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Allis-Chalmers Manufacturing Co. v. National Labor Relations Board

March 11, 1966


Hastings, Chief Judge, Duffy, Schnackenberg, Knoch, Castle, Kiley, and Swygert, Circuit Judges. Hastings, Ch. J., dissenting. Kiley, C. J., dissenting. Swygert, Circuit Judge (dissenting).

Author: Knoch


Allis-Chalmers Manufacturing Company, petitioner, sought to review and set aside the action of the National Labor Relations Board, respondent, in dismissing Allis-Chalmers' complaint against Locals 248 and 401 of International Union, UAW-AFL-CIO, who are bargaining agents for certain Allis-Chalmers' employees. The Union was charged with unfair labor practices in fining members who had crossed picket lines during two different strikes. The original opinion of this Court which issued September 13, 1965, denied Allis-Chalmers' petition for review.*fn*

We granted petition for rehearing en banc in this case for a number of reasons, including the following:

(a) the national significance of our decision to management and labor alike, as well as to other courts dealing with kindred or related matters;

(b) an asserted conflict with our prior ruling in Allen Bradley Company v. NLRB, 7th Cir. 1961, 286 F.2d 442;

(c) an opportunity for a critical re-evaluation of their respective positions by members of the original panel;

(d) our natural desire to maintain the historical liberty of the American working man to remain free to work without coercion from employers or from unions; and to preserve the traditional character of American labor organizations which, largely through voluntary association, have contributed toward raising the living standards of our working people in this country to the highest plane known anywhere in the world.

As set out in our original opinion:

The issue before us is whether a union which imposes fines upon its members for crossing a picket line of the union and seeks to secure payment of the fines by suing or by threat of suit is guilty of violating the prohibition, in Section 8(b) (1)(A) of the National Labor Relations Act, as amended, 61 Stat. 136, 29 U.S.C. § 141, et seq., against union action restraining or coercing employees in the exercise of rights guaranteed by Section 7 of the Act.

The maximum fine permitted under the Union constitution was $100 with each crossing of the picket lines treated as a separate offense.Consecutive fines may run into thousands of dollars creating a far greater burden on the working man than expulsion from his labor organization or even loss of job.

Section 7 of the Labor Management Relations Act, 29 U.S.C. § 157, provides:

Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection, and shall also have the right to refrain from any or all of such activities except to the extent that such right may be affected by an agreement requiring membership in a labor organization as a condition of employment as authorized in section 158(a)(3) of this title.

The parties agreed that generally employees have the right not to strike and that the Union may expel its members for any reason authorized by its rules, but that the Union may not demand the discharge of an employee or other adverse change of his employment status except for non-payment of uniform initiation fees and dues.

Section 8 of the Act, 29 U.S.C. § 158, provides:

(b) It shall be an unfair labor practice for a labor organization or its agents --

(1) to restrain or coerce (A) employees in the exercise of the rights guaranteed in section [7] of this title: Provided, That this paragraph shall not impair the right of a labor organization to prescribe its own rules with respect to the acquisition or retention of membership therein; * * *

Allis-Chalmers contended that union members who cross their own union picket lines are exercising their rights under § 7 to refrain from engaging in a particular concerted activity, and that union discipline for such activity violates § 8(b)(1)(A) if it takes any form other than expulsion from the union. This contention, of course, rests on a literal reading of § 7.

In our original opinion, we mistakenly took the position that such a literal reading was unwarranted in the light of the history and purposes of the section.

We relied on certain aspects of the legislative history, as, for example, committee reports indicating that wildcat and sitdown strikes, although "concerted" activities, were not included in the activities protected by § 7; and the fact that the original proposals of the House and Senate (prior to the 1947 Taft-Hartley amendments) which did include a number of restrictions on union-membership dealings, nevertheless did not specifically prohibit union fines for strike-breaking, although Congress must have been aware of union disciplinary practices and did specifically make provision permitting disciplinary expulsion. Reference was also made to Senator Taft's remarks that the pending measure did not propose any limitation with respect to the internal affairs of unions. However, he did go on to speak only of discipline by expulsion and to say that the only result of the provision under discussion was that a union "firing" a member for some reason other than non-payment of dues could not force the member's employer to discharge him. It now appears that he had reference to § 8(a)(3), as when he was clearly speaking of § 8(b) (1)(A) he said that the union could conduct any form of propaganda it chose to persuade but could not by threat of economic reprisal prevent its members from exercising their right to work and that, as he saw it, was the effect of the amendment, which was adopted shortly after these remarks.

