9 The Duty to Bargain 9 The Duty to Bargain

Sections 8(a)(5); 8(b)(3); 8(d)

9.1 National Labor Relations Board v. Jones & Laughlin Steel Corp. 9.1 National Labor Relations Board v. Jones & Laughlin Steel Corp.

National Labor Relations Board V. Jones & Laughlin Steel Corp.

No. 419.

Argued Feb. 10, 11, 1937.

Decided April 12, 1937.

Mr. Chief Justice HUGHES delivered the opinion of the Court.

In a proceeding under the National Labor Relations Act of 19351 the National Labor Relations Board found that the respondent, Jones & Laughlin Steel Corporation, had violated the act by engaging in unfair labor practices affecting commerce. The proceeding was instituted by the Beaver Valley Lodge No. 200, affiliated with the Amalgamated Association of Iron, Steel and Tin Workers of America, a labor organization. The unfair labor practices charged were that the corporation was discriminating against members of the union with regard to hire and tenure of employment, and was coercing and intimidating its employees in order to interfere with their self-organization. The discriminatory and coercive action alleged was the discharge of certain employees.

The National Labor Relations Board, sustaining the charge, ordered the corporation to cease and desist from such discrimination and coercion, to offer reinstatement to ten of the employees named, to make good their losses in pay, and to post for thirty days notices that the corporation would not discharge or discriminate against members, or those desiring to become members, of the labor union. As the corporation failed to comply, the Board petitioned the Circuit Court of Appeals to enforce the order. The court denied the petition holding that the order lay beyond the range of federal power. 83 F.(2d) 998. We granted certiorari. 299 U.S. 534, 57 S.Ct. 119, 81 L.Ed. —-.

The scheme of the National Labor Relations Act—which is too long to be quoted in full—may be briefly stated. The first section (29 U.S.C.A. § 151) sets forth findings with respect to the injury to commerce resulting from the denial by employers of the right of employees to organize and from the refusal of employers to accept the procedure of col*23lective bargaining. There follows a declaration that it is the policy of the United States to eliminate these causes of obstruction to the free flow of commerce.2 The act*24 then defines the terms it uses, including the terms 'commerce' and 'affecting commerce.' Section 2 (29 U.S.C.A. § 152). It creates the National Labor Relations Board and prescribes its organization. Sections 3—6 (29 U.S.C.A. §§ 153—156). It sets forth the right of employees to self-organization and to bargain collectively through representatives of their own choosing. Section 7 (29 U.S.C.A. § 157). It defines 'unfair labor practices.' Section 8 (29 U.S.C.A. § 158). It lays down rules as to the representation of employees for the purpose of collective bargaining. Section 9 (29 U.S.C.A. § 159). The Board is empowered to prevent the described unfair labor practices affecting commerce and the act prescribes the procedure to that end. The Board is authorized to petition designated courts to secure the enforcement of its order. The findings of the Board as to the facts, if supported by evidence, are to be conclusive. If either party on application to the court shows that additional evidence is material and that there were reasonable grounds for the failure to adduce such evidence in the hearings before the Board, the court may order the additional evidence to be taken. Any person aggrieved by a final order of the Board may obtain a review in the designated courts with the same procedure as in the case of an application by the Board for the enforcement of its order. Section 10 (29 U.S.C.A. § 160). The Board has broad powers of investigation. Section 11 (29 U.S.C.A. § 161). Interference with members of the Board or its agents in the performance of their duties is punishable by fine and imprisonment. Section 12 (29 U.S.C.A. § 162). Nothing in the act is to be construed to interfere with the right to strike. Section 13 (29 U.S.C.A. § 163). There is a separability clause to the effect that, if any provision of the act or its application to any person or circumstances shall be held invalid, the remainder of the act or its application to other persons or circumstances shall not be affected. Section 15 (29 U.S.C.A. § 165). The particular provisions which are involved in the instant case will be considered more in detail in the course of the discussion.

The procedure in the instant case followed the statute. The labor union filed with the Board its verified charge.

*25The Board thereupon issued its complaint against the respondent, alleging that its action in discharging the employees in question constituted unfair labor practices affecting commerce within the meaning of section 8, subdivisions (1) and (3), and section 2, subdivisions (6) and (7), of the act. Respondent, appearing specially for the purpose of objecting to the jurisdiction of the Board, filed its answer. Respondent admitted the discharges, but alleged that they were made because of inefficiency or violation of rules or for other good reasons and were not ascribable to union membership or activities. As an affirmative defense respondent challenged the constitutional validity of the statute and its applicability in the instant case. Notice of hearing was given and respondent appeared by counsel. The Board first took up the issue of jurisdiction and evidence was presented by both the Board and the respondent. Respondent then moved to dismiss the complaint for lack of jurisdiction and, on denial of that motion, respondent in accordance with its special appearance withdrew from further participation in the hearing. The Board received evidence upon the merits and at its close made its findings and order.

Contesting the ruling of the Board, the respondent argues (1) that the act is in reality a regulation of labor relations and not of interstate commerce; (2) that the act can have no application to the respondent's relations with its production employees because they are not subject to regulation by the federal government; and (3) that the provisions of the act violate section 2 of article 3 and the Fifth and Seventh Amendments of the Constitution of the United States.

The facts as to the nature and scope of the business of the Jones & Laughlin Steel Corporation have been found by the Labor Board, and, so far as they are essential to the determination of this controversy, they are not in dispute. The Labor Board has found: The corporation is*26 organized under the laws of Pennsylvania and has its principal office at Pittsburgh. It is engaged in the business of manufacturing iron and steel in plants situated in Pittsburgh and nearby Aliquippa, Pa. It manufactures and distributes a widely diversified line of steel and pig iron, being the fourth largest producer of steel in the United States. With its subsidiaries nineteen in number—it is a completely integrated enterprise, owning and operating ore, coal and limestone properties, lake and river transportation facilities and terminal railroads located at its manufacturing plants. It owns or controls mines in Michigan and Minnesota. It operates four ore steamships on the Great Lakes, used in the transportation of ore to its factories. It owns coal mines in Pennsylvania. It operates towboats and steam barges used in carrying coal to its factories. It owns limestone properties in various places in Pennsylvania and West Virginia. It owns the Monongahela connecting railroad which connects the plants of the Pittsburgh works and forms an interconnection with the Pennsylvania, New York Central and Baltimore & Ohio Railroad systems. It owns the Aliquippa & Southern Railroad Company, which connects the Aliquippa works with the Pittsburgh & Lake Erie, part of the New York Central system. Much of its product is shipped to its warehouses in Chicago, Detroit, Cincinnati and Memphis,—to the last two places by means of its own barges and transportation equipment. In Long Island City, New York, and in New Orleans it operates structural steel fabricating shops in connection with the warehousing of semi-finished materials sent from its works. Through one of its wholly-owned subsidiaries it owns, leases, and operates stores, warehouses, and yards for the distribution of equipment and supplies for drilling and operating oil and gas wells and for pipe lines, refineries and pumping stations. It has sales offices in*27 twenty cities in the United States and a wholly-owned subsidiary which is devoted exclusively to distributing its product in Canada. Approximately 75 per cent. of its product is shipped out of Pennsylvania.

Summarizing these operations, the Labor Board concluded that the works in Pittsburgh and Aliquippa 'might be likened to the heart of a self-contained, highly integrated body. They draw in the raw materials from Michigan, Minnesota, West Virginia, Pennsylvania in part through arteries and by means controlled by the respondent; they transform the materials and then pump them out to all parts of the nation through the vast mechanism which the respondent has elaborated.'

To carry on the activities of the entire steel industry, 33,000 men mine ore, 44,000 men mine coal, 4,000 men quarry limestone, 16,000 men manufacture coke, 343,000 men manufacture steel, and 83,000 men transport its product. Respondent has about 10,000 employees in its Aliquippa plant, which is located in a community of about 30,000 persons.

Respondent points to evidence that the Aliquippa plant, in which the discharged, men were employed, contains complete facilities for the production of finished and semi-finished iron and steel products from raw materials; that its works consist primarily of a by-product coke plant for the production of coke; blast furnaces for the production of pig iron; open hearth furnaces and Bessemer converters for the production of steel; blooming mills for the reduction of steel ingots into smaller shapes; and a number of finishing mills such as structural mills, rod mills, wire mills, and the like. In addition, there are other buildings, structures and equipment, storage yards, docks and an intra-plant storage system. Respondent's operations at these works are carried on in two distinct stages, the first being the conversion of raw materials into pig*28 iron and the second being the manufacture of semi-finished and finished iron and steel products; and in both cases the operations result in substantially changing the character, utility and value of the materials wrought upon, which is apparent from the nature and extent of the processes to which they are subjected and which respondent fully describes. Respondent also directs attention to the fact that the iron ore which is procured from mines in Minnesota and Michigan and transported to respondent's plant is stored in stock piles for future use, the amount of ore in storage varying with the season but usually being enough to maintain operations from nine to ten months; that the coal which is procured from the mines of a subsidiary located in Pennsylvania and taken to the plant at Aliquippa is there, like ore, stored for future use, approximately two to three months' supply of coal being always on hand; and that the limestone which is obtained in Pennsylvania and West Virginia is also stored in amounts usually adequate to run the blast furnaces for a few weeks. Various details of operation, transportation, and distribution are also mentioned which for the present purpose it is not necessary to detail.

Practically all the factual evidence in the case, except that which dealt with the nature of respondent's business, concerned its relations with the employees in the Aliquippa plant whose discharge was the subject of the complaint. These employees were active leaders in the labor union. Several were officers and others were leaders of particular groups. Two of the employees were motor inspectors; one was a tractor driver; three were crane operators; one was a washer in the coke plant; and three were laborers. Three other employees were mentioned in the complaint but it was withdrawn as to one of them and no evidence was heard on the action taken with respect to the other two.

*29While respondent criticizes the evidence and the attitude of the Board, which is described as being hostile toward employers and particularly toward those who insisted upon their constitutional rights, respondent did not take advantage of its opportunity to present evidence to refute that which was offered to show discrimination and coercion. In this situation, the record presents no ground for setting aside the order of the Board so far as the facts pertaining to the circumstances and purpose of the discharge of the employees are concerned. Upon that point it is sufficient to say that the evidence supports the findings of the Board that respondent discharged these men 'because of their union activity and for the purpose of discouraging membership in the union.' We turn to the questions of law which respondent urges in contesting the validity and application of the act.

First. The Scope of the Act.—The act is challenged in its entirety as an attempt to regulate all industry, thus invading the reserved powers of the States over their local concerns. It is asserted that the references in the act to interstate and foreign commerce are colorable at best; that the act is not a true regulation of such commerce or of matters which directly affect it, but on the contrary has the fundamental object of placing under the compulsory supervision of the federal government all industrial labor relations within the nation. The argument seeks support in the broad words of the preamble (section 13) and in the sweep of the provisions of the act, and it is further insisted that its legislative history shows an essential universal purpose in the light of which its scope cannot be limited by either construction or by the application of the separability clause.

If this conception of terms, intent and consequent inseparability were sound, the act would necessarily fall*30 by reason of the limitation upon the federal power which inheres in the constitutional grant, as well as because of the explicit reservation of the Tenth Amendment. Schechter Corporation v. United States, 295 U.S. 495, 549, 550, 554, 55 S.Ct. 837, 851, 853, 79 L.Ed. 1570, 97 A.L.R. 947. The authority of the federal government may not be pushed to such an extreme as to destroy the distinction, which the commerce clause itself establishes, between commerce 'among the several States' and the internal concerns of a state. That distinction between what is national and what is local in the activities of commerce is vital to the maintenance of our federal system. Id.

But we are not at liberty to deny effect to specific provisions, which Congress has constitutional power to enact, by superimposing upon them inferences from general legislative declarations of an ambiguous character, even if found in the same statute. The cardinal principle of statutory construction is to save and not to destroy. We have repeatedly held that as between two possible interpretations of a statute, by one of which it would be unconstitutional and by the other valid, our plain duty is to adopt that which will save the act. Even to avoid a serious doubt the rule is the same. Federal Trade Commission v. American Tobacco Co., 264 U.S. 298, 307, 44 S.Ct. 336, 337, 68 L.Ed. 696, 32 A.L.R. 786; Panama R.R. Co. v. Johnson, 264 U.S. 375, 390, 44 S.Ct. 391, 395, 68 L.Ed. 748; Missouri Pacific R.R. Co., v. Boone, 270 U.S. 466, 472, 46 S.Ct. 341, 343, 70 L.Ed. 688; Blodgett v. Holden, 275 U.S. 142, 148, 276 U.S. 594, 48 S.Ct. 105, 107, 72 L.Ed. 206; Richmond Screw Anchor Co. v. United States, 275 U.S. 331, 346, 48 S.Ct. 194, 198, 72 L.Ed. 303.

We think it clear that the National Labor Relations Act may be construed so as to operate within the sphere of constitutional authority. The jurisdiction conferred upon the Board, and invoked in this instance, is found in section 10(a), 29 U.S.C.A. § 160(a), which provides:

'Sec. 10(a). The Board is empowered, as hereinafter provided, to prevent any person from engaging in any unfair labor practice (listed in section 8 (section 158)) affecting commerce.'*31 The critical words of this provision, prescribing the limits of the Board's authority in dealing with the labor practices, are 'affecting commerce.' The act specifically defines the 'commerce' to which it refers (section 2(6), 29 U.S.C.A. § 152(6):

'The term 'commerce' means trade, traffic, commerce, transportation, or communication among the several States, or between the District of Columbia or any Territory of the United States and any State or other Territory, or between any foreign country and any State, Territory, or the District of Columbia, or within the District of Columbia or any Territory, or between points in the same State but through any other State or any Territory or the District of Columbia or any foreign country.'

There can be no question that the commerce thus contemplated by the act (aside from that within a Territory or the District of Columbia) is interstate and foreign commerce in the constitutional sense. The act also defines the term 'affecting commerce' section 2(7), 29 U.S.C.A. § 152(7):

'The term 'affecting commerce' means in commerce, or burdening or obstructing commerce or the free flow of commerce, or having led or tending to lead to a labor dispute burdening or obstructing commerce or the free flow of commerce.'

This definition is one of exclusion as well as inclusion. The grant of authority to the Board does not purport to extend to the relationship between all industrial employees and employers. Its terms do not impose collective bargaining upon all industry regardless of effects upon interstate or foreign commerce. It purports to reach only what may be deemed to burden or obstruct that commerce and, thus qualified, it must be construed as contemplating the exercise of control within constitutional bounds. It is a familiar principle that acts which directly burden or obstruct interstate or foreign commerce, or its free flow, are within the reach of the congressional power. Acts having that effect are not*32 rendered immune because they grow out of labor disputes. See Texas & N.O.R. Co. v. Railway & S.S. Clerks, 281 U.S. 548, 570, 50 S.Ct. 427, 433, 434, 74 L.Ed. 1034; Schechter Corporation v. United States, supra, 295 U.S. 495, at pages 544, 545, 55 S.Ct. 837, 849, 79 L.Ed. 1570, 97 A.L.R. 947; Virginian Railway Co. v. System Federation No. 40, 300 U.S. 515, 57 S.Ct. 592, 81 L.Ed. 789, decided March 29, 1937. It is the effect upon commerce, not the source of the injury, which is the criterion. Second Employers' Liability Cases (Mondou v. New York, N.H. & H.R. Co.), 223 U.S. 1, 51, 32 S.Ct. 169, 56 L.Ed. 327, 38 L.R.A.(N.S.) 44. Whether or not particular action does affect commerce in such a close and intimate fashion as to be subject to federal control, and hence to lie within the authority conferred upon the Board, is left by the statute to be determined as individual cases arise. We are thus to inquire whether in the instant case the constitutional boundary has been passed.

Second. The Unfair Labor Practices in Question.—The unfair labor practices found by the Board are those defined in section 8, subdivisions (1) and (3). These provide:

'Sec. 8. It shall be an unfair labor practice for an employer

'(1) To interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in section 7 (section 157 of this title). * * *

'(3) By discrimination in regard to hire or tenure of employment or any term or condition of employment to encourage or discourage membership in any labor organization.'4*33 Section 8, subdivision (1), refers to section 7, which is as follows:

'Section 7. Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in concerted activities for the purpose of collective bargaining or other mutual aid or protection.'

Thus, in its present application, the statute goes no further than to safeguard the right of employees to self-organization and to select representatives of their own choosing for collective bargaining or other mutual protection without restraint or coercion by their employer.

That is a fundamental right. Employees have as clear a right to organize and select their representatives for lawful purposes as the respondent has to organize its business and select its own officers and agents. Discrimination and coercion to prevent the free exercise of the right of employees to self-organization and representation is a proper subject for condemnation by competent legislative authority. Long ago we stated the reason for labor organizations. We said that they were organized out of the necessities of the situation; that a single employee was helpless in dealing with an employer; that he was dependent ordinarily on his daily wage for the maintenance of himself and family; that, if the employer refused to pay him the wages that he thought fair, he was nevertheless unable to leave the employ and resist arbitrary and unfair treatment; that union was essential to give laborers opportunity to deal on an equality with their employer. American Steel Foundries v. Tri-City Central Trades Council, 257 U.S. 184, 209, 42 S.Ct. 72, 78, 66 L.Ed. 189, 27 A.L.R. 360. We reiterated these views when we had under consideration the Railway Labor Act of 1926, 44 Stat. 577. Fully recognizing the legality of collective action on the part of employees in*34 order to safeguard their proper interests, we said that Congress was not required to ignore this right but could safeguard it. Congress could seek to make appropriate collective action of employees an instrument of peace rather than of strife. We said that such collective action would be a mockery if representation were made futile by interference with freedom of choice. Hence the prohibition by Congress of interference with the selection of representatives for the purpose of negotiation and conference between employers and employees, 'instead of being an invasion of the constitutional right of either, was based on the recognition of the rights of both.' Texas & N.O.R. Co. v. Railway & S.S. Clerks, supra. We have reasserted the same principle in sustaining the application of the Railway Labor Act as amended in 1934 (45 U.S.C.A. § 151 et seq.). Virginian Railway Co. v. System Federation, No. 40, supra.

