Breeding Transfer Co.

BREEDING TRANSFER COMPANY 493 BREEDING TRANSFER COMPANY and GENERAL DRIVERS, WAREHOUSEMEN AND HELPERS , LOCAL 21, A. F. L., AFFILIATED WITH THE INTERNA- TIONAL BROTHERHOOD OF TEAMSTERS , CHAUFFEURS, WAREHOUSEMEN AND HELPERS OF AMERICA , PETITIONER . Case No. 14-RC-2512. October 26,1954 Decision and Order Upon a petition duly filed under Section 9 (c) of the National Labor Relations Act, a hearing was held before Philip Ross, hearing officer. The hearing officer's rulings made at the hearing are free from prej- udicial error and are hereby affirmed. Upon the entire record in this case, the Board finds that it will not effectuate the policies of the Act to assert jurisdiction in this case for the reasons stated below. The Employer, a copartnership, is engaged in the general hauling of furniture and freight at Hannibal, Missouri, employing 4 drivers and utilizing 6 trucks in its operations. In 1953, the Employer pur- chased goods directly from sources outside the State of Missouri worth less than $50. It performed all its hauling services within the State, for which it received a total income of about $26,500 last year. Of this amount, about $8,400 was received for the performance of local pickup and delivery services, pursuant to contracts, for the Chicago, Burlington & Quincy Railroad, the Wabash Railroad, and the Bur- lington Truck Line, all of which are interstate common carriers. In 1953 the Employer also received about $900 for services performed as an agent for 3 motor van lines, of which 2, North American and Wheaton Lines, are located outside the State. The Employer did not use any of its employees or equipment in connection with the per- formance of the latter services. The remainder of its income was derived from local hauling services. The Employer contends that its limited operations do not have a sufficient impact upon interstate commerce to warrant the expenditure of Federal funds in the application of the statute which we admin- ister. The Petitioner argues that because some of the Employer's deliveries constitute the last link in the interstate transportation of materials, the Board, as in the past, ought to exercise its jurisdiction. It has been the consistent position of the Board that it better ef- fectuates the purposes of the Act, and promotes the proriipt handling of major cases, not to exercise its jurisdiction to the fullest extent possible under the authority delegated to it by Congress, but to limit that exercise to enterprises whose operations have, or at which labor disputes would have a pronounced impact upon the flow of interstate commerce. In furtherance of that policy, the Board in October 1950 110 NLRB No. 64. 494 DECISIONS OF NATIONAL LABOR RELATIONS BOARD adopted certain standards to govern its assertion of jurisdiction. Those standards resulted from a study of the Board's experience up, to that time. Pursuant to these standards, the Board determined to exercise its, jurisdiction over enterprises that serve as an "essential link in the, services performed by . . . instrumentalities of commerce."' Early this year, the Board undertook to study and reappraise the' 1950 jurisdictional standards in the light of the Board's experience. since their adoption and also in the light of changing economic con- ditions. Based upon that study and reappraisal, it is our opinion that the jurisdictional standard enunciated in Red Cab, Inc., should be re- vised so that the Board's long-established policy of limiting the exer- cise of its jurisdiction to enterprises whose operations have, or at which labor disputes would have, a pronounced impact upon the flow of interstate commerce can be better attained. We have determined that in future cases the Board will assert juris- diction over transportation operations or other local activities which constitute a link in the chain of interstate commerce only where the- annual income received by the particular company involved from services which constitute a part of interstate commerce total no less than $100,000.2 Our senior dissenting colleague, Mr. Murdock, has selected this case as a vehicle for making a sweeping broadside attack upon every fea- ture of our new jurisdictional plan. There emerges from his opinion the strong view that this Board has no legal or moral right to self- impose any restrictions upon its activities, and that we are inexorably bound to extend our regulatory authority to the outermost boundaries, of the constitutional Federal power. If this view is correct, it is con- trary to the consistent position taken by this Board since its inception, now almost 20 years ago. We think it also fair to point out that the. 1950 jurisdictional plan of the Board, no less than this one, drew a jurisdictional line short of the legal limits of this Board's jurisdic- tion, and at that time, no voice on the Board was heard to question the propriety of the Board's action. Indeed, Member Murdock joined in the announcement of that policy, which was flatly and openly in opposition to the then General Counsel who advocated the position- now taken by Member Murdock-that the Board was required by law to exercise the fullest reach of its jurisdictional powers.' 1 Red Cab, Inc., 92 NLRB 175. 2 To the extent that Red Cab, Inc, and cases relying thereon are inconsistent with our decision herein , those cases are overruled. a In 1949 , appearing as spokesman for this Board , its then Chairman, Paul Herzog, tes- tified as follows in hearings before the Senate Committee on Labor and Public Welfare, 81st Congress , 1st Session, on S. 249, p 175: It has been the position of the Board that the Federal Government should not use its constitutional power right up to the hilt . In other words; where something has a local flavor to it, the mere fact that we could under the present constitutional doc- BREEDING TRANSFER COMPANY 495• We did not expect that every Member of this Board would agree as to the jurisdictional standards to be applied by this Agency, but we think it late in the day for a Member of the Board, who has in the past given his stamp of approval to similar jurisdictional restrictions,. to question the right of the present Board to modify its jurisdictional standards. Similarly, since Member Peterson has never before indi- cated any disagreement with the 1950 plan, and is now proposing various changes in it, we are at a loss to comprehend the basis for his, assertion that the majority plan is arbitrary and capricious. The fact is that this Board, since the earliest days of the Wagner Act, has operated on the premise, which has court and legislative ap- proval, that the Board has discretion to determine the circumstances under which it will exercise its jurisdiction over labor disputes. Prior to 1950, this discretion was exercised on a case-to-case basis, but it is a matter of history that the Board for years refused to assert jurisdiction over many establishments, such as retail stores, hotels,. restaurants, taxicabs, local transit companies, and even the entire con- struction industry. In 1950, this ad hoc basis of exercising jurisdic- tion was abandoned in favor of a codified jurisdictional plan- adopted without a dissenting voice on the Board-which imposed fixed dollar volume limits upon the enterprises over which the Board would assert its jurisdictional power. This 1950 plan, like the pres- ent one, drew a line short of the legal limits of the Board's jurisdic- tion. It may, therefore, be justly stated that, if our present modifica- tion of the 1950 plan is ultra vires, this Board has been acting on an incorrect legal premise from its inception and certainly since the unanimous announcement of the 1950 jurisdictional plan. We, of course, concede that this Board, like any other quasi- judicial agency, has no authority to act capriciously or arbitrarily. This is a fundamental and wholly salutary rule of law which governs our action on jurisdiction as well as every substantive decision which we make. We have no doubt that the courts will scrutinize our new jurisdictional policy in the light of this accepted principle of Amer- ican jurisprudence. It will do no good for us to assert that our action is reasonable or for others to brand it as arbitrary. The pro- priety of what we do here will, as always, be determined by the judi- cial application of legal principles to objective facts. We will not trines of the Supreme Court take the case would not necessarily mean that we should waste the time of Feder al officials or expend Federal funds to proceed with such cases. That was the practice under the Wagner Act and there was nothing in our opinion in the legislative history of the Taft-Hartley Act to require a change, with the possible exception of some variation in secondary boycotts and possibly jurisdictional dis- putes as well. The general counsel, looking at it from his view of the law, has taken the posi- tion, with which I have aheady indicated I cannot agree, that is, that it is the busi- ness of his office to step into every case, no matter how small, in any part of the United States, provided the constitutional power exists. 496 DECISIONS OF NATIONAL LABOR RELATIONS BOARD be so presumptuous as to predict the ultimate decision, but we would not have agreed to these modifications had we not been convinced that they were reasonable and proper. The repeated accusations running through the separate opinions of both Mr. Murdock and Mr. Peterson that our policy determinations are arbitrary and capricious can only be intended to belabor the in- correct premise that the 1950 standards were reached by logical syllogism and mathematically provable computations. As stated above, and as the dissenters agree, the Board in 1950 explained its various fixed standards in terms of effectuating the policies of the Act and of distinguishing between commercial operations having a pronounced impact on interstate commerce and others which were intrinsically local. This was the only explanation offered by the Board for its action at that time, and, indeed, it was the only honest ex- planation the Board could have given. Our modifications of the 1950 standard are not to be taken as a present finding that the Board then acted unreasonably, arbitrarily, or "categorically," as Mr. Peter- son now charges us with doing. Our decision today is no different in kind, and therefore no less proper, than that of the 1950 Board. This is shown by Mr. Peterson's own admission that one of the im- portant criteria utilized in reaching the 1950 plan was "the relative importance to the national economy of enterprises having intrinsically local characteristics as against those having a substantial impact upon commerce." Reasonable persons can disagree as to where the line should be drawn, without branding the prevailing view as arbi- trary, and certainly without impugning by innuendo the motives behind it. While we do not adopt his proposed standards, we find no inher- ent fault in Mr. Peterson's opinion that the interstate portion of a local trucking operation should be $50,000, instead of $100,000; or that the direct outflow and indirect inflow standards should be in- creased, but only to $50,000 and $100,000, respectively. Nor do we believe that he, and Mr. Murdock, were "dogmatic" in their numer- ous decisions over the years to assert jurisdiction when there was $500,000 direct or $1,000,000 indirect inflow, but to refuse jurisdiction in cases where the direct inflow was $499,000 or the indirect $999,000. The superficial appearance of arbitrariness arising in particular cases under the 1950 plan was never a matter of concern to the Board, and should not have been. The impact of such standards on indi- vidual cases was the necessary consequence of applying fixed and predetermined standards to the varying business operations of our industrial establishments. If, in the considered judgment of the Board, flow of goods out of a State in the sum of $25,000 was suffi- cient proof of pronounced impact upon commerce, but less than $500,000 flow into the State was "insufficient" we are not willing to BREEDING TRANSFER COMPANY 497 say now that their failure to explicate the "criteria utilized" in for- mulating these particular standards, made their action arbitrary and capricious. Arbitrariness is more likely to arise in the application of rules rather than in their making. Mr. Peterson also suggests that, in decisions made between 1950 and the present, no "trite" phrases were used. This is true only in the sense that, in each instance the lead decisions of the 1950 plan were cited without comment. We note, however, that the rationale of those lead cases justified the various standards in terms of sub- stantial impact of commerce or intrinsically local character, and, of course, the courts affirmed the Board's proper exercise of discretion in similar language. Similar phrases do not become trite or unique de- pending upon who happens to employ them. Like our colleagues we believe that to the maximum extent possible, policy determinations of this kind, which the statute makes manda- tory upon us, are best decided on the basis of exhaustive study and research, both with respect to statistical data and to other relevant considerations. It is for this reason that issuance of our jurisdic- tional standards was long delayed pending the completion of a com- prehensive study made by a committee of legal assistants which cul- minated in a very extended report analysis of hundreds of cases before the Board this year and of information available from many other sources. Our dissenting colleagues' assertions to the contrary, our new standards are in a large measure a result of a careful study and consideration of the many valuable analyses contained in those com- mittee reports. This is not to say that our final decision was not ulti- mately one of policy and of considered judgment by the Board Mem- bers, themselves. By their very nature the standards which we now announce cannot be proved scientifically like mathematical problems. In making these modifications, we have given due consideration to all of the criteria spelled out by the Board in 1950, including (1) the problem of bringing the caseload of the Board down to manageable size, (2) the desirability of reducing an extraordinarily large caseload in order that we may give adequate attention to more important cases, (3) the relative importance to the national economy of essentially local enterprises as against those having a truly substantial impact on our economy, and (4) overall budgetary policies and limitations. If one of the inevitable consequences of our action is to leave a somewhat larger area for local regulation of disputes, we do not share our col- leagues' apparent view that this is a sinister development. IWe do say, however, that a desire to establish broader State jurisdiction is in no wise a factor in our decision. We are concerned here solely with the problem of defining the limits of our jurisdiction pursuant to the discretionary power vested in us by the Congress. 