In 1942, the National Labor Relations Board certified a union as
bargaining representative for employees of a manufacturer producing
goods for interstate commerce. In 1943, under pressure from the
Department of Labor and the War Labor Board, the employer agreed to
a "maintenance of membership" clause in its contract with the
union, which was extended from year to year to April, 1947. In
January, 1947, an employee was discharged for refusal to pay union
dues, and filed a complaint with the Wisconsin Employment Relations
Board charging violation of Wis.Stat. § 111.06(1)(c)1, which, in
effect, forbids enforcement of a "maintenance of membership" clause
unless the contract containing it is approved by two-thirds of the
employees in a referendum conducted by the State Board. No such
referendum had been conducted for these employees. The State Board
ordered the manufacturer to cease and desist from giving effect to
the maintenance of membership clause, to offer the employee
reinstatement, and to reimburse him for loss of pay.
Held: the order is not in conflict with the National
Labor Relations Act or the Labor Management Relations Act. Pp.
336 U. S.
303-315.
1. The State Board was not deprived of power to issue its order
by § 10(a) of the National Labor Relations Act, which grants the
National Board exclusive power to prevent any person from engaging
in any unfair labor practice listed in § 8. Pp.
336 U. S.
305-307.
2. Nor was it deprived of power to issue its order by § 8(3),
which forbids employers to encourage or discourage membership in a
union, but provides that nothing in the Act or any other federal
statute shall preclude an employer from making an agreement with a
union to require membership therein as a condition of employment if
the union is the bargaining representative of the employees. Pp.
336 U. S.
307-312.
(a) This conclusion is supported by the language and legislative
history of § 8(3). Pp.
336 U. S.
307-310.
(b) It is not in conflict with any ruling by the courts or the
National Labor Relations Board. P.
336 U. S.
310.
Page 336 U. S. 302
(c) Nor is it in conflict with the administrative practice of
the War Labor Board in prescribing "maintenance of membership"
clauses to settle wartime disputes, since that practice was based
upon the war powers, rather than upon § 8(3) of the National Labor
Relations Act, and the War Labor Board had ceased to exist when the
State Board issued it order. Pp.
336 U. S.
310-312.
3. Nor does the state statute or the State Board's action
thereunder conflict with § 10(a) of the Labor Management Relations
Act. Pp.
336 U. S.
313-314.
4. The certification of the union by the National Board did not
oust the State Board from jurisdiction to enjoin practices
forbidden by state law and not governed by federal law. Pp.
336 U. S.
314-315.
252 Wis. 549, 32 N.W.2d 417, affirmed.
The Wisconsin Employment Relations Board ordered an employer to
cease and desist from giving effect to a "maintenance of
membership" clause in a contract with a union certified by the
National Labor Relations Board as the collective bargaining
representative of its employees and to reimburse for loss of pay an
employee who had been discharged for refusal to pay union dues. A
state circuit court modified the order by striking the award of
back pay, but otherwise affirmed it. 14 Labor Cases (C.C.H.) No.
64,253. The State Supreme Court sustained the order as originally
issued. 252 Wis. 549, 32 N.W.2d 417. This Court granted certiorari.
335 U.S. 812.
Affirmed., p.
336 U. S.
315.
Page 336 U. S. 303
MR. JUSTICE FRANKFURTER delivered the opinion of the Court.
The Algoma Plywood & Veneer Co. manufactures in Kewaunee
County, Wisconsin, the products for which it is named. Ninety-five
percent of its output is sold in interstate commerce. In 1942, the
National Labor Relations Board held an election at the plant, the
outcome of which was the certification of Local 1521 of the
Carpenters and Joiners Union as bargaining representative for all
production employees, about 650 in number. In 1943, under pressure
from the Department of Labor and the War Labor Board, Algoma agreed
to a "maintenance of membership" clause in its contract with Local
1521. That clause was carried over from year to year, and was part
of the contract effective for the year following April 29, 1946.
One Victor Moreau refused to pay dues, and on Jan. 7, 1947, the
Union notified him that, unless he paid up by Jan. 13, he would be
discharged. On Jan. 14, 1947, in the presence of representatives of
the Company and the Union, he said that he would rather quit than
pay dues to the Union. And so the Vice-President of the Company
told him to collect his pay and go home.
On Jan. 27, 1947, Moreau filed with the Wisconsin Employment
Relations Board a complaint charging the Company with an unfair
labor practice under Wis.Stat. § 111.06(1)(c)1, which provides:
"It shall be an unfair labor practice for an employer . . . to
encourage . . . membership in any labor organization . . . by
discrimination in regard to hiring, tenure, or other terms or
conditions of employment; provided, that an employer shall not be
prohibited from entering into an all-union agreement with the
representatives of his employees in a collective bargaining unit
where at least two thirds of such employees voting . . . shall have
voted
Page 336 U. S. 304
affirmatively by secret ballot in favor of such all-union
agreement in a referendum conducted by the board. . . ."
No referendum had been conducted at the Algoma plant. The Board
accordingly, on April 30, 1947, ordered the Company to cease and
desist from giving effect to the "maintenance of membership"
clause, to offer Moreau reinstatement, and to make him whole for
any loss of pay. The Company and the Union petitioned the Wisconsin
Circuit Court of Kewaunee County for review of the order, and the
Board petitioned for its enforcement. In its judgment of Nov. 21,
1947, the Circuit Court modified the order by striking the award of
back pay, but otherwise affirmed it. On May 11, 1948, the Wisconsin
Supreme Court affirmed the judgment of the Circuit Court insofar as
it sustained the jurisdiction of the Board to issue its cease and
desist order and to require an offer of reinstatement but directed
enforcement of the backpay award. 252 Wis. 549, 32 N.W.2d 417.
