Notice required to be posted by the union.
There are presently before this Court four other cases involving Brown-Olds remedies: N.L.R.B. v. American Dredging Co., 3 Cir., 276 F.2d 286 (sur petition for rehearing); N. L. R. B. v. Local 1566, ILA, 3 Cir., 278 F.2d 883 (argued Nov. 16, 1959); N. L. R. B. v. Lakeland Bus Lines, Inc. and Lakeland Bus Operators Ass'n, 3 Cir., 278 F.2d 888; Paul M. O'Neill Int'l Detective Agency v. N.L. R.B., ___ F.2d ___ (argued March 7, 1960).
The policies of the Act, as stated in § 1, 29 U.S.C.A. § 151, are the encouragement of "the practice and procedure of collective bargaining and * * * [the protection of] the exercise by workers of full freedom of association, self-organization, and designation of representatives of their own choosing, for the purpose of negotiating the terms and conditions of their employment or other mutual aid or protection."