Third. The application of the Act to Employees Engaged in Production.—The Principle Involved.—Respondent says that, whatever may be said of employees engaged in interstate commerce, the industrial relations and activities in the manufacturing department of respondent's enterprise are not subject to federal regulation. The argument rests upon the proposition that manufacturing in itself is not commerce. Kidd v. Pearson, 128 U.S. 1, 20, 21, 9 S.Ct. 6, 32 L.Ed. 346; United Mine Workers v. Coronado Co., 259 U.S. 344, 407, 408, 42 S.Ct. 570, 581, 582, 66 L.Ed. 975, 27 A.L.R. 762; Oliver Iron Co. v. Lord, 262 U.S. 172, 178, 43 S.Ct. 526, 529, 67 L.Ed. 929; United Leather Workers' International Union v. Herkert & Meisel Trunk Co., 265 U.S. 457, 465, 44 S.Ct. 623, 625, 68 L.Ed. 1104, 33 A.L.R. 566; Industrial Association v. United States, 268 U.S. 64, 82, 45 S.Ct. 403, 407, 69 L.Ed. 849; Coronado Coal Co. v. United Mine Workers, 268 U.S. 295, 310, 45 S.Ct. 551, 556, 69 L.Ed. 963; Schechter Corporation v. United States, supra, 295 U.S. 495, at page 547, 55 S.Ct. 837, 850, 79 L.Ed. 1570, 97 A.L.R. 947; Carter v. Carter Coal Co., 298 U.S. 238, 304, 317, 327, 56 S.Ct. 855, 869, 875, 880, 80 L.Ed. 1160.

The government distinguishes these cases. The various parts of respondent's enterprise are described as interdependent and as thus involving 'a great movement of*35 iron ore, coal and limestone along well-defined paths to the steel mills, thence through them, and thence in the form of steel products into the consuming centers of the country—a definite and well-understood course of business.' It is urged that these activities constitute a 'stream' or 'flow' of commerce, of which the Aliquippa manufacturing plant is the focal point, and that industrial strife at that point would cripple the entire movement. Reference is made to our decision sustaining the Packers and Stockyards Act.5 Stafford v. Wallace, 258 U.S. 495, 42 S.Ct. 397, 66 L.Ed. 735, 23 A.L.R. 229. The Court found that the stockyards were but a 'throat' through which the current of commerce flowed and the transactions which there occurred could not be separated from that movement. Hence the sales at the stockyards were not regarded as merely local transactions, for, while they created 'a local change of title,' they did not 'stop the flow,' but merely changed the private interests in the subject of the current. Distinguishing the cases which upheld the power of the state to impose a nondiscriminatory tax upon property which the owner intended to transport to another state, but which was not in actual transit and was held within the state subject to the disposition of the owner, the Court remarked: 'The question, it should be observed, is not with respect to the extent of the power of Congress to regulate interstate commerce, but whether a particular exercise of state power in view of its nature and operation must be deemed to be in conflict with this paramount authority.' Id., 258 U.S. 495, at page 526, 42 S.Ct. 397, 405, 66 L.Ed. 735, 23 A.L.R. 229. See Minnesota v. Blasius, 290 U.S. 1, 8, 54 S.Ct. 34, 36, 78 L.Ed. 131. Applying the doctrine of Stafford v. Wallace, supra, the Court sustained the Grain Futures Act of 19226 with respect to transactions on the Chicago Board of Trade, although these transactions were 'not in and of themselves interstate commerce.' Congress had found*36 that they had become 'a constantly recurring burden and obstruction to that commerce.' Board of Trade of City of Chicago v. Olsen, 262 U.S. 1, 32, 43 S.Ct. 470, 476, 67 L.Ed. 839. Compare Hill v. Wallace, 259 U.S. 44, 69, 42 S.Ct. 453, 458, 66 L.Ed. 822. See, also, Tagg Bros. & Moorhead v. United States, 280 U.S. 420, 50 S.Ct. 220, 74 L.Ed. 524.

Respondent contends that the instant case presents material distinctions. Respondent says that the Aliquippa plant is extensive in size and represents a large investment in buildings, machinery and equipment. The raw materials which are brought to the plant are delayed for long periods and, after being subjected to manufacturing processes 'are changed substantially as to character, utility and value.' The finished products which emerge 'are to a large extent manufactured without reference to pre-existing orders and contracts and are entirely different from the raw materials which enter at the other end.' Hence respondent argues that, 'If importation and exportation in interstate commerce do not singly transfer purely local activities into the field of congressional regulation, it should follow that their combination would not alter the local situation.' Arkadelphia Milling Co. v. St. Louis, Southwestern R. Co., 249 U.S. 134, 151, 39 S.Ct. 237, 63 L.Ed. 517; Oliver Iron Co. v. Lord, supra.

We do not find it necessary to determine whether these features of defendant's business dispose of the asserted analogy to the 'stream of commerce' cases. The instances in which that metaphor has been used are but particular, and not exclusive, illustrations of the protective power which the government invokes in support of the present act. The congressional authority to protect interstate commerce from burdens and obstructions is not limited to transactions which can be deemed to be an essential part of a 'flow' of interstate or foreign commerce. Burdens and obstructions may be due to injurious action springing from other sources. The fundamental principle is that the power to regulate commerce is*37 the power to enact 'all appropriate legislation' for its 'protection or advancement' (The Daniel Ball, 10 Wall. 557, 564, 19 L.Ed. 999); to adopt measures 'to promote its growth and insure its safety' (County of Mobile v. Kimball, 102 U.S. 691, 696, 697, 26 L.Ed. 238); 'to foster, protect, control, and restrain.' (Second Employers' Liability Cases, supra, 223 U.S. 1, at page 47, 32 S.Ct. 169, 174, 56 L.Ed. 327, 38 L.R.A.(N.S.) 44). See Texas & N.O.R. Co. v. Railway & S.S. Clerks, supra. That power is plenary and may be exerted to protect interstate commerce 'no matter what the source of the dangers which threaten it.' Second Employers' Liability Cases, 223 U.S. 1, at page 51, 32 S.Ct. 169, 176, 56 L.Ed. 327, 38 L.R.A.(N.S.) 44; Schechter Corporation v. United States, supra. Although activities may be intrastate in character when separately considered, if they have such a close and substantial relation to interstate commerce that their control is essential or appropriate to protect that commerce from burdens and obstructions, Congress cannot be denied the power to exercise that control. Schechter Corporation v. United States, supra. Undoubtedly the scope of this power must be considered in the light of our dual system of government and may not be extended so as to embrace effects upon interstate commerce so indirect and remote that to embrace them, in view of our complex society, would effectually obliterate the distinction between what is national and what is local and create a completely centralized government. Id. The question is necessarily one of degree. As the Court said in Board of Trade of City of Chicago v. Olsen, supra, 262 U.S. 1, at page 37, 43 S.Ct. 470, 477, 67 L.Ed. 839, repeating what had been said in Stafford v. Wallace, supra: 'Whatever amounts to more or less constant practice, and threatens to obstruct or unduly to burden the freedom of interstate commerce is within the regulatory power of Congress under the commerce clause, and it is primarily for Congress to consider and decide the fact of the danger and to meet it.'

That intrastate activities, by reason of close and intimate relation to interstate commerce, may fall within federal control is demonstrated in the case of carriers who*38 are engaged in both interstate and intrastate transportation. There federal control has been found essential to secure the freedom of interstate traffic from interference or unjust discrimination and to promote the efficiency of the interstate service. The Shreveport Case (Houston, E. & W.T.R. Co. v. United States), 234 U.S. 342, 351. 352, 34 S.Ct. 833, 58 L.Ed. 1341; Railroad Commission of Wisconsin v. Chicago, B. & Q.R. Co., 257 U.S. 563, 588, 42 S.Ct. 232, 237, 66 L.Ed. 371, 22 A.L.R. 1086. It is manifest that intrastate rates deal primarily with a local activity. But in rate making they bear such a close relation to interstate rates that effective control of the one must embrace some control over the other. Id. Under the Transportation Act, 1920,7 Congress went so far as to authorize the Interstate Commerce Commission to establish a state-wide level of intrastate rates in order to prevent an unjust discrimination against interstate commerce. Railroad Commission of Wisconsin v. Chicago, B. & Q.R.R. Co., supra; Florida v. United States, 282 U.S. 194, 210, 211, 51 S.Ct. 119, 123, 75 L.Ed. 291. Other illustrations are found in the broad requirements of the Safety Appliance Act (45 U.S.C.A. §§ 1—10) and the Hours of Service Act (45 U.S.C.A. §§ 61 64). Southern Railway Co. v. United States, 222 U.S. 20, 32 S.Ct. 2, 56 L.Ed. 72; Baltimore & Ohio R.R. Co. v. Interstate Commerce Commission, 221 U.S. 612, 31 S.Ct. 621, 55 L.Ed. 878. It is said that this exercise of federal power has relation to the maintenance of adequate instrumentalities of interstate commerce. But the agency is not superior to the commerce which uses it. The protective power extends to the former because it exists as to the latter.

The close and intimate effect which brings the subject within the reach of federal power may be due to activities in relation to productive industry although the industry when separately viewed is local. This has been abundantly illustrated in the application of the Federal Anti-Trust Act (15 U.S.C.A. §§ 1—7, 15 note). In the Standard Oil and American Tobacco Cases (Standard Oil Co. v. United States), 221 U.S. 1, 31 S.Ct. 502, 55 L.Ed. 619, 34 L.R.A.(N.S.) 834, Ann.Cas.1912D, 734; (United States v. American Tobacco Co.) 221 U.S. 106, 31 S.Ct. 632, 55 L.Ed. 663), that statute was applied to combinations of employers engaged in productive industry.

*39Counsel for the offending corporations strongly urged that the Sherman Act had no application because the acts complained of were not acts of interstate or foreign commerce, nor direct and immediate in their effect on interstate or foreign commerce, but primarily affected manufacturing and not commerce. 221 U.S. 1, at page 5, 31 S.Ct. 502, 55 L.Ed. 619, 34 L.R.A.(N.S.) 834, Ann.Cas.1912D, 734; 221 U.S. 106, at page 125, 31 S.Ct. 632, 55 L.Ed. 663. Counsel relied upon the decision in United States v. E.C. Knight Co., 156 U.S. 1, 15 S.Ct. 249, 39 L.Ed. 325. The Court stated their contention as follows: 'That the act, even if the averments of the bill be true, cannot be constitutionally applied, because to do so would extend the power of Congress to subjects dehors the reach of its authority to regulate commerce, by enabling that body to deal with mere questions of production of commodities within the states.' And the Court summarily dismissed the contention in these words: 'But all the structure upon which this argument proceeds is based upon the decision in United States v. E.C. Knight Co., 156 U.S. 1, 15 S.Ct. 249, 39 L.Ed. 325. The view, however, which the argument takes of that case, and the arguments based upon that view have been so repeatedly pressed upon this court in connection with the interpretation and enforcement of the Anti-trust Act, and have been so necessarily and expressly decided to be unsound as to cause the contentions to be plainly foreclosed and to require no express notice' (citing cases). 221 U.S. 1, at pages 68, 69, 31 S.Ct. 502, 519, 55 L.Ed. 619, 34 L.R.A.(N.S.) 834, Ann.Cas.1912D, 734.

Upon the same principle, the Anti-Trust Act has been applied to the conduct of employees engaged in production. Loewe v. Lawlor, 208 U.S. 274, 28 S.Ct. 301, 52 L.Ed. 488, 13 Ann.Cas. 815; Coronado Coal Co. v. United Mine Workers, supra; Bedford Cut Stone Co. v. Stone Cutters' Association, 274 U.S. 37, 47 S.Ct. 522, 71 L.Ed. 916, 54 A.L.R. 791. See, also, Local 167, International Brotherhood of Teamsters v. United States, 291 U.S. 293, 297, 54 S.Ct. 396, 398, 78 L.Ed. 804; Schechter Corporation v. United States, supra. The decisions dealing with the question of that application illustrate both the principle and its limitation. Thus, in the first Coronado Case, the Court held that mining was not interstate commerce, that the power of Congress did not extend to its regulation as such,*40 and that it had not been shown that the activities there involved a local strike—brought them within the provisions of the Anti-Trust Act, notwithstanding the broad terms of that statute. A similar conclusion was reached in United Leather Workers' International Union v. Herkert & Meisel Trunk Co., supra, Industrial Association v. United States, supra, and Levering & Garrigues v. Morrin, 289 U.S. 103, 107, 53 S.Ct. 549, 550, 77 L.Ed. 1062. But in the first Coronado Case the Court also said that 'if Congress deems certain recurring practices though not really part of interstate commerce, likely to obstruct, restrain or burden it, it has the power to subject them to national supervision and restraint.' 259 U.S. 344, at page 408, 42 S.Ct. 570, 582, 66 L.Ed. 975, 27 A.L.R. 762. And in the second Coronado Case the Court ruled that, while the mere reduction in the supply of an article to be shipped in interstate commerce by the illegal or tortious prevention of its manufacture or production is ordinarily an indirect and remote obstruction to that commerce, nevertheless when the 'intent of those unlawfully preventing the manufacture or production is shown to be to restrain or control the supply entering and moving in interstate commerce, or the price of it in interstate markets, their action is a direct violation of the Anti-Trust Act.' 268 U.S. 295, at page 310, 45 S.Ct. 551, 556, 69 L.Ed. 963. And the existence of that intent may be a necessary inference from proof of the direct and substantial effect produced by the employees' conduct. Industrial Association v. United States, 268 U.S. 64, at page 81, 45 S.Ct. 403, 407, 69 L.Ed. 849. What was absent from the evidence in the first Coronado Case appeared in the second and the act was accordingly applied to the mining employees.

It is thus apparent that the fact that the employees here concerned were engaged in production is not determinative. The question remains as to the effect upon interstate commerce of the labor practice involved. In the Schechter Case, supra, we found that the effect there was so remote as to be beyond the federal power. To find 'immediacy or directness' there was to find it 'almost*41 everywhere,' a result inconsistent with the maintenance of our federal system. In the Carter Case, supra, the Court was of the opinion that the provisions of the statute relating to production were invalid upon several grounds,—that there was improper delegation of legislative power, and that the requirements not only went beyond any sustainable measure of protection of interstate commerce but were also inconsistent with due process. These cases are not controlling here.

Fourth. Effects of the Unfair Labor Practice in Respondent's Enterprise.—Giving full weight to respondent's contention with respect to a break in the complete continuity of the 'stream of commerce' by reason of respondent's manufacturing operations, the fact remains that the stoppage of those operations by industrial strife would have a most serious effect upon interstate commerce. In view of respondent's far-flung activities, it is idle to say that the effect would be indirect or remote. It is obvious that it would be immediate and might be catastrophic. We are asked to shut our eyes to the plainest facts of our national life and to deal with the question of direct and indirect effects in an intellectual vacuum. Because there may be but indirect and remote effects upon interstate commerce in connection with a host of local enterprises throughout the country, it does not follow that other industrial activities do not have such a close and intimate relation to interstate commerce as to make the presence of industrial strife a matter of the most urgent national concern. When industries organize themselves on a national scale, making their relation to interstate commerce the dominant factor in their activities, how can it be maintained that their industrial labor relations constitute a forbidden field into which Congress may not enter when it is necessary to protect interstate commerce from the paralyzing consequences of industrial war? We have often said that interstate commerce itself is a practical*42 conception. It is equally true that interferences with that commerce must be appraised by a judgment that does not ignore actual experience.

Experience has abundantly demonstrated that the recognition of the right of employees to self-organization and to have representatives of their own choosing for the purpose of collective bargaining is often an essential condition of industrial peace. Refusal to confer and negotiate has been one of the most prolific causes of strife. This is such an outstanding fact in the history of labor disturbances that it is a proper subject of judicial notice and requires no citation of instances. The opinion in the case of Virginia Railway Co. v. System Federation No. 40, supra, points out that, in the case of carriers, experience has shown that before the amendment, of 1934, of the Railway Labor Act, 'when there was no dispute as to the organizations authorized to represent the employees, and when there was willingness of the employer to meet such representative for a discussion of their grievances, amicable adjustment of differences had generally followed and strikes had been avoided.' That, on the other hand, 'a prolific source of dispute had been the maintenance by the railroads of company unions and the denial by railway management of the authority of representatives chosen by their employees.' The opinion in that case also points to the large measure of success of the labor policy embodied in the Railway Labor Act. But, with respect to the appropriateness of the recognition of self-organization and representation in the promotion of peace, the question is not essentially different in the case of employees in industries of such a character that interstate commerce is put in jeopardy from the case of employees of transportation companies. And of what avail is it to protect the facility of transportation, if interstate commerce is throttled with respect to the commodities to be transported!

*43These questions have frequently engaged the attention of Congress and have been the subject of many inquiries.8 The steel industry is one of the great basic industries of the United States, with ramifying activities affecting interstate commerce at every point. The Government aptly refers to the steel strike of 1919-1920 with its far-reaching consequences.9 The fact that there appears to have been no major disturbance in that industry in the more recent period did not dispose of the possibilities of future and like dangers to interstate commerce which Congress was entitled to foresee and to exercise its protective power to forestall. It is not necessary again to detail the facts as to respondent's enterprise. Instead of being beyond the pale, we think that it presents in a most striking way the close and intimate relation which a manufacturing industry may have to interstate commerce and we have no doubt that Congress had constitutional authority to safeguard the right of respondent's employees to self-organization and freedom in the choice of representatives for collective bargaining.

Fifth. The Means Which the Act Employs.—Questions under the Due Process Clause and Other Constitutional Restrictions. Respondent asserts its right to conduct its business in an orderly manner without being subjected to arbitrary restraints. What we have said points to the fallacy in the argument. Employees have their correlative*44 right to organize for the purpose of securing the redress of grievances and to promote agreements with employers relating to rates of pay and conditions of work. Texas & N.O.R. Co. v. Railway S.S. Clerks, supra; Virginian Railway Co. v. System Federation No. 40. Restraint for the purpose of preventing an unjust interference with that right cannot be considered arbitrary or capricious. The provision of section 9(a)10 that representatives, for the purpose of collective bargaining, of the majority of the employees in an appropriate unit shall be the exclusive representatives of all the employees in that unit, imposes upon the respondent only the duty of conferring and negotiating with the authorized representatives of its employees for the purpose of settling a labor dispute. This provision has its analogue in section 2, Ninth, of the Railway Labor Act, as amended (45 U.S.C.A. § 152, subd. 9), which was under consideration in Virginian Railway Co. v. System Federation No. 40, supra. The decree which we affirmed in that case required the railway company to treat with the representative chosen by the employees and also to refrain from entering into collective labor agreements with any one other than their true representative as ascertained in accordance with the provisions of the act. We said that the obligation to treat with the true representative was exclusive and hence imposed the negative duty to treat with no other. We also pointed out that, as conceded by the government,11 the injunc*45tion against the company's entering into any contract concerning rules, rates of pay and working conditions except with a chosen representative was 'designed only to prevent collective bargaining with any one purporting to represent employees' other than the representative they had selected. It was taken 'to prohibit the negotiation of labor contracts, generally applicable to employees' in the described unit with any other representative than the one so chosen, 'but not as precluding such individual contracts' as the company might 'elect to make directly with individual employees.' We think this construction also applies to section 9(a) of the National Labor Relations Act (29 U.S.C.A. § 159(a).

