A group of local manufacturers of and dealers in millwork and
patterned lumber and their incorporated trade associations and
officials thereof and a group of unincorporated trade unions and
their officials or business agents were indicted for conspiracy to
violate § 1 of the Sherman Act. The indictment charged that they
unlawfully combined and conspired together, successfully, to
monopolize unduly a part of interstate commerce in the commodities
for the purpose and with the effect of restraining out-of-state
manufacturers from shipping and selling the commodities within a
certain area and of preventing dealers in that area from freely
handling them, and also for the purpose of raising the prices of
the commodities; that, to achieve this purpose, a contract was
entered into between defendants for a wage scale for members of
labor unions working on the articles, combined with a restrictive
clause that
"no material will be purchased from, and no work will be done on
any material or article that has had any operation performed on
same by Saw Mills, Mills or Cabinet Shops, or their distributors
that do not conform to the rates of wage and working conditions of
this agreement;"
and that this clause was enforced to the mutual advantage of
defendants and to the disadvantage of other manufacturers and of
consumers.
Held:
1. Conspiracies between employers and employees to restrain
interstate commerce violate § 1 of the Sherman Act.
Allen
Bradley Co. v. Local Union No. 3, 325 U.
S. 797. Pp.
330 U. S. 400,
330 U. S.
411.
2. The indictment charges a conspiracy forbidden by the Sherman
Act. P.
330 U. S.
401.
Page 330 U. S. 396
3. On that issue, the power of the trial court is limited by § 6
of the Norris-LaGuardia Act, 47 Stat. 70, which applies to all
courts of the United States in all matters growing out of labor
disputes covered by the Act which may come before them. P.
330 U. S.
401.
4. The purpose and effect of § 6 of the Norris-LaGuardia Act is
to relieve organizations, whether of labor or capital, and members
of those organizations from liability for damages or imputations of
guilt for lawless acts done in labor disputes by some individual
officers or members of the organization without clear proof that
the organization or member charged with responsibility for the
offense actually participated, gave prior authorization, or
ratified such acts after actual knowledge of their perpetration. P.
330 U. S.
403.
5. The word "organization," as used in the Act, is not
restricted to unincorporated entities, but covers generically all
organizations that take part in labor disputes, including
corporations. P. 403,
n
12.
6. While participants in a conspiracy covered by § 6 are not
immunized from responsibility for authorized acts in furtherance of
such a conspiracy, they are protected against liability for
unauthorized illegal acts of other participants in the conspiracy.
P.
330 U. S.
404.
7. As used in § 6, "authorization" means something different
from corporate criminal responsibility for the acts of officers and
agents in the course or scope of employment. Its requirement
restricts the responsibility or liability in labor disputes of
employer or employee associations, organizations or their members
for unlawful acts of the officers or members of those associations
or organizations, although such officers or members are acting
within the scope of their general authority as such officers or
members, to those associations, organizations, or their officers or
members who actually participate in the unlawful acts, except upon
clear proof that the particular act charged, or acts generally of
that type and quality, had been expressly authorized, or
necessarily followed from authority granted, by the association or
nonparticipating member sought to be charged or was subsequently
ratified by such association, organization, or member after actual
knowledge of its occurrence. Pp.
330 U. S.
406-407.
8. A refusal to instruct the jury to this effect is reversible
error -- as to both individuals and organizations and as to both
employers and employees -- no matter how clear the evidence may be
of participation in the conspiracy, since the defendants are
entitled to have the jury instructed in accordance with the
standards which Congress has prescribed. Pp.
330 U. S.
407-412.
Page 330 U. S. 397
9. Prior to the decision of this Court in
Allen Bradley Co.
v. Local Union No. 3, supra, two employer groups, each
containing an incorporated trade association and its officers and
members, both individual and corporate, demurred to the indictment
in this case on the ground that, as the restrictive agreement was
directed at the maintenance of proper working conditions, the
indictment did not state a crime under the Sherman Act. The
demurrer was overruled, and they pleaded
nolo contendere.
This Court granted certiorari as to them.
Held: in view of the uncertainty existing at the time
of their pleas of
nolo contendere, as to liability for
contracts between groups of employers and groups of employees that
restrained interstate commerce, and as to the application of § 6 of
the Norris-LaGuardia Act, they should have an opportunity to make
defense to the indictment notwithstanding their pleas of
nolo
contendere. Pp.
330 U. S.
411-412.
144 F.2d 546 reversed.
Petitioners were convicted in a Federal District Court of a
conspiracy to violate § 1 of the Sherman Act, 15 U.S.C. § 1.
42 F. Supp.
910. The Circuit Court of Appeals affirmed. 144 F.2d 546. This
Court granted certiorari. 323 U.S. 706-707.
Reversed and
remanded, p.
330 U. S.
412.
Page 330 U. S. 398
MR. JUSTICE REED delivered the opinion of the Court.
These are criminal cases in which conviction of various
defendants has been obtained in the District Court of the United
States for the Northern District of California, Southern Division,
and affirmed by the Circuit Court of Appeals of the Ninth Circuit,
144 F.2d 546. They were charged with conspiracy to violate the
Sherman Act, § 1. [
Footnote 1]
The parties to the alleged conspiracy were of two groups: on the
one hand, local manufacturers of and dealers in the commodities
affected and their incorporated trade associations and officials
thereof, and, on the other, unincorporated trade unions and their
officials or business agents. The indictment charged that the
defendants below unlawfully combined and conspired together,
successfully, to
Page 330 U. S. 399
monopolize unduly a part of interstate commerce in millwork and
patterned lumber. The purpose and effect of the conspiracy was
alleged to be to restrain out-of-state manufacturers from shipping
and selling these commodities within the San Francisco Bay area of
California, and to prevent the dealers in that area from freely
handling them. It was alleged that the conspiracy also sought to
raise the prices of the products affected. To achieve the purpose,
a contract was entered into between the defendants for a wage scale
for members of labor unions working on the articles involved,
combined with a restrictive clause,
". . . no material will be purchased from, and no work will be
done on any material or article that has had any operation
performed on same by Saw Mills, Mills, or Cabinet Shops, or their
distributors that do not conform to the rates of wage and working
conditions of this agreement,"
with specified exceptions not here material. This clause, it is
alleged, was enforced to the mutual advantage of the conspirators
by some of the parties through conference or picketing or
acquiescence in the arrangement. By means of the conspiracy, union
workmen obtained better wages, the employers higher profits, and
manufacturers against whom the conspiracy was directed were largely
prevented from sharing in the Bay Area business, all to the price
disadvantage of the consumer and the unreasonable restraint of
interstate commerce. The legal theory which was followed in their
conviction was that conspiracies between employers and employees to
restrain interstate commerce violate the Sherman Act.