338207-55-vol. 110--33 498 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Member Peterson's attack on the new standards winnows down to a disagreement as to precisely where the line should be drawn. The charge of arbitrariness which he levels at our standards applies equally to his, or indeed to any that the hand of man might devise. But, as Mr. Justice Holmes once aptly stated, "Yet, when you realize you are dealing with a matter of degree you must realize that reasonable men may differ widely as to the place where the line should fall." Member Peterson agrees that a line must be drawn, and admittedly there is no "mathematical or logical way of fixing it precisely." Disagreement, however strongly expressed, with our conclusions, is not enough to demonstrate that we shot so wide of the mark as to brand our action arbitrary and capricious. It is frequently wise to test the validity of theoretical agreements by reference to practical facts. Accordingly, it is appropriate to look at the particular business involved in this case, over which our dis- senting colleagues insist that we should assert jurisdiction. This Employer is a small, local trucker whose only connection with interstate commerce grows out of the fact that, over a full year's opera- tion, he did $8,400 worth of local hauling to and from the railroad station. He has 6 trucks and employs 4 drivers. His total annual business in 1953 was about $26,500. His trucks never cross the State line. This Employer is an "essential link in interstate commerce" to about the same extent as a taxicab driver who occasionally picks up passengers at the railroad station and drives them to their homes or places of business. His business is truly local, if that term any longer has real significance. It is important to note, moreover, that we have not excluded all such local hauling firms, as we might reasonably have done. All that we have done is to require that firms of this kind do an annual business with interstate carriers in the amount of $100,000 before we will assert jurisdiction. This, in our view, is a minimal figure and one which certainly will not exclude from the purview of the statute any labor dispute which has a substantial effect on interstate commerce. In establishing this particular jurisdictional test, as is true of all others, we have attempted to apply a reasonable rule measured by the probable impact of a labor dispute on interstate commerce. Admit- tedly, this dollar volume test (which incidentally is characteristic of the 1950 plan) is an imperfect standard, but it is nonetheless a precise and meaningful one. It represents our best judgment, arrived at after months of consideration, as to where the line should be drawn. Member Murdock's contention that the new standards will effect a "wholesale slash" in the Board's jurisdiction is, assertedly, predicated upon "studies made by the Board." Presumably Mr. Murdock refers to the study and analysis made by a committee of legal assistants re- ferred to above. Certain figures set out in the dissent, ranging from BREEDING TRANSFER COMPANY 499 50 percent to as high as 95 percent in various categories, suggest a conclusion quite at variance both with the probable result of the changed standards, and with a fair appraisal of the reasonable im- plications indicated by the hypothetical survey. To begin with, at the time of the study, we had not so much as formulated the standards which we are now enunciating. Rather, the committee tested different tentative and exploratory proposals against a number of pending cases. The figures set out in the dissent, there- fore, have been selected from hypothetical tests which in many respects bear no relationship to the present plan. Particularly in this inherent unreliability of the cited figures true with respect to the categories of cases involving multistate enterprises. And, of course, apart from the consequent irrelevancy of some of the figures cited, the overall study contains other hypothetical results in other categories showing practically no change in the number of cases affected. Moreover, the studies revealed, as was to be expected, that, tested against various proposals, some pending cases would definitely be dis- missed, and that as to many other there was insufficient commerce in- formation available to resolve the issue either way. Without explica- tion, Mr. Murdock joined both the known results and the unknown, and thereby reaches cumulative figures of little significance. An ex- ample of this are the figures he cites with respect to national defense cases. The very high figure appearing in the dissent, when read in context with the protracted discourse on the rights of individual employees, creates a gross misconception in another respect. The dissent would have it that 50 percent to 60 percent of the firms carrying on public utility functions would be removed from the Board's jurisdiction by our present change in standards. The purpose of our jurisdictional changes being to eliminate purely local activities, the true impact of our change is more intelligently understood in terms of the number of employees affected rather than by the number of companies ex- cluded. Even assuming some value in the dissent figures, which al- ready have been shown to be of little significance, a totally different picture emerges when the number of employees is considered. In this respect, the Bureau of Old Age and Survivors' Insurance (OASI) reports, from a study covering the year 1947, that in the categories "utilities : electric and gas" and "local utilities and local public serv- ices, not elsewhere classified," that elimination of the 50 percent of the units at the lowest end of the size scale would result in elimination of only 4.4 percent of the total employees." As to "local railways and bus lines," elimination of the first 50 percent of the units would cut off but 4 We use this data, and the remaining 0A51 statistics , with the assumption that there is a positive correlation between gross revenue and number of employees , an assumption that, under the circumstances of our economy , seems eminently reasonable. 500 DECISIONS OF NATIONAL LABOR RELATIONS BOARD 2.2 percent of the total employees. Referring to newspaper publishers, the dissent says, again with figures already shown to be totally unre- liable, that 65 percent to 90 percent of the companies would be lost. Again, the same OASI source, with a study for the year 1951, reports that if the 65 percent level of elimination is taken, no more than 8 per- cent of the total employees in this area are eliminated. Clearly, then, the net effect of our policy determination upon em- ployees, if any generalization can be made now at all, is markedly dif- ferent than that suggested by the dissent. By the same token, these same figures only serve to emphasize once again the stress that our new standards place upon removal of truly local operations from the proper bounds of the Board's jurisdiction. A final clarification is in point. It must be remembered that all these figures, both those in the dissent in terms of companies and those ,of the OASI reports in terms of employees, include all those firms or employees which, even under the Board's 1950 plan, would also have fallen outside the Board's jurisdiction. Indeed, in the field of news- paper publishing a not inconsiderable number of newspapers have always been beyond the reach of our jurisdiction entirely because of the lack of legal jurisdiction, apart from questions of policy. Considering all the information available to us, bearing in mind the fact that the mass industries throughout the country in which the vast majority of workers are gainfully employed are in no wise affected by these changes, we judge that the changes now made in jurisdictional standards will reduce the Board's caseload by no more than 10 percent, and in terms of employees will affect no more than 1 percent of the total number of employees subject to the broadest reach of the Board's legal jurisdiction. As the Employer's operations do not meet the new minimum re- quirement set forth above, we shall not extend our jurisdiction here. We shall instead dismiss the petition.5 Accordingly, we find that no question affecting commerce exists concerning the representation of employees of the Employer within the meaning of Section 9 (c) (1) and Section 2 (6) and (7) of the Act. [The Board dismissed the petition.] MEMBER MURDOCK, dissenting : On July 1 and 15, a majority of this Board issued press releases 6 unaccompanied by any issued decisions, which substituted compre- hensive new jurisdictional standards for those which have been in effect since 1950. These new standards accomplished a drastic cur- 6 See San, Jose City Lines, Inc., 106 NLRB 1167 6 N L R B Announces Changes in Standards for Its Exercise of Jurisdiction , National Labor Relations Board Press Release No 445, July 1, 1954; N. L. R B Announces New Standards for Exercise of Jurisdiction , National Labor Relations Board Press Release No. 449. July 15, 1954. BREEDING TRANSFER COMPANY 501 tailment in the area of protection afforded by the Labor Management Relations Act of 1947 as reflected in the jurisdictional standards pre- viously followed by the Board. Although I strongly disagreed with this deep slash in the Board's jurisdiction, no appropriate vehicle for a judicial dissent has been available to me until the Board began to announce and explicate these new standards, one by one, in Board decisions such as this. I am therefore utilizing this decision not only to dissent from the refusal to assert jurisdiction in this case, but also to state my basic disagreement with both the purpose and effect of the new jurisdictional standards to severely limit the jurisdiction of the Board, and with the legality thereof. In summary, it is my firm conviction that the new standards are in basic conflict with the Act and the legal responsibilities which it im- poses on this Agency. They are premised upon the view that there should be a reallocation of authority between the Federal Govern- ment and the States in the regulation of labor relations, with the Federal Government and this Board surrendering jurisdiction in wide areas. Such action inescapably entails a usurpation of legislative power by an administrative agency, contrary to the principle of sepa- ration of powers under our constitutional system. There is no neces- sity or justification for this retrenchment based upon budgetary limitations or other administrative necessities. The majority opinion views any protest against a wholesale slash in the Board's jurisdiction, and particularly this one, as constituting a contention that this Agency must assert jurisdiction to the furthest possible extreme. This misconstruction of my views completely misses the point and serves only as a straw man to divert attention from the vital issues involved. I do not, as stated in the majority opinion, take "the strong view that this Board has no legal or moral right to self-impose any restrictions upon its activities." I do not "question the legal authority of the present Board to modify its jurisdictional standards," and the attempt to make it appear that there is inconsist- ency between my approval of the 1950 plan and my objections to the new standards is misplaced. My complaint is not with the fact of modification but against the purpose and effect of the new standards. The majority did not frame the 1954 standards on the same considera- tions as those involved in framing the 1950 standards. The majority have not made a deep slash in existing jurisdiction standards because limitations of funds or personnel preclude the Board's handling cases in the excised area. It made the slash in jurisdiction because of its view that there should be a reallocation of authority between Fed- eral and State Government' with authority in the excised areas sur- rendered to the States. The Board has, of course, never asserted juris- diction in every instance where the statute granted it. But we have asserted that jurisdiction to the extent that our funds and staff per- 502 DECISIONS OF NATIONAL LABOR RELATIONS BOARD mitted. In 1950, for purposes of clarity and consistency, we drew up a comprehensive jurisdictional plan which preserved limits based upon 15 years of case-by-case findings affirmed by the courts as to where unfair labor practices would have the greatest impact upon commerce. But the 1950 plan, unlike the present wholesale slash, did not seriously decrease (or increase) the scope of the Board's existing operations nor did it attempt to evade the job Congress gave us to do to the extent that our funds and staff would permit. To equate the 1950 plan, its motivations and its results with the present slash, is to say that putting one's house in order is equivalent to tearing part of the structure down. The importance and grave consequences of the new jurisdictional standards of the Board can scarcely be overstated. Hundreds of thou- sands of employees and employers are now deprived, by fiat of this Board, of the protections and restraints afforded by both the Taft- Hartley Act and the Wagner Act which it amended. Bluntly speak- ing, and there is reason for bluntness, these employees and labor or- ganizations in these areas of industry are now left free to commit each and every one of the unfair labor practices condemned in those statutes as dangerous to the economic and industrial health of this nation. Such practices will now receive neither notice nor action on the part of this Agency. The problems of representation for these employees-problems which we have learned through hard experi- ence mature into the cancer of industrial warfare and problems which this Board was especially established to solve by peaceful means-will be settled in the future, if at all, only by contestants armed with the weapons of strike, lockout, boycott, blacklist, and the like. There is no question but that the underlying consideration dictat- ing the majority's action in adopting the new jurisdictional stand- ards is one far removed from a legal determination of the effect of certain activity upon commerce and from proper policy considera- tions. The slash in jurisdiction now consummated has been frequently promised and predicted in public speeches of members of the majority during the past year in keeping with an announced belief in the phi- losophy of returning a greater share of Federal authority to State and local governments. Typical of such utterances are the following : The one thing this nation needs more than anything else to main- tain its vigor and strength is a revival of interest by local govern- ment in tackling and solving the problems of their local people. That is why I strongly advocate a gradual but nevertheless marked withdrawal of the hand of the NLRB from strictly local disputes? [Emphasis supplied.] 4 Address of Chairman Guy Farmer, NLRB, before the Joint Conference of The Indus- trial Relations Committees of the Edison Electric Institute , The Southeastern Electric Exchange , and the Southwestern Personnel Gioup, New Orleans, Louisiana , January 21, 1954. BREEDING TRANSFER COMPANY 503 . . . regardless of the legal scope of the commerce clause, the Federal Agencies should, as a matter of self restraint, impose limits on their own power and thus provide the opportunity for local problems to be settled on a local basis by the citizens of the community in which those problems arise.' The first of these [actions which should be taken by the new members] is to limit the jurisdiction of the Board-to free it from the consideration of hundreds, if not thousands, of cases which are markedly local in nature and in impact. Such cases should, in keeping with our American system of constitutional govern- ment, be dealt with by the localities and the states.' This is, after all, a Federal State, and it is the underlying philosophy of our government, and I might add of our President, that the states and communities not only should, but must, assume and discharge the responsibility of local affairs. I believe that this agency must use sound restraint in the exercise of its juris- diction. I believe that this agency should assist this administra- tion in pulling back the outer reaches of federal bureaucracy, and thus encourage rather than impede the development of our Com- m unities and our states.10 [Emphasis supplied. ] Against the background of these pronouncements, I have read with considerable amazement the statement in the majority opinion that a desire to transfer more authority over labor relations to the States "is in no wise a factor" in the framing of their new standards; likewise their assertion that the new restrictive standards were arrived at on the basis of four named criteria, including "an extraordinarily large caseload" and "budgetary policies and limitations." I cannot recon- cile these latter statements with the earlier pronouncements or with recent Board history. Let us look at the record of that history, subse- quent to the speeches just quoted, in more detail than the bits which are referred to in the majority opinion. As indicated in the majority opinion, two proposed new jurisdic- tional plans, of a highly restrictive nature, were submitted for con- sideration of the Board last March. On April 1, I sent a memo to my colleagues pointing out that before considering specific substitute jurisdictional standards there were certain basic questions which merited serious discussion by the Board : What is the necessity or reason for making a radical change in our present plan to accomplish a deep cut in our caseload? Have s Chairman Farmer before the National Conference of Business Paper Editors, Wash- ington. D C , October 21, 1953, after noting that the jurisdiction of the Board was to be reexamined 0 Member Rodgers before the American Bar Association, Atlanta, Georgia, March 15, .1954. 