Beasley v. Food Fair of N. C., Inc.

193 S.E.2d 911, 282 N.C. 530, 1973 N.C. LEXIS 1105, 82 L.R.R.M. (BNA) 2711

• Court: Supreme Court of North Carolina
• Decided: January 26, 1973
• Docket: 66
• Status: Published

Opinion

MOORE, Justice.

The first question posed on this appeal is whether the courts of North Carolina have jurisdiction to adjudicate a claim brought by plaintiffs, supervisors, against their employer for damages resulting from an alleged unfair practice under the provisions of our Right-to-Work Law, Chapter 328, Session Laws of 1947, codified as G.S. 95, Sections 78 through 84.

Plaintiffs were discharged from their employment with defendant Food Fair of N. C., Inc., on June 25 and June 27, 1971. Plaintiffs allege that the discharge contravenes G.S. 95-81, which is as follows:

“No person shall be required by an employer to abstain or refrain from membership in any labor union or labor organization as a condition of employment or continuation of employment.”

Plaintiffs’ action for damages is based on G.S. 95-83, which provides:

“Any person who may be denied employment or be deprived of continuation of his employment in violation of §§ 95-80, 95-81, and 95-82 or of one or more of such sections, shall be entitled to recover from such employer and from any other person, firm, corporation, or association acting in concert with him by appropriate action in the courts of this State such damages as he may have sustained by reason of such denial or deprivation of employment.”

Our Right-to-Work Law has been upheld by this Court and the Supreme Court of the United States. State v. Whitaker, 228 N.C. 352, 45 S.E. 2d 860 (1947); Lincoln Fed. L. U. v. Northwestern I. & M. Co., 335 U.S. 525, 93 L.Ed. 212, 69 S.Ct. 251, 6 A.L.R. 2d 473 (1949); 29 USC § 164(b). The determinative question then in this case is: Are supervisors entitled to protection under this Act?

Prior to the institution of this action, plaintiffs filed charges with the National Labor Relations Board claiming that their discharges were unlawful under the National Labor Relations Act as amended. The Regional Director of that Board found that the employer was engaged in commerce within the meaning of the Act and it would effectuate the purpose of the Act to assert jurisdiction, but dismissed the charges after determining that the plaintiffs were supervisors and not employees and were not entitled to protection of the Act. The Board’s General Counsel denied plaintiffs’ appeal for the same reason. Thereafter the plaintiffs instituted this action.

In Willard v. Huffman, 250 N.C. 396, 109 S.E. 2d 233 (1959), this Court upheld a judgment for an employee awarding damages sustained as the result of his discharge by his employer for failure to abstain and refrain from membership in a labor union or labor organization. The Willard case is distinguishable from the present case in two important respects. First, in Willard the National Labor Relations Board refused to consider plaintiff’s claim, stating: “Further proceedings are not warranted inasmuch as the operations of the employer do not appear to meet the required standards to warrant the Board’s exercise of its jurisdiction in this matter.” In the present case, the National Labor Relations Board had jurisdiction but refused to grant plaintiffs’ relief due to the provisions of 29 USC § 164 (a), which provides:

“Nothing herein shall prohibit any individual employed as a supervisor from becoming or remaining a member of a labor organization, but no employer subject to this sub-chapter shall be compelled to deem individuals defined herein as supervisors as employees for the purpose of any law, either national or local relating to collective bargaining.” (Emphasis added.)

Secondly, plaintiff in Willard was an employee clearly entitled to protection under our Right-to-Work Law, while in the present case plaintiffs were admittedly supervisors.

The National Labor Relations Act as amended distinguishes supervisors from employees. 29 USC § 152(3) provides, inter alia: “The term ‘employee’ shall include any employee . . . but shall not include . . . any individual employed as a supervisor. . . .” 29 USC § 152(11) defines the term “supervisor” as: “. . . (A) ny individual having authority, in the interest of the employer, to hire, transfer, suspend, lay off, recall, promote, discharge, assign, reward, or discipline other employees, or responsibly to direct them, or to adjust their grievances. . . .”