Five petitions for certiorari were presented to this Court by
different defendants, either singly or jointly with others. It is
sufficient for the purposes of this review to say that they raised
the question of the application of § 1 of the Sherman Act to
conspiracies between employers and employees to restrain commerce
and, except the petitions in the employer group, the application of
§ 6 of the
Page 330 U. S. 400
Norris-LaGuardia Act in trial of such an indictment. [
Footnote 2] On account of the
importance of the federal questions raised and asserted conflicts
in the circuits, the writs of certiorari were granted. [
Footnote 3]
Since these cases were taken, the important question of the
application of the Sherman Act to a conspiracy between labor union
and business groups has been decided by us. We held that such a
conspiracy to restrain trade violated the Sherman Act.
Allen
Bradley Co. v. Local Union No. 3, 325 U.
S. 797. This holding causes us to approve the ruling of
the trial and appellate courts on the first question presented by
the certiorari, but it left unresolved the question as to the
application of § 6 of the Norris-LaGuardia Act, the point to which
this decision is directed.
Page 330 U. S. 401
The indictment charges a conspiracy forbidden by the Sherman
Act. On that issue, the power of the trial court is limited by § 6
of the Norris-LaGuardia Act.
Note
2 supra. The limitations of that section are upon all
courts of the United States in all matters growing out of labor
disputes, covered by the Act, which may come before them. It
properly is conceded that this agreement grew out of such a labor
dispute, and that all parties defendant participated or were
interested in that dispute.
See § 13, 47 Stat. 73. Section
6 of the Norris-LaGuardia Act first appeared in a draft bill of the
Senate Committee on the Judiciary as § 6 thereof. At that time, its
form was precisely the same as at present. The draft was drawn as a
comprehensive substitute for S. 1482 of the 70th Congress, a bill
providing only for a limitation on the jurisdiction of equity
courts in the issuance of injunctions. In the 71st Congress, a
similarly limited bill on the same subject, S. 2497, was
reintroduced, and a like comprehensive substitute proposed. Neither
substitute was reported out of the Committee. [
Footnote 4] These substitute bills are quite
similar in form to the Norris-LaGuardia Act. In substance, and
therefore in effectiveness, they are the same.
In the next, the 72d Congress, the bill, H.R. 5315, which was to
become the Norris-LaGuardia Act, was introduced. Section 2
succinctly states the public policy that it was designed to further
-- a definition of and limitation upon the jurisdiction and
authority of courts of the United States in labor disputes.
[
Footnote 5] That purpose was
in accord with
Page 330 U. S. 402
that behind the earlier drafts referred to above. [
Footnote 6] As the new bill was practically
identical with these long considered committee substitutes, the
hearings on H.R. 5315 were short. [
Footnote 7] But even so, the attack continued on § 6 as a
restriction on the general law of agency in labor disputes.
[
Footnote 8] The reply of the
House Committee was that it did "not affect the general law of
agency," and was necessary "under the circumstances" so that
"the courts should know that Congress expects them not to hold
officers or associations liable for the unlawful acts of a member
without clear proof of actual participation in, or authorization
of, any unlawful acts by the officer or association. [
Footnote 9]"
The Senate Committee was of the view that it was a "rule of
evidence," not a "new law of agency."
"There is no provision made relieving an individual from
responsibility for his acts, but provision is made that a person
shall not be held responsible for an
Page 330 U. S. 403
'unlawful act' except upon 'clear proof' of participation or
authorization or ratification. Thus, a rule of evidence, not a rule
of substantive law, is established. [
Footnote 10]"
We need not determine whether § 6 should be called a rule of
evidence or one that changes the substantive law of agency. We hold
that its purpose and effect was to relieve organizations, whether
of labor or capital, [
Footnote
11] and members of those organizations from liability for
damages or imputation of guilt for lawless acts done in labor
disputes by some individual officers or members of the organization
without clear proof that the organization or member, charged with
responsibility for the offense, actually participated, gave prior
authorization, or ratified such acts after actual knowledge of
their perpetration. [
Footnote
12]
Page 330 U. S. 404
Thus, § 6 limited responsibility for acts of a coconspirator --
a matter of moment to the advocates of the bill. [
Footnote 13] Before the enactment of § 6,
when a conspiracy between labor unions and their members,
prohibited under the Sherman Act, was established, a widely
publicized case had held both the unions and their members liable
for all overt acts of their coconspirators. [
Footnote 14] This liability resulted whether the
members or the unions approved of the acts or not, or whether or
not the acts were offenses under the criminal law. While, of
course, participants in a conspiracy that is covered by § 6 are not
immunized from responsibility for authorized acts in furtherance of
such a conspiracy, they now are protected against liability for
unauthorized illegal acts of other participants in the
conspiracy.
The legislative history makes the intended meaning of the word
"authorization," we think, almost equally clear. The rule of
liability for acts of an agent within the scope of his authority,
based on the
Danbury Hatters Case, was urged as an
argument against the language of § 6. [
Footnote 15] When
Page 330 U. S. 405
the Senate Committee on the Judiciary reported the bill, it
dealt with this contention.
"But the argument is made that a man is held legally responsible
for the acts of his agents taken in due course of employment. This
argument is evidently based upon a doctrine of the civil law of
negligence. It has no application to the criminal law. If a man is
held responsible for an unlawful act, his responsibility rests on
the basis of actual or implied participation. He is responsible for
conspiring to do
Page 330 U. S. 406
an unlawful act or for setting in motion forces intended to
result, or necessarily resulting, in an unlawful act."
