American Ship Building Company v. National Labor Relations Board/Concurrence White

by Byron White

United States Supreme Court

380 U.S. 300

American Ship Building Company  v.  National Labor Relations Board

 Argued: Jan. 21, 1965. --- Decided: March 29, 1965

Mr. Justice WHITE, concurring in the result.

The Court today holds that the use of economic weapons by an employer for the purpose of improving his bargaining position can never violate the broad provisions of §§ 8(a)(1) and (3) of the NLRA and hence a bargaining lockout of employees in resistance to demands of a union is invariably exempt from the proscriptions of the Act. As my Brother GOLDBERG well points out, the Court applies legal standards that cannot be reconciled with decisions of this Court defining the Board's functions in applying these sections of the Act and does so without pausing to ascertain if the Board's factual premises are supported by substantial evidence. I also think the Court, in the process of establishing the legality of a bargaining lockout, overlooks the uncontradicted facts in this record and the accepted findings of the trial examiner which indicate to me that the employer's closing of the Chicago yard was not a 'lockout' for the purpose of bringing economic pressure to break an impasse and to secure more favorable contract terms.

In my view the issue posed in this case is whether an employer who in fact anticipates a strike may inform customers of this belief to protect his commercial relationship with customers and to safeguard their property thereby discouraging business, and then lay off employees for whom there is no available work. I, like the trial examiner, think he may, and do not think this conduct can be impeached under §§ 8(a)(1) and (3) by merely asserting that the employer and his customers were erroneous in believing a strike was imminent.

The Board, the Court of Appeals, and presumably this Court, accept all the findings of the trial examiner, except the finding that the employer's honest belief that a strike would occur had a reasonable basis in fact. The examiner found that at the time of the layoffs at the Chicago yard there was no work there and very little at the other yards, which remained open until all available work was completed. During past slack summer seasons a nucleus crew had been retained at the yards to perform emergency repair jobs for Ship Building's 14 or 15 regular customers. Absent a job, these employees also did maintenance work, but the accommodation of these regular customers and retention of their good will was the only reason for remaining open, the operations being otherwise unprofitable. The customers learned of the labor unrest at the yards through newspaper accounts and Ship Building's plant managers, who felt constrained to tell longstanding customers of the possibility of a strike during the course of repair work. The manager of the Buffalo yard was of the opinion that 'the owner that brought the boat into the dock would have rocks in his head if he would have taken the chance.' Work was not refused, however. There were few, if any, requests for repairs during that summer, a substantial number of shipowners being reluctant to bring their vessels into the yard. The last job left the Chicago yard three weeks before closing. The examiner found that at the time of closing, Ship Building had 'men working on maintenance in the yards, with no work on hand, none anticipated, and customers refusing to send work in.' Only those workers for whom there was no work were laid off and no new jobs were taken on. The examiner noted that the employer was not unaware of the union's negotiating strategy and of the possible effect of a closing on this strategy. But in carefully assessing all the testimony he found that at most these considerations partially colored the employer's motivation. The examiner concluded from these facts that 'the economic inducements so overshadowed anything improper that they must be considered primary, particularly when the economic factors which supported them arose through no fault of Respondent and anteceded the layoff.'

Given the finding that the closing was due to lack of work at the Chicago yard, it is no answer to say, as the Board does, that there was no reasonable basis to anticipate a strike and hence the closing was an offensive bargaining lockout. Whether there was a reasonable basis to fear a strike or not, the fact remains that the employer, and its customers, did fear a strike, and consequently there was no work for the employees. It has long been the law that an employer is free to modify or shut down operations temporarily for business reasons unrelated to the exercise by his employees of statutory rights, and the reasonableness of an employer's response to business exigencies is not ordinarily subject to review. See Pepsi-Cola Bottling Co., 145 N.L.R.B. 785 (1964); Associated General Contractors of America, Inc., 105 N.L.R.B. 767 (1953); cf. Fibreboard Paper Products Corp. v. National Labor Relations Board, 379 U.S. 203, 85 S.Ct. 398, 13 L.Ed.2d 233; Textile Workers' Union v. Darlington Mfg. Co., 380 U.S. 263, 85 S.Ct. 994. There is nothing in the decisions of the NLRB, including this case, which would indicate that there are occasions when an employer may not truthfully inform his customers of a labor dispute and his fear of a strike to protect his business and their property and may not lay off employees for lack of work. Indeed, these decisions hold that an employer may shut down in response to such economic conditions, even though these conditions are the result of protected concerted activities, Pepsi-Cola Bottling Co., 145 N.L.R.B. 785 (1964); Associated General Contractors of America, Inc., 105 N.L.R.B. 767 (1953); H. H. Zimmerli, 133 N.L.R.B. 1217 (1961), so long as the creation of or alleged reliance on these conditions is not a subterfuge for a lockout, Ripley Mfg. Co., 138 N.L.R.B. 1452 (1962); Savoy Laundry, Inc., 137 N.L.R.B. 306 (1962); New England Web, Inc., 135 N.L.R.B. 1019 (1962). There is no evidence here that the lack of work was a result of the employer's decision or desire to lay off its employees and the Board did not so find. I do not now determine whether a temporary economic shutdown could ever be found to violate the Act. Here the Board has given no reasons, no rationale, to show how this closing violated the Act, except to say the closing was a bargaining lockout. A lockout is the refusal by an employer to furnish available work to his regular employees. It is apparent that the considerations which fault an employer for refusing to furnish available work are quite different from those which would prohibit him from laying off workers for whom there is no work. Hence, reliance on the Board's lockout cases does not explain, no less support, the result reached in this case. The compelling conclusion is that the Board has failed to 'disclose the basis of its order' and to 'give clear indication that it has exercised the discretion with which Congress has empowered it.' Phelps Dodge Corp. v. National Labor Relations Board, 313 U.S. 177, 197, 61 S.Ct. 845, 854, 85 L.Ed. 1271. This is not to say the Board has reached an erroneous balance in regard to the bargaining lockout; it is to say that the bargaining lockout analysis will not suffice to judge the legality of the layoffs in this case.

