Stork Restaurant, Inc. v. Boland

In the summer of 1937 the Hotel, Restaurant and Cafeteria Employees Organization Committee (hereinafter referred to as the union) was established jointly by twelve local unions, affiliated with the American Federation of Labor. Its purpose was to conduct a campaign to organize workers in the hotel and restaurant industry in New York city. Shortly before Labor Day some of the

The Legislature, by chapter 443 of the Laws of 1937, added to the Labor Law (Cons. Laws, ch. 31) article 20, entitled, New York State Labor Relations Act. It provides that “ employees shall have the right of self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in concerted activities, for the purpose of collective bargaining or other mutual aid or protection, free from interference, restraint, or coercion of employers.” (§ 703.) To protect these rights guaranteed by section 703, the same article of the Labor Law creates a Labor Board, empowered and directed, as provided in the statute, “ to prevent any employer from engaging in any unfair labor practice.” (§ 706.) The union has, in this case, charged that the Stork Restaurant, Inc., has engaged in unfair labor practices which interfere with the exercise by its employees of the rights guaranteed by the Labor Law.

The acts which constitute “ unfair labor practices ” in which employers may not engage, and which the Board is empowered to prevent, are enumerated in section 704. So far as relevant to the charges made by the union against Stork Restaurant, Inc., that section provides:

“ It shall be an unfair labor practice for an employer:

“1. To spy upon or keep under surveillance, whether directly or through-agents or any other person, any activities

“2. To prepare, maintain, distribute or circulate any blacklist of individuals for the purpose of preventing any of such individuals from obtaining or retaining employment because of the exercise by such individuals of any of the rights guaranteed by section seven hundred three.

“ 3. To dominate or interfere with the formation, existence, or administration of any employee organization or association, agency or plan which exists in whole or in part for the purpose of dealing with employers concerning terms or conditions of employment, labor disputes or grievances, or to contribute financial or other support to any such organization, by any means, including but not limited to the following: (a) by participating or assisting in, supervising, controlling or dominating (1) the initiation or creation of any such employee organization or association, agency, or plan, or (2) the meetings, management, operation, elections, formulation or amendment of constitution, rules or policies, of any such employee organization or association, agency or plan; (b) by urging the employees to join any such employee organization or association, agency or plan for the purpose of encouraging membership in the same; (c) by compensating any employee or individual for services performed in behalf of any such employee organization or association, agency or plan, or by donating free services, equipment, materials, office or meeting space or anything else of value for the use of any such employee organization or association, agency or plan; provided that, an employer shall not be prohibited from permitting employees to confer with him during working hours without loss of time or pay.

“ 4. To require an employee or one seeking employment, as a condition of employment, to join any company union or to refrain from forming, or joining or assisting a labor organization of his own choosing.

“ 5. To encourage membership in any company union or discourage membership in any labor organization, by discrimination in regard to hire or tenure or in any term or

“ 9. To distribute or circulate any blacklist of individuals exercising any right created or confirmed by this article or of members of a labor organization, or to inform any person of the exercise by any individual of such right, or of the membership of any individual in a labor organization for the purpose of preventing individuals so blacklisted or so named from obtaining or retaining employment.

“ 10. To do any acts, other than those already enumerated in this section, which interfere with, restrain or coerce employees in the exercise of the rights guaranteed by section seven hundred three.”

“ Whenever a charge has been made that any employer has engaged in or is engaging in any unfair labor practice, the board shall have power to issue and cause to be served upon such employer a complaint stating the charges * * *.” (§ 706.) The complaint which the Board issued and caused to be served upon Stork Restaurant, Inc., as thereafter amended, stated in substance that the employer had engaged in the unfair labor practices enumerated in section 704, by discharging eleven waiters, named in the complaint, because of their union activities; by spying and keeping its employees under surveillance; by forming and dominating a company union, known as the Stork Restaurant Employees Association, and by otherwise interfering with, restraining and coercing its employees in the exercise of the rights guaranteed them by section 703 of the Labor Law.