The act does not compel agreements between employers and employees. It does not compel any agreement whatever. It does not prevent the employer 'from refusing to make a collective contract and hiring individuals on whatever terms' the employer 'may by unilateral action determine.'12 The act expressly provides in section 9(a) that any individual employee or a group of employees shall have the right at any time to present grievances to their employer. The theory of the act is that free opportunity for negotiation with accredited representatives of employees is likely to promote industrial peace and may bring about the adjustments and agreements which the act in itself does not attempt to compel. As we said in Texas & N.O.R. Co. v. Railway & S.S. Clerks, supra, and repeated in Virginian Railway Co. v. System Federation No. 40, the cases of Adair v. United States, 208 U.S. 161, 28 S.Ct. 277, 52 L.Ed. 436, 13 Ann.Cas. 764, and Coppage v. Kansas, 236 U.S. 1, 35 S.Ct. 240, 59 L.Ed. 441, L.R.A.1915C, 960, are inapplicable to legislation of this character. The act does not interfere with the normal exercise of the right of the employer to select its employees or to discharge them. The employer may not, under cover of that right, intimidate or coerce its employees with respect to their*46 self-organization and representation, and, on the other hand, the Board is not entitled to make its authority a pretext for interference with the right of discharge when that right is exercised for other reasons than such intimidation and coercion. The true purpose is the subject of investigation with full opportunity to show the facts. It would seem that when employers freely recognize the right of their employees to their own organizations and their unrestricted right of representation there will be much less occasion for controversy in respect to the free and appropriate exercise of the right of selection and discharge.

The act has been criticized as one-sided in its application; that it subjects the employer to supervision and restraint and leaves untouched the abuses for which employees may be responsible; that it fails to provide a more comprehensive plan, with better assurances of fairness to both sides and with increased chances of success in bringing about, if not compelling, equitable solutions of industrial disputes affecting interstate commerce. But we are dealing with the power of Congress, not with a particular policy or with the extent to which policy should go. We have frequently said that the legislative authority, exerted within its proper field, need not embrace all the evils within its reach. The Constitution does not forbid 'cautious advance, step by step,' in dealing with the evils which are exhibited in activities within the range of legislative power. Carroll v. Greenwich Insurance Co., 199 U.S. 401, 411, 26 S.Ct. 66, 50 L.Ed. 246; Keokee Coke Co. v. Taylor, 234 U.S. 224, 227, 34 S.Ct. 856, 58 L.Ed. 1288; Miller v. Wilson, 236 U.S. 373, 384, 35 S.Ct. 342, 59 L.Ed. 628, L.R.A.1915F, 829; Sproles v. Binford, 286 U.S. 374, 396, 52 S.Ct. 581, 588, 76 L.Ed. 1167. The question in such cases is whether the Legislature, in what it does prescribe, has gone beyond constitutional limits.

The procedural provisions of the act are assailed. But these provisions, as we construe them, do not offend against the constitutional requirements governing the*47 creation and action of administrative bodies. See Interstate Commerce Commission v. Louisville & Nashville R. Co., 227 U.S. 88, 91, 33 S.Ct. 185, 57 L.Ed. 431. The act establishes standards to which the Board must conform. There must be complaint, notice and hearing. The Board must receive evidence and make findings. The findings as to the facts are to be conclusive, but only if supported by evidence. The order of the Board is subject to review by the designated court, and only when sustained by the court may the order be enforced. Upon that review all questions of the jurisdiction of the Board and the regularity of its proceedings, all questions of constitutional right or statutory authority are open to examination by the court. We construe the procedural provisions as affording adequate opportunity to secure judicial protection against arbitrary action in accordance with the well-settled rules applicable to administrative agencies set up by Congress to aid in the enforcement of valid legislation. It is not necessary to repeat these rules which have frequently been declared. None of them appears to have been transgressed in the instant case. Respondent was notified and heard. It had opportunity to meet the charge of unfair labor practices upon the merits, and by withdrawing from the hearing it declined to avail itself of that opportunity. The facts found by the Board support its order and the evidence supports the findings. Respondent has no just ground for complaint on this score.

The order of the Board required the reinstatement of the employees who were found to have been discharged because of their 'union activity' and for the purpose of 'discouraging membership in the union.' That requirement was authorized by the act. Section 10(c), 29 U.S.C.A. § 160(c). In Texas & N.O.R. Co. v. Railway & S.S. Clerks, supra, a similar order for restoration to service was made by the court in contempt proceedings for the violation of an injunction issued by the court to restrain an interference with*48 the right of employees as guaranteed by the Railway Labor Act of 1926. The requirement of restoration to service of employees discharged in violation of the provisions of that act was thus a sanction imposed in the enforcement of a judicial decree. We do not doubt that Congress could impose a like sanction for the enforcement of its valid regulation. The fact that in the one case it was a judicial sanction, and in the other a legislative one, is not an essential difference in determining its propriety.

Respondent complaints that the Board not only ordered reinstatement but directed the payment of wages for the time lost by the discharge, less amounts earned by the employee during that period. This part of the order was also authorized by the act. Section 10(c). It is argued that the requirement is equivalent to a money judgment and hence contravenes the Seventh Amendment with respect to trial by jury. The Seventh Amendment provides that 'In suits at common law, where the value in controversy shall exceed twenty dollars; the right of trial by jury shall be preserved.' The amendment thus preserves the right which existed under the common law when the amendment was adopted. Shields v. Thomas, 18 How. 253, 262, 15 L.Ed. 368; In re Wood, 210 U.S. 246, 258, 28 S.Ct. 621, 52 L.Ed. 1046; Dimick v. Schiedt, 293 U.S. 474, 476, 55 S.Ct. 296, 79 L.Ed. 603, 95 A.L.R. 1150; Baltimore & Carolina Line v. Redman, 295 U.S. 654, 657, 55 S.Ct. 890, 891, 79 L.Ed. 1636. Thus it has no application to cases where recovery of money damages is an incident to equitable relief even though damages might have been recovered in an action at law. Clark v. Wooster, 119 U.S. 322, 325, 7 S.Ct. 217, 30 L.Ed. 392; Pease v. Rathbun-Jones Engineering Co., 243 U.S. 273, 279, 37 S.Ct. 283, 61 L.Ed. 715, Ann.Cas.1918C, 1147. It does not apply where the proceeding is not in the nature of a suit at common law. Guthrie National Bank v. Guthrie, 173 U.S. 528, 537, 19 S.Ct. 513, 43 L.Ed. 796.

The instant case is not a suit at common law or in the nature of such a suit. The proceeding is one unknown to the common law. It is a statutory proceeding. Reinstatement of the employee and payment for time lost are requirements imposed for violation of the statute and are remedies appropriate to its enforcement. The contention under the Seventh Amendment is without merit.

Our conclusion is that the order of the Board was within its competency and that the act is valid as here applied. The judgment of the Circuit Court of Appeals is reversed and the cause is remanded for further proceedings in conformity with this opinion. It is so ordered.

Reversed and remanded.

1

Act of July 5, 1935, 49 Stat. 449, 29 U.S.C. § 151 et seq. (29 U.S.C.A. § 151 et seq.).

2

This section is as follows:

'Section 1. The denial by employers of the right of employees to organize and the refusal by employers to accept the procedure of collective bargaining lead to strikes and other forms of industrial strife or unrest, which have the intent or the necessary effect of burdening or obstructing commerce by (a) impairing the efficiency, safety, or operation of the instrumentalities of commerce; (b) occurring in the current of commerce; (c) materially affecting, restraining, or controlling the flow of raw materials or manufactured or processed goods from or into the channels of commerce, or the prices of such materials or goods in commerce; or (d) causing diminution of employment and wages in such volume as substantially to impair or disrupt the market for goods flowing from or into the channels of commerce.

'The inequality of bargaining power between employees who do not possess full freedom of association or actual liberty of contract, and employers who are organized in the corporate or other forms of ownership association substantially burdens and affects the flow of commerce, and tends to aggravate recurrent business depressions, by depressing wage rates and the purchasing power of wage earners in industry and by preventing the stabilization of competitive wage rates and working conditions within and between industries.

'Experience has proved that protection by law of the right of employees to organize and bargain collectively safeguards commerce from injury, impairment, or interruption, and promotes the flow of commerce by removing certain recognized sources of industrial strife and unrest, by encouraging practices fundamental to the friendly adjustment of industrial disputes arising out of differences as to wages, hours, or other working conditions, and by restoring equality of bargaining power between employers and employees.

'It is hereby declared to be the policy of the United States to eliminate the causes of certain substantial obstructions to the free flow of commerce and to mitigate and eliminate these obstructions when they have occurred by encouraging the practice and procedure of collective bargaining and by protecting the exercise by workers of full freedom of association, self-organization, and designation of representatives of their own choosing, for the purpose of negotiating the terms and conditions of their employment or other mutual aid or protection.' 29 U.S.C.A. § 151.

3

See note 2.

4

What is quoted above is followed by this proviso—not here involved—' Provided, That nothing in this Act (chapter), or in the National Industrial Recovery Act (U.S.C., Supp. VII, title 15, Secs. 701—712), as amended from time to time (sections 701 to 712 of Title 15), or in any code or agreement approved or prescribed thereunder, or in any other statute of the United States, shall preclude an employer from making an agreement with a labor organization (not established, maintained, or assisted by any action defined in this Act (chapter) as an unfair labor practice) to require as a condition of employment membership therein, if such labor organization is the representative of the employees as provided in section 9(a) (section 159(a) of this title), in the appropriate collective bargaining unit covered by such agreement when made.'

5

42 Stat. 159 (7 U.S.C.A. § 181 et seq.).

6

42 Stat. 998 (7 U.S.C.A. §§ 1—17).

7

Sections 416, 422, 41 Stat. 484, 488 (49 U.S.C.A. §§ 13, 15a); Interstate Commerce Act, § 13(4), 49 U.S.C.A. § 13(4).

8

See, for example, Final Report of the Industrial Commission (1902), vol. 19, p. 844; Report of the Anthracite Coal Strike Commission (1902), Sen.Doc. No. 6, 58th Cong., Spec.Sess.; Final Report of Commission on Industrial Relations (1916), Sen.Doc. No. 415, 64th Cong., 1st Sess., vol. 1; National War Labor Board, Principles and Rules of Procedure (1919), p. 4; Bureau of Labor Statistics, Bulletin No. 287 (1921), pp. 52—64; History of the Shipbuilding Labor Adjustment Board, U.S. Bureau of Labor Statistics, Bulletin No. 283.

9

See Investigating Strike in Steel Industries, Sen.Rep. No. 289, 66th Cong., 1st Sess.

10

The provision is as follows: 'Sec. 9(a). Representatives designated or selected for the purposes of collective bargaining by the majority of the employees in a unit appropriate for such purposes, shall be the exclusive representatives of all the employees in such unit for the purposes of collective bargaining in respect to rates of pay, wages, hours of employment, or other conditions of employment: Provided, That any individual employee or a group of employees shall have the right at any time to present grievances to their employer.' 29 U.S.C.A. § 159(a).

11

See Virginian Railway Co. v. System Federation No. 40, 300 U.S. 515, 57 S.Ct. 592, 600, 81 L.Ed. 789, note 6, decided March 29, 1937.

12

See note 11.

*76Mr. Justice McREYNOLDS delivered the following dissenting opinion.

Mr. Justice VAN DEVANTER, Mr. Justice SUTHERLAND, Mr. Justice BUTLER and I are unable to agree with the decisions just announced.

We conclude that these causes were rightly decided by the three Circuit Courts of Appeals and that their judgments should be affirmed. The opinions there given without dissent are terse, well-considered and sound. They disclose the meaning ascribed by experienced judges to what this Court has often declared and are set out below in full.

Considering the far-reaching import of these decisions, the departure from what we understand has been consistently ruled here, and the extraordinary power confirmed to a Board of three,1 the obligation to present our views becomes plain.

The Court as we think departs from well-established principles followed in Schechter Poultry Corporation v. United States, 295 U.S. 495, 55 S.Ct. 837, 79 L.Ed. 1570, 97 A.L.R. 947 (May, 1935), and Carter v. Carter Coal Co., 298 U.S. 238, 56 S.Ct. 855, 80 L.Ed. 1160 (May, 1936). Upon the authority of those decisions, the Circuit Courts of Appeals of the Fifth, Sixth and Second Circuits in the causes now before us have held the power of Congress under the commerce clause does not extend to relations between employers and their employees engaged in manufacture, and therefore the act conferred upon the National Labor Relations Board no authority in respect of matters covered by the questioned orders. In Foster Bros. Mfg. Co. v. National Labor Relations Board, 85 F.(2d) 984, the Circuit Court of Appeals, Fourth Circuit, held the act inapplicable to manufacture and expressed the view that if so extended it*77 would be invalid. Six District Courts, on the authority of Schechter's and Carter's Cases, have held that the Board has no authority to regulate relations between employers and employees engaged in local production.a No decision or judicial opinion to the contrary has been cited, and we find none. Every consideration brought forward to uphold the act before us was applicable to support the acts held unconstitutional in causes decided within two years. And the lower courts rightly deemed them controlling.

By its terms the Labor Act extends to employers--large and small--unless excluded by definition,2 and declares that, if one of these interferes with, restrains, or coerces any employee regarding his labor affiliations, etc., this shall be regarded as unfair labor practice. And a 'labor organization' means any organization of any kind or any agency or employee representation committee or plan which exists for the purpose in whole or in part of dealing with employers concerning grievances, labor disputes,*78 wages, rates of pay, hours of employment or conditions of work.b

The three respondents happen to be manufacturing concerns--one large, two relatively small. The act is now applied to each upon grounds common to all. Obviously what is determined as to these concerns may gravely affect a multitude of employers who engage in a great variety of private enterprises-- mercantile, manufacturing, publishing, stock-raising, mining, etc. It puts into the hands of a Board power of control over purely local industry beyond anything heretofore deemed permissible.

*79II.

(No. 419) Circuit Court of Appeals (Fifth Circuit)

(National Labor Relations Board v. Jones & Laughlin Steel Corporation)

Opinion June 15, 1936, 83 F.(2d) 998

Before Foster, Sibley, and Hutcheson, Circuit Judges.

By the Court: ‘The National Labor Relations Board has petitioned us to enforce an order made by it, which requires Jones & Laughlin Steel Corporation, organized under the laws of Pennsylvania, to reinstate certain discharged employees in its steel plant in Aliquippa, Pa., and to do other things in that connection.

‘The petition must be denied, because, under the facts found by the Board and shown by the evidence, the Board has no jurisdiction over a labor dispute between employer and employees touching the discharge of laborers in a steel plant, who were engaged only in manufacture. The Constitution does not vest in the Federal Government the power to regulate the relation as such of employer and employee in production or manufacture.

“One who produces or manufactures a commodity, subsequently sold and shipped by him in interstate commerce, whether such sale and shipment were originally intended or not, has engaged in two distinct and separate activities. So far as he produces or manufactures a commodity, his business is purely local. So far as he sells and ships, or contracts to sell and ship, the commodity to customers in another state, he engages in interstate commerce. In respect of the former, he is subject only to regulation by the state; in respect of the latter, to regulation only by the federal government. Utah Power & L. Co. v. Pfost, 286 U.S. 165, 182, 52 S.Ct. 548, 76 L.Ed. 1038. Production is not commerce; but a step in preparation for commerce. Chassaniol v. Greenwood, 291 U.S. 584—587, 54 S.Ct. 541, 78 L.Ed. 1004.

“We have seen that the word ‘commerce’ is the equivalent of the phrase ‘intercourse for the purposes of trade.’*80 Plainly, the incidents leading up to and culminating in the mining of coal do not constitute such intercourse. The employment of men, the fixing of their wages, hours of labor, and working conditions, the bargaining in respect of these things—whether carried on separately or collectively—each and all constitute intercourse for the purposes of production, not of trade. The latter is a thing apart from the relation of employer and employee, which in all producing occupations is purely local in character. Extraction of coal from the mine is the aim and the completed result of local activities. Commerce in the coal mined is not brought into being by force of these activities, but by negotiations, agreements, and circumstances entirely apart from production. Mining brings the subject matter of commerce into existence. Commerce disposes of it.’ Carter v. Carter Coal Company (298 U.S. 238) 56 S.Ct. 855, 80 L.Ed. 1160, decided May 18, 1936.

‘That the employer has a very large business, the interruption of which by a strike of employees which might happen, and that in consequence of such strike production might be stopped and interstate commerce in the products affected, does not make the regulation of the relation justified under the commerce power of Congress, because the possible effect on interstate commerce is too remote to warrant Federal invasion of the state’s right to regulate the employer-employee relation. Nor is it important that the employer imports part of his raw materials in interstate commerce and sells and exports a large part of his product in interstate commerce, which imports and exports would possibly be stopped by a possible strike. The employers’ entire business thus connected together does not, as respects federal power, make a case different from that in which importation of materials, manufacture of them, and sale and export of the product are conducted by three persons. The employer here by doing*81 all three things does not alter the respective constitutional spheres of the federal and state governments. The making and fabrication of steel by Jones & Laughlin Steel Corporation is production regulable by the state of Pennsylvania, notwithstanding the corporation also engages in interstate commerce regulable by Congress in bringing in its raw materials and again in selling and delivering its products. No specific present intent appears to impede or destroy interstate commerce by means of a strike in a manufacturing plant, or other like direct obstruction to or burden on interstate commerce. The order we are asked to enforce is not shown to be one authorized to be made under the authority of Congress. Carter v. Carter Coal Co., supra.

‘The petition is denied.’

III.

(Nos. 420—421) Circuit Court of Appeals (Sixth Circuit)

(Fruehauf Trailer Co. v. National Labor Relations Board)

Opinion June 30, 1936, 85 F.(2d) 391

Before Moorman, Hicks, and Simons, Circuit Judges.

‘Per Curiam. The National Labor Relations Board has filed a petition in this court to enforce an order issued by it in proceedings which it instituted against the Fruehauf Trailer Company. The order directs the Trailer Company to cease and desist from discharging or threatening to discharge any of its employees because of their activities in connection with the United Automobile Workers Federal Labor Union No. 19,375, to cease discouraging its employees from becoming members of that union, to offer to certain of its former employees immediate and full reinstatement in their former positions without prejudice to their seniority rights, to make such employees whole for any losses of pay that they have suffered by reason of their discharge by paying*82 them what they would have earned as wages from the dates of their discharges, and to post notices throughout its Detroit plant, in conspicuous places, stating that it has ceased and desisted from discharging or threatening to discharge its employees for joining the United Automobile Workers Federal Labor Union No. 19,375. The Fruehauf Trailer Company has filed its petition seeking a review of the order and praying that the court set it aside. The record of the proceeding before the Labor Board has been filed and the two petitions have been heard together in this court.

