Before EVANS and KERNER, Circuit Judges, and LINDLEY, District Judge.
Petitioner seeks to have set aside and respondent to enforce an order entered by the National Labor relations Board June 6, 1940, determining that petitioner has refused to bargain in good faith with its employees and their regularly designated collective bargaining agent and directing it to cease and desist from such refusal and from "in any other manner interfering with, restraining or coercing" the employees in the exercise of their rights guaranteed by Section 7 of the Act. U.S.C.A., Title 29, Sec. 151 et seq. The Board ordered affirmatively that petitioner, upon request, bargain collectively with the bargaining agent, herein designated the United, and post notices of intention to comply. Petitioner insists that the record contains no evidence substantiating the finding that petitioner refused to bargain and that, under the proof, the order is directed toward compelling petitioner to maintain a state of mind rather than to perform specific acts, is too broad and, under the proof, wholly improper. No question is presented as to jurisdiction or as to the fact that the United was the duly designated bargaining agent.
At the outset, in considering whether there was substantial evidence to support a finding that petitioner has refused to bargain collectively, we are faced with a collateral question dependent largely upon the subsidiary inquiry (1) whether the order in effect seeks to compel petitioner and its officials to formulate in their minds specified mental concepts, and (2) how far, as a matter of law, the Board may go in determining whether an employer has bargained "in good faith."
For more than a year petitioner and United had negotiated with reference to a written contract. Some twelve meetings, submission and resubmission of proposed drafts, suggestions and countersuggestions in regard thereto ended without tangible fruitful result. This evidence, petitioner asserts, can support a finding only that petitioner has negotiated within the meaning of the Act. The Board, on the contrary, found this dealing to be a sham, a pretense, carried o n with actual intent upon the part of petitioner not to bargain and not to arrive at any agreement.
The Board's conclusion of fact in this respect was that petitioner's " * * * plan and purpose, reflected by its conduct during the negotiations, is clear. It would meet and deal with the United whenever requested, it would appear to listen with respectful attention to the United's demands, and it would pretend a semblance of an endeavor to reach a mutual understanding. However, it would refuse to agree with the United to grant conditions of employment or make concessions which it was willing to grant the employees directly, and would require the United to accept less desirable conditions of employment than it would grant the employees if they bargained individually, or than they were legally entitled to receive in the absence of a collective agreement. Thus the petitioner's hostility to the United would be manifested, membership in the United discouraged and, by pretending to bargain, collective bargaining defeated." The natural effect of such course of conduct, the Board found, was to imply to employees that their best interests lay in their continued reliance upon the generosity and good will of their employer; that the United could not secure for them any substantial objective sought by them with respect to terms and conditions of employment, but that, on the contrary, the employees' continued membership in the United constituted a threat of loss of desirable conditions and terms already enjoyed and that petitioner entertained no desire to reach an agreement with the United and made no effort in good faith so to do. Concerning the statutory burden of petitioner, the Board said "The duty encompasses an obligation to enter into discussin and negotiation with an open and fair mind and with a sincere purpose to find a basis of agreement concerning the issues presented, and to make contractually binding the understanding upon terms that are reached."
Petitioner asserts that upon this reasoning men may, by legislative fiat and administrative order, be compelled to be "fair, just, honorable, generous, kind and humane," that if the Board may enter this order, it may equally as reasonably direct abolishment of "selfishness, greed, cruelty and hostility." It invokes the premise that laws are made to govern action, not to control beliefs and opinions. With this hypothesis we have no quarrel. And we think its reasoning wholly compatible with the present situation. We realize full well that Congress has provided only that certain acts shall be perfored or omitted. The statute requires of the employer that he bargain collectively and whether he does so depends upon the character of his acts of commission or omission. Collective bargaining is an act; pretended collective bargaining is an omission to perform the act, and no unusual difficulty arises because, in determining whether bargaining within the meaning of the Act has indeed occurred, the trier of the facts must determine whether the acts proved were rendered in good faith or were merely in pretended good faith and performed with the actual intent to achieve the very opposite of collective bargaining. Existence or nonexistence of good faith, just as existence and nonexistence of intent, involve only inquiry as to fact. Whether a crime has been committed not infrequently depends upon existence or nonexistence of a felonious intent. Whether one is a bona fide purchaser for value of negotiable paper before maturity without notice puts in issue questions of fact. The neutrality required of an employer in his transactions with his employees is another intangible product of fact, the existence or nonexistence of which usually depends upon the character of acts committed or omitted. The civil law furnishes repeated instances of application of the principle.
