National Labor Relations Board v. Marshall Car Wheel and Foundry Co. of Marshall, Texas, Inc, 218 F.2d 409 (5th Cir. 1955)

The Board petitions for enforcement of its order issued against respondent on May 28, 1953, based on findings that respondent had discriminatorily discharged certain of its striking employees and denied others full reinstatement privileges because of their prior concerted activity. The decision and order of the Board are reported in 105 N.L.R.B. 132.

Respondent is a Texas corporation with principal offices and plant at Marshall, Texas, where it employs over 200 workers in the operation of an iron foundry. It manufactures and sells in interstate commerce car wheels, pipe and related products.

Pursuant to a Board conducted election held on August 15, 1951, at which the charging union prevailed,¹  the Board certified the union on August 23, 1951 as the exclusive bargaining representative of respondent's employees in the appropriate unit.²  Thereafter, the union sought to institute bargaining negotiations, but shortly became dissatisfied with the progress made, principally because of the alleged discriminatory layoff of eleven employees, respondent's further failure to accede to its wage demands, and the union's inability to arrange bargaining meetings to its satisfaction with respondent's attorney-representative, J. A. Gooch. Because of these grievances, a strike was voted by the employees at the union meeting held on the evening of October 15. At 11 A.M. the following day, in accordance with their predetermined plan, approximately 45% of respondent's employees then at work walked out of the plant. It is practically undisputed that the striking employees intentionally chose a time for their walkout when molten iron in the plant cupola was ready to be poured off,³  and that a lack of sufficient help to carry out the critical pouring operation might well have resulted in substantial property damage and pecuniary loss to respondent, though it was further shown that certain employees, who did not honor the strike, together with respondent's supervisory staff, were able to pour off the molten metal and prevent any actual damage.

The union representative, J. A. Lee, arrived in town shortly after the employee walkout at 11 A.M. and tried unsuccessfully to telephone respondent's vice president and general manager, Emory E. Fry. When Fry returned Lee's call around noon, Lee requested him to meet with the union committee to discuss the alleged discriminatory layoffs, and further offered to return a number of the strikers to help pour the molten lead from the cupola and relieve the emergency situation created by the employee walkout. Fry, who was then quite understandably engaged in pouring molten metal, declined the belated offer of help. Even in the emergency situation, however, Fry stated respondent's position with respect to reinstatement of the striking employees substantially as follows: that because of their violation of respondent's "long-standing rule" prohibiting employees from leaving the plant "without notice and permission", they had, in effect, quit their employment; that whether they would be permitted to return "was strictly up to the foreman"; and that, if they were taken back, "they would have to come back as new employees". According to further findings, to which the Board attached crucial significance, Fry did not specifically mention either then, or in a later telephone conversation with Lee that afternoon,⁴  that the risk of property damage occasioned by the precipitate nature of the walkout during a critical stage of respondent's manufacturing process was the underlying reason for respondent's refusal to permit return of the strikers except "as new employees".

Following the abortive strike, the union set up a picket line at respondent's plant, and on October 17th and 18th wrote respondent letters restating Lee's prior unconditional offer to return the striking employees to work. In spite of repeated efforts, both by the union and the individual strikers, to secure their unconditional reinstatement, respondent never receded materially from its prior position, but reasserted through its attorney at a conference on November 6th that "the men would be rehired if their job had not been filled," but that "if they returned, they would be returned as new employees". Though respondent concededly did not maintain a seniority system, as such, the effect of its position that all the striking employees had actually terminated their employment through violation of the previously mentioned plant rule,⁵  and particularly its consistent treatment of a number of strikers actually rehired "as new employees", was that Christmas bonuses and vacation time of these employees, which would have accrued in their favor but for the strike, were substantially restricted by respondent's failure to credit them with their period of employment preceding the strike. On November 8th, the union ended the strike and removed the picket line.

The Board originally adopted those findings of the Trial Examiner here material to the effect that respondent's employees, by engaging in the walkout on October 16, 1951, were economic strikers entitled to reinstatement with back pay from the time of their unconditional application through union representative, Lee, as of 3:30 P.M. that same day; that respondent, in refusing to take them back before any permanent replacements had been hired, except "as new employees" with restricted bonus and vacation benefits, had in effect discriminatorily discharged and refused to reinstate them because of its plant rule, in violation of Sections 8(a) (3) and (1) of the Act, 29 U.S.C.A. § 158(a) (1, 3).⁶  In a supplemental decision and order denying respondent's motion for reconsideration, a majority of the Board conceded that "at least some of the strikers engaged in unprotected activity", and expressly acknowledged "the validity of the general principle" that employees who deliberately time a strike so as to create a risk of substantial property damage thereby "engage in unprotected activity for which they may be discharged or subjected to other forms of discipline affecting their employment conditions". The majority concluded, however, with Chairman Guy Farmer dissenting, that this principle had no application so as to bar reinstatement of any of the striking employees here. Relying upon well settled principles that "a striker does not automatically lose his status as an employee under the Act", and that "an employer may waive his right to discharge or discipline an employee for engaging in such conduct" in such manner that he "may not later assert the misconduct as a valid reason for discharge or refusal to reinstate", the majority observed that the crucial issue was "whether the Respondent did in fact condone or waive the strikers' misconduct." They viewed the record as disclosing "clear and convincing evidence of such condonation", unlike the dissenting Chairman, who could find "no real evidence of condonation in this case."

