National Labor Relations Board v. Crowe Coal Co. (104 F.2d 633, 1939)

WOODROUGH, Circuit Judge.

This case comes before the court upon petition by the National Labor Relations Board for the enforcement of an order issued by it pursuant to Section 10 (c) of the National Labor Relations Act, July 5, 1935, 29 U.S.C.A. § 151 et seq., against respondent, Crowe Coal Company, a Missouri corporation, which operates a coal mine in Llenry County, Missouri. (Case No. C-564, decided Nov. 23, 1938.)

The case was begun by the filing with the Board of a charge by United Mine Workers of America, District No. 14, a labor organization referred to as the United. Thereafter United filed its amended charge in which it was alleged that respondent had engaged in and was engaging in certain described unfair labor practices affecting commerce as defined in the Act. The Board by its Regional Director at Kansas City, Missouri, issued a complaint and notice of hearing, which were served upon respondent. It was charged in the complaint that respondent discharged and refused to reinstate Kaples Forsythe, A. W. Sivils, Charles Kern and Carey Scott because they had joined and assisted the United and engaged in concerted activities with other employees of respondent for the purpose of collective bargaining and other mutual aid and protection; that by the aforesaid discharges and other acts respondent interfered with, restrained and coerced its employees in the exercise of the rights guaranteed to them by Section 7 of the Act; and that by the foregoing acts respondent had engaged in and was engaging in unfair labor practices affecting commerce within the meaning of Section 8 (1) and (3) and Section 2 (6) and (7) of the Act. Respondent filed an answer in which it denied all the material allegations of the complaint.

A hearing was held at Kansas City, Missouri, before a Trial Examiner designated by the Board. At the hearing, counsel for the Board and for respondent entered into an “Agreed Statement of Facts”, setting forth the facts as to the nature of respondent’s business and containing the following paragraph dealing with the unfair labor practice charges:

“It is hereby stipulated * * *

“4. That the evidence which would be offered' by the National Labor Relations Board at the hearing in the above-entitled matter as" the reason for the discharge of the above-named employees, and each of them, would be sufficient to justify a finding by the National Labor Relations Board that the above-named men were discharged from the employ of the respondent because of their membership in the United Mine Workers of America,'District No. 14.”

No testimony of witnesses as to the: discriminatory character, of 'the discharges was introduced.. Thereafter, the Trial Examiner filed with the Board.his-Intermediate Report in which he found that respondent had engaged in unfair labor practices as alleged in the complaint. Exceptions to the Intermediate Report were filed with the Board by respondent.

Thereafter the Board, being of the' opinion that '“the record was inadequate for a determination of the issues”, issued an order, pursuant to Article II, Section 36/ of the Board’s Rules and Regulations, reopening the hearing for the purpose of introducing further evidence. ■ Thereafter/ due notice of the holding óf a further hearing “on the complaint heretofore issued in the * * * matter” having been givenj a second hearing was held' before the Trial Examiner designated by th'e Board. At this hearing, the Board called witnesses and introduced evidence upon the issue whether or not the respondent had been guilty of the unfair labor practices alleged in the complaint.

At the conclusion of the second hearing, counsel for the Board requested that the record be kept open for the inclusion of “material that will pertain to the bituminous coal industry generally”, and counsel for respondent also indicated that if respondent desired, the same opportunity should be given to it “to offer similar documentary proof.” Counsel for the Board subsequently offered in evidence Bulletin No. 2 purporting to be a publication of the Division of Economic Research of the National Labor Relations Board, entitled “The Effect of Labor Relations in the Bituminous Coal Industry Upon Interstate Commerce”, containing general economic and historical data and statistical tables relating to the subject of the title. The respondent filed' objections to the introduction of this material in evidence on the grounds that the data was unverified hearsay “of no evidentiary value” and immaterial under the issues. The Board in its decision overruled' the objections and ordered that the data be made part of the record. No objections to such action are argued here.