The Court, like the Board, assimilates the employer's conduct here to the bargaining lockout and restrikes the balance; it dismisses the actual justification for the closing with the assertion that the 'examiner found * * * (the) closing was not due to lack of work. Despite similarly slack seasons in the past, the employer had for 17 years retained a nucleus crew to do maintenance work and remain ready to take such work as might come in.' Ante, at p. 304. This is puzzling, since the examiner found precisely the contrary, and neither the Board nor the Court of Appeals took issue with these findings. The examiner said that a nucleus crew was maintained in the past only in the expectation of emergency work, the performance of such work being thought necessary to maintain customer good will. Because of the labor uncertainty and the decision that undertaking emergency jobs would jeopardize customer relations, there was no expectation of work during the summer of 1961, unlike past years. Since I think an employer's decision to lay off employees because of lack of work is not ordinarily barred by the Act, and since neither the Board nor the Court properly can ignore this claim, I would reverse the Board's order, but without reaching out to decide an issue not at all presented by this case.

Since the Court does rule on the status of the bargaining lockout under the National Labor Relations Act, I feel constrained to state my views. This Court has long recognized that the Labor Relations Act 'did not undertake the imposible task of specifying in precise and unmistakable language each incident which would constitute an unfair labor practice,' but 'left to the Board the work of applying the Act's general prohibitory language in the light of the infinite combinations of events which might be charged as violative of its terms.' Republic Aviation Corp. v. National Labor Relations Board, 324 U.S. 793, 798, 65 S.Ct. 982, 985, 89 L.Ed. 1372. Thus the legal status of the bargaining lockout, as the Court indicated in National Labor Relations Board v. Truck Drivers Union, etc., 353 U.S. 87, 96, 77 S.Ct. 643, 648, 1 L.Ed.2d 676, is to be determined by 'the balancing of the conflicting legitimate interests.'

The Board has balanced these interests here-the value of the lockout as an economic weapon against its impact on protected concerted activities, including the right to strike, for which the Act has special solicitude, National Labor Relations Board v. Erie Resistor Corp., 373 U.S. 221, 234, 83 S.Ct. 1139, 1148, 10 L.Ed.2d 308-and has determined that the employer's interest in obtaining a bargaining victory does not outweigh the damaging consequences of the lockout. It determined that for an employer to deprive employees of their livelihood because of demands made by their representatives and in order to compel submission to the employer's demands, coerces employees in their exercise of the right to bargain collectively and discourages resort to that right. And this interferes with the right to strike, sharply reducing the effectiveness of that weapon and denying the union control over the timing of the economic contest. The Court rejects this reasoning on the ground that the lockout is not conduct 'demonstrably so destructive of collective bargaining that the Board need not inquire into employer motivation.' Ante, at p. 309. Since the employer's true motive is to bring about settlement of the dispute on favorable terms, there can be no substantial discouragement of union membership or interference with concerted activities. And the right to strike is only the right to cease work, which the lockout only encourages rather than displaces.

This tour de force denies the Board's assessment of the impact on employee rights and this truncated definition of the right to strike, nowhere supported in the Act, is unprecedented. Until today the employer's true motive or sole purpose has not always been determinative of the impact on employee rights. Republic Aviation Corp. v. National Labor Relations Board, 324 U.S. 793, 65 S.Ct. 982, 89 L.Ed. 1372; Radio Officers' Union v. National Labor Relations Board, 347 U.S. 17, 74 S.Ct. 323, 98 L.Ed. 455; National Labor Relations Board v. Truck Drivers Union, etc., 353 U.S. 87, 77 S.Ct. 643, 1 L.Ed.2d 676; National Labor Relations Board v. Erie Resistor Corp., 373 U.S. 221, 83 S.Ct. 1139, 10 L.Ed.2d 308; National Labor Relations Board v. Burnup & Sims, Inc., 379 U.S. 21, 85 S.Ct. 171, 13 L.Ed.2d 1. The importance of the employer's right to hire replacements to continue operations, or of his right to fire employees he has good reason to believe are guilty of gross misconduct was not doubted in Erie Resistor and Burnup & Sims. Nonetheless the Board was upheld in its determination that the award of super-seniority to strike replacements and discharge of the suspected employee were unfair labor practices. Of course, such conduct is taken in the pursuit of legitimate business ends, but nonetheless the 'conduct does speak for itself. * * * (i)t carries with it unavoidable consequences which the employer not only foresaw but which he must have intended.' Erie Resistor, 373 U.S., at 228, 83 S.Ct., at 1145. I would have thought it apparent that loss of jobs for an indefinite period, and the threatened loss of jobs, which the Court's decision assuredly sanctions, cf. Textile Workers' Union v. Darlington Mfg. Co., 380 U.S., at 274, 85 S.Ct., at 1001, n. 20, because of the union's negotiating activity, itself protected conduct under § 7, hardly encourage affiliation with a union.