10 Member Rodgers before the National Retail Dry Goods Association , New York, New York , January 12, 1954 , in noting that "Probably the most pressing administrative prob- lem confronting the Board at this time is the problem of jurisdiction." 504 DECISIONS OF NATIONAL LABOR RELATIONS BOARD we suffered such a serious cut in our appropriations? Do we have a case backlog in the Secretary's office more than our staff can handle? Does the General Counsel have too many cases in the field to permit processing with reasonable expedition? I likewise pointed out therein that if factors of the kind mentioned did not require a reduction in the Board's jurisdiction, there was a serious question as to the Board's power deliberately to refuse to exercise its jurisdiction for other reasons. It has been apparent, however, that the majority has little interest in exploring and discussing such cri- teria to determine if there was an actual need to cut the Board's juris- diction. It is plain that in their zeal to get on with the business of cutting the Board's jurisdiction, there is no patience with any con- sideration of factors such as these which might create obstacles to that goal. It was agreed on my suggestion to have the committee of legal as- sistants referred to in the majority opinion appointed to make a report on jurisdiction as had been done prior to the adoption of the 1950 plan. Although that committee made a report with a lengthy appendix, its report did not explore or discuss the criteria mentioned above or the need to cut the Board's jurisdiction, or recommend any jurisdictional plan. Rather the committee acted on the well-founded assumption that a majority of the Board desired to make a cut in jurisdiction and the main thrust of its report was directed to a factual study of what the effect of each of the two proposed plans would be on dismissals of cases as applied to 413 cases then pending at Board level. (In addition it did contain information on such matters as legislative history bearing on assertion of jurisdiction, prior legisla- tive proposals to curtail jurisdiction, and a limited discussion of the 1950 plan.) In the latter part of June and early July, a large accumulation of cases involving jurisdictional issues were scheduled for Board agendas. The votes on these cases were combined to become the majority's "plan" as announced in the press releases of July 1 and 15. In the decision of these cases, so far as I am aware, no more consideration was given to the question whether there was a need to reduce the Board's jurisdiction in the light of the criteria recited in the ma- jority opinion or in my memo of April 1 than had been given to these questions prior to the committee's report or in the committee's report. Plainly one cannot disregard the public pronouncements by members of the majority in advance of restricting the Board's jurisdiction as to their purpose in doing so, in considering the statement as to their motivation which Member Peterson has noted was made for the first time in the latest revised majority opinion in this case 3 months after the accomplishment of the deed. BREEDING TRANSFER COMPANY 505 I do not question the sincerity of my colleagues' publicly stated beliefs that a reallocation of authority over labor relations between the Federal and State Governments would be good for -the country nor do I pretend to discuss the abstract wisdom of such a move. I do question that such a decision is theirs to make rather than for the Congress to determine. As the Supreme Court stated, in answer to a contention in a case where public utilities were held within the juris- diction of this Board, that "predominantly local problems are best left to local government authority for solution,"-"In our view, these questions are for legislative determination and have been resolved by Congress adversely to respondents." 11 [Emphasis supplied.] In brief outline, the new jurisdictional rules will result in the Board's refusal to entertain and process representation or unfair labor practice cases involving any of the employees of the following employers :12 1. Employers with less than $50,000 in direct sales to out-of-State purchasers. 2. Employers with less than $100,000 in sales or services to other firms which do interstate business. 3. Employers whose businesses affect national defense but who have less than $100,000 of national defense sales furnished under Govern- ment contract. 4. Radio and television stations with less than $200,000 gross an- nual revenue. 5. Newspapers with less than $500,000 gross annual income. 6. "Local" power, gas, water, and public transit companies with less than $3,000,000 gross annual income. 7. Interstate public transit companies with less than $100,000 gross annual income. n Amalgamated Association of Street , Electric Railway and Motor Coach Employees of America, Division 998 v. Wisconsin Employment Relations Board, 340 U S 383 at 397. 12 For purposes of compaiison, the following standards were set forth by the Board in 1950 for the assertion of jurisdiction. At that time the Board stated that it would assert jurisdiction over (a) All employers producing or handling goods destined for out-of-State shipment or performing services outside the State if the goods or services amounted to at least $25 ,000 annually in value (b) All employers having purchases of $500,000 directly or $1,000,000 indirectly from out-of-State sources (c) All employers furnishing goods or services to the firms listed above or cer- tain others to the value of $50,000 annually. (d) All employers whose volume of business, while not meeting the entire mini- mum amounts listed above, nevertheless had a large enough percentage of the mini- mum amount in each to have a comparable though cumulative effect upon commerce. (e) All instrumentalities and channels of interstate commerce, public utility and transit systems , integral units of multistate enterprises such as chain stores and franchised dealers in automobiles , establishments located in areas of plenary juris- diction, and establishments whose operation substantially affect national defense The reasons for the establishment of these criteria, which, of course, are now supplanted, are discussed hereinafter. 506 DECISIONS OF NATIONAL LABOR RELATIONS BOARD 8. All public restaurants , whether or not servicing instruments of interstate commerce. 9. Intrastate trucking companies which are links in interstate com- merce but do less than $100,000 of business a year for other enterprises over which the Board will assert jurisdiction. 10. Retail and service stores, whether or not members of an inter- state chain, except under very limited circumstances. 11. Other multistate enterprises except where the individual plant meets the criteria noted above under 1 and 2, or has $500 ,000 direct or $1,000,000 indirect inflow of purchases, or the chain as an entirety has direct interstate sales of $250,000. 12. Most franchised retail outlets for manufacturers regardless of their integrated position in a nationwide distributing system. 13. General or public office buildings regardless of the essential nature of the services that the latter may render to tenants engaged interstate commerce. This compressed outline, of course, does not list the many and varied subsidiary rules under which employers, ostensibly within these new commerce standards, will nevertheless be excluded from the Board's jurisdiction . Nor does it detail the confusion and contra- dictions implicit in the complexity of many of these standards or note the unexplained alterations which have been made in a number of these standards since they were first announced in July. These matters must and will be the subject of comment in other "lead" decisions which will follow as to the remainder of the new standards. The comparatively brief summary of the new criteria Which I have given, however, affords some idea of the slash that has been made. Statistics are available, in some instances , to document the severity of that slash . As the majority decision notes, a number of proposed jurisdictional standards were checked by a committee of legal assistants against a group of 413 cases pending at the Board this spring.13 Among the proposed standards were a number that were the same or elosely parallel to particular standards thereafter adopted by the Board majority, which makes pertinent the statistics as to the dismissals which would result therefrom. Thus, it was ascertained that at least 50 percent of gas, water , power, and public transit firms over which the Board had previously asserted jurisdic- tion would be excluded as a result of the $3,000 ,000 receipts test actu- ally adopted by the Board, while another 10 percent would be in 13 The sample group of 413 cases corresponded almost exactly to the Board's caseload in the past 2 years as to the percentage and types of industry or commerce represented. The survey indicated that 50 percent of the Board's jurisdiction under the 1950 plan would be affected by the standards being proposed; 25 percent being certain of dismissal while another 25 percent were questionable as to assertion of jurisdiction. While some of the proposed standards were, as the majority notes, more restrictive even than those adopted in July, others were the same or less restrictive. BREEDING TRANSFER COMPANY 507 doubt. This conclusion is affirmed by Federal Power Commission data showing that 79 percent of the electric utilities in the country have less than $3,000,000 in yearly receipts. Yet these public utilities furnish admittedly vital services and employ more than 690,000 em- ployees. The committee survey further showed that a requirement of $100,000 yearly receipts from national defense work (even apart from the additional defense requirements adopted by the majority)' would exclude at least 20 percent of those firms previously under our jurisdiction as business substantially affecting the national defense and would make 40 percent more possibly subject to dismissal. More- over, while the survey did not include all the highly complex and restrictive standards finally adopted as to multistate enterprises, the survey did disclose that a comparable standard would eliminate from 55 to 90 percent of those enterprises which are part of multistate organizations from our jurisdiction despite the very interstate char- acter of their organization. This is vividly shown by the admitted exclusion of practically all franchised dealers under the revised multi- state standards although just 1 part of that group, the retail auto- mobile field, alone employs more than 520,000 workers and does more than $16,000,000,000 of business annually. In each of the foregoing areas, contrary to the alleged "clarification" of our data by the ma- jority, percentage of dismissals cited above is a percentage of those enterprises previously under the Board's jurisdiction and not a per- centage of the total enterprises in that field. Even apart from these figures available from the committee's survey, however, other statistics confirm the great extent to which the Board's jurisdiction has been cut. According to statistics furnished by the Federal Communications Commission, approximately 80 percent of the nation's radio stations employing about 50 percent of the workers in that field will be excluded from the Board's jurisdiction as a result of the adoption of the $200,000 yearly receipts test for such enterprises announced in the July press releases. And other data, gratuitously labeled "totally unreliable" by the majority, but prepared by the Board's Industrial Analysis Branch, shows that 65 percent of daily newspapers and 95 percent of the weekly newspapers in the country will be excluded from the Board's jurisdiction under the new stand- ards. All this despite the obvious status of newspapers and radio stations as instrumentalities and channels of commerce and the tre- mendous importance these media have upon the flow of commerce by reason of the billions of dollars spent each year in the advertising of nationally distributed products. Unfortunately, I have no way of accurately determining the total number or percentage of employers and employees now shown of the Act's protection and restraints. On the basis of the spot statistics in 508 DECISIONS OF NATIONAL LABOR RELATIONS BOARD the industries noted above, however, it seems probable that at least 25 percent and perhaps as much as 331/3 percent of our past jurisdiction is now eliminated. The majority, however, deprecate these findings and aver that only a miniscule 1 percent of the "total number of em- ployees who could possibly be subject to the broadest reach of the Board's legal jurisdiction" will now be excluded together with 10 per- cent of our past caseload. This ultimate conclusion is projected from the employment figures in only 2 industries-utilities and news- papers-which show an alleged exclusion of between 2 percent and 8 percent. How these can be projected into 1 percent for all industries is wholly unexplained. If, however, contrary to all indications, their 1 percent guess is correct, then indeed the mountain has labored mightily to bring forth a mouse and at the cost of tremendous confusion and delay in Board work. But I note that my colleagues, in their highly selective justification of that estimate, based upon OASI fig- ures, do not take any note of the OASI figures showing an exclusion of 50 percent of all employees at radio stations or the half million retail auto employees, or the hundreds of thousands of employees in retail service, office building, interstate and intrastate transit, public restau- rant, and other occupations who are now totally or partially excluded by the new standards. Nor can I accept the implied premise that the number of employees in a plant is the test of whether or not jurisdic- tion should be asserted when the Congress, in enacting the statute, purposely rejected that test and stated that "The rights of employees should not be denied because of the size of the plant in which they work." But in any event, it is not the exact number of enterprises and employees now to be excluded which is the basic issue but the justifica- tion for any curtailment of jurisdiction which must be established. There are two approaches to the general question of the Board's assertion of jurisdiction. The first is concerned with the intent of the legislature which enacted this statute and with the legal obligations and grant of power which the statute encompasses. The second ap- proach, greatly dependent upon the findings of the first, is concerned