By the Labor Act, Congress, with expressed intent to prevent industrial strife and to promote industrial peace, has conceived and enacted remedial legislation. It has placed upon the employer the duty, in the interest of public welfare, to enter into discussion with its employees with open and fair minds, with sincere purpose to find basis for agreement. No employer, party to a labor controversy, may rightfully refuse to comply and thus work a detriment to the public interest, peace and welfare. In Virginian Railway Co. v. System Federation No. 40, 300 U.S. 515, 57 S. Ct. 592, 597, 81 L. Ed. 789, the court reviewed a decree requiring the railroad company to "treat with" the agent of its employees and to "exert every reasonable effort to make and maintain agreements." The company insisted that its obligation to bargain was not a fit subject of a decree in equity because negotiation depends upon desires and mental attitudes, far beyond judicial control. It argued that, since equity cannot compel parties to make an agreement, it will not compel them to take the preliminary steps which may result in agreement. But the court rather curtly disposed of this contention, saying: "Whether an obligation has been discharged, and whether action taken or omitted is in good faith or reasonable, are everyday subjects of inquiry by courts in framing and enforcing their decrees." The greatest of rascals may solemnly affirm his honesty of purpose; that does not foreclose a jury from finding from the evidence submitted that he possesses no trace of such innocent quality. We think the Board had full authority to determine as a fact whether petitioner was acting in good faith or whether its actions amounted to a mere superficial pretense at bargaining, - whether it had actually the intent to bargain, sincerely and earnestly, - whether the negotiations were captiousand accompanied by an active purpose and intent to defeat or obstruct real bargaining. N.L.R.B. v. Whittier Mills Co., 5 Cir., 111 F.2d 474; Agwilines, Inc. v. N.L.R.B., 5 Cir., 87 F.2d 146; N.L.R.B. v. Express Publishing Co., 5 Cir., 111 F.2d 588; Globe Cotton Mills v. N.L.R.B., 5 Cir., 103 .F.2d 91; N.L.R.B. v. Griswold Mfg. Co., 3 Cir., 106 F.2d 713; N.L.R.B. v. Link-Belt Co., 61 S. Ct. 358, 85 L. Ed. ; New Idea, Inc. v. N.L.R.B., 7 Cir., 117 F.2d 517; Virginian Railway Co. v. System Federation No. 40, 300 U.S. 515, 57 S. Ct. 592, 81 L. Ed. 789.
Petitioner insists in this connection that the order is vague and indefinite. We do not think the criticism well founded. If substantial evidence supports the finding of no bona fide attempt top bargain, the Board may not dictate the terms of the formal contract; but it may direct petitioner to do that which the Act requires, - to bargain in good faith. In this we think there is no vagueness. We have no doubt that if petitioner so acts as to indicate its bona fides, it will experience no difficulty. It cannot be forced to enter into an agreement but it can be compelled to conduct negotiations in an honest attempt to arrive at an agreement in conformity with the spirit and intent of the Act. The negotiations may fail, but petitioner will experience no hardship in so acting as to convince the Board or the court of its honesty of purpose.
Obviously all we have said concerning the order is dependent upon the ultimate question of whether there was substantial evidence to support the Board's finding of failure to bargain collectively in good faith. Consequently it has been necessary to examine the record.
