National Labor Relations Board v. Insurance Agents' International Union/Dissent Frankfurter

by Felix Frankfurter

United States Supreme Court

361 U.S. 477

National Labor Relations Board  v.  Insurance Agents' International Union

 Argued: Dec. 7, 8, 1959. --- Decided: Feb 23, 1960

Separate opinion of Mr. Justice FRANKFURTER, which Mr. Justice HARLAN and Mr. Justice WHITTAKER join.

The sweep of the Court's opinion, with its far-reaching implications in a domain of lawmaking of such nationwide importance as that of legal control of collective bargaining, compels a separate statement of my views.

The conduct which underlies this action was the respondent union's 'Work Without a Contract' program which it admittedly initiated after the expiration of its contract with the Prudential Insurance Company on March 19, 1956. In brief, the union directed its members at various times to arrive late to work; to decline, by 'sitting-in' the company offices, to work according to their regular schedule; to refuse to write new business or, when writing it, not to report it in the ordinary fashion; to decline to attend special business meetings; to demonstrate before company offices; and to solicit petitions in the union's behalf from policyholders with whom they dealt. Prudential was given notice in advance of the details of this program and of the demands which the union sought to achieve by carrying it out.

This action was commenced by a complaint issued on June 5, 1956, alleging respondent's failure to bargain in good faith. After a hearing, the Trial Examiner recommended that the complaint be dismissed, finding that '(f)rom the 'circumstantial evidence' (of the union's state of mind) of the bargaining itself * * * but one inference is possible * * * the Union's motive was one of good faith . . .'; and that 'whatever inference may be as reasonably drawn from the Union's concurrent 'unprotected' activities' is not sufficient to outweigh this evidence of good faith.

The Board sustained exceptions to the Trial Examiner's report, concluding that respondent failed to bargain in good faith. The only facts relied on by the Board were based on the 'Work Without a Contract' program. The Board found that such tactics on respondent's part 'clearly revealed an unwillingness to submit its demands to the consideration of the bargaining table' and that respondent therefore failed to bargain in good faith. In support of its conclusion of want of bargaining in good faith, the Board stated that '(h) arassing activities are plainly 'irreconcilable with the Act's requirement of reasoned discussion in a background of balanced bargaining relations upon which good-faith bargaining must rest' * * *.' The Board made no finding that the outward course of the negotiations gave rise to an inference that respondent's state of mind was one of unwillingness to reach agreement. It found from the character of respondent's activities in carrying out the 'Work Without a Contract' program that what appeared to be good faith bargaining at the bargaining table was in fact a sham:

'(T)he fact that the Respondent continued to confer with the Company and was desirous of concluding an agreement does not alone establish that it fulfilled its obligation to bargain in good faith, as the Respondent argues and the Trial Examiner believes. At most, it demonstrates that the Respondent was prepared to go through the motions of bargaining while relying upon a campaign of harassing tactics to disrupt the Company's business to achieve acceptance of its contractual demands.'

The Board issued a cease-and-desist order ^[1] and sought its enforcement in the Court of Appeals for the District of Columbia. Respondent cross-petitioned to set it aside. The Court of Appeals, relying exclusively on its prior decision in Textile Workers Union v. National Labor Relations Board, 1955, 97 U.S.App.D.C. 35, 227 F.2d 409, denied enforcement and set aside the order. In the Textile Workers case the court had held (one judge dissenting) that the Board could not consider the 'harassing' activities of the union there involved as evidence of lack of good faith during the negotiations. 'There is not the slightest inconsistency between genuine desire to come to an agreement and use of economic pressure to get the kind of agreement one wants.' 97 U.S.App.D.C. 35, 36, 227 F.2d 409, 410.