‘The Fruehauf Trailer Company is a corporation organized and existing under the laws of the state of Michigan and is engaged in the manufacture, assembly, and sale of automobile trailers at its plant in Detroit, Mich. The material and parts used in the manufacture and production of the trailers are shipped to the plant. After the trailers are manufactured, many of them are shipped to other states for sale and use. The order in question undertakes to regulate and control the Trailer Company’s relations and dealings with its employees engaged in the production and manufacture of trailers at the company’s plant in Detroit and does not directly affect any of the activities of the Trailer Company in the purchasing and transporting to its plant of materials and parts for the manufacture and production of trailers or in the shipping or selling of such trailers after they are manufactured. It was issued under the authority of the Act of Congress of July 5, 1935, known as the National Labor Relations Act (29 U.S.C.A. s 151 et seq.). The authority for the act is claimed under the commerce clause of the Constitution. Since the order is directed to the control and regulation of the relations between the Trailer Company and its employees in respect to their activities in the manufacture and production of*83 trailers and does not directly affect any phase of any interstate commerce in which the Trailer Company may be engaged, and since, under the ruling of Carter v. Carter Coal Company (298 U.S. 238) 56 S.Ct. 855, 80 L.Ed. 1160 (decided May 18, 1936), the Congress has no authority or power to regulate or control such relations between the Trailer Company and its employees, the National Labor Relations Board was without authority to issue the order. See National Labor Relations Board v. Jones & Laughlin Steel Corporation (C.C.A.5) 83 F.(2d) 998, decided June 15, 1936.

‘The petition of the Board is accordingly dismissed and the order is set aside.’

IV.

(Nos. 422—423) Circuit Court of Appeals (Second Circuit)

(National Labor Relations Board v. Friedman-Harry Marks Clothing Co.)

Opinion July 13, 1936, 85 F.(2d) 1

Before Manton, Swan, and A.N. Hand, Circuit Judges.

‘Per Curiam. The respondent, a Virginia corporation, is a manufacturer of men’s clothing with its principal office and its factory in Richmond, Va. Practically all the raw materials used are brought from other states into Virginia, where respondent manufactures them into men’s clothing. About 83 per cent. of the manufactured products are sold f.o.b. Richmond, to customers located in states other than Virginia.

‘Two sets of charges were filed with petitioner’s local regional director by the Amalgamated Clothing Workers of America, a labor union of workers in the men’s clothing industry, in which it was alleged that the respondent violated the National Labor Relations Act (29 U.S.C.A. s 151 et seq.) by discharging from its employ, and discriminating against 29 out of 800 of its employees, because they had engaged in union activities. The Board filed complaints under section 10(b) of the act (*84 29 U.S.C.A. s 160(b), and after a hearing respondent was found to have violated the act and was ordered to cease and desist from the unfair labor practices.

‘Petitioner’s theory is that the respondent is engaged in interstate commerce because of the shipment of raw materials to it from other states and the shipment of its finished products to other states, and, in addition, that the flow of commerce doctrine, as exemplified in Swift & Co. v. United States, 196 U.S. 375, 25 S.Ct. 276, 49 L.Ed. 518, brings this manufacturer within the federal power to regulate commerce. Respondent contends that the National Labor Relations Act, as applied to it, is unconstitutional and therefore invalid, and that the attempt to enforce its provisions against it is illegal.

‘It is shown that the alleged unfair labor practices complained of occurred in the manufacture of clothing in Richmond, Va. None of the workers involved had to do with the transportation of the clothing after its manufacture. They were engaged in various operations in the Richmond factory.

‘The relations between the employer and its employees in this manufacturing industry were merely incidents of production. In its manufacturing, respondent was in no way engaged in interstate commerce, nor did its labor practices so directly affect interstate commerce as to come within the federal commerce power. Carter v. Carter Coal Co. (298 U.S. 238), 56 S.Ct. 855, 80 L.Ed. 1160, May 18, 1936; Schechter Poultry Corporation v. United States, 295 U.S. 495, 55 S.Ct. 837, 79 L.Ed. 1570, 97 A.L.R. 947. No authority warrants the conclusion that the powers of the Federal Government permit the regulation of the dealings between employers or employees when engaged in the purely local business of manufacture.

‘Therefore the orders to cease and desist may not be enforced.

‘Petitions denied.’*85 V.

In each cause the Labor Board formulated and then sustained a charge of unfair labor practices towards persons employed only in production. It ordered restoration of discharged employees to former positions with payment for losses sustained. These orders were declared invalid below upon the ground that respondents while carrying on production operations were not thereby engaging in interstate commerce; that labor practices in the course of such operations did not directly affect interstate commerce; consequently respondents’ actions did not come within congressional power.

Respondent in No. 419 is a large, integrated manufacturer of iron and steel products—the fourth largest in the United States. It has two production plants in Pennsylvania where raw materials brought from points outside the state are converted into finished products, which are thereafter distributed in interstate commerce throughout many states. The Corporation has assets amounting to $180,000,000, gross income $47,000,000, and employs 22,000 people—10,000 in the Aliquippa plant where the complaining employees worked. So far as they relate to essential principles presently important, the activities of this Corporation, while large, do not differ materially from those of the other respondents and very many small producers and distributors. It has attained great size; occupies an important place in business; owns and operates mines of ore, coal, and limestone outside Pennsylvania, the output of which, with other raw material, moves to the production plants. At the plants this movement ends. Having come to rest, this material remains in warehouses, storage yards, etc., often for months, until the process of manufacture begins. After this has been completed, the finished products go into interstate commerce. The discharged employees labored only in the manufacturing*86 department. They took no part in the transportation to or away from the plant; nor did they participate in any activity which preceded or followed manufacture.

Our concern is with those activities which are common to the three enterprises. Such circumstances as are merely fortuitous—size, character of products, etc.—may be put on one side. The wide sweep of the statute will more readily appear if consideration be given to the Board’s proceedings against the smallest and relatively least important—the Clothing Company. If the act applies to the relations of that Company to employees in production, of course it applies to the larger respondents with like business elements although the affairs of the latter may present other characteristics. Though differing in some respects, all respondents procure raw materials outside the state where they manufacture, fabricate within and then ship beyond the state.

In Nos. 420, 421, the respondent, Michigan corporation, manufactures commercial trailers for automobiles from raw materials brought from outside that state, and thereafter sells these in many states. It has a single manufacturing plant at Detroit and annual receipts around $3,000,000; 900 people are employed.

In Nos. 422, 423, the respondent is a Virginia corporation engaged in manufacturing and distributing men’s clothing. It has a single plant and chief office at Richmond, annual business amounting perhaps to $2,000,000, employs 800, brings in almost all raw material from other states and ships the output in interstate commerce. There are some 3,300 similar plants for manufacturing clothing in the United States, which together employ 150,000 persons and annually put out products worth $800,000,000.

*87VI.

The Clothing Company is a typical small manufacturing concern which produces less than one-half of one per cent. of the men’s clothing produced in the United States and employs 800 of the 150,000 workmen engaged therein. If closed today, the ultimate effect on commerce in clothing obviously would be negligible. It stands alone, is not seeking to acquire a monopoly or to restrain trade. There is no evidence of a strike by its employees at any time or that one is now threatened, and nothing to indicate the probable result if one should occur.

Some account of the Labor Board’s proceedings against this Company will indicate the ambit of the act as presently construed.

September 28, 1935, the Amalgamated Clothing Workers of America, purporting to act under section 10(b) of the National Labor Relations Act,3 filed with the Board a*88 ‘Charge,’ stating that the Clothing Company had engaged in unfair labor practices within the meaning of the act—section 8(1)(3), 29 U.S.C.A. s 158 (1, 3)—in that it had, on stated days in August and September, 1935, unjustifiably discharged, demoted or discriminated against some 20 named members of that union and, in other ways, had restrained, interfered with and coerced employees in the exercise of their right of free choice of representatives for collective bargaining. And further ‘that said labor practices are unfair labor practices affecting commerce within the meaning of said Act.’

This ‘Charge’ contained no description of the Company’s business, no word concerning any strike against it past, present or threatened. The number of persons employed or how many of these had joined the union is not disclosed.

Thereupon the Board issued a ‘Complaint’ which recited the particulars of the ‘Charge,’ alleged incorporation of the Company in Virginia, and ownership of a plant at Richmond where it is continuously engaged in the ‘production, sale and distribution of men’s clothing’; that material is brought from other states and manufactured into clothing, which is sold and shipped to many states, etc.—‘ all of aforesaid constituting a continuous flow of commerce among the several states.’ Also that while operating the Richmond plant the Clothing Company discharged, demoted, laid off or discriminated against some 20 persons ‘employed in production at the said plant * * * for the reason that all of the said employees, and each of them, joined and assisted a labor organization known as the Amalgamated Clothing Workers of America, and engaged in concerted activities with other employees for the purpose of collective bargaining and other mutual aid and protection,’ etc. Further, that the Company circulated among its employees and under*89 took to coerce them to sign a writing expressing satisfaction with conditions; induced some members of the union to withdraw; did other similar things, etc.—all of which amounted to unfair labor practices affecting commerce within the meaning of section 8(1)(3)(4)4 and section 2(6)(7)5 of the Labor Act. ‘The aforesaid unfair labor practices occur in commerce among the several states, and on the basis of experience in the aforesaid plant and others in the same and other industries, burden and obstruct such commerce and the free flow thereof and have led and tend to lead to labor disputes burdening and obstructing such commerce and the free flow thereof.’

The complaint says nothing concerning any strike against the Clothing Company past, present or threatened; there is no allegation concerning the number of persons employed, how many joined the union, or the value of the output.

*90The respondent filed a special appearance objecting to the Board’s jurisdiction, which was overruled; also an answer admitting the discharge of certain employees, but otherwise it generally denied the allegations of the ‘Complaint.’

Thereupon the Board demanded access to the Company’s private records of accounts, disclosure of the amount of capital invested by its private owners, the names of all of its employees, its pay rolls, the amounts and character of all purchases and from whom made, the amounts of sales and to whom made, including the number and kind of units, the number of employees in the plant*91 during eight years, the names and addresses of the directors and officers of the Company, the names and addresses of its salesmen, the stock ownership of the Company, the affiliation, if any, with other companies, and the former occupations and businesses of its stockholders.

During hearings held at Richmond and Washington, unfettered by rules of evidence, it received a mass of testimony—largely irrelevant. Much related to the character of respondent’s business, general methods used in the men’s clothing industry, the numbers employed and the general effect of strikes therein. The circumstances attending the discharge or demotion of the specified employees were brought out.

Following this the Board found—

The men’s clothing industry of the United States ranks sixteenth in the number of wage earners employed, with more than 3,000 firms and 150,000 workers engaged. The steps in the typical process of manufacture are described. Raw material is brought in from many states, and after fabrication the garments are sold and delivered through canvassers and retailers. ‘The men’s clothing industry is thus an industry which is nearly entirely dependent in its operations upon purchases and sales in interstate commerce and upon interstate transportation.’

The Amalgamated Clothing Workers of America is a labor organization composed of over 125,000 men and women employed in making clothing. Members are organized in local unions. Before recognition of this union by employers long and bitter strikes occurred, some of which are described. The union has striven consistently to improve the general economic and social conditions of members. Benefits that flow from recognizing and co-operating with it are realized by manufacturers.

Description is given of the Clothing Company’s operations, the sources of its raw material (nearly all outside*92 Virginia), and the method used to dispose of its output. Eighty-two per cent. is sold to customers beyond Virginia. It is among the fifty largest firms in the industry, and among the ten of that group paying the lowest average wage.

In the summer of 1935 the employees at the Richmond plant formed a local of the Amalgamated Clothing Workers and solicited memberships. The management at once indicated opposition and declared it would not permit employees to join. Hostile acts and the circumstances of the discharge or demotion of complaining employees are described. It is said all were discharged or demoted because of union membership. And further that ‘Interference by employers in the men’s clothing industry with the activities of employees in joining and assisting labor organizations and their refusal to accept the procedure of collective bargaining has led and tends to lead to strikes and other labor disputes that burden and obstruct commerce and the free flow thereof. In those cases where the employees have been permitted to organize freely and the employers have been willing to bargain collectively, strikes and industrial unrest have gradually disappeared, as shown in Finding 19. But where the employer has taken the contrary position, strikes have ensued that have resulted in substantial or total cessation of production in the factories involved and obstruction to and burden upon the flow of raw materials and finished garments in interstate commerce.’

The number of employees who joined the union does not appear; the general attitude of employees towards the union or the Company is not disclosed; the terms of employment are not stated—whether at will, by the day or by the month. What the local chapter was especially seeking at the time we do not know.

It does not appear that, either prior or subsequent to the ‘Complaint,’ there has been any strike, disorder or*93 industrial strife at respondent’s factory, or any interference with or stoppage of production or shipment of its merchandise. Nor that alleged unfair labor practices at its plant had materially affected manufacture, sale or distribution; or materially affected, burdened or obstructed the flow of products; or affected, burdened or obstructed the flow of interstate commerce, or tended to do so.

The Board concluded that the Clothing Company had discriminated in respect to tenure and employment and thereby had discouraged membership in the union; that it had interfered with, restrained and coerced its employees in violation of rights guaranteed by section 7 of the National Labor Relations Act; that these acts occurred in the course and conduct of commerce among the states, immediately affect employees engaged in the course and conduct of interstate commerce, and tend to lead to labor disputes burdening and obstructing such commerce and the free flow thereof.

An order followed, March 28, 1936, which commanded immediate reinstatement of eight discharged employees and payment of their losses; also that the Company should cease and desist from discharging or discriminating against employees because of connections with the union, should post notices, etc. On the same day the Board filed a petition asking enforcement of the order in the United States Circuit Court of Appeals (Second Circuit) at New York, which was denied July 13, 1936. National Labor Relations Board v. Friedman-Harry Marks Clothing Co., 85 F.(2d) 1.

VII.

The precise question for us to determine is whether in the circumstances disclosed Congress has power to authorize what the Labor Board commanded the respondent to do. Stated otherwise, in the circumstances here existing could Congress by statute direct what the Board has ordered? General disquisitions concerning the enactment*94 are of minor, if any, importance. Circumstances not treated as essential to the exercise of power by the Board may, of course, be disregarded. The record in Nos. 422, 423—a typical case—plainly presents these essentials and we may properly base further discussion upon the circumstances there disclosed.

A relatively small concern caused raw material to be shipped to its plant at Richmond, Va., converted this into clothing, and thereafter shipped the product to points outside the State. A labor union sought members among the employees at the plant and obtained some. The Company’s management opposed this effort, and in order to discourage it discharged eight who had become members. The business of the Company is so small that to close its factory would have no direct or material effect upon the volume of interstate commerce in clothing. The number of operatives who joined the union is not disclosed; the wishes of other employees is not shown; probability of a strike is not found.

The argument in support of the Board affirms: ‘Thus the validity of any specific application of the preventive measures of this Act depends upon whether industrial strife resulting from the practices in the particular enterprise under consideration would be of the character which Federal power could control if it occurred. If strife in that enterprise could be controlled, certainly it could be prevented.’

Manifestly that view of congressional power would extend it into almost every field of human industry. With striking lucidity, fifty years ago, Kidd v. Pearson, 128 U.S. 1, 21, 9 S.Ct. 6, 10, 32 L.Ed. 346, declared: ‘If it be held that the term (commerce with foreign nations and among the several states) includes the regulation of all such manufactures as are intended to be the subject of commercial transactions in*95 the future, it is impossible to deny that it would also include all productive industries that contemplate the same thing. The result would be that congress would be invested, to the exclusion of the states, with the power to regulate, not only manufacture, but also agriculture, horticulture, stock-raising, domestic fisheries, mining,—in short, every branch of human industry.’ This doctrine found full approval in United States v. E. C. Knight Co., 156 U.S. 1, 12, 13, 15 S.Ct. 249, 253, 39 L.Ed. 325; Schechter Poultry Corporation et al. v. United States, supra, and Carter v. Carter Coal Co. et al., supra, where the authorities are collected and principles applicable here are discussed.

In Knight’s Case, Chief Justice Fuller, speaking for the Court, said: ‘Doubtless the power to control the manufacture of a given thing involves, in a certain sense, the control of its disposition, but this is a secondary, and not the primary, sense; and, although the exercise of that power may result in bringing the operation of commerce into play, it does not control it, and affects it only incidentally and indirectly. Commerce succeeds to manufacture, and is not a part of it. * * * It is vital that the independence of the commercial power and of the police power, and the delimitation between them, however sometimes perplexing, should always be recognized and observed, for, while the one furnishes the strongest bond of union, the other is essential to the preservation of the autonomy of the states as required by our dual form of government; and acknowledged evils, however grave and urgent they may appear to be, had better be borne, than the risk be run, in the effort to suppress them, of more serious consequences by resort to expedients of even doubtful constitutionality.’

In Schechter’s Case we said: ‘In determining how far the federal government may go in controlling intrastate transactions upon the ground that they ‘affect’ interstate*96 commerce, there is a necessary and well-established distinction between direct and indirect effects. The precise line can be drawn only as individual cases arise, but the distinction is clear in principle. * * * But where the effect of intrastate transactions upon interstate commerce is merely indirect, such transactions remain within the domain of state power. If the commerce clause were construed to reach all enterprises and transactions which could be said to have an indirect effect upon interstate commerce, the federal authority would embrace practically all the activities of the people, and the authority of the state over its domestic concerns would exist only by sufferance of the federal government. Indeed, on such a theory, even the development of the state’s commercial facilities would be subject to federal control.’

Carter’s Case declared—‘Whether the effect of a given activity or condition is direct or indirect is not always easy to determine. The word ‘direct’ implies that the activity or condition invoked or blamed shall operate proximately—not mediately, remotely, or collaterally—to produce the effect. It connotes the absence of an efficient intervening agency or condition. And the extent of the effect bears no logical relation to its character. The distinction between a direct and an indirect effect turns, not upon the magnitude of either the cause or the effect, but entirely upon the manner in which the effect has been brought about. If the production by one man of a single ton of coal intended for interstate sale and shipment, and actually so sold and shipped, affects interstate commerce indirectly, the effect does not become direct by multiplying the tonnage, or increasing the number of men employed, or adding to the expense or complexities of the business, or by all combined.’