Since the 1947 amendments to the National Labor Relations Act, the federal courts have been called upon on numerous occasions to determine the relative rights of employers and supervisors under that statute. The federal courts have consistently held that a supervisor is not protected under the statute from discharge due to union membership or activity. In NLRB v. Big Three Welding Equipment Co., 359 F. 2d 77 (5th Cir.1966), the Court decided that a “dispatcher” of company trucks and drivers was a supervisor. Based upon that determination, it was held that the plaintiff was not entitled to reinstatement and back pay because of his discharge for union membership and activity. Accord, NLRB v. Charley Toppino and Sons, Inc., 332 F. 2d 85 (5th Cir. 1964). In Oil City Brass Works v. NLRB, 357 F. 2d 466 (5th Cir. 1966), the same Court said:

“If Hammock was fired solely because of his union affiliation, there has been no unfair labor practice on which the Board can predicate its order. The National Labor Relations Act does not protect supervisory personnel. [Citations omitted.] It is settled that the Act does not preclude a company from firing or refusing to recall from layoff status a supervisory employee solely because that employee is affiliated with a union. [Citations omitted.]”

The Ninth Circuit Court of Appeals reached the same conclusion in NLRB v. Fullerton Publishing Company, 283 F. 2d 545 (9th Cir. 1960). In that case the county news editor of a newspaper was deemed to be a supervisor. The Court then said:

“The law is clear that a supervisor is not entitled to the protection afforded ordinary employees under the National Labor Relations Act, and as to supervisors there can be no such thing as a discriminatory discharge or unfair labor practice....”

Accord, NLRB v. Inter-City Advertising Co., 190 F. 2d 420 (4th Cir. 1951), cert. den. 342 U.S. 908, 96 L.Ed. 679, 72 S.Ct. 301 (1952); NLRB v. Griggs Equipment, Inc., 307 F. 2d 275 (5th Cir. 1962).

The federal cases go further than merely holding that the National Labor Relations Act affords supervisory personnel no protection. These cases recognize the existence of the legislative intent on the part of Congress to leave employers unfettered in dealing with union affiliation on the part of their supervisory personnel. NLRB v. Edward G. Budd Mfg. Co., 169 F. 2d 571 (6th Cir. 1948), cert. den. 335 U.S. 908, 93 L.Ed. 441, 69 S.Ct. 411 (1949), was one of the first cases dealing with supervisors decided after the 1947 amendments to the National Labor Relations Act. There the Court discussed the intent of Congress in enacting the amendments:

“We believe it is clear that Congress intended by the enactment of the Labor Management Relations Act that employers be free in the future to discharge supervisors for joining a union, and to interfere with their union activities. ...”

Congressional intent was also considered at length by Circuit Judge Pope in NLRB v. Retail Clerks Inter. Ass’n, 211 F. 2d 759 (9th Cir. 1954):

“A primary objective of § 2(11) of the Act, to which reference is made in this paragraph of the decree, was to assure to the employer his right to procure the loyalty and efficiency of his supervisors and managers. The reports which accompanied the legislative bill which Congress enacted into the Labor Management Relations Act of 1947, made this abundantly clear. The reports were specific as to certain evils which the congressional committees thought they could avoid by excluding foremen and other supervisors from the operation of the Labor Act. Much emphasis was laid upon the desirability of assuring their independence of unions of the rank-and-file. It was noted that what had been happening in respect to unionizing of foremen under the former Act was ‘bad for output’ and hurt the free flow of commerce which the Act was intended to promote . . . . ”

Similarly, in Carpenters District Council, Etc. v. NLRB, 274 F. 2d 564 (D.C. Cir. 1959), that Court said:

“ . . . Congress was aware of the potential conflict between the obligations of foremen as representatives of their employers, on the one hand, and as union members, on the other. Section 2(3) evidences its intent to make the obligations to the employer paramount. That provision excepts foremen from the protection of the Act. Its purpose was to give the employer a free hand to discharge foremen as a means of ensuring their undivided loyalty, in spite of any union obligations....”

“When a union attempts to organize supervisors, or when supervisors elect to become members of a union, a problem of federal preemption does arise.” 4 Jenkins, Labor Law § 21.9, The Federal Preemption Doctrine, p. 103. In San Diego Unions v. Garmon, 359 U.S. 236, 3 L.Ed. 2d 775, 79 S.Ct. 773 (1959), Mr. Justice Frankfurter, speaking for the majority, laid down certain guidelines when he said:

“ ... If the Board decides, subject to appropriate federal judicial review, that conduct is protected by § 7 [29 USC § 157] or prohibited by § 8 [29 USC § 158], then the matter is at an end, and the States are ousted of all jurisdiction. Or, the Board may decide that an activity is neither protected nor prohibited, and thereby raise the question whether such activity may be regulated by the States...." 359 U.S. at p. 245.