The record presents two different grounds for the Board's action in this case. The Board's own opinion proceeds in terms of an examination of respondent's conduct as it bears upon the genuineness of its bargaining in the negotiation proceedings. From the respondent's conduct the Board drew the inference that respondent's state of mind was inimical to reaching an agreement, and that inference alone supported its conclusion of a refusal to bargain. The Board's position in this Court proceeded in terms of the relation of conduct such as respondent's to the kind of bargaining required by the statute, without regard to the bearing of such conduct on the proof of good faith revealed by the actual bargaining. The Board maintained that it

'could appropriately determine that the basic statutory purpose of promoting industrial peace through the collective bargaining process would be defeated by sanctioning resort to this form of industrial warfare as a collective bargaining technique.' The opinion of this Court, like that of the Court of Appeals, disposes of both questions by a single broad stroke. It concludes that conduct designed to exert pressure on the bargaining situation with the aim of achieving favorable results is to be deemed entirely consistent with the duty to bargain in good faith. No evidentiary significance, not even an inference of a lack of good faith, is allowed to be drawn from the conduct in question as part of a total context.

I agree that the position taken by the Board here is not tenable. In enforcing the duty to bargain the Board must find the ultimate fact whether, in the case before it and in the context of all its circumstances, the respondent has engaged in bargaining without the sincere desire to reach agreement which the Act commands. I further agree that the Board's action in this case is not sustainable as resting upon a determination that respondent's apparent bargaining was in fact a sham, because the evidence is insufficient to justify that conclusion even giving the Board, as we must, every benefit of its right to draw on its experience in interpreting the industrial significance of the facts of a record. See Universal Camera Corp. v. National Labor Relations Board, 340 U.S. 474, 71 S.Ct. 456, 95 L.Ed. 456. What the Board has in fact done is lay down a rule of law that such conduct as was involved in carrying out the 'Work Without a Contract' program necessarily betokens bad faith in the negotiations.

The Court's opinion rests its conclusion on the generalization that 'the ordinary economic strike is not evidence of a failure to bargain in good faith * * * (because) there is simply no inconsistency between the application of economic pressure and good-faith collective bargaining.' This large statement is justified solely by reference to § 8(b)(3) and to the proposition that inherent in bargaining is room for the play of forces which reveal the strength of one party, or the weakness of the other, in the economic context in which they seek agreement. But in determining the state of mind of a party to collective bargaining negotiations the Board does not deal in terms of abstract 'economic pressure.' It must proceed in terms of specific conduct which it weighs as a more or less reliable manifestation of the state of mind with which bargaining is conducted. No conduct in the complex context of bargaining for a labor agreement can profitably be reduced to such an abstraction as 'economic pressure.' An exertion of 'economic pressure' may at the same time be part of a concerted effort to evade or disrupt a normal course of negotiations. Vital differences in conduct, varying in character and effect from mild persuasion to destructive, albeit 'economic,' violence ^[2] are obscured under cover of a single abstract phrase.

While § 8(b)(3) of course contemplates some play of 'economic pressure,' it does not follow that the purpose in engaging in tactics designed to exert it is to reach agreement through the bargaining process in the manner which the statute commands, so that the Board is precluded from considering such conduct, in the totality of circumstances, as evidence of the actual state of mind of the actor. Surely to deny this scope for allowable judgment to the Board is to deny it the special function with which it has been entrusted. See Universal Camera Corp. v. National Labor Relations Board, supra. This Court has in the past declined to pre-empt by broad proscriptions the Board's competence in the first instance to weigh the significance of the raw facts of conduct and to draw from them an informed judgment as to the ultimate fact. It has recognized that the significance of conduct, itself apparently innocent and evidently insufficient to sustain a findings of an unfair labor practice, 'may be altered by imponderable subtleties at work which it is not our function to appraise' but which are, first, for the Board's consideration upon all the evidence. National Labor Relations Board v. Virginia Elec. & Power Co., 314 U.S. 469, 479, 62 S.Ct. 344, 349, 86 L.Ed. 348. Activities in isolation may be wholly innocent, lawful and 'protected' by the Act, but that ought not to bar the Board from finding, if the record justifies it, that the isolated parts 'are bound together as the parts of a single plan (to frustrate agreement). The plan may make the parts unlawful.' Swift & Co. v. United States, 196 U.S. 375, 396, 25 S.Ct. 276, 279, 49 L.Ed. 518. See also Aikens v. State of Wisconsin, 195 U.S. 194, 206, 25 S.Ct. 3, 6, 49 L.Ed. 154.