Any effect on interstate commerce by the discharge of employees shown here would be indirect and remote in*97 the highest degree, as consideration of the facts will show. In No. 419 ten men out of ten thousand were discharged; in the other cases only a few. The immediate effect in the factor may be to create discontent among all those employed and a strike may follow, which, in turn, may result in reducing production, which ultimately may reduce the volume of goods moving in interstate commerce. By this chain of indirect and progressively remote events we finally reach the evil with which it is said the legislation under consideration undertakes to deal. A more remote and indirect interference with interstate commerce or a more definite invasion of the powers reserved to the states is difficult, if not impossible, to imagine.

The Constitution still recognizes the existence of states with indestructible powers; the Tenth Amendment was supposed to put them beyond controversy.

We are told that Congress may protect the ‘stream of commerce’ and that one who buys raw material without the state, manufactures it therein, and ships the output to another state is in that stream. Therefore it is said he may be prevented from doing anything which may interfere with its flow.

This, too, goes beyond the constitutional limitations heretofore enforced. If a man raises cattle and regularly delivers them to a carrier for interstate shipment, may Congress prescribe the conditions under which he may employ or discharge helpers on the ranch? The products of a mine pass daily into interstate commerce; many things are brought to it from other states. Are the owners and the miners within the power of Congress in respect of the latter’s tenure and discharge? May a mill owner be prohibited from closing his factory or discontinuing his business because so to do would stop the flow of products to and from his plant in interstate commerce?

*98May employees in a factory be restrained from quitting work in a body because this will close the factory and thereby stop the flow of commerce? May arson of a factory be made a federal offense whenever this would interfere with such flow? If the business cannot continue with the existing wage scale, may Congress command a reduction? If the ruling of the Court just announced is adhered to, these questions suggest some of the problems certain to arise.

And if this theory of a continuous ‘stream of commerce’ as now defined is correct, will it become the duty of the federal government hereafter to suppress every strike which by possibility it may cause a blockade in that stream? In re Debs, 158 U.S. 564, 15 S.Ct. 900, 39 L.Ed. 1092, Moreover, since Congress has intervened, are labor relations between most manufacturers and their employees removed from all control by the state? Oregon-Washington R. Co. v. Washington (1926) 270 U.S. 87, 46 S.Ct. 279, 70 L.Ed. 482.

To this argument Arkadelphia Milling Co. v. St. Louis Southwestern Railway Co., et al., 249 U.S. 134, 150, 39 S.Ct. 237, 63 L.Ed. 517, affords an adequate reply. No such continuous stream is shown by these records as that which counsel assume.

There is no ground on which reasonably to hold that refusal by a manufacturer, whose raw materials come from states other than that of his factory and whose products are regularly carried to other states, to bargain collectively with employees in his manufacturing plant, directly affects interstate commerce. In such business, there is not one but who distinct movements or streams in interstate transportation. The first brings in raw material and there ends. Then follows manufacture, a separate and local activity. Upon completion of this and not before, the second distinct movement or stream in interstate commerce begins and the products go to other states. Such is the common course for small as well as*99 large industries. It is unreasonable and unprecedented to say the commerce clause confers upon Congress power to govern relations between employers and employees in these local activities. Stout v. Pratt (D.C.) 12 F.Supp. 864. In Schechter’s Case we condemned as unauthorized by the commerce clause assertion of federal power in respect of commodities which had come to rest after interstate transportation. And, in Carter’s Case, we held Congress lacked power to regulate labor relations in respect of commodities before interstate commerce has begun.

It is gravely stated that experience teaches that if an employer discourages membership in ‘any organization of any kind’ ‘in which employees participate, and which exists for the purpose in whole or in part of dealing with employers concerning grievances, labor disputes, wages, rates of pay, hours of employment or conditions of work,’ discontent may follow and this in turn may lead to a strike, and as the outcome of the strike there may be a block in the stream of interstate commerce. Therefore Congress may inhibit the discharge! Whatever effect any cause of discontent may ultimately have upon commerce is far too indirect to justify congressional regulation. Almost anything—marriage, birth, death—may in some fashion affect commerce.

VIII.

That Congress has power by appropriate means, not prohibited by the Constitution, to prevent direct and material interference with the conduct of interstate commerce is settled doctrine. But the interference struck at must be direct and material, not some mere possibility contingent on wholly uncertain events; and there must be no impairment of rights guaranteed. A state by taxation on property may indirectly but seriously affect the cost of transportation; it may not lay a direct tax upon*100 the receipts from interstate transportation. The first is an indirect effect, the other direct.

This power to protect interstate commerce was invoked in Standard Oil Co. v. United States, 221 U.S. 1, 31 S.Ct. 502, 55 L.Ed. 619, 34 L.R.A.(N.S.) 834, Ann.Cas.1912D, 734, and United States v. American Tobacco Co., 221 U.S. 106, 31 S.Ct. 632, 55 L.Ed. 663. In each of those cases a combination sought to monopolize and restrain interstate commerce through purchase and consequent control of many large competing concerns engaged both in manufacture and interstate commerce. The combination was sufficiently powerful and action by it so persistent that success became a dangerous probability. Here there is no such situation, and the cases are inapplicable in the circumstances. There is no conspiracy to interfere with commerce unless it can be said to exist among the employees who became members of the union. There is a single plant operated by its own management whose only offense, as alleged, was the discharge of a few employees in the production department because they belonged to a union, coming within the broad definition of ‘labor organization’ prescribed by section 2(5) of the act. That definition includes any organization in which employees participate and which exists for the purpose in whole or in part of dealing with employers concerning grievances, wages, &c.

Section 13 of the Labor Act (29 U.S.C.A. s 163) provides—‘Nothing in this Act (chapter) shall be construed so as to interfere with or impede or diminish in any way the right to strike.’ And yet it is ruled that to discharge an employee in a factory because he is a member of a labor organization (any kind) may create discontent which may lead to a strike and this may cause a block in the ‘stream of commerce’; consequently the discharge may be inhibited. Thus the act exempts from its ambit the every evil which counsel insist may result from discontent caused by a discharge of an association member, but permits coercion of a nonmember to join one.

*101The things inhibited by the Labor Act relate to the management of a manufacturing plant—something distinct from commerce and subject to the authority of the state. And this may not be abridged because of some vague possibility of distant interference with commerce.

IX.

Texas & New Orleans Railroad Co. et al., v. Brotherhood of Railway & Steamship Clerks et al., 281 U.S. 548, 50 S.Ct. 427, 434, 74 L.Ed. 1034, is not controlling. There the Court, while considering an act definitely limited to common carriers engaged in interstate transportation over whose affairs Congress admittedly has wide power, declared: ‘The petitioners invoke the principle declared in Adair v. United States, 208 U.S. 161, 28 S.Ct. 277, 52 L.Ed. 436, 13 Ann.Cas. 764, and Coppage v. Kansas, 236 U.S. 1, 35 S.Ct. 240, 59 L.Ed. 441, L.R.A.1915C, 960, but these decisions are inapplicable. The Railway Labor Act of 1926 does not interfere with the normal exercise of the right of the carrier to select its employees or to discharge them. The statute is not aimed at this right of the employers but at the interference with the right of employees to have representatives of their own choosing. As the carriers subject to the act have no constitutional right to interfere with the freedom of the employees in making their selections, they cannot complain of the statute on constitutional grounds.’

Adair’s Case, supra, presented the question—‘May Congress make it a criminal offense against the United States—as, by the 10th section of the act of 1898 (30 Stat. 428), it does—for an agent or officer of an interstate carrier, having full authority in the premises from the carrier, to discharge an employee from service simply because of his membership in a labor organization?’ The answer was no. ‘While, as already suggested, the right of liberty and property guaranteed by the Constitution against deprivation without due process of law is subject to such reasonable restraints as the common good or the general welfare may*102 require, it is not within the functions of government—at least, in the absence of contract between the parties—to compel any person, in the course of his business and against his will, to accept or retain the personal services of another, or to compel any person, against his will, to perform personal services for another. The right of a person to sell his labor upon such terms as he deems proper is, in its essence, the same as the right of the purchaser of labor or prescribe the conditions upon which he will accept such labor from the person offering to sell it. So the right of the employee to quit the service of the employer, for whatever reason, is the same as the right of the employer, for whatever reason, to dispense with the services of such employee. It was the legal right of the defendant, Adair,—however unwise such a course might have been,—to discharge Coppage because of his being a member of a labor organization, as it was the legal right of Coppage, if he saw fit to do so, however unwise such course on his part might have been—to quit the service in which he was engaged, because the defendant employed some persons who were not members of a labor organization. In all such particulars the employer and the employee have equality of right, and any legislation that disturbs that equality is an arbitrary interference with the liberty of contract which no government can legally justify in a free land.’ ‘The provision of the statute under which the defendant was convicted must be held to be repugnant to the 5th Amendment, and as not embraced by nor within the power of Congress to regulate interstate commerce, but, under the guise of regulating interstate commerce, and as applied to this case, it arbitrarily sanctions an illegal invasion of the personal liberty as well as the right of property of the defendant, Adair.’

Coppage v. Kansas, following the Adair Case held that a state statute, declaring it a misdemeanor to require an*103 employee to agree not to become a member of a labor organization during the time of his employment, was repugnant to the due process clause of the Fourteenth Amendment.

The right to contract is fundamental and includes the privilege of selecting those with whom one is willing to assume contractual relations. This right is unduly abridged by the act now upheld. A private owner is deprived of power to manage his own property by freely selecting those to whom his manufacturing operations are to be entrusted. We think this cannot lawfully be done in circumstances like those here disclosed.

It seems clear to us that Congress has Transcended the powers granted.

1

National Labor Relations Act (Act of July 5, 1935, c. 372, 49 Stat. 449, U.S.C.Supp. I, tit. 29, s 151 et seq. (29 U.S.C.A. s 151 et seq.)).

a

Stout v. Pratt, 12 F.Supp. 864; Bendix Products Corporation v. Beman, 14 F.Supp. 58; Eagle-Picher Lead Co. v. Madden, 15 F.Supp. 407; Bethlehem Shipbuilding Corporation v. Meyers, 15 F.Supp. 915; El Paso Electric Co. v. Elliott, 15 F.Supp. 81; Oberman & Co. v. Pratt, 16 F.Supp. 887.

2

Sec. 2. (2) The term ‘employer’ includes any person acting in the interest of an employer, directly or indirectly, but shall not include the United States, or any State or political subdivision thereof, or any person subject to the Railway Labor Act, amended from time to time (sections 151 to 163 of Title 45), or any labor organization (other than when acting as an employer), or anyone acting in the capacity of officer or agent of such labor organization.

Sec. 2. (3) The term ‘employee’ shall include any employee, and shall not be limited to the employees of a particular employer, unless the Act (chapter) explicitly states otherwise, and shall include any individual whose work has ceased as a consequence of, or in connection with, any current labor dispute or because of any unfair labor practice, and who has not obtained any other regular and substantially equivalent employment, but shall not include any individual employed as an agricultural laborer, or in the domestic service of any family or person at his home, or any individual employed by his parent or spouse.

Sec. 7. Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in concerted activities, for the purpose of collective bargaining or other mutual aid or protection.

b

Sec. 2. (5) The term ‘labor organization’ means any organization of any kind, or any agency or employee representation committee or plan, in which employees participate and which exists for the purpose, in whole or in part, of dealing with employers concerning grievances, labor disputes, wages, rates of pay, hours of employment, or conditions of work.

Sec. 3. (a) There is created a board, to be known as the ‘National Labor Relations Board’ (hereinafter referred to as the ‘Board’), which shall be composed of three members, who shall be appointed by the President, by and with the advice and consent of the Senate. One of the original members shall be appointed for a term of one year, one for a term of three years, and one for a term of five years, but their successors shall be appointed for terms of five years each, except that any individual chosen to fill a vacancy shall be appointed only for the unexpired term of the member whom he shall succeed. The President shall designate one member to serve as chairman of the Board. Any member of the Board may be removed by the President, upon notice and hearing, for neglect of duty or malfeasance in office, but for no other cause.

3

Sec. 10. (b). Whenever it is charged that any person has engaged in or in engaging in any such unfair labor practice, the Board, or any agent or agency designated by the Board for such purposes, shall have power to issue and cause to be served upon such person a complaint stating the charges in that respect, and containing a notice of hearing before the Board or a member thereof, or before a designated agent or agency, at a place therein fixed, not less than five days after the serving of said complaint. Any such complaint may be amended by the member, agent, or agency conducting the hearing or the Board in its discretion at any time prior to the issuance of an order based thereon. The person so complained of shall have the right to file an answer title 15, secs. 701-712), as amended from and to appear in person or otherwise and give testimony at the place and time fixed in the complaint. In the discretion of the member, agent or agency conducting the hearing or the Board, any other person may be allowed to intervene in the said proceeding and to present testimony. In any such proceeding the rules of evidence prevailing in courts of law or equity shall not be controlling. 29 U.S.C.A. s 160(b).

4

Sec. 8. It shall be an unfair labor practice for an employer—

‘(1) To interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in section 7 (section 157 of this title).

(2) To dominate or interfere with the formation or administration of any labor organization or contribute financial or other support to it: Provided, That subject to rules and regulations made and published by the Board pursuant to section 6(a) (section 156 of this title), an employer shall not be prohibited from permitting employees to confer with him during working hours without loss of time or pay.

(3) By discrimination in regard to hire or tenure of employment or any term or condition of employment to encourage or discourage membership in any labor organization: Provided, That nothing in this Act (chapter), or in the National Industrial Recovery Act (U.S.C., Supp. VII, title 158 secs. 701-712), as amended from time to time (sections 701 to 712 of Title 15), or in any code or agreement approved or prescribed thereunder, or in any other statute of the United States, shall preclude an employer from making an agreement with a labor organization (not established, maintained, or assisted by any action defined in this Act (chapter) as an unfair labor practice) to require as a condition of employment membership therein, if such labor organization is the representative of the employees as provided in section 9(a) (section 159(a) of this title), in the appropriate collective bargaining unit covered by such agreement when made.

(4) To discharge or otherwise discriminate against an employee because he has filed charges or given testimony under this Act (chapter).

(5) To refuse to bargain collectively with the representatives of his employees, subject to the provisions of Section 9(a) (section 159(a) of this title). 29 U.S.C.A. s 158.

Sec. 9. (a) Representatives designated or selected for the purposes of collective bargaining by the majority of the employees in a unit appropriate for such purposes, shall be the exclusive representatives of all the employees in such unit for the purposes of collective bargaining in respect to rates of pay, wages, hours of employment, or other conditions of employment: Provided, That any individual employee or a group of employees shall have the right at any time to present grievances to their employer. 29 U.S.C.A. s 159(a).

5

Sec. 2(6) The term ‘commerce’ means trade, traffic, commerce, transportation, or communication among the several States, or between the District of Columbia or any Territory of the United States and any State or other Territory, or between any foreign country and any State, Territory, or the District of Columbia, or within the District of Columbia or any Territory, or between points in the same State but through any other State or any Territory or the District of Columbia or any foreign country.

(7) The term ‘affecting commerce’ means in commerce, or burdening or obstructing commerce or the free flow of commerce, or having led or tending to lead to a labor dispute burdening or obstructing commerce or the free flow of commerce. 29 U.S.C.A. s 152(6, 7).

9.2 National Labor Relations Board v. Katz 9.2 National Labor Relations Board v. Katz

NATIONAL LABOR RELATIONS BOARD v. KATZ et al.

No. 222.

Argued March 22, 1962.

Decided May 21, 1962.

*737 Solicitor General Cox argued the cause for petitioner. With him on the briefs were Stuart Rothman, Dominick L. Manoli, Norton J. Come, Frederick U. Reel and Stephen J. Poliak.

Sidney O. Raphael argued the cause for respondents. With him on the briefs was Leo M. Drachsler.

Mb. Justice Brennan

delivered the opinion of the Court.

Is it a violation of the duty “to bargain collectively” imposed by § 8 (a) (5) of the National Labor Relations Act1 for an employer, without first consulting a union with which it is carrying on bona fide contract negotiations, to institute changes regarding matters which are subjects of mandatory bargaining under § 8 (d) and which are in fact under discussion? 2 The National Labor Relations Board answered the question affirmatively in this case, in a decision which expressly disclaimed any finding that the totality of the respondents’ conduct manifested bad faith in the pending negotiations.3 126 N. L. R. B. *738288. A divided panel of the Court of Appeals for the Second Circuit denied enforcement of the Board's cease- and-desist order, finding in our decision in Labor Board v. Insurance Agents’ Union, 361 U. S. 477, a broad rule that the statutory duty to bargain cannot be held to be violated, when bargaining is in fact being carried on, without a finding of the respondent’s subjective bad faith in negotiating. 289 F. 2d 700.4 The Court of Appeals said:

“We are of the opinion that the unilateral acts here complained of, occurring as they did during the negotiating of a collective bargaining agreement, do not per se constitute a refusal to bargain collectively and per se are not violative of § 8 (a) (5). While the subject is not generally free from doubt, it is our conclusion that in the posture of this case a necessary requisite of a Section 8 (a)(5) violation is a finding that the employer failed to bargain in good faith.” 289 F. 2d, at 702-703.

We granted certiorari, 368 U. S. 811, in order to consider whether the Board’s decision and order were contrary to Insurance Agents. We find nothing in the Board’s decision inconsistent with Insurance Agents and hold that *739the Court of Appeals erred in refusing to enforce the Board’s order.

The respondents are partners engaged in steel fabricating under the firm name of Williamsburg Steel Products Company. Following a consent election in a unit consisting of all technical employees at the company’s plant, the Board, on July 5, 1956, certified as their collective bargaining representative Local 66 of the Architectural and Engineering Guild, American Federation of Technical Engineers, AFL-CIO. The Board simultaneously certified the union as representative of similar units at five other companies which, with the respondent company, were members of the Hollow Metal Door' & Buck Association. The certifications related to separate units at the several plants and did not purport to establish a multi-employer bargaining unit.'

On July 11,1956, the union sent identical letters to each of the six companies, requesting collective bargaining. Negotiations were invited on either an individual or “association wide” 5 basis, with the reservation that wage rates and increases would have to be discussed with each employer separately. A follow-up letter of July 19, 1956, repeated the request for contract negotiations and enumerated proposed subjects for discussion. Included were merit increases, general wage levels and increases, and a sick-leave proposal.

The first meeting between the company and the union took place on August 30, 1956. On this occasion, as at the ten other conferences held between October 2, 1956, and May 13, 1957, all six companies were in attendance *740and represented by the same counsel.6 It is undisputed that the subject of merit increases was raised at the August 30, 1956, meeting although there is an unresolved conflict as to whether an agreement was reached on joint participation by the company and the union in merit reviews, or whether the subject was simply mentioned and put off for discussion at a later date. It is also clear that proposals concerning sick leave were made. Several meetings were held during October and one in November, at which merit raises and sick leave were each discussed on at least two occasions. It appears, however, that little progress was made.

