Shepard v. National Labor Relations Board

459 U.S. 344, 103 S. Ct. 665, 74 L. Ed. 2d 523, 1983 U.S. LEXIS 125, 51 U.S.L.W. 4087, 112 L.R.R.M. (BNA) 2369

• Court: Supreme Court of the United States
• Decided: January 18, 1983
• Docket: 81-1627
• Status: Published

Opinions

Justice Rehnquist

delivered the opinion of the Court.

This case grows out of a labor dispute in the construction industry in San Diego County, Cal. The issue is whether the National Labor Relations Board was required to provide a make-whole remedy for a violation of § 8(e) of the National Labor Relations Act (Act), 73 Stat. 543, 29 U. S. C. § 158(e), which prohibits so-called “hot cargo” contracts.¹

Petitioner Larry Shepard owns a dump truck, and operates it in the San Diego area to haul materials to and from construction sites. Contractors in this area generally hire dump truck operators through so called “brokers” on a day-to-day basis. Brokers agree with contractors to supply trucks and operators, then refer hauling jobs to individual owner-operators such as Shepard. Brokers handle the owner-operators’ billing and perform other coordinating services. They receive commissions based on the amount billed.

Before August 1978, Shepard was not a member of any union. In 1977 respondent Building Material and Dump Truck Drivers, Teamsters Local 86 (Union), entered into a new master collective-bargaining agreement (Agreement) with respondent contractors’ associations and their member contractors (Contractors). This Agreement accomplished a long-sought objective of the Union by prohibiting dealings on the part of contractors with nonunion operators. The effect of the Agreement was described by the Court of Appeals in this language:

“[T]he Union enlisted the aid of the Contractors to insure that only signatory brokers received subcontracts and only union truck operators performed hauling services for building contractors in the San Diego area.” 215 U. S. App. D. C. 373, 376, 669 F. 2d 759, 762 (1981).

In February 1978, Shepard contracted with Terra Trucking Co., a broker that had subscribed to the Agreement, for brokerage services. Although Shepard was not a member of the Union, he authorized Terra to make deductions from his earnings for several purposes, including the fringe benefit plan created by the Agreement. Terra deducted the appropriate sums when Shepard worked on union jobs and paid them to the Union’s fringe benefit funds.

In August 1978, the Union wrote to Terra stating that under the Agreement Terra must not deal with seven nonunion owner-operators, including Shepard. Terra informed these owner-operators that they would have to join the Union or find a new broker. Shepard joined under protest and paid an initiation fee and dues.

Shepard and respondent California Dump Truck Owners Association (Association) filed charges with the National Labor Relations Board, claiming that the Agreement violated both § 8(e) and § 8(b)(4) of the Act,² 29 U. S. C. § 158(b)(4), the latter of which prohibits secondary boycotts. At the request of the Regional Director of the Board, Shepard filed a new charge alleging only a violation of § 8(e). In 1979 the Regional Director consolidated the two charges and issued a complaint against the Union and the Contractors alleging only a violation of § 8(e). After a hearing, an Administrative Law Judge found that these owner-operators are independent contractors rather than employees, and that the Union and the Contractors had therefore violated § 8(e) by agreeing not to do business with nonunion owner-operators. The ALJ recommended that the Board issue a cease-and-desist order and order the Union and the Contractors to reimburse owner-operators who were compelled to join the Union for amounts paid as dues, initiation fees, and fringe benefit contributions.

The Board affirmed the AL J’s findings and adopted his recommended order except for the reimbursement provision. The Board stated:

“The Board has on one occasion adopted without comment an [ALJ’s] recommended order containing such a remedy. Local 814, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America (Santini Brothers, Inc.), 208 NLRB 184, 201 (1974). In the present case, however, there is insufficient evidence in the record with respect to alleged losses directly attributable to actual coercion by Respondents. Furthermore, we find a reimbursement order, typically used to ‘make whole’ employees for violations of the Act, to be generally overbroad and inappropriate in the context of 8(e) violations. We note that aggrieved owner-operators engaged in business as independent contractors may pursue a damage claim under Sec. 303 of the Act. For the foregoing reasons, we find that the reimbursement of owner-operators ordered by the [ALJ] would not effectuate the remedial policies of the Act. See [Carpenters] v. N. L. R. B., 365 U. S. 651 (1961).” 249 N. L. R. B. 386, n. 2 (1980) (emphasis in original).