In Hanna Mining v. Marine Engineers, 382 U.S. 181, 15 L.Ed. 2d 254, 86 S.Ct. 327 (1965), in an opinion by Mr. Justice Harlan, expressing the view of eight members of the Court, it was held that under the circumstances of that case, the federal Act did not preempt the State’s jurisdiction. Plaintiffs, employers, declined to negotiate with a union representing the marine engineers until it was established that the union represented a majority of the engineers, whereupon the union picketed plaintiffs’ ships. Employers petitioned that a representation election among its engineers be held. The petition was dismissed by the National Labor Relations Board on the ground that the engineers were “supervisors” under the Act and excluded from the definition of employees. The employers’ charge, alleging a violation of Section 8 (29 USC § 158) of the Act, wag dismissed on the ground that the union’s conduct fell outside the provisions of the Act because it sought to represent “supervisors" rather than “employees.” Plaintiffs then brought suit in Wisconsin state court seeking injunctive relief. The state court dismissed for lack of jurisdiction. The Supreme Court of Wisconsin affirmed on the ground that the picketing, while illegal under Wisconsin law, arguably violated Sections 8(b)(4)(B) and 8(b) (7) of the Act (29 USC § 158(b) (4) (B) and 29 USC § 158(b) (7)) and so fell within the exclusive jurisdiction of the National Labor Relations Board. In reversing, the Supreme Court said:

“The ground rules for preemption in labor law, emerging from our Gannon decision, should first be briefly summarized: in general, a State may not regulate conduct arguably ‘protected by § 7, or prohibited by § 8’ of the National Labor Relations Act, see 359 U.S., at 244-246, and the legislative purpose may further dictate that certain activity ‘neither protected nor prohibited’ be deemed privileged against State regulation, cf. 359 U.S., at 245.”

Thus, after reaffirming the “arguably” test as set out in Gar-mon, Hanna recognized an additional aspect of the Garmon rule: “ (L) egislative purpose may further dictate that certain activity ‘neither protected nor prohibited’ be deemed privileged against state regulation.” The Court then determined that because the picketers in Hanna were supervisors, their activity was not arguably protected or prohibited by Sections 7 and 8. The union argued, however, that Section 14(a) indicated that Congress had affirmatively adopted a laissez faire attitude toward supervisors which brought the case within the second aspect of the Garmon rule and precluded both federal and state regulation. In answering this contention Mr. Justice Harlan said:

“This broad argument fails utterly in light of the legislative history, for the Committee reports reveal that Congress’ propelling intention was to relieve employers from any compulsion under the Act and under state law to countenance or bargain with any union of supervisory employees. Whether the legislators fully realized that their method of achieving this result incidentally freed supervisors’ unions from certain limitations under the newly enacted § 8(b) is not wholly clear, but certainly Congress made no considered decision generally to exclude state limitations on supervisory organizing. ...”

The Wisconsin law increased the restrictions on supervisor organizing and so was consistent with the national labor relations policy concerning supervisors. Hanna, however, specifically recognizes a national policy established by Congress “to relieve employers from any compulsion under the Act and under state law to countenance or bargain with any union of supervisory employees.” The plaintiffs contend that the North Carolina Right-to-Work Law protects supervisors from discharge based solely upon union membership. If the North Carolina Right-to-Work Law, in fact, does this, the additional burden on employers and the added protection for supervisors would run counter to the legislative intent assigned to Congress by both Mr. Justice Harlan in Hanna and the many Circuit Court of Appeals cases herein cited. Preservation of the integrity of a national policy in the field of labor-management relations is the purpose of the doctrine of federal preemption in this context.