We think the majority of the Board had no authority to compel reinstatement of those employees who either participated in, authorized or ratified the illegal walkout of October 16, 1951. That the union deliberately timed its strike without prior warning and with the purpose of causing maximum plant damage and financial loss to respondent cannot be denied.⁷  Even conceding the validity of the general principle relied upon, i. e. that employees who engage in certain unprotected activities do not automatically lose their employee status for remedial purposes under the Act,⁸  it seems to us that the illegitimate nature of this activity, though taking the form of a concerted walkout rather than a sit-down strike, renders it closely akin to that type of irresponsible and unprotected activity condemned by the Supreme Court as effectively removing the guilty employees from statutory protection. See N.L.R.B. v. Fansteel Metallurgical Corp., 306 U.S. 240, 255-259, 59 S. Ct. 490, 83 L. Ed. 627; Southern S. S. Co. v. National Labor Relations Board, 316 U.S. 31, 38, 62 S. Ct. 886, 86 L. Ed. 1246; McNeely & Price Co. v. N. L.R.B., 3 Cir., 106 F.2d 878, 880; N.L. R.B. v. Ohio Calcium Co., 6 Cir., 133 F.2d 721, 726-727; Mid-Continent Petroleum Corp. v. N.L.R.B., No. 134, 54 N.L. R.B. pp. 912, 931-933.

Assuming, however, that the majority espoused doctrine of condonation is properly applicable to vitiate the unlawful character of this strike, we agree with the dissenting Chairman that there is no substantial evidence to support a finding of employer condonation here. Where, as here, the strike misconduct is clearly shown, condonation may not be lightly presumed from mere silence or equivocal statements, but must clearly appear from some positive act by an employer indicating forgiveness and an intention of treating the guilty employees as if their misconduct had not occurred. We think respondent correctly asserts that the essential elements of condonation, i.e. forgiveness and the resumption of the former relationship between the strikers and respondent, are patently lacking here. As the Board Chairman observed, respondent never affirmatively indicated its forgiveness for the strikers' misconduct, nor did it ever actually consent to re-employ them without penalty, but at the union's insistence agreed to take them back only "as new employees". See N.L.R.B. v. Dorsey Trailers, Inc., 5 Cir., 179 F.2d 589, 592; N.L.R.B. v. Warner Bros. Pictures, Inc., 9 Cir., 191 F.2d 217, 219; cf. W. T. Rawleigh Co. v. N.L.R.B., 7 Cir., 190 F.2d 832, 837; Longview Furniture Company, 100 N.L.R.B. 301, 306; Alabama Marble Company, 83 N.L.R.B. 1047, enforced per curiam, 5 Cir., 185 F.2d 1022; Hoover Co. v. N.L.R.B., 6 Cir., 191 F.2d 380.

The majority of the Board, however, relying mainly upon the Board's finding of employer condonation in its Clearfield Cheese Company case, 106 N.L.R.B. No. 80, nevertheless found that respondent had, in effect, affirmatively indicated its intent to condone the strikers' misconduct, thereby waiving its right to discharge or deny them reinstatement therefor, both by Fry's failure during the emergency situation created by their walkout expressly to assign their unprotected activity as the reason for their discharge, and by the failure of respondent's attorney either in the pleadings⁹  or at the hearing before the Trial Examiner¹⁰  unequivocally to assert their justifiable discharge for strike misconduct as an affirmative defense to reinstatement. The Board's order in the Clearfield Cheese Company case, supra, insofar as based upon the finding of condonation arising from substantially similar facts, was subsequently denied enforcement by the Third Circuit in language as follows:

"The Board's thought is that respondent condoned the misconduct (1) by failing to mention it at any time during the otherwise lawful strike as a reason for not taking back its employees; and (2) in indicating that it would `reinstate' the strikers to available positions irrespective of their behavior.