In December, 1936, certain of petitioner's employees were chartered as a local of the United Automobile Workers of America. This group almost immediately took steps looking toward collective bargaining. On July 20, 1937 the union transferred its membership to the United Electrical, Radio & Machine Workers of America. At the request of United, conferences were had between its committee and petitioner in February, March, April and October, 1937, February, March and April, 1938, none of which resulted in a contract. On May 14, 1938, the Board issued a complaint charging that petitioner had refused to bargain. At the conclusion of the hearing thereon, the examiner allowed the motion of petitioner that the complaint be dismissed on the merits, counsel at that time stating that the management had been and would in the future be willing to bargain with United. In the present proceeding, arising under a subsequent complaint, it was stipulated that the Board might receive the record of the original proceeding in evidence, provided, however, that the admission should not have the effect of raising any issue with respect to any act of petitioner occurring before May 25, 1938 and that the dismissal of the prior proceeding should remain res adjudicata respecting such acts. The Board, in arriving at its conclusion here involved, declared that evidence of events occurring prior to conclusion of the earlier proceeding had been considered only in determining the propriety of petitioner's conduct since that time and not as basis for any finding of unfair practices. In other words, the Board confined its findings and conclusions to the conduct of petitioner subsequent to the termination of the first proceeding, except that it adverted collaterally to the earlier events in order to determine whether they threw any light upon the character of petitioner's conduct since that time.
After dismissal of the original proceeding, petitioner and the United resumed negotiations in June, 1938, and thereafter twelve conferences were had (the last, subsequent to the filing of the present charge), wherein various proposed drafts of contracts were submitted, discussed and criticized. Petitioner submitted from time to time counterproposals. On April 11, 1939, United called a strike, relying, as immediate justification, upon the fact that petitioner had hired a new employee in preference to others previously laid off, who the United claimed deserved priority. This employee shortly thereafter resigned, however, and the strike persisted apparently because of the claim of United that petitioner had not bargained in good faith. Apparently, at the close of the conference on April 18, 1939, the parties were no nearer an agreement than at the beginning.
The complaint here involved was issued April 17, 1939 and hearing upon the charge of failure to bargain in good faith began on May 4, 1939. The evidence considered by the examiner included documents representing the recollections of petitioner's representative as to what occurred at the conferences, various drafts of contracts submitted by United, letters exchanged between petitioner and United and oral testimony of representatives of United. The examiner's findings and recommendations are not included in the transcript. The Board considered the evidence in its relationship to (1) paid holidays, vacations and bonuses; (2) wages; (3) hours of employment; (4) duration of contract; (5) discrimination, strike and lockouts, and (6) seniority. In so far as these subject matters were discussed in the various conferences, the evidence is not greatly in dispute. The disagreement of the parties arises out of the inferences drawn by the Board.
The dates of the conferences were June 16, 17 and 23; July 8, September 1, October 28, November 4 and 17, and December 16, 19, 1938; January 20, 1939; April 14, 1939, April 17 and 18, 1939. At the meetings prior to January 20, 1939, United presented proposed contracts, six in number. Two of them included some twenty articles dealing with an even greater number of matters. Petitioner made countersuggestions; no agreement was reached. On March 22, 1939 the United wrote petitioner that it had voted "not to participate in any further negotiations unless there is a chance of settlement" and postponed "indefinitely" petitioner's offer of further conferences. Under date of March 27, 1939 petitioner expressed the hope that United might see fit to renew negotiations in the near future. At a conference held on April 14, 1939 there were present representatives of United and of petitioner and federal and state conciliators. United then requested resumption of collective bargaining and April 17, 1939 was agreed upon. On that date and on the 18th further conferences were had. United then declared that its committee would consider all of petitioner's proposals and would prepare and submit to petitioner a new contract which would incorporate United's views upon the subject of recognition, seniority, grievances, wages and hours, and requested that petitioner call the committee when it was possible to resume bargaining. Petitioner then stated that it was willing to consider such redraft as soon as the committee could deliver it; that it had received notice of hearing before the Board on May 4, 1939 and that because of this it might not be possible to renew negotiation until after the hearing. On April 19, 1939 United presented a draft containing seven articles. On April 28, petitioner replied thereto accepting the preamble, suggesting a substitute for Article I regarding recognition, making a counterproposal as to seniority of the character it had previously insisted upon, offering a counterproposal in lieu of Article III as to hours in accord with what it had previously urged, suggesting that it saw no reason to change its position with regard to minimum rates, tendering a substitute article reducing wages ten per cent and other articles in lieu of Article V and Article VI as to grievances, strikes and lockouts and, finally, as to Article VII, urging that the contract should be indefinite in duration and ...