• U.S.

The Supreme Court: Limits on Labor & Management

6 minute read

In the continuing struggle between big labor and big business, just what are an employer’s rights? What tactics may he use if union activity threatens to hurt his business? Last week, in three landmark cases, the Supreme Court supplied some answers that set new limits on labor-management disputes.

The court’s hottest case posed a particularly important question: Can an employer close a plant entirely to avoid unionization? The answer is vital to multiplant textile manufacturers who have moved South in search of low-wage and largely nonunion labor. It is equally vital to the Textile Workers Union of America, still trying to organize Southern mill hands.

“Absolute Prerogative.” In 1956 the union tackled South Carolina’s Darlington Manufacturing Co., one of 27 mills and 17 companies making up a combine called Deering Milliken & Co. Manhattan Textileman Roger Milliken argued bitterly that union wages would sink Darlington, which he said was already in the red. By a margin of six votes, the union won the right to represent Darlington’s 550 workers. Milliken immediately closed the plant, a move that depressed the town (pop. 7,000) and crippled the union’s entire Southern campaign. Textile manufacturers festooned the region with bumper stickers that warned: “Remember Darlington.”

The National Labor Relations Board condemned the closing as an illegal tactic born of Roger Milliken’s “antiunion animus” and aimed at curbing unionism among Deering Milliken’s 19,000 other employees. The board ordered back pay (now an estimated $12 million), minus interim earnings, for Darlington’s fired workers until they found equivalent jobs. The U.S. Court of Appeals in Richmond refused to enforce the NLRB order. The court said that Darlington had an “absolute prerogative” to quitbusiness in whole or part at any time it wished. Having thus fairly ended the employment relationship, ruled the court, the company could not be held liable for union busting.

Chilling Unionism. When the NLRB appealed to the Supreme Court, Darlington hired an unusual advocate—North Carolina’s Democratic Senator (and ex-State Supreme Court justice) Sam J. Ervin Jr. No law prevents members of the House or Senate from trying cases in any court except the U.S. Court of Claims, though purists looked askance at a U.S. Senator representing a private client against the U.S. Government—to say nothing of the fact that Ervin’s constituents include thousands of North Carolina textile workers. Ervin, however, insisted that he was “fighting for the economic freedom of all Americans.” He told the Court not to fret over Milliken’s motive for closing his plant, quoted I Samuel 16:07: “God judgeth not as man judgeth, for man looketh upon external appearance, but God judgeth upon the heart.”*

Speaking for the court, Justice John M. Harlan last week seemed at first to be sympathetic to Ervin’s pitch. “An employer has the absolute right to terminate his entire business for any reason he pleases,” ruled Harlan. To hold otherwise “would represent such a startling innovation that it should not be entertained without the clearest manifestation of legislative intent or unequivocal judicial precedent.”

That said, Harlan then proceeded to reject Ervin’s case. “A partial closing is an unfair labor practice,” Harlan ruled, “if motivated by a purpose to chill unionism in any of the remaining plants of the single employer and if the employer may reasonably have foreseen that such closing will likely have that effect.”

As for Darlington itself, Harlan ordered the NLRB to further probe “the purpose and effect” of the closing in relation to the combine’s other workers. He left open for future review by the lower court the board’s finding that Darlington was an integral part of Deering Milliken. Although this may yet bring the case back to the Supreme Court, the union joyously hailed the Darlington decision as a Waterloo for “large union-busting textile complexes in the South,” which “can no longer play musical chairs with workers’ lives and the welfare of textile communities.”

Legal Lockouts. In two other cases, though, the court sharply rapped the NLRB for ruling that lockouts give employers “too much power.” The court went far toward holding that lockouts are illegal only if designed for union busting—a point partly illustrated by the case of five retail grocers who bargained together against their clerks’ union in Carlsbad, N. Mex.

To divide and conquer, the union had called a “whipsaw strike” against one store, hoping that loss of business would force it to come to terms that the other stores would then be forced to follow. Instead, all five stores locked out their clerks and stayed in business with temporary nonunion help. After seven weeks, the union gave up and signed a new contract.

According to the NLRB, the lockout would have been legal had the stores shut down. Disagreeing, the court said that the lockouts were legal because they were not “hostile” to the union; indeed the stores immediately rehired their union clerks after the strike. The lockouts were thus a legitimate “defensive measure to preserve the multiemployer group in the face of the whipsaw strike.”

Fair’s Fair. Equally business-saving rather than union-busting, said the court, was a lockout by American Ship Building Co., which depends for its income largely on repairs to Great Lakes ships laid up during the icebound winter. In the summer of 1961, after five strikes, the company reached an impasse with eight unions that demanded an extended contract expiring in midwinter, the height of the business season. In desperation, the company closed one yard and laid off workers in two others. By fall, the company had a two-year contract and has not been struck since.

Was this an unfair labor tactic? Yes, said the NLRB, because the lockout forced the unions to abandon their wage demands. Moreover, it was so timed that it nullified the unions’ strike power during the company’s most vulnerable period. The court sharply disagreed. The company showed no antiunion bias, said Justice Potter Stewart for the unanimous bench. Rather, it legally used the “bargaining lockout” as a corollary of the “bargaining strike.” Lockouts may disrupt strike plans, but the right to strike does not include “the right exclusively to determine the timing and duration of all work stoppages. The right to strike, as commonly understood, is the right to cease work—nothing more.” An employer does not violate the law if, during an impasse, “he temporarily shuts down his plant and lays off his employees for the sole purpose of bringing economic pressure to bear in support of his legitimate bargaining position.”

*The King James version: “The Lord seeth not as man seeth; for man looketh on the outward appearance, but the Lord looketh on the heart.”

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