On December 5, a meeting was held at the New York State Mediation Board attended by a mediator of that agency, who was at that time mediating a contract negotiation between the union and Aetna Steel Products Corporation, a member of the Association bargaining separately from the others; and a decision was reached to recess the negotiations involved here pending the results of the Aetna negotiation. When the mediator called the next meeting on March 29, 1957, the completed Aetna contract was introduced . into the discussion. At a resumption of bargaining on April 4, the company, along with the other employers, offered a three-year agreement with certain initial and prospective automatic wage increases. The offer was rejected. Further meetings with the mediator on April 11, May 1, and May 13, 1957, produced no agreement, and no further meetings were held.

Meanwhile, on April 16, 1957, the union had filed the charge upon which the General Counsel’s complaint later issued. As amended and amplified, at the hearing and construed by the Board, the complaint’s charge of unfair *741labor practices particularly referred to three acts by the company: unilaterally granting numerous merit increasés in October 1956 and January 1957; unilaterally announcing a change in sick-leave policy in March 1957; and unilaterally instituting a new system of automatic wage increases during April 1957. As the ensuing litigation has developed, the company has defended against the charges along two fronts: First, it asserts that the unilateral changes occurred after a bargaining impasse had developed through the union’s fault in adopting obstructive tactics.7 According to the Board,, however, “the evidence is clear that the Respondent undertook its unilat*742eral actions before negotiations were discontinued in May-1957, or before, as we find on the record, the existence of any possible impasse.” 126 N. L. R. B., at 289-290. There is ample support in the record considered as a whole for this finding of fact, which is consistent with the Examiner’s Intermediate Report, 126 N. L. R. B., at 295-296, and which the Court of Appeals did not question.8

The second line of defense was that the Board could not hinge a conclusion that §8 (a)(5) had been violated on unilateral actions alone, without making a finding of the employer’s subjective bad faith at the bargaining table; and that the unilateral actions were merely evidence relevant to the issue of subjective good faith. This argument prevailed in the Court of Appeals which remanded the cases to the Board saying:

“Although we might ... be justified in denying enforcement without remand, . . . since the Board’s finding of an unfair labor practice impliedly proceeds from an erroneous view that specific unilateral acts, regardless of bad faith, may constitute violations of § 8 (a) (5), the case should be remanded to the Board in order that it may have an opportunity to take additional evidence, and make such findings as may be warranted by the record.” 289 F. 2d, at 709.9

The duty “to bargain collectively” enjoined by § 8 (a) (5) is defined by § 8 (d) as the duty to “meet . . . and confer in good faith with respect to wages, hours, and other terms *743and conditions of employment.” Clearly, the duty thus defined may be violated without a general failure of subjective good faith; for there is no occasion to consider the issue of good faith if a party has refused even to negotiate in fact — “to meet . . . and confer” — about any of the mandatory subjects.10 A refusal to negotiate in fact as to any subject which is within § 8 (d), and about which the union seeks to negotiate, violates § 8 (a) (5) though the employer has every desire to reach agreement with the union upon an over-all collective agreement and earnestly and in all good faith bargains to that end. We hold that an employer’s unilateral change in conditions of employment under negotiation is similarly a violation of §8 (a)(5), for it is a circumvention of the duty to negotiate which frustrates the objectives of § 8 (a) (5) much as does a flat refusal.11

*744The unilateral actions of the respondent illustrate the policy and practical considerations which support our conclusion.

We consider first the matter of sick leave. A sick-leave plan had been in effect since May 1956, under which employees were allowed ten paid sick-leave days annually and could accumulate half the unused days, or up to five days each year. Changes in the plan were sought and proposals and counterproposals had come up at three bargaining conferences. In March 1957, the company, without first notifying or consulting the union, announced changes in the plan, which reduced from ten to five the number of paid sick-leave days per year, but allowed accumulation of twice the unused days, thus increasing to ten the number of days which might be carried over. This action plainly frustrated the statutory objective of establishing working conditions through bargaining. Some employees might view the change to be a diminution' of benefits. Others, more interested in accumulating sick-leave days, might regard the change as an improvement. If one view or the other clearly prevailed among the employees, the unilateral action might well mean that the employer had either uselessly dissipated trading material or aggravated the sick-leave issue: On the. other hand, if the employees were more evenly divided on the merits of the company’s changes, the union negotiators, beset by conflicting factions, might be led to adopt a protective vagueness- on the issue of sick leave, which also would inhibit the useful discussion contemplated by Congress in imposing the specific obligation to bargain collectively.

Other considerations appear from consideration of the respondents’ unilateral action in increasing wages. At the April 4, 1957, meeting the employers offered, and the union rejected, a three-year contract with an imme*745diate across-the-board increase of $7.50 per week, to be followed at the end of the first year and again at the end of the second by further increases of $5 for employees earning less than $90 at those times. Shortly thereafter, without having advised or consulted with the union, the company announced a new system of automatic wage increases whereby there would be an increase of $5 every three months up to $74.99 per week; an increase of $5 every six months between $75 and $90 per week; and a merit review every six months for employees earning over $90 per week. It is clear at a glance that the automatic wage increase system which was instituted unilaterally was considerably more generous than that which had shortly theretofore been offered to and rejected by the union. Such action conclusively manifested bad faith in the negotiations, Labor Board v. Crompton-Highland Mills, 337 U. S. 217, and so would have violated § 8 (a) (5) even on the Court of Appeals’ interpretation, though no additional evidence of bad faith appeared. An employer is not required to' lead with his best offer; he is free to bargain. But even after an impasse is reached he has no license to grant wage increases greater than any he has ever offered the union at the bargaining table, for such action is necessarily inconsistent with a sincere desire to conclude an agreement with the union.12

The respondents’ third unilateral action related to merit increases, which are also a subject of mandatory bargaining. Labor Board v. Allison & Co., 165 F. 2d 766. The matter of merit increases had been raised at three of the *746conferences during 1956 but no final understanding had been reached. In January 1957, the company, without notice to the union, granted merit increases to 20 employees out of the approximately 50 in the unit, the increases ranging between $2 and $10.13 This action too must be viewed as tantamount to an outright refusal to negotiate on that subject, and therefore as a violation of § 8 (a)(5), unless the fact that the January raises were in line with the company’s long-standing practice of granting quarterly or semiannual merit reviews — in effect, were a mere continuation of the status quo — differentiates them from the wage increases and the changes in the sick-leave plan. We do not think it does. Whatever might be the case as to so-called “merit raises” which are in fact simply automatic increases to which the employer has already committed himself, the raises here in question were in no sense automatic, but were informed by a large measure of discretion. There simply is no way in such case for a union to know whether or not there has been a substantial departure from past practice, and therefore the union may properly insist that the company *747negotiate as to the procedures and criteria for determining such increases.14

It is apparent from what we have said why we see nothing in Insurance Agents contrary to the Board’s decision. The union in that case had not in any way whatever foreclosed discussion of any issue, by unilateral actions or otherwise.15 The conduct complained of consisted of partial-strike tactics designed to put pressure on the employer to come to terms with the union negotiators. We held that Congress had not, in § 8 (b) (3), the counterpart of § 8 (a)(5), empowered the Board to pass judgment on the legitimacy of any particular economic weapon used in support of genuine negotiations. But the Board is authorized to order the cessation of behavior which is in effect a refusal to negotiate, or which directly obstructs or inhibits the actual process of discussion, or which reflects a cast of mind against reaching agreement. Unilateral action by an employer without prior discussion with the union does amount to a refusal to negotiate about the affected conditions of employment under negotiation, and must of necessity obstruct bargaining, contrary to the congressional policy. It will often disclose an unwillingness to agree with the union. It will rarely be justified by any reason of substance. It follows that the Board may hold such unilateral action to be an unfair labor practice in violation of §8 (a)(5), without also finding the employer guilty of over-all subjective bad faith. While *748we do not foreclose the possibility that there might be circumstances which the Board could or should accept as excusing or justifying unilateral action, no such case is presented here.16

The judgment of the Court of Appeals is reversed and the case is remanded with direction to the court to enforce the Board’s order.

It is so ordered.

Mr. Justice Frankfurter took no part in the decision of this case.

Mr. Justice White took no part in the consideration or decision of this case.

9.3 National Labor Relations Board v. General Electric Co. 9.3 National Labor Relations Board v. General Electric Co.

NATIONAL LABOR RELATIONS BOARD, Petitioner, v. GENERAL ELECTRIC COMPANY, Respondent, and International Union of Electrical, Radio, and Machine Workers, AFL-CIO, Intervenor.

Nos. 337, 338, Dockets 29502, 29576.

United States Court of Appeals Second Circuit.

Argued June 3, 1969.

Decided Oct. 28, 1969.

Friendly, Circuit Judge, dissented in part.

*738Eugene B. Granof, Bethesda, Md. (Arnold Ordman, Gen. Counsel, Dominick L. Manoli, Associate Gen. Counsel, Marcel Mallet-Prevost, Asst. Gen. Counsel, Warren M. Davison, Eugene B. Granof, N. L. R. B., on the brief), for petitioner.

David L. Benetar, New York City (David L. Benetar, Robert C. Isaacs, Michael I. Bernstein, Stanley Schair, Nordlinger, Riegelman, Benetar & Charney, New York City, on the brief), for respondent.

Ruth Weyand, Washington, D. C. (Irving Abramson, Washington, D. C., on the brjef), for intervenor.

Before WATERMAN, FRIENDLY and KAUFMAN, Circuit Judges.

IRVING R. KAUFMAN, Circuit Judge.

Almost ten years after the events that gave rise to this controversy, we are *739called upon to determine whether an employer may be guilty of bad faith bargaining, though he reaches an agreement with the union, albeit on the company’s terms. We must also decide if the company committed three specific violations of the duty to bargain by failing to furnish information requested by the union, by attempting to deal separately with IUE locals, and by presenting a personal accident insurance program on a take-it-or-leave-it basis.

I.

THE PRIOR PROCEEDINGS

In the wake of what it regarded as unsatisfactory negotiations with the General Electric Company (GE) during the summer and fall of 1960, the International Union of Electrical, Radio and Machine Workers, AFL-CIO (IUE) filed unfair labor practice charges with the National Labor Relations Board. The General Counsel, on April 12, 1961, filed a complaint alleging that GE had committed unfair labor practices in violation of sections 8(a) (1), 8(a) (3), and 8(a) (5) of the National Labor Relations Act, 29 U.S.C. §§ 158(a) (1), 158(a) (3), and 158(a) (5) (1964). Hearings were held before a trial examiner between July, 1961, and January, 1963, and included testimony, oral argument, and submission of briefs. The Trial Examiner issued his Intermediate Report on April 1, 1963, which found GE guilty of several unfair labor practices: GE and the IUE filed exceptions to the Intermediate Report, and on December 16, 1964, the NLRB agreed with the Trial Examiner. 150 N.L.R.B. 192 (1964).

There followed the race to the courthouse that is an unhappy feature too often encountered in these matters. See Carrington, Crowded Dockets and the Courts of Appeals: The Threat to the Function of Review and the National Law, 82 Harv.L.Rev. 542, 598-600 (1969). Since GE does business in every state, every court of appeals has jurisdiction, if GE’s petition for review is first filed there. See 29 U.S.C. § 160(f) (1964); 28 U.S.C. § 2112 (1964). The IUE claimed that it filed in the District of Columbia Circuit 14 seconds before GE handed its petition to the clerk in the Seventh Circuit. GE’s version of course differed. The NLRB, admitting its confusion (not without reason, it would seem), suggested that since the question of timing was incapable of rational solution, the Second Circuit, where the unfair labor practices complained of occurred, would be the logical place to begin. The District of Columbia and Seventh Circuits agreed. IUE v. NLRB, 120 U.S.App.D.C. 45, 343 F.2d 327 (1965); GE v. NLRB, 58 LRRM 2694 (7th Cir. 1965) . Another year was required to determine that the Union’s proper status in the action was that of intervenor. NLRB v. General Electric Co., 59 LRRM 2094, 2095 (2d Cir. 1965), vacated and remanded, IUE v. NLRB, 382 U.S. 366, 86 S.Ct. 528,15 L.Ed.2d 420 (1966), modified on remand, NLRB v. General Electric Co., 358 F.2d 292 (2d Cir.), cert. denied, 385 U.S. 898, 87 S.Ct. 201, 17 L.Ed. 2d 130 (1966). See International Union, United Auto., Aerospace, etc., Local 283 v. Scofield, 382 U.S. 205, 86 S.Ct. 373, 15 L.Ed.2d 272 (1965).

In order for the action to reach its present state of ripeness, this court consolidated GE’s petition for review (No. 29576) with the Board’s petition for enforcement (No. 29502). NLRB v. General Electric Co., 358 F.2d 292 (2d Cir. 1966) , cert, denied, 385 U.S. 898, 87 S.Ct. 201 (1966). Another year and a half passed while the parties attempted to settle the case without recourse to further litigation. When a satisfactory settlement proved too elusive, they reentered the fray with renewed vigor, undiminished by the passage of time, two successive collective bargaining contracts (1963 and 1966), and by another suit over proper representation arising out of the 1966 negotiations. McLeod for and on Behalf of NLRB v. General Electric Co., 257 F.Supp. 690 (S.D.N.Y.), rev’d 366 F.2d 847 (2d Cir. 1966), remanded 385 U.S. 533, 87 S.Ct, 637,17 L.Ed.2d 588 (1967). See also General Electric Co. v. *740NLRB, 412 F.2d 512 (2d Cir., June 9, 1969).

II.

THE BARGAINING BACKGROUND General Electric, a New York corporation, is the largest and perhaps best known manufacturer of electrical equipment, appliances, and the like. Its products — manufactured in all the 50 states— range from refrigerators to atomic energy plants, from submarines to light bulbs. In 1960, it employed about 250,-000 men and women; of these only 120,-000 were unionized. The IUE is an international union, affiliated with the AFL-CIO, and had a total membership of about 300,000. In 1960 it .represented some 70,000 of the 120,000 unionized GE employees, formally grouped in more than 105 bargaining units, and was far and away the largest single union with whom GE dealt. The next largest, the United Electrical Workers (UE), represented only 10,000 members, and the remaining 50,000 unionized employees were split among some 100-odd other unions or bargaining agents who dealt independently with GE. A high proportion of GE employees are supervisory or managerial personnel, who are available to the company in the event of a strike.

The present action has its roots deep in the history of prior negotiations and bargaining relationships. Before 1950, the major union was the UE. In 1946, negotiations reached an impasse and resulted in a serious and crippling strike. GE eventually capitulated, and agreed to a settlement that it later characterized as a “debacle,” and beyond the company’s ability to meet.

GE’s response came in the form of a new approach to employee relations, urged by one of its vice presidents, Lemuel R. Boulware. Although GE generally objects to use of the term, describing it as a “hostile label,” the tactic of “Boulwareism” associated with his name soon became the hallmark of the company’s entire attitude towards its employees.1

In many respects, GE’s negotiating policy after the 1946 strike followed a predictable course. The Company had been concerned over the antipathy many of the employees displayed during the strike. It decided that it was no longer enough to act in a manner that it thought becoming for a “good” employer; it had to insure that the employees recognized and appreciated the Company’s efforts in their behalf. The problem was perceived as a failure to apply GE’s highly successful consumer product merchandising techniques to the employment relations field.

The new plan was threefold. GE began by soliciting comments from its local management personnel on the desires of the work force, and the type and level of benefits that they expected. These were then translated into specific proposals, and their cost and effectiveness researched, in order to formulate a “product” that would be attractive to the employees, and within the Company’s means. The last step was the most important, most innovative, and most often criticized. GE took its “product” — now a series of fully-formed bargaining proposals — and “sold” it to its employees and the general public. Through a veritable avalanche of publicity, reaching awesome proportions prior to and during negotiations, GE sought to tell its side of the issues to its employees. It described its proposals as a “fair, firm offer,” characteristic of its desire to “do right voluntarily,” without the need for *741any union pressure or strike. In negotiations, GE announced that it would have nothing to do with the “blood-and-threat-and-thunder” approach, in which each side presented patently unreasonable demands, and finally chose a middle ground that both knew would be the probable outcome even before the beginning of the bargaining. The Company believed that such tactics diminished the company’s credibility in the eyes of its employees, and at the same time appeared to give the union credit for wringing from the Company what it had been willing to offer all along. Henceforth GE would hold nothing back when it made its offer to the Union; it would take all the facts into consideration, and make that offer it thought right under all the circumstances. Though willing to accept Union suggestions based on facts the Company might have overlooked, once the basic outlines of the proposal had been set, the mere fact that the Union disagreed would be no ground for change. When GE said firm, it meant firm, and it denounced the traditional give and take of the so-called auction bargaining as “flea bitten eastern type of cunning and dishonest but pointless haggling.”

To bring its position home to its employees, GE utilized a vast network of plant newspapers, bulletins, letters, television and radio announcements, and personal contacts through management personnel.

Side by side with its policies of “doing right voluntarily” through a “firm, fair offer,” GE also pursued a policy of guaranteeing uniformity among unions, and between union and non-union employees. Thus all unions received substantially the same offer, and unrepresented employees were assured that they would gain nothing through representation that they would not have had in any case. Prior to 1960, GE held up its proposed benefits for unrepresented employees until the unions agreed, or until the old contract with the Union expired.

The IUE split off from the UE in 1950, when the UE was expelled from the CIO for alleged Communist domination. Since 1950, the IUE and GE have bargained on a multi-unit basis, despite the presence of separate unit certifications for IUE locals. The pattern was continued in successive 1951,1952,1954, and 1955 renewal contracts. In practice, the IUE has dealt with the company through its General Electric Conference Board, composed of delegates elected from IUE locals. Under the Union constitution, the Conference Board may call strikes, make contract proposals, and conclude agreements, regardless of an individual local’s consent. GE has dealt with, and recognized the status of, the Conference Board since 1950, although the national agreements frequently provided that some matters, usually minor, would be left to local agreement.

The 1955 Contract, which was to run for five years, contained a provision allowing the Union to reopen in 1958, solely on the issue of employment security. The union did so, but was unable either to gain concessions from the Company, or to elicit enough support for a strike.

III.

THE 1960 NEGOTIATIONS

Under the 1955 Contract, the earliest date that either party could compel the beginning of negotiations was August 16, 1960, 45 days before the end of the contract. Both sides, however, were anxious to take at least some preliminary steps before they were required to.

The IUE set up a loose alliance with several other AFL-CIO unions who bargained with GE, and they jointly polled their members on proposals. Before the actual beginning of formal negotiations, the IUE also began preparing its members through information about some of the possible demands that appeared likely to be presented to GE.