At every stage of the proceedings, the Company and the Union
contested the jurisdiction of the Employment Relations Board on the
ground of the exclusive authority of the National Labor Relations
Board under § 10(a) of the National Labor Relations Act, 49 Stat.
453, 29 U.S.C. § 160(a), and asserted the repugnancy of Wis.Stat. §
111.06(1)(c)1 to § 8(3) of the National Labor Relations Act, 49
Stat. 452, 29 U.S.C. § 158(3). We granted certiorari under 28
U.S.C. § 1257(3), because of the important bearing of these issues
upon the distribution of power in our federal system. 335 U.S.
812.
The discharge of Moreau and the orders of the Wisconsin Board
preceded the Labor Management Relations Act, 1947, colloquially
known as the Taft-Hartley Act, 61 Stat. 136, 29 U.S.C. § 141
et
seq. The judgments of the Circuit Court for Kewaunee County
and the Supreme Court of Wisconsin were rendered after it came
into
Page 336 U. S. 305
force. If the National Labor Relations Act gave affirmative
protection to the employer in discharging an employee under a union
security agreement for failure to maintain union membership, it
would be necessary to decide whether adoption of the Taft-Hartley
Act retroactively removed that protection and whether it equally
gave effect to a reinstatement order, an award of back pay, and a
cease and desist order which would previously have been invalid.
Since, however, we do not find conflict between the Wisconsin law
under which the orders were issued and either the National Labor
Relations Act or the Taft-Hartley Act, we are relieved from
defining the respective applicability of the federal Acts.
In seeking to show that the Wisconsin Board had no power to make
the contested orders, petitioner points first to § 10(a) of the
National Labor Relations Act, which is set forth in the margin.
[
Footnote 1] It argues that the
grant to the National Labor Relations Board of "exclusive" power to
prevent "any unfair labor practice" thereby displaced State power
to deal with such practices, provided, of course, that the practice
was one affecting commerce. But this argument implies two equally
untenable assumptions. One requires disregard of the parenthetical
phrase "(listed in section 8);" the other depends upon attaching to
the section as it stands, the clause "and no other agency shall
have power to prevent unfair labor practices not listed in section
8."
The term "unfair labor practice" is not a term of art having an
independent significance which transcends its statutory definition.
The State are free
Page 336 U. S. 306
(apart from preemption by Congress) to characterize any wrong of
any kind by an employer to an employee, whether statutorily created
or known to the common law, as an "unfair labor practice." At the
time when the National Labor Relations Act was adopted, the courts
of many States, at least under some circumstances, denied validity
to union security agreements.
See 1 Teller, Labor Disputes
and Collective Bargaining § 170 (1940). Here, Wisconsin has
attached conditions to their enforcement, and has called the
voluntary observance of such a contract when those conditions have
not been met an "unfair labor practice." Had the sponsors of the
National Labor Relations Act meant to deny effect to State policies
inconsistent with the unrestricted enforcement of union shop
contracts, surely they would have made their purpose manifest. So
far as appears from the Committee Reports, however, § 10(a) was
designed, as its language declares, merely to preclude conflict in
the administration of remedies for the practices proscribed by § 8.
The House Report, after summarizing the provisions of the section,
adds, "The Board is thus made the paramount agency for dealing with
the unfair labor practices described in the bill." H.R. Rep. No.
969, 74th Cong., 1st Sess. 21.
See also the identical
language of H.R. Rep. No. 972, 74th Cong., 1st Sess. 21 and H.R.
Rep. No. 1147, 74th Cong. 1st Sess. 23. And the Senate Report
describes the purpose of the section as
"intended to dispel the confusion resulting from dispersion of
authority and to establish a single paramount administrative or
quasi-judicial authority in connection with the
development of the Federal American law regarding collective
bargaining."
S.Rep. No. 573, 74th Cong., 1st Sess. 15.
The contention that § 10(a) of the Wagner Act swept aside State
law respecting the union shop must therefore
Page 336 U. S. 307
be rejected. If any provision of the Act had that effect, it
could only have been § 8(3), which explicitly deals with membership
in a union as a condition of employment. We now turn to
consideration of that section.
Section 8(3) provides that it shall be an unfair labor practice
for an employer,
"By discrimination in regard to hire or tenure of employment or
any term or condition of employment to encourage or discourage
membership in any labor organization:
Provided, That
nothing in this Act . . . or in any other statute of the United
States, shall preclude an employer from making an agreement with a
labor organization . . . to require as a condition of employment
membership therein, if such labor organization is the
representative of the employees as provided in section 9(a), in the
appropriate collective bargaining unit covered by such agreement
when made."
It is argued, therefore, that a State cannot forbid what § 8(3)
affirmatively permits. The short answer is that § 8(3) merely
disclaims a national policy hostile to the closed shop or other
forms of union security agreement. This is the obvious inference to
be drawn from the choice of the words "nothing in this Act . . . or
in any other statute of the United States," and it is confirmed by
the legislative history.
The Senate Report on the bill which was to become the National
Labor Relations Act has this to say about § 8(3):
"The proviso attached to the third unfair labor practice deals
with the question of the closed shop. Propaganda has been
widespread that this proviso attaches special legal sanctions to
the closed shop or seeks to impose it upon all industry. This
propaganda
Page 336 U. S. 308
is absolutely false. The reason for the insertion of the proviso
is as follows: according to some interpretations, the provision of
section 7(a) of the National Industrial Recovery Act, 48 Stat. 198,
assuring the freedom of employees 'to organize and bargain
collectively through representatives of their own choosing,' was
deemed to illegalize the closed shop. The Committee feels that this
was not the intent of Congress when it wrote section 7(a), that it
is not the intent of Congress today, and that it is not desirable
to interfere in this drastic way with the laws of the several
States on this subject."
