Lauf v. E. G. Shinner & Co.
303 U.S. 323, 58 S. Ct. 578, 1938 U.S. LEXIS 365 (1938)
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Rule of Law:
A controversy between a union and an employer concerning the unionization of the employer's workforce constitutes a "labor dispute" within the meaning of the Norris-LaGuardia Act, even if the disputants do not stand in the proximate relation of employer and employee.
Facts:
- E. G. Shinner & Co. (Shinner) was a Delaware corporation that operated five meat markets in Milwaukee, Wisconsin.
- None of Shinner's thirty-five employees were members of the petitioning union, led by Edward Lauf.
- The union demanded that Shinner require its employees to become union members as a condition of their continued employment.
- Shinner notified its employees that they were free to join the union, but the employees unanimously declined and refused to join.
- To coerce Shinner into forcing its employees to join, the union conspired to injure its business.
- The union initiated picketing in front of Shinner's markets, using signs the company claimed were false and misleading.
- The union's members, who were not Shinner employees, also allegedly molested, annoyed, and threatened patrons to prevent them from shopping at the markets.
Procedural Posture:
- E. G. Shinner & Co. sued Edward Lauf and his union in the United States District Court for the Eastern District of Wisconsin, seeking an injunction to stop picketing.
- After a hearing, the District Court granted a preliminary injunction and later a final decree enjoining the union's activities, holding that no 'labor dispute' existed.
- Lauf and the union, as appellants, appealed the decree to the United States Circuit Court of Appeals for the Seventh Circuit.
- The Circuit Court of Appeals affirmed the District Court's decision, siding with Shinner & Co., the appellee.
- The United States Supreme Court granted a writ of certiorari to review the decision of the Circuit Court of Appeals.
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Issue:
Does a controversy between a union and an employer, where the union seeks to compel the employer to require its employees to join the union, constitute a 'labor dispute' under the Norris-LaGuardia Act, thereby restricting a federal court's jurisdiction to issue an injunction against the union's picketing?
Opinions:
Majority - Mr. Justice Roberts
Yes. The controversy is a 'labor dispute' under the Norris-LaGuardia Act, which defines the term broadly to include any controversy concerning the association or representation of persons in negotiating employment terms, regardless of whether the disputants are in a direct employer-employee relationship. Because this situation falls within the statutory definition of a labor dispute, a federal court's jurisdiction to grant an injunction is strictly limited by the Act. The District Court exceeded its jurisdiction by issuing an injunction without making the specific findings of fact required by Section 7 of the Act, such as that unlawful acts have been threatened, that public officers are unable to provide adequate protection, and that greater injury will be inflicted upon the complainant by denying relief than upon the defendants by granting it. The court also erred by failing to apply the Wisconsin Labor Code, which defined 'labor dispute' similarly and declared peaceful picketing lawful. The policy declarations within these acts regarding employee freedom of choice do not narrow the explicit and broad definition of a 'labor dispute'.
Dissenting - Mr. Justice Butler
No. The controversy is not a 'labor dispute' because the union's demand—that the employer coerce its employees—is directly contrary to the Norris-LaGuardia Act's declared public policy of ensuring employees are free from employer interference in selecting their representatives. The term 'labor dispute' should be interpreted in harmony with this policy, not in a way that subverts it. There was no true controversy, but rather a coercive demand by an outside party for the employer to perform an unlawful act. To deny an injunction in this case, where the union engaged in false accusations and intimidation, allows the Act to be used to destroy property rights, raising serious Fifth Amendment due process concerns.
Analysis:
This decision significantly broadened the scope of what constitutes a 'labor dispute' under the Norris-LaGuardia Act, solidifying its application to 'stranger picketing'—picketing by a union that does not represent any of the employer's employees. By confirming that such organizational efforts fall under the Act, the Court severely curtailed the power of federal courts to issue injunctions in these common labor conflicts. The ruling reinforced that federal jurisdiction is determined by the Act's broad definitions, not by a court's view of the dispute's merits or the fact that an employer is caught between a union's demands and its employees' wishes. This interpretation greatly strengthened the ability of unions to engage in organizational activities without federal judicial interference.
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