with the extent of the Board's administrative discretion in curtailing our jurisdiction and the proper criteria on which such discretion must be based. I submit that careful analysis of both of these approaches compels the conclusion that the new standards are not defensible. The initial issue which arises is whether the Act itself contains any mandate as to the extent of the Board's jurisdiction. It is a vital issue for the simple reason that this Board, as is true of any quasi-judicial administrative agency, is bound by the limits of the authority granted in the statute creating it and is under an affirmative mandate to exer- cise the duties set forth therein. Congress, in the Act, outlaws unfair labor practices "affecting commerce." The key term "affecting com- BREEDING TRANSFER COMPANY 509 coerce" is further defined in Section 2 (7) of the Act as meaning "in commerce, or burdening or obstructing commerce or the free flow of commerce, or having led or tending to lead to a labor dispute burden- ing or obstructing commerce or the free flow of commerce." This basic delineation of the area in which the National Labor Relations Board not only may act but is under an affirmative direction by Congress to act was first set forth in the original Wagner Act, was continued with- out any alteration in the Taft-Hartley amendments of 1947 and has thus remained constant and unchanged by Congress for the 19 years this Agency has existed. Almost from the day that the National Labor Relations Board was established, the question of which employers are encompassed within this statutory definition has been before the Board and the courts. The ensuing history of litigation on this point has spelled out the answer in considerable detail. That history makes it clear that Con- gress, in enacting both the 1935 and 1947 statutes, sought to confer the full extent of its constitutional power to prevent unfair labor practices. As stated by the Supreme Court : " By that Act, Congress in order to protect interstate commerce from the adverse effects of labor disputes has undertaken to regu- late all conduct having such consequences that constitutionally it can regulate. . . . Again, half a dozen enactments, other than the National Labor Relations Act, are sufficient to illustrate that when it [Congress] wants to bring aspects of commerce within the full sweep of its constitutional authority, it manifests its pur- pose by regulating not only "commerce" but also matters which "affect," "interrupt," or "promote" interstate commerce. . . . In so describing the range of its control, Congress is not indulging in stylistic preferences; it is mediating between federal and state authorities, and deciding what matters are to be taken over by the central Government and what to be left to the States. . . . And so in this Act, unlike some federal regulatory measures, .. . Congress has explicitly regulated not merely transactions or goods in interstate commerce but activities which in isolation might be deemed to be merely local but in the interfacings of business across state lines adversely affect such commerce. [Emphasis supplied.] and, again : 15 The unfair labor practices which the Act purports to reach are those affecting commerce. . . . In determining the constitu- tional bounds of the authority conferred, we have applied the well "Polish National Alliance of the Uni ted States of Noith America v. N. L. R. B, 322 U S. 643 at 647 " Co-nsolidated Ldison Co v. Al. L R B , 305 U 8 197 at 222. 510 DECISIONS OF NATIONAL LABOR RELATIONS BOARD settled principle that it is the effect upon interstate and foreign commerce, not the source of the injury, which is the criterion. and, again : 16 It has been settled by repeated decisions of this Court that an em- ployer may be subject to the National Labor Relations Act al- though not himself engaged in commerce. The end sought in the enactment of the statute was the prevention of the disturbance to interstate commerce consequent upon strikes and labor disputes induced or likely to be induced because of unfair labor practices named in the Act. That those consequences may ensue from strike of the employees of manufacturers who are not engaged in inter- state commerce where the cessation of manufacture necessarily results in the cessation of the movement of manufactured goods has been repeatedly pointed out by this court. N. L. R. B. v. Jones c6 Laughlin Steel Corp., 301 U. S. 1, 38-40; N. L. R. B. v. Fruehauf Trailer Co., 301 U. S. 49; N. L. R. B. v. Friedman-Harry Marks Clothing Co., 301 U. S. 58; Santa Cruz Fruit Packing Co. v. N. L. R. B., 303 U. S. 4531463 et seq. Apart from the clear intent of Congress not even to require direct participation in interstate and foreign commerce as a basis for asser- tion of the Board's jurisdiction, there is also ample evidence from the legislative history that the size or volume of the individual enter- prise was not to be decisive. A proposal to exclude employers of less than 10 employees from the jurisdiction of the Board, received com- plete rejection from the Congress which enacted the 1935 Act. The Senate committee report 17 on this proposal notes that : .. . the Committee decided not to exclude employees working for very small employer units. The rights of employees should not be denied because of the size of the plant in which they work. Section 7 (a) imposes no such limitation. And in cases where the organi- zation of workers is along craft or industrial lines, very large associations of workers fraught with great public significance may exist, although all members work in very small establish- ments. [Emphasis supplied.] The same Senate report goes on to state very clearly that the limi- tation of jurisdiction to activities "affecting commerce" sets the line which Congress deems the appropriate test for excluding enterprises and disputes which may properly be deemed essentially local. Furthermore, it is clear that the limitation of this bill to events affecting interstate commerce is sufficient to prevent intervention 11 N. L R. B v Fainblatt, 306 U. S. 601 at 604 17 Senate Committee Report No . 573 on S. 1958, Senate Committee on Education and Labor, 74th Congress, 1st Session. BREEDING TRANSFER COMPANY 511 by the Federal government in controversies of purely local significance. and the Supreme Court has clearly recognized this."R The language of the National Labor Relations Act seems to make it plain that Congress has set no restrictions upon the jurisdiction of the Board to be determined or fixed exclusively by reference to the volume of interstate commerce involved. . . . Examining the Act in the light of its purpose and of the circumstances in which it must be applied we can perceive no basis for inferring any intention of Congress to make the operation of the Act depend on any particular volume of commerce affected more than that to which courts would apply the maxim de minimis. There are not a few industries in the United States which, though con- ducted by relatively small units, contribute in the aggregate a vast volume of interstate commerce. Some, like the clothing industry, are extensively unionized and have had a long and tragic history of industrial strife. It is not to be supposed that Congress, in its attempted nationwide regulation of interstate commerce through the removal of the causes of industrial strife affecting it, intended to exclude such industries from the sweep of the Act. [Empha- sis supplied.] The cited authority, to this point, has been concerned with the in- terpretations and legislative history of the commerce clause as ini- tially set forth in the National Labor Relations Act of 1935. Indeed this is necessary, for, when that Act was amended in 1947 to become the present Labor Management Relations Act, the language of these sections dealing with the Board's jurisdiction remained constant and the reports of both the House and Senate committees state plainly that the terms, "employer," "commerce," and "affecting commerce" as used in the 1935 Act, were to remain unchanged in meaning.19 It is pertinent to note, moreover, that the chief sponsors of the 1947 legis- lation were well aware of the necessity of retaining comparatively small employers under the jurisdiction of the Board where unfair labor practices committed by or against them would, in fact, affect commerce. In the course of debate on the bill, Senator Taft, coauthor of the successful amendments, noted that,20 I myself feel that the larger employers can well look after them- selves, but throughout the United States there are hundreds of 78i . L R B. v Fasnblatt, et al , supra in House Report No 245 on H R 3020, p. 18, House Committee on Education and L, her, 80th Congress, 1st Session , Senate Report No. 105 on S 1126, pp 18. 19, Senate Com- mittee on Labor and Public welfare, 80th Congress, 1st Session, House Conference Report No 510 on H R 3020, p 33, 80th Congress, 1st Session 20 93 Daily Congressional Record 3950, April 23, 1947 See also the views of Senators Taft. Ball, Donnell, and Jenner, all proponents of the legislation, as expressed in Senate Report No. 105 on S 1126, Supplemental Views, p. 45, 512 DECISIONS OF NATIONAL LABOR RELATIONS BOARD thousands of smaller employers, smaller businessmen, who, -under the existing statutes, have come gradually to be at the mercy of labor-union leaders, either labor-union leaders attempting to or- ganize their employees, or labor-union leaders interfering with the conduct of their business for one reason or another. It is also worthy of note that the legislative history of the 1947 amendments rather than manifesting any intent for the Board to con- tract its jurisdiction, on the contrary shows a congressional intent for the Board to extend its jurisdiction into areas in which it- had not previously asserted jurisdiction. Thus, prior to 1947 the Board had not taken jurisdiction over the building construction industry. This self-imposed restriction probably stemmed from a combination of fac- tors-the industry was highly organized and the limited budgets and personnel of the Board could better be used to protect the right of self- organization and collective bargaining in other areas; also, there was a disposition to view this field as "essentially local" despite an inflow of materials from out of State. But the legislative history of Section 8 (b) (4) of the Act showed that this industry was one of those par- ticularly subject to the secondary boycott and closed shops, and re- flected the congressional intent to eliminate such practices therein.21 Accordingly, since 1947 the Board has abandoned a policy of not tak- ing jurisdiction in the building construction field, and, hearkening to congressional intent, has taken jurisdiction, with the result that cases therein account for a very substantial part of the Board's caseload. I have noted above what was the recorded intent of both the 1935 and 1947 Congresses and the fact that the Act was passed "with full appreciation of the extent of its coverage." A further important point to be observed is this. From the date the National Labor Re- lations Board was established to the present time, there has been no congressional revision of the statutory coverage of the Board's juris- diction despite the introduction of numerous bills which would have excluded the same enterprises now eliminated from our jurisdiction by the action of the majority. The most recent of these efforts by individual members of the Congress to cut down the scope of Board jurisdiction failed of passage only a few months ago. Despite this consistent congressional refusal to decrease the Board's jurisdiction, the majority's drastic action achieves by administrative fiat what Congress has refused to do by statute. As the Supreme Court has warned, albeit in reference to another statute, where repeated at- tempts in Congress have failed to secure a curtailment of Federal 21 See United Brotherhood of Carpenters and Joiners of America, Di•strwt Council of Kansas City, Missouri, and Vicinity, AFL, 81 NLRB 802 and references to the legislative history contained therein BREEDING TRANSFER COMPANY 513 regulht'ory activity, it is both inappropriate and subject to court re- versal for an administrative agency to unilaterally achieve that end.22 If any lingering doubt could exist as to my conclusion that the majority's action in divesting the Board of jurisdiction in wide areas simply to invest the States with the opportunity to regulate labor relations therein is contrary to the mandate of the Act, Section 10 (a) supplies a final and incontrovertible answer. In that section 23 Con- gress specifically dealt with the question whether any part of the au- thority to deal with unfair labor practices affecting commerce vested by the Act in the Board might be surrendered to the States. It pro- vided that only in extremely limited circumstances could the Board do this and then by an agreement with the appropriate State agency. It further limited the industries in which it could be done. It further set forth the all-embracing prohibition against cession of jurisdiction to States where "the provision of the State or Territorial statute ap- plicable to the determination of such cases by such agency is incon- sistent with the corresponding provision of this Act or has received a construction inconsistent therewith." We are thus confronted with the considered judgment of the Congress which enacted the Taft- Hartley Act, that there should be no surrender of the Federal au- thority now vested in this Board to the States except where a State has a similar statute whose provisions with respect to the cases ceded is not "inconsistent with the corresponding provision of this Act." It is a well-established principle of statutory construction that ex- pressio unius est exelusio alterius.24 The specification of the par- ticular circumstances under which cession to States is permitted ex- cludes all other circumstances from the permitted authority. More- over, we are confronted with the further fact that in sessions up to and including the present session of Congress, attempts to liberalize the circumstances under which this Board could surrender authority to the States (stemining perhaps from the fact that no State has had a law since 1947 which would permit cession under Section 10 (a)) have failed of enactment. S. 1264, a bill introduced by Senator Ives which would have repealed the 10 (a) limitations on the Board's surrender 22 In Phillips Petroleum Co v. State of Wsscousiia, et al., 74 S Ct 794, the Court re- versed a recision of jurisdiction effectuated by the Fedeial Power Commission holding that "Attempts to weaken this protection by amendatory legislation exempting independent nat- ural gas producers from federal regulation have repeatedly failed and we refuse to achieve the same result by a strained interpretation of the statutory language 23 Section 10 (a) reads , in peitrnent part, Provided, That the Board is empowered by agreement with any agency of any State or Territory to cede to such agency jurisdiction over any cases in any industry (other than mining, manufacturing, communications , and transportation except where pre- dominantly local in character ) even though such cases may involve labor disputes affecting commerce, unless the piovision of the State or Territorial statute applicable to the determination of such cases by such agency is inconsistent with the corre- sponding piovision of this Act or has received a construction inconsistent therewith. u See Sutheiland , Statutory Construction , Sections 6603, 5822 338207-:5-vol 110-34 514 DECISIONS OF NATIONAL LABOR RELATIONS BOARD of its jurisdiction, and specifically provided for State authority to proceed where the Board declined to exercise its jurisdiction, did not pass in the last Congress. The action of a majority of the