"But, to prevent similar misconceptions of this bill, the
proviso in question states that nothing in this bill, or in any
other law of the United States, or in any code or agreement
approved or prescribed thereunder, shall be held to prevent the
making of closed shop agreements between employers and employees.
In other words, the bill does nothing to facilitate closed shop
agreements or to make them legal in any State where they may be
illegal; it does not interfere with the
status quo on this
debatable subject, but leaves the way open to such agreements as
might now be legally consummated. . . ."
S.Rep. No. 573, 74th Cong., 1st Sess. 11-12.
The House Report contains similar language:
"The proviso to the third unfair labor practice, dealing with
the making of closed shop agreements, has been widely
misrepresented. The proviso does not impose a closed shop on all
industry; it does not give new legal sanctions to the closed shop.
All that it does is to eliminate the doubts and misconstructions in
regard to the effect of section 7(a) upon closed shop agreements,
and the possible repetition of such doubts and misconstructions
under this bill,
Page 336 U. S. 309
by providing that nothing in the bill or in section 7(a) or in
any other statute of the United States shall illegalize a closed
shop agreement between an employer and a labor organization,
provided such organization has not been established, maintained, or
assisted by any action defined in the bill as an unfair labor
practice and is the choice of a majority of the employees, as
provided in section 9(a), in the appropriate collective bargaining
unit covered by the agreement when made. The bill does nothing to
legalize the closed shop agreement in the States where it may be
illegal; but the committee is confident that it would not be the
desire of Congress to enact a general ban upon closed shop
agreements in the States where they are legal. And it should be
emphasized the no closed shop may be effected unless it is assented
to by the employer."
H.R.Rep. No. 969, 74th Cong., 1st Sess. 17.
See also
the identical language in H.R.Rep. No. 972, 74th Cong., 1st Sess.
17, and H.R.Rep. No. 1147, 74th Cong., 1st Sess.19, 20.
In his major speech to the Senate in support of the bill,
Senator Wagner said:
"While outlawing the organization that is interfered with by the
employer, this bill does not establish the closed shop, or even
encourage it. The much discussed closed shop proviso merely states
that nothing in any Federal law shall be held to illegalize the
confirmation of voluntary closed shop agreements between employers
and workers."
79 Cong.Rec. 7570.
The Senator went on to explain the purpose of the section as
dispelling misunderstanding of § 7(a) of the National Industrial
Recovery Act, 48 Stat. 198, denied
Page 336 U. S. 310
either advocacy or disapproval of the closed shop, then
added:
"The virulent propaganda to the effect that this bill encourages
the closed shop is outrageous in view of the fact that, in two
respects, it actually narrows the now existing law in regard to the
closed shop agreement."
Ibid. Later, during discussion of proposed amendments,
Senator Wagner answered a question from the floor about the effect
of the proviso in the following words:
"The provision will not change the
status quo. That is
the law today, and wherever it is the law today that a closed shop
agreement can be made, it will continue to be the law. By this
bill, we do not change that situation."
Id. at 7673.
Equally conclusive is the answer by Representative Connery,
manager of the bill in the House, to a statement by Representative
Taber in support of an amendment which would have entirely stricken
the proviso. Representative Taber charged that the proviso would
make it possible for 51% of the employees of any organization to
bring about the discharge of the other 49%. Representative Connery
said:
"Mr. Chairman, I merely rise to say this in opposition: the
closed shop proposition in this bill does not refer to any State
which has any law forbidding the closed shop. It does not interfere
with that in any way."
Id. at 9726.
No ruling by the courts or the National Labor Relations Board,
the agency entrusted with administration of the Wagner Act, has
adopted a construction of § 8(3) in disregard of this legislative
history. It is suggested, however, that the interpretation given
the section of the War Labor Board supports petitioner's position.
The
Page 336 U. S. 311
Board, it is true, in view of the practical desirability of the
"maintenance of membership" clause in settling wartime disputes
over union security, found authority to order contracts containing
such clauses despite inconsistent State law. It found such
authority, however, not in § 8(3), but in the conclusion that
"its power to direct the parties to abide by the 'maintenance of
membership' provision in such a case as this one stems directly
from the war powers of the United States Government."
Greenebaum Tanning Co., 10 War Lab. Rep. 527, 534.
[
Footnote 2] The Supreme Court
of Wisconsin itself acknowledged the supremacy of the war power in
a decision suspending an order directing the reinstatement of an
employee discharged under a "maintenance of membership" clause
ordered by the War Labor Board.
International Brotherhood of
Papermakers v. Wisconsin Employment Relations Board, 245 Wis.
541, 15 N.W.2d 806. When the orders of the Wisconsin Board in the
present case were entered, the War Labor Board had ceased to exist,
Exec.Order No. 9672, 11 Fed.Reg. 221, and, with the occasion that
had called it into
Page 336 U. S. 312
being, the necessity for suppression of State law had also come
to an end. [
Footnote 3]
Since we would be wholly unjustified, therefore, in rejecting
the legislative interpretation of § 8(3) placed upon it at the time
of its enactment, it is not even necessary to invoke the principle
that, in cases of concurrent power over commerce, State law remains
effective so long as Congress has not manifested an unambiguous
purpose that it should be supplanted.
See, e.g., 63 U.
S. Davenport, 22 How. 227;
Missouri, K. &
T. R. Co. v. Haber, 169 U. S. 613. Nor
need we, if Congress, in enacting § 8(3), did not mean to enlarge
the right to bargain for union security, consider contentions based
on
Hill v. Florida, 325 U. S. 538, to
the effect that, in guaranteeing the right to collective
bargaining, the National Labor Relations Act also guaranteed the
right to contract upon any terms which are commonly the subject of
collective bargaining.