". . . it is high time that, by legislative action, the courts
should be required to uphold the long established law that guilt is
personal and that men can only be held responsible for the unlawful
acts of associates because of participation in, authorization or
ratification of such acts. As a rule of evidence, clear proof
should be required, so that criminal guilt and criminal
responsibility should not be imputed but proven beyond reasonable
doubt in order to impose liability. [
Footnote 16]"
We hold therefore that "authorization," as used in § 6, means
something different from corporate criminal responsibility for the
acts of officers and agents in the course or scope of employment.
[
Footnote 17] We are of the
opinion that the requirement of "authorization" restricts the
responsibility or liability in labor disputes of employer or
employee associations, organizations, or their members for unlawful
acts of the officers or members of those associations or
organizations, although such officers or members are acting within
the scope of their general authority as such officers or members,
to those associations, organizations, or their officers or members
who actually participate in the unlawful acts, except upon clear
proof that the particular act charged, or acts generally of that
type and
Page 330 U. S. 407
quality, had been expressly authorized, or necessarily followed
from a granted authority, by the association or nonparticipating
member sought to be charged or was subsequently ratified by such
association, organization, or member after actual knowledge of its
occurrence.
In this prosecution, the United Brotherhood of Carpenters and
Joiners and all the local unions who were convicted requested an
instruction or instructions that embodied the above interpretation
of § 6. [
Footnote 18] A
similar request was made by the individual members by requested
instruction No. 58. These requested instructions were refused, and,
instead, instructions were given that stated a different concept of
law, as is evidenced by the excerpts in the marginal note.
[
Footnote 19]
Page 330 U. S. 408
So far as the Unions, both local and national, are concerned,
the necessity under our construction for an instruction based on §
6 is apparent. The United Brotherhood was not a party to any of the
agreements. Local unions took a more definite part than the United
Brotherhood. In some instances, the name of a local union was
signed to the agreement that contained the restrictive clause.
Necessarily, acts performed by or for the unions were done by their
individual officers, members, or agents. We do not enter into an
analysis of the evidence that was relied upon to show the
participation of the unions in the conspiracy. The evidence in any
new trial may be quite different. No matter how strong the evidence
may be of an association's or organization's participation through
its agents in the conspiracy, there must be a charge to the jury
setting out correctly the limited liability under § 6 of such
association or organization for acts of its agents. [
Footnote 20] For a judge may not direct a
verdict of guilty, no matter how conclusive the evidence. [
Footnote 21] There is no way of
knowing here whether the jury's verdict was based on facts within
the condemned instructions,
note
19 above or on actual authorization or
Page 330 U. S. 409
ratification of such acts,
note 18 [
Footnote
22] A failure to charge correctly is not harmless, since the
verdict might have resulted from the incorrect instruction. We are
of the opinion, therefore, that the judge should have instructed
the jury as to the limitations upon the association's liability for
the acts of its agents under § 6. The error is aggravated by the
failure to give the correct charge upon request.
The suggestion is made that the alert and powerful unions and
corporations gain the greatest degree of immunity under our
interpretation of § 6. That is not the case. Section 6 draws no
distinction as to liability for unauthorized acts between the large
and the small, between national unions and local unions, between
powerful unions and weak unions, between associations or
organizations and their members. And we draw no such
distinctions.
There is no implication in what we have said that an association
or organization in circumstances covered by § 6 must give explicit
authority to its officers or agents to violate in a labor
controversy the Sherman Act or any other law, or to give antecedent
approval to any act that its officers may do. Certainly an
association or organization cannot escape responsibility by
standing orders disavowing authority on the part of its officers to
make any agreements in violation of the Sherman Act and disclaiming
union responsibility for such agreements. Facile arrangements do
not create immunity from the act, whether they are made by employee
or by employer groups. The conditions
Page 330 U. S. 410
of liability under § 6 are the same in the case of each. The
grant of authority to an officer of a union to negotiate agreements
with employers regarding hours, wages, and working conditions may
well be sufficient to make the union liable. An illustrative but
nonrestrictive example might be where there was knowing
participation by the union in the operation of the illegal
agreement after its execution. And the custom or traditional
practice of a particular union can also be a source of actual
authorization of an officer to act for and bind the union.
Our only point is this: Congress, in § 6, has specified the
standards by which the liability of employee and employer groups is
to be determined. No matter how clear the evidence, they are
entitled to have the jury instructed in accordance with the
standards which Congress has prescribed. To repeat, guilt is
determined by the jury, not the court. The problem is not
materially different from one where the evidence against an accused
charged with a crime is well nigh conclusive and the court fails to
give the reasonable doubt instruction. It could not be said that
the failure was harmless error. [
Footnote 23]
It is suggested that, since "conscious participation" was
required for conviction by the instructions given, error as to the
individual defendants cannot be found under any theory of the rule
of § 6. But we think that failure to instruct the jury on the
imputation of guilt from the acts of others as limited in labor
disputes by § 6 affects the individuals, as well as the
associations. The section covers organizations and their members
alike. Individuals, without association authority, may be guilty of
such a conspiracy as this under the Sherman Act, but, under § 6,
they will not be guilty merely because they are members or officers
of a guilty association. Nor are individuals guilty
Page 330 U. S. 411
because of acts of other individuals in which they did not
participate, or which they did not authorize or ratify. Although an
illegal conspiracy under the Sherman Act was proven at the trial,
the individuals are entitled to have their participation weighed by
a jury under an instruction explaining the circumstances under
which § 6 permits acts of other individuals or of associations or
of organizations in labor disputes to create personal liability. To
instruct only that conscious participation of the individual is
required leaves a jury free to weigh an individual's guilt in the
light of unauthorized and unratified acts of others with whom he is
associated but in whose acts he has not participated. As the
evidence of any individual's activities in the alleged conspiracy
is a minor part of the evidence as to the entire scheme, this
delimitation of his responsibility is important.
