1. A cease and desist order of the National Labor Relations
Board and an order of the Circuit Court of Appeals for its
enforcement may validly provide that the order shall apply to the
employer's "successors and assigns." P.
324 U. S. 16.
2. An order of the Circuit Court of Appeals for the enforcement
of a cease and desist order of the Board, though applying in terms
to "successors and assigns," would have a scope no broader than
that prescribed by Rule 65 of the Rules of Civil Procedure for the
District Courts --
"Every order granting an injunction and every restraining order
. . . is binding only upon the parties to the action, their
officers, agents, servants, employees, and attorneys, and upon
those persons in active concert or participation with them who
receive actual notice of the order by personal service or
otherwise."
P.
324 U. S. 14.
Page 324 U. S. 10
3. Whether one brings himself in contempt of an enforcement
order as a "successor" or "assign" depends on an appraisal of his
relations and behavior, not upon mere construction of the terms of
the order. P.
324 U. S. 15.
140 F.2d 746 affirmed.
Certiorari, 323 U.S. 692, to review a decree granting
enforcement of an order of the National Labor Relations Board.
MR. JUSTICE JACKSON delivered the opinion of the Court.
The National Labor Relations Board, after appropriate
proceedings, issued a cease and desist order against the
petitioner, 49 N.L.R.B. 560, and thereafter obtained from the
Circuit Court of Appeals for the Second Circuit an order for its
enforcement. 140 F.2d 746. We granted certiorari, limited to a
single question on which there was a conflict in practice between
different circuits . 323 U.S. 692. The Board has followed the
formula which orders not only a particular respondent but also "its
officers, agents, successors and assigns" to cease and desist. The
question is whether enforcement will be granted without deleting
"successors and assigns" from those enjoined. The Circuit Court of
Appeal for the First, Second, Third, Fourth, and Eighth Circuits
and the Court of Appeals for the District of Columbia have upheld
the authority of the Board to include such a provision. [
Footnote 1] In some of these cases,
Page 324 U. S. 11
change of ownership was shown to be probable, and in other cases
there was no such proof. The Second Circuit, in refusing to delete
the provision, said:
"In allowing these words to stand, we wish to make it clear,
however, that we do not hold that a 'successor' or an 'assign' will
be in contempt of our order if it should (even after notice of the
order, but without participating with the respondent in any
disobedience by it) do exactly those things which the order
forbids. In other words, we do not hold that those words impose any
liability which would not exist without them."
Labor Board v. Blackstone Mfg. Co., 123 F.2d 633, 635;
see also Bethlehem Steel Co. v. Labor Board, 74 App.D.C.
52, 120 F.2d 641, 650, 651. The Circuit Court of Appeals for the
Seventh Circuit, on the other hand, consistently eliminates the
provision as to successors and assigns from the order, [
Footnote 2] but recognizes that
successors or assigns, under some circumstances, are bound by the
Board's order even without the words. [
Footnote 3]
When one court of appeals strikes out the provision but says its
absence may in some circumstances have the same effect as if it
were there, and another court of appeals approves the provision but
says its presence may have no more effect than if it were out,
there is more than a faint suggestion that the conflict is over
semantics, rather than over practical realities.
Page 324 U. S. 12
The formula that includes successors and assigns, among others,
is one probably borrowed from the jargon of conveyancing. Doubtless
these words often are used not out of consideration of their
appropriateness, but because of their familiarity. Courts of equity
sometimes have used this formula in their decrees. [
Footnote 4] Before the enactment of the Labor
Relations Act, the Federal Trade Commission issued orders
containing these familiar provisions. [
Footnote 5] The Securities and Exchange Commission has
done the same. [
Footnote 6] The
Bituminous Coal Division of the Department of the Interior does
likewise. [
Footnote 7] The
National Labor Relations Board has employed this formula
consistently since 1937, [
Footnote
8] and some state labor boards have followed the example.
[
Footnote 9] Not only have
circuit courts of appeals, except of the Seventh Circuit, generally
enforced orders containing this provision, but this Court has
several times done so.
Southport Petroleum Co. v. Labor
Board, 315 U. S. 100,
315 U. S. 106,
note 6. [
Footnote 10]
Page 324 U. S. 13
The dearth of cases in which actual controversies have been
precipitated by this more general than discriminating use of this
ritual indicates that its significance both for good and ill is
greater in anticipation than in retrospect.
Administrative agencies have considerable latitude to shape
their remedies within the scope of their statutory authority, and,
where the infirmity is inadequacy of findings to show
appropriateness of the choice made in the particular case, are
ordinarily entitled to have the case remanded for further
consideration.
Phelps Dodge Corp. v. Labor Board,
313 U. S. 177,
313 U. S. 194;
Addison v. Holly Hill Fruit Products, Inc., 322 U.
S. 607,
322 U. S. 616.
The courts, nevertheless, may not grant an enforcement order or
injunction so broad as to make punishable the conduct of persons
who act independently and whose rights have not been adjudged
according to law.
