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Hi-Craft Clothing Co. v. National Labor Relations Board

decided: October 1, 1981.

HI-CRAFT CLOTHING CO. PETITIONER
v.
NATIONAL LABOR RELATIONS BOARD RESPONDENT



PETITION FOR REVIEW AND CROSS-APPLICATION FOR ENFORCEMENT NATIONAL LABOR RELATIONS BOARD (NLRB NO. 4-CA-10028)

Before Aldisert and Weis, Circuit Judges, and Re,*fn* Chief Judge.

Author: Weis

Opinion OF THE COURT

The National Labor Relations Board ordered reinstatement of a supervisor who had been discharged because of his threat to institute Board action against his employer. Despite the fact that the National Labor Relations Act excludes supervisors from its ambit, the Board contends that enforcement of the right of access to its procedures justifies an expansive interpretation of its authority. We reject that statutory interpretation and, concluding that the Board had no jurisdiction, deny enforcement of its order.

James J. Jiorle charged that he had been dismissed by his employer, Hi-Craft Clothing Company, in violation of § 8(a)(4) of the Act. After a hearing, an Administrative Law Judge recommended that Jiorle be reinstated with back pay. A three member panel of the Board, one member dissenting, adopted the ALJ's recommendations.

At the hearing, the parties stipulated that Jiorle was a supervisor. The ALJ resolved some factual disputes about events that had occurred, and found that the controversy centered on whether Hi-Craft had promised to pay Jiorle a $1,000 annual bonus when he was hired. For two years in succession, Jiorle received only $500, and he was convinced that Hi-Craft was reneging on its agreement. When the company proposed a profit sharing arrangement instead of the bonus, he became indignant and said he was "going to the Labor Board" to see what could be done to help him. Once the company owners realized that Jiorle was serious, he was discharged.

The ALJ found that the reason for Jiorle's termination soon became known to the other employees, and that Hi-Craft could reasonably have expected this to occur. Although acknowledging that as a supervisor Jiorle was not entitled to protection under the National Labor Relations Act, the ALJ held that the company's action produced a coercive effect on the employees' right of free access to the Board and in their exercise of other guarantees provided by the Act. The ALJ also accepted General Counsel's alternative argument that even supervisors should be protected when seeking to invoke the Board's processes. The Board agreed with the latter point, relying on its earlier decision in General Services, Inc., 229 N.L.R.B. 940 (1977), enf. denied, 575 F.2d 298 (5th Cir. 1978),*fn1 and said that "it is the Board's function, and not the employer's, to decide whether the individual is covered by the Act and his claim has merit."

Dissenting Member Truesdale pointed out that in the General Services case, a divided Board had in effect adopted a subjective approach by extending protection to a supervisor who was unsure of his status. As the dissenting opinion noted, this was contrary to the objective standard used in other areas, such as those in which the Board determines whether an employer violated § 8(a) (3) by discharging an alleged supervisor. In that line of cases, subjective good faith is irrelevant the parties proceed at their own risk. The dissent also observed that "access to the Board is not an incantation that can somehow transform a supervisor into an employee and confer statutory rights upon a class of individuals that Congress has expressly excluded from the Act's coverage."

In addition to its contentions that factual matters were improperly resolved against it, the employer on appeal argues that the Board had no jurisdiction to act because the supervisor was acting only on his own behalf. In seeking enforcement, the Board contends that promoting unimpeded access to its processes requires that any person seeking assistance be protected including a supervisor who is not otherwise covered by the National Labor Relations Act. In conclusion, the Board urges that its interpretation of the Act be accepted as "permissible if not actually required."

I

We begin with the question often presented in administrative appeals the deference a reviewing court should accord to an agency's statutory interpretation. The respect required in a given case may be determinative of the outcome, for if great weight is given to an agency's interpretation, it must be given effect even if the court would have decided otherwise in the first instance. NLRB v. United Insurance Co., 390 U.S. 254, 260, 88 S. Ct. 988, 991, 19 L. Ed. 2d 1083 (1968). The reviewing court's role is an uncertain one despite the fact that the Administrative Procedure Act provides that "the reviewing court shall decide all relevant questions of law, (and) interpret constitutional and statutory provisions...." 5 U.S.C. § 706 (1976).

Early in the history of American administrative law, the Supreme Court took a restrictive view of the respective functions of agency and reviewing court. In Federal Trade Commission v. Gratz, 253 U.S. 421, 427, 40 S. Ct. 572, 574, 64 L. Ed. 993 (1920), the Court said, "The words "unfair method of competition' are not defined by the statute and their exact meaning is in dispute. It is for the courts, not the commission, ultimately to determine as a matter of law what they include." That flat statement, however, eventually gave way to an approach that gave deference to an agency on the theory that it was the instrumentality created by Congress to carry out a policy expressed in broad statutory terms. Thus, in 1948, the Court in another FTC case said that it would give "great weight to the Commission's conclusion" that certain conduct was an "unfair method of competition." FTC v. Cement Institute, 333 U.S. 683, 720, 68 S. Ct. 793, 812, 92 L. Ed. 1010 (1948).

Application of this deferential standard, however, has not been consistent, even with respect to particular agencies. The acceptance given decisions of the NLRB by the Supreme Court has hardly been steadfast, and the passage of time has not revealed a trend toward one preferred position. In Bayside Enterprises, Inc. v. NLRB, 429 U.S. 298, 303, 97 S. Ct. 576, 580, 50 L. Ed. 2d 494 (1977), for example, the Court acquiesced in the Board's contention as "a reasonable interpretation of the statute," consistent with the Board's prior holdings and the Secretary of Labor's construction, even though the issue could have, with equal reason, been resolved either way.

Similarly, NLRB v. Hearst Publications, Inc., 322 U.S. 111, 131, 64 S. Ct. 851, 860, 88 L. Ed. 1170 (1944), said a Board determination that "specified persons are "employees' under this Act is to be accepted if it has "warrant in the record' and a reasonable basis in law." Accord NLRB v. United Insurance Co., 390 U.S. 254, 88 S. Ct. 988, 19 L. Ed. 2d 1083 (1968). In Beth Israel Hospital v. NLRB, 437 U.S. 483, 501, 98 S. Ct. 2463, 2473, 57 L. Ed. 2d 370 (1978), the Court cautioned "(t)he judicial role is narrow: The rule which the Board adopts is judicially reviewable for consistency with the Act, and for rationality, but if it satisfies those criteria, the Board's application of the rule, if supported by substantial evidence on the record as a whole, must be enforced." (footnote and citations omitted).

On the other side are cases such as NLRB v. Insurance Agents' International Union, 361 U.S. 477, 499, 80 S. Ct. 419, 432, 4 L. Ed. 2d 454 (1960), where the Court declined the opportunity to expound a detailed delineation of the respective functions of court and agency, and said, "We think the Board's resolution of the issues here amounted not to a resolution of interests which the Act left to it for case-by-case adjudication, but to a movement into a new area of regulation which Congress had not committed to it. Where Congress has in the statute given the Board a question to answer, the courts will give respect to that answer, but they must be sure the question has been asked."

In American Ship Building Co. v. NLRB, 380 U.S. 300, 85 S. Ct. 955, 13 L. Ed. 2d 855 (1965), the Court refused to yield to the Board's finding of an unfair labor practice when an employer "locked out" its employees after a bargaining impasse had been reached. The Court was "unable to find that any fair construction of the provisions relied on by the Board in this case can support its finding of an unfair labor practice. Indeed, the role assumed by the Board in this area is fundamentally inconsistent with the structure of the Act and the function of the ...


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