Certiorari was granted to two employer groups, Nos. 8 and 10,
each containing an incorporated trade association and its officers
and members, both individual and corporate. Both groups combatted
the indictment by demurrer on the ground that, as the restrictive
agreement was directed at the maintenance of proper working
conditions, it did not state a crime under the Sherman Act. The
demurrer was overruled by the trial court. Our decision in
Allen Bradley Co. requires us to uphold this conclusion.
Thereafter, pleas of
nolo contendere were entered by each
defendant in the employer petitioner groups.
Each of the employer petitioners, if they has stood trial, as we
have indicated hereinbefore, would have been entitled to the same
instruction under § 6 as we have held the union group should have
received. And though the failure so to charge was not excepted to,
we would not be precluded from entertaining the objection.
[
Footnote 24] The
erroneous
Page 330 U. S. 412
charge was on a vital phase of the case, and affected the
substantial rights of the defendants. We have the power to notice a
"plain error" though it is not assigned or specified. [
Footnote 25] In view of their plea
of
nolo contendere, does justice require that these
employer groups should now be given an opportunity to stand trail
in the situation created by our subsequent rulings in the
Allen
Bradley case and in this case? We think that it does.
This present decision furnishes a guide for the application of §
6 to liability for acts of agents in labor disputes. Ordinarily a
plea of
nolo contendere leaves open for review only the
sufficiency of an indictment. [
Footnote 26] However, in view of the then existing
uncertainty as to liability for contracts between groups of
employers and groups of employees that restrained interstate
commerce and the application of § 6 of the Norris-LaGuardia, we
conclude that in this exceptional situation the employer groups,
also, should have an opportunity to make defense to the indictment.
[
Footnote 27]
The judgments in each case are reversed. and the causes remanded
to the District Court.
MR. JUSTICE JACKSON took no part in the consideration or
decision of this case.
Page 330 U. S. 413
* Together with No. 7,
Bay Counties District Council of
Carpenters et al. v. United States; No. 8,
Lumber Products
Association, Inc., et al. v. United States; No. 9,
Alameda
County Building and Construction Trades Council v. United
States, and No. 10,
Boorman Lumber Co. et al. v. United
States, also on certiorari to the same Court.
[
Footnote 1]
15 U.S.C. § 1:
"Every contract, combination in the form of trust or otherwise,
or conspiracy in restraint of trade or commerce among the several
States, or with foreign nations is hereby declared to be illegal: .
. . Every person who shall make any contract or engage in any
combination or conspiracy declared by sections 1-7 of this title to
be illegal shall be deemed guilty of a misdemeanor, and, on
conviction thereof, shall be punished by fine not exceeding $5,000,
or by imprisonment not exceeding one year, or by both said
punishments, in the discretion of the court."
[
Footnote 2]
47 Stat. 70, 71:
"SEC. 6. No officer or member of any association or
organization, and no association or organization participating or
interested in a labor dispute, shall be held responsible or liable
in any court of the United States for the unlawful acts of
individual officers, members, or agents, except upon clear proof of
actual participation in, or actual authorization of, such acts, or
of ratification of such acts after actual knowledge thereof."
[
Footnote 3]
323 U.S. 706-707.
Compare Allen Bradley Co. v. Local Union
No. 3, 145 F.2d 215,
and United States v. International
Fur Workers Union, 100 F.2d 541, 547,
with the
opinion of the Circuit Court of Appeals in this case, 144 F.2d
546.
These cases were argued in the Supreme Court of the United
States first on March 8, 1945. On June 18, 1945, they were restored
to the docket and assigned for reargument, counsel being requested
to discuss (1) the scope of § 6 of the Norris-LaGuardia Act in
relation to prosecutions under the Antitrust Act; (2) the scope of
§ 6 in relationship to § 13(b); (3) the scope of the words
"association or organization" appearing in § 6, in that section's
relationship to § 13(b), and (4) consideration of the Court's oral
charge and written charges requested and refused involving § 6, in
the light of objections and exceptions by each and all of the
defendants and the state of the evidence on that issue as to each
of them. Journal, Sup.Ct., U.S., October Term 1944, pp. 284-285.
The cases were reargued on April 29-30,1946, and again restored to
the docket on June 10, 1946, for a third argument.
[
Footnote 4]
S.Rep. No. 1060, 71st Cong., 2d Sess., p. 4.
In the hearings on the proposed substitute, the language now
incorporated into § 6 of the Norris-LaGuardia Act was criticized as
changing the rules of agency, so as to relieve organizations of
responsibility for acts of their agents in labor disputes. It was
defended as intended to apply the law of agency to labor unions.
Hearings, Subcommittee of the Committee on the Judiciary, U.S.
Senate, 70th Cong., 2d Sess., on S. 1482, Part 5, p. 759,
et
seq.
[
Footnote 5]
47 Stat. 70.
[
Footnote 6]
S.Rep. No. 163, 72d Cong., 1st Sess.; H.Rep. No. 669, 72d Cong.,
1st Sess.; S.Rep. No. 1060, 71st Cong., 2d Sess.; Hearings,
Subcommittee of the Committee on the Judiciary, U.S. Senate, 70th
Cong., 1st Sess., on S. 1482; Hearing, Subcommittee of the
Committee on the Judiciary, U.S. Senate, 71st Cong., 2d Sess., on
S.2497.
[
Footnote 7]
Hearing, Committee on the Judiciary, House of Representatives,
72d Cong., 1st Sess., on H.R. 5315.
[
Footnote 8]
Id., p. 16:
"But § 6 effects a revolution in the substantive law of agency.
By that section no officer or member of any organization,
participating in a labor dispute, and this applies equally to
employers, is to be held liable in any court of the United States
for the unlawful act of agents acting in such dispute unless there
by clear proof of actual participation, authorization, or
ratification of the agents' acts after actual knowledge. The
general law of agency is thus repealed or restricted to a labor
dispute, and it applies equally to employers and employees. It
applies to men who, by collusion, enter into agreements which may
harmfully affect the public interests, and which in some instances
might be violations of the antitrust act, although they may be the
result, or grow out of, or involve terms of a labor dispute."
See also pp. 33 and 39.
[
Footnote 9]
H.Rep. No.669, 72d Cong., 1st Sess., p. 9.