Page 336 U. S. 313
We come now to the question whether the Taft-Hartley Act
expresses a policy inconsistent with § 111.06(1)(c)1 of the
Wisconsin Employment Peace Act.
Section 10(a) of the Taft-Hartley Act, which is set forth in the
margin, [
Footnote 4] contains
important changes, but none requiring modification of the
conclusions we have reached as to the corresponding section of the
National Labor Relations Act. One phrase, however, reinforces those
conclusions -- that is the phrase "inconsistent with the
corresponding provision of this Act." These words must mean that
cession of jurisdiction is to take place only where State and
federal laws have parallel provisions. Where the State and federal
laws do not overlap, no cession is necessary, because the State's
jurisdiction is unimpaired. This reading is confirmed by the
purpose of the proviso in which the phrase is contained: to meet
situations made possible by
Bethlehem Steel Co. v. New York
State Labor Relations Board, 330 U. S. 767,
where no State agency would be free to take jurisdiction of cases
over which the National Board had declined jurisdiction.
See H.R.Rep. No. 245, 80th Cong., 1st Sess. 40; S.Minority
Rep. No. 105, p. 2, 80th Cong., 1st Sess. 38.
Other provisions of the Taft-Hartley Act make it even clearer
than the National Labor Relations Act that the
Page 336 U. S. 314
States are left free to pursue their own more restrictive
policies in the matter of union security agreements. Because § 8(3)
of the new Act forbids the closed shop and strictly regulates the
conditions under which a union shop agreement may be entered, §
14(b) was included to forestall the inference that federal policy
was to be exclusive. It reads:
"Nothing in this Act shall be construed as authorizing the
execution or application of agreements requiring membership in a
labor organization as a condition of employment in any State or
Territory in which such execution or application is prohibited by
State or Territorial law."
It is argued, however, that the effect of this section is to
displace State law which "regulates," but does not wholly
"prohibit," agreements requiring membership in a labor organization
as a condition of employment. But if there could be any doubt that
the language of the section means that the Act shall not be
construed to authorize any "application" of a union security
contract, such as discharging an employee, which under the
circumstances "is prohibited" by the State, the legislative history
of the section would dispel it.
See S.Rep. No. 105, 80th
Cong., 1st Sess. 5-7; H.R.Rep. No. 245, 80th Cong., 1st Sess. 9,
34, 40, 44; H.R.Conf.Rep. No. 510, 80th Cong., 1st Sess. 60; 93
Cong.Rec. 3554, 3559, 4904, 6383-84, 6446; H.R. 3020, as reported,
§ 13.
It remains to consider whether certification of the Union by the
National Labor Relations Board in 1942 thereby forever ousted
jurisdiction of the Wisconsin Board to enjoin practices forbidden
by Wisconsin law. Since the enumeration by the Wagner Act and the
Taft-Hartley Act of unfair labor practices over which the National
Board has exclusive jurisdiction does not prevent the States from
enforcing their own policies in matters not governed by the federal
law, such freedom of action
Page 336 U. S. 315
by a State cannot be lost because the National Board has once
held an election under the Wagner Act. The character of activities
left to State regulation is not changed by the fact of
certification. Certification, it is true, makes clear that the
employer and the union are subject to federal law, but that is not
disputed. So far as the relationship of State and national power is
concerned, certification amounts to no more than an assertion that,
as to this employer, the State shall not impose a policy
inconsistent with national policy,
Hill v. Florida,
325 U. S. 538, or
the National Board's interpretation of that policy,
Bethlehem
Steel Co. v. New York State Labor Relations Board,
330 U. S. 767;
La Crosse Telephone Corporation v. Wisconsin Employment
Relations Board, 336 U. S. 18.
Indeed, the express disclaimer in § 8(3) of the National Labor
Relations Act of intention to interfere with State law, and the
permission granted the States by § 14(b) of the Taft-Hartley Act to
carry out policies inconsistent with the Taft-Hartley Act itself,
would be practically meaningless if so easily avoided. For these
provisions can have application, obviously, only where State and
federal power are concurrent; it would have been futile to disclaim
the assertion of federal policy over areas which the commerce power
does not reach.
Since, therefore, the effect given the Wisconsin Employment
Peace Act by the judgment below does not conflict with the enacted
policies of Congress, that judgment is
Affirmed.
MR. JUSTICE RUTLEDGE and MR. JUSTICE MURPHY, concur in the
result.
[
Footnote 1]
"SEC. 10.(a) The Board is empowered, as hereinafter provided, to
prevent any person from engaging in any unfair labor practice
(listed in section 8) affecting commerce. This power shall be
exclusive, and shall not be affected by any other means of
adjustment or prevention that has been or may be established by
agreement, code law, or otherwise."
[
Footnote 2]
Although some language in the
Greenebaum opinion seems
to point to an interpretation of § 8(3) inconsistent with its
legislative history,
see 10 War Lab.Rep. at 542-43, the
Board adopted as its own the conclusion of its General Counsel, Mr.
Lloyd K. Garrison, reached in a full-dress opinion which reviewed
that history. 10 War Lab.Rep. at 541. The General Counsel had
said:
"The National Labor Relations Act does not preclude a government
agency from ordering maintenance of membership in suitable cases
for the purpose of settling disputes and stabilizing industrial
relations in time of war."
12 War Lab.Rep. ix, xxii. The next two cases ordering a
"maintenance of membership" contract which would not have been
permitted by State law did not mention the National Labor Relations
Act.
Fairbanks, Morse & Co., 11 War Lab.Rep. 217;
Vilter Mfg. Co., 11 War Lab.Rep. 332. In later cases, the
Board adhered to its reliance upon the war power.