If the Court means what it says today, an employer may not only lock out after impasse consistent with §§ 8(a)(1) and (3), but replace his locked-out employees with temporary help, cf. National Labor Relations Board v. Brown, 380 U.S. 278, 85 S.Ct. 980, or perhaps permanent replacements, and also lock out long before an impasse is reached. Maintaining operations during a labor dispute is at least equally as important an interest as achieving a bargaining victory, see National Labor Relations Board v. Mackay Radio & Telegraph Co., 304 U.S. 333, 58 S.Ct. 904, 82 L.Ed. 1381, and a shutdown during or before negotiations advances an employer's bargaining position as much as a lockout after impasse. And the hiring of replacements is wholly consistent with the employer's intent 'to resist the demands made of it in the negotiations and to secure modification of these demands.' Ante, at p. 309. I would also assume that under §§ 8(a)(1) and (3) he may lock out for the sole purpose of resisting the union's assertion of grievances under a collective bargaining contract, absent a no-lockout clause. Given these legitimate business purposes, there is no antiunion motivation, and absent such motivation, a lockout cannot be deemed destructive of employee rights. '(I)nquiry into employer motivation' may not be truncated. Ante, at p. 312. 'Proper analysis of the problem demands that the simple intention to support the employer's bargaining position as to compensation and the like be distinguished from a hostility to the process of collective bargaining which could suffice to render a lockout unlawful.' Ante, at p. 309. I think that the Board may assess the impact of a bargaining lockout on protected employee rights, without regard to motivation, and that the Court errs in failing to give due consideration to the Board's conclusions in this regard.

The balance and accommodation of 'conflicting legitimate interests' in labor relations does not admit of a simple solution and a myopic focus on the true intent or motive of the employer has not been the determinative standard of the Board or this Court. As the Court points out, there are things an employer may do for business reasons which are inconsistent with a rigid or literal interpretation of employee rights under the Act, such as the right to hire strike replacements. National Labor Relations Board v. Mackay Radio & Telegraph Co., 304 U.S. 333, 58 S.Ct. 904, 82 L.Ed. 1381. But there are just as clearly others which he may not. Republic Aviation, 324 U.S. 793, 65 S.Ct. 982, 89 L.Ed. 1372; Erie Resistor, 373 U.S. 221, 83 S.Ct. 1139, 10 L.Ed.2d 308; Burnup & Sims, 379 U.S. 21, 85 S.Ct. 171, 13 L.Ed.2d 1. A literal interpretation will not suffice to reconcile these cases, nor to justify the result in the present case. For in saying an employer may lock out all his employees, the Court fully ignores the most explicit statutory right of employees 'to refrain from any or all (concerted) activities.' Nor can these cases be explained by the Court's test that employer conduct is not proscribed unless it is 'inherently so prejudicial to union interests and so devoid of significant economic justification,' ante, at p. 311, that true motivation need not be independently shown. The test is clearly one of choosing among several motivations or purposes and weighing the respective interests of employers and employees. And I think that is the standard the Court applies to the bargaining lockout in this case, but without heeding the fact the balance is for the Board to strike in the first instance.

The Board's role in this area is a 'delicate task, reflected in part in decisions of this Court, of weighing the interests of employees in concerted activity against the interest of the employer in operating his business in a particular manner.' Erie Resistor, 373 U.S., at 229, 83 S.Ct., at 1145. Its decisions are not immune from attack in this Court. Its findings must be supported by substantial evidence and its explication must fit the case before it, be adequate, and be based upon the policy of the Act and an acceptable reading of industrial realities. I would reverse the Board's decision here because it has not articulated a rational connection between the facts found and the decision made. 'This is not to deprecate, but to vindicate (see Phelps Dodge Corp. v. Labor Board, 313 U.S. 177, 197, 61 S.Ct. 845, 853, 854, 85 L.Ed. 1271), the administrative process, for the purpose of the rule is to avoid 'propel(ling) the court into the domain which Congress has set aside exclusively for the administrative agency.' 332 U.S., at 196, 67 S.Ct., at 1577, 91 L.Ed. 1995.' Burlington Truck Lines v. United States, 371 U.S. 156, 169, 83 S.Ct. 239, 246, 9 L.Ed.2d 207. It is to ask the Board to show that it has exercised the discretion which it has under the Act. Such insistence on a reasoned decision is a foremost function of judicial review, especially where conflicting significant interests are sought to be accommodated. Compare Securities & Exchange Comm. v. Chenery Corp., 318 U.S. 80, 63 S.Ct. 454, 87 L.Ed. 626, with Securities & Exchange Comm. v. Chenery Corp., 332 U.S. 194, 197, 67 S.Ct. 1575, 1577, 91 L.Ed. 1995. But this function is not to reject the Board's reasoned assessment of the impact of a particular economic weapon on employee rights. It is certainly not to restrike the balance which the Board has reached.

