National Labor Relations Board v. Sunshine Mining Co.

HEALY, Circuit Judge.

The National Labor Relations Board has petitioned for an order restraining certain persons from instituting, prosecuting, or maintaining any action or proceeding or invoking any process to carry into effect certain writs and injunctive orders issuing from the courts of the state of Idaho in actions by them against various named employees of Sunshine Mining Company to whom back pay is required to be paid by that Company under the terms of the decree of this court, the intent or purport of which proceedings is to prevent or restrain Sunshine from paying directly to the named employees the full amount of such back pay as may be payable to them under our decree and to compel Sunshine to pay the whole or a part of the same to persons other than these employees toward satisfaction of the respective claims or demands of the named persons. An order to show cause was issued together with a temporary restraining order. The question now before us is whether the temporary restraint should be made permanent.

The petition is ancillary to the main proceeding in which this court’s decree of enforcement was rendered. The petition states that the restraining order is sought in the interest of protecting the exclusive jurisdiction of this court over the subject matter of its decree and of achieving the effectuation of the decree jn accordance with its terms. The Board claims that the authority to issue such restraining order is vested in this court under § 262 of the Judicial Code, 28 U.S.C.A. § 377, empowering the federal courts to issue such writs as may be necessary for the exercise of their respective jurisdictions. Sunshine, by its answer and cross claim in effect supports the Board’s petition and asks that its own duty in the premises be declared. A number of the plaintiffs in the state court suits have appeared in response to the order to show cause and have interposed answers resisting the prayer of the petition.

In June, 1938, the Board, in a proceeding against the Sunshine Company, issued its decision in which Sunshine was found to have engaged in unfair labor practices, and ordered that Sunshine cease and desist therefrom and take certain affirmative steps to effectuate the policies of the Act. April 3, 1940 this court entered its decree enforcing the Board’s order, with modifications not here pertinent. 9 Cir., 110 F. 2d 780. Petition of Sunshine for certiorari was denied January 13, 1941, 312 U.S. 678, 61 S.Ct. 447, 85 L.Ed. 1118. The decree orders that Sunshine “take the following affirmative action which the Board finds will effectuate the policies of the Act”, namely:

“(a) Offer to all the employees who went on strike on August 2, 1937, immediate and full reinstatement to their former or substantially equivalent positions, without prejudice to their seniority and other rights and privileges and effect such reinstatement in the following manner: * * *

“(b) Make whole the employees ordered to be offered reinstatement for any loss of pay they may have suffered by reason of the respondent’s discrimination, by payment to them of a sum equal to that which each would normally have earned as wages during the period from August 18, 1937, the date of the respondent’s discrimination against them, to the date of the offer of employment or placement upon the preferential list required by paragraph (a) above, less the amount each has earned during that period.”

As the investigations necessary to compliance with this phase of the decree are incomplete, the amounts payable are as yet unliquidated.

Most of the suits in the state courts are by creditors who seek money judgments against the employees in question.¹ In these actions writs of attachment have been issued and process of garnishment served on Sunshine. ² There are three suits in the nature of divorce actions. In one of these the divorced wife of an employee seeks to quiet her title to one-half the moneys payable by Sunshine to the former husband. Sunshine was restrained until further order from paying over to the employee or to any other person more than one-half the moneys which might be due the • employee. In another case a wife has sued for divorce and has obtained an order restraining Sunshine from paying over to the employee husband or to any other person any of the back pay which may be payable to him. In the third suit of this type the decree of divorce awards to the wife, as her sole and separate property, the claim of the employee husband against Sunshine for the back wages awarded, and Sunshine has been served with a certified copy of the decree. Altogether, 23 of the employees are affected by these various suits, and in all cases the writs or decrees operative against or directed toward Sunshine have application solely to the money payable by Sunshine under the terms of our decree.

The net result of these various writs, decrees, and injunctive orders is that Sunshine is prevented from complying with the decree of this court in accordance with its terms. Stating the situation from the standpoint of the employer, Sunshine is or may become subject to orders or judgments by which it may eventually be compelled to pay the awards both to the named employees and to third persons or find itself in contempt for failing to do so.

We do not here concern ourselves with the mere convenience of litigants or with possible hardships that may be visited upon the employer. If the plight of Sunshine alone were to be taken into account, it is rather clear that it should be left to litigate the matter in the state courts. While, generally speaking, the construction and application of state láws pertaining to garnishment and to process analogous thereto are matters for local determination, compare Huron Holding Corp. v. Lincoln Mine Co., 312 U.S. 183, 61 S.Ct. 513, 85 L.Ed. 725, yet questions concerning the nature of these awards and whether, in any event, unexecuted awards of back pay made under the terms of the Act are subject to state process, are federal questions determinable ultimately by the Supreme Court on review of the state proceedings. Cf. Toucey v. New York Life Ins. Co., 62 S.Ct. 139, 86 L.Ed. —.

