Farmers' Loan & Trust Co. v. Northern Pac. R.
60 F. 803, 1894 U.S. App. LEXIS 2761, 25 L.R.A. 414 (1894)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
A court of equity may enjoin employees from engaging in a strike or a conspiracy to quit work when their primary object and intent is not to simply sever the employment relationship, but to cripple the employer's property and business operations, thereby harming the public.
Facts:
- The Northern Pacific Railroad Company was insolvent and being operated by court-appointed receivers.
- Due to a major financial depression and falling revenue in 1893, the receivers ordered two rounds of wage reductions for employees earning over a certain amount.
- The receivers also announced that existing work schedules, which had been in place for years, would be abrogated and replaced with new ones on January 1, 1894.
- In response, some employees expressed discontent and threatened to suddenly quit their jobs in a coordinated effort.
- These employees allegedly threatened to use force and intimidation to compel willing employees to also quit, prevent new workers from taking their place, and disable locomotives and cars.
- Committees representing various classes of employees were formed and confederated to consider a joint recommendation for a system-wide strike to begin on January 1, 1894.
- The employees, mostly members of national labor organizations, allegedly would not strike unless ordered to do so by the heads of those organizations.
Procedural Posture:
- The court-appointed receivers of the Northern Pacific Railroad Company filed a petition in the Circuit Court seeking authority to implement new wage schedules and an injunction.
- The court granted the petition and issued a writ of injunction restraining employees from, among other things, conspiring to quit with the intent of crippling the railroad.
- The receivers then filed a supplemental petition seeking to enjoin the leaders of national labor organizations from ordering or advising a strike.
- The court issued a second, broader writ of injunction containing the requested restraints against the labor leaders.
- P.M. Arthur and other chief executive officers of the national labor organizations moved the court to modify the injunctions by striking out the clauses that restrained them from conspiring to quit and from ordering or advising a strike.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Does a court with control over a railroad in receivership have the equitable power to issue an injunction preventing employees from combining and conspiring to quit their service with the intent to cripple the railroad's operation, and preventing their leaders from ordering a strike for that purpose?
Opinions:
Majority - Jenkins, Circuit Judge
Yes, a court has the power to enjoin such a conspiracy. While an individual has a right to quit his employment, that right is not absolute and does not extend to combining with others to quit as a pretext for the real purpose of inflicting injury upon an employer and the public. The court reasoned that a combination of individuals to do an act becomes an unlawful conspiracy when its direct intention is to cause injury, benefit the conspirators to the prejudice of the public, or oppress individuals. Here, the threatened action was not a good-faith abandonment of service, but a conspiracy to use the cessation of labor as a weapon to cripple the railroad property held in trust by the court. The court emphasized the railroad's public duties, stating that the rights of employees, like those of shareholders, are subordinate to the public welfare. The court defined a strike as an inherently coercive and violent effort to extort concessions, not a peaceful cessation of work, and thus an unlawful means to an end. However, the court did modify the injunction to remove a clause forbidding anyone from 'advising' employees to quit, finding it overly broad and susceptible to misinterpretation, while leaving the core prohibitions against conspiring and striking intact.
Analysis:
This case is a landmark decision in the history of American labor law, solidifying the use of the labor injunction as a powerful tool for employers to combat strikes. It established a crucial legal distinction between an individual's right to quit work and a collective conspiracy to strike with malicious intent to cause harm, labeling the latter illegal. By framing strikes as inherently coercive and violent conspiracies that threaten public welfare, the court provided a legal rationale that federal courts would use for decades to break strikes, particularly in industries affecting interstate commerce. This ruling significantly hampered the power of organized labor until legislative changes, like the Norris-LaGuardia Act of 1932, limited the judiciary's ability to issue such injunctions.
