1. An application to the Circuit Court of Appeals, under § 10(e)
of the National Labor Relations Act, for leave to adduce additional
evidence before the Board is addressed to the sound discretion of
the Court. P.
315 U. S.
104.
2. A Labor Board order required a Texas corporation, its
officers, agents, successors and assigns, to desist from certain
unfair labor practices; to offer reinstatement to employees found
to have been discriminatorily discharged; to grant them backpay; to
post certain notices at its Texas refinery, etc. Pending a petition
of the Board to enforce the order, the corporation applied to the
court under § 10(e) of the Act for leave to adduce additional
Page 315 U. S. 101
evidence before the Board, averring that it had distributed all
of its assets to its four stockholders as a liquidating dividend,
and that two of them, who had received the Texas refinery in which
the unfair labor practices were employed, had conveyed it to a
newly organized Delaware corporation whose stockholders were at no
time stockholders of the employer corporation, and later, in its
answer, it alleged that it had very recently been dissolved
pursuant to the statutes of Texas, and prayed a dismissal of the
Board's petition upon that ground.
Held: under these circumstances and others disclosed by
the record, that denial of the application to adduce additional
evidence was not error. P.
315 U. S. 104.
117 F.2d 90 affirmed.
Certiorari, 313 U.S. 558, to review a decree directing the
enforcement of an order of the National Labor Relations Board, and
therein denying a motion for leave to adduce additional
evidence.
MR. JUSTICE JACKSON delivered the opinion of the Court.
The petitioner, a Texas corporation, was ordered by the National
Labor Relations Board in August of 1938 to cease and desist from
unfair labor practices; [
Footnote
1] to offer to
Page 315 U. S. 102
reinstate three employees found to have been discriminatorily
discharged, and to pay them backpay for the period from the time of
discharge to the date of the offer of reinstatement, less earnings
during such period, and to post certain notices at its Texas City
refinery, where the unfair labor practices had been employed.
The petitioner has never obeyed any of the affirmative
directions of the order. In June of 1939, it entered into a written
stipulation with the Board that it would obey the order except as
it related to backpay, and the Board stipulated, on its part, that
it would accept the performance so promised as sufficient
compliance with its order. But the petitioner no more regarded its
own promise than it had the Board's command. It finally ceased even
to answer communications from the Board, and the latter, in April
of 1940, filed its petition with the Circuit Court of Appeals for
the Fifth Circuit for enforcement of its order.
The petitioner then began the pleas to that court denial of
which it says are errors. Nearly four months after the Board had
filed its petition, the present petitioner filed an application
under § 10(e) of the National Labor Relations Act [
Footnote 2] to adduce additional evidence
before the Board.
Page 315 U. S. 103
The application stated on the oath of petitioner's president
that, in June of 1939, three days after petitioner had executed the
stipulation of obedience to the Board's order, it distributed all
of its assets to its four stockholders as a liquidating dividend,
and that the two stockholders who received the Texas City refinery
conveyed it to a newly organized Delaware corporation, whose
stockholders were at no time stockholders of the Texas corporation.
It asked that the court order that proof of these facts be taken
before the Board or its agent and added to the transcript, and that
the court thereupon dismiss the enforcement proceeding. In November
of 1940, while this application was pending, it filed an answer to
the petition for enforcement attacking the findings and order of
the Board on evidentiary grounds and also praying that the petition
be dismissed because petitioner had been formally dissolved on
October 16, 1940, as evidenced by an attached copy of a certificate
by the Texas Assistant Secretary of State. [
Footnote 3]
Page 315 U. S. 104
The Circuit Court of Appeals sustained the Board's order and
entered a decree directing that it be enforced, thus in effect
denying the motion to dismiss and the application for leave to
adduce additional evidence. 117 F.2d 90. We granted certiorari
limited to the question of the propriety of the denial of the
latter because of the general importance of the question. 313 U.S.
558.