Mr. Justice GOLDBERG, with whom THE CHIEF JUSTICE joins, concurring in the result.

I concur in the Court's conclusion that the employer's lockout in this case was not a violation of either § 8(a)(1) or § 8(a)(3) of the National Labor Relations Act, 49 Stat. 453, as amended, 29 U.S.C. §§ 158(a)(1) and (3) (1958 ed.), and I therefore join in the judgment reversing the Court of Appeals. I reach this result not for the Court's reasons, but because, from the plain facts revealed by the record, it is crystal clear that the employer's lockout here was justifiable. The very facts recited by the Court in its opinion show that this employer locked out its employees in the face of a threatened strike under circumstances where, had the choice of timing been left solely to the unions, the employer and its customers would have been subject to economic injury over and beyond the loss of business normally incident to a strike upon the termination of the collective bargaining agreement. A lockout under these circumstances has been recognized by the Board itself to be justifiable and not a violation of the labor statutes. Betts Cadillac Olds, Inc., 96 N.L.R.B. 268; see Packard Bell Electronics Corp., 130 N.L.R.B. 1122; International Shoe Co., 93 N.L.R.B. 907; Duluth Bottling Assn., 48 N.L.R.B. 1335; Quaker State Oil Refining Corp., 121 N.L.R.B. 334, 337.

The trial examiner for the Labor Board found that the employer reasonably and 'honestly believed that a strike might take place immediately, or when a vessel was docked, or that bargaining would be delayed until closer to the winter months when Respondent would be more vulnerable,' 142 N.L.R.B., at 1382, and that the company 'by its actions, therefore, did not violate * * * the Act,' 142 N.L.R.B., at 1383. The Board did not dispute the trial examiner's finding that the employer in fact believed that a strike was threatened. Nor did it deny that if the employer reasonably believed that 'there was a real strike threat,' the lockout would be justified. 142 N.L.R.B., at 1364. The Board, however, rejected the ultimate finding of the trial examiner because it disagreed with his conclusion that the employer 'had reasonable grounds to fear a strike.' (Emphasis added.) 142 N.L.R.B., at 1363. The Court of Appeals in a single sentence sustained the Board's holding on this point concluding, without detailed analysis, 'that the Board's finding that respondent had no reasonable basis for fearing a strike is not without the requisite record support.' 331 F.2d 839, 840. In my view the Board's conclusion that the employer's admitted fear of a strike was unreasonable is not only without the requisite record support but is at complete variance with 'the actualities of industrial relations,' National Labor Relations Board v. United Steelworkers, 357 U.S. 357, 364, 78 S.Ct. 1268, 1272, 2 L.Ed.2d 1383, which the Board is to take into account in effectuating the national labor policy.

We do not deal with a case in which the facts are disputed and the Board has resolved testimonial controversies. The facts here are undisputed, and a review of them demonstrates that the employer's fear of a strike at a time strategically selected by the unions to cause it maximum damage and to give the unions the maximum economic advantage was totally reasonable.

The employer company is primarily engaged in repairing ships and operates four shipyards on the Great Lakes at Buffalo, New York, Lorain and Toledo, Ohio, and South Chicago, Illinois. As the Court points out, the employer's business is highly seasonal, concentrated in the winter months when the Great Lakes are frozen over and shipping is impossible. Speed is of the utmost importance in this business, for the shipping season is short and the tie-up of a ship for several weeks during the season or a delay in a ship's re-entry into service in the spring produces a severe economic impact. A work stoppage while a ship is in the yards can have serious economic consequences both for the employer and for his customers. Customers are justifiably wary of entrusting their ships to the yards at a time when a collective bargaining dispute is unresolved. For this reason the expiration date of a contract in situations such as this is a vital issue in collective bargaining. The employer seeks an expiration date during the slack season; the union seeks an expiration date during the busy season. In this case is a result of past bargaining, the employer's contract expired on August 1, rather than during the busy season.

From 1952 until 1961, when the negotiations now under consideration began, the employer had negotiated five times with the eight unions here involved, and it had experienced exactly one strike per negotiation. The strikes in 1952, 1953, 1955, and 1956 lasted about three weeks each, and the 1958 strike continued for 10 weeks. In 1955 employees had engaged in a showdown before the agreement expired and thereby caught an $8,000,000 ship in the yard, the use of which was lost to the customer for four weeks during its busiest season. In February 1961, at the height of the busy season, wildcat work stoppages occurred in Chicago and Buffalo.