"Reinstatement was never offered by respondent. Orally and in writing it emphasized that any hiring would be solely on a new employee status. The misconduct by the strikers, as the Examiner states, was that they `* * * physically barred all entrances to the plant in such a manner that for the nonstrikers there was "an effective implied threat of bodily harm * * * should they risk entering the plant". Socony Vacuum Oil Company, Inc., 78 N.L.R.B. 1185, 1186.' That action was directly opposed to the force and violence prohibition of the Act. It was for that reason the reinstatement rights of the strikers in question were forfeited. N.L.R.B. v. Fansteel [Metallurgical] Corporation, 306 U.S. 240, 258, 59 S. Ct. 490, 83 L. Ed. 627; McNeely & Price Co. v. N.L.R.B., 3 Cir., 1939, 106 F.2d 878, 880. Where the employer sees fit to waive its rights to terminate because of misconduct the employment of particular employees it can hardly be assumed to have foreclosed itself from rejecting any other employees in the same category. What the Supreme Court said in Fansteel, supra, 306 U.S. at page 259, 59 S. Ct. at page 497, applies to the situation before us:

"`The important point is that respondent stood absolved by the conduct of those engaged in the "sitdown" from any duty to reemploy them, but respondent was nevertheless free to consider the exigencies of its business and to offer reemployment if it chose. In so doing it was simply exercising its normal right to select its employees.'" N.L.R.B. v. Clearfield Cheese Co., 213 F.2d 70, 75.

We think the failure of respondent unequivocally to assert its valid defense of strike misconduct in its pleadings, and the statements of respondent's attorney at the hearing construed as admissions by a majority of the Board, may not fairly be accorded the effect claimed. To the contrary, it seems to us that respondent, in denying in its answer and motion for reconsideration that it had discharged the strikers, but alleging that their discharge would have been justified, was merely pleading separate and alternative, though inconsistent, defenses. Furthermore, viewing the contentions of respondent's counsel as contained in the disputed colloquy with the Trial Examiner fully and fairly in their entirety, rather than on the basis of the excerpt quoted by the majority, it seems to us that, like the pleadings, they sufficiently reveal that the risk of danger to respondent's plant resulting from the concerted walkout was alternatively pleaded in justification for any discharge or discipline of the strikers, resulting from their reinstatement only "as new employees", which might be found by the Board. While respondent's position throughout might have been more aptly and unequivocally stated, it is nevertheless true that the issue of whether a Board order of reinstatement should be enforced in any case properly depends upon the substantiality of the evidence "`on the record considered as a whole'", Universal Camera Corp. v. N.L.R.B., 340 U.S. 474, 71 S. Ct. 456, 463, 95 L. Ed. 456, and upon considerations of whether any legitimate remedial purpose of the Act would be subserved thereby, rather than upon the aptness of phraseology used by the parties in any instance.¹¹  The Board itself has many times successfully urged upon the courts its theory that harsh requirements of common law pleading are inapplicable to restrict its proceedings, thereby displaying a commendable administrative reluctance to permit subordination of the statutory substance to technicalities of legal form. See Consolidated Edison Co. v. N.L.R.B., 305 U.S. 197, 229-230, 59 S. Ct. 206, 83 L. Ed. 126; Annotation 123 A.L.R. 628.

Of course, the majority acknowledged a correct general principle in holding that respondent's plant rule barring absence without permission could not be discriminatorily applied or enforced so as to terminate an employee's status for engaging in a lawful strike, thereby abrogating the statutory right of employees to engage in concerted activity. See N.L.R.B. v. Mackay Radio & Telegraph Co., 304 U.S. 333, 347, 58 S. Ct. 904, 82 L. Ed. 1381; J. A. Bentley Lumber Co. v. N.L.R.B., 5 Cir., 180 F.2d 641, 642; N.L.R.B. v. United States Cold Storage Corp., 5 Cir., 203 F.2d 924, 926. We think they erred, however, in concluding that respondent treated the guilty employees "as applicants for new employment solely because of their violation of the plant rule", and was not primarily concerned with the imminent threat of damage resulting from the precipitate walkout. Their ultimate conclusion that "it was the violation of the plant rule, and that alone, which respondent refused to condone or forgive" seems to us illogically to confuse cause and effect, to make the tail wag the dog. Assuredly the respondent was not more interested in preserving the inviolability of its plant rule, as such, than it was in protecting its plant from the extensive damage and loss which might have resulted from the illegal walkout. On the ultimate issue of whether respondent was entitled to discharge or deny reinstatement to the offending strikers, the real inquiry is the character of the concerted activity engaged in, not whether the rule was incidentally breached thereby. If there actually exists any conflict in this case between the enforcement of respondent's plant rule and the statutory right of its employees to engage in legitimate concerted activity, we certainly find no inconsistency in its application here as to those particular employees who participated in, authorized or ratified the strike misconduct.

