National Labor Relations Board v. Fansteel Metallurgical Corp.
1939 U.S. LEXIS 1092, 306 U.S. 240, 59 S. Ct. 490 (1939)
Rule of Law:
The National Labor Relations Act does not grant the National Labor Relations Board the authority to compel an employer to reinstate employees who were lawfully discharged for engaging in illegal conduct, such as seizing the employer's property in a sit-down strike, even if the strike was precipitated by the employer's unfair labor practices.
Facts:
- In the summer of 1936, employees at Fansteel Metallurgical Corporation formed a union, Lodge 66.
- Fansteel engaged in anti-union activities, including employing a labor spy, attempting to form a company-controlled union, and refusing to bargain with Lodge 66 after it achieved majority status.
- On February 17, 1937, after Fansteel's superintendent again refused to bargain, about 95 union members staged a "sit-down strike," seizing and occupying two of the company's key buildings.
- That same evening, Fansteel's counsel announced that all employees occupying the buildings were discharged for the seizure and retention of company property.
- The striking employees continued to occupy the buildings for nine days, defying a state court injunction to vacate the premises.
- On February 26, 1937, the sit-down strikers were forcibly evicted by the sheriff and arrested.
- After resuming operations, Fansteel began hiring new employees and also offered to rehire many of the strikers individually, but without recognizing the union.
Procedural Posture:
- The union, Lodge 66, filed a complaint with the National Labor Relations Board (NLRB) alleging Fansteel had engaged in unfair labor practices.
- The NLRB found that Fansteel had committed unfair labor practices and issued an order requiring Fansteel to cease and desist, to stop recognizing a company union, and to offer reinstatement with back pay to the discharged strikers.
- Fansteel, the respondent, petitioned the U.S. Circuit Court of Appeals to review and set aside the NLRB's order.
- The Circuit Court of Appeals set aside the Board's order.
- The NLRB, the petitioner, was granted a writ of certiorari by the United States Supreme Court.
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Issue:
Does the National Labor Relations Act authorize the National Labor Relations Board to require an employer to reinstate employees who were discharged for engaging in an unlawful sit-down strike by seizing the employer's property?
Opinions:
Majority - Mr. Chief Justice Hughes
No. The National Labor Relations Board is not authorized to require reinstatement of employees who were discharged for their unlawful conduct in seizing and holding the employer's property. The employees' seizure of the plant was an illegal act, and the employer's preceding unfair labor practices did not excuse this conduct or deprive the employer of its right to protect its property and discharge the wrongdoers. The NLRA protects the right to engage in lawful strikes, not illegal seizures of property. The Board's authority to order affirmative action is remedial, not punitive, and ordering reinstatement of employees who committed serious illegal acts would not effectuate the policies of the Act but would subvert its goal of promoting peaceful industrial relations.
Dissenting - Mr. Justice Reed
Yes. The National Labor Relations Board should have the authority to order reinstatement in this situation. The language of the Act, specifically the definition of "employee" in § 2(3), was intended to protect striking workers from being discharged during a labor dispute. The majority's holding allows an employer to provoke a strike through illegal anti-union conduct and then seize upon any misconduct by the strikers as a pretext for discharge, thereby defeating the Act's purpose. It is the function of the Board, not the courts, to weigh the misconduct of both parties and determine whether reinstatement would best serve the goal of industrial peace.
Concurring - Mr. Justice Stone
No. The Board was without statutory authority to order reinstatement of the discharged employees. This conclusion rests on the construction of the Act's definition of "employee." While § 2(3) preserves the employee status of individuals whose work has ceased due to a labor dispute or an unfair labor practice, it does not protect the status of those who have been lawfully discharged for a separate, independent reason, such as committing an illegal act. Once these employees were discharged for cause, they were no longer "employees" under the Act, and therefore the Board lacked the jurisdiction under § 10(c) to order their reinstatement.
Analysis:
This landmark decision significantly limited the remedial power of the National Labor Relations Board and curtailed the use of the sit-down strike as a union tactic. The Court established that an employee's participation in unlawful activity, even during a strike provoked by an employer's unfair labor practices, can serve as a legitimate, independent basis for termination. This ruling affirmed that the protections of the NLRA are not absolute and do not shield employees from the consequences of illegal conduct. It drew a critical distinction between protected, lawful concerted activities and unprotected, unlawful actions, thereby reinforcing employer property rights against even illegally provoked labor actions.
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