UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT
decided: April 11, 1969.
NATIONAL LABOR RELATIONS BOARD, APPELLANT,
Q-T SHOE MANUFACTURING CO., INC., ET AL., APPELLEES
Biggs, Forman and Freedman, Circuit Judges.
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 the court reasoned that fairness to the parties might well entail the allowance of sufficient time to alter their conduct to accord with the new standard.*fn17
This court considers the reasoning of the Second Circuit to be more persuasive in this respect. It is to be noted that the Administrative Procedure Act defines "adjudication" simply as "agency process for the formulation of an order."*fn18 Clearly, the Board's decision in Excelsior was in conformance with this broad definition, and no case has been found which invalidates agency action on the ground that a new rule is to have only a prospective application.*fn19 Traditionally, the courts have been more concerned with agency decisions having a retroactive effect, although these have generally been sustained.*fn20 Implicit in each of these cases, however, has been the idea that a ruling having only an in futuro impact would merit judicial enforcement, since the possibilities of unfairness to the parties and lack of adequate notice would then be removed.
The overriding principle to be followed in cases of this nature was established by the Supreme Court in SEC v. Chenery Corporation.*fn21 It was there held that "the choice made between proceeding by general rule or by individual, ad hoc litigation is one that lies primarily in the informed discretion of the administrative agency."*fn22 Since the Court also concluded that it was generally within the discretion of the agency whether to apply its rules retroactively, it necessarily follows that in a given factual context prospective application, especially where the equitable consideration of fairness to the parties is involved, is permissible. The circumstances surrounding the adoption of the Excelsior rule certainly do not constitute grounds for holding otherwise in this case.*fn23
The final issue to be considered is that which largely forms the basis for the District Court's decision, namely, whether a subpoena duces tecum compelling production of an Excelsior list of names and addresses is capable of judicial enforcement. Section 11(2) of the National Labor Relations Act*fn24 provides for enforcement of Board subpoenas issued in accordance with the requirements of Section 11(1), and thus the proper inquiry in each case is whether the Board is seeking "evidence . . . that relates to any matter under investigation or in question." Although the District Court concluded that a representation proceeding is an "investigation" within the meaning of this section, it nevertheless held that the information called for by an Excelsior list could not properly be considered as "evidence" connected with such investigation, since the Board was simply acting as an intermediary on behalf of the Union, the party for whose benefit that information was in fact elicited. The District Court reasoned:
"Nowhere do Sections 11(1) and 11(2) of the Act authorize the Board to use its investigatory and subpoena powers for the sole purpose of transmitting information to certain parties to a representation proceeding, as required by the Excelsior rule. The plain language of Section 11(1) of the Act would appear to indicate that there must be some independent use made by the Board itself of evidence obtained pursuant to its investigatory powers under that section. Nor does the court regard FCC v. Schreiber, 381 U.S. 279, 85 S. Ct. 1459, 14 L. Ed. 2d 383 (1965), or NLRB v. Friedman, 352 F.2d 545 (3d Cir. 1965), as being dispositive of the issue. The facts of the present case are distinguishable from those presented in both the Schreiber and Friedman cases, in that here the Board is seeking to act as a mere conduit of the information to the Union. Although the court is of the opinion that it is proper for the Board to have the names of all employees of Q-T Shoe, so that those entitled to vote be properly identified, judicial enforcement of the Board's subpoena in the present case would effectively result in the enforcement of the Excelsior rule itself; it was certainly not the intention of Congress under Section 11(2) to confer jurisdiction upon federal courts for the disguised purpose of enforcing the Board's rules of decision."*fn25
We are in agreement with the District Court to the extent that it held a representation proceeding to be an investigation within the purview of the Act. In reaching its ultimate conclusion, however, the court seemingly overlooked the Supreme Court's admonition that "the control of the election proceeding, and the determination of the steps necessary to conduct that election fairly were matters which Congress entrusted to the Board alone."*fn26 The information sought by an Excelsior list, while concededly of primary benefit to the unions striving to be certified as collective bargaining representatives of groups of employees, clearly facilitates the equitable resolution of election issues, and in this sense such information is "used" by the Board. Also noteworthy is the statement within the Excelsior opinion itself, wherein the Board announced as an important secondary purpose of the new rule a desirable reduction in the number of voter eligibility challenges.*fn27 In sum, it is apparent that the Excelsior rule makes a significant contribution to the Board's control over the election process, and in such posture the list of names and addresses should be regarded as "evidence" in connection with a particular kind of "investigation." Since that evidence is "not plainly incompetent or irrelevant"*fn28 to legitimate Board functions, the subpoena calling for its production should have been enforced.
In so holding, the decision of this court is in substantial accord with several other judicial holdings, both prior and subsequent to the District Court's determination in this case.*fn29 In light of this disposition we do not reach the question whether the same information could be obtained by means of a mandatory injunction under 28 U.S.C. § 1337.*fn30
Accordingly, the judgment of the United States District Court for the District of New Jersey of February 6, 1968 will be reversed and the case will be remanded with instructions to enforce compliance with the subpoena duces tecum of the National Labor Relations Board as prayed for in its complaint.