Opinion · Supreme Court of the United States
National Labor Relations Board v. Gullett Gin Co.
Nat’l Labor Rels. Bd. v. Gullett Gin Co., 71 S. Ct. 337 (1951)
- Type
- Opinion
- Court
- Supreme Court of the United States
- Jurisdiction
- Federal
- Date
- 1951-01-15
- Topic
- general
holding unemployment compensation payments not deductible from back pay award under the National Labor Relations Act | holding that unemployment compensation should not be deducted from a back pay award under the National Labor Relations Act because failing to deduct unemployment payments does not make the employee more than “whole.” | deciding a case under the National Labor. Relations Act, on which the back-pay provisions of other employment-discrimination statutes are modeled | holding unemployment compensation benefits collateral and exempt from offset in labor case | holding unemployment compensation benefits collateral and exempt from offset in labor case | reviewing, prior to compliance, Board's determination that unemployment benefits should be disregarded in computing backpay | affirming NLRB decision refusing to deduct state unemployment compensation benefits from back pay awards to discriminatorily discharged employees because the two benefits were "collateral" | affirming NLRB decision refusing to deduct state unemployment compensation benefits from back pay awards to diseriminatorily discharged employees because the two benefits were “collateral” | reviewing, prior to compliance, Board’s determination that unemployment benefits should be disregarded in computing backpay | adopting Gullett Gin rule for back pay awards under Title VII | NLRB has the authority to refuse to deduct unemployment compensation payment from a back pay award | NLRB has the authority to refuse to deduct unemployment compensation payment from a back pay award | NLRB has discretion to refuse to deduct state unemployment compensation from back pay award | “[P]ayments to the employees were not made to discharge any liability or obligation of respondent, but to carry out a policy of social betterment for the benefit of the entire state.” | court need not reduce back pay award by deducting state unemployment compensation benefits | By re-enacting provision without pertinent modification, Congress accepted enforcement agency’s interpretation | it is within the discretion of the National Labor Relations Board to refuse to deduct unemployment insurance payments from an award of backpay under National Labor Relations Act, from which Title VII remedy provision is derived | unemployment benefits were collateral because the payments to the employees were not made to discharge any liability or obligation of employer, but to carry out a policy of social betterment for the benefit of the entire state | unemployment compensation benefits not deducted from back pay award | unemployment benefits are a collateral source benefit | distinguishing direct and collateral source income | no offset for unemployment benefits | unemployment compensation as collateral benefit
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- 135 opinions
(a) Since no consideration is given to collateral losses in ordering reimbursement of wrongfully discharged employees for their lost earnings, no consideration need be given to collateral benefits which they may have received. P. 364.
(b) Unemployment compensation payments made by a state out of funds derived from taxation are collateral benefits, since they were not made to discharge any liability or obligation of the employer but to carry out a policy of social betterment for the benefit of the entire state. Pp. 364-365.
(c) A different result is not required by the fact that, under the state law, the unemployment compensation payments incidentally affect adversely the employer's experience-rating record and prevent him from qualifying for a lower tax rate. P. 365.
(d) The conclusion here reached is supported by the fact that the Board had for many years been following the practice of disallowing deductions for collateral benefits such as unemployment compensation, and Congress did not require any change in that practice when it amended the National Labor Relations Act in 1947. Pp. 365-366.179 F.2d 499, reversed.
The Board found that respondent Gullett Gin Company had discharged certain employees in violation of the National Labor Relations Act, as amended,61 Stat. 136, 29 U.S.C. (Supp. III) §§ 141et seq., and ordered their reinstatement with back pay. Although the order provided for deduction of the employees' net earnings and willful losses of wages, if any, the Board refused to deduct certain payments made by the State of Louisiana as unemployment compensation. The Court of Appeals for the Fifth Circuit held such payments must be deducted, and modified the order accordingly.179 F.2d 499. We granted certiorari because of the importance of the question presented in the administration of the Act.340 U.S. 806.
In issuing the challenged order the Board acted under § 10(c) of the Act,61 Stat. 147, 29 U.S.C. (Supp. III) § 160(c), which provides that upon finding an unfair labor practice, the Board shall issue a cease and desist order requiring the guilty party "to take such affirmative action including reinstatement of employees with or without back pay, as will effectuate the policies of this Act . . . ."
To effectuate the policies of the Act the Board has broad but not unlimited discretion.Republic Steel Corp. v.Labor Board,311 U.S. 7,11. "[T]he power to command affirmative action is remedial, not punitive."Id., at 12. We must not, however, be more mindful of the limits of the Board's discretion than we are of our ownPage 363limited function in reviewing Board orders. In an opinion dealing with a related matter the Court cautioned:
"There is an area plainly covered by the language of the Act and an area no less plainly without it. But in the nature of things Congress could not catalogue all the devices and stratagems for circumventing the policies of the Act. Nor could it define the whole gamut of remedies to effectuate these policies in an infinite variety of specific situations. Congress met these difficulties by leaving the adaptation of means to end to the empiric process of administration. The exercise of the process was committed to the Board, subject to limited judicial review. Because the relation of remedy to policy is peculiarly a matter for administrative competence, courts must not enter the allowable area of the Board's discretion and must guard against the danger of sliding unconsciously from the narrow confines of law into the more spacious domain of policy."Phelps DodgeCorp. v.Labor Board,313 U.S. 177,194.