[
Footnote 10]
S.Rep. No.163, 72d Cong., 1st Sess., p. 19.
[
Footnote 11]
"Section 6 of the bill relates to damages for unlawful acts
arising out of labor disputes. It is provided that officers and
members of any labor organization, and officers and members of any
employers' organization, shall not be held liable for damages
unless it is proven that the defendant either participated in or
authorized such unlawful acts or ratified such unlawful acts after
actual knowledge thereof."
S.Rep. No.163,
supra, p. 19; 75 Cong.Rec. 4507; 47
Stat. 70, 73:
"SEC. 13. . . ."
"
* * * *"
"(b) A person or association shall be held to be a person
participating or interested in a labor dispute if relief is sought
against him or it, and if he or it is engaged in the same industry,
trade, craft, or occupation in which such dispute occurs, or has a
direct or indirect interest therein, or is a member, officer, or
agent of any association composed in whole or in part of employers
or employees engaged in such industry, trade, craft, or
occupation."
[
Footnote 12]
See the full statement in S.Rep. No. 163,
supra, pp. 19-21. Nothing has been found to give
definition to the word "organization" as used in the act. We see no
reason to restrict its meaning to unincorporated entities.
Apparently it was employed by the draftsmen to cover, generally,
all organizations that take part in labor disputes.
See
note 11 supra. We
so apply the word. The corporate form, as is true in this case, is
frequently employed for trade groups.
[
Footnote 13]
The
Danbury Hatters Case -- Loewe v.Lawlor,
208 U. S. 274, and
Lawlor v. Loewe, 235 U. S. 522,
involving damages against union members for their union's acts in
an unlawful conspiracy, was in their minds. Hearings on S.1482,
supra, p. 760,
et seq. Compare the
partnership in crime theory.
United States v. Kissel,
218 U. S. 601,
218 U. S. 608;
United States v. Socony-Vacuum Oil Co., 310 U.
S. 150,
310 U. S.
253.
[
Footnote 14]
United States v. Railway Employees' Dept. of A.F.L.,
283 F. 479, 492.
[
Footnote 15]
Hearings on S.1482,
supra, p. 760:
"When that came before the Supreme Court of the United States,
Justice Holmes -- I do not remember the exact language, but he had
in mind that it might not be necessary to show that they knew or
ought to have known or that they ought to have been warranted in
their belief -- that, under the rule of agency as prevailing in all
other activities, including bankers' associations, to which you
refer, and all other associations, it is the common accepted
proposition, as fundamental as any I know in Anglo-Saxon
jurisprudence, that a principal may be liable for the acts of his
agent, even though he never knew or heard of them and actually
forbade them, provided he was acting within the general scope of
his authority, in furtherance of the purpose of the association.
That is the law laid down by the Supreme Court of the United
States, and that is the law that I am afraid is curtailed by this
provision in this section 6."
Excerpts from
Lawlor v. Loewe, 235 U.S. at
235 U. S.
534-535, will explain the reference:
"We agree with the circuit court of appeals that a combination
and conspiracy forbidden by the statute were proved, and that the
question is narrowed to the responsibility of the defendants for
what was done by the sanction and procurement of the societies
above named."
"The court in substance instructed the jury that, if these
members paid their dues and continued to delegate authority to
their officers unlawfully to interfere with the plaintiffs'
interstate commerce in such circumstances that they knew or ought
to have known, and such officers were warranted in the belief that
they were acting in the matters within their delegated authority,
then such members were jointly liable, and no others. It seems to
us that this instruction sufficiently guarded the defendants'
rights, and that the defendants got all that they were entitled to
ask in not being held chargeable with knowledge as matter of law. .
. . If the words of the documents, on their face and without
explanation, did not authorize what was done, the evidence of what
was done publicly and habitually showed their meaning and how they
were interpreted. The jury could not but find that, by the usage of
the unions, the acts complained of were authorized, and authorized
without regard to their interference with commerce among the
States."
[
Footnote 16]
S.Rep. No.163,
supra, p. 20.
[
Footnote 17]
See New York Central R. Co. v. United States,
212 U. S. 481,
212 U. S.
494.
These cases now being passed upon have not involved the
liability of an employer, whether a member or not of an association
or organization of employers, for the acts, in a labor dispute, of
his or its own officers. We express no opinion upon that.
[
Footnote 18]
A fair example, requested instruction No. 56, is as follows:
"You are instructed that no labor union or organization can be
found guilty in this case for an unlawful act or acts, if any, of
individual officers, members, or agents, unless you find upon clear
proof from the evidence that such labor organization actually
participated in, or actually authorized such unlawful act, if any,
or ratified such an act, if any, after actual knowledge
thereof."
[
Footnote 19]
"The act of an agent done for or on behalf of a corporation and
within the scope of his authority, or an act which an agent has
assumed to do for a corporation while performing duties actually
delegated to him, is deemed to be the act of the corporation."
"If you find that there did exist a combination and conspiracy
such as is charged in the indictment, and that any defendant
corporation participated therein, then I instruct you that such act
of participation is deemed to be also the act of the individual
director, officer, or agent of such defendant corporation who
authorized, ordered or did such act in whole or in part."
"Likewise, the list of defendants includes a number of labor
union organizations and several members thereof. It has been
stipulated in this case that these labor unions are associations.
Like corporations, associations are separate entities with the
meaning of the Sherman Act, and may be found guilty of violations
of that act, separately and apart from the guilt or innocence of
their members."
"You are to determine the guilt or innocence of the labor unions
which are defendants in this case in the same manner as you
determine that of the corporations -- that is, by an examination of
the acts of their agents."
"
* * * *"
"In this case, several individuals are named as defendants,
together with a number of corporations. While these defendants have
been jointly indicted and charged with the offenses contained in
the indictment, each defendant is entitled to an independent
consideration by you of the evidence as it relates to his conscious
participation in the alleged unlawful acts, and it is your duty to
determine the guilt or innocence of each individual
separately."
[
Footnote 20]
See Battle v. United States, 209 U. S.
36,
209 U. S.
38.