Since the linchpin of the “Boulware approach” was to bring GE’s side of the story home to its employees and to the general public, it began in the latter part of 1959 to advise its Employment Rela*742tions Managers of the subjects that they should be prepared to discuss with employees. This was effected through various media, including plant publications and personal contact. General arguments in favor of keeping GE competitive through low costs, and the advantage of receiving GE benefits without having to wait for Union officials to approve them, were among the suggestions presented.

Informal meetings were first held in January, 1960, and Union and Company subsequently joined in preparing a body of information. Neither side felt any inclination to complain of want of cooperation at this stage. GE, in fact, took pains to suggest alternate information when the precise form the Union desired was unavailable.

Before another planned informal meeting in June, 1960, GE notified the IUE by letter that as of July it would institute a contributory group accident and life insurance plan for all employees, but if the Union objected, only unrepresented employees would receive the benefits. The Union protested that the Company had to bargain before making such a unilateral change, but GE insisted that the 1955 IUE-GE Pension and Insurance agreement waived all such requirements. The Union still objected, and the program was put into effect only for unrepresented employees.

At the June meeting, the Union stated its proposals, as they then stood. Without much discussion, other than some minor clarifications, Philip D. Moore, GE’s Union Relations Service Manager and chief negotiator, called the proposals “astronomical” in cost, “ridiculous,” and not designed for early settlement.

Following the presentation of these proposals, the early publicity phase of the Boulware approach swung into high gear. Employing virtually all media, from television and radio, to newspaper, plant publications and personal contact, the Company urged employees and the public to regard the Union demands as “astronomical” (then and later a favored Company term), and likely to cost many GE employees their jobs through increased foreign competition. GE, on the other hand, announced it would in time make a fair and “firm” offer that would give employees no reason to allow union leadership to impose a strike. The basic theme was that the Company, and not the Union, was the best guardian and protector of the employees’ interests.

The IUE also tried its hand at publicity, including an “IUE Caravan” that travelled from city to city, and occasional articles in the International Union’s newspaper. In scope and effectiveness, however, they were far outshadowed by the Company’s massive campaign.

From July 19 to August 11, the Union presented its specific proposals on employment security, to which the Company replied with general expressions of disapproval, or simply rejected. GE^ spent the next five meetings delivering prepared presentations on the general causes of economic instability, which the Union branded as a waste of time.

In subsequent meetings, the Company’s posture remained unchanged. It would comment generally on some Union demands, and consider them in formulating its offer, but would not commit itself in any way. While it complained that the IUE proposals were excessive, it replied to Union requests for cost estimates with “we talk about the level of benefits,” or that the proposals cost “a lot.” GE would not indicate the total cost of a settlement it considered reasonable (“we talk level of benefits”); the Union in turn refused to rank its demands by priority, describing them all as “musts.” Indeed the entire early period — and the later negotiations as well — were characterized by an air of rancor on both sides, which provided each with welcome opportunities to downgrade the other in communications to Union members.

GE finally revealed its own proposal informally on August 29. While expressing distress at some features of the offer, Union negotiators urged the Company to delay publicizing its “firm, fair” offer, so that its position would *743not be frozen before the IUE had an opportunity to examine it and offer changes. GE refused, agreeing only to hold up most of the prepared and packaged publicity until after formal presentation of the offer on the next day.

Union officials frequently renewed their requests for cost information during the ensuing month of negotiations. GE consistently refused to estimate the cost of its proposal or of-any of its. elements, so that the Union might reallocate its demands. When pressed for some of the highly-touted GE cost studies, Moore frequently slipped into the “level of benefits” format, and generally showed no interest in presenting alternate information that was available and would have served the Union’s needs.

There were few modifications made in the original GE offer. The Company did propose an extra week’s vacation after 25 years in exchange for a smaller wage increase; but Union officials had indicated at the outset that they were uninterested in paring down what they considered an already inadequate wage offer. Despite this, and in the face of the departure by Union officials for their national conference, GE publicized the “new” offer heavily in employee communications.

After declaring late in September that the “whole offer” was “on the table,” GE contrary to prior practice, brought its position home by making its three per cent wage increase offer effective for unrepresented employees before the end of the contract or IUE acceptance. Two days later GE also put its pension and insurance proposals into effect, despite IUE President James Carey’s complaint that this would “inhibit” any subsequent modifications.

On September 21, Federal Mediation Service officials began to sit in on the negotiations at the request of the Union. Their presence does not appear to have measurably aided the negotiations. The Union, in response to Company complaints that the IUE proposals were too costly, submitted a written request for information on the cost per employee of the GE pension and insurance plans, as well as the number of employees who could be expected to benefit from GE’s vacation and income extension proposals. The request was refused in part, and the remainder was not complied with until after the strike, when the information would be of no substantial value to the Union.

Similar difficulties confronted the Union in its efforts to change the effective date of the pension and insurance plans. The Company proposed a January 1 date for the first increase in pension and insurance benefits; the Union in turn suggested that the increase in benefits should coincide with the beginning of the contract. GE shifted its ground back and forth: first it claimed that the earlier date would be too costly; then it said that it was talking “level of benefits” and not cost; then it argued that prior contracts had always provided for pension increases on the first of the year. When this last ground proved to be incorrect, one GE negotiator promised to “consider” the October date, although he insisted the January date was “appropriate.” During that afternoon, however, even this concession was withdrawn, and later explanations included describing January again as “appropriate,” and “the time that you make all the resolutions for the New Year.” 2

*745Union officials complained that “it is just because we request something that you would refuse to give it,” and subsequent Company explanations served to support, rather than to undercut, this feeling. On September 28, with three scheduled meetings left before the end of the contract, a Union negotiator, seeking to salvage something of the earlier IUE Supplemental Unemployment Benefits proposal, suggested a local option plan under which some of the funds the Company had allocated to wage increases and its income extension offer could be diverted to supplement unemployment compensation. He was clear that nothing was to be added to the Company’s costs. Moore responded, “After all our month of bargaining and after telling the employees before they went to vote that this is it, we would look ridiculous to change it at this late date; and secondly the answer is no.” A few moments later Moore reiterated his belief that “we would look ridiculous if we changed it.” Hilbert, for GE, later gave three reasons why the Company would not consider the proposal — and two of them were that it would make GE “look foolish in the eyes of employees and others. * * * ”

GE on September 29 rejected a Union offer to maintain the status quo under the old contract until a new one was signed, specifically refusing the cost-of-living escalator clause, and stating that it would “consider” later Union-related terms such as dues checkoff. A strike (which took place on October 2, except for the Schenectady Local, which joined October 6) was clearly imminent. Although claiming to be uncertain about truce terms with national IUE negotiators, GE headquarters on September 29 authorized its Schenectady Employee Relations Manager, Stevens, to offer all the pre-existing terms of the contract (except for the cost-of-living term) to the local. Stevens did so in statements to Union members and to the local Business Agent, Jandreau. A similar offer was made to the Pittsfield local, and broadly publicized there.

By October 10, the Company (after the Union had filed an unfair labor practice charge) made the same offer to the Union’s national negotiators, for any locals that returned to work. Despite rejection by the Union at the national level, the Company proceeded to deal directly with local officials, and to urge acceptance of the offer. When local officials demurred, as, for example, at Lynn, Massachusetts, publicity was aimed at the employees themselves, criticizing the local officials’ stand on the “truce.” Similar events occurred at Waterford, Louisville, Bridgeville, and Syracuse.

Throughout the course of the strike, GE communications to the employees emphasized the personal character of the Union leaders' conduct, and threatened loss of jobs to plants that returned to work late. Negotiations were held during the strike until October 19, when the Company declared that an impasse had been reached. During that period, GE refused to give the IUE definitive contract language until the Union had chosen which of the options it preferred, and until it gave its unqualified approval of the Company proposal.

On October 21, it became clear that Union capitulation was near. The Company, which had previously refused to delete the retraining provision from its offer, felt free to relax its position, and granted the Union’s request to permit a local option on retraining. While refusing a joint strike settlement agreement, which both parties would sign, GE did propose a unilateral “letter of intent,” indicating that it was in agreement with most of the Union settlement *746proposals. On October 22, the Union capitulated completely, signing a short form memorandum agreement (they had not yet seen the complete contract language to which they were agreeing), and the Company alone issued its letter of intent. The strike ended on October 24.

Two matters were left open for settlement : seniority for transferred employees, and dues checkoffs. Neither, when finally settled, represented more than an adjustment to take account of NLRB decisions that rendered the original form of the agreement of dubious legality. Some minor changes also followed, none of any considerable significance.

The only other events of importance occurred at the Augusta, Georgia plant. On October 5, the plant manager sent a letter to the four employees on strike (at that time the only ones), warning them that their employment would be terminated and replacements hired if they did not return to work. On October 13, however, he sent them telegrams, retracting the earlier letter as to job termination, but indicating the replacements would be hired. More employees (twenty in all) joined the strike after October 5, and on October 24 the Company refused their unconditional offer to return to work. It did, however, give physical examinations to three of the employees, and rehired the two who passed.

IV.

THE SPECIFIC UNFAIR LABOR PRACTICES

A. Unilateral Insurance Proposal ,

On June 1, 1960, before the reopening of negotiations, but after GE had agreed to meet with the Union on June 13 to hear its proposals, the Company notified the Union by letter that it would unilaterally institute a personal accident insurance proposal. Under the Company plan, the insurance would go into effect on July 1, would be paid wholly by the employees, and would be in addition to existing insurance coverage provided by GE. If the IUE objected, GE would not offer the insurance to its members; it would, however, make it available to other employees regardless of the stand taken by the IUE.

Prior to the June 13 meeting, GE publicized the new insurance proposal, along with the information that enrollment would take place later in the month. At the meeting, the Union objected strenuously to GE’s failure to bargain over the insurance, claiming that it was clearly a bargainable issue, which GE had a duty to discuss with Union representatives.

Ordinarily, the matter would be relatively simple; it appears well settled that insurance is a mandatory subject for collective bargaining, and the employer violates section 8(a) (5) of the National Labor Relations Act by refusing to bargain over it. See NLRB v. General Motors Corp., 179 F.2d 221 (2d Cir. 1950); Inland Steel Co. v. NL RB, 170 F.2d 247, 12 A.L.R.2d 240 (7th Cir. 1948), cert. denied, 336 U.S. 960, 69 S.Ct. 887, 93 L.Ed. 1112 (1949) (dictum). He would, of course, also violate the Act if he unilaterally changed the conditions or terms of employment. See NLRB v. Katz, 369 U.S. 736, 82 S.Ct. 110, 8 L.Ed.2d 230 (1962). Here, however, both the policy of section 8(d) of the Act, and the 1955 IUE-GE Pension and Insurance Agreement (which was to remain in force until October 1, 1960) affect the issue, although it is correct that section 8(d) is not by its terms applicable. Section 8(d) provides that during the term of a collective bargaining agreement neither party need:

“ * * * discuss or agree to any modification of the terms and conditions contained in a contract for a fixed period, if such modification is to become effective before such terms and conditions can be reopened under the provisions of the contract.” 29 U.S.C. § 158(d) (1964).

Under the 1955-1960 Pension and Insurance Agreement, each party waived the right to require the other to bargain *747as to pensions or insurance matters except during the stated renegotiation period — which, barring waiver, ' was months off.

Read expansively, and without any attention to the purpose of the section, the combination of 8(d) and the Pension Agreement might appear to protect any action that GE might take with respect to insurance during the term of the agreement. In Equitable Life Insurance Co., 133 N.L.R.B. 1675 (1961), however, the Board took the view that 8(d) was designed to protect the status quo; it was to be used as a shield, not as a sword.

To support this view, the Board now urges that the legislative history demonstrates that the primary purpose to be served by the relevant portion of 8(d) was to achieve “peaceful industrial relations” through stable collective bargaining agreements which guard “the right of either party to a contract to hold firm to the terms or conditions of employment specifically provided for in writing.” 133 N.L.R.B. at 1689. See II Legislative History, LMRA 1947, at 1625.3 See also NLRB v. Jacobs Mfg. Co., 196 F.2d 680, 684 (2d Cir. 1952). Indeed, a convincing reductio ad absurdum argument can be made that any other reading would construe 8(d) and the contract provision as permitting GE to make any modifications in the insurance terms that it sees fit — for example to increase or decrease its contribution to the existing policy — all without any consultation with or recourse for the Union. Section 8(d), the argument would run, covers “any modification,” which would include a decrease in benefits. Such.a construction is patently unsupportable; it would simply destroy the stability of the agreement that 8(d) is designed to protect. Moreover, viewing this as a matter of contractual interpretation, it seems highly unlikely that the Union would have ever considered such a clause.

An argument more reasonable superficially is that the Company might add to the agreement through unilateral action, but could not subtract from it. In a sense, of course, the difference is illusory. A collective bargaining agreement is a compromise not only between the parties, but of their past, present, and future goals. An insurance agreement that covers particular risks, in a specified way, impliedly rejects other risks, and other methods. Specifically, a Union may always oppose insurance plans to which its employees contribute, believing that the tax benefits of non-contributory plans to its members — and often to the company — in the long run will outweigh any present gains. Or, it may believe that it is important to keep insurance benefits within narrow bounds, so that at the next negotiating session it will be able to press more vigorously for other benefits. In this sense, then, even “additions” to the insurance agreement subtract from the basic compromise that the agreement represents.

Yet even if we were to ignore this threshold difficulty, there are serious objections to permitting one party to an agreement unilaterally to hold out this type of inducement to the other. It creates divisive tensions within the Union; employees with hazardous occupations will favor the proposal, while those with routine tasks will object. Whichever way the Union moves, it loses ground with some part of its constituency. Union democracy is not furthered by permitting the Company to pick the Union apart piece by piece. The same point may be made where there are both union and non-union employees. If the Union refuses the benefit, then it may appear, at least in the short run, to have disadvantaged its members vis-á-vis nonmembers. Thus it may be forced to sacrifice long-term goals to avoid short-term dissatisfaction.

*748In the context of this case, where the Company’s tactics seemed so clearly designed to show the employees that the Union could win them nothing more than the Company was prepared to offer, it is even more apparent that a unilateral offer — over which the Union may not bargain — diminishes the rewards and the importance of the bargaining at the end of the contract period. Thus the Union’s ability to function as a bargaining representative is seriously impaired. Indeed, such conduct amounts to a declaration on the part of the Company that not only the Union, but the process of collective bargaining itself may be dispensed with. Cf. Equitable Life Ins. Co., 133 N.L.R.B. 1675, 1693 (1961).

A far more subtle argument on behalf of the Company concentrates on the effect the Equitable rule has on non-Union employees. This line of thought suggests that the employer can always grant unilateral benefits to non-Union employees. If he were forbidden to do so whenever some of the employees chose a Union as their bargaining representative, then the Union would in effect have the ability to prevent non-Union employees from making an independent choice on benefits. In fact, the argument goes, he would be denying the unrepresented employees their right to refuse to be represented by the Union, and would thus be committing an unfair labor practice. See § 7, 29 U.S.C. § 157 (1964) (“Employees * * * shall also have the right to réfrain from any or all of such activities * * *”); § 8(a) (1), 29 U.S.C. § 158 (a) (1) (1964) (making violations of § 7 an unfair labor practice).

There are two answers to this argument. Section 8(a) (3), 29 U.S.C. § 158 (a). (3) (1964), forbids discrimination in terms of employment that discourage or encourage union membership. Were GE unilaterally to give only non-Union employees a cash bonus, it would be violating the policy of section 8(a) (3), if its aim were to disparage the Union. Under some circumstances, in fact, its subjective state of mind would be wholly irrelevant. See Note, Labor Law — The Decreasing Importance of Employer Motivation as an Element of Unfair Labor Practice, 46 North Carolina L.Rev. 975 (1968). Hence it is not by any means clear that an employer may give benefits to non-union employees whenever he wishes; his freedom, and that of the non-union employees, is limited by section 8(a) (3).

Moreover, Equitable hardly says that an employer like GE may not offer to increase benefits during the term of the contract; rather, its thrust is that if an employer wishes to do so, he must be prepared to bargain with the union. The Act can hardly be read to require less.

GE attempts to distinguish Equitable by urging that only section 8(d) and not a contract provision was at stake in that case, and the employer attempted to capitalize on the dilemma it created for the union. The first ground is unconvincing. GE does not direct us to circumstances indicating a desire by the parties to the collective bargaining agreement to do more than invoke the protections of section 8(d). Indeed, the Company described the contract language as “the standard 8(d) clause.”4

*749Although the Trial Examiner found that GE did not attempt to capitalize on the IUE’s refusal to accept the personal accident insurance proposal, this case is not distinguishable from Equitable. The employer’s attempt to use the Union’s plight to its own advantage was not a determinative factor there. The dilemma created by an employer exists whether he uses it crudely or subtly ; it is inherent in a take-it-or-leave-it bargaining approach. True, GE did not capitalize on the Union’s refusal; but through its enrollment program late in June, and by the unavoidable controversy that the issue itself raised in Union ranks, the Company was able to profit from the situation without exploiting it outright. The rationale of the Board’s Equitable rule reaches at least that far. Once it is clear that the party who disrupts the status quo cannot rely on section 8(d) to protect his conduct, then unilateral action over a mandatory matter, joined to a refusal to bargain, represents a straightforward rejection of the collective bargaining principle in fact. See NLRB v. Katz, 369 U.S. 736, 743, 82 S.Ct. 1107, 8 L.Ed.2d 230 (1962).

Lastly, GE urges that since the Equitable decision was not filed until 1961, it should be found blameless, since it did not know that its conduct was proscribed.5 Of course, it is also true that the conduct, although not yet proscribed, had not been judged proper either, and indeed, Equitable Life Insurance Company itself stands on the same footing with GE in that respect. In any event, parties who make a practice of stretching the statutory fabric to the breaking point should not be surprised when the cloth gives way. Cf. NLRB v. Gissel Packing Co., Inc., 395 U.S. 575, 620, 89 S.Ct. 1918, 23 L.Ed.2d 547 (1969) (condemning “brinkmanship”).

B. Refusal to Furnish Information

It is conceded that in the prenegotiation period GE was quite cooperative in aiding the Union to secure information. GE submits that it spent over $100,000 in fulfilling Union requests. Indeed, in several instances where the necessary data was too costly to obtain, or was unavailable, GE suggested a substitute, which substantially satisfied the Union’s needs without straining the Company’s resources.

Once formal negotiations were underway, however, GE’s attitude changed markedly. A pattern gradually began to develop in which the Union would propose a particular benefit, Company negotiators would label it as “astronomical,” or “costly,” and when pressed by the Union for figures to back up their cost criticisms, would respond with “we talk level of benefits, not costs.”

