U. O. P. Norplex, Division of Universal Oil Products Co. v. National Labor Relations Board (445 F.2d 155, 1971)

KILEY, Circuit Judge.

Petitioner, U. O. P. Norplex, Division of Universal Oil Products Company (Norplex), seeks to have reviewed and set aside an order of the National Labor Relations Board which found petitioner had violated Section 8(a) (5) and (1) of the National Labor Relations Act by insisting to the point of impasse upon the Union’s withdrawal of fines previously imposed on member-employees of Nroplex who had crossed the picket line during an economic strike in violation of a Union rule. The Union seeks enforcement of the order. We deny the Nor-plex petition and enforce the order.

Norplex manufactures plastic parts for the automotive, electronic and other industries. The Union has been bargaining agent for employees of Nor-plex’s predecessor and Norplex since it was certified after an election in 1958. The termination date of the last contract between Norplex and the Union was March 31, 1968. Efforts at negotiating a new contract failed, and the Union struck May 14, 1968. At that time 54 Union members of the 92 employee force in the bargaining unit joined the strike, but 13 Union members crossed the picket line and returned to work. Thereafter, the Union imposed fines on each of the 13, ranging from $300.00 to $500.00.

At the outset of the strike Norplex continued to operate with replacement of employees. On August 16, 1968, there were 98 employees doing bargaining unit work, 56 of them replacement employees. Norplex on that date refused to supply the Union with information requested by the Union for framing a proposal counter to one made by Nor-plex. After notice to the Union, Nor-plex petitioned for an election. The Union then filed a refusal to bargain charge. Subsequently, Norplex and the Union entered a settlement agreement under which Norplex agreed to “bargain collectively * * * by furnishing” the Union the information it requested which was necessary for bargaining as to “wages, hours, and other terms and conditions of employment.”

We see no merit in the contention of Norplex that there is not substantial evidence in the record as a whole to support the finding that the Union represented a majority during the period of negotiation. The settlement agreement required Norplex to bargain with the Union, and following the settlement agreement Norplex continued to negotiate with the Union.

At a bargaining meeting on November 7, 1968, attended by a federal mediator, Norplex advised the mediator that any contract with the Union must include a provision that the Union would withdraw the fines imposed on members who crossed the picket line. The Union rejected such a provision. At a later meeting Norplex advised the Union committee that any contract must be predicated on the Union’s withdrawal of the fines. The Union again rejected any such predicate on the ground that the fines were internal affairs of the Union. After an impasse in the negotiations was reached, the Union filed charge of violation of 8(a) (5), and the proceeding before us followed.

I.

The question before us is whether Norplex’s insistence to the point of impasse upon the withdrawal of the fines imposed upon the Union member-employees who crossed the picket line violated Section 8(a) (5) and (1).

In NLRB v. Wooster Div. of Borg-Warner Corp., 356 U.S. 342, 78 S.Ct. 718, 2 L.Ed.2d 823 (1958), the Supreme Court held that an employer’s insistence, as a condition precedent to the execution of a contract, that the union agree to a “ballot clause” — a clause which required polling of union members before calling a strike or refusing the employer’s last offer — violated Section 8(a) (5) and (1) of the Act. The Supreme Court stated that the phrase “wages, hours, and other terms and conditions of employment” in Section 8(d) defines the subject matter over which the employer and union must bargain.

The Court reasoned that since the ballot clause related solely to the internal affairs of the union, it was a nonmanda-tory subject of bargaining, and the company’s insistence to the point of impasse on such a clause in its contract with its employees constituted a refusal to bargain about the mandatory bargaining items. The Court distinguished the ballot clause from a “no-strike” clause, which is a mandatory subject of bargaining :

A “no-strike” clause prohibits the employees from striking during the life of the contract. It regulates the relations between the employer and the employees. See Labor Board v. American Insurance Co., (supra, [343 U.S.] at 408, n. 22 [, 72 S.Ct. at page 831, 96 L.Ed. 1027], The “ballot clause”, on the other hand, deals only with relations between the employees and their unions. It substantially modifies the collective-bargaining system provided for in the statute by weakening the independence of the “representative” chosen by the employees. It enables the employer, in effect, to deal with its employees rather than their statutory representative. Cf. Medo Photo Corp. v. Labor Board, 321 U.S. 678, [64 S.Ct. 830, 88 L.Ed. 1007]. 356 U.S. at 350, 78 S.Ct. at 723.