Further insight into the application of the preemption doctrine in situations which do not fall within the “arguably” test of Garmon may be found in an analysis of Teamsters Local 20 v. Morton, 377 U.S. 252, 12 L.Ed. 2d 280, 84 S.Ct. 1253 (1964). In that case Morton was engaged in hiring out trucks and drivers for use in highway construction. Local 20 represented Morton’s employees. During a strike over the terms of a new collective bargaining agreement, Local 20 sought to exert upon Morton various forms of secondary pressure which violated Section 8(b) (4) of the National Labor Relations Act. Local 20 also persuaded the management of one of Morton’s customers to refrain from doing business with Morton during the strike. Since the customer was not threatened with any form of reprisal, the persuasion to boycott Morton was not even arguably an unfair labor practice. Local 20 was, likewise, not protected in this activity by the National Labor Relations Act. A persuasive boycott, however, violated Ohio law and the state courts granted compensatory and punitive damages. The United States Supreme Court acknowledged that the union’s activity did not bring the case within the Gcurmon rule:

“It is the respondent’s contention, however, that since the petitioner union’s peaceful conduct was neither arguably protected under § 7 nor arguably prohibited under § 8 of the National Labor Relations Act, as amended, the trial court was free to award damages on the basis of state law for injuries caused by this conduct. But even though it may be assumed that at least some of the secondary activity here involved was neither protected nor prohibited, it is still necessary to determine whether by enacting § 308, ‘Congress occupied this field and closed it to state regulation.’ Automobile Workers v. O’Brien, 339 U.S. 454, 457. The basic question, in other words, is whether ‘in a case such as this, incompatible doctrines of local law must give way to principles of federal labor law.’ Teamsters Local 174 v. Lacas Flour Co., 369 U.S. 95, 102. ...”

The Court then determined that a persuasive boycott was precluded from state regulation by the preemption doctrine. The Court said:

“ . . . This weapon of self-help, permitted by federal law, formed an integral part of the petitioner’s effort to achieve its bargaining goals during negotiations with the respondent. Allowing its use is a part of the balance struck by Congress between the conflicting interests of the union, the employees, the employer and the community. Electrical Workers Local 761 v. Labor Board, 366 U.S. 667, 672. If the Ohio law of secondary boycott can be applied to proscribe the same type of conduct which Congress focussed upon but did not proscribe when it enacted § 303 [8 (b) (4) ], the inevitable result would be to frustrate the congressional determination to leave this weapon of self-help available, and to upset the balance of power between labor and management expressed in our national labor policy. ‘For a state to impinge on the area of labor combat designed to be free is quite as much an obstruction of federal policy as if the state were to declare picketing free for purposes or by methods which the federal Act prohibits.’ Garner v. Teamsters Union, 346 U.S. 485, 500. . . .”

To permit a state law to deprive an employer of his right to discharge his supervisor for membership in a union would completely frustrate the congressional determination to leave this weapon of self-help to the employer. Furthermore, the balance of power between labor and management expressed in our national labor policy would be upset. Oil City Brass Works v. NLRB, supra; NLRB v. Fullerton Publishing Co., supra; Carpenters District Council, Etc. v. NLRB, supra. See 85 Harv. L. Rev. 1337, 1351, Labor Law Preemption Revisited.

Congress and the federal courts have adopted a national industrial relations policy which gives an employer the right to discharge his supervisor for union membership. The state is precluded from interfering with that policy. “When the exercise of state power over a particular area of activity threatened interference with the clearly indicated policy of industrial relations, it has been judicially necessary to preclude the states from acting.” San Diego Unions v. Garmon, 359 U.S. 236, 3 L.Ed. 2d 775, 79 S.Ct. 773 (1959). “Incompatible doctrines of local law must give way to principles of federal labor law.” Teamsters Local 174 v. Lucas Flour Co., 369 U.S. 95, 7 L.Ed. 2d 593, 82 S.Ct. 571 (1961).

The North Carolina Right-to-Work Law defines certain rights of employers and employees. See State v. Whitaker, supra; Lincoln Fed. L. U. v. Northwestern I. & M. Co., supra. However, this state law cannot be construed to contravene the national policy as between employer and supervisor. When, as in the present case, the facts disclose that plaintiffs as supervisors seek to invoke a remedy precluded by the established national policy, the doctrine of federal preemption applies, and the state court is without jurisdiction over the subject matter of the controversy. For this reason, it is not necessary to consider the other questions raised by the pleadings in this case or discussed in the opinion of the Court of Appeals.

The decision of the Court of Appeals is reversed, and the case is remanded to the Court of Appeals with direction that it remand the case to the Superior Court of Forsyth for entry of judgment affirming the order of Judge Gambill dismissing the action.

Reversed and remanded.