Finally, while the dissenting Chairman apparently subscribed to the view that all the striking employees were properly discharged, irrespective of whether they actually engaged in the unlawful walkout, we note that the majority found it "unnecessary to determine which, if any, of the strikers engaged in unprotected activity" to such an extent as would forfeit their right, as economic strikers, to reinstatement before their jobs had been filled. On this issue, the Board contends in brief that, if the dereliction of individual strikers was improperly treated "as irrelevant in the circumstances of this case, it will be necessary to remand the case to the Board to identify which of the strikers actually engaged in misconduct," in view of the principle that only those employees guilty of strike misconduct may justifiably be discharged or disciplined for their default. See N.L.R.B. v. Crowley's Milk Co., 3 Cir., 208 F.2d 444, 446; N.L.R.B. v. Deena Artware, Inc., 6 Cir., 198 F.2d 645, 652; N.L.R.B. v. Wallick, 3 Cir., 198 F.2d 477, 485, note 10; N.L.R.B. v. Mt. Clemens Pottery Co., 6 Cir., 147 F.2d 262, 268; N.L.R.B. v. Ohio Calcium Co., 6 Cir., 133 F.2d 721, 726; Republic Steel Corp. v. N.L.R.B., 3 Cir., 107 F.2d 472, 479. To the contrary, respondent contends, in effect, that the issue of misconduct by individual employees is immaterial, and that it properly discharged or denied reinstatement to all strikers, regardless of when they joined the strike and whether their cessation of work actually contributed to the property hazard,¹²  presumably on the theory of an agency relationship between all strikers, the guilty employees, and the union. Though this precise question was not considered by the Board, and has never been adequately argued or briefed, it seems to us that the following language of the 6th Circuit, in a case arising under the Act before amendment, N.L. R.B. v. Ohio Calcium Co., 133 F.2d 721, 726, is applicable and appropriate for restatement here:

"Respondent insists that none of its striking employees are entitled to reinstatement, because all were members of the Union which initiated and conducted the unlawful strike and further that each was a member of a combination or conspiracy to engage in lawful conduct. This contention must fail. Members of a Union participating in a labor dispute are not responsible `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.' Sec. 6 of the Norris-LaGuardia Act, 29 U.S.C.A. § 106.

"The implied termination of an employer-employee relationship, by reason of unlawful conduct in labor controversies applies only to those actually participating in violence and their aiders and abettors. National Labor Relations Board v. Fansteel [Metallurgical Corporation], supra (op., 306 U.S. [240] 269, 59 S. Ct. 490, 83 L. Ed. 627, 123 A.L.R. 599.)"

This record does not satisfactorily reveal sufficient facts to enable us to pass intelligently upon the issue of whether all striking employees must necessarily be denied reinstatement in the light of the cited authorities. In any event, it is the Board's initial province under the Act, indeed its duty, to find the essential facts upon which an order granting or denying reinstatement may legitimately be based. And in the absence of specific findings by the Board upon this issue, we are unable to accept respondent's intimation in brief that, unless reinstatement is denied as a matter of law to all striking employees because of the dereliction of their union officers and other strikers, an abortive construction of the act will result which would permit individual strikers to profit from misconduct by union officers or other union members merely because they did not actually participate therein. It seems to us that this contention disregards the repeated admonition of this Court, as recently and so aptly stated by Chief Judge Hutcheson in N.L.R.B. v. Braswell Motor Freight Lines, 209 F.2d 622, 624, that we ought not summarily "by our decree, entered to protect the employees, too often the forgotten men in struggles of this kind, deprive them of the rights the act confers not on unions as such but on employees as such." (Emphasis supplied.)

In view of the majority's conceded failure to resolve what appears to us the crucial factual issue in this case, and its erroneous treatment of the striker's conduct as immaterial because of respondent's claimed concessions and condonation, we think that this case must be remanded to the Board with directions to ascertain which employees were justifiably discharged or denied reinstatement for the strike misconduct in the light of the aforementioned principles. We have dealt with this issue at some length, principally because it appears to us that, in this type situation, the Board has the initial duty and responsibility, in the exercise of its broad statutory discretion, to fashion an order which, while deterring irresponsible dereliction of duty either by unions or individual members thereof by refusing them all remedial relief, nevertheless would not tend to penalize those individual employees, if any, who may not fairly be charged with any responsibility therefor.

Enforcement of the Board's order is denied without prejudice to further proceedings consistent with the views expressed in this opinion,¹³  and the cause is remanded to the Board for the purposes and action herein indicated.

Denied and remanded.