[
Footnote 21]
Sparf and Hansen v. United States, 156 U. S.
51,
156 U. S. 105,
dissent
156 U. S. 173.
Compare Capital Traction Co. v. Hof, 174 U. S.
1,
174 U. S. 13.
[
Footnote 22]
Bird v. United States, 180 U.
S. 356,
180 U. S.
361:
"The chief object contemplated in the charge of the judge is to
explain the law of the case, to point out the essentials to be
proved on the one side and the other, and to bring into view the
relations of the particular evidence adduced to the particular
issues involved."
See Pierce v. United States, 314 U.
S. 306.
[
Footnote 23]
Weiler v. United States, 323 U.
S. 606;
Bruno v. United States, 308 U.
S. 287.
[
Footnote 24]
Wiborg v. United States, 163 U.
S. 632,
163 U. S. 658;
Brasfield v. United States, 272 U.
S. 448,
272 U. S. 450;
see also United States v. Atkinson, 297 U.
S. 157,
297 U. S. 160.
And see Rules of the Supreme Court, Rule 27.
[
Footnote 25]
Weems v. United States, 217 U.
S. 349,
217 U. S. 362;
Mabler v. Eby, 264 U. S. 32,
264 U. S. 45;
Sibbach v. Wilson & Co., 312 U. S.
1,
312 U. S. 16;
see also Kessler v. Strecker, 307 U. S.
22,
307 U. S. 34.
And see Federal Rules of Criminal Procedure, rule
52(b).
[
Footnote 26]
Nolo contendere "is an admission of guilt for the
purposes of the case,"
Hudson v. United States,
272 U. S. 451,
272 U. S. 455;
United States v. Norris, 281 U. S. 619,
281 U. S. 622,
and, like pleas of guilty, may be reviewed to determine whether a
crime is stated by the indictment.
Hocking Valley R. Co. v.
United States, 210 F. 735, 738;
Tucker v. United
States, 196 F. 260, 262.
[
Footnote 27]
See Husty v. United States, 282 U.
S. 694,
282 U. S. 703;
Ashcraft v. Tennessee, 322 U. S. 143,
322 U. S. 155;
Reconstruction Finance Corp. v. Prudence Securities Advisory
Group, 311 U. S. 579,
311 U. S. 582;
Watts, Watts & Co. v. Unione Austriaca, 248 U. S.
9,
248 U. S. 21;
Montgomery Ward & Co. v. Duncan, 311 U.
S. 243,
311 U. S.
254.
MR. JUSTICE FRANKFURTER, with whom THE CHIEF JUSTICE and MR.
JUSTICE BURTON concur in result, dissenting.
The issue in this case is clear and simple. It is this. When
officers make an arrangement on behalf of their organization,
whether a corporation or a union, while acting in the regular
course of business and within their general authority as such
officers, is the organization liable for what these officers did if
the court should subsequently find that such an arrangement is
prohibited by the Sherman Law? The issue is clear, and it is
susceptible of a clear answer. Neither the issue nor the answer
should be obscured. Either the organization is subject to the
liability that the law in other respects imposes upon organizations
for the acts of their agents, or the Norris-LaGuardia Act freed
unions and corporations from such liability. The lower courts must
apply the law as laid down by this Court, and we owe them clarity
of pronouncement. They cannot very well guide juries, or even
themselves in equity suits, if told that the principles of the law
of agency do not apply to unions and corporations under the Sherman
Law, but that perhaps they "can" apply. What the Court means to
decide ought to be brought out of the twilight of ambiguity. It
does not advance the administration of justice to impart new doubts
to an old statute. And the Sherman Law is not merely old. It
embodies, as this Court has often indicated, a vital policy.
By explicit language, Congress forbade "corporations and
associations" no less than individuals to engage in combinations
and conspiracies in restraint of interstate trade. Section 8 of the
Sherman Law. And it has long been settled that trade unions are
"associations" under the Sherman Law.
United Mine Workers v.
Coronado Coal Co., 259 U. S. 344.
Before the
Coronado decision and since, repeated efforts
were made to have Congress take trade unions from under the Sherman
Law. Regardless
Page 330 U. S. 414
of the political complexion of Congress, these efforts have
consistently failed. Equally futile have been efforts to have this
Court read the liability of trade unions out of the Sherman Law by
judicial construction. This Court has undeviatingly held that trade
unions are within "the general interdict of the Sherman Law,"
although later enactments have withdrawn "specifically enumerated
practices of labor unions" from the scope of that law.
See
§ 20 of the Clayton Act, 38 Stat. 730, 738;
United States v.
Hutcheson, 312 U. S. 219,
312 U. S. 230,
and
Apex Hosiery Co. v. Leader, 310 U.
S. 469,
310 U. S. 487.
In the light of this history, it would be strange indeed to find
that Congress, by hitherto unsuspected indirection, had, from the
point of view of effectiveness, sterilized the Sherman Law as to
trade unions, and particularly as to those which alone could to any
serious extent unreasonably restrain commerce. It is a conclusion
which can be reached only by disregarding the circumstances to
which § 6 of the Norris-LaGuardia Act was addressed, and by
wrenching it from the context of history in which it must be read.
[
Footnote 2/1]
The construction given by the Court to § 6 is based on
considerations which move in a world of unreality. The argument is
quite unmindful of the way in which trade unions function -- their
organization, the authority of their international officers, the
inevitable influence of the international office upon the
affiliated locals. In short, such a construction is unmindful of
the anatomy and physiology of trade union life. It is especially
the powerful
Page 330 U. S. 415
international unions who are in strategic positions to impose
unreasonable restraints on commerce, and it is these that are
especially rendered immune by the construction the Court gives to §
6. It is such unions that can most readily be insulated from
responsibility for the acts of their leading officers, although
such action be taken in furtherance of the vital concerns of the
union and in every other aspect of legal responsibility be deemed
within the direct authority of these officers and binding on the
union.
