National Licorice Co. v. National Labor Relations Board

Background

A Brooklyn licorice manufacturer employing about 140 production workers refused to recognize a union after many workers signed union authorization cards in July 1937. Meetings between the union and the company failed and workers struck in early August. The company then helped form a worker committee, collected individual signatures, and obtained individual employment contracts that limited signers’ rights, such as giving up the right to strike or to seek a union contract.

Reasoning

The National Labor Relations Board found the company had engaged in unfair labor practices by refusing to bargain with the union, coercing employees, and sponsoring a company‑dominated committee to secure the individual contracts. The Board ordered the company to stop relying on those contracts, to stop recognizing the committee, and to bargain with the union. The Supreme Court held that the Board may order the employer to refuse to enforce contracts that were procured through unlawful, company‑dominated means even though the individual employees who signed the contracts were not parties to the Board proceeding. The Court also said the Board could address related unfair practices that occurred after the original charge was filed.

Real world impact

The ruling prevents an employer from keeping benefits gained by unlawful company domination of employee organization and from enforcing individual contracts that undermine collective bargaining. The Court modified the Board’s required notice wording to avoid implying the Board adjudicated the employees’ private contract rights, and affirmed the Board’s power to deal with connected practices arising during a pending case.

Dissents or concurrances

Justices Douglas and Black agreed with the outcome but saw no need to change the Board’s original notice language; they reserved the question about when employees must be made parties.