U.S. Vanadium
Corp., 13 War Lab.Rep. 527;
Ingalls Iron Works Co.,
17 War Lab.Rep. 190;
Cudahy Bros. Co., 19 War Lab.Rep.
124.
[
Footnote 3]
The significance of the War Labor Board's determination of the
impact of federal power on State law must be viewed in the light of
the fact that it was an agency of the War Administration organized
not to interpret the Constitution, but to prevent interruption of
production.
See Exec.Order No. 9017, 7 Fed.Reg. 237. That
the two roles are quite distinct is illustrated by the policy of
the War Labor Board of the First World War which outlawed "yellow
dog" contracts for the duration of that war, thereby in effect
nullifying this Court's then recent decision in
Hitchman Coal
& Coke Co. v. Mitchell, 245 U. S. 229.
See Smith & Wesson Co., War Lab.Bd. Docket No. 273;
Gregg, The National War Labor Board, 33 Harv.L.Rev. 39, 54. The
difference in roles is again emphasized by the ruling of the War
Labor Policies Board of 1918 that all Government contracts should
contain a clause prohibiting the use of child labor, although
Hammer v. Dagenhart, 247 U. S. 251,
invalidating such a child labor provision, was decided within a few
weeks after that Board was established.
See 6th Ann.Rep.
of the Secretary of Labor 114 (1918); 7th Ann.Rep. of the Secretary
of Labor 126 (1919); Report on International Labor Standards 43
(prepared in 1918 by the War Labor Policies Board, undated).
[
Footnote 4]
"SEC. 10.(a) The Board is empowered, as hereinafter provided, to
prevent any person from engaging in any unfair labor practice
(listed in section 8) affecting commerce. This power shall not be
affected by any other means of adjustment or prevention that has
been or may be established by agreement, law, or otherwise:
Provided, That the Board is empowered by agreement with
any agency of any State or Territory to cede to such agency
jurisdiction over any cases in any industry (other than mining,
manufacturing, communications, and transportation except where
predominantly local in character) even though such cases may
involve labor disputes affecting commerce, unless the provision of
the State or Territorial statute applicable to the determination of
such cases by such agency is inconsistent with the corresponding
provision of this Act or has received a construction inconsistent
therewith."
MR. JUSTICE BLACK, with whom MR. JUSTICE DOUGLAS joins,
dissenting.
The decision just rendered holds that the Wisconsin can compel
the petitioner to pay unearned back wages to an employee found to
have been discharged
Page 336 U. S. 316
by petitioner under the terms of a collective bargaining
agreement which required such discharge. The petitioner had
originally entered into the agreement in response to irresistible
pressure by the United States Government. 252 Wis. 549, 559, 32
N.W.2d 417. The circumstances under which the contract was made
were these:
From 1938 to 1943, the company and the union were in an almost
constant wrangle. The chief bone of controversy throughout this
five-year period was the union's demand for a "closed shop."
Petitioner resolutely fought for an "open shop." In 1938, the union
took its cause to the National Labor Relations Board. After a long
hearing of which the closed shop issue was a prominent phase, that
Board, in 1940, ordered petitioner to bargain with the union on the
pending issues.
Algoma Plywood Co., 26 N.L.R.B. 975, 980,
1002 (1940). The Court of Appeals, referring to the closed shop
question as the "main stumbling block" between petitioner and the
union, refused to enforce the order on the ground that it was not
clear that the union represented a majority of petitioner's
employees.
Labor Board v. Algoma Plywood & Veneer Co.,
121 F.2d 602, 606, 611. Thereafter, early in 1942, petitioner
appealed to the Wisconsin Employment Relations Board to conduct an
election. The union went to the National Board; petitioner withdrew
its state board application; the National Board conducted an
election; the union won, and the old closed shop controversy was
renewed with increased intensity.
The union appealed to the National War Labor Board to settle the
closed shop dispute. That Board, in collaboration with the United
States Department of Labor, put pressure on petitioner to yield to
the union's demands. Petitioner was informed that, unless it agreed
to a maintenance of membership clause, which was at the time
forbidden by Wisconsin law, the clause "would be put in by the War
Labor Board anyhow," since inclusion of
Page 336 U. S. 317
such provisions was a part of that Board's national policy.
Thus, fired at from one side by the state and from the other side
by powerful federal agencies, petitioner had to flee to one side or
the other. Neither side offered a safe sanctuary. In weighing the
conflicting considerations, petitioner, not unreasonably, found the
scales tipped on the United States' side. Had petitioner refused
the demands of the federal agency, the Government could and might
have seized and operated its plants. [
Footnote 2/1] Furthermore, petitioner's employees might
have stopped work. In response to its best judgment, though
contrary to its own strong desires, petitioner finally yielded to
the Federal Government's demands and agreed to the union's terms.
January 23, 1943, a collective bargaining agreement was executed
which contained the controversial maintenance of union membership
clause and an automatic extension clause. This contract was
approved by the War Labor Board. The controversial clause was
extended automatically from year to year, and was in effect when
the alleged discharge took place. The Court apparently concedes
that this clause of the collective bargaining contract was valid
when petitioner entered into it under federal compulsion. In my
judgment, it was equally valid when
Page 336 U. S. 318
the employee was discharged under it. It seems at least a
questionable interpretation of federal statutory policy for this
Court -- a federal tribunal -- to hold that a state is free to
impose a money penalty on this company for acting in obedience to a
contract which a federal agency validly compelled it to make.
[
Footnote 2/2]
I
The Court's concession that the contract was valid when made
rests on the premise that the statute creating the War Labor Board
stemmed from the war power of Congress, and that, under this power,
the War Labor Board could, as it did, force petitioner to make the
contract.
