Darlington Manufacturing Co. v. National Labor Relations Board

ALBERT V. BRYAN, Circuit Judge

(dissenting):

The Supreme Court’s prefatory recount of the facts, 380 U.S. 263, 85 S.Ct. 994, 13 L.Ed.2d 827 (1964), necessarily taken from the Board’s findings, discloses a complete knowledge of all of the conduct and tie-ins which is now the predicate of the majority opinion. These premises the Supreme Court declared fell “short of establishing the factors of ‘purpose’ and ‘effect’ which are vital requisites of the general principles that govern a case of this kind.” The controversy was remanded to the Board to make further findings.

Nothing significantly new was introduced after the remand. This is the observation of the trial examiner who heard the evidence on the return of the case to the Board. Indeed, this is manifest too in the majority’s reliance now on what was said in dissent here, of course before the appeal. 325 F.2d 682, 689 (1963). My difficulty is understanding how our Court sees the facts as supporting “purpose and effect” where the Supreme Court could not.

A single director’s, Roger Milliken, statements, writings and attitude are now imputed to the entire board of directors, and a majority of the stockholders, of Darlington by the Court to sustain the NLRB’s finding that both the purpose and foreseeable effect of the plant closure was to “chill unionism” in the other Milliken plants. All of the power of Roger Milliken, and the entire linkage of Darlington with the other Milliken corporations, upon which the Court now counts, were known to the Supreme Court when it decided this case, and yet it did not think this evidence sufficient to arrive at the judgment now delivered by our majority.

*777 The answer is that for its support the majority draws inferences and makes assumptions which are not warranted by the proof. With nothing to sustain it, the majority terms some of the Milliken units as “paper corporations”. Also, it adopts a sweeping implication that their directors would do just exactly what Roger Milliken wished, for fear they be at once removed and replaced by him to register his views. This undeserved derogation of the directors stands refuted both by the absence of evidence to establish it, and by obstinate facts and testimony exactly opposite.

Darlington was closed for economic reasons according to its directors. At least they said so and gave the basis of their determination. The NLRB recognized this fact. In its supplemental decision it admitted that,

“[ajccording to the testimony in this case, the financial condition of Darlington was discussed at the board meeting. It was brought out that Darlington had averaged less than a 3 percent return on invested capital in the previous 5 years, including the current year in which a loss of $40,000 was expected, and that, if market prices did not rise or costs decrease, a loss of $240,000 could be anticipated in the following year.”

There was no impeachment of the Darlington board’s word save NLRB’s argument, now accepted by the majority, that the members’ votes were nothing more than echoes of Roger Milliken’s partisanship. Truth is the directors were persons of conviction and unquestioned character. There were 7 including Roger Milliken, and 3 of them had no interest in any other Deering-Milliken corporations. The remaining 3 were connections of the Milliken family. The relationship alone does not impugn their evidence on the economic advisability of the plant closing.

The stockholders must also be found unworthy of belief, for they voted to ratify the directors’ action. Additionally, the directors of Cotwool and Deering-Milliken must also be condemned in similar fashion. Each board voted, in favor of the closure, all of the Darlington shares held by its corporation, constituting a majority of Darlington’s outstanding stock.

The NLRB’s supplemental decision, upheld by the court, tells Darlington that it did not have a right to liquidate after the union election but instead should have made that decision prior to the election. With the financial losses that Darlington was currently sustaining, the corporation reasoned quite realistically that the foreseeable additional costs resulting from the arrival of the union, would be simply too much for the corporation to bear. Surely this consideration may be indulged, and acted upon, without offense to the National Labor Relations Act — indeed even if it be a mistaken conclusion.

The Trial Examiner emphasized that, “I find and conclude from all of the testimony * * * at this hearing, confirmed by that previously received, that a purpose at Darlington with respect to employees elsewhere has not been shown; and that testimony concerning related events at other mills is slight, considering quantity and credibility, and that such events can not be causally traced to a chilling purpose at Darling-ton.” (Accent added.)

I think it appalling that the Board and the courts may step into a business and tell the directors that their judgment of the economics of their business was not correct, that it did not warrant the closing of their plant and that in reality they were evilly motivated in reference to union organization. More astounding, the Board presumes to know better than do the directors the basis for their decision — that they were simply paying servile obeisance to another.

I would not enforce the Board’s order.

BOREMAN, Circuit Judge, authorizes me to state that he joins in this dissent.