It took some time for the law to catch up with reality and to
hold that, when men aggregated to form an entity, the entity, as
such, acquires power, and may therefore be held to responsibility
in exerting its power. But it can act only through individuals. Its
power is exerted, and its responsibility accrues, through the
conduct of individual men entrusted with the power of the entity to
achieve its purposes. This conclusion, supported alike by morality
and by reason, the early law escaped through empty subtleties that
seem fanciful to the modern reader. Arguments not unlike them
underlie a reading of § 6 whereby the Sherman Law will be
sterilized -- certainly so far as national labor unions are
concerned. The Court's opinion, to be sure, does not say in words
that a national union is not liable under the Sherman Law for acts
by its chief officers undertaken in the course of duty and for the
furtherance of the union's purposes. But the conditions formulated
by the Court, which must now be met before a union may be held to
liability, are practically unrealizable, whether in the case of a
big or a small union, a local or an international. Escape from
responsibility can be easily contrived. It will be difficult to
charge a union with culpability unless a convention of its
membership, held perhaps every two years or even four, should
knowingly authorize or approve a violation of the Sherman Law, or
give
carte blanche to the officers of the union by
approving
Page 330 U. S. 416
in advance whatever they may do, no matter what the legal
significance. For instance, if the president of an international
union should negotiate an agreement with employers regarding hours
and wages and working conditions, his union will not be responsible
for the agreement, under the rule now laid down by the Court, if it
should turn out to run counter to the Sherman Law, although making
agreements to promote the economic betterment of its membership is
the aim of the union and the job of its president.
The case before us illustrates how an association like the
Brotherhood pursues its objectives. The Locals took no action until
the General Office of the Brotherhood offered its approval; the
President of the Brotherhood himself took an active part in the
contract negotiations; a representative of the Brotherhood was
present at the time that the contracts were made; no union
agreement was forthcoming until the General Office approved the
contracts in the routine way for such approval -- collective
agreements are not ordinarily subject to approval at the
quadrennial convention of the Brotherhood; a circular issued by the
General Office requested adherence to the contracts by the members
of the local. Surely here was active "participation" by the
Brotherhood in what has been found to be an outlawed combination,
in the normal way in which such a union exerts its authority and
"participates" in agreements. On such evidence did the jury find
the Brotherhood guilty.
The Court finds that there was error in not giving a requested
charge which was in the language of the statute. A trial court does
not discharge its duty merely by quoting a statute relevant to the
conduct of the trial. The issue before an appellate court is not
whether the trial judge might have given a request of abstract
correctness, or even charged differently, but whether the judge's
instructions were accurate and ample. It might have been wise
Page 330 U. S. 417
for the judge to emphasize the counsel of care embodied in § 6.
But the failure to do so or to use the statutory formula is not the
Court's basis for upsetting the convictions. The Court upsets the
convictions because it deems erroneous the view which the trial
court took of § 6. The holding is that the view which the trial
court should have taken, which all trial courts will have to take
hereafter, and which, whatever the language used in the charge,
must control a jury's findings from the evidence, is the
elucidation which the Court now gives to § 6. For practical
purposes, this elucidation immunizes unions and corporate offenders
for acts which their agents perform because they are agents, and,
as such, endowed with authority. For practical purposes, a union or
a corporation could not be convicted on any evidence likely to
exist if the trial court has to charge what the Court now holds to
be required by § 6.
The trial court repeatedly warned the jury that, to find guilt,
they must be satisfied beyond a reasonable doubt. It instructed the
jury that the guilt or innocence of labor unions should be
determined in the same manner as that of corporations. On the
question of authorization, it charged that
"The act of an agent done for or on behalf of a corporation and
within the scope of his authority, or an act which an agent has
assumed to do for a corporation while performing duties actually
delegated to him, is deemed to be the act of the corporation."
That statement correctly expresses the standard of guilt of
corporations and unions under all other criminal statutes. If it is
not the standard for violations of the Sherman Law, it is only
because the Court now reads in § 6 an exception to the whole of the
criminal law. Presumably, trial courts will conscientiously apply
the intendment of the opinion of the Court. That means that they
will have to charge juries that the rules of agency do not apply in
Sherman Law cases -- there must be more to hold the union for the
acts of its officers. And "more" will not be found in view of
Page 330 U. S. 418
the practical workings of unions, reinforced by the safeguards
they will naturally take on the basis of this decision.
Aside from the actualities of trade union practice, the terms of
§ 6, read in the light of its legislative history and its purpose,
repel the result reached by the Court once "we free our minds from
the notion that criminal statutes must be construed by some
artificial . . . rule."
United States v. Union Supply Co.,
215 U. S. 50,
215 U. S. 55. To
assure immunity to powerful unions collaborating with employers'
associations in disregard of the Sherman Law was not the purpose of
§ 6, and the provision should not be so read. This minor provision
of the Norris-LaGuardia Act was directed against decisions by some
of the federal courts in litigation involving industrial
controversies. The abuse was misapplication of the law of agency so
that labor unions were held responsible for the conduct of
individuals in whom was lodged no authority to wield the power of
the union. By undue extension of the doctrine of conspiracy,
whereby the act of each conspirator is chargeable to all, unions
were on occasion held responsible for isolated acts of individuals,
believed in some instances to have been agents provocateurs who
held a spurious membership in the union during a strike. Congress
merely aimed to curb such an abusive misapplication of the
principle of agency. It did not mean to change the whole legal
basis of collective responsibility. By talking about "actual
authorization," Congress merely meant to emphasize that persons for
whose acts a corporation or a union is to be held responsible
should really be wielding authority for such corporation or
union.