We hold that the application for leave to adduce additional
evidence pursuant to § 10(e) of the National Labor Relations Act
was addressed to the sound judicial discretion of the court, and
that the denial of petitioner's application, under the
circumstances disclosed by the record in this case, was not
error.
To ensure that the applicable part of § 10(e) would be used only
for proper purposes, and not abused by resort to it as a mere
instrument of delay, Congress provided that, before the court might
grant relief thereunder, it must be satisfied of the materiality of
the additional evidence, and that there were reasonable grounds for
failure to adduce it at the hearing before the Board. The decision
below under § 10(e) apparently resulted solely from a belief
that
Page 315 U. S. 105
the proffered evidence was not "material." Accordingly, we have
no occasion to decide whether a Circuit Court of Appeals may, in
its discretion, deny an application under § 10(e) even though it be
satisfied that the additional evidence is material and that there
were reasonable grounds for failure to adduce it in the hearing
before the Board. For the same reason, we do not consider the
question of the credibility of petitioner's allegations, viewed in
the light of its conduct.
The petitioner's conduct does, however, give point to omissions
of pertinent facts from its allegations. The record makes it
certain that it would gain delay by all honorable means, and leaves
it doubtful whether it has even stopped at that. The liquidation
relied upon took place three days after it had entered into the
stipulation of obedience. The purpose to liquidate was not
communicated to the Board, nor was the Board advised of the action
when taken, nor until nearly four months after the petition for
enforcement was filed in the Circuit Court of Appeals.
The statements that the Texas corporation has discontinued
operations and that the Delaware corporation has taken over the
refinery did not call for recommitment by the Circuit Court of
Appeals to the Board for reconsideration of that part of its order
which required that the three employees be offered reinstatement.
The allegation in the application that the "owners of the stock of
Southport Petroleum Company of Delaware, were never the owners of
any of the stock of the respondent herein" does not negative either
the possibility that the stock in the Delaware corporation
represents but an insubstantial part of its total capitalization,
with the balance and real control being held by the Texas
corporation or its stockholders, or that its stock was held by
straw men. A sworn statement in the answer to the Board's petition
that the Delaware corporation
"is a separate and distinct entity, and the
Page 315 U. S. 106
stockholders in respondent have no interest, and never had any
interest, directly or indirectly, in the stock ownership of the
said Delaware corporation, all as set out in respondent's motion
heretofore filed herein,"
if it adds anything, does not add enough to negative these
possibilities, for the court was not required to be satisfied with
such conclusions of the petitioner.
Implicit in the reinstatement provision of the Board's order was
a condition of the continued operation by the offending employer of
the refinery to the employment of which the illegally discharged
employees were to be restored. [
Footnote 4] Such operation might have continued under the
old business form or under a disguise intended to evade this
provision. If there was merely a change in name or in apparent
control, there is no reason to grant the petitioner relief from the
Board's order of reinstatement; instead, there is added ground for
compelling obedience. Whether there was a
bona fide
discontinuance and a true change of ownership -- which would
terminate the duty of reinstatement created by the Board's order --
or merely a disguised continuance of the old employer, does not
clearly appear, and accordingly is a question of fact properly to
be resolved by the Board on direct resort to it, or by the court if
contempt proceedings are instituted. [
Footnote 5]
The additional evidence was immaterial for the further reason
that the Board's order ran not only to the petitioner, but also to
its "officers, agents, successors, and assigns." [
Footnote 6]
Page 315 U. S. 107
Granting the truth of every one of petitioner's allegations, it
still is possible that the Board's order may yet be the basis --
and the indispensable basis -- of liability on the part of any of
these persons, regardless of any present incapacity of petitioner
to perform, or liability on its part for failure to perform, its
duty of reinstatement. Of course, we do not pass on the question
whether any such liability actually exists; all we hold is that
there has not been a sufficient showing by the petitioner to
negative the possibility which we note.
