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National Labor Relations Board v. Q-T Shoe Manufacturing Co.

decided: April 11, 1969.


Biggs, Forman and Freedman, Circuit Judges.

Author: Forman


This is an appeal from an order of the United States District Court for the District of New Jersey*fn1 dismissing the action of the appellant National Labor Relations Board against appellees Q-T Shoe Manufacturing Company, Inc. ("Company") and Martin S. Nadler, president of the Company. The Board had sought enforcement of a subpoena duces tecum or, alternatively, the issuance of a mandatory injunction to compel production of certain information hereinafter specified.

On September 20, 1966, Joint Council No. 13, United Shoe Workers of America, AFL-CIO ("Union") filed a petition with the Board's regional office in Newark, New Jersey, seeking a representation election and certification as the collective bargaining representative of the Company's production and maintenance employees at its plant in Paterson, New Jersey. Following a hearing, the Board's Regional Director on November 25, 1966 issued a Decision and Direction of Election pursuant to Section 9(c)(1) of the National Labor Relations Act*fn2 ("Act"), directing that an election be held for the unit of approximately 250 employees. Additionally, the Company was directed to file with the Regional Director a list of the names and addresses of all employees eligible to vote in the election within seven days after issuance of the Decision and Direction of Election, in accordance with the Board's rule announced in Excelsior Underwear, Inc.*fn3

On December 2, 1966 the Company informed the Regional Director that it would not supply employee addresses, although a list of names was furnished. Since the Union did not wish to proceed with the election in the absence of full compliance with the Excelsior rule, the Regional Director postponed the election and on December 19, 1966 issued a subpoena duces tecum, pursuant to Section 11(1) of the Act,*fn4 directing appellee Nadler to produce at the Board's regional office the Company's books and records containing the names and addresses of all employees or, in lieu thereof, a list containing this information to be verified by Board agents. Mr. Nadler did not appear on the return date of the subpoena and persisted in his refusal to disclose the material in question, whereupon the Board sought judicial relief in the District Court.

It was the conclusion of the District Court that it was without jurisdiction either to enforce the subpoena under Section 11(2)*fn5 of the Act or to issue a mandatory injunction compelling production under 28 U.S.C. § 1337.*fn6 Essentially, the court held that if it were to grant the requested relief, it would actually be enforcing the Excelsior rule itself; such enforcement would be authorized only

"after it has been properly determined by the Board that the refusal by the defendant to provide the Union with a list of its employees' names and addresses constitutes an unfair labor practice under Section 8(a)(1) of the Act, 29 U.S.C. § 158(a)(1)."*fn7

On appeal, it is contended by the appellees that the substantive validity of the Excelsior rule was not in dispute before the District Court, and consequently is not an issue here. While it is true that the court did not explicitly decide whether disclosure of the employees' names and addresses would constitute an invasion of their right to privacy,*fn8 it is apparent that a definitive decision thereon was considered unnecessary in the light of the court's ultimate determination that it was in any event without jurisdiction to grant the relief sought by the Board. A perusal of the appellees' answer in the District Court reveals that they did in fact assert, as their second affirmative defense, that their employees' right to privacy would be infringed by compliance with the Excelsior rule.

Although we conclude that the question is properly before us, little comment is merited in its resolution. Even on the dubious assumption that the Company has standing to raise its employees' rights in this context, it is clear that none of their rights is infringed by the mere opportunity afforded a union to solicit their support. The primary stated purpose of the rule announced in the Excelsior case was to insure that the electorate in any Board representation proceeding would be fully informed and have access to the views of all parties involved. If there is any abuse of the rule in a given situation, it is readily apparent that the employee retains the right to insulate himself against offensive solicitation.*fn9 The mere possibility of such harassment is surely not a sufficient ground for invalidating a rule designed to achieve greater enlightenment with respect to labor election issues, and it is noteworthy that every court which has passed on the issue has held the Excelsior rule to be a legitimate exercise of the Board's jurisdiction over representation proceedings.*fn10

While it is not strenuously urged on this appeal, appellees raise as an alternative ground for the affirmance of the District Court's decision the alleged lack of compliance with Sections 3(a)(3) and (4) of the Administrative Procedure Act*fn11 in the adoption of the Excelsior rule. The argument is that since the rule was not applied to the parties in the cases which gave rise to its formulation, and would only become effective 30 days from the date of the decision, the Board in Excelsior was not engaging in actual "adjudication" but rather was proceeding by way of rule-making. This being the case, it is contended, the Board was obligated to comply with the notice and publication requirements of Section 4, and the failure to do so renders the Excelsior rule a nullity not capable of enforcement by a federal court.

The District Court gave short shrift to this argument,*fn12 but it has assumed substantially more significance in the light of the subsequent First Circuit decision in Wyman-Gordon Company v. NLRB,*fn13 holding the Excelsior rule to have been improperly promulgated. A divided court there reasoned:

"In Excelsior, however, the Board did not decide a case between party and party, or, more exactly, it decided a case one way, and took occasion to lay down a future rule the other way. Chenery [SEC v. Chenery Corporation, 332 U.S. 194, 91 L. Ed. 1995, 67 S. Ct. 1575 (1947)] in no fashion suggests approval of this. On the contrary, to the extent the Board was not deciding a case, this is precisely where Congress had instructed it as to the procedure it should adopt. The Board has chosen to disregard Congress."*fn14

Other courts have explicitly rejected the Wyman-Gordon rationale,*fn15 and notable among these decisions is that of the Court of Appeals of the Second Circuit in NLRB v. Beech-Nut Life Savers, Inc.*fn16

In the course of its opinion the Second Circuit stated that it would have followed the Wyman-Gordon decision if the Excelsior rule had been announced in an opinion where the facts and issues in dispute were totally unrelated to the new statement of policy. In the absence of such circumstances, the court concluded that administrative agencies such as the Board were empowered to determine for themselves whether to proceed by rule-making or adjudication. The fact that the Excelsior rule was to have only prospective application was not regarded as having any effect on the judicial nature of the Board's proceedings, for ...

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