But the petition of the Board³ presents a problem of a different sort, one which must be considered in the light of the policy and terms of the National Labor Relations Act, 29 U.S.C.A. § 151 et seq. The Act looks toward expeditious performance of the decree, see § 10 (i). Moreover this court must of necessity retain full control over the subject matter until final compliance. If, pending compliance, third persons were permitted to obtain fixed rights against the employer growing out of the back pay awards, the power of the court effectively to enforce its decree, either as originally entered or as modified as circumstances might require, ⁴ would he subject to partial or complete frustration. The administration of the decree, or the time, manner or sufficiency of the compliance, are matters which cannot be made dependent upon the consent of the employees or of third persons, or upon the uncertain outcome of tedious proceedings in other courts.

It is settled that the Act creates no private right, ⁵ and that there is no authority anywhere save in the Board itself to inaugurate proceedings for the enforcement of the Board’s order or of the decree entered upon its petition. ⁶ The award of back pay is not a private judgment or a chose in action belonging to the employee, and he has no property right in the award pending his actual receipt of it.⁷ Until that time the subject matter remains exclusively under the administrative authority of the Board and in control of the court, and outside interference of any sort would tend inevitably to shackle or impede the free exercise of their powers. Third persons may, of course, as between themselves and the employee, freely litigate the question whether the amount of the award, when paid over pursuant to the decree, is their property or that of the employee, United States v. Klein, 303 U.S. 276, 58 S. Ct. 536, 82 L.Ed. 840, and they may, to the extent permitted by state law, subject the money to attachment after its receipt by the employee; but they cannot, by resort to judicial process, be permitted to command the payment of the awards to others than those whom the decree has designated as the appropriate recipients.

The state litigants contend, however that there is no public policy inexorably demanding the payment of the back pay to the employees rather than to their estranged wives or to creditors, and indeed that the decree is not in any essential respect subverted by the process subjecting the inchoate rights of the employees to the legitimate claims of third persons. But the Board thought otherwise. It believed that an appropriate corrective of the unfair labor practices lay in the payment of back pay to the individuals who were the immediate victims of those practices. Obviously it is still of that opinion; and, while it now appears that there were collateral casualties in the train of social and economic ills set in motion by the strike, we cannot say that the Board’s conclusion as to what should be done at this juncture is without a rational basis. It is the Board’s order which the decree enforces, Amalgamated Utility Workers v. Consolidated Edison Co., supra, 309 U.S. 269, 60 S.Ct. 561, 84 L.Ed. 738, and the statutory scheme commits to the Board the responsibility of determining in each case what affirmative action will best serve to effectuate the policies of the Act.⁸ While we undoubtedly have the power, on application of the Board, to modify or even dispense with the back pay requirement, the application before us looks to the strict enforcement of the requirement as it is written. We take it that a prime purpose of the Board’s petition is to vindicate the principle of non-interference, and we agree that insistence upon that principle is both salutary and necessary. In what circumstances the Board should lend a sympathetic ear to third party pleas of this sort is a matter which rests in the judgment and discretion of the public ngency to which Congress has committed the administration of the Act. Cf. N.L.R.B. v. Virginia Electric & Power Co., 62 S.Ct. 344, 86 L.Ed.-, decided Dec. 22, 1941.

It remains to inquire whether § 265 of the Judicial Code, 28 U.S.C.A. § 379 ⁹ is an obstacle in the way of our granting the injunction. We think it is not. Nor do we regard the holding in Toucey v. New York Life Ins. Co., supra, as determinative of the question before us. This is not a re-litigation case. In a sense the proceeding may be assimilated to the res cases. The subject matter of the awards is certainly a potential if not an actual res.