In NLRB v. Allis-Chalmers Mfg. Co., 388 U.S. 175, 87 S.Ct. 2001, 18 L.Ed.2d 1123 (1967), the Court held that a union imposition of fines on members who crossed picket lines and returned to work was not a violation by the union of Section 8(b) (1) (A). The basis for the Court’s decision was that Section 8(b) (1) (A) was not intended to interfere with the internal affairs of a union and that the imposition of such fines or expulsion from membership was a matter of “internal union discipline.”

We think these two cases dispose of the issue before us. It seems clear that since the Union had the right — as an internal Union affair — to discipline by fining, the right not to withdraw the fines is likewise an internal Union affair, and accordingly a matter “involving relations between the employees and their union” within the meaning of Borg-Warner, and therefore not a mandatory bargaining item.

The Union’s fining of members who break an authorized strike is analogous to the ballot clause, which the Borg-Warner Court held to be a non-mandatory bargaining item. Both are matters primarily involving the relations. between the employee and his union, although both are of some interest to the employer, or the employer would not pursue the point to impasse. Neither ballot clause nor withdrawal of fines for strikebreaking relates to terms or conditions of employment within the meaning of Section 8(d).

Norplex’s freedom to insist that the fines be withdrawn would destroy the effectiveness of the Union rule against crossing picket lines. This in turn would permit the employer to strengthen its position vis-a-vis the Union by dealing with “the employees rather than their statutory representative,” NLRB v. Wooster Div. of Borg-Warner Corp., 356 U.S. 342, 350, 78 S.Ct. 718, 723 (1958), and, if permitted, would give rise to the same “weakening [of] the independence of the ‘representative’ chosen by the employees” which was condemned by Borg-Warner, and would effectually destroy the Union’s economic strike power, a power which the Supreme Court has called “the ultimate weapon in labor’s arsenal for achieving agreement upon its own terms.” NLRB v. Allis-Chalmers Mfg. Co., supra 388 U.S. at 181, 87 S.Ct. 2001 at 2007.

We hold that Norplex’s insistence upon withdrawal of the Union imposed fines upon its member-employees who crossed the picket line is a matter between the Union and its members. Under 8(d), Norplex’s interest in the Union members and Union is minimal, and Norplex’s insistence to the point of impasse that the fines be withdrawn is with respect to a non-mandatory item of bargaining resulting in a refusal to bargain within the meaning of 8(a) (5) and (1).

There is no validity in the attempt to distinguish between the facts in Allis- Chalmers and the case before us on the ground that the fines here are excessive and the fines in Allis-Chalmers reasonable. Even if excessive, they have no bearing on the issue before us. The Board here made no finding that the fines were excessive, although the Examiner stated he was sympathetic to the respondent’s position that the fines were excessive. The reasonableness of the fines is a matter for the state court to determine should the Union seek judicial enforcement of the fines. See NLRB v. Allis-Chalmers Mfg. Co., 388 U.S. 175, 193, n. 32, 87 S.Ct. 2001 (1967).

II.

Petitioner relies on this court’s opinion in Allen Bradley Co. v. NLRB, 286 F.2d 442 (7th Cir. 1961), for its view that the Board’s order should be set aside. Allen Bradley was decided six years before the Supreme Court’s decision in Allis-Chalmers. The issue in Allen Bradley was whether a company-proposed clause — whereby both the company and the union agreed not to restrain or coerce employees in the exercise of their statutory rights, including the right to refrain from any of the specified activities, “by discipline, discharge, fine or otherwise” — was a mandatory subject of bargaining. The court decided that it was, bottoming its decision on two grounds. First, the National Labor Relations Act “permits no impairment of the right of an employee to work, with the corollary right of an employer to utilize his services.” Second, the imposition of fines on union members who cross picket lines is “more akin” to the no-strike clause example than to the ballot clause example in Borg-Warner.

We think both of these grounds of decision are vitiated by the Supreme Court’s decision in Allis-Chalmers. The first statement, in so far as it means that a union may not fine members for crossing a picket line — as the dictum 286 F.2d at 446 indicates that it does —is rejected by the holding in Allis-Chalmers. See Scofield v. NLRB, 393 F.2d 49, 54 (7th Cir. 1968). The second statement, while not expressly rejected by Allis-Chalmers, is undermined by that decision. The Court’s holding in Allis-Chalmers that the union’s imposition of the fines was lawful is based on the notion that the fines were a matter of internal union discipline. Accordingly, it follows that such fines would be a matter between the union and its members and, like the ballot clause in Borg-Warner, of no legal concern to the employer.