Shortly before May 1961 the unions notified the employer that they wished to modify the contract due to expire on August 1. At the first bargaining meeting on June 6, 1961, the employer spokesman maintained that competitive conditions prevented any increase in wages or benefits. The unions took an opposite view and asked for a substantial increase in pension and other benefits. The parties met on numerous occasions throughout June and July. As the negotiations progressed, the employer receded from its original position and offered improved wages and benefits; the unions receded from some of their demands, but a meeting of the minds was not reached. On July 20 and subsequently, with the August 1 expiration date approaching, the unions proposed a six-month extension of the current contract. This would have given the unions an expiration date at a time most advantageous to them; the employer rejected this proposal on the grounds that the contract would then expire on February 1, 1962, the very height of its busy season, and that no customer would risk its ships by putting them in the company's yards knowing that the labor contract was about to expire. On July 28 the unions' negotiator informed the employer that the union members had voted 'overwhelmingly to take a strike if necessary.' On July 31 the employer made a new and increased offer on wages and benefits, asked that its proposals be submitted to the employees for a vote and offered to extend the contract for the limited period sufficient to enable this vote to be taken. The unions in turn asked that the labor agreement be extended indefinitely until a new agreement was reached. The employer refused to agree to an indefinite extension of its present contract on the ground that it could then be struck at any time of the unions' choosing. ^[1]

Although the contract expired on August 1, the unions did not call a strike on that date but continued to work on a day-to-day basis and submitted the employer's revised offer to a vote of the membership. On August 8 the unions informed the employer that its proposals had been 'overwhelmingly' rejected by the employees. On August 9 the employer made a new package offer on many issues. The union negotiators rejected this new offer, refused to take it to the employees for a vote, and made no counteroffer. Negotiations were broken off without any definite plans for further meetings between the parties. Future meetings were left to the call of a federal mediator.

Faced with the situation of an expired contract and the unions free to strike at any time, in particular at a time of their own choosing during the busy season, or whenever the yard was filled with ships, the employer decided to shut down the Chicago yard completely and lay off all but two employees at Toledo. Notices were issued to employees at Chicago, Toledo, and to some in Buffalo, which stated, 'Because of the labor dispute which has been unresolved since August 1, 1961, you are laid off until further notice.' Negotiations were resumed after this lockout and continued until agreement was reached on October 27. The laid off employees were then recalled to work. Since then the parties have engaged in other negotiations and have agreed upon contracts without either strike or lockout.

On this record the trial examiner held that the employer reasonably feared that the unions would strike when the time was ripe. He found that the employer reasonably believed that:

'(t)he Unions' strategy was:

'Keep working at Lorain, keep the nonproductive men on the payroll as long as possible at the other yards until one of two things occurred: (a) A shipowner would send a ship into one of the yards, and then by striking, the Respondent would be forced to his knees in effecting a labor settlement satisfactory to the Union, and if this didn't occur, then, (b) continue to bargain, into the winter months, and then execute an agreement effective in November, December, January, or February, and in this way, when the agreement was reopened, Respondent would be sure to have ships in its docks, and a strike at such a time would bring the Respondent to his knees in effecting an agreement.' 142 N.L.R.B., at 1381.

Accordingly the trial examiner held that no unfair labor practice was committed. This holding followed settled Board doctrine that 'lockouts are permissible to safeguard against unusual operational problems or hazards or economic loss where there is reasonable ground for believing that a strike (is) * * * threatened or imminent.' Quaker State Oil Refining Corp., supra, at 337.

The Board overturned the trial examiner's ultimate holding, reaching what, on this record, is a totally unsupportable conclusion-that the employer's fear of a strike was unreasonable. The Board rested its conclusion upon the grounds that 'the Unions made every effort to convey to the Respondent their intention not to strike; and they also gave assurances that if a strike were called, any work brought into Respondent's yard before the strike would be completed. The Unions further offered to extend the existing contract (which contained a no-strike provision) for 6 months, or indefinitely, until contract terms were reached * * *.' 142 N.L.R.B., at 1364. Upon analysis it is clear that none of these grounds will support the Board's conclusion that the employer had no reasonable basis to fear a strike.

The Board's finding that 'the Unions made every effort to convey to the Respondent their intention not to strike' is based upon statements made by union negotiators during the course of the negotiations. The chief negotiator for the unions testified that on the first day of negotiations, 'I stated that it was my understanding that in the past there seemed to have been a strike at every-during every negotiation since World War II from information I had received, and it was our sincere hope that we could negotiate this agreement-go through those negotiations and negotiate a new agreement without any strife, that personally I always had a strong dislike to strike and that I thought if two parties sincerely desired to reach an agreement, one could be reached without strike. The Company * * * stated that the Company concurred in those thoughts, that they too disliked strikes, and it was their hope, also, that an agreement could be reached amicably.' ^[2] The negotiators for the unions expressed this same sentiment on several other occasions during the negotiations.

These statements, which one would normally expect a union agent to make during the course of negotiations as a hopeful augury of their outcome rather than as a binding agreement not to strike, scarcely vitiate the reasonableness of the employer's fear of a strike in light of the long history of past strikes by the same unions. Further, they cannot be deemed to render the employer's fear of a strike unreasonable after the negotiations had reached an impasse, particularly in view of the fact that a strike vote had been taken by the unions' membership, and the membership rather than the union representatives had final authority to determine whether a strike would take place.

