MacKay Radio employed telegraph operators in San Francisco, many of whom belonged to Local No. 3 of the American Radio Telegraphists Association. While the union and the company were negotiating over wages and working conditions, the union called a nationwide strike. The San Francisco operators struck on October 4, 1935. To keep its service operating, MacKay brought in workers from other offices and hired replacements.
When the strike collapsed a few days later, MacKay generally offered the strikers their jobs back. It singled out eleven strikers, however, requiring them to submit applications subject to approval. Six of the eleven ultimately returned to work, but five prominent union and strike participants were refused reinstatement. The Board found that MacKay had selected those five because of their union activity, rather than because all available positions had been permanently filled.
The NLRB found violations of Sections 8(1) and 8(3) of the National Labor Relations Act and ordered MacKay to cease discriminating, reinstate the five workers with back pay, and post notices. The Court of Appeals refused enforcement. Its judges variously reasoned that the strikers had ceased to be statutory employees, that compelled reinstatement was unconstitutional, or that the Board could require only that the workers be treated as new applicants. The Supreme Court granted certiorari, reversed, and remanded for enforcement proceedings.
Issue #1
Whether the Supreme Court had jurisdiction when the petition for certiorari followed the Court of Appeals' denial of rehearing rather than its original judgment.
Holding
Yes. The Court of Appeals retained jurisdiction while timely rehearing petitions were pending, and the certiorari period ran from its final order disposing of those petitions.
Reasoning
MacKay argued that the Board's petition was late because it was not filed within three months of the Court of Appeals' initial judgment. The Supreme Court held that the timely motions for rehearing kept the case under the Court of Appeals' control during the same term, and that court actually granted rehearing, received additional argument, and issued further opinions. Its final order confirming the original disposition was therefore the judgment from which the time to seek certiorari ran.
Issue #2
Whether the strike arose from, or was connected with, a current labor dispute under the National Labor Relations Act.
Holding
Yes. The ongoing negotiations over wages and employment terms, and the union's decision to strike because those negotiations were unsatisfactory, established a current labor dispute.
Reasoning
The Act distinguishes a labor dispute from an unfair labor practice. The company had not committed an unfair labor practice before the strike merely because negotiations had failed to produce an agreement. But the parties were negotiating over employment terms, and the workers struck because they regarded the negotiations as unsatisfactory. That was enough to show that the strike occurred in connection with a current labor dispute, regardless of whether the employer was at fault or the strike was wise.
Issue #3
Whether economic strikers remained statutory employees protected by the Act after they stopped work.
Holding
Yes. Workers whose employment ceases because of or in connection with a current labor dispute remain employees under Section 2(3), so long as they have not obtained regular and substantially equivalent work elsewhere.
Reasoning
Section 2(3) expressly includes individuals whose work has ceased because of or in connection with a current labor dispute. Because these operators struck in connection with such a dispute and had not obtained equivalent new employment, they retained employee status for purposes of the Act. MacKay therefore could not discriminate against them in reinstatement on account of protected union activity.
Issue #4
Whether an employer may permanently replace economic strikers, and whether MacKay nevertheless committed an unfair labor practice in choosing which strikers to reinstate.
Holding
An employer may hire permanent replacements to continue its business during an economic strike and need not displace those replacements when strikers seek to return. But it may not use reinstatement decisions to discriminate against strikers because of their union activity.
Reasoning
The Court rejected the view that the Act's protection of the right to strike deprives an innocent employer of the ability to keep its business running. MacKay could fill vacancies left by the strike, promise replacement workers permanent jobs, and decline to discharge those replacements merely to make room for returning strikers. Its failure to restore every striker was thus not, by itself, unlawful.
The Board found that MacKay did not neutrally select the five workers who would remain out of work because five replacement workers stayed in San Francisco. Instead, it used a special list and application process to single out leading union participants. Evidence showed that several were told their union activity made them undesirable, while six of the eleven workers initially marked for separate treatment were allowed to return without awaiting approval. The Court held that substantial evidence supported the Board's finding that the asserted full-quota explanation was an afterthought and that the actual reason was antiunion discrimination.
