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Scofield v. National Labor Relations Board

March 5, 1968


Knoch, Senior Circuit Judge, and Swygert and Cummings, Circuit Judges. Knoch, S. C. J., dissenting.

Author: Cummings


Petitioners, four employees of Wisconsin Motor Corporation ("the Company"), ask us to set aside an order of the National Labor Relations Board dismissing an unfair labor practice complaint that had issued upon their charges against their Union.*fn1

Petitioners are members of a Union that has been the bargaining representative of the production employees of the Company since 1937. The collective bargaining contract requires such employees to belong to the Union or to pay it a service fee equivalent to dues. The Company is based in West Allis, Wisconsin, where it manufactures motors. Half of its 850 production employees, including these petitioners, are compensated on a basis permitting them to earn amounts above their basic hourly wages by producing at a rate in excess of established hourly norms of output.

In 1944, the Union membership adopted a resolution providing in substance that "the men turn in [report for payment] no more than 10 cents per hour over and above the new machine rates." In 1946, the membership approved fines as penalties for violation of that ceiling rule. The penalties are presently contained in a February 1961 Union by-law which provides that any member violating the production ceilings is "guilty of conduct unbecoming a Union member" and subject to a fine of $1.00 for each violation. The by-law also provides that in case of persistent ceiling violations, the offender would be charged with "conduct unbecoming a Union member." If a member were found guilty of such conduct, he could be assessed with a maximum fine of $100 (enforceable within a specified time by automatic suspension or expulsion) or suspended or expelled from membership. The Union's sanctions do not impair a member's status as an employee of the Company.

Ceilings were established from time to time through collective bargaining between the Company and the Union although the Company did not agree to limit wages accordingly. Thus if an employee produced work in excess of the ceilings, the Company would on request pay him for his actual production without regard to the ceilings. So far the Company has been unsuccessful in its bargaining for the elimination of the Union ceiling rates, but the ceilings on all piecework jobs were increased in July of 1953 and August 1956. The ceilings in effect at the time of this dispute were between 45 and 50 cents above the machine rates.

By Union rule, any production which a production employee member has turned out at a pace which would yield hourly rates above the ceiling rates is not to be reported to the Company for immediate compensation. Instead, such members are required to "bank" with the Company their earnings in excess of ceilings. On occasions when they receive less than ceilings (for example, through absence or enforced idleness), the Union permits the members to draw upon their "bank" by charging the Company for work previously produced but not reported for wage purposes. Although the Company normally acquiesces in the "banking" system, if an employee chooses to disregard the Union rule and report all production for immediate payment, the Company, as noted, will pay him even though the Union ceilings are exceeded.

In 1946, the Union first began enforcing its "banking" system by imposing fines. In 1961, the Union found that six members had violated the "banking" system by reporting to the Company for immediate payment production at a rate in excess of the Union ceilings. Two members were fined $35 each and paid their fines. Two of the petitioner members were fined $100 each, the third was fined $75, and the fourth was fined $50. Instead of paying their fines, the four petitioners filed unfair labor practice charges with the Regional Director of the National Labor Relations Board in May 1961. In October 1961, the Union filed a suit to collect the fines in the Civil Court of Milwaukee County, Wisconsin, where it is still pending. In December 1961, the General Counsel of the Board issued a complaint charging that the Union, in fining and suing petitioners, had restrained and coerced them in the exercise of their rights under Section 7 of the National Labor Relations Act*fn2 and thereby violated Section 8(b)(1)(A)*fn3 of the Act. The Union and Company have taken no measures to impair the job status of the petitioners.

The Trial Examiner and the Board concluded that Section 8(b)(1)(A) had not been violated and dismissed the complaint. In view of the authoritative construction of that Section in National Labor Relations Board v. Allis-Chalmers Mfg. Co., 388 U.S. 175, 18 L. Ed. 2d 1123, 87 S. Ct. 2001, we must deny the employees' petition for review.

As early as 1951, this Court construed the proviso in Section 8(b)(1)(A) in American Newspaper Publishers Association v. National Labor Relations Board, 193 F.2d 782 (7th Cir. 1951), affirmed on other grounds, 345 U.S. 100, 97 L. Ed. 852, 73 S. Ct. 552. There the union threatened to expel members for violation of a rule forbidding them to work in a shop with non-members. Even though the expulsion might involve the loss by the employee of his job and other economic benefits such as pension and mortuary provisions, we held (at pp. 800-801, 806):

"Under this limitation Congress left labor organizations free to adopt any rules they desired governing membership in their organizations. Members could be expelled for any reason and in any manner prescribed by the organization's rules, so far as § 8(b)(1)(A) is concerned. This interpretation has support in the legislative history of the Act. It is also significant that while the Board has been so interpreting this section of the Act during the past four years, Congress has not amended the section to indicate that a broader interpretation of the section was intended or desired. It is not within the power of the courts to write into this section of the Act, by interpretation, language which would broaden its scope.

"* * * the proviso in § 8(b)(1)(A) permits unions to enforce their internal policies upon their membership as they see fit."

In National Labor Relations Board v. Amalgamated Local 286, 222 F.2d 95 (7th Cir. 1955), the union threatened to deprive certain members of group and hospitalization insurance coverage because they had refused to pay various disciplinary assessments and fines which the union had imposed upon them. Following the lead of American Newspaper Publishers Association, the Court held that under the proviso in Section 8(b)(1)(A) the union's threatened withdrawal of the insurance rights of the complaining employees as a disciplinary measure was in full conformity with its right to regulate its internal affairs.

Thus in this Circuit, even before the decision in National Labor Relations Board v. Allis-Chalmers Mfg. Co., 388 U.S. 175, 18 L. Ed. 2d 1123, 87 S. Ct. 2001, great breadth was accorded to the proviso in Section 8(b)(1)(A). In Allis-Chalmers, the opinion of the Court holds that the words "restrain or coerce" used in Section 8(b)(1), as shown by the legislative history of the Section, were not meant to encompass internal affairs of unions. In other words, internal union disciplines are not among the proscribed restraints. In reaching this conclusion, the Court was partly motivated by our national labor policy that clothes a union with powers analogous to a legislature, with union rules enacted by the majority becoming binding on the minority. The Court noted that in the case of a strong union, expulsion from membership is a far more severe penalty than a reasonable fine (at p. 183).*fn4 The Court's examination of the legislative history of Section 8(b)(1)(A) convinced it that the statute does not prohibit union imposition of disciplinary fines and suits to collect them. In ...

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