Moreover, conduct designed to exert and exerting 'economic pressure' may not have the shelter of § 8(b)(3) even in isolation. Unlawful violence, whether to person or livelihood, to secure acceptance of an offer, is as much a withdrawal of included statutory subjects from bargaining as the 'take it or leave it' attitude which the statute clearly condemns. ^[3] One need not romanticize the community of interest between employers and employees, or be unmindful of the conflict between them, to recognize that utilization of what in one set of circumstances may only signify resort to the traditional weapons of labor may in another and relevant context offend the attitude toward bargaining commanded by the statute. Section 8(b)(3) is not a specific direction, but an expression of a governing viewpoint or policy to which, by the process of specific application, the Board and the courts must give concrete, not doctrinaire content.

The main purpose of the Wagner Act was to put the force of law behind the promotion of unionism as the legitimate and necessary instrument 'to give laborers opportunity to deal on equality with their employer.' Mr. Chief Justice Taft for the Court, in American Steel Foundries v. Tri-City Central Trades Council, 257 U.S. 184, 209, 42 S.Ct. 72, 78, 66 L.Ed. 189. Equality of bargaining power between capital and labor, to use the conventional terminology of our predominant economic system, was the aim of this legislation. The presupposition of collective bargaining was the progressive enlargement of the area of reason in the process of bargaining through the give-and-take of discussion and enforcing machinery within industry, in order to substitute, in the language of Mr. Justice Brandeis, 'processes of justice for the more primitive method of trial by combat.' Duplex Printing Press Co. v. Deering, 254 U.S. 443, 488, 41 S.Ct. 172, 184, 65 L.Ed. 349 (dissenting). Promotion of unionism by the Wagner Act, with the resulting progress of rational collective bargaining, has been gathering momentum for a quarter of a century. In view of the economic and political strength which has thereby come to unions, interpretations of the Act ought not to proceed on the assumption that it actively throws its weight on the side of unionism in order to redress an assumed inequality of bargaining power. For the Court to fashion the rules governing collective bargaining on the assumption that the power and position of labor unions and their solidarity are what they were twenty-five years ago, is to fashion law on the basis of unreality. Accretion of power may carry with it increasing responsibility for the manner of its exercise.

Therefore, in the unfolding of law in this field it should not be the inexorable premise that the process of collective bargaining is by its nature a bellicose process. The broadly phrased terms of the Taft-Hartley Act should be applied to carry out the broadly conceived policies of the Act. At the core of the promotion of collective bargaining, which was the chief means by which the great social purposes of the National Labor Relations Act were sought to be furthered, is a purpose to discourage, more and more, industrial combatants from pressing their demands by all available means to the limits of the justification of self-interest. This calls for appropriate judicial construction of existing legislation. The statute lays its emphasis upon reason and a willingness to employ it as the dominant force in bargaining. That emphasis is respected by declining to take as a postulate of the duty to bargain that the legally impermissible exertions of so-called economic pressure must be restricted to the crudities of brute force. Cf. National Labor Relations Board v. Fansteel Metallurgical Corp., 306 U.S. 240, 59 S.Ct. 490, 83 L.Ed. 627.

However, it of course does not follow because the Board may find in tactics short of violence evidence that a party means not to bargain in good faith that every such finding must be sustained. Section 8(b)(3) itself, as previously construed by the Board and this Court and as amplified by § 8(d), provides a substantial limitation on the Board's becoming, as the Court fears, merely 'an arbiter of the sort of economic weapons the parties can use in seeking to gain acceptance of their bargaining demands.' The Board's function in the enforcement of the duty to bargain does not end when it has properly drawn an inference unfavorable to the respondent from particular conduct. It must weigh that inference as part of the totality of inferences which may appropriately be drawn from the entire conduct of the respondent, particularly its conduct at the bargaining table. The state of mind with which the party charged with a refusal to bargain entered into and participated in the bargaining process is the ultimate issue upon which alone the Board must act in each case, and on the sufficiency of the whole record to justify its decision the courts must pass. National Labor Relations Board v. American National Ins. Co., 343 U.S. 395, 72 S.Ct. 824, 96 L.Ed. 1027.