The respondent argued the case orally before the Board and filed a brief in support of its conclusions and on consideration of the entire record, the Board rendered its decision setting forth its findings of fact, conclusions of law,' and the order now before us.

The findings of fact made by the Board were based upon the agreed statement of facts submitted before the examiner at the first hearing and the testimony taken before the examiner at the second hearing. The facts concerning the business of the respondent' were found separately from those relating to the discharge of the workmen. In Section I it was found as to the nature of respondent’s operations that respondent,. “a Missouri corporation, operates a strip mine in Clinton, Missouri, and maintains a sales office in Kansas City, Missouri. During the year 1936, the respondent mined and sold 267,495.5 tons of coal to various consumers. Of this amount, jobbers who accepted delivery at the mine, sent 34,004.74 tons of coal out of the State f. o. b. respondent’s mine. In addition, the respondent sold 32,231.33 tons of coal to the Kansas City Power & Light Company and 46,-590 tons to the St. Louis-San Francisco Railway Company for road and engine service and for use in its stationary plants. The Kansas City Terminal Railway Company purchased 17,888.58 tons of coal which were used' at its power house in Kansas City, Missouri.”

In respect to the unfair labor practices, the Board found, Section III, “that respondent discharged Kaples Forsythe, Albert Sivils, Charles Kerns, and Carey Scott because of their membership and activity in the United; that respondent discriminated against its employees in regard to hire and tenure of employment, thereby discouraging membership in a labor organization; and that by the foregoing acts respondent interfered with, restrained, and coerced its employees in the exercise of the rights guaranteed in Section 7 of the Act.”

Upon the foregoing findings of fact, the Board concluded the respondent had engaged in and was engaging in unfair labor practices in violation of Section 8, subdivision's (1) and (3) of the Act, and that said unfair labor practices affected commerce within the meaning of Section 2, subdivisions (6) and (7), of the Act. Thereupon the Board ordered respondent to cease and desist from discouraging membership in the United, or any other labor organization of its employees, by discriminating in regard to hire or tenure of employment or any term or condition of employment; and from in any manner interfering with, restraining, or coercing its employees in the exercise of the rights as guaranteed in Section 7 of the Act.

As affirmative action which the Board found would effectuate the policies of the Act, the Board directed respondent to reinstate the four men to their former positions, to make them whole for part of their back pay and to post appropriate notices.

The Board’s findings with respect to the nature of respondent’s operations are based on the agreed statement of facts entered into between counsel for respondent and counsel for the Board and are not in dispute. It appears that respondent is a corporation organized under the laws of Missouri and is engaged in the operation of a strip coal mine located near Clinton, Missouri. Its only offices and places of business are its principal office and place of business in Kansas City, Missouri, and its office at Clinton, Missouri. The business done during the year 1936 was tabulated in the agreed statement and it was' agreed that the sales, manner of billing and tonnage shown by the tabulation for the year 1936 was a representative year of respondent’s business and is representative of all the periods of time here involved. During that year, respondent produced 267,494.50 tons of coal. Of its total production, 34,004,74 tons, or 12.7 per cent, was sold loaded in the cars at the mine to jobbers and billed at their direction to points outside the State of Missouri, and 64,478.58 tons, or 24.1 per cent, was sold to the St. Louis-San Francisco Railway and the Kansas City Terminal Railway Company. Of the coal sold to the railways, 22,638.58 tons, or approximately 36 per cent, was used in the generation of power and production of heat in stationary plants within the State of Missouri, and 41,480 tons or approximately 64 per cent, was used directly in engine service as locomotive fuel. Thus, during the year 1936, a total of 98,583.32 tons, or 36.8 per cent of respondent’s' total production of coal, entered into the channels of interstate trade or was used either in the servicing of instrumentalities of interstate commerce or in the maintenance of facilities essential to the functioning of such instrumentalities. In addition, the Kansas City Power & Light Company purchased 32,090.10 tons, or 11.9 per cent of the coal produced by respondent. 5.4 per cent of the electrical energy generated by this company is transmitted to points outside the State of Missouri. The amount of coal sold by respondent to the railway carriers and the power company constituted only a fraction of a per Cent of the total coal used in the operations of the utilities and of the total coal produced in respondent’s competitive trade territory. The amount that went into interstate commerce was an even smaller fraction of totals in such commerce.