The fact that the assistant business managers of Local 85 and Local 374 of the Boilermakers Union 'gave assurances that if a strike were called, any work brought into Respondent's yard before the strike would be completed' ^[3] likewise cannot be deemed to offset the unions' threat of a strike and its consequences. These men were officials of locals in only one of the eight separate unions involved. At most they could give assurances as to a few of the men at two of the company's four yards. And even had all of the unions joined in these statements, which was not the case, the employer had been subject to wildcat strikes at a time when the unions were bound by a no-strike clause in their contract. Therefore, without impugning the good faith of these union agents, it surely was not unreasonable for the employer, notwithstanding this assurance, to fear that its employees might not complete work on ships when they were not bound by a no-strike clause.

The Board also relies on the fact that the unions offered a six-month extension of the present contract. As I have already pointed out, this would have caused the contract to expire during the employer's busiest season. The employer had a perfect right to reject this stratagem. Had it agreed, the unions would have achieved one of their important objectives without the necessity of striking. By the same token it is clear that the unions would have agreed not to strike had the employer accepted their proposals for increases in wages and benefits. Surely the employer had every right to reject these proposals, and its rejection of them would not show that it was unreasonable in fearing a strike based upon its failure to accede to the unions' demands.

Finally, the offer of an indefinite extension of the contract is an equally unsupportable basis for the Board's conclusion. An indefinite extension presumably would mean under traditional contract theory that the unions could strike at any time or after giving brief notice. ^[4] Surely the employer would be reasonable in fearing that such an arrangement would peculiarly place the timing of the strike in the unions' hands.

The sum of all this is that the record does not supply even a scintilla of, let alone any substantial, evidence to support the conclusion of the Board that the employer's fear of a strike was unreasonable, but, rather, this conclusion appears irrational. Cf. National Labor Relations Board v. Erie Resistor Corp., 373 U.S. 221, at 236, 83 S.Ct. 1139, at 1149, 10 L.Ed.2d 308. I would therefore hold on this record that the employer's lockout was completely justified.

The fact that the Board held on the undisputed facts that the employer's fear of a strike was unreasonable and that the Court of Appeals has affirmed the Board does not preclude us from reviewing this determination. See Public Service Comm. v. United States, 356 U.S. 421, 78 S.Ct. 796, 2 L.Ed.2d 886. The standard that should have been applied by the Court of Appeals was whether the Board's finding was supported by substantial evidence when the record was viewed as a whole. Universal Camera Corp. v. National Labor Relations Board, 340 U.S. 474, 71 S.Ct. 456, 95 L.Ed. 456. See Burlington Truck Lines, Inc. v. United States, 371 U.S. 156, 168, 83 S.Ct. 239, 245, 9 L.Ed.2d 207; Interstate Commerce Comm. v. J-T Transport Co., 368 U.S. 81, 93, 82 S.Ct. 204, 211, 7 L.Ed.2d 147. 'The Board's findings are entitled to respect; but they must nonetheless be set aside when the record before a Court of Appeals clearly precludes the Board's decision from being justified by a fair estimate of the worth of the testimony of witnesses or its informed judgment on matters within its special competence or both.' Universal Camera Corp. v. National Labor Relations Board, supra, 340 U.S., at 490, 71 S.Ct., at 466. Indeed, the Board here set aside the report of its trial examiner, and in Universal Camera this Court recognized 'that evidence supporting a conclusion may be less substantial when an impartial, experienced examiner who has observed the witnesses and lived with the case has drawn conclusions different from the Board's than when he has reached the same conclusion.' 340 U.S., at 496, 71 S.Ct., at 469. The Court of Appeals in my view in its summary affirmance on this issue grossly misapplied the standards laid down by Universal Camera. This case is properly before us on a substantial legal question, which necessarily involves a review of the entire record. In making such a review, although we give proper weight to what the first reviewing court decides, we cannot ignore our duty to apply the statutory standard that the Board's findings must be supported by substantial evidence. Since the Board's holding was not so supported, but, on the contrary, as the plain facts of the record reveal, was irrational, I would reverse the Court of Appeals on this ground.

My view of this case would make it unnecessary to deal with the broad question of whether an employer may lock out his employees solely to bring economic pressure to bear in support of his bargaining position. The question of which types of lockout are compatible with the labor statute is a complex one as this decision and the other cases decided today illustrate. See Textile Workers Union v. Darlington Mfg. Co., 380 U.S. 263, 85 S.Ct. 994; National Labor Relations Board v. Brown, 380 U.S. 278, 85 S.Ct. 980. This Court has said that the problem of the legality of certain types of strike activity must be 'revealed by unfolding variant situations' and requires 'an evolutionary process for its rational response, not a quick, definitive formula as a comprehensive answer.' Local 761, Intern. Union of Electrical, etc., Workers v. National Labor Relations Board, 366 U.S. 667, 674, 81 S.Ct. 1285, 1290, 6 L.Ed.2d 592; see also National Labor Relations Board v. United Steelworkers, supra, 357 U.S. 362-363, 78 S.Ct. 1271. The same is true of lockouts.