MacKay could have used a lawful, nondiscriminatory method to determine which returning strikers would have to wait for openings. It also could have made decisions based on skill or ability. The Board found that it did neither. Because the company selected the excluded workers because of their union activities, its conduct violated Sections 8(1) and 8(3).
Issue #5
Whether construing the Act to permit reinstatement of strikers discriminatorily denied return to work violated the Fifth Amendment.
Holding
No. Congress could preserve the employment relationship during a strike connected with a labor dispute and authorize reinstatement as a remedy for discriminatory conduct.
Reasoning
The Court treated the statute as a valid regulation of the employment relationship under Congress's commerce power. In National Labor Relations Board v. Jones & Laughlin Steel Corp., the Court had already upheld reinstatement remedies that limited an employer's otherwise existing freedom of contract in order to prevent industrial strife affecting commerce. Extending statutory employee status to strikers and ordering reinstatement where the employer discriminatorily excluded them rested on the same principle.
The order did not require MacKay to remove innocent permanent replacements simply because the strike ended. Rather, it remedied MacKay's unlawful choice to deny available reinstatement opportunities to particular workers on the basis of union activity. That limited remedy did not amount to an unconstitutional compulsion to form an employment contract against the company's will.
Issue #6
Whether the Board's reinstatement, back-pay, and notice remedies were within its statutory authority and were nonarbitrary.
Holding
Yes. Reinstatement with back pay was an appropriate means of neutralizing the proven discrimination, and the order was properly construed to require mitigation credit through the date of reinstatement and to prohibit only union-based discharges.
Reasoning
The Act authorizes remedies adapted to the violation found. Since the Board found that MacKay discriminatorily denied the five employees their former positions, complete relief required restoring them to those positions and reimbursing them for wages lost because of the discrimination. The Court relied on its prior recognition that the Board has remedial discretion to fashion relief suited to the particular unfair labor practice.
The Court rejected objections that the remedy improperly awarded back pay without accounting for interim earnings or broadly forbade any future discharge. The Board agreed that earnings through the date of reinstatement must be credited against back pay. And the notice requirement, though awkwardly phrased, had to be read with the rest of the order as prohibiting discharge or discrimination because of union activity, not as preventing discharge for every legitimate reason.
Issue #7
Whether the amended complaint and the Board's procedure denied MacKay due process by changing the theory from discharge to refusal to reemploy.
Holding
No. MacKay had adequate notice and a full opportunity to contest the material issue: whether it discriminatorily excluded the five workers because of union activity.
Reasoning
The Court regarded the asserted difference between a discriminatory discharge and a discriminatory refusal to reemploy as technical in this context. Because the strikers remained statutory employees, refusing them work after the company's general offer to reinstate was effectively a discharge. From the outset, the evidence and arguments focused on whether MacKay had treated these particular workers differently because of union activity.
Due process protects substantial rights, not a prescribed procedural form. MacKay understood the accusation, presented evidence to defend its officials' conduct, argued before the Board, and identified no concrete prejudice from the Board's decision not to obtain an intermediate examiner's report. The Court therefore found no denial of a fair hearing.
Issue #8
Whether the remaining constitutional and judicial-review objections, including the Article III and Seventh Amendment objections, barred enforcement of the Board's order.
Holding
No. The Court held that its prior decisions foreclosed the remaining objections.
Reasoning
After resolving the statutory, evidentiary, remedy, and due-process questions, the Court rejected MacKay's remaining challenges as controlled by earlier Supreme Court decisions sustaining the National Labor Relations Act's administrative scheme and the Board's remedial authority. Those precedents left no basis to deny enforcement on the asserted Article III, jury-trial, or related constitutional grounds.