The Board urges that this Court has approved its enforcement of § 8(b)(3) by the outlawry of conduct per se, and without regard to ascertainment of a state of mind. It relies upon four cases: H. J. Heinz Co. v. National Labor Relations Board, 311 U.S. 514, 61 S.Ct. 320, 85 L.Ed. 309; National Labor Relations Board v. Crompton-Highland Mills, 337 U.S. 217, 69 S.Ct. 960, 93 L.Ed. 1320; National Labor Relations Board v. F. W. Woolworth Co., 352 U.S. 938, 77 S.Ct. 261, 1 L.Ed.2d 235; and National Labor Relations Board v. Borg-Warner Corp., 356 U.S. 342, 78 S.Ct. 718, 2 L.Ed.2d 823. These cases do not sustain its position. While it is plain that the per se proscription of an employer's refusal to reduce a collective agreement to writing was approved in the Heinz case, it is equally plain from its opinion in that case as well as its argument before this Court that the Board itself regarded the act of refusal to agree to the integration of the agreement in a writing as a manifestation that the employer's state of mind was hostile to agreement with the union. This Court so regarded the evidence. 311 U.S. at pages 525-526, 61 S.Ct. at page 325. Decision in the Borg-Warner case proceeded from a similar premise. By forcing a deadlock upon a non-statutory subject of bargaining the employer manifested his intention to withdraw the statutory subjects from bargaining. The Crompton-Highland decision rested not on approval of a per se rule that unilateral changes of the conditions of employment by an employer during bargaining constitute a refusal to bargain, but upon the inferences of a lack of good faith which arose from the facts, among others, that the employer instituted a greater increase than it had offered the union and that it did so without consulting the union. Finally, no such conclusion as the Board urges can be drawn from the summary disposition of the Woolworth case here. ^[4] To the extent that in any of these cases language referred to a per se proscription of conduct it was in relation to facts strongly indicating a lack of a sincere desire to reach agreement.

Moreover, in undertaking to fashion the law of collective bargaining in this case in accordance with the command of § 8(b)(3), the Board has considered § 8(b)(3) in isolation, as if it were an independent provision of law, and not a part of a reticulated legislative scheme with interlacing purposes. It is the purposes to be drawn from the statute in its entirely, with due regard to all its interrelated provisions, in relation to which § 8(b)(3) is to be applied. Cf. Textile Workers Union v. Lincoln Mills, 353 U.S. 448, 456, 77 S.Ct. 912, 917, 1 L.Ed.2d 972. A pertinent restraint on the Board's power to consider as inimical to fair bargaining the exercise of the 'economic' weapons of labor is expressed in the Act by § 13: ^[5]

'Nothing in this Act, except as specifically provided for herein, shall be construed so as either to interfere with or impede or diminish in any way the right to strike, or to affect the limitations or qualifications on that right.'

Section 501(2) of the Labor Management Relations Act provides a definition of 'strike': ^[6]

'When used in this Act-* * * (2) The term 'strike' includes any strike or other concerted stoppage of work by employees (including a stoppage by reason of the expiration of a collective-bargaining agreement) and any concerted slowdown or other concerted interruption of operations by employees.'

As the last clause of § 13 makes plain, the section does not recognize an unqualified right, free of Board interference, to engage in 'strikes,' as respondent contends. The Senate Report ^[7] dealing with the addition of the clause to the section confirms that its purpose was to approve the elaboration of limitations on the right to engage in activities nominally within the definition of § 501(2) which this Court had heretofore developed in such cases as National Labor Relations Board v. Fansteel Metallurgical Corp., supra; National Labor Relations Board v. Sands Mfg. Co., 306 U.S. 332, 59 S.Ct. 508, 83 L.Ed. 682; and Southern S.S.C.o. v. National Labor Relations Board, 316 U.S. 31, 62 S.Ct. 886, 86 L.Ed. 1246. But 'limitations and qualifications' do not extinguish the rule. For the Board to proceed, as it apparently claims power to do, against conduct which, but for the bargaining context in which it occurs, would not be within those limitations, ^[8] it must rely upon the specific grant of power to enforce the duty to bargain which is contained in § 8(b)(3). In construing that section the policy of the rule of construction set forth by § 13, see International Union, U.A.W., A.F. of L., Local 232 v. Wisconsin Board, 336 U.S. 245, 259, 69 S.Ct. 516, 524, must be taken into account. In the light of that policy there is no justification for divorcing from the total bargaining situation particular tactics which the Board finds undesirable, without regard to the actual conduct of bargaining in the case before it.