The petitioner's allegations are immaterial with respect to the
backpay provision in the Board's order for like reasons, and
because some liability in this respect unquestionably exists,
although for a disputed period of time. And, from what we have
said, it is apparent that the petitioner has not shown that there
has been any change in its relations to the refinery such as to
indicate any alteration of the Board's order in respect of its
requirements that petitioner post notices at "its Texas City,
Texas, refinery," and that it desist from unfair labor
practices.
Affirmed.
MR. JUSTICE ROBERTS took no part in the consideration or
decision of this case.
Page 315 U. S. 108
[
Footnote 1]
Section 1 of the Board's order required that the petitioner
cease and desist from:
"(a) Discouraging membership in Oil Workers International Union,
Local No. 227, or in any other labor organization of its employees,
by discharging its employees or by otherwise discriminating in
regard to hire or tenure of employment or any term or condition of
employment;"
"(b) In any other manner interfering with, restraining, or
coercing its employees in the exercise of the right to
self-organization, to form, join, or assist labor organizations, to
bargain collectively through representatives of their own choosing,
or to engage in concerted activities for the purpose of collective
bargaining or other mutual aid or protection, as guaranteed in
Section 7 of the Act."
We do not consider the question whether, in the rather unusual
circumstances of this case, the order should be modified as being
unduly broad in this respect,
see Labor Board v. Express
Publishing Co., 312 U. S. 426,
since this question was not considered or raised in the court below
or in the petition for certiorari.
Alice State Bank v. Houston
Pasture Co., 247 U. S. 240,
247 U. S. 242;
Gunning v. Cooley, 281 U. S. 90,
281 U. S. 98;
Zellerbach Paper Co. v. Helvering, 293 U.
S. 172,
293 U. S.
182.
[
Footnote 2]
This provides in pertinent part as follows:
"If either party shall apply to the court for leave to adduce
additional evidence and shall show to the satisfaction of the court
that such additional evidence is material and that there were
reasonable grounds for the failure to adduce such evidence in the
hearing before the Board, its member, agent, or agency, the court
may order such additional evidence to be taken before the Board,
its member, agent, or agency, and to be made a part of the
transcript."
49 Stat. 449, 454, 29 U.S.C. (Supp. V) § 160(e).
[
Footnote 3]
Texas provides by statute that:
"
Art. 1388. Liquidation by officers. -- Upon the
dissolution of a corporation, unless a receiver is appointed by
some court of competent jurisdiction, the president and directors
or managers of the affairs of the corporation at the time of its
dissolution shall be trustees of the creditors and stockholders of
such corporation, with power to settle the affairs, collect the
outstanding debts, and divide the moneys and other property among
the stockholders after paying the debts due and owing by such
corporation at the time of its dissolution, as far as such money
and property will enable them after paying all just and reasonable
expenses, and, for this purpose, they may, in the name of such
corporation, sell, convey and transfer all real and personal
property belonging to such company, collect all debts, compromise
controversies, maintain or defend judicial proceedings, and
exercise full power and authority of said company over such assets
and property. Said trustees shall be severally responsible to the
creditors and stockholders of such corporation to the extent of its
property and effects that shall have come into their hands."
"
Art. 1389. Extension of existence. -- The existence of
every corporation may be continued for three years after its
dissolution, from whatever cause, for the purpose of enabling those
charged with the duty to settle up its affairs. In case a receiver
is appointed by a court for this purpose, the existence of such
corporation may be continued by the court so long as, in its
discretion, it is necessary to suitably settle the affairs of such
corporation."
"
Art. 1390. Effect of dissolution. -- The dissolution
of a corporation shall not operate to abate, nor be construed as
abating, any pending suit in which such corporation is a defendant,
but such suit shall continue against such corporation, and judgment
shall be rendered as though the same were not dissolved."
3 Vernon's Annotated Texas Statutes (Civil Statutes).
[
Footnote 4]
The order required that the employees be reinstated "to their
former positions, without prejudice to their seniority and other
rights and privileges."
[
Footnote 5]
Such proceedings may be instituted only by the Board.
Amalgamated Utility Workers v. Consolidated Edison Co.,
309 U. S. 261.
[
Footnote 6]
This is the usual form of order, and has frequently been
employed in cases where this Court has sustained Board orders.