We also laid emphasis on Congressional concern with the use or threat of use of various forms of violent coercion and the elimination of "repressive tactics bordering on violence or involving particularized threats of economic reprisal" as quoted from the opinion in NLRB v. Drivers, Chauffeurs, Helpers, Local Union No. 639, Int. Bro. Teamsters, etc. (Curtis Bros., Inc.) 362 U.S. 274, 286-7, 4 L. Ed. 2d 710, 80 S. Ct. 706 (1960) and concluded incorrectly, we now believe, that economic reprisal meant only such things as securing discharge or reductions in pay or seniority but not imposition of fines.

In formulating our original opinion, we gave favorable consideration to the following arguments:

1. A member ought not to enjoy all the benefits of union membership while relinquishing none of the advantages of non-union membership.

2. Congress would have been guilty of inconsistency in adopting 29 U.S.C.A. § 411(a)(2) which allows unions to enforce reasonable rules as to the responsibility of members with respect to refraining from conduct that interfered with the union's legal and contractual obligations, if Congress were also prohibiting imposition of fines for members who crossed picket lines.

3. If a union's disciplinary powers are limited to expulsion, a union must choose between permitting anarchy in its ranks or depleting its strength, and Congress could not have intended to present unions with so invidious a choice.

4. A fine may be a lesser penalty than expulsion with attendant loss of union insurance and other benefits, and Congress would not have allowed the more severe while withholding the less serious form of punishment.

5. If a union may not fine strikebreakers, then it cannot fine wildcat strikers and cannot enforce a "no strike" clause in its contract.

6. An analogy was drawn between an industrial union and a democratic society where the majority vote rules, forgetting that a union is largely the creature of statute, that it differs in many ways from other secular societies freely joined and equally freely abandoned by individuals who disagree with the majority, and who are free to withdraw their moral and financial support at any time.

7. Our statement in Allen Bradley Co. v. NLRB, 7th Cir. 1961, 286 F.2d 442, that fines for crossing picket lines imposed a sanction on the exercise of the right to work guaranteed by the Act was mere dictum, as in that case, we held a proposal to limit unions' rights to fine or discipline its members for crossing picket lines was a subject of mandatory bargaining. It was suggested that it was somehow inconsistent to require bargaining with respect to a prohibited activity.

On rehearing, fortified with the additional arguments of counsel, and after discussion with all members of our Court, we conclude that the foregoing reasons set out in support of our prior opinion lack validity.

The statutes in question present no ambiguities whatsoever, and therefore do not require recourse to legislative history for clarification. The wording used evolved out of extensive Congressional debate and study. Although in our original opinion we rejected a literal reading of the statutes, in effect, we conceded that such a literal reading would require reversal of the Board's Order.

As interpreted in our original opinion these statutes would protect a union member from his union's coercive threats to take away his wages by securing his discharge from employment, but would not protect him from his union's coercive threats to take away his wages by imposition of fines. A substantial fine such as permitted here may easily pose a greater threat to a member than simple expulsion from the union.

Congress has determined what rights the employee may retain while availing himself of the benefits of union membership. All the protections which Congress has seen fit to throw about the union member operate to diminish the authority and power of the union to police its members by coercion and to that degree impose on the union the burden of achieving its ends by persuasion, rather than by penal exaction.

Recent history has demonstrated the extreme and far reaching effect of the irresponsible exercise of power and the resulting confusion and loss wreaked on labor, management, and the general public. On the other hand, we, as do all right-thinking citizens, hold those labor leaders in highest respect and esteem, whose authority is based on voluntary association rather than coercion, and who, fortified with the weapons Congress has deemed advisable, carry out their legitimate activities on behalf of their members. Such labor leaders have created a beneficent climate in which labor, management, and the general public may thrive without peril to that priceless American heritage; namely, the right of freedom to work and to organize on a voluntary basis.

We should never forget, nor should we let our fellow citizens forget, that in the all-inclusive, authoritarian state, represented as our common enemy today, the individual rights of the worker and the collective rights of organized workers have been completely appropriated. The state produces but one by-product and that is absolute and abject slavery. Thus ends the right to strike for increased wages or better working conditions. There is no redress of grievances, no individual management of business to create a strong economy for the commonweal. Each and every person does exactly what he is told to do, nothing more and nothing less. It is more important for the individual laboring man to be free and for his labor organization to be free than for any other segment of our society. Our greatness in the past, in the present, and, we prophesy, in the future, stems from those who toil.

The expressed Congressional policy of protecting the union member is particularly apt where, as in the case before us, membership is the result not of individual voluntary choice but of the insertion of a union security provision in the contract under which a substantial minority of the employees may have been forced into membership. Such membership properly incurs an obligation to pay dues and fees but may not be extended to include liability to submit to fines for indulging in a protected ...

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