Greenebaum Tanning Co., 10 War Lab.Rep. 527.
But, says the Court, when Wisconsin entered the backpay order, the
War Labor Board had ceased to exist, and, on its dissolution on
January 4, 1946, Wisconsin became possessed of the power to order
petitioner to break his contract. In other words, the holding seems
to be that the discontinuance of the War Labor Board automatically
and instantly empowered the states to impair and nullify all
collective bargaining contracts entered into under authority of the
supreme federal policy embodied in the National War Labor Board
Act. For several reasons, I cannot agree.
1. The termination of the War Labor Board was accomplished by
Executive Order of the President, No. 9672. 11 Fed.Reg. 221. But
there is nothing in that Executive
Page 336 U. S. 319
Order that indicates a purpose to authorize invalidation of
contracts made under the Board's directions. A contrary purpose is
indicated. The Executive Order established the National Wage
Stabilization Board. As the name of that Board indicates, it was
established to exercise functions in connection with wage disputes
which might adversely affect the national economy. For the limited
purposes enumerated in the Order, the new Board was vested with all
the "powers, functions and responsibilities of the National War
Labor Board. . . ." While scope for operation of these powers was
within more narrow limits than had been the scope of the War Labor
Board's powers, the creation of this new Board negatives any
possible contention that dissolution of the War Labor Board showed
an intention to permit states to invalidate previously executed
legal contracts approved by the War Labor Board in the interests of
industrial peace. And far from indicating a presidential belief
that wage stabilization and industrial peace were no longer
essential in the war emergency period, the new Executive Order, as
had the old, rested on the war power and the statutes that had
stemmed from it. The War Labor Board was created to implement a
congressional war policy expressed in part in the War Labor
Disputes Act. 57 Stat. 163. The Board's dissolution could not
detract from the force of the statute or from the congressional war
power.
See Kelly v. Washington, 302 U. S.
1,
302 U. S. 14.
This Executive Order recognized the continued existence of
conditions that called for the further exercise of war powers. It
was promulgated January 4, 1946. The last automatic extension of
the compelled contract was April 4, 1946. This automatically
extended contract was the basis for the discharge. Under the
foregoing circumstances, I cannot agree that dissolution of the War
Labor Board authorized Wisconsin to punish petitioner for its
continued observance of the contract.
Page 336 U. S. 320
2. That the President correctly assumed the continued existence
of war powers after the cessation of hostilities seems beyond
question in the light of this Court's holding in
Ludecke v.
Watkins, 335 U. S. 160,
335 U. S.
166-170. The holding in the
Ludecke case was
that the war had not, at that time, officially ended, and that the
congressional war power still existed in May, 1947. This was long
after the dissolution of the War Labor Board and the employee's
discharge. In light of the 1947
Ludecke holding, it seems
odd that dissolution of the War Labor Board should now be held an
adequate reason for permitting a state, in 1946, to invalidate
contracts previously entered into in obedience to federal commands
made under a valid federal law rooted in the war power. It seems to
me that the Court's holding today can be justified, if at all, only
by adopting the holding of the Wisconsin Supreme Court in this
case. That court supported the state penalty imposed on petitioner
by concluding that the National War Labor Board's action was
ultra vires. Its reasoning was that national war powers
had "ended" in 1946. 252 Wis. 549 at 560, 32 N.W.2d 417. But, in
the
Ludecke case, this Court held those powers still
existed in 1947. The result here is all the more inexplicable when
it is considered that wholesale invalidation of those federally
authorized contracts could result in serious industrial conflicts
at a time when industrial relationships were extremely strained due
to the transition from a war to a peace economy.
Woods v. Cloyd
W. Miller Co., 333 U. S. 138,
333 U. S.
144.
3. I suppose it cannot be denied that congressional authority to
force contracts under the war power carries with it authority to
provide that (at least during the existence of the war power) the
obligations assumed under those contracts should be faithfully
observed, and that the contracts should be invulnerable to state
attack. In this view, after the War Labor Board ceased to exist and
before
Page 336 U. S. 321
peace had been officially declared, Congress, under the war
power, doubtless could have made it possible under enumerated
contingencies for states to invalidate contracts such as this one.
But no suggestion has been made that any statutory language of
Congress can be stretched far enough to find such congressional
intent. Since no such intent has been manifested, it seems fair to
assume that Congress intended that such contracts should remain
immune from state attack and continue in force unless terminated
under their valid provisions. I would therefore hold that
petitioner was obligated to continue to observe the terms of the
contract until terminated according to its provisions.
The contract had not terminated when the War Labor Board ceased
to exist. It had been given continued vitality under its own
original terms -- terms which must be interpreted under controlling
federal law authorizing the contract's creation. I may assume at
this point that the contract was invulnerable to state impairment
or nullification only because of congressional authority stemming
from the war power. Even so, and despite the dissolution of the War
Labor Board, I think the state was without power to penalize
petitioner for observance of the contract -- at least during the
period in which the war had not officially ended.
II
It is apparent that the Wisconsin statute as here applied
deprives petitioner and his employees of a substantial federal
right if § 8(3) of the National Labor Relations Act [
Footnote 2/3] authorized union membership
maintenance agreements without regard to contrary state policies.
For, given that interpretation of § 8(3), the Wisconsin Act would
not only impair collective bargaining rights
Page 336 U. S. 322
protected by § 8(3); [
Footnote
2/4] it would also stand "as an obstacle to the accomplishment
and execution of the full purposes and objectives of Congress."
Hill v. Florida, 325 U. S. 538,
325 U. S. 542;
Bethlehem Steel Co. v. New York Labor Board, 330 U.
S. 767,
330 U. S.
775-776.