The main question for determination is whether the National Labor Relations Act of July 5, 1935, is applicable. The first section of the Act recites, among other things, that the refusal by employers to accept the procedure of collective bargaining leads to strikes and other forms of industrial strife and unrest, and that the inequality of bargaining power between employees who do not possess full freedom of association, and employers who are organized in corporate form of ownership, substantially burdens and affects the flow of commerce and tends to aggravate recurrent business depressions by depressing wage rates and the purchasing power of wage earners in industry; that experience has proved that protection by law of the right of employees to organize and bargain collectively safeguards commerce from impairment or interruption and promotes the flow of commerce by removing certain recognized sources of industrial strife and unrest. There can be and is no dispute upon the record presented but that the respondent corporation discharged the four named employees because of their union activity. and membership and denied them the rights which Congress intended to protect and which it accorded by Section 7 of the Act to those who are within the scope of the protection.

The respondent contends that the workmen in its employ were not within the. protection of the Act; that the respondent’s business, in which they were employed, is not interstate commerce, and that its activities are of such intrastate and local character that they do' not directly affect interstate commerce and that interference with its business through strikes or strife with, or industrial unrest of its industrial employees would not constitute a burdening or obstructing of commerce ór the free flow of commerce. The Board found:

“The activities of the respondent set forth in Section III above, occurring in connection with its operations described in Section I above, have a close, intimate, and substantial relation to trade, traffic, and commerce among the several States, and tend to lead to labor disputes burdening and obstructing commerce and the free flow of commerce.”

Whether the interference with or stoppage of the operations of a particular corporation through industrial strife will or will not interfere with or obstruct the flow of interstate commerce, must depend upon the relation of the corporation’s operations to the commerce. It is recognized that bituminous coal is of basic importance to the economic life of the country and the main energy supply of all its industries, and that only a small percentage of it (3.3) is used locally at the points of production. It is produced in some of the states, but is transported in interstate commerce to every state. Such transportation constituted 31.8 per cent of all freight carried by rail in 1936. Having such vast coal supplies within the country made accessible in commerce to every part is a prime factor in the economic advantage the country has over all others. No comparable condition is to be found elsewhere.

The parties in this case have not sought to belittle or minimize the contribution of the respondent to the general commerce in bituminous coal. Its output of 267,494 tons a year reflects corporate enterprise of substantial magnitude and the combination of its production and selling activities which enables it to carry on continuously in the competition of its trade territory, forbids classing it as a negligible unit. The multiplication of such units makes up a large part of the whole coal industry. Likewise, the 34,000 tons of coal which it annually loads on wheels moving immediately and directly in interstate commerce to points outside the state amount to a substantial quantity contribution to that commerce. It is argued in respondent’s brief that it has “no knowledge * * * of the use to which this coal will be put or the place to which it will be transported”, but no such want of knowledge was stipulated or found by the Board. It is stated in the Bulletin of the economic division in evidence that “typically'there is no provision for storage of coal at the mine” and that “production is customarily not undertaken until orders are received and a supply of cars assured.” A list of respondent’s customers in Nebraska, Iowa, and Kansas, at whose orders the interstate shipments were made, is included in the agreed statement of facts and whatever the true facts may be, the record presents nothing to justify this court to hold that this company’s agents at Kansas City or Clinton had no knowledge where their trade territory was. The respondent’s activities, like those of many other corporations engaged in selling, mining and loading coal for distribution in commerce, both intrastate and interstate, have a close relation to trade, traffic and commerce among the several states, and a cessation