Chase National Bank v. Norwalk,
291 U. S. 431,
291 U. S.
436-437;
Hitchman Coal & Coke Co. v.
Mitchell, 245 U. S. 229,
245 U. S. 234;
Scott v. Donald, 165 U. S. 107,
165 U. S. 117;
Alemite Mfg. Corp. v. Staff, 42 F.2d 832.
The Federal Rules of Civil Procedure provide that:
"Every order granting an injunction and every restraining order
. . . is binding only upon the parties to the action
Page 324 U. S. 14
their officers, agents, servants, employees, and attorneys, and
upon those persons in active concert or participation with them who
receive actual notice of the order by personal service or
otherwise. [
Footnote
11]"
This is derived from the common law doctrine that a decree of
injunction not only binds the parties defendant, but also those
identified with them in interest, in "privity" with them,
represented by them, or subject to their control. In essence, it is
that defendants may not nullify a decree by carrying out prohibited
acts through aiders and abettors, although they were not parties to
the original proceeding.
The term "successors and assigns" in an enforcement order, of
course, may not enlarge its scope beyond that defined by the
Federal Rules of Civil Procedure. Successors and assigns may,
however, be instrumentalities through which defendant seeks to
evade an order or may come within the description of persons in
active concert or participation with them in the violation of an
injunction. If they are, by that fact, they are brought within
scope of contempt proceedings by the rules of civil procedure. We
have indicated that Labor Board orders are binding upon successors
and assigns who operate as "merely a disguised continuance of the
old employer."
Southport Petroleum Co. v. Labor Board, 315
U.S. at
315 U. S. 106.
We have also said of an injunction to restrain violation of the
Fair Labor Standards Act, which is somewhat analogous to Labor
Board orders, that
"Not only is such an injunction enforceable by contempt
proceedings against the corporation its agents and officers and
those individuals associated with it in the conduct of its
business, . . . but it may also, in appropriate circumstances, be
enforced against those to whom the business may have been
transferred, whether as a means of evading the judgment or for
other reasons. "
Page 324 U. S. 15
Walling v. Reuter, 321 U. S. 671,
321 U. S. 674.
In both of these cases, the reference is not merely to succession,
but to a relation between the defendant and the successor which
might of itself establish liability within the terms of Rule
65.
We do not undertake to decide whether or under what
circumstances any kind of successor or assign will be liable for
violation of a Labor Board order. It is true that we have said that
"Questions of construction had better be ironed out before
enforcement orders issue than upon contempt proceedings." (
J.
I. Case Co. v. Labor Board, 321 U. S. 332,
321 U. S.
341.) But it is apparent from Rule 65, and from the
views of one circuit court of appeals as to the narrow effect of
the words in the order and of another as to the broad effect of the
order without the words, that whether one brings himself in
contempt as a "successor or assign" depends on an appraisal of his
relations and behavior, and not upon mere construction of terms of
the order. If defendants enter upon transactions which raise doubts
as to the applicability of the injunction, they may petition the
court granting it for a modification or construction of the order.
Cf. New Jersey v. New York City, 296 U.
S. 259. While such relief would be in the sound
discretion of the court, we think courts would not be apt to
withhold a clarification in the light of a concrete situation that
left parties or "successors and assigns" in the dark as to their
duty toward the court. Enforcement orders are issued to effectuate
the purposes of the Act, not for the entrapment of parties, and
courts, no less than parties, desire to avoid unwitting contempts,
as well as to punish deliberate ones.
No concrete case is before us. We have here an abstract
controversy over the use of these words, and it is as sterile as
abstract controversies usually are. The employer objects to the
words of the order merely as words. They do not enlarge its own
obligation, and, if
Page 324 U. S. 16
it complies with the order, little by way of obligation could be
passed to a successor or assign by the order that is not in any
event imposed by statute. The Board is not here attempting to reach
or to hold anyone in contempt by virtue of such orders. No
successor or assign appears before us complaining that these words
put him in jeopardy. No one can be punished for contempt because of
these words until after a judicial hearing, in which their
operation could be determined on a concrete set of facts. All that
is before us is the question whether we will hold abstractly that
this provision is an illegal one to include in a cease and desist
order of the Labor Board or an enforcement order of the Court.
Whether it is wise that an order attempt to define its own
effect on others than parties to the action when the law has
already done so is not for us to say. We cannot say that
"successors and assigns," as well as "officers and agents," may
not, under some circumstances, be among those reached by the order
within the scope of Rule 65, and hence cannot say that it is not a
permissible provision.
Affirmed.
[
Footnote 1]
Labor Board v. Brezner Tanning Co., 141 F.2d 62, 65;
Labor Board v. Blackstone Mfg. Co., 123 F.2d 633, 635;
Labor Board v. Weirton Steel Co., 135 F.2d 494, 498, 499;
Labor Board v. Landis Tool Co., 145 F.2d 152;
Labor
Board v. Feinberg Hosiery Mill, Inc., 134 F.2d 620;
Labor
Board v. Gluek Brewing Co., 144 F.2d 847;
Bethlehem Steel
Co. v. Labor Board, 74 App.D.C. 52, 120 F.2d 641, 650,
651.