The types of situation in which an employer might seek to lock out his employees differ considerably one from the other. This case presents the situation of an employer with a long history of union recognition and collective bargaining, confronted with a history of past strikes, which locks out only after considerable good-faith negotiation involving agreement and compromise on numerous issues after a bargaining impasse has been reached, more than a week after the prior contract has expired, and when faced with the threat of a strike at a time when it and the property of its customers can suffer unusual harm. Other cases in which the Board has held a lockout illegal have presented far different situations. For example, in Quaker State Oil Refining Corp., supra, an employer locked out its employees the day after its contract with the union expired although no impasse has been reached in the bargaining still in progress, no strike had been threatened by the unions, which had never called a sudden strike during the 13 years they had bargained with the employer, and the unions had offered to resubmit the employer's proposals to its employees for a vote. See also Utah Plumbing & Heating Contractors Assn., 126 N.L.R.B. 973. These decisions of the Labor Board properly take into account, in determining the legality of lockouts under the labor statutes, such factors as the length, character, and history of the collective bargaining relation between the union and the employer, as well as whether a bargaining impasse has been reached. Indeed, the Court itself seems to recognize that there is a difference between locking out before a bargaining impasse has been reached and locking out after collective bargaining has been exhausted, for it limits its holding to lockouts in the latter type of situation without deciding the question of the legality of locking out before bargaining is exhausted. Since the examples of different lockout situations could be multiplied, the logic of the Court's limitation of its holding should lead it to recognize that the problem of lockouts requires 'an evolutionary process,' not 'a quick, definitive formula,' for its answer.

The Court should be chary of sweeping generalizations in this complex area. When we deal with the lockout and the strike, we are dealing with weapons of industrial warfare. While the parties generally have their choice of economic weapons, see National Labor Relations Board v. Insurance Agents', 361 U.S. 477, 80 S.Ct. 419, 4 L.Ed.2d 454, this choice, with respect to both the strike and the lockout, is not unrestricted. While we have recognized 'the deference paid the strike weapon by the federal labor laws,' National Labor Relations Board v. Erie Resistor, supra, 373 U.S., at 235, 83 S.Ct., at 1149, not all forms of economically motivated strikes are protected or even permissible under the labor statutes ^[5] or the prior decisions of this Court. ^[6] Moreover, a lockout prompted by an antiunion motive is plainly illegal under the National Labor Relations Act, ^[7] though no similar restrictions as to motive operate to limit the legality of a strike. See National Labor Relations Board v. Somerset Shoe Co., 1 Cir., 111 F.2d 681; National Labor Relations Board v. Stremel, 10 Cir., 141 F.2d 317; National Labor Relations Board v. Somerset Classics, Inc., 2 Cir., 193 F.2d 613. The varieties of restrictions imposed upon strikes and lockouts reflect the complexities presented by variant factual situations.

The Court not only overlooks the factual diversity among different types of lockout, but its statement of the rules governing unfair labor practices under §§ 8(a)(1) and (3) does not give proper recognition to the fact that '(t)he ultimate problem (in this area) is the balancing of the conflicting legitimate interests.' National Labor Relations Board v. Truck Drivers Union, etc., 353 U.S. 87, 96, 77 S.Ct. 643, 648, 1 L.Ed.2d 676. The Court states that employer conduct, not actually motivated by antiunion bias, ^[8] does not violate § 8(a) (1) or § 8(a)(3) unless it is 'demonstrably so destructive of collective bargaining,' ante, at 309, or 'so prejudicial to union interests and so devoid of significant economic justification,' ante, at 311, that no antiunion animus need be shown. This rule departs substantially from both the letter and the spirit of numerous prior decisions of the Court. See, e.g., National Labor Relations Board v. Truck Drivers Union, etc., supra, 353 U.S., at 96, 77 S.Ct., at 647; Republic Aviation Corp. v. National Labor Relations Board, 324 U.S. 793, 65 S.Ct. 982, 89 L.Ed. 1372; National Labor Relations Board v. Babcock & Wilcox Co., 351 U.S. 105, 76 S.Ct. 679, 100 L.Ed. 975; National Labor Relations Board v. Burnup & Sims, Inc., 379 U.S. 21, 85 S.Ct. 171, 13 L.Ed.2d 1.

These decisions demonstrate that the correct test for determining whether § 8(a)(1) has been violated in cases not involving an employer antiunion motive is whether the business justification for the employer's action outweighs the interference with § 7 rights involved. In Republic Aviation Corp. v. National Labor Relations Board, supra, for example, the Court affirmed a Board holding that a company 'no-solicitation' rule was invalid as applied to prevent solicitation of employees on company property during periods when employees were free to do as they pleased, not because such a rule was 'demonstrably * * * destructive of collective bargaining,' but simply because there was no significant employer justification for the rule and there was a showing of union interest, though far short of a necessity, in its abolition. See also, National Labor Relations Board v. Burnup & Sims, Inc., supra.