The Wisconsin Employment Relations Board began proceedings
against the petitioner eleven years after passage of the National
Labor Relations Act. During that entire eleven-year period, it
seems to have been generally assumed that § 8(3) was an unequivocal
federal authorization for collective bargaining provisions of the
type here made. This Court had noticed that such provisions were
"frequent subjects of negotiation between employers and employees,"
and had strongly indicated that it was an unfair labor practice for
an employer to refuse to bargain concerning them.
National
Licorice Co. v. Labor Board, 309 U. S. 350,
309 U. S. 360.
Both the courts and the National Labor Relations Board have held
that efforts of employers to frustrate the right of unions to
bargain for exclusive union employment constituted a violation of
the federal Act for which employers could be held accountable.
[
Footnote 2/5]
The action of the United States Department of Labor and the
National War Labor Board in forcing this petitioner to accept a
maintenance of membership provision in its collective bargaining
agreement was not the result of an isolated or haphazard
interpretation of § 8(3) of the
Page 336 U. S. 323
National Labor Relations Act. The action forced upon petitioner
was pursuant to a thoroughly considered and well established policy
of the National War Labor Board. [
Footnote 2/6] Both the National War Labor Board and the
conciliation division of the United States Department of Labor were
charged with special duties in regard to labor disputes by the War
Labor Disputes Act of June 25, 1943, 57 Stat. 163, 50
U.S.C.Appendix, §§ 1501-1511. And the War Labor Disputes Act
required both these federal agencies to conform to the provisions
of the National Labor Relations Act. In order that these government
agencies might be better able to carry out their statutory duty of
conforming to the National Labor Relations Act, an
interdepartmental committee was established. It consisted of
representatives of the National Labor Relations Board, the
Department of Labor, and the National War Labor Board. This
committee was vested with power to discuss and consider policy
questions and other problems relating to administration of the
duties of the National Labor Relations Board and the National War
Labor Board. This power was exercised. Rep.N.L.R.B. 74 (1943).
As early as April, 1942, the National War Labor Board, in the
Little Steel Companies' controversy, 1 War Lab.Rep. 325,
asserted its power to require that contracts for maintenance of
union membership be inserted in collective bargaining agreements.
It reached the conclusion,
see pp. 354-356, that such
collective bargaining provisions were valid because they fell
within the proviso of § 8(3) of the National Labor Relations Act.
From then on until 1945, when its last decisions were made, the
National War Labor Board continued to require maintenance of
membership contracts. [
Footnote
2/7]
Page 336 U. S. 324
The most extensive discussion of the question directly involved
in this case occurred in the National War Labor Board's opinion in
Greenebaum Tanning Co., 10 War Lab.Rep. 527. Greenebaum
Tanning Co., a Wisconsin business, was engaged in interstate
commerce, and therefore was covered by the National Labor Relations
Act. In the
Greenebaum case, the National War Labor Board
had to decide whether it could enforce a maintenance of union
membership contract in Wisconsin contrary to the provisions of the
very Wisconsin statute relied on by the Wisconsin Board in this
case. It was decided, over the strenuous objection of the company,
that the National War Labor Board had power to enforce contracts
such as petitioner made here, despite the conflicting Wisconsin
statute. [
Footnote 2/8] The Board
found its power to override the state law in the war powers of the
President, the War Labor Disputes Act, and the National Labor
Relations Act. The National War Labor Board pointed out in the
Greenebaum decision that, at the request of the President
of the United States, it had first considered with the National
Labor Relations Board the questions of the power of these Boards in
cases such as the
Greenebaum case. In holding that § 8(3)
of the National Labor Relations Act granted the employers and
employees the right to make maintenance of union membership
agreements, the Board, at p. 543 stated:
"The Board is satisfied that, were it not for the existence of
the war emergency, the employees involved in this case would have
had the right to demand maintenance of membership in favor of the
designated representative of a majority
Page 336 U. S. 325
of employees. This right is granted to the employees under the
National Labor Relations Act, and is a right which could be
enforced in peacetime by strike. If the Wisconsin Employment Peace
Act requires more than a majority of employees to vote for
maintenance of membership under those circumstances, it must be
subordinated to the provisions of the National Labor Relations
Act."
The foregoing is evidence that, up to the time the Taft-Hartley
Act was passed by Congress in 1947, § 8(3) of the National Labor
Relations Act had been accepted by government agencies as an
unequivocal authorization for maintenance of union membership
contracts. The Taft-Hartley Act expressly granted the states more
leeway in regard to enforcement of their own policies as to
contracts of the type here involved. 61 Stat. 136, 151, 29 U.S.C. §
164. And the National Labor Relations Board has now construed the
new federal Act as precluding such contracts to the same extent
that they are precluded by state law. [
Footnote 2/9] But it is significant that this
interpretation rested entirely on the language and legislative
history of the Taft-Hartley Act. The Board did not indicate any
belief that this phase of the new Taft-Hartley Act was a mere
clarification of the old Act.
Thus, up to 1943, when petitioner originally made this contract,
and up to 1946, when it was automatically renewed, all indications
were that § 8(3) authorized the type of contract which federal
authorities practically commanded petitioner to accept. There
seemed to be no reason then why petitioner or any other employer
should anticipate that § 8(3) would be construed to permit states
to nullify collective bargaining rights which
Page 336 U. S. 326
that section was generally supposed to have recognized. It is
apparent from this record that petitioner entered into the contract
and permitted its automatic renewal in the belief that § 8(3)
deprived the state of power to enforce its policy and that
petitioner's reluctant action was due to pressure incident to the
then accepted interpretation of § 8(3).