On petitions for review, the Court of Appeals enforced the Board’s order in all respects. It held that “the Board’s explanation is adequate, and that given our limited authority to disturb the Board’s exercise of discretion in such matters we may not interfere.” 215 U. S. App. D. C., at 380, 669 F. 2d, at 766. In a similar case involving dump truck owner-operators and a similar collective-bargaining agreement, the Court of Appeals for the Ninth Circuit remanded the case to the Board to order reimbursement, or to explain why reimbursement would not effectuate the purposes of the Act. Joint Council of Teamsters No. 42 v. NLRB, 671 F. 2d 305, 310-313 (1981). We granted certiorari in this case, 456 U. S. 970 (1982), and now affirm the judgment of the Court of Appeals for the District of Columbia Circuit.

The Board’s authority to issue an order in this case is granted by § 10(c) of the Act, 49 Stat. 454, as amended, 29 U. S. C. § 160(c):

“If. . . the Board shall be of the opinion that any person named in the complaint has engaged in or is engaging in any such unfair labor practice, then the Board . . . shall issue... an order requiring such person to cease and desist from such unfair labor practice, and to take such affirmative action including reinstatement of employees with or without back pay, as will effectuate the policies of this Act.”

Shepard and the Association argue that the Board is required to order a make-whole remedy in this case. They rely on the reasoning of the Ninth Circuit in Joint Council of Teamsters No. 1+2, swpra, that “where money has been collected illegally, the Board should order a refund, absent some rational ground for not doing so.” 671 F. 2d, at 310. We think the Court of Appeals for the Ninth Circuit took too restricted a view of the Board’s discretion in designing a remedy. We conclude that the Board need not order reimbursement because its conclusion that the policies of the Act would not be effectuated by such an order is reasonable.

Congress has delegated to the Board the power to determine when the policies of the Act would be effectuated by a particular remedy. “In fashioning its remedies . . . the Board draws on a fund of knowledge and expertise all its own, and its choice of remedy must therefore be given special respect by reviewing courts.” NLRB v. Gissel Packing Co., 395 U. S. 575, 612, n. 32 (1969). See Fibreboard Paper Products Corp. v. NLRB, 379 U. S. 203, 216 (1964). In this case, the Board issued a cease-and-desist order and an order requiring the Union and the Contractors to post notices stating that the illegal portions of the Agreement will not be enforced. Shepard insists that the Board should have gone the last mile and ordered reimbursement as well.

The Board justified its action in declining to grant this additional remedy by the portion of its order quoted above. This explanatory paragraph strikes us as something less than a model of precise expository prose. Shortly after the enactment of the National Labor Relations Act, this Court had occasion to remind the Board:

“The administrative process will best be vindicated by clarity in its exercise. Since Congress has defined the authority of the Board and the procedure by which it must be asserted and has charged the federal courts with the duty of reviewing the Board’s orders (§ 10(e) and (f)), it will avoid needless litigation and make for effective and expeditious enforcement of the Board’s order to require the Board to disclose the basis of its order. We do not intend to enter the province that belongs to the Board, nor do we do so. All we ask of the Board is to give clear indication that it has exercised the discretion with which Congress has empowered it.” Phelps Dodge Corp. v. NLRB, 313 U. S. 177, 197 (1941).

In this case, we think that the sense of the Board’s explanation is that it has decided to treat cases in which there is no finding of “actual” coercion differently from cases in which there is such a finding. By actual coercion, the Board apparently means threats, picketing, a strike, or some other form of coercion that would amount to a violation of § 8(b)(4). See Teamsters v, Morton, 377 U. S. 252, 259 (1964). It can scarcely be doubted that the Board could properly conclude that a remedy such as reimbursement should be reserved for especially egregious situations.

