NLRB v. Erie Resistor Corp. - 373 U.S. 221, 83 S. Ct. 1139 (1963)

Rule:

Under § 8(a)(3) (29 U.S.C.S. § 158) of the National Labor Relations Act, it is unlawful for an employer by discrimination in terms of employment to discourage membership in any labor organization, which includes discouraging participation in concerted activities, such as a legitimate strike.

Facts:

Erie Resistor Corporation and Local 613 of the International Union of Electrical, Radio and Machine Workers were bound by a collective bargaining agreement which was due to expire on March 31, 1959. In January 1959, both parties met to negotiate new terms but, after extensive bargaining, they were unable to reach agreement. Upon expiration of the contract, the union, in support of its contract demands, called a strike which was joined by all of the 478 employees in the unit. On May 3, however, the company notified the union members that it intended to begin hiring replacements and that strikers would retain their jobs until replaced. Replacements were told that they would not be laid off or discharged at the end of the strike. To implement that assurance, particularly in view of the 450 employees already laid off on March 31, the company notified the union that it intended to accord the replacements some form of super-seniority. On May 28, the company informed the union that it had decided to award 20 years' additional seniority both to replacements and to strikers who returned to work, which would be available only for credit against future layoffs and which could not be used for other employee benefits based on years of service. Following the strike's termination, the company reinstated those strikers whose jobs had not been filled. At about the same time, the union received some 173 resignations from membership. By September of 1959, the production unit work force had reached a high of 442 employees, but by May of 1960, the work force had gradually slipped back to 240. Many employees laid off during this cutback period were reinstated strikers whose seniority was insufficient to retain their jobs as a consequence of the company's super-seniority policy. The union filed a charge with the National Labor Relations Board (“Board”) alleging that awarding super-seniority during the course of the strike constituted an unfair labor practice and that the subsequent layoff of the recalled strikers pursuant to such a plan was unlawful. The Trial Examiner found that the policy was promulgated for legitimate economic reasons, not for illegal or discriminatory purposes, and recommended that the union's complaint be dismissed. The Board rejected the argument that super-seniority granted during a strike is a legitimate corollary of the employer's right of replacement under Labor Board v. Mackay Radio & Tel. Co., 304 U.S. 333. Accordingly, the Board declined to make findings as to the specific motivation of the plan or its business necessity in the circumstances here. The Court of Appeals rejected as unsupportable the rationale of the Board that a preferential seniority policy is illegal however motivated. It consequently denied the Board's petition for enforcement and remanded the case for further findings.

Issue:

Did an employer commit an unfair labor practice under 8(a) of the amended National Labor Relations Act by extending a 20-year seniority credit to strike replacements and strikers who returned to work?

Answer:

Yes

Conclusion:

The Supreme Court reversed a decision which held that in the absence of a finding of specific illegal intent, a legitimate business purpose was always a defense to an unfair labor practice charge. The super-seniority respondent extended to strikers who left the strike and returned to work by its very terms operated to discriminate between strikers and nonstrikers, both during and after a strike, and had a destructive impact upon the strike and union activity. Petitioner was entitled to treat respondent's case as involving conduct that carried its own indicia of intent and that was barred by the National Labor Relations Act, 29 U.S.C.S. § 158, unless saved from illegality by an overriding business purpose justifying the invasion of union rights. The Supreme Court agreed that the business purpose of keeping production going was insufficient to insulate the super-seniority plan from § 158. Therefore, because respondent's judgment that the claimed business purpose would not outweigh the necessary harm to employee rights, it properly put aside evidence of respondent's motive and declined to find whether the conduct was or was not prompted by the claimed business purpose.