Neither this court’s opinion in Scofield v. NLRB, 393 F.2d 49 (1968), nor the Supreme Court’s affirmance of Scofield, 394 U.S. 423, 89 S.Ct. 1154, 22 L.Ed.2d 385 (1969), supports petitioner’s contention that Allen Bradley is still viable. Both decisions do cast doubt on whether every union rule is a non-mandatory bargaining item.

This court held in Scofield that a union’s imposition of fines on members for violation of a union production ceiling rule was not unlawful under Section 8(b) (1) (A) of the Act. The court went on to state: “But as Allen Bradley stills holds, the Wisconsin Motor Corporation can require the Union to bargain over a demand to give up its ceiling rule.” 393 F.2d at 54. This statement does not decide the question before us, namely, whether withdrawal of fines imposed on Union members for crossing the picket line is a mandatory bargaining item. The Supreme Court in its Scofield opinion did not expressly consider the question whether the ceiling rule was or was not mandatory. However, Justice White, speaking for the majority, stated:

It is doubtless true that the union [ceiling] rule in question here affects the interest of all three participants in the labor-management relation: employer, employee, and union. Although the enforcement of the rule is handled as an internal union matter, the rule has and was intended to have an impact beyond the confines of the union organization.

394 U.S. at 431-432, 89 S.Ct. at 1159.

We think that this statement affords no support for petitioner’s position. Here we have internal Union discipline, i.e., withdrawal of a fine pursuant to a rule aimed at deterring members from crossing picket lines, and neither the rule nor its enforcement by fine “has and was intended to have” any impact on the employer, other than to prevent him from encouraging Union members to by-pass the Union and deal directly with the employer, a practice which was condemned by Borg-Warner.

We conclude that Allen Bradley v. NLRB, 286 F.2d 442 (7th Cir. 1961), is no longer viable, and we therefore expressly overrule it as the law of this circuit.

The Order Will Be Enforced.

. 29 U.S.C. § 158(a) (1), (5).

. Lodge 1616 International Association of Machinists and Aerospace Workers, AFL-CIO.

. 29 U.S.O. § 158(d).

. The company, of course, could propose the clause in question without violating Section 8(a) (5) and (1). It is only the insistence on the clause to the point of impasse that constitutes the refusal to bargain about mandatory items.

. Although the union may fine and expel strikebreakers from union membership, it cannot coerce the employer to discharge the strikebreaker from employment. 29 U.S.C. § 158(b) (2).

. In this case, 13 striking employees crossed the picket line and returned to work. Within six months the Company was able to hire approximately 70 other replacement workers. This suggests that the primary purpose of seeking to withdraw the fines in this case was, not to guarantee employees for the Company during a strike, but rather to weaken the Union rule against strikebreaking.

. The Board currently is considering whether a union violates Section 8(b) (1) (A) by imposing excessive fines on its members who engage in protected concerted action. This point has not been decided by the Supreme Court. See Scofield v. NLRB, 394 U.S. 423, 430, 89 S.Ct. 1154, 22 L.Ed.2d 385 (1968). But even if the fines were excessive, the remedy would be for the company to file an 8(b) (1) (A) charge against the union, not to try to convert an otherwise non-mandatory subject of bargaining into a “term or condition of employment.”

. The relevant paragraph in full is:

In our view, Borg-Warner furnishes no support for the Board’s position in the instant situation; in fact, its rationale points in the opposite direction. Section 7 protects an employee in his right to refrain from concerted activities and this includes, of course, the right to refuse to participate in or recognize a strike. Coercion or interference with that right, whether by the employer or by the union, is made an unfair labor practice by the terms of the Act. So far as material to the instant situation, the Act permits no impairment of the right of an employee to work, with the corollary right of the employer to utilize his services. 286 F.2d at 445.

The court later went on to add:

Coercive action, whether by way of fine, discharge or otherwise, which deprives a member of his right to work and Ms employer of the benefit of his services, cannot be said to relate only to the internal affairs of the union.

Id. at 446.

. See note 8, supra.

. If all union rules were non-mandatory bargaining items, the union could avoid its obligation to bargain by merely incorporating into a union rule the area' concerning which it dees not wish to bargain.