E.g., Consolidated Edison Co. v. Labor Board, 305 U.
S. 197,
enforcing, as modified, 4 N.L.R.B. 71,
108;
Labor Board v. Newport News Shipbuilding & Dry Dock
Co., 308 U. S. 241,
enforcing 8 N.L.R.B. 866, 877;
Labor Board v. Falk
Corp., 308 U. S. 453,
enforcing 6 N.L.R.B. 654, 666;
Labor Board v. Waterman
Steamship Corp., 309 U. S. 206,
enforcing 7 N.L.R.B. 237, 252;
Labor Board v.
Link-Belt Co., 311 U. S. 584,
enforcing 12 N.L.R.B. 854, 883;
Phelps Dodge Corp. v.
Labor Board, 313 U. S. 177,
enforcing, as modified, and remanding, 19 N.L.R.B. 547,
603.
MR. JUSTICE REED, dissenting.
The record does not lead me to the conclusion that petitioner
has taken any improper steps to secure leave to adduce additional
evidence, the matter to which the certiorari was limited by our
grant. It is plain that the Circuit Court of Appeals did not act on
any such ground. Neither the record on that issue nor the
Government's brief or argument make any such contention. Only after
evidence before the Board would it seem proper for a court to form
its opinion of that question.
So far as we now know, the petitioner sold its facilities in
good faith, after the entry of the Board's order and prior to its
motion to remand, thus divesting itself of all interest or control
over its former properties. In that situation, it asked a remand to
the Board to present before the Board the change of conditions
because of which it asked a dismissal of the proceedings. § 10(e),
49 Stat. 453. There were two literally unconditional provisions of
the order which petitioner, if its allegations are true, could not
meet, 2(a) and (c):
"2. Take the following affirmative action which the Board finds
will effectuate the policies of the Act:"
"(a) Offer to William Cornish, E.D. Richey, and Earl Gooch
immediate and full reinstatement to their former positions, without
prejudice to their seniority and other rights and privileges;"
"
* * * *"
"(c) Post immediately notices in conspicuous places at its Texas
City, Texas, refinery stating that the respondent will cease and
desist in the manner aforesaid, and maintain said notices for a
period of thirty (30) consecutive days from the date of
posting;"
In its brief respondent, it seems to me, admits the correctness
of petitioner's view. It says:
Page 315 U. S. 109
"In its application to adduce evidence, petitioner alleged that,
by reason of its distribution of assets and discontinuation of
business, it could not reinstate any employees. Thereafter, in its
petition for rehearing in the court below and petition for
certiorari in this Court, petitioner maintained that it could not
do so unless, as it suggested, the order required it to purchase
and operate another refinery or otherwise resume business. Properly
construed (
cf. Federal Trade Commission v. Standard Education
Society, 302 U. S. 112,
302 U. S.
117-118), the order contains no such requirement. Its
purpose was to remedy petitioner's violations of the Act by
restoring the
status quo as it existed prior to the
violations, but only to the extent possible under the circumstances
existing at the time of compliance, assuming that the circumstances
were not changed through any bad faith on petitioner's part.
See Labor Board v. Remington Rand, Inc., 97 F.2d 195,
196-197. That the men were to be offered reinstatement 'to their
former positions' is express indication that the reinstatement
provision was contingent upon continued operation of the Texas City
refinery. This likewise appears to have been true of paragraph 2(c)
of the order requiring the posting of notices 'at its Texas City,
Texas, refinery.'"
We cannot treat this suggestion as relieving this petitioner of
the threat of contempt proceedings. The statement does not consent
to the amendment of the order. Bad faith may still be claimed to
exist. This should be determined by the Board. Consequently, I am
of the opinion that the decree below should be reversed with
directions to sustain the motion for a remand unless the Board
agrees to eliminate sections 2(a) and (c) of the order in line with
the Board's apparent concession in its brief.
THE CHIEF JUSTICE concurs in this dissent.