Board in adopting new jurisdictional standards designed to surrender author- ity to the States in the face of the prohibitions in Section 10 (a) which the present Congress has specifically failed to liberalize, re- sults in a plain circumvention of the provisions of Section 10 (a). It cannot be made legal by calling it policy or discretion. In summation, the language of the Act and its legislative history make it clear that this Board is to protect the entire range of eco- nomic activity "affecting commerce," from the impact of industrial disputes. In determining that scope of protection, Congress, both at the time the Act was passed and in the period since then, has uni- formly rejected any measure which would reduce it by limitations based upon size or volume of business. In creating the edifice of a national labor policy with a Federal agency to protect commerce within that broad area, the Congress also specifically 'placed strong prohibitions in the Act against the transfer of that authority to the States except in a limited area in which Congress prescribed a single method by which such cession could be accomplished. I view this background to be of paramount importance since, as a matter of ele- mentary law, it is the judgment of Congress as expressed in legisla- tion which is controlling as to our jurisdiction and not such pref- erences as individual members of this Board might hold from time to time. Evasion or failure to apply the jurisdictional standard set forth in the Act must inevitably result in misadministration of the Act. I submit that this basic standard has not been applied when the Board, as it does now by majority action, drastically curtails its jurisdiction without reference or regard to the ensuing effect upon commerce of unfair labor practices among the excluded enterprises. I submit that such an action is completely untenable when it seeks to accomplish the aim of cession without complying with the statutory restrictions upon such cession. I turn now to a consideration of what administrative discretion the Board has in administering the scope of authority granted in the Act. For lack of a better term this might be termed the "policy" approach to jurisdiction. By "policy," in fact, we mean nothing more or less than the administrative implementation of the broad statutory aims and mandate. The problem arises in the following manner. As is obvious, the Board's capacity to perform the task of administering the Act is significantly affected by the appropriations which Congress makes to do the job. When there are insufficient funds and personnel with which effectively to cover the entire field of the Board's legal jurisdiction practical administration requires that the Board expend BREEDING TRANSFER COMPANY 515 them in such manner as will most nearly effectuate the policies of the Act under the circumstances of the budgetary limitations. If the Board cannot as a practical matter deal efficiently and with reasonable expedition with unfair labor practices and representation questions in the entire field of its legal jurisdiction, it must concentrate its efforts on those cases which have a greater effect upon commerce. But this is not to say that this agency, under the guise of "administrative discretion" has the authority or the privilege of determining how much commerce should be protected by the Federal Government in- stead of how much commerce can be protected with the funds and personnel available. The question of how much of the Nation's economic life should be protected was determined by the Congress when it enacted this statute; it is not the province of members of this agency to substitute their judgment for that of the legislature. The necessity for the use of administrative discretion because of budgetary limitations has been consistent throughout the life of this Board. The years prior to 1947 were relatively "lean" years of limited appropriations, budget cuts, and reduced personnel. The budget never exceeded 41/2 million dollars per year or the personnel 850 employees during this early period. In 1946 when the Board had the biggest backlog of cases in its history to that time it suffered a budget cut which required a 20 percent reduction in its personnel.a5 With the passage of the 1947 amendments, however, the Board entered upon a period of comparatively generous appropriations approxi- mating 9 million dollars per year and permitting a staff of 1,700 employees. In part, of course, this increase which resulted in appro- priations and staff being doubled had to be devoted to handling the new types of cases arising under Section 8 (b) and other new sections of the Act. The increased appropriations have also permitted, how- ever, extending in some measure the Board's assertion of jurisdiction more widely than had been possible in the "lean" years. One example, already noted above, was the change in policy to assert jurisdiction in the building and construction industry where the Board had not previously done so. The Board, in 1950, adopted and published a set of comparatively simple basic standards by which it would or would not assert juris- diction. These neither had the purpose or effect of extending or cutting the Board's jurisdiction nor of making any appreciable change therein. Instead they were intended to codify and make uniform the general principles which the Board had been following to remove the possibility of inconsistency resulting from a case-by-case approach; to save the large amount of Board time required by the case-by-case method; and to let employers, employees, and labor organizations alike 25 See Eleventh Annual Report, NLRB, 1947, p 6. 516 DECISIONS OF NATIONAL LABOR RELATIONS BOARD know with certainty whether the Board would assert jurisdiction over them. Of 'necessity, this formalization of jurisdictional standards, into a comprehensive plan continued to reflect the experience of the previous 15 years in determining which areas of economic activity had less impact on commerce than others to enable the Board to con- centrate its still limited though more generous budgets in those areas where it could do the most effective job of effectuating the purposes of the Act. They provided a manageable caseload. It is thus plain that the 1950 jurisdictional standards were estab- lished-as a policy in practical conformance with the affirmative duties the statute imposes upon the Board. If the 1950 standards did not in- clude all enterprises within the scope of our legal jurisdiction, as of course they did not, it was because the standards themselves repre- sented the full limit of the Board's capacity to do the most effective job of effectuating the purposes of the Act with the staff permitted by the current appropriations ; and the exclusions represented those enter- prises where industrial disputes would less seriously endanger the free flow of commerce. In short, they represented a discretion born of necessity; not a discretion which assumed the substantive powers of the legislature. The 1950 standards have survived all court tests." I consider nothing about the 1950 standards to be immutable let alone as having an origin "on Sinai." To the extent that parts of Member Peterson's separate opinion may suggest such an inflexible po- sition on my part, he too misconstrues my position. As earlier stated, it is not the fact of modification with which I quarrel; it is the purpose and effect of the new standards which I consider an abuse rather than an appropriate exercise of administrative discretion. Certainly it is appropriate for the Board either to increase or decrease its exercise of jurisdiction as budgetary or other administrative necessities dictate. But the existence of an area of discretion which may be exercised for valid reason does not justify its exercise for an invalid reason. Because the 1950 standards represent the accumulated and consistent findings of some 15 years reinforced by our experience since 1950, there is, in my mind, a considerable burden of proof to be placed upon those who wish to alter those standards. It must be obvious that this burden of proof is not satisfied by a bland assertion, at a somewhat late date, that the majority has applied certain criteria. Saying does 16 See Howell Chevrolet Co v. N L R. B ., 346 U. S . 482, enfg 204 F. 2d 79 ; N. L. R B- v Ken Rose Motors, Inc., 193 F. 2d 769 ( C. A. 1) ; Ewchleay Corporation v. 2V L R B., 206 F 2d 799 (C. A 3) ; N. L R. B v. Seven-Up Bottling Company of Miami, 196 F 2d 424 (C A 5) , N L. R B v Vulcan Foiging, 188 F. 2d 927 (C A. 6) ; Local Union No 12, Proyr essive Mine Workers of America, District No 1 v N L R . B., 189 F 2d 1 (C, A- 7) , N L R B v El Dorado Water Company, Inc, 195 F. 2d 950 ( C. A. 8) , N. L R B V_ Reed, 206 F 2d 184 (C A 9) ; N. L R. B v Conover Motor Co, 192 F 2d 779 (C A 10) - BREEDING TRANSFER COMPANY 517 not mean doing. The majority states that it has applied a test of "bringing the caseload of the Board down to manageable size" yet does not offer a scintilla of evidence that this factor required a change in our standards and played a part in their conclusions . In fact, since the adoption of the 1950 standards the Board has had a manageable caseload and , even in the past year with delays stemming from the replacement of a majority of the members of the Board, there has been no evidence to the contrary. Likewise the asserted existence of an '"extraordinarily large caseload " as a factor in cutting jurisdiction is negated by the Board's own statistics . As of October 8 , the date on -which the majority's draft referring to these criteria was given me, only 16 complaint cases and 18 representation cases were available for as- signment to legal assistants needing new assignments . This is an extremely low working back log for a staff of more than 85 legal as- sistants . The majority's citation of "overall budgetary policies and limitations" as a factor in cutting jurisdiction is an ambiguous state- ment which is completely unexplicated and undocumented. If in- tended to convey the idea that appropriations do not permit handling as many cases as under the 1950 plan , it is in marked contrast to the actual facts which show no pressing budget difficulties and in fact a voluntary reduction in the staff of the agency in the past year during which it has been operating , with few exceptions , under the 1950 standards . The final criterion advanced by the majority is that of "the relative importance to the National economy of essentially local enter- prises as against those having a truly substantial impact on our economy." Yet this is obviously not a legitimate reason for reducing jurisdiction beneath that set by statute but n'ierely a measure to be utilized where a reduction is made necessary by other factors. In sum, none of the criteria to which lip service is given are substanti- ated by the citation of fact or figure nor could they be; and no claim has ever been made until this late date of the existence of legitimate budgetary or administrative necessity for a curtailment of our juris- diction. Under these circumstances , I do not consider it sufficient to simply acknowledge and disclaim the possibility that these new standards may be arbitrary and to make an unsupported and self- serving declaration that they are reasonable and proper . The Con- gress has vested this Board with a job to do and the authority to do it. When we do not perform that job and exercise that authority I think a clear accounting is necessary. When that accounting is absent, as it is when we adopt jurisdictional restrictions without vestige of fac- tual support or documentation , and for an invalid purpose , the Board has clearly resorted to an arbitrary abuse of its discretion. 51$ DECISIONS OF NATIONAL LABOR RELATIONS BOARD This patently arbitrary quality of the standards embodied in the July 1 and 15 press releases is also recognized by Member Peterson.27 It is clear that these standards were not born of it legitimate use of proper criteria but were motivated by a desire to cut the Board's juris- diction for the sake of depriving the Federal Government of authority in these areas. The new standards, though described by the majority as effectuating 'the purposes of the Act, have precisely the opposite effect. While it is not the Board's function to force collective bargaining on any em- ployees, we cannot overlook the fact that the congressional policy laid down in the 1935 Act and left unchanged in the 1947 amendments is to "encourage the practice and procedure of collective bargaining" as a means of eliminating industrial disputes which burden commerce. Yet the specialized knowledge of this Agency leads inexorably to the finding that a large share of the specific enterprises now cut loose from the Board's jurisdiction constitute an area of potential and real labor unrest which should demand the Board's close attention. The hun- dreds of thousands of employers and millions of employees at work in those enterprises now cut out from the Act form, as a whole, the very area in which organization of employees is least advanced and most vigorously pressed at the present time. Retail stores, particil- larly of the chain variety, small plants and operations, plants set up for national defense work under subcontracts, small trucking concerns, franchised dealers in automobiles and farm machinery-these are the areas which at present have the lowest incidence of collective bargain- ing and employee self-organization and these are the areas, as the Board well knows, in which organizational activity by unions is most intense. It is very definitely the Board's concern that this area of in- tensifying union and antiunion activity of both the legal and illegal types is also precisely the area of greatest industrial unrest with the, resulting serious threat to the free flow of commerce which Congress sought to protect. While it is true that many of these employers are small, it has earlier been noted that Congress specifically refused to ex- empt small employers from the Act, and we have been repeatedly adjured by the courts that : 28 Appropriate for judgment is the fact that the immediate situation is representative of many others throughout the country, the total 27 Member Peterson lists certain criteria as appropriate factors for consideration in the exercise of the Board 's administrative discretion in framing its jurisdictional policy, the application of which he asserts are the basis for his own modification of the 1950 plan with some more stringent standards Even assuming that each and every one of the fac- tors he mentions should be included in a list of appropriate criteria, I note that he too falls to establish the necessity for any curtailment of our present jurisdiction ; or to expli- cate in what way the 1950 standards fall short of achieving the purpose for which they were designed ; and how the application of any one or more of such criteria require his change in a particular standard . As for his metaphorical voyage between Scylla and Charybdis ; while I wish him bon voyage, I seriously doubt that his craft is seaworthy 28 Polish National Alliance v. N L. R. B., 322 U S . 