However that may be, we do not have here the typical situation exemplified in the Toucey case or in Kline v. Burke Constr. Co., 260 U.S. 226, 43 S.Ct. 79, 67 L.Ed. 226, 24 A.L.R. 1077, where the state and federal courts have concurrent jurisdiction over the controversy. The proceeding is purely statutory and the jurisdiction of the federal court is exclusive.¹⁰ As said in Amalgamated Workers v. Consol. Edison Co., supra, 309 U.S. page 264, 60 S.Ct. page 563, 84 L.Ed. 738, “Congress was entitled to determine what remedy it would provide, the way that remedy should be sought, the extent to which it should be afforded, and the means by which it should be made effective.” By § 10(c) the Board, upon a finding that any person has engaged in unfair labor practices, is required to “issue and cause to be served on such person an order requiring such person to cease and desist * * * and to take such affirmative action, including reinstatement of employees with or without back pay, as will effectuate the policies of this Act [chapter].” If, as must be conceded, the true intent and purpose of the present order comprehends payment of back pay directly to the striking employees themselves, it is not for a state court to say that the order was wrong, nor has that court, by the use of its injunctive or attachment processes, rightful authority to compel the employer to disobey the order. As in removal cases and in proceedings in the district courts for limitation of shipowners’ liability, Toucey v. New York Life Ins. Co., supra, the authority to enjoin proceedings inimical to the free exercise of the court’s exclusive jurisdiction is implicit in the terms of the law. See provision quoted in note 10. In cases of the type mentioned the federal courts have freely resorted to the implied power to enjoin. We see strong reasons for believing that the power should be exercised here and no good reason why it should not. The power to punish for contempt is not an adequate safeguard in any case. Certainly we cannot know that it would be. When the power is invoked it may prove futile, even as a purely punitive measure, as the employer by his enforced compliance with the state process may well have been stripped of the means of complying with our decree.

It is ordered fhat a writ of injunction be issued directed toward the persons named in the petition of the Board, permanently restraining all further proceedings by them against the Sunshine Mining Co. as prayed for in said petition.

1 Some of the actions are being prosecuted in the state district court for the county in which Sunshine’s operations are conducted, others are pending in justice’s courts for that county.

2 Following is a summary of the pertinent provisions of the attachment statutes as contained in ch. 5, title 6, Idaho Code 1932: A plaintiff may have the property of the defendant attached as security for the satisfaction of any judgment that may be recovered, and all debts owing such defendant, not exempt from execution, are subject to attachment. “Debts and credits” must be attached by leaving with the person owing the same a copy, of the writ and a notice that such credits or debts are attached pursuant thereto. A person owing any debt at the time of the service of garnishment is made liable to the plaintiff for the amount of such debt unless the debt is paid to the officer, until the attachment is discharged or any judgment recovered is satisfied. In garnishment proceedings the garnishee is required to disclose whether he owes the defendant any money, and, if so, the amount, on what account, and when it will become due. If the garnishee admits an indebtedness, or that he has money of the defendant in his hands or under his control, and fails to turn the same over to the officer, the plaintiff may move the court out of which the writ issued for judgment against the garnishee for the amount of such admitted debt, or for the delivery to the officer of the money of the defendant in his hands, to an amount sufficient to satisfy the plaintiff’s claim. Provision is made for the trial of the issue if the garnishee denies that he is indebted, and an appropriate judgment may be rendered upon such trial.

3 The Board is not a party to the proceedings in the state courts, and its right to intervene or to be heard there is at least doubtful. Consult § 5-322, Idaho Code, and annotations.

4 Compare N.L.R.B. v. Carlisle Lumber Co., 9 Cir., 108 F.2d 188. In that case the employer claimed to be financially unable to pay the awards. Ultimately a stipulation between the Board and the employer was approved by this court, by the terms of which the employer was permitted to pay the awards in installments over a long period out of its production. One of the provisions of the stipulation was that the employer should have and allow full credit on any debt owing it by an employee entitled to back pay. The amount of such credits was in the neighborhood of 89,000. Before this stipulation was made the Board had seriously considered a proposal by the employer that it be permitted to turn over certain property in lieu of money.

5 National Licorice Co. v. N.L.R.B., 309 U.S. 350, 362, 60 S.Ct. 569, 84 L.Ed. 799; N.L.R.B. v. American Potash & Chemical Corp., 9 Cir., 113 F.2d 232, 235, 129 A.L.R. 874; N.L.R.B. v. Colten, 6 Cir., 105 F.2d 179, 182.

6 Amalgamated Utility Workers v. Consolidated Edison Co., 309 U.S. 261, 60 S.Ct. 561, 84 L.Ed. 738.

7 Agwilines, Inc., v. N.L.R.B., 5 Cir., 87 F.2d 146.

8 N.L.R.B. v. Pennsylvania Greyhound Lines, Inc., et al., 303 U.S. 261, 265, 58 S.Ct. 571, 82 L.Ed. 831, 115 A.L.R. 307; N.L.R.B. v. Mackay Radio & Telegraph Co., 304 U.S. 333, 348, 58 S.Ct. 904, 82 L.Ed. 1381; N.L.R.B. v. Link-Belt Co., 311 U.S. 584, 600, 61 S.Ct. 358, 85 L.Ed. 368.

9 “Tlie writ of injunction shall not be granted by any court of the United States to stay proceedings in any court of a State, except in cases where such injunction may be authorized by any law relating to proceedings in bankruptcy.”

10 The Act provides (§ 10(e) that “the jurisdiction of the court shall be exclusive and its judgment and decree shall be final”, subject only to review by the Supreme Court.