The scope of the permission embodied in § 13 must be considered by the Board in determining, under a proper rule of law, whether the totality of the respondent's conduct justifies the conclusion that it has violated the 'specific' command of § 8(b)(3). When the Board emphasizes tactics outside the negotiations themselves as the basis of the conclusion that the color of illegitimacy is imparted to otherwise apparently bona fide negotiations, § 13 becomes relevant. A total, peaceful strike in compliance with the requirements of § 8(d) would plainly not suffice to sustain the conclusion; prolonged union-sponsored violence directed at the company to secure compliance as plainly would. Here, as in so many legal situations of different gradations, drawing the line between them is not an abstract, speculative enterprise. Where the line ought to be drawn should await the decision of particular cases by the Board. It involves experienced judgment regarding the justification of the means and the severity of the effect of particular conduct in the specialized context of bargaining.

Section 8(d), which was added in the amendments of 1947, is also inconsistent with the Board's claim of power to proscribe conduct without regard to the state of mind with which the actor participated in negotiations. The 1935 Act did not define the 'practice and procedure of collective bargaining' which it purposed to 'encourage.' Act of July 5, 1935, § 1, 49 Stat. 449. That definition, until 1947, was evolved by the Board and the courts in the light of experience in the administration of the Act. See, e.g., H. J. Heinz Co. v. National Labor Relations Board, supra. In 1947, after considerable controversy over the need to objectify the elements of the duty to bargain, § 8(d) was enacted. We have held that the history of that enactment demonstrates an intention to restrain the Board's power to regulate, whether directly or indirectly, the substantive terms of collective agreements. National Labor Relations Board v. American National Ins. Co., supra, 343 U.S. at page 404, 72 S.Ct. at page 829. In the same case we recognized that implicit in that purpose is a restraint upon the Board's proceeding by the proscription of conduct per se and without regard to inferences as to state of mind to be drawn from the totality of the conduct in each case. Id., 343 U.S. at page 409, 72 S.Ct. at page 832.

Finally, it is not disputed that the duty to bargain imposed on unions in 1947 was the same as that previously imposed on employers, and it is therefore not without significance for its present assertion of power that for 25 years of administration of the employer's duty to bargain, which was imposed by the Act of 1935 and preserved by the amendments of 1947, the Board has not found it necessary to assert that it may proscribe conduct as undesirable in bargaining without regard to the actual course of the negotiations. See Federal Trade Comm. v. Bunte Bros., 312 U.S. 349, 351-352, 61 S.Ct. 580, 581-582, 85 L.Ed. 881.

These considerations govern the disposition of the case before the Court. Viewed as a determination upon all the evidence that the respondent bargained without the sincere desire to compose differences and reach agreement which the statute commands, the Board's conclusion must fall for want of support in the evidence as a whole. See Universal Camera Corp. v. National Labor Relations Board, supra. Apart from any restraint upon its conclusion imposed by § 13, a matter which the Board did not consider, no reason is manifest why the respondent's nuisance tactics here should be thought a sufficient basis for the conclusion that all its bargaining was in reality a sham. On this record it does not appear that respondent merely stalled at the bargaining table until its conduct outside the negotiations might force Prudential to capitulate to its demands, nor does any other evidence give the color of pretence to its negotiating procedure. From the conduct of its counsel before the Trial Examiner, and from its opinion, it is apparent that the Board proceeded upon the belief that respondent's tactics were, without more, sufficient evidence of a lack of a sincere desire to reach agreement to make other consideration of its conduct unnecessary. For that reason the case should be remanded to the Board for further opportunity to introduce pertinent evidence, if any there be, of respondent's lack of good faith.

Viewed as a determination by the Board that it could, quite apart from respondent's state of mind, proscribe its tactics because they were not 'traditional,' or were thought to be subject to public disapproval, or because employees who engaged in them may have been subject to discharge, the Board's conclusion proceeds from the application of an erroneous rule of law.