In effectuating the policies of the Act, the Board clearly may award back pay to discriminatorily discharged employees. This means that employees may be reimbursed for earnings lost by reason of the wrongful discharge, from which should be deducted net earnings of employees from other employment during the back-pay period,Republic Steelcase,supra, and also sums which they failed without excuse to earn,Phelps Dodge Corp. v.Labor Board,313 U.S. 177,197-198.
InMarshall Field Co. v.Labor Board,318 U.S. 253, this Court held that the benefits received by employees under a state unemployment compensation act were plainly not earnings which, under the Board's order in that case, could be deducted from the back pay awarded. The question of whether the Board had the power toPage 364make such an order was not reached for the reason that the question had not been presented to the Board as required by § 10(e) of the National Labor Relations Act,49 Stat. 454,29 U.S.C. § 160(e). The question is here on this record, and we hold that the Board had the power to enter the order in this case refusing to deduct the unemployment compensation payments from back pay, and that in so doing the Board did not abuse its discretion.
Such action may reasonably be considered to effectuate the policies of the Act. To decline to deduct state unemployment compensation benefits in computing back pay is not to make the employees more than whole, as contended by respondent. Since no consideration has been given or should be given to collaterallossesin framing an order to reimburse employees for their lost earnings, manifestly no consideration need be given to collateral benefits which employees may have received.
But respondent argues that the benefits paid from the Louisiana Unemployment Compensation Fund were not collateral but direct benefits. With this theory we are unable to agree. Payments of unemployment compensation were not made to the employees by respondent but by the state out of state funds derived from taxation. True, these taxes were paid by employers, and thus to some extent respondent helped to create the fund. However, the payments to the employees were not made to discharge any liability or obligation of respondent, but to carry out a policy of social betterment for the benefit of the entire state. See Dart's La. Gen. Stat., 1939, § 4434.1;In re Cassaretakis,289 N.Y. 119,126,44 N.E.2d 391,394-395, aff'dsub nom. Standard Dredging Co. v.Murphy,319 U.S. 306;Unemployment Compensation Commissionv.Collins,182 Va. 426,438,29 S.E.2d 388,393. We think these facts plainly show the benefits to be collateral. It is thus apparent from what we have already said that failure to take them into account in orderingPage 365back pay does not make the employees more than "whole" as that phrase has been understood and applied.1
Finally, respondent urges that the Board's order imposes upon it a penalty which is beyond the remedial powers of the Board because, to the extent that unemployment compensation benefits were paid to its discharged employees, operation of the experience-rating record formula under the Louisiana Act, Dart's La. Gen. Stat., 1939 (Cum. Supp. 1949) §§ 4434.1et seq., will prevent respondent from qualifying for a lower tax rate. We doubt that the validity of a back-pay order ought to hinge on the myriad provisions of state unemployment compensation laws. Cf.Labor Boardv.Hearst Publications,322 U.S. 111,122-124. However, even if the Louisiana law has the consequence stated by respondent, which we assumearguendo, this consequence does not take the order without the discretion of the Board to enter. We deem the described injury to be merely an incidental effect of an order which in other respects effectuates the policies of the federal Act. It should be emphasized that any failure of respondent to qualify for a lower tax rate would not be primarily the result of federal but of state law, designed to effectuate a public policy with which it is not the Board's function to concern itself.Republic Steelcase,supra.
Our holding is supported by the fact that when Congress amended the National Labor Relations Act in 1947, the Board had for many years been following the practice of disallowing deduction for collateral benefits such as unemployment compensation.2During this period thePage 366Board's practice had been challenged before the courts in only two cases, and in both the Board's position was sustained.Labor Boardv.Marshall Field Co.,129 F.2d 169;Labor Boardv.Brashear Freight Lines,127 F.2d 198. In the course of adopting the 1947 amendments Congress considered in great detail the provisions of the earlier legislation as they had been applied by the Board.3Under these circumstances it is a fair assumption that by reenacting without pertinent modification the provision with which we here deal, Congress accepted the construction placed thereon by the Board and approved by the courts. SeeHelveringv.Reynolds Co.,306 U.S. 110,114-115;Brewsterv.Gage,280 U.S. 327,337;NorwegianNitrogen Prod. Co. v.United States,288 U.S. 294,313-315.
The judgment is reversed and the case remanded for enforcement of the Board's order without the objectionable modification.It is so ordered.
MR. CHIEF JUSTICE VINSON took no part in the consideration or decision of this case.Page 367
- Page 365 We note that some states permit recoupment of benefits paid during a period for which the National Labor Relations Board subsequently awards back pay.E. g., In re Skutnik,268 A.D. 357,51 N.Y.S.2d 711. Recoupment in such situations is a matter between the State and the employees. ↩
- Page 365 3 N.L.R.B. Ann. Rep. 202, n. 11 (1938); 4 N.L.R.B. Ann. Rep. 100, n. 25 (1939); 11 N.L.R.B. Ann. Rep. 50 (1946). ↩
- Page 366 Ample evidence of this may be found in the Committee reports accompanying the bills which were the basis of the comprehensive 1947 Act. See H.R. Rep. No. 245, 80th Cong., 1st Sess.; S. Rep. No. 105, 80th Cong., 1st Sess. ↩