Nevertheless, the Court now, after § 8(3) is no longer the law,
gives it an entirely new and apparently wholly unanticipated
interpretation. Whether such new interpretation will affect the
past conduct of any persons other than the parties to this action
we do not know. We do know that a new interpretation will impose
penalties on this employer for conduct pressed upon it by federal
labor authorities under authority of the federal Act.
The new interpretation given § 8(3) by the Court rests on the
conclusion that the legislative history of the Act shows that
Congress intended to leave states free to bar the type of contract
here involved. The committee reports and legislative comments on
the national Act set out in the Court's opinion do lend strong
support to this contention. In the light of this legislative
history, I would join in the Court's interpretation of § 8(3) if we
were interpreting that section on a clean slate. But we are not.
The section has a history of administrative interpretation counter
to the one that the Court gives it today. The language of § 8(3)
[
Footnote 2/10] is reasonably
Page 336 U. S. 327
susceptible of the interpretation the section was given by the
Conciliation Division of the United States Department of Labor and
by the National War Labor Board, an interpretation to which the
National Labor Relations Board appears to have assented. And, as
previously pointed out, the National Labor Relations Board held
this very petitioner guilty of an unfair labor practice for its
refusal to bargain with its Wisconsin employees on their demand for
a closed shop.
Algoma Plywood Co., supra, at 994, 998.
This NLRB finding was in 1940, a year after the passage of the
Wisconsin Act here held controlling. I think a change in the
interpretation of § 8(3) should not be made at this late date, when
the section is no longer the law, merely to invalidate a contract
made under federal compulsion and founded on a justifiable belief
that § 8(3) authorized the contract. I would not make a trap of
this settled administrative interpretation by subjecting this
employer to penal damages for his good faith reliance on it.
See Labor Board v. Hearst Publications, 322 U.
S. 111,
322 U. S.
123.
I would reverse this judgment.
[
Footnote 2/1]
The dire consequences of a violation of a Board order is
illustrated by
United States v. Montgomery Ward & Co.,
150 F.2d 369. This Court granted certiorari, and ordered the
judgment vacated on the ground that the cause had become moot.
Montgomery Ward & Co. v. United States, 326 U.S. 690.
In this case, Montgomery Ward refused to carry out an order of the
War Labor Board. One of the subjects of the order was a maintenance
of membership clause similar to the one involved in this case. The
action in this
Montgomery Ward case was brought by the
United States to test the legality of an order of the President of
the United States directing seizure of the properties of Montgomery
Ward because of the refusal of that company to obey the Board's
order. The Court of Appeals upheld the legality of the seizure
order.
See also National War Labor Board v. Montgomery Ward
& Co., 79 U.S.App.D.C. 200, 144 F.2d 528, and
United
States v. Montgomery Ward & Co., 58 F. Supp.
408.
[
Footnote 2/2]
The Wisconsin trial court refused to impose this "penalty" on
petitioner. It found the "equities" on petitioner's side. The State
Supreme Court held that the compulsion under which petitioner had
acted could not relieve him from the state penalty which was
imposed to "retard the employer's inclination to yield to this
compulsion in the future." 252 Wis. 549, 561, 32 N.W.2d 417, 423.
In other words, the penalty was imposed as a warning to petitioner
and others that continued compliance with the federal policy would
subject them to penalties in Wisconsin.
[
Footnote 2/3]
See 336
U.S. 301fn2/10|>note 10.
[
Footnote 2/4]
See Allen-Bradley Local v. Wisconsin Employment Relations
Board, 315 U. S. 740,
315 U. S.
751.
[
Footnote 2/5]
Labor Board v. Reed & Prince Mfg. Co., 118 F.2d
874, 883;
Peninsular & Occidental S.S. Co. v. Labor
Board, 98 F.2d 411, 414. In 1944, the National Labor Relations
Board held that an employer was guilty of an unfair labor practice
where it refused to negotiate with the union's collective
bargaining representative on the subject of a contract providing
that none but union members should be employed. The Board held that
such a refusal was an unfair labor practice.
In the Matter of
Tempa Electric Co., 56 N.L.R.B. 1270, 1273.
And see Algoma
Plywood Co., 26 N.L.R.B. 975, 994.
[
Footnote 2/6]
See for example, Little Steel Companies, 1 War Lab.Rep.
325, and
Industrial Cotton Mills Co., Inc., 25 War
Lab.Rep. 136.
[
Footnote 2/7]
Douglas Aircraft Co., 28 War Lab.Rep. 51 (1945).
[
Footnote 2/8]
In all of the cases below, the War Labor Board required
insertion of the maintenance of membership clause despite local
state statutes which prohibited such agreements.
Vilter Mfg.
Co., 11 War Lab.Rep. 332;
U.S. Vanadium Corp., 13 War
Lab.Rep. 527;
Ingalls Iron Works Co., 21 War Lab.Rep. 27;
St. Joe Paper Co., 25 War Lab.Rep. 421.
[
Footnote 2/9]
Giant Food Shopping Center, Inc. (1948), 77 N.L.R.B.
(No. 133). The Taft-Hartley Act cannot justify this order of the
Wisconsin Board because the Act was passed after the order was
issued.
[
Footnote 2/10]
"SEC. 8. It shall be an unfair labor practice for an employer
--"
"
* * * *"
"(3) By discrimination in regard to hire to tenure of employment
or any term or condition of employment to encourage or discourage
membership in any labor organization:
Provided, That
nothing in this Act, . . . or in any code or agreement approved or
prescribed thereunder, or in any other statute of the United
States, shall preclude an employer from making an agreement with a
labor organization . . . to require as a condition of employment
membership therein, if such labor organization is the
representative of the employees as provided in section 9(a), in the
appropriate collective bargaining unit covered by such agreement
when made."
49 Stat. 449, 452, 29 U.S.C. § 158(3).