Numerous hearings on the charges stated in the complaint were held between October 28, 1937, and February 17, 1938, before different members of the Board and one hearing before the Secretary of the Board, who had been designated as Trial Examiner for that hearing. The employer had full opportunity to be heard, to examine and cross-examine

It is not disputed that eleven waiters named in the complaint, who were members of the union, were discharged in September. The Board found that ten of the eleven were discharged because they joined the union, assisted the union or were suspected of being members of the -union. It found that one of the eleven waiters was discharged for other cause. The Board also found that another one of the eleven waiters, though discharged because of membership in the union, was thereafter reinstated; that he then became ill and that the evidence does not show that he " was replaced or refused reinstatement after his illness because of his membership in or assistance of the union.” The employer was commanded to offer to the other nine discharged waiters immediate and full reinstatement to the positions they had previously held and was commanded to “ make whole ” these waiters “ for any loss of pay they have suffered by reason of their having been discharged, by payment to them of a sum of money equivalent to that which they would normally have earned from the date of their discharge to the date of such offer of reinstatement, less the amount earned by each of them during such period.”

Other findings of the Board amplify or support the findings which we have quoted or set forth in summary. The Board based upon these findings conclusions that “ Stork Restaurant Employees Association is a company union within the meaning of section 701, subdivision 6, of the act.” That Stork Restaurant, Inc., “ by participating in, dominating and interfering with the formation, existence and administration of the Stork Restaurant Employees Association and by urging, through its supervisory employees, that its employees join the said Association, has engaged in and is engaging in unfair labor practices within the meaning of section 704, subdivisions 3 and 10, of the Act.” That the restaurant has discriminated in regard to the hire and tenure of employment of nine of its waiters “ thereby discouraging membership in the Union and encouraging membership in the Association, and has thereby engaged in and

When, after a hearing, the Labor Board has determined that an employer has engaged in or is engaging in any unfair labor practice, it must state its findings of fact and must issue an order requiring the employer “ to cease and desist from such unfair labor practice, and to take such further affirmative or other action as will effectuate the policies of this article, including, but not limited to (a) withdrawal of recognition from and refraining from bargaining collectively with any employee organization or association, agency or plan defined in this article as a company union or established, maintained or assisted by any action defined in this article as an unfair labor practice; (b) awarding of back pay; (c)

When an order of the Board is challenged, the Board may petition the Supreme Court “ for the enforcement of such order ” or “ any person aggrieved by a final order of the board * * * may obtain a review of such order in the supreme court * * * by filing in such court a written petition praying that the order of the board be modified or set aside.” (§ 707.) The Stork Restaurant, Inc., filed such a petition. The same section of the statute which provides for a judicial review of- orders of the Board also defines the scope of the review, “No objection that has not been urged before the board * * * shall be considered by the court, unless the failure or neglect to urge such objection shall be excused because of extraordinary circumstances. The findings of the board as to the facts, if supported by evidence, shall be conclusive(Italics, of course are ours.) The Supreme Court at Special Term held that the findings were supported by the evidence and refused to set aside or modify the order. The Appellate Division, by a closely divided court, reversed the order of Special Term and set aside the order of the Board.

The only substantial question presented by this appeal is whether the findings of the Board are supported by the evidence. The conclusions of the Board are firmly based upon the findings, if there is evidence to sustain the findings; and the orders of the Board to the employer are authorized by the statute and do not exceed the powers of the Board if the findings and conclusions of the Board are sound. The respondent does not seriously contend otherwise. True, it has argued in this court that the proceedings of the Board do not accord with the requirements of due process of law but the argument is based largely upon objections not raised before the Labor Board and not raised or considered in the court below. Those obj ections which we are free to consider are, we think, without substance and the respondent places small reliance upon them. We examine the record

