National Labor Relations Board v. Fansteel Metallurgical Corp.

1939-02-27

Headline: Court limits Labor Board power by blocking its order to require reinstatement of workers who seized employer’s plant in an illegal sit-down, while upholding other orders against company-supported union tactics.

Holding: The Court ruled that the National Labor Relations Board lacked statutory authority to require reinstatement of employees discharged for unlawfully seizing the employer’s property in a sit-down strike, though other Board orders were partly sustained.

Real World Impact:

Allows employers to refuse rehiring workers who seized plant property.
Affirms the Labor Board's power to order bargaining and stop company-controlled unions.
Clarifies that illegal sit-downs are addressed through courts and criminal penalties.

Topics: labor organizing, sit-down strikes, employer rights, union recognition, Labor Board authority

Summary

Background

Fansteel Metallurgical Company, a North Chicago rare-metals manufacturer, was accused by the National Labor Relations Board of interfering with employees’ efforts to organize. Employees formed Lodge 66 of the Amalgamated Association; the company used a labor spy, promoted a company-backed group, and the superintendent made anti-union moves. On February 17, 1937, about 95 workers occupied two "key" plant buildings in a sit-down strike; state courts later ordered their removal, fights and arrests followed, the workers were fined or jailed, and the company resumed operations and rehired some workers. The Board found unfair labor practices by Fansteel and ordered a number of remedies, including reinstatement with back pay for the strikers and withdrawal of recognition from the company-linked Rare Metal Workers Local No. 1.

Reasoning

The central question was whether the Board could compel reinstatement of employees discharged for unlawfully seizing the plant. The Court held that Congress intended to protect lawful union activity and peaceful strikes but did not give the Board power to force employers to retain workers who committed illegal acts like seizure or violence. The Court interpreted §2(3) and §10(c) of the National Labor Relations Act as preserving employee status for lawful strikers but not as creating immunity from discharge for illegal conduct. The Court therefore reversed the reinstatement portion of the Board’s order but upheld orders requiring Fansteel to stop unfair practices and to withdraw support from the company-sponsored organization.

Real world impact

The decision limits the Board’s remedial power in cases involving illegal sit-downs: employers may refuse to rehire workers who seized plant property, while the Board can still order employers to stop anti-union conduct and undo company-dominated unions. Employers, unions, and the Board must rely on other legal remedies for violent or unlawful conduct rather than on mandatory reinstatement orders. The case drew a separate concurrence emphasizing statutory interpretation and a partial dissent arguing for broader protection for strikers.