In choosing to accord the limited relief that it did, the Board relied on Carpenters v. NLRB, 365 U. S. 651 (1961), in which this Court held that a showing of coercion was required before the Board could order a union to reimburse dues paid to it by workers who were required by an unlawful “closed shop” contract to join the union. The Board presumably concluded that the reasoning of this case supported, at least by analogy, its decision not to award reimbursement. We think this conclusion was justifiable.

Congress has provided a judicial damages remedy for illegal secondary activity in § 303 of the Labor Management Relations Act of 1947,³ 29 U. S. C. §187. Shepard and the Board agree that § 303 provides a remedy only for violations of § 8(b)(4) of the Act, which, in turn, requires proof of coercion. Brief for Petitioner 28-37; Brief for Respondent National Labor Relations Board 32, n. 19, 38-42. Of course, Congress is free to provide a damages remedy for some violations of federal law, and not for others. It is reasonable for the Board to follow the pattern of the Act and order reimbursement only where Congress chose to permit damages.

The crux of the argument against the Board’s position made by Shepard and the Association is that actual coercion is not an element of a § 8(e) violation and therefore should not be required as a prerequisite to what they call “complete relief.” Brief for Petitioner 17. But the very way in which this argument is framed suggests that its proponents misconceive the role of the Board. The Board is not a court; it is not even a labor court; it is an administrative agency charged by Congress with the enforcement and administration of the federal labor laws. While a prayer for “complete relief” might find a receptive ear in a court of general jurisdiction, it is well settled that there are wide differences between administrative agencies and courts. See, e. g., FCC v. Pottsville Broadcasting Co., 309 U. S. 134, 141-144 (1940). This Court has said that the Board’s “power to order affirmative relief under § 10(c) is merely incidental to the primary purpose of Congress to stop and to prevent unfair labor practices. Congress did not establish a general scheme authorizing the Board to award full compensatory damages for injuries caused by wrongful conduct.” Automobile Workers v. Russell, 356 U. S. 634, 642-643 (1958).

We find nothing in the language or structure of the Act that requires the Board to reflexively order that which a complaining party may regard as “complete relief” for every unfair labor practice. We are satisfied for the reasons heretofore stated that the Board acted within its authority in deciding that a reimbursement order in this case would not effectuate the policies of the Act. The judgment of the Court of Appeals is therefore

Affirmed.

1 Section 8(e) provides in pertinent part:

“It shall be an unfair labor practice for any labor organization and any employer to enter into any contract or agreement. . . whereby such employer ceases or refrains or agrees to cease or refrain from handling, using, selling, transporting or otherwise dealing in any of the products of any employer, or to cease doing business with any other person, and any contract or agreement entered into . . . containing such an agreement shall be to such extent unenforcible [sic] and void . . . .” 73 Stat. 543.

2 Section 8(b)(4), as set forth in 29 U. S. C. § 158(b)(4), provides in pertinent part:

“It shall be an unfair labor practice for a labor organization or its agents—

“(4)(i) to engage in, or to induce or encourage any individual employed by any person engaged in commerce or in an industry affecting commerce to engage in, a strike or a refusal in the course of his employment to use, manufacture, process, transport, or otherwise handle or work on any goods, articles, materials, or commodities or to perform any services; or (ii) to threaten, coerce, or restrain any person engaged in commerce or in an industry affecting commerce, where in either case an object thereof is—

“(A) forcing or requiring any employer or selfemployed person to join any labor or employer organization or to enter into any agreement which is prohibited by subsection (e) of this section;

“(B) forcing or requiring any person to cease using, selling, handling, transporting, or otherwise dealing in the products of any other producer, processor, or manufacturer, or to cease doing business with any other person . . . .”

3 Section 303 provides in pertinent part:

“(a) It shall be unlawful, for the purpose of this section only, in an industry or activity affecting commerce, for any labor organization to engage in any activity or conduct defined as an unfair labor practice in section 8(b)(4)....

“(b) Whoever shall be injured in his business or property by reason [of] any violation of subsection (a) of this section may sue therefor in any district court of the United States . . . without respect to the amount in controversy, or in any other court, and shall recover the damages by him sustained and the cost of the suit.” 61 Stat. 158, as amended, 73 Stat. 545.