Where there is conflict in the testimony produced before the Board, where reasonable men might differ as to whether the testimony of one witness should be accepted or the testimony of another witness be rejected, where from the evidence either of two conflicting inferences may be drawn, the duty of weighing the evidence and making the choice rests solely upon the Board. The courts may not weigh the evidence or reject the choice made by the Board where the evidence is conflicting and room for choice exists. (Cf. National Labor Relations Bd. v. Waterman S. S. Co., 309 U. S. 206 , decided unanimously by United States Supreme Court, Feb. 12, 1940.) We attempt, in this opinion, to state and analyze the testimony only so far as necessary to determine whether there is evidence which might reasonably be believed and which, if believed, adequately supports the findings of the Board.

Facts which are undisputed or established by testimony which cannot reasonably be rejected form the background against which the controversy must be viewed. The Stork . Club is a restaurant with a well-established reputation. It seeks to maintain standards of service as high as any restaurant in New York and to employ only trained, competent waiters. The waiters who, it is said, were discharged because they joined the union, had been employed during the previous year. Many of them had been brought to the restaurant in September, 1936, by a headwaiter who was employed by the Stork Club after the close of the summer season at Saratoga. It was not unusual for the Stork Club to hire a new headwaiter or a new captain after the

On September 4th, the day after two waiters distributed, in the restaurant, application cards for membership in the union, the manager of the restaurant, who was in complete charge whenever the proprietor _was absent, called each

The proprietor, who was away over the Labor Day weekend when these talks with the manager were held, returned on September 7th. On the same day he called the waiters together and made a little speech to them. He was not a witness at the hearings held by the Board but waiters who heard the speech were produced as witnesses by each side and there is substantial agreement as to what was said. He told the waiters that he had heard that rumors were current that waiters would lose their jobs unless they joined a umon and that he wanted to tell them that tMs was not true; that they were free to join a decent union or to join none but that he would have nothing to do with the “ racketeering ” umon controlled by “ Dutch Schultz,” who had dominated a waiters’ umon with wMch the restaurant had had a controversy several years before; and that he would rather close the place than have anything to do with that umon. Several of the discharged waiters testified that on the same day the proprietor questioned them not only about their own umon affiliations but also as to the umon affiliations of other waiters. One of these witnesses even testified that he said, “ You know union men only a bunch of racketeers. I wouldn’t have nobody employed in my place here if I know they are union men ” (sic).

The discharge of several waiters followed the next day; but two days thereafter the discharged waiters were told by

The New York State Labor Relations Act leaves an employer free to employ or to discharge as he sees fit for good reason or for poor reason or for no reason at all — subject only to one limitation, that he may not “ require an employee or one seeking employment, as a condition of employment, to join any company union or to refrain from forming, or joining or assisting a labor organization of his own choosing.” . Nor may an employer “ encourage membership in any company union or discourage membership in any labor organization, by discrimination in regard to hire or tenure or in any term or condition of employment.” A member of a union has under the statute no security of tenure, which the Board may protect, greater than other employees who are not members. The policy of the statute is that employees shall be free to join a union of their choice or, if they prefer, to join no union. The statute confers upon the Board power to prevent discrimination by the employer which interferes with such freedom of his employees. The Board may not command an employer to retain in his employ a discharged employee who is a member of the union unless it appears that the discharge was influenced by the employee’s membership in the union and was calculated to interfere with the freedom of choice guaranteed by the act to all employees. Here, the employer claims that the members of the union were discharged because of incompetence and the employer has produced