[
Footnote 2]
Labor Board v. Bachelder, 125 F.2d 387, 388;
Labor
Board v. Stone, 125 F.2d 752, 757. The Sixth Circuit has also
refused in one case to include the phrase.
Labor Board v.
Cleveland-Cliffs Iron Co., 133 F.2d 295, 302.
[
Footnote 3]
See also In re Lennon, 166 U.
S. 548;
International Brotherhood of Teamsters v.
Keystone Freight Lines, Inc., 123 F.2d 326, 329;
Labor
Board v. Cleveland-Cliffs Iron Co., 133 F.2d 295, 302.
[
Footnote 4]
See decrees in
United States v. Pullman Co.,
Civil Action No. 994, E.D.Pa.1944;
United States v. Vehicular
Parking, Ltd., Civil Action No. 259, D.C.Del.1944;
Aluminum Colors Inc. v. Empire Plating Co., 5 F. Supp.
687;
United States v. Great Lakes Towing Co., 1 Decrees
and Judgments in Federal Antitrust Cases, 253-54 (N.D.Ohio, 1915);
United Gilpin Corp. v. Wilmore, 100 Colo. 453, 456, 68
P.2d 34, 35.
[
Footnote 5]
Matter of Superior Woolen Mills, 8 F.T.C. 283, 288;
Matter of American Snuff Co., 11 F.T.C. 144, 160;
Matter of The Sherwin-Williams Co., 36 F.T.C. 25, 72,
74.
[
Footnote 6]
Securities and Exchange Commission v. Aldrich Blake,
Inc., 1 S.E.C.Jud.Dec.19, 21.
[
Footnote 7]
Matter of Cove Hill Coal Co., 7 F.R. 7572, 7574;
Matter of Waltrip & Sons, 7 F.R. 7864.
[
Footnote 8]
Matter of Hill Bus Co., 2 N.L.R.B. 781, 800.
[
Footnote 9]
Matter of The Great Atlantic & Pacific Tea Co.,
Case No. CU-333, New York State Labor Relations Board;
Matter
of W. T. Grant Co., Case No. 82, Pennsylvania Labor Relations
Board.
[
Footnote 10]
Citing 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.
It is suggested at least inferentially, that
Labor Board v.
Express Publishing Co., 312 U. S. 426, is
authority against the position of the Court in the case at bar.
However, the order there under review contained these same words.
Matter of Express Publishing Co., 13 N.L.R.B. 1213, 1226.
While this Court limited the enforcement order in certain other
respects, it did not strike the words "successors and assigns." The
issue was not passed on, but its very absence from a case
concerning permissible breadth of orders suggests the innocuous
character of the provision as compared with that passed on in the
Express case.
[
Footnote 11]
Rule 65(d), which is derived from § 19 of the Clayton Act, 38
Stat. 738; 28 U.S.C. § 383.
MR. CHIEF JUSTICE STONE, dissenting, with whom MR. JUSTICE
ROBERTS and MR. JUSTICE REED concur.
An injunction is a continuing threat, to those named as subject
to it, of the pains of contempt proceedings if they disobey its
provisions. The opinion of the Court recognizes that the present
injunction running against the employer's "successors and assigns"
purports to include within its sweep some who are not subject to
its command, and is thus a threat to those over whom the Court has
no authority. The opinion also admits that the persons who are
bound by the present decree would be as effectively bound if the
decree were to omit the words
Page 324 U. S. 17
"successors and assigns."
See Walling v. Reuter Co.,
321 U. S. 671,
321 U. S.
674-675, and cases cited.
It has long been deemed to be an abuse of power for a federal
court to enjoin practices in which a defendant has not engaged and
which are unrelated to those which may be properly enjoined.
See Labor Board v. Express Publishing Co., 312 U.
S. 426, and cases cited. To me, it seems no less a
misuse of authority for a court, as well as for the Labor Board
itself, to threaten those who are not subject to its command. This
is the more so where the tendency of the threat is to inflict an
unauthorized penalty on the employer by deterring third persons
from dealing with him to acquire his property and business in
circumstances in which that may lawfully be done.
That there have been numerous cases before this Court where the
Board's order has not been challenged in this respect is
significant only as showing how extensive the abuse has become and
how ready employers and the lower courts have been to acquiesce in
threatened wrong when the injury seemed not to be immediate. But
these are not reasons for our acquiescence when the question is
brought to us for decision for the first time. It is no part of the
function of the Board or of courts to make unwarranted threats
against suitors or innocent third persons. Such misleading and
unwarranted use of the phrase should be avoided either by striking
it from the decree or so qualifying it as to designate the class of
"successors and assigns" to whom it may be lawfully applied.
Cf. Southport Co. v. Labor Board, 315 U.
S. 100,
315 U. S.
107.