The Congressional purpose behind § 6, then, is clear. [
Footnote 2/2] All that Congress sought to
do was to eliminate an extraneous
Page 330 U. S. 419
doctrine that had crept into some of the decisions whereby
organizations were held responsible not for acts of agents who had
authority to act, but for every act committed by any member of the
union merely because he was a member, or because he had some
relation to the union, although not authorized by virtue of his
position to act for the union in what he did. And so Congress
charged the federal courts with the duty to look sharply to the
relation of the individual to the affairs of the organization, and
not to confound individual with union unless the individual
Page 330 U. S. 420
is clothed with power by the union, in the ordinary way of union
operation, in doing what he does for the union. A basis for
liability which has entered into the warp and woof of our law, as
is true of the responsibility of collective bodies for the acts of
their agents, should not be deemed to have been uprooted by an
enactment which merely emphasizes that basis and rules out its
distortions. 1932 was too late in the day for Congress not to have
known that unions, like other organizations, act only through
officers, and that unions do not, any more than do other
organizations, explicitly instruct their officers to violate the
Sherman Law. Neither by inadvertence nor on purpose did Congress
remove the legal liability of organizations for the conduct of
officials who, within the limits of their authority, wield the
power of those organizations. It is not lightly to be assumed that
Congress would thus turn back the clock of legal history a hundred
years and disregard the practicalities of collective action by
powerful organizations.
Nor are the debilitating implications for Sherman Law
enforcement of the construction now placed on § 6 limited to their
bearing on union activities. Congress did not lay down one rule of
liability for corporations and another for unions. On the contrary,
it subjected both groups of organizations to the same basis and
measure of liability. Both can act only through responsible agents,
and both are responsible as organizations only through the acts of
such agents.
See § 13(b) of the Norris-LaGuardia Act.
[
Footnote 2/3] If the
Page 330 U. S. 421
liability of a union does not flow from the acts of responsible
officers acting in the due course of their authority in the pursuit
of union purposes, then a corporation "interested in a labor
dispute" cannot be held liable for the acts of its responsible
officers acting within their customary authority in pursuit of
corporate purposes. Violations of the Sherman Law by corporate
officers acting on behalf of the corporation and pursuing its
economic interest are not usually explicitly authorized by a formal
vote of the Board of Directors, or by the stockholders in annual
meeting assembled.
The teaching of the present case can hardly fail. To come under
the Court's indulgent rule of immunity from liability for the acts
of its officers, unions will not rest on a lack of affirmative
authorization. To make assurance doubly sure, they will, doubtless
in good conscience, have standing orders disavowing authority on
the part of their officers to make any agreements which may be
found to be in violation of the Sherman Law. So also, corporations
"interested in a labor dispute," as, for instance, by combining to
resist what they deem unreasonable labor demands, will, by the
formality of a resolution at a directors' meeting, disavow and
disapprove any arrangements made by their officers which run afoul
of the Sherman Law. This may achieve immunity even though the
officers are moving within the orbit of their normal authority, and
are acting solely in the interests of their corporation.
Words are symbols of meaning. In construing § 6, as in
construing other enactments of Congress, meaning must be extracted
from words as they are used in relation to their setting, with due
regard to the evil which the legislation was designed to cure, as
well as to the mischievous and startling consequences of one
construction as against another.
"Doubt, if there can be any, is not likely to survive a
consideration of the mischiefs certain to be engendered. . . . The
mind rebels against the notion
Page 330 U. S. 422
that Congress . . . was willing to foster an opportunity for
juggling so facile and so obvious."
Cardozo, J., in
Woolford Realty Co. v. Rose,
286 U. S. 319,
286 U. S.
329-330.
Practically speaking, the interpretation given by the Court to §
6 serves to immunize unions, especially the more alert and
powerful, as well as corporations involved in labor disputes, from
Sherman Law liability. To insist that such is not the result
intended by the Court is to deny the practical consequences of the
Court's ruling. For those entrusted with the enforcement of the
Sherman Law, there may be found in the opinion words of promise to
the ear, but the decision breaks the promise to the hope.
In our view, the judgments below should be affirmed.
[
Footnote 2/1]
"SEC. 6. No officer or member of any association or
organization, and no association or organization participating or
interested in a labor dispute, shall be held responsible or liable
in any court of the United States for the unlawful acts of
individual officers, members, or agents, except upon clear proof of
actual participation in, or actual authorization of, such acts, or
of ratification of such acts after actual knowledge thereof."
47 Stat. 70, 71, 29 U.S.C. § 106.
[
Footnote 2/2]
See the statement of Senator Blaine, a Committee
spokesman:
"I have this memorandum which I can refer to which gives the
purpose of this section 6. This is merely the application of the
sound principles of the law of agency to labor cases. It has become
necessary because the Federal courts in many cases have held the
union or members not connected with the unlawful acts responsible
for those acts, although proof of actual authorization or
ratification is wholly lacking."
"Now, that is the law of agency, and we want to apply that. We
want to apply that for this reason -- that, if it is unjust to hold
all members of the union responsible for the acts of its officers
and their members merely because of such membership, similarly it
is unjust to hold the officers responsible during the strike merely
because they pass on questions of this kind, that an attempt is
here made to recognize the rules of law of agency in labor
cases."
See Hearings before Subcommittee of Senate Committee on
Judiciary, S.1482, 70th Cong., 2d Sess., p. 763.
The Senate Committee reported this:
"There has been a distinct conflict of opinion in the courts as
to the degree of proof required. Mere
ex parte affidavits
establishing a certain amount of lawless conduct in the prosecution
of a strike have been held in some instances to establish a
'presumption' that the entire union and its officers were engaged
in an unlawful conspiracy, and, on the other hand, other courts
have declined thus to substitute inference for proof, rejecting
such a doctrine in language such as the following used in a New
York case: 'Is it the law that a presumption of guilt attaches to a
labor union association?' Various examples of these different
rulings are quoted in The Labor Injunction, by Frankfurter and
Greene, pp. 74-75."
"It is appropriate and necessary to define by legislation the
proper rule of evidence to be followed in this matter in federal
courts. That is the only object of section 6."
S.Rep. No.163, 72d Cong., 1st Sess. (1932) pp. 20-21.
[
Footnote 2/3]
"SEC. 13. When used in . . . this act, and for the purposes of
this act -- . . . (b) A person or association shall be held to be a
person participating or interested in a labor dispute if relief is
sought against him or it, and if he or it is engaged in the same
industry, trade, craft, or occupation in which such dispute occurs,
or has a direct or indirect interest therein, or is a member,
officer, or agent of any association composed in whole or in part
of employers or employees engaged in such industry, trade, craft,
or occupation."
47 Stat. 70, 73, 29 U.S.C. § 113(b).