In considering that question we do not ignore the fact that an employer, exercising his right to discharge unsatisfactory employees, has not under the statute the burden of justifying the discharge. The burden of proving a charge against an employer of “ unfair labor practices ” rests upon those making the charge. The evidence to prove the charge may, of course, be circumstantial, but it must be sufficient to permit a reasonable inference of violation, by the employer, of rights guaranteed by the statute. The testimony which we have stated in brief summary shows beyond possibility of dispute that in the month of September twelve waiters joined the union. In the same month they and one waiter who had long been a member of the union were discharged. During the days when these waiters were joining the union and were being discharged, the manager and the proprietor of the restaurant were warning the waiters against “ racketeering unions,” assuring the waiters that they need join no union to save their jobs and inquiring of individual waiters whether they had joined a union. While the management of this restaurant was inquiring about the union affiliations of the waiters in its employ and was discharging waiters who were members of the union, other employees were forming the association confined to employees of the Stork Club. The head waiter of the

We need not extend this opinion by reference here to other testimony — much of it not challenged — which lends additional support to the findings and conclusions of the Board. The testimony to which we have already referred briefly is, it is plain, cogent evidence which might reasonably induce and perhaps even compel the Labor Board to draw the inference that the Stork Club had engaged in "unfair labor practices, unless that evidence is rebutted by the testimony produced by the restaurant and relied

Many witnesses testified that the discharged waiters were incompetent, insolent, unruly and dishonest, and that for months before their discharge the management had received many complaints about their conduct until the patience of the management was exhausted. They were retained until September, it is said, only because it is the practice of the Stork Club to replace unsatisfactory employees after the close of the Saratoga season. There is testimony that even before they joined the union, their names were, as we have already said, placed upon a list of employees who were to be discharged and the list so prepared was introduced and admitted in evidence. Testimony was produced also to show that the employees of the Stork Club organized the association without suggestion from the management and even without the knowledge of the management; that the management did not dominate or interfere with the administration of the association and that the management had recognized the association and granted its demands only because the association had been organized by the employees as their chosen representative for collective bargaining. We are told that, in the light of this testimony, the only reasonable inference is that the employees were discharged because of complaints against them. Suspicion or knowledge that their discharge was impending induced them, it is argued, to join the union; the fact that they had joined the union neither induced nor averted the discharge.

Judicial review of determinations of an adminsitrative board is often limited, as it has been limited in the New York State Labor Relations Act, by a statutory provision to the effect that “ the findings of the board as to the facts, if supported by evidence, shall be conclusive.” (§ 707, subd. 2.) A finding is supported by the evidence only when the evidence is so substantial that from it an inference of the existence of the fact found may be drawn reasonably. A mere scintilla of evidence sufficient to justify a suspicion is not sufficient to support a finding upon which legal rights and

There is often greater difficulty in applying the test than in formulating it. The evidence produced by one party must be considered in connection with the evidence produced by the other parties. Evidence which unexplained might be conclusive may lose all probative force when supplemented and explained by other testimony. The Board must consider and sift all the evidence — accepting the true and rejecting the false — and must base inferences on what it has accepted as true. Choice lies with the Board and its finding is supported by the evidence and is conclusive where others might reasonably make the same choice. (Cf. Matter of Metropolitan Life Ins. Co. v. N. Y. State Labor Relations Board, 280 N. Y. 194 .)

The Board has rejected the testimony produced by the Stork Club in its defense. We have stated that testimony only in barest outline. If the court had power to weigh the evidence, the picture should be drawn in greater detail. Few additional details are necessary to show that the Board might reasonably reject the testimony. True, it is in large part not contradicted, but also in large part it could not be contradicted even if untrue; and inherent improbabilities, furnish good reason for its rejection.

At the outset, question must arise why men as incompetent and as insolent as the discharged waiters must have been, if the picture painted by the employer be true, should have been retained for many months in a restaurant of established reputation and why, in spite of their shortcomings, the restaurant should have been willing to reinstate them if they would “ apologize." Doubt is cast upon

The order of the Appellate Division should be reversed and that of the Special Term affirmed, with costs in this court and in the Appellate Division.

Loughran, Finch, Rippey, Sears, Lewis and Conway, JJ., concur.

Ordered accordingly.