643, 648. BREEDING TRANSFER COMPANY 519) incidence of which if left unchecked may well become far reaching in its harm to commerce. I must therefore ask, with all candor, precisely how the majority pro- poses to "effectuate the policies of the Act" by denying these employers and employees the very protection the statute was enacted to provide. It is clear and my colleagues admit, that these hundreds of thousands of employers and employees now deprived of the protection of the Act are unquestionably included within the jurisdictional ambit of the Act. Many, if not most, are directly engaged in interstate commerce; the remainder are, without question, in enterprises which are closely linked and intertwined with such commerce. During the 19 years of this Agency's existence, these employers, time and time again, have been found to be enterprises where industrial disputes would have a sub- stantial effect upon commerce. The Board, the courts, and even the Congress in some instances, have made factual findings of that sub- stantial effect upon commerce. I shall set forth those findings with respect to the individual categories of the newly announced jurisdic- tional plan, in the companion decisions which will follow. Suffice it here to ask : How do we effectuate the purposes of the Act by refusing to administer it where it clearly applies and we have the facilities to apply it? How does this Board implement the intent of Congress when, for example, it creates a special classification which removes half of the public utility companies under its jurisdiction when Congress itself, in passing the Act, specifically refused to exclude any public utilities? For as the Supreme Court has stated : 29 No distinction between public utilities and national manufac- turing organizations has been drawn in the administration of the Federal Act, and, when separate treatment for public utili- ties was urged upon Congress in 1947, the suggested differentia- tion was expressly rejected. Creation of a special classification for public utilities is for Congress and not this Court. [Em- phasis supplied.] How does the Board now advance the Act's announced aim of pro- tecting commerce when it adopts a new standard which removes most of the retail automobile dealers in the Nation, among others, from its jurisdiction despite the finding of the Board and the courts in the. past that : 30 To deny jurisdiction of the Board would allow thousands of re- tailers of new automobiles to engage in unfair labor practices with impunity. The "total incidence" of such unfair labor prac- 20 Amalgamated Association of Street, Electric Railway h Motor Coach Employees or America, Dtivtision 998, et at v Wisconsin Employment Relations Board, supra 30 N L. R B. v. Conover Motor Co., 192 F 2d 779 (C A 10) as quoted with approval in N. L. R. B. v. Ken Rose Motors, Inc , 193 F. 2d 769 (C. A. 1). 520 DECISIONS OF NATIONAL LABOR RELATIONS BOARD tices if left unchecked would not only substantially interfere with the free flow of commerce but would conceivably bring to a com- plete standstill the interstate transactions of one of the Nation's greatest industries. [Emphasis supplied.] Is the free flow of commerce more secure or less secure from interrup- tion by industrial disputes when the more than 520,000 workers and the more than $16,000,000,000 of yearly business in that segment of the retail field are now stripped of the protections and restraints of the Act? My colleagues do point to the instant case as an. illustration of such effectuation of the purposes of the Act by a refusal to assert juris- diction. This Employer, as part of its general hauling business in Hannibal, Missouri, performs delivery services pursuant to exclusive contracts with 2 interstate railroads and 1 interstate trucking com- pany. The amount and value of the interstate freight transported under these contracts is not shown by the record but obviously must exceed by many times the cartage fees in the amount of $8,400 re- ceived by the Employer in the past year for hauling such freight. On the basis of these facts my colleagues admit that the Employer's operations are clearly within our legal jurisdiction. Nevertheless, because they also view such activity, when not resulting in cartage fees of $100,000 or more annually, as without "pronounced impact" on commerce and "truly local," the majority rejects jurisdiction. This conclusion, as is similarly the case with the $50,000 figure adopted by Member Peterson, is in conflict with a long line of con- trary findings by the Board and the courts including it prior Board decision involving this same Employer.31 It is, accordingly, deserv- ing of some careful analysis. As Member Peterson has observed in his separate opinion, these terms such as "pronounced impact" and "truly local," without more, are insubstantial as findings of fact. Nor does it suffice to comment incorrectly that the business of this Employer is analogous to that of an itinerant taxicab. I agree with Member Peterson that the ad- ministration of the Act requires a more searching examination on the question of what "affects commerce" within the meaning of the statute. Unless we are to ignore the facts as set forth in this record, this Employer is bound by contract as an integral part of a system of interstate transportation of freight. Despite this clearly vital po- sition in the flow of interstate commerce, my colleagues seem to con- clude that the amount of the Employer's receipts and the fact that the freight is hauled in one city at the beginning or last stage of the 31 See Bi eedvnq Transfer Company, 95 NLRB 1157 ; Horace F Wood Auto Livery Com- pany, 93 NLRB 997 ; Bess F Young, d/b/a Young's Motor Freight Lines, 91 NLRB 1430; see also N L R B. v Gluck Brewing Co , 144 F 2d 847 at 854 ( C A. 8) ; Garner v. Team- sters, Chauffeurs and Helpers Local Union No. 776, 346 U S 485 BREEDING TRANSFER COMPANY 521 interstate journey negates the need for assertion of the Board's juris- diction. However, as I have emphasized herein, both the courts and the Congresses which enacted the legislation we administer, have clearly indicated that it is not the size or location of an enterprise which is the proper gauge of that enterprise's effect upon commerce. The instant case illustrates this unmistakably. The Employer per- forms its delivery services under exclusive contract with 2 interstate railways and 1 interstate trucking company. If the latter interstate carrier itself undertook to make deliveries in Hannibal, Missouri, and a labor dispute occurred which prevented final delivery of the goods shipped to that city in interstate commerce, even my colleagues would unquestionably assert jurisdiction for the impact upon com- merce is both considerable and plain. This would be true whether or not the cost of such delivery service in Hannibal reached $100,000 yearly and despite the fact that the labor dispute, itself, might be con- ined to the Hannibal area. There is no reason whatsoever why a different result should obtain merely because the delivery services are performed by a Hannibal firm under exclusive contract with the interstate carriers. Indeed, as the Courts have pointed out, in a similar situation : 32 If an employer can use a separate, independent, purely intra- state business as a means of effectuating an unfair labor practice and that business is always beyond reach of the Board, the ad- ministration of the Act and the application of remedies by the Board would be effectually and improperly restricted. [Empha- sis in part supplied.] It is plain, therefore, that mere reference to the volume and locale of an enterprise, particularly of the type here involved, does not touch the basic question on which the Board's jurisdiction must rest. In the instant case, it is clear that a strike by the Employer's em- ployees would have the same immediate effect upon interstate com- merce as a strike anywhere among the employees of the interstate car- riers themselves. The interstate movement of goods would be affected regardless of whether the interference occurred at the beginning, the middle, or the end of their journey. As the Supreme Court has aptly commented : 33 Restraints, to be effective, do not have to be applied all along the line of movement of interstate commerce. The source of the re- straint may be intrastate, as the making of a contract or combina- tion usually is; the application of the restraint may be intra- 32N L R. B. v. Gtuek Brewing Co, supra at 854-855. See also N. L R B. v Thomas Rigging Co., 211 F. 2d 153 (C. A. 9) where the court noted that the Boaid's jurisdiction under the Act cannot be frustrated by the "simple expedient of subcontracting." 11 United States v Women's Sportswear Manufacturers Association, 336 U. S. 460 at 464. .522 DECISIONS OF NATIONAL LABOR RELATIONS BOARD state, as it often is; but neither matters if the necessary effect is to stifle or restrain commerce among the states. If it is inter- state commerce that feels the pinch, it does not matter how local the operation which applies the squeeze. [Emphasis supplied.] Dismissal of the instant case, accordingly, as well as the $100,000 standard which it explicates, in no way effectuates the purpose of the Act insofar as the protection of interstate commerce from the impact of industrial disputes. A jurisdictional standard, such as this, which has no basis in fact, no documentation in experience, and no justifica- tion in practice, can only be termed arbitrary. Any "yardstick" which is premised, as this and the remainder of the new standards are, upon the philosophy of transferring Federal authority in labor relations to the States rather than upon a determination to exert that authority where commerce is affected is plainly not a correct one. We have been cautioned by the Seventh Circuit Court of Appeals in a previous case,34 that the Board does not possess "the unbridled discre- tion to evaluate such impact by any standard which its fancy may suggest as expedient in a particular case." There is an additional factor of tremendous importance which must be taken into 'consideration in any determination to decrease the Board's jurisdiction. In the past few years, it has become evident from judicial decisions that a serious legal question exists as to the au- thority of any State or local governnment to act with respect to con- duct falling within the legal jurisdiction of the Board. The Board can scarcely plead ignorance of this question however it is ignored in the majority decision for it has been explored by representatives of this agency before Congress and has been the subject of innumerable articles and critical comment. In a number of instances the Supreme Court has ruled that State boards and courts could not act when the conduct complained of was, in fact, a violation of the Federal statute.35 In the Amalgamated As- sociation case,36 the Supreme Court held that the Wisconsin Public Utility Anti-Strike Act was unconstitutional as it was in conflict with the Labor Management Relations Act, 1947. It was in this last instance that the Court stated : We have recently examined the extent to which Congress has regulated peaceful strikes for higher wages in industries affect- ing commerce. . . . We noted that Congress, in § 7 of the Na- tional Labor Relations Act of 1935, as amended by the Labor Management Relations Act of 1947, expressly safeguarded for 34 Joliet Contractors Association, et al v N. L R B, 193 F 2d 833. Automobile Workers v O'Brien, 339 U. S. 454; Buildvng Trades v. Kinard Construe tcon Co , 346 U. S. 933 36 Amalgamated Association of Street, Electric Railway & Motor Coach Employees of America, Division 998 v Wtisconsan Employment Relations Board, supra, at 389-390. BREEDING TRANSFER COMPANY 523 employees in such industries the "right ... to engage in . . . concerted activities for the purpose of collective bargaining or other mutual aid or protection," "e. g., to strike." We also listed the qualifications and regulations which Congress itself has im- posed upon its guarantee of the right to strike , . . . Upon re- view of these federal legislative provisions , we held, 339 U. S. at 457: "None of these sections can be read as permitting concur- rent state regulation of peaceful strikes for higher wages. Con- gress occupied this field and closed it to state regulation . Plank- inton Packing Co. v. Wisconsin Board, 338 U. S. 953 (1950) ; LaCrosse Telephone Corp v. Tisconsin Board, 336 U. S. 18 (1949) ; Bethlehem Steel Co. v. New York Labor Board, 330 U. S. 767 (1947) ; Hill v. Florida, 325 U. S. 538 (1945). [Emphasis supplied.] Of particular interest and importance on this question is the case of Garner v. Teamsters, Chauffeurs and Helpers Local Union No. 776.37 This decision of the Supreme Court concerned a trucking company almost identical to the Hannibal , Missouri, firm over which j urisdic tion is now being rejected by my colleagues in the instant case. The Garner firm was picketed by the Teamsters Union and requested an injunction from a State court. No attempt was made to resolve the issues by a complaint to the National Labor Relations Board. The 'Supreme Court, on appeal, however, found that the Garner trucking enterprise was clearly subject to the jurisdiction of the Federal Board and that the conduct complained of was within the power of the Board to control and prevent. The Court therefore found that the courts and administrative agencies of the State of Pennsylvania were with- out authority to adjudicate the controversy, holding that: Congress did not merely lay clown a substantive rule of law to be enforced by any tribunal competent to apply law generally to the parties. It went on to confide primary interpretation and ap- plication of its rules to a specific and specially constituted tri- bunal and prescribed a particular procedure for investigation, complaint and notice, and hearing and decision, including judi- cial relief pending a final administrative order. Congress evi- dently considered that centralized administration of specially de- signed procedures was necessary to obtain uniform application of its substantive rules and to avoid these diversities and conflicts likely to result from a variety of local procedures and attitudes towards labor controversies. [Emphasis supplied.] As numerous commentators have pointed out, and as the Board is well aware, the Garner decision spotlights a "no-man 's" land of labor disputes for where conduct affecting commerce and falling among the 37 346 U. S 485 524 DECISIONS OF NATIONAL LABOR RELATIONS BOARD restraints or rights governed by the Federal Act is concerned, that con- duct is within the exclusive province of this Board, whether or not the Board takes action. It is true that the Supreme Court, in the Garner case, did not deal with the specific question of what authority the States would have where the Federal Board has jurisdiction but refused to exercise it. I shall not attempt to anticipate the answer to that question. Neither do I think it wise, in the absence of such an authoritative answer, and mindful of the legal inability of this Board" to cede such jurisdiction, to drastically increase the number, size, and importance of the enterprises whose status is thus cast in doubt, as the majority do by their new standards. It was possibly with this in mind, that the Court, in Garner, noted that "Congress, in enacting such legislation as we have here, can save alternative or supplemental state remedies by express terms, or by some clear implication, if it sees fit." [Emphasis supplied.] It is now but a few short months since Con- gress rejected such concurrent State control.38 Moreover, even if we were to assume that the States have the legal authority to act where the Board has declined jurisdiction, the situa- tion is still, at best, extremely unsatisfactory. Only a relatively small number of States have established administrative machinery to handle industrial disputes, their root causes, and their results. These States, however, in no case have statutes consistent enough with the Federal Act to qualify for receiving jurisdiction by cession from the National Labor Relations Board. And, by giving up jurisdiction in the areas eliminated by the new standards, the Board creates a chaotic vacuum in the great number of remaining States which have no administrative facilities to protect the rights and regulate the evils governed by the Federal Act. Does this not leave, in these States, only the State in- junctive processes-the doors to which Congress