. Since this opinion overrules Allen Bradley v. NLRB, 286 F.2d 442 (7th Cir. 1961), we have circulated the opinion to all the judges of this court in regular active service, and a majority has voted not to rehear en banc the matter of overruling the Allen Bradley decision.

DUFFY, Senior Circuit Judge

(concurring) .

I concur in Judge Kiley’s opinion. I, personally, am of the view that the union fines of $500 each, levied on women workers who were working or helping to support their families, were excessive and unreasonable. The Trial Examiner was, apparently, of the same view.

However, in N.L.R.B. v. Allis Chal-mers Manufacturing Company, 388 U.S. 175, 87 S.Ct. 2001, 18 L.Ed.2d 1123 (1967), the Court held that Section 8(b) (1) (A) of the Act was not intended to interfere with the internal affairs of a union. The Court also held that the imposition of fines on members who crossed picket lines and returned to work was a matter of “internal union discipline.”

In view of the decision in Allis-Chal-mers Manufacturing Company, supra, it seems clear to me that we must reach the conclusion set forth by Judge Kiley.

PELL, Circuit Judge

(dissenting).

I must respectfully dissent as it seems to me the majority opinion can only but lead to the imposition of a double standard in the scope of subjects for mandatory negotiations under the National Labor Relations Act.

Without intending to disagree with, nor unnecessarily to duplicate, the statement of the factual situation here involved as contained in the majority decision, I do note certain additional undisputed matters, in part as background and in part because of their significance to the instant decision.

From the time of the union certification in 1958, the Union and the company enjoyed harmonious relationships for a period of 10 years. A number of bargaining sessions occurred in 1968 prior to the economic strike beginning on May 14, 1968.

As indicated in the majority opinion, 13 of the striking employees returned to work, this being during the period from June 15 to August 26, 1968.

Some of the striking employees who did return to work had been strong Union adherents. Two of them had joined the Union shortly before the strike and were among the first to return to work. Each was fined $500 by the Union because of returning to work while the strike was still in effect. On the other hand, others had held various positions with the Union but nevertheless each was fined $500. In its brief the Board states that each of the 13 employees was fined either $300 or $500. The majority opinion speaks of a range of fines from $300 to $500. The only support I find in the record for any figure less than $500 was in the testimony of the negotiation representative of the Union who stated to the best of his recollection the range of fines was $500 and $300. The employees involved who testified, all testified $500, and the trial examiner in his findings of fact indicated that the employees each were fined approximately $500. In any event, obviously no employee was fined less than $300 and apparently substantially all, if not all, of the employees were actually fined $500.

There was evidence at the hearing indicative of a low scale of pay in the area and in this particular plant and that difficult financial situations motivated the return to work of the erstwhile strikers.

The last contract which, expired on March 31, 1968 had a maintenance of membership provision. At the initiation of the strike, while 54 employees did not come to work, the company continued to operate the plant and did hire replacements. The picketing was for the most part peaceful.

On this appeal, Norplex strenuously contends that on the hearing before the trial examiner the Board General Counsel had failed to sustain an essential element of the case, i.e., proof that the Union represented a majority of employees in the unit during the period of negotiations here involved. S & M Manufacturing Co., 172 NLRB No. 104 (1968).

The majority opinion disposes of this issue by finding “no merit in the contention of Norplex that there is not substantial evidence in the record as a whole to support the finding that the Union represented the majority during the period of negotiation.” At the hearing the General Counsel had pleaded surprise because the company had not offered the question as an affirmative defense. The company, however, had, it contends, by general denial placed the matter of majority status in issue. While the trial examiner disagreed with the necessity of proving this matter, he did offer the General Counsel an opportunity, if he so desired, to put in evidence that the Union presently had a majority. The General Counsel declined the opportunity.

Further, the majority opinion states that the October 21, 1968 Settlement Agreement required Norplex to bargain with the Union. The Settlement Agreement itself is at best ambiguous and while no doubt, even if there were not specific proof offered on the matter by the General Counsel, “the substantial evidence” rule would be applicable, there is nevertheless a slender reed of support for there being majority status in the Union. The certification of the Union had been more than 10 years prior to the period in controversy. On November 7, 1968 there were 112 employees doing bargaining unit work in the plant with 41 outside on strike. On November 20 there were either 115 or 120 in the plant and 41 outside.

It appears to me that there would be ample basis for finding no substantial evidence of the majority status from the record as a whole. However, the more important issue in this ease, it seems to me, is the matter of the subject of negotiations since the company an