H. & F. Binch Co. Plant of the Native Leces and Textiledivision of Indian Head, Inc., Petitioner, v. National Labor Relations Board, Respondent, 456 F.2d 357 (2d Cir. 1972)

This labor dispute stemmed from the posting by an employer, H. & F. Binch Co. Plant of the Native Laces and Textile Division of Indian Head, Inc. (hereafter Binch), of a new work schedule for its greige mill at Glens Falls, N. Y., late in the afternoon of Friday, March 15, 1968. The notice, signed by Cavanaugh, manager of the greige mill, informed the employees that in order to increase production to fulfill commitments to customers, "effective immediately and until further notice, all departments in the greige mill will work a seven day week schedule. . . ." Each of the three shifts was to get one day off; on those days the other two shifts were to work twelve hours each.

It was scarcely surprising that the notice provoked a lively reaction among the then unorganized employees of the raschel (knitting) department, which is in the greige mill. At 8:00 P.M., two hours before the end of their shift, 15, or somewhat less than half, of the employees on the evening shift in the raschel department, acting by prearrangement, met and walked out of the plant in protest, without punching their time cards. Having repaired to a nearby cafe marche was made as a group; when Macey told the strikers they had been replaced, no one inquired whether they all had been or asked to discuss the matter with higher authority. The leaflet prepared immediately thereafter referred to the discharge of all 15 employees, not just of those who had not been replaced. The tenor of the Sunday meeting was similar. The Board concedes that the telegram sent on Tuesday, March 19, see footnote 1, was not an unconditional offer to return to work. The argument is, however, that there was an earlier unconditional offer and the telegram simply served to revoke this. But we do not see any evidence of an earlier unconditional offer; the demand of the workers-by no means an unnatural position-was that all fifteen of the March 15 strikers must be reinstated. The only testimony bearing directly on the strikers' intention, that of Joan Shippe on examination by the general counsel, was that she would have gone back to work on March 16 " [i]f the rest of them had gone back . . . with me." There is no basis for thinking she stood alone.⁷ 

The remaining issues concern the validity and applicability of the Board's decision in The Laidlaw Corporation, 171 N.L.R.B. No. 175 (1968), enforced 414 F.2d 99 (7 Cir. 1969), cert. denied, 397 U.S. 920, 90 S. Ct. 928, 25 L. Ed. 2d 100 (1970). The Board there held that economic strikers who unconditionally apply for reinstatement at a time when their positions are filled by permanent replacements are entitled, upon departure of the replacements, to reinstatement to their former positions and fringe benefits unless they have acquired regular and substantially similar employment or the employer proves that his failure to offer full reinstatement was for legitimate and substantial business reasons. We agree with other circuits, for the reasons stated by them, that such a decision was a permissible extrapolation from what the Supreme Court had decided in NLRB v. Great Dane Trailers, Inc., supra, 388 U.S. at 26, 87 S. Ct. 1792, 18 L. Ed. 2d 1027 and NLRB v. Fleetwood Trailer Co., supra, 389 U.S. 375, 88 S. Ct. 543, 19 L. Ed. 2d 614. See, in addition to the Seventh Circuit decision enforcing Laidlaw, American Machinery Corp. v. NLRB, 424 F.2d 1321 (5 Cir. 1970); C. H. Guenther & Son, Inc. v. NLRB, 427 F.2d 983 (5 Cir.), cert. denied, 400 U.S. 942, 91 S. Ct. 240, 27 L. Ed. 2d 246 (1970); NLRB v. Johnson Sheet Metal, Inc., 442 F.2d 1056, 1061 (10 Cir. 1971); NLRB v. Hartmann Luggage Co., 453 F.2d 178 (6 Cir. 1971).

Binch contends that even if Laidlaw was a permissible decision, it should not be applied so as to require back pay prior to its date, in respect of conduct by an employer which conformed to previously enunciated Board policy. Other courts have rejected that contention. The Fifth Circuit, in an opinion by Judge Wisdom, American Machinery Corp. v. NLRB, supra, 424 F.2d at 1330, quoted our observation in NLRB v. A.P.W. Prods. Co., 316 F.2d 899, 905 (2 Cir. 1963):

" [W]hen an administrative agency makes law as a legislature would, it must follow the rule-making procedure . . . and when it makes law as a court would, it must follow the adjudicative procedure . . .; whether to use one method of law making or the other is a question of judgment, not of power."

While we are honored by such recognition, we think the problem here is somewhat more serious than in A.P.W. Products. The decision which the Board there applied retroactively had overruled a previous holding that backpay awards were tolled for the period between an examiner's dismissal of a discriminatory discharge complaint and the Board's reversal of him. Clearly no employer had engaged in discriminatory discharges on the faith that if a Board examiner were sometime to rule in his favor he would have no backpay liability for the period between that date and a reversal by the Board. Here, in contrast, the Laidlaw decision established a new norm of employer conduct toward strikers who had sought or achieved reinstatement, cf. NLRB v. Majestic Co., 355 F.2d 854, 860-61 (2 Cir. 1966). Binch, in effect, is saying that the time has come when courts should stop merely shedding crocodile tears over the Board's failure to utilize its rule making power and calling its attention to the Supreme Court's "rather pointed hint" on that subject in the second Chenery case, SEC v. Chenery Corp., 332 U.S. 194, 202, 67 S. Ct. 1575, 91 L. Ed. 1995 (1947), and should administer the one kind of medicine the Board will have no difficulty in understanding. Compare United States v. Antonelli Fireworks Co., 155 F.2d 631, 661-662 (2 Cir.), (dissenting opinion of Frank, J.), cert. denied, 329 U.S. 742, 67 S. Ct. 49, 91 L. Ed. 640 (1946).

It is indeed surprising that the Board should so consistently have refused to utilize its rule-making power, or to develop techniques of prospective ruling and overruling save in one notable instance where it overdid this. NLRB v. Wyman-Gordon Co., 394 U.S. 759, 89 S. Ct. 1426, 22 L. Ed. 2d 709 (1969), dealing with Excelsior Underwear, Inc., 156 N.L.R.B. 1236 (1966). Starting with what was only a gleam in Judge Cardozo's perceptive eye,⁸  this technique has evolved so that now almost any enunciation of a new doctrine or repudiation of an old one carries, or is shortly given, a tag announcing as of when it speaks. See Schaefer, The Control of "Sunbursts": Techniques of Prospective Overruling, 22 Rec. of Ass'n of the Bar of the City of New York 394 (1967), reprinted in 42 N.Y.U. L. Rev. 631 (1967). It would be unfortunate if the Excelsior fiasco should deter the Board from further experimentation along these lines. See The Supreme Court, 1968 Term, 83 Harv. L. Rev. 7, 226-27 (1969). On the other hand, we do not deem this case an appropriate vehicle for taking the action the company seeks. As Judge Wisdom said in American Machinery Corp., supra, 424 F.2d at 1328, "The Supreme Court's decision in Fleetwood should have demonstrated the erosion of employers' freedom in treating jobless economic strikers as new applicants"; the extension in Laidlaw thus was hardly a great surprise. Also we must weigh the hardship in imposing liability on the company for conduct conforming to what it may reasonably have thought the limit of its duties against the hardship to the employees in being denied important rights that are now recognized to have been properly theirs. We shall therefore await a stronger case before we refuse to give retroactive force to a Board order because it was founded on a decision enunciating a stricter rule of conduct for employers or unions than the Board had previously imposed.

The Board's order is modified as indicated in this opinion and, as so modified, is enforced. The parties are directed to endeavor to agree on a form of order; if this cannot be done, it shall be settled on ten days notice. No costs.