thought it was closing by this and other legislation? In summation, the jurisdictional standards now made effective by a majority of this Board are limitations conceived and adopted as a method of divesting the Board and investing the States with control over labor relations in a large segment of our national economy. That program is clearly not a matter within the authority of this agency to either adopt or reject but is a legislative question to be decided by the Congress. The invasion of the powers of the legislature which the adoption of this program constituted, is made particularly evident and untenable by the recent and consistent rejection by the Congress of the same proposals. The standards by which the Board will hereafter accept or reject jurisdiction are patently arbitrary formulae without basis of foundation in fact or reasonable relation to the duty of this ' S 1264 , a bill introduced by Senator Ives, which would have specifically provided for State authority to proceed where the Board declined to exercise jurisdiction , has failed of passage in the current session of the Congiess along with other proposals of the same nature BREEDING TRANSFER COMPANY 525 Agency to protect commerce from labor disputes affecting it. These standards are in direct conflict with the long history of judicial and Board determinations in the same field. They cannot be justified in law and, as policy, give little or no weight to the years of experience .and intimate knowledge of this agency in its specialized field. I must add one final caveat lest the instant decision and the new -standards which it illustrates give thought of victory to either the opponents or proponents of collective bargaining. The slash in the Board's jurisdiction now consummated is not a curtailment of em- ployee rights alone or employer rights alone. Both the Wagner Act, as amended, and the Taft-Hartley Act have been curtailed by this action. If comfort is to be taken by anyone, it belongs to those elimi- nated from the Act who wish to violate the restrictions and rights con- tained in those statutes and who may now do so with impunity. It is the employee who wishes, freely, to engage or not engage in collective bargaining and the employer faced with boycott, forced bargaining, ,or worse, who will accept and suffer the inevitable consequences of this action. To the extent that they do so, the economic health of this Na- tion must unquestionably be harmed, and the statutory duty of this Board must, inevitably, be evaded. Separate opinion of MEMBER PETERSON : 39 But for the fact that I deem it an obligation of office to do so, I would not undertake to set down my views now on the broad issue of the Board's jurisdiction; to some it may seem an academic venture into futility, especially in an anticlimatic atmosphere where there is scant hope of converting those of my colleagues who have already announced their conclusions 40 However, I believe that Members of this Board owe it to the public and all interested parties to explicate their positions on significant issues coming before us. The more so, because of the uncertain state of the law relating to the propriety of action by the States in an area from which this Board has voluntarily chosen to re- treat. Therefore, I offer my own estimate of the extent to which and why a quasi-judicial agency such as the Board can or should, at this juncture, eschew any substantial part of the statutory authority, judi- cially sanctioned, to exercise the full reach of the commerce clause power. 89 When this opinion was written, the only extant explanation of the majority's exten- sive revision of the 1950 jurisdictional plan was contained in the July 1 and 15 press re- leases and a short draft majority opinion Member Murdock had more fully expressed his 'ien•s Peifoice I addressed myself to those documents and the reasoning which they contained. My colleagues have revised their opinions to read as they now do It seems unnecessary for me to revise what follows. Sometime there must be an end to the rather pointless and to me distasteful business of revising draft opinions to score a supposed point on a colleague Therefore, except for this footnote, my opinion remains as it was ouginally 40 See press releases, July 1 and 15, 1954, announcing the Board's new jurisdictional standards. 526 DECISIONS OF NATIONAL LABOR RELATIONS BOARD I take it, as the late Justice Cardozo observed, that each of us "has in truth an underlying philosophy of life, even those of us to whom the names and the notions of philosophy are unknown or anathema." 41 To, me, a basic premise is that this Board, no less than as has been said of the Supreme Court, should bow "to the lessons of experience and the- force of better reasoning, recognizing that the process of trial and error, so fruitful in the physical sciences, is appropriate also in the judicial process." 42 At the outset, I agree that the Board is not legally precluded from adopting new jurisdictional standards. Although the legislative his- tories of the Wagner 43 and Taft-Hartley 4° Acts as well as court de- cisions 45 disclose that Congress intended to delegate to the Board its full power under the commerce clause of the Constitution, I doubt that it can be denied that the Board is free, within limits, to utilize its discretion in determining the boundaries in which that power should be exercised. I do not read the cases upholding the Board's asser- tion of jurisdiction as requiring us to assert jurisdiction wherever we legally can. In their context, they only spell out what we may do, not what we must. Since at least 1943, the Board has consistently held that it has the discretion to decline to exercise jurisdiction over enter- prises which are essentially local in character, although they may af- fect commerce within the meaning of the Act, on the ground that as- sertion would not effectuate the policies of the Act.46 Indeed, the Supreme Court 4l and various circuit courts 48 have approved this exer- cise by the Board of its discretion. The Board's 1950 jurisdictional standards, as I understand them, were never intended to be immune to change or compromise, as all of us agree. The plan represented the best but tentative opinions of our predecessors, gleaned from their experience in office, as to how to cope with the difficult question of the Board's jurisdictional role, and noth- ing more. They did not promulgate it as coming from on Sinai, to have the same enduring effect as the Law of Moses. Rather, they recognized that the plan would, and intended that it should, be subject to revision if required by changing times and circumstances. More- over, in my opinion, we would be derelict in our duties as their suc- 41 Cardoso, Nature of the Judicial Piocess, p 12 42 Brandeis , J, dissenting in Barnett v Coronado Oil d Gas Go, 285 U S 393 at 407-8. 93 Senate Report No 573 on S 1958, pp. 17-19 , Legislat44 e History of the National Labor Relations Act, 1935 , pp 2315-2319. 44 H Rep No 245 on H R 3020 , p 18, Legislative History of the Labor Management Relations Act, 1947, p 309, S . Rep No 105 in S. 1126, pp 18, 19 45 See for example, N L R B. v. FavnMlatt, 306 U. S 601, 607. 46 Lacey Melling Company, 48 NLRB 914 471N L R B v Denver Bldg Trades Council, 341 S 675, 684. 48 Local Union No 12, Progressive Mine lVoi leers of America, District No 1 v N L R B , 189 F 2d 1 ( C A 7), cert denied , 342 U. S . 868, Wayside Press, Inc v N L. R B , 206 F. 2d 862 ( C. A. 9) , Haleston Drug Stores, Inc v. N L. R B , 187 F. 2d 418 ( C A. 9), cert. denied , 342 U S 815. BREEDING TRANSFER COMPANY 527 cessors in office if we were to accept the plan as gospel, without assay- ing or appraising its efficacy in the crucible of our own knowledge and the experience in its application to a fluid industrial scene. However, I do not mean to imply that the 1950 standards did not represent a needed and salutary change in the Board's approach to the whole problem of jurisdiction or that they were not based upon a sound and informed judgment. As one having taken office much after the plan was evolved, I understand it was designed to achieve the dual objectives of remedying the pattern of uncertainty that had developed over the prior years because of the declination or assertion of juris- diction by the Board on a case-to-case basis, and of limiting the Board's exercise of jurisdiction to enterprises having a pronounced impact on commerce.49 I think all my present colleagues would agree that the first objective of the plan was successfully accomplished. In my opinion, the same can be said with respect to the second objective, if due recognition is given to its nature. Thus, I believe that the framers. of the plan realized that the concept of what constitutes essentially local enterprise could not be fixed and rigid because of its relationship, to the Nation's changing economic conditions. Putting it another way, that which may have been considered as having a substantial effect on commerce in 1950 may not necessarily be so viewed in 1954 because of influencing factors upon our national economy such as changes in the price level and the state of collective bargaining. In summary, I believe that the Board has the legal authority to establish a jurisdictional plan such as has been enunciated by the majority. However, this should not be interpreted as an indication that I agree with the basis upon which the new plan was formulated or with all of its features. Fora detailed analysis of why I am unable to accept the new jurisdictional plan as announced, I shall turn now to a discussion of the majority opinion in this case. My principal objection to the new plan stems from what strikes. me as its arbitrary and categorical character. To say, as I have, that the Board has discretion to decide how or in what circumstances th& policies of the Act will be effectuated by asserting or declining juris- diction, is not to say that such discretion can be exercised in an un- restrained or capricious manner.50 Yet, this appears to me to be the net effect, although doubtless not intended, of the action taken by the majority in promulgating the new standards. I do not find any real effort to explain what criteria have been utilized in arriving at the new standards or why the changes which have been made are advisable-if indeed they are. Mere use of such trite phrases as "pronounced impact" and "business is truly local"-without more, 19 Hollow Tee Lumber Company, 91 NLRB 635 10 Joliet Cont?aotors Association, et at , v Al L. R. B., 193 F 2d (C A 7). 528 DECISIONS OF NATIONAL LABOR RELATIONS BOARD does not suffice. A complex issue is involved here which is not appro- priate for dogmatic disposition. In my opinion, it is an obligation of this Board in dealing with a matter as fundamental and vital as this to state explicitly how it reached its conclusion to curtail drasti- cally the Board's area of jurisdiction, and why; employers, labor organizations, and several million employees are entitled to know why they are being deprived of rights apparently vouchsafed them in the Act. The old plan was evolved after a careful and studious consideration of certain definite factors-which I shall discuss later-but one can only speculate as to the source of the new one. In this posture, it is not only plausible but natural to infer, as Member Murdock sug- gests, that the new standards had their genesis in a decision to confine the Board to a much narrower jurisdiction so that a considerable amount of Federal authority to regulate labor relations would be administratively reallocated to the State governments.51 If this is the origin and purpose of the new plan, it smacks of administrative iegislation, because it deals with a matter for Congress to determine and not the Board.52 Moreover, assuming arguendo that the Board has such authority, the efficacy of its use as manifested in the new plan is open to serious question, as Member Murdock points out, for the legal authority of State boards and courts to act in areas where the Board has declined jurisdiction is, to say the least, uncertain.53 What is more, there is but a mere handful of States which have estab- lished administrative machinery to handle industrial disputes.54 Far from accomplishing the purpose of returning to the several sovereign States the regulation of that which is essentially or primarily local in character, my majority colleagues are relegating to a State of chaos sizeable parts of many branches of industry that are plainly within the ambit of the Act. Another difficulty I have with the action here taken concerns what appears to me to be a blurred view of, or disregard for, our proper role as members of a continuing quasi-judicial body. I conceive our 51 The proviso to Section 10 (a) of the Act clearly restricts the Board's authority to cede its jurisdiction to the States Indeed, it was because Senator Ives recognized that this limitation upon the Board's authority was a matter for Congress to correct that he proposed a bill (S 1264, March 11, 1953) to repeal this proviso and to substitute language which would liberalize the Board's power to cede jurisdiction to the States. 52 Colgate-Palmolive-Peet Co v. N. L R B , 338 U S 355, 363: "It is not necessary for us to justify the policy of Congiess It is enough that we find it in the statute. . . . To sustain the Board's contention would be to permit the Board under the guise of ad- ministration to put limitations in the statute not placed there by Congress " 53 Garner, et al. v Teamsters, Chauffeurs, and Helpe; s Union Local No. 776, (AFL) et al , 346 U S. 485 "The following 12 States have Labor Relations Acts: Colorado, Connecticut, Kansas, Massachusetts, Michigan, Minnesota, New York, Oregon, Pennsylvania, Rhode Island, Utah, Wisconsin. BREEDING TRANSFER COMPANY 529 positions to be analogous to those of judges. As I have stated, I do not believe that we are fettered and shackled by what our predecessors have done; but I also think we should not lightly overturn Board precedents and practice or blithely ignore the lessons to be discerned in the experiences of both management and labor in living under these precedents. In the 19 years of administration of the Act, this Board has built a tremendous body of administrative common law in the field of labor relations. Those regulated by the Act, as interpreted and applied, have to an appreciable extent sought to accommodate their af- fairs to the Board's decisions, and thus have a substantial stake in being able to rely on established principles absent revisions in the basic statute. These considerations, plus the "lessons of experience" derived from living with these principles, I submit, should not be brushed aside by new administrative judges, who may wish-as indeed most of us would-to paint on a clean canvas. In short, arbitrary and drastic changes in the rules of the game-regardless of how tempting their promulgation may be to the rule makers-do not contribute to orderly relations. Although the effort to steer a middle course between the majority and dissenting opinions in this case is fraught with some of the dan- gers that assailed the mariner in cruising between Scylla and Charyb- dis, I am not without some charts. Happily, the Board has already dealt with the problem. The criteria which heretofore were applied in reaching a determination are as efficacious, pertinent, and available today. The factors which were considered in 1950 may be summa- rized as follows : (1) The physical volume of cases Board Members and their staffs can reasonably handle; (2) the desirability of limiting the Board's jurisdictional coverage so as to enable the Board to accom- modate the volume of incoming cases to manageable proportions, and to permit adequate attention to be given a more select group of im- portant cases; (3) the Agency's available