A similar test is applicable in § 8(a)(3) cases where no antiunion motive is shown. The Court misreads Radio Officers' Union v. National Labor Relations Board, 347 U.S. 17, 74 S.Ct. 323, 98 L.Ed. 455, and National Labor Relations Board v. Erie Resistor Corp., supra, in stating that the test in such cases under § 8(a)(3) is whether practices 'are inherently so prejudicial to union interests and so devoid of significant economic justification that no specific evidence of intent to discourage union membership or other antiunion animus is required.' Ante, at 311. Radio Officers did not restrict the application of § 8(a)(3) in cases devoid of antiunion motive to the extreme situations encompassed by the Court's test. Rather, in holding applicable the common-law rule that a man is presumed to intend the foreseeable consequences of his own actions, the Court extended the reach of § 8(a)(3) to all cases in which a significant antiunion effect is foreseeable regardless of the employer's motive. In such cases the Court, in Erie Resistor Corp., held that conduct might be determined by the Board to violate § 8(a)(3) where the Board's determination resulted from a reasonable 'weighing (of) the interests of employees in concerted activity against the interest of the employer in operating his business in a particular manner and * * * (from) balancing in the light of the Act and its policy the intended consequences upon employee rights against the business ends to be served by the employer's conduct.' 373 U.S., at 229, 83 S.Ct., at 1145.

These cases show that the tests as to whether an employer's conduct violates § 8(a)(1) or violates § 8(a)(3) without a showing of antiunion motive come down to substantially the same thing: whether the legitimate economic interests of the employer justify his interference with the rights of his employees-a test involving 'the balancing of the conflicting legitimate interests.' National Labor Relations Board v. Truck Drivers Union, etc., supra, 353 U.S., at 96, 77 S.Ct., at 648. As the prior decisions of this Court have held, '(t)he function of striking * * * (such a) balance * * * often a difficult and delicate responsibility, * * * Congress committed primarily to the National Labor Relations Board, subject to limited judicial review.' Ibid.

This, of course, does not mean that reviewing courts are to abdicate their function of determining whether, giving due deference to the Board, the Board has struck the balance consistently with the language and policy of the Act. See National Labor Relations Board v. Brown, supra; National Labor Relations Board v. Truck Drivers Union, etc., supra. Nor does it mean that reviewing courts are to rubber-stamp decisions of the Board where the application of principles in a particular case is irrational or not supported by substantial evidence on the record as a whole. Applying these principles to the factual situation here presented, I would accept the Board's carefully limited rule, fashioned by the Board after weighing the 'conflicting legitimate interests' of employers and unions, that a lockout does not violate the Act where used to 'safeguard against unusual operational problems or hazards or economic loss where there is reasonable ground for believing that a strike (is) * * * threatened or imminent.' Quaker State Oil Refining Corp., supra, at 337. This rule is consistent with the policies of the Act and based upon the actualities of industrial relations. I would, however, reject the determination of the Board refusing to apply this rule to this case, for the undisputed facts revealed by the record bring this case clearly within the rule.

In view of the necessity for, and the desirability, of weighing the legitimate conflicting interests in variant lockout situations, there is not and cannot be any simply formula which readily demarks the permissible from the impermissible lockout. This being so, I would not reach out in this case to announce principles which are determinative of the legality of all economically motivated lockouts whether before or after a bargaining impasse has been reached. In my view both the Court and the Board, in reaching their opposite conclusions, have inadvisably and unnecessarily done so here. Rather, I would confine our decision to the simple holding, supported by both the record and the actualities of industrial relations, that the employer's fear of a strike was reasonable, and therefore, under the settled decisions of the Board, which I would approve, the lockout of its employees was justified.

Notes

1. See note 4, infra.
2. This same negotiator also testified as follows:
3. There is some evidence in the record that one other local business agent gave a similar assurance.
4. See 1 Williston, Contracts §§ 38, 39 (3d ed. 1957); cf. Pacific Coast Association of Pulp & Paper Manufacturers, 121 N.L.R.B. 990, 993.
5. See, e.g., the secondary boycott and organizational picketing restrictions. 61 Stat. 141, 29 U.S.C. § 158(b)(4) (1958 ed.), 73 Stat. 542, 544, 29 U.S.C. §§ 158(b)(4) and (7) (1958 ed., Supp. V).
6. See International Union Automobile Workers, etc. v. Wisconsin Unemployment Relations Board, 336 U.S. 245, 69 S.Ct. 516, 93 L.Ed. 651; National Labor Relations Board v. Fansteel Metallurgical Corp., 306 U.S. 240, 59 S.Ct. 490, 83 L.Ed. 627.
7. See National Labor Relations Board v. Truck Drivers Union, etc., supra, 353 U.S., at 93, 77 S.Ct., at 646; Textile Workers' Union v. Darlington Mfg. Co., 380 U.S. 263, at 268-269, 85 S.Ct. 994, at 998-999.
8. National Labor Relations Act § 8(a)(3), 49 Stat. 452, as amended, 29 U.S.C. § 158(a)(3) provides that it shall be an unfair labor practice 'by discrimination * * * to encourage or discourage membership in any labor organization.' The only type of discriminatory motive with which we are here concerned is that which discourages membership in a union.