The decision of the Court of Appeals should be vacated, and the case remanded to the Board for further proceedings consistent with these views.

Notes

1. The order in part provided: '(T)he Respondent * * * shall: 1. Cease and desist from refusing to bargain collectively in good faith with The Prudential Insurance Company of America * * * by authorizing, directing, supporting, inducing or encouraging the Company's employees to engage in slowdowns, harassing activities or other unprotected conduct, in the course of their employment and in disregard of their duties and customary routines, for the purpose of forcing the Company to accept its bargaining demands, or from engaging in any like or related conduct in derogation of its statutory duty to bargain * * *.'
2. 'There are plenty of methods of coercion short of actual physical violence.' Senator Taft, at 93 Cong.Rec. 4024.
3. As the Court states, the prevention of union conduct designed to enforce such an attitude was a primary purpose of the enactment of § 8(b)(3). See, e.g., 93 Cong. Rec. 4135.
4. The Court held that 'The Board acted within its allowable discretion in finding that under the circumstances of this case failure to furnish the wage information constituted an unfair labor practice.' (352 U.S. 938, 77 S.Ct. 261) It cited National Labor Relations Board v. Truitt Mfg. Co., 351 U.S. 149, 76 S.Ct. 753, 100 L.Ed. 1027; and in Truitt the entire Court was in agreement both that the withholding of wage information by the employer was weighty evidence of a lack of willingness to bargain sincerely, and that the judgment of the Board had to be predicated on all the facts pertinent to state of mind. 351 U.S. at pages 153, 155, 76 S.Ct. at pages 756, 757. Moreover, the lower court in the Woolworth case found that the Board had not proceeded by a per se determination, 9 Cir., 235 F.2d 319, 322, but that there was no basis for its conclusion that the information requested was relevant to administration of the agreement.
5. While the Board does consider these sections in connection with respondent's assertion that they afford protection to its conduct from Board regulation, see n. 8, infra, it does not consider their application as a rule of construction of § 8(b)(3).
6. Although I am in sympathy with the Court's conclusion that the construction of § 8 in this case is to be uninfluenced by what was said in International Union, U.A.W., A.F. of L., Local 232 v. Wisconsin Board, 336 U.S. 245, 69 S.Ct. 516, I do not agree that the case held that the definitions of § 501(2) are inapplicable to § 13. The question which the Court there considered was whether § 13, as defined in § 501(2), independently rendered activities within its terms immune from state regulation. The Court's observation that for § 501(2) to have so extended the force of § 13 would have been inconsistent with the purpose of the inclusion of the definition, which was to extend the Board's power with reference to the unfair labor practice defined by § 8(b)(4), 336 U.S. at page 263, 69 S.Ct. at page 526, was made in light of the contention that § 13 itself had the effect of precluding the States. The crux of the decision with regard to § 13 was that it announced no more than a rule of construction of the Federal Act. It was neither argued nor decided that § 501(2) does not apply to § 13. There appears to be no support for such a conclusion either in the text of the Act or in its legislative history. It is hardly conceivable that such a word as 'strike' could have been defined in these statutes without congressional realization of the obvious scope of its application.
7. S.Rep. No. 105, 80th Cong., 1st Sess. (1947), at p. 28. This provision of the Taft bill was adopted by the Conference. H.R.Conf.Rep. No. 510, 80th Cong., 1st Sess. (1947), at p. 59.
8. The Board urges that respondent's activities are not within the 'dispensation or protection' of § 13, because International Union, U.A.W., A.F. of L., Local 232 v. Wisconsin Board, 336 U.S. 245, 69 S.Ct. 516, held 'slowdowns' to be 'unprotected' activities subject to state regulation. The argument misreads the significance of that case as regards § 13. See n. 6, supra. Nor is it valid to assume that all conduct loosely described as a 'slowdown' has the same legal significance, or that union sponsorship of such conduct falls within the 'limitations or qualifications' on the right to strike incorporated in § 13 in every case in which employee participation in it would be 'unprotected' by § 7, and therefore subject to economic retaliation by the employer. See the portions of the Board's order quoted in n. 1, supra.