funds; (4) the relative im- portance to the national economy of enterprises having intrinsically local characteristics as against those having a substantial impact upon commerce; and, (5) the need for expeditious resolution of labor disputes and for a decrease in the time lag between the hearing and final decision in Board cases. These criteria, while necessarily not as precise as some might wish, seem as valid in 1954 as in 1950. In addition, I have taken into ac- count the experiences with the 1950 formulation as well as the fact that an upward swing in the Nation's economic level has occurred since the minimum dollar volume figures were set and, that there are many more enterprises today which come within the dollar volume test of the 1950 plan than there were at that time. All of these con- 338207-55-vol. 110-35 530 DECISIONS OF NATIONAL LABOR RELATIONS BOARD siderations suggest the advisability of increasing the minimum dollar volume figures to reflect present circumstances and conditions 55 Having reexamined and evaluated the 1950 jurisdictional standards in light of all the criteria at my disposal and having given the matter the most careful consideration of which I am capable, I now propose to specify how I would change the plan, indicating here only wherein my views differ from those of my majority colleagues and reserving my more detailed reasons for disagreeing until specific cases are pre- sented to the Board involving particular aspects of the new plan. The most convenient vehicle for presenting my views is the 1950 plan itself. According to that plan, the Board indicated that it would assert jurisdiction over : 1. Instrumentalities and channels of interstate and foreign com- merce. a. Included under this category were, among others, motor carriers, shipping and pipelines, telephone, telegraph, radio, and television systems, banks, and newspapers. In general, no minimum total dol- lar volume of business was required and jurisdiction was taken so long as the impact on commerce of the operations involved was not de minimis. The majority would assert jurisdiction over radio and television sta- tions only if their gross annual revenue amounts to at least $200,000, and over newspapers only if their gross annual income amounts to at least $500,000. I would adhere to the 1950 plan requiring only that with respect to radio and television stations and telephone and tele- graph systems the operations not be de minimis and that with regard to newspapers the particular employer be a member of an interstate wire service or publish syndicated features and advertise nationally sold products. The majority would exercise jurisdiction over intrastate trucking companies and similar firms which are links in interstate commerce only if they do at least $100,000 worth of business annually for other concerns in categories numbered 1, 2, or 4 of the new plan. I am dis- posed to agree with the majority that a monetary figure should be fixed s5 Member Murdock states I fail to establish the necessity for any changes in the 1950 plan to explicate wherein the old standards fall short of achieving their goal or how any of the criteria I utilize require the changes I propose. In my view, and to my sat- isfaction, I have done so, although regrettably not to his, in this and in other cases issued or in preparation My willingness to apply revised standards of dollar volume minima, and to consider alteration of the 1950 plan in other respects, has been dictated by my concept of a proper exercise of the Boaid's discretion If my interpretation does not coincide with a view which others may hold, that administrative standards once laid down are immutable, that is a result which I cannot avoid. For my part, although I might prefer that cutoff points be reached and changes proposed by the application of standards that are themselves less imprecise than those which I have applied, I believe that the law in this field, "like humankind, if life is to continue, must find some path of compromise " (Cai doze, The Growth of the Law, p. 2.) BREEDING TRANSFER COMPANY 531 for local trucking concerns because I do not believe that they should be properly considered essential links in interstate commerce without regard to the amount of business they do. However, I would set the figure at $50,000 rather than $100,000. As the Employer in this case does much less than $50,000 worth of business, I agree with the majority that the petition should be dismissed. 2. Public utility and transit systems. a. Included in this category were gas, electric, and water companies and public transit systems. In general, no minimum total dollar vol- ume of business was required and jurisdiction was taken as long as the impact on commerce of the operations involved were not de m,inimis. The majority would assert jurisdiction over "local" power, gas, and water utilities and intrastate public transit systems only if the com- pany does a gross annual business of $3,000,000, and would exercise jurisdiction over public transit systems engaged in interstate commerce only if the gross annual revenue from interstate operations amounts to at least $100,000. I would adhere to the 1950 plan on the ground that public utilities including public transit lines have such an important impact on commerce as to warrant taking jurisdiction over all cases involving such enterprises, where they are engaged in commerce, or operations affecting commerce, subject only to the rule of de minimis.16 3. Establishments which, although local in character, operate as in- tegral parts of a multistate enterprise. a. Included in this category were retail chain stores, and branch divisions of national or interstate organizations. In general, no mini- mum total dollar volume of business was required and jurisdiction was taken so long as the establishment was part of a multistate enterprise. The majority would assert jurisdiction over such establishments other than a retail or service establishment if : (a) The plant involved has a direct outflow of goods into interstate commerce amounting to $50,000 a year or furnishes goods to the value of $100,000 a year to interstate concerns coming within categories 1, 2, or 4 of the new plan, or (b) if the plant does not meet the separate plant tests listed in (a) above, if the multistate enterprise, of which the plant is a part, has a total outflow of $250,000 a year into interstate commerce. Also, jurisdiction would not be exercised over an establishment solely be- cause it was operating under a franchise from a national enterprise and would be exercised over franchised establishments only if they satisfied some other standard in the new plan. I would adhere to the 56I realize that the view expressed here is contrary to the position I took recently in three rural electric cooperative cases and another involving a public bus system. See Inter-County Rural Electric Cooperative Cop, 106 NLRB 1305; Coles-Uoultise Electric Cooperative, 107 NLRB 30 , Upshur Rural Electric Cooperative Corporation, 107 NLRB 207; Auburn Bus Company, 107 NLRB 919 These cases were decided at a time when the Board was dealing with the question of jurisdiction and ievision of the 1950 plan on an ad hoc basis . Upon further reflection , I have concluded to reverse my position in each of the four 532 DECISIONS OF NATIONAL LABOR RELATIONS BOARD 1950 plan with respect to establishments such as are involved here. However, I agree with the majority that with respect to franchised establishments the possession by the particular enterprise of a fran- chise should not be the solely determinative test. 4. Enterprises engaged in producing or handling goods destined for out-of-State shipment, or performing services outside the State, if the goods or services are valued at $25,000 per annum. a. Included in this category, among others, were interstate building and engineering firms, and firms that sell their product within the State to a company for shipment by the latter to another State, or for incorporation in a product the latter ships outside the State. The majority would assert jurisdiction over such enterprises, other than retail stores, producing or handling goods destined for out-of- State shipment or performing services outside the State in which the firm is located, where such goods or services are valued at $50,000 a year. I would agree to this change in the minimum total dollar volume figure made by the majority for the reasons discussed earlier in this opinion. 5. Intrastate enterprises furnishing services or materials necessary to the operation of enterprises falling into categories 1, 2, or 4, pro- vided such goods or services are valued at $50,000 per annum. a. Included in this category were, among others, contract shops or other employers who process allied or supplementary operations for manufacturers engaged in interstate commerce, and suppliers of raw materials, finished parts used in the final product, machinery, ma- chinery parts, tools, dies, patterns, and designs. The majority would assert jurisdiction over: (1) Enterprises sup- plying goods or furnishing services amounting to $100,000 a year or more to concerns in categories 1, 2, or 4 of the new plan, except that jurisdiction would not be exercised over enterprises supplying ma- terials to other firms which do interstate business unless the materials themselves ultimately go outside the State or over enterprises furnish- ing services unless the services are part of the stream of commerce; (2) enterprises furnishing services, other than those in category 5 of the new plan, amounting to $200,000 a year or more to concerns in categories 1, 2, or 4 of the new plan, or if the establishment involved is part of a multistate chain jurisdiction would be exercised if the chain furnishes services amounting to $1,000,000 or more per year to concerns in categories 1, 2, or 4 of the new plan except that juris- diction would not be exercised over general or public office buildings merely because such buildings have tenants over which the Board takes jurisdiction. Regarding (1), I agree with the majority that the mini- mum total dollar volume of business figures should be raised from $50,000 to $100,000. However, I would adhere to the old plan in not requiring that materials supplied to other firms in interstate com- BREEDING TRANSFER COMPANY 533 merce ultimately go outside the State and not requiring that services be part of the stream of commerce.57 Regarding (2), I can see no essential difference between furnishing services which become part of the stream of commerce and those which do not, since both types of services are used in the operations of the interstate enterprises which purchase them. Therefore, I would use the $100,000 figure in (1), above, rather than the $200,000 figure in (2). Furthermore, I would adhere to the 1950 plan with respect to office buildings. 6. Any other enterprise which has (a) direct inflow of $500,000 per annum or (b) indirect inflow of $1,000,000 per annum or (c) combined percentages of any outflow and inflow requirements de- scribed in categories 4, 5, 6 (a) and (b), totalling in combination to 100 percent. The majority would assert jurisdiction over enterprises other than retail establishments which have (a) direct inflow of goods or ma- terials from out-of-State valued at $500,000 a year or more, or (b) an indirect inflow of goods or materials valued at $1,000,000 a year or more. The majority would abolish the "combination category" (c) of the old plan. I would agree to the abandonment of category (c) as part of the jurisdictional plan; while logically defensible, it has had the effect of an irritant scarcely worth the price. 7. Establishments substantially affecting national defense. a. Under the 1950 plan the Board took jurisdiction of any company doing any work affecting national defense. The majority would assert jurisdiction over enterprises affecting the national defense, where the goods or services furnished are directly related to national defense, and amount to at least $100,000 annually, and are furnished pursuant to a Government contract. I agree to the fixing of a minimum total dollar volume of business figure for estab- lishments affecting national defense. However, I think the minimum figure should be set at $50,000 and that jurisdiction should be asserted over any company engaged in that amount of national defense work regardless of whether it is pursuant to direct Government contract. 8. This is a new category introduced by the majority with respect to retail stores. Jurisdiction would be asserted over : a. Independent retail stores, whether a single store or part of a chain operating entirely within a State, only if (1) the store involved in the case has annual purchases amounting to at least $1,000,000 coming to it directly from outside the State, or (2) the store involved has annual purchases of $2,000,000 coming to it indirectly from outside the State, or (3) if the store ships $100,000 worth of merchandise into another State or States. 57 In this respect, I would therefore reverse the position I took in Brooks Wood Products, 107 NLRB 237. 534 DECISIONS OF NATIONAL LABOR RELATIONS BOARD b. Chains of retail stores, with stores in more than 1 State, only if (1) the individual store involved meets either of the tests for intra- state stores, or (2) the chain has gross annual sales totalling $10,000,- 000 or more. Jurisdiction would not be exercised over public restau- rants regardless of source and volume of materials and regardless of whether the restaurant is part of a multistate chain. With regard to this new category, I would in general adhere to the 1950 plan as to the retail stores and public restaurants. WILLIAM T. WILSON AND MABEL J. WILSON, A PARTNERSHIP, D/B/A WILSON-OLDSMOBILE and LOCAL 985, INTERNATIONAL UNION, UNITED AUTOMOBILE, AIRCRAFT AND AGRICULTURAL IMPLEMENT W ORKERS OF AMERICA, UAW-CIO, PETITIONER. Case No. 7-RC-2145. October 26, 1954 Decision and Order Upon a petition duly filed under Section 9 (c) of the National Labor. Relations Act, a hearing was held before Emil C. Farkas, hearing officer. The hearing officer's rulings made at the hearing are free from prejudicial error and are hereby affirmed. Upon the entire record in this case, the Board finds : 1. The labor organization involved claims to represent certain em- ployees of the Employer. 2. No question affecting commerce exists concerning the representa- tion of employees of the Employer within the meaning of Section 9 (c) (1) and Section 2 (6) and (7) of the Act, for the following reasons: At the hearing the Employer 1 moved to dismiss the petition on the ground that its operations do not affect commerce within the meaning of the Act and on the further ground that in any event it would not effectuate the purposes of the Act for the Board to exercise its jurisdic- tion over this operation.2 The Petitioner ,ipposed the motion, and the hearing officer referred it to the Board for decision. The facts relative to the Employer's business are not in dispute. Wilson-Oldsmobile, a partnership, sells and services motor vehicles. Its sole place of business is located in Detroit, Michigan. In 1953, its purchases of new automobiles, parts, accessories, gas, etc., were valued in excess of $1,300,000, all of which were purchased and received di- i The Employer's name appears in the caption as amended at the hearing. 2 At the hearing the Employer further moved to dismiss the instant petition on the grounds (1) that the hearing was not an open hearing to which the public had free access, and (2) that the petition and notice of hearing improperly list the Employer' s name as Wilson-Oldsmobile, Inc., and that the Employer is not properly before the Board. We find it unnecessary to discuss these contentions because of our disposition of the question of jurisdiction. 110 NLRB No. 74.