*750There were times when the format changed, but the result remained relatively the same. On occasion, the Company might suggest one set of employment security provisions, which the Union did not like. When the Union indicated that it preferred its proposals to the Company’s, the Company responded that the Union alternates were too costly. GE refused to indicate the cost of Union proposals, or how much it was willing to expend, so that the Union might recast its demands. The following exchange is not atypical:

Swire (Union): We are asking for an improvement in maternity. We want the Company to pay everything up to $550, then co-insurance after that.

Willis (Company): Something like that is out of reach. Maternity is the most expensive item.

Swire: What does it cost, Sid ?

Willis: We talk level of benefits, not costs.

The cases that have dealt with the difficult problem of giving meaning to “bargaining in good faith” are instructive. In NLRB v. Truitt Manufacturing Co., 351 U.S. 149, 76 S.Ct. 753, 100 L.Ed. 1027 (1956), the company claimed that a wage increase of over 2% cents per hour would put it out of business, but refused to furnish the Union with any indication of its financial status. The Supreme Court, in finding that the Company had committed an unfair labor practice, commented,

“Good-faith bargaining necessarily requires that claims made by either bargainer should be honest claims. This is true about an asserted inability to pay an increase in wages. If such an argument is important enough to present in the give and take of bargaining, it is important enough to require some sort of proof of its accuracy.” 351 U.S. at 152-153, 76 S.Ct. at 755-756.

See also NLRB v. George P. Pilling & Son Co., 119 F.2d 32 (3d Cir. 1941); NLRB v. Western Wirebound Box Co., 356 F.2d 88 (9th Cir. 1966).

Moreover, it is not always necessary that the Company put the cost of its proposals in issue, or even refuse Union demands on the ground that they are too costly. In Sylvania Electric Products, Inc. v. NLRB, 358 F.2d 591 (1st Cir.), cert, denied, 385 U.S. 852, 87 S.Ct. 87, 17 L.Ed.2d 80 (1966), the court decided (without raising the issue of cost justifications by the company) that pension and insurance costs (which it labeled “collateral” issues) should be made available to the Union where it wished to weigh the value of such plans against an increase in take-home pay.6 This is particularly true, of course, where the Company contributes to the plan, thus in effect substituting it for wages.

The rationale of these opinions seems obvious; if the purpose of collective bargaining is to promote the “rational exchange of facts and arguments” that will measurably increase the chance for amicable agreement, then sham discussions in which unsubstantiated reasons are substituted for genuine arguments should be anathema. See Cox, The Duty to Bargain in Good Faith, 71 Harv. L.Rev. 1401 (1958).

The Board and the Trial Examiner relied on two specific instances of refusal to furnish information to substantiate their unfair labor practice charge. The first was an oral request by the Union *751on August 24 for the number of employees with one year, and with twenty years, of service, so that the Union might determine the cost of its demand for a fourth week of vacation for employees with 20 or more years of service. Carey later pointed out that this request was in response to the Company’s labelling the Union’s vacation plan as “astronomical.” Hilbert, for GE, stated that the Company did not have the information; on August 31 Moore responded that GE was discussing “the level of benefits.”

The second refusal to furnish information relied upon occurred in September. When the Union, on September 8, sought to evaluate the number of employees who would have benefited from the Company’s Income Extension Aid proposal, had it been in effect for the past two years, Moore responded, “Somewhere between zero and 100 per cent.” Later in the month, on September 22, the IUE put this and other requests for information in writing, and submitted them to GE. Like the original August oral request, the cost information the Union wanted was put in issue by the Company’s repeated references to cost as a justification for rejecting Union proposals, or as a reason for preferring Company plans.7 GE also frequently couched its objections to Union demands on the ground of “competition,” thereby implying that the cost of the IUE proposals was a material element in its considerations. See United Steelworkers of America, AFL-CIO, Local 5571 v. NLRB, 130 U.S.App.D.C. 369, 401 F.2d 434 (1968); NLRB v. George P. Pilling & Son Co., 119 F.2d 32 (3d Cir. 1941).

The September 22 letter requested basically five categories of information: (A) cost per employee of proposed insurance benefits; (B) cost per employee of proposed pension benefits; (C), (D) number of employees likely to benefit from the Company’s income extension aid (IEA) program; (E) number of employees with 20 or 25 years of continuous service.8 The last request, like that made *752orally on August 24, was designed to test the Company’s assertion that an extra week of vacation after 20 years would be too expensive, and that one after twenty-five years would be preferable.

Addressing ourselves first to the oral request of August 24, GE never did reply until it answered the same question, posed under “E,” above, after the strike was over. While there is some dispute over whether the Union orally requested the information for the whole Company or for IUE units alone, there is no disagreement that GE had the figures available on a company-wide basis.

Even if we were to assume that the Union had asked for figures for IUE units alone, GE’s failure to provide the information is inexcusable. The Trial Examiner appropriately found that GE could readily have obtained the data from local plants, and even had it been unwilling to do so, it could, at a minimum, have informed the Union that it had the information available on a company-wide basis, which the Union probably would have found just as useful (since GE indicated that it would put the same benefits into effect for all employees, pursuant to its uniformity policy). Thus, under the most favorable interpretation of the facts, GE’s offhanded refusal to submit information on an issue which it had itself raised, would amount to an unfair labor practice. This conclusion is fortified by GE’s behavior in the prenegotiation meetings, when it demonstrated that it was capable of providing information —indeed even suggesting that it be provided — in a form different from that originally desired. If we were to hold that because the information requested did not conform precisely to the data in the possession of the Company, an employer might refuse to provide any data at all, we would, in our view, be taking a step backwards, towards incorporating all the worst features of the ancient common law pleading system into our present-day labor negotiations. GE seems to suggest that even an insignificant variance between the request and the available information would be a complete bar to the Union — even though it was utterly unaware of the precise form in which the Company kept its records, and the Company refused to enlighten it. In a day when liberal pleadings, liberal discovery, and modern rules of evidence have largely supeseded ancient formalism, grafting such a pointless and dysfunctional rule onto negotiating procedures is clearly out of place.

GE did finally respond to item “E”, as well as items “C” and “D” in the September 22 letter, on November 7, after the strike had been settled and the contract agreed upon.9 All three of the requests required that the Company collect information from its local plant managers; GE, however, waited until October 24 to initiate the collection process. The Company also claims that mass picketing, violence, and problems of shutting down struck plants forced it to delay. But, as the Trial Examiner pointed out, this retrospective explanation fails to explain the initial delay of a week, before the strike began. The Trial Examiner, who had the opportunity to observe and evaluate the testimony, refused to credit this explanation. Finding that his conclusion (adopted by the Board) is supported by substantial evidence (and is not vigorously contested by the Company), we conclude that the Company committed an unfair labor practice by failing to provide the information, highly *753relevant to the negotiations, within a reasonable time. See NLRB v. Fitzgerald Mills Corp., 813 F.2d 260 (2d Cir.), cert. denied 375 U.S. 834, 84 S.Ct. 47, 11 L.Ed. 2d 64 (1963); Utica Observer Dispatch, Inc., 111 N.L.R.B. 5863, enforced 229 F.2d 575 (2d Cir. 1956) ; Reed & Prince Mfg. Co., 96 N.L.R.B. 850, enforced 205 F.2d 131 (1st Cir.), cert. denied 346 U.S. 887 (1953). See also section 10(e), 29 U.S.C. § 160(e) (1964); Universal Camera Corp. v. NLRB, 340 U.S. 474, 71 S.Ct. 456, 95 L.Ed. 456 (1951) (Frankfurter, J.).

Items A and B, mentioned in the September 22 letter — the estimated per employee pension and insurance data — were never provided by the Company. It insisted that it was not legally required to disclose the cost of fringe benefits to it, and that in any case the information was so “purely speculative” that compiling it would be both burdensome and valueless. The first contention seems clearly wrong. In order for the Union to assess properly the Company’s objections to some of its proposals, and to understand which of GE’s objections to cost were soundly based, the IUE had to have the basic data on which to make informed choices.

A union weighing wages against benefits, or one form of benefit against another, should receive answers to its genuine non-burdensome requests for cost information. If the Union were denied such data, it would be unable to bargain intelligently, and arrive at sensible and reasoned decisions, particularly those involving reallocation of benefits within GE’s cost framework. Even the first Sylvania decision indicated that when the employer (as here) puts cost in issue, or the discussion involves a contributory plan (as here), the Union may be entitled to cost information. See also note 6, swpra.

The Company further urges that since the Trial Examiner found that some of the information would have been difficult or expensive to obtain in the form requested, it need not have provided it. But GE had most of the information in some form that would have been useful to the Union, and easily could have either presented it in that form, or at least advised the Union that it had other relevant information (like the C, D, and E data) available. The objection is unavailing.

The last major claim is that future pension and insurance costs were “purely speculative” and only “educated guesses.” The difficulty with this stand is that it would excuse the Company from furnishing virtually all information of which it was not absolutely certain. In bargaining, as in most other circumstances, it is the use to which the information is put that should determine the degree of accuracy that is required. The root question, as posed in the second Sylvania ease, is whether the data “would significantly aid in the bargaining process.” 358 F.2d at 592. There can be no question that the information available would have assisted the Union here; GE committed an unfair labor practice in withholding it.10

C. Bargaining Directly with Locals

As we have pointed out above, GE and the IUE had a consistent pattern of national negotiations for over ten years before the 1960 strike. There can be little doubt that the Board’s finding that GE recognized and dealt with the IUE-GE Conference Board as representative *754of all IUE locals was both supported by substantial evidence and correct.11

Once the strike was imminent, however, GE abandoned this pattern, and dealt separately with several of the IUE locals. On September 29, GE notified the IUE at their bargaining meeting that after October 1, it would consider its contractual obligations at an end; it would continue current wages, benefits, and seniority, but ■ such union-related matters as dues checkoff, grievance time pay and superseniority for union officials, would have to be “considered.”

That same day, however, GE headquarters authorized their local Employment Relations Manager, A. C. Stevens, in Schenectady to offer more to the local there than had been offered to the national negotiators, if Schenectady Local 301 stayed at work. Specifically, all the union-related provisions of the old contract — dues checkoff and the like — were to remain in effect, while at the national level, GE had committed itself only to “consider” them. On October 4, Stevens wrote to Leo Jandreau, Local 301’s business agent, stating:

“We agree to extend to you protection of the recent contract, including grievance machinery, protection covering working conditions, seniority, prices, wage rates, and any other condition of employment recited in the contract. Current cost-of-living adders will remain in effect. We will continue union representation recognition as presently constituted and all the above will remain in effect so long as we are not on strike.”

On the same day, the local Employee Relations Manager at Pittsfield made a similar offer, containing the same truce conditions, which was broadly publicized.12 The IUE then filed an unfair labor practice charge, based on the offers to the locals. Several days later (about October 10), GE offered the same terms to the national negotiators.

On the day the Company made its Schenectady-Pittsfield terms available to the IUE generally, the Lynn, Massachusetts Employment Relations Manager, Robert Burns, wrote to Lynn Local 201’s Business Agent, and proposed:

“ * * * we meet to work out a memorandum of intent which would re-establish for all employees represented by Local 201 all of the provisions which were in the contract * * * which * * * would go into effect when Local 201 terminates the strike in Lynn while contract negotiations continue.”

At Waterford, a similar proposal was made to the local Business Agent, and union members were telephoned by their foremen and urged to convince their local officers to accept the return to work proposal.

At Louisville, Kentucky, the Employee Relations Manager forwarded a copy of the Company’s October 10 proposal along with a noncommittal letter to the Local Business Agent indicating that the copy might be “helpful” in removing the “confusion” over how employees might return to work. The Bridgeville, Pennsylvania Employee Relations Manager also forwarded a copy of the proposal, but he in addition added that he was

“ * * * suggesting it to you and other Local 640 officials as a means of permitting local members to return to their jobs and to continue to earn their *755wages, until a settlement agreement is reached.”

At Syracuse, in a phone conversation between the Local President and the Union Relations Manager, the Manager not only suggested accepting the terms now offered to the IUE nationally, but indicated that the President and several other Syracuse employees could have their alleged strike misconduct suspensions lifted if they returned to work.

The Trial Examiner and the Board agreed that in each instance GE committed an unfair labor practice when it went behind the backs of the national negotiators and offered separate peace settlements to locals. Medo Photo Supply Corp. v. NLRB, 321 U.S. 678, 64 S.Ct. 830 (1944) sustains this conclusion. In Medo, several employees who appeared to represent a majority met with their employer to express their dissatisfaction with the union representing them. They offered to abandon it if their wages were increased. When the Employer treated with the dissenting employees, the Court held, he violated section 9(a) of the Act, 29 U.S.C. § 159(a) (bargaining representatives of the union are “exclusive”). Therefore, he committed unfair labor practices under sections 8(a) (1) and 8 (a) (5), 29 U.S.C. §§ 158(a) (1), 158 (a) (5) (1964). Medo instructs that it does not matter who initiates the bypassing of the bargaining representatives. 321 U.S. at 683, 64 S.Ct. 830. Subsequent cases appear to have applied the doctrine even where the offer to the local or to the employees was no better than that made to the bargaining representative. See, e. g., Independent Stave Co. v. NLRB, 352 F.2d 553 (8th Cir. 1965), cert, denied, 384 U.S. 962, 86 S.Ct. 1558, 16 L.Ed.2d 674 (1966) (by implication). We have, under similar circumstances, condemned efforts by an employer to take a matter up with his employees, where their bargaining representative had already taken a stand on the matter. Utica Observer-Dispatch v. NLRB, 229 F.2d 575 (1956). But cf. NLRB v. Penokee Veneer Co., 168 F.2d 868, 4 A.L.R.2d 1350 (7th Cir. 1948).

The terms offered at Schenectady and Pittsfield were in fact better than those made available to the national negotiators. There can be no question but that such offers clash with the Medo rationale, for they cut deeply into the Act's command that bargaining representatives be “exclusive.” See § 9(a), 29 U.S.C. § 159 (á) (1964). The Company’s claim that it had to “clarify” its position to the Schenectady management so that they would know what terms to effectuate if the local there came to work ignores the fact that it was the Company’s vagueness on return to work provisions that caused the need for clarification. In any case, the additional union-related terms should have been offered to the national negotiators for their consideration before — or at least at the same time that — they were given to the locals; yet GE waited until the Union had filed an unfair labor practice charge to do so. We agree with the Board that GE committed an unfair labor practice by failing to respect the IUE-GE Conference Board’s status as exclusive bargaining representative.

The other proposals complained of occurred after October 10, and so there is no question (with the possible exception of Syracuse) of offering more to the local than to the national negotiators. Yet, as we have suggested, this factor cannot be dispositive. The vice that Medo sought to avoid was the practice of undermining the authority of the union’s bargaining representatives through direct dealings with the locals or employees they represented. Such tactics are inherently divisive; they make negotiations difficult and uncertain; they subvert the cooperation necessary to sustain a responsible and meaningful union leadership. The evil, then, is not in offering more. It is in the offer itself.

At Lynn and Waterford it is clear that the employment managers were proposing that they and the local make a separate settlement. At Lynn, GE even offered a separate “letter of intent.” Bridgeville is similar, and though the *756evidence is not so strong, the Board might reasonably have found that the manager there was suggesting an independent settlement. The offers of reinstatement at Syracuse place that proposal as well in the forbidden category, for they indicate that an individual settlement was being held out to the local.

At Louisville, however, the only indicia the Board relies on pointing to a separate agreement, or to treating separately with the local, is the fact that the letter was addressed to the local’s president. A fair reading of the brief missive, however, fails to disclose that it had anything more than an informational purpose, giving the content of the proposal made at the national level previously. The basic distinction is between attempting to reach a separate settlement with the local — as at Schenectady— and keeping the local informed of Company positions. In circumstances such as these, the interest in free speech and informed choice must prevail over the slight possibility that the representatives’ positions might be undermined, and thus we believe the Board’s finding is unsupported by substantial evidence. See NLRB v. Penokee Veneer Co., 168 F.2d 868 (7th Cir. 1948). Cf. Linn v. United Plant Guard Workers of America, 383 U.S. 53, 62, 86 S.Ct. 657, 15 L.Ed.2d 582 (1966) (favoring “uninhibited, robust” debate).

V.

OVERALL FAILURE TO BARGAIN IN GOOD FAITH

We now approach the most troublesome and most vigorously contested of the charges. In addition to the three specific unfair labor practices, GE is also charged with án overall failure to bargain in good faith, compounded like a mosaic of many pieces, but depending not on any one alone. They are together to be understood to comprise the “totality of the circumstances.” Despite my brother Friendly’s distaste for the term, past decisions have indeed emphasized that good faith — or lack of it— must in the absence of a per se violation depend upon a factual determination based on the overall conduct of the party charged. See NLRB v. Insurance Agents’ Union, 361 U.S. 477, 498, 80 S.Ct. 419, 4 L.Ed.2d 454 (1960); NLRB v. Truitt Mfg. Co., 351 U.S. 149, 76 S.Ct. 753, 100 L.Ed. 1027 (1956). The Board can hardly be faulted for resting its finding on a ground that the Supreme Court has mandated. Certain specific practices, such as making unilateral changes in working conditions during bargaining, can be found to constitute per se violations of the duty to bargain, since they constitute a “refusal to negotiate in fact.” See NLRB v. Katz, 369 U.S. 736, 743, 82 S.Ct. 1107, 8 L.Ed.2d 230 (1962). When such conduct is present, the Board need make no finding that the totality of the party’s conduct manifests bad faith; the practice itself is conclusive on that issue.

The Board, however, chose to find an overall failure of good faith bargaining in GE’s conduct. Specifically, the Board found that GE’s bargaining stance and conduct, considered as a whole, were designed to derogate the Union in the eyes of its members and the public at large. This plan had two major facets; first, a take-it-or-leave-it approach (“firm, fair offer”) to negotiations in general which emphasized both the powerlessness and uselessness of the Union to its members, and second, a communications program that pictured the Company as the true defender of the employees’ interests, further denigrating the Union, and sharply curbing the Company’s ability to change its own position.

The Board relies both on the unfair labor practices already discussed and on several other specific instances to show that GE had developed a pattern of conduct inconsistent with good faith bargaining. It points to GE’s proposed personal accident insurance proposal on a take-it-or-leave-it basis as an example of an attempt to bypass the Union, and an attempt to disparage its importance and usefulness in the eyes of its members. GE’s response to this is that the Equitable case had not been decided in *7571960. Therefore, it argues, its actions were based on a “justifiable belief” in the state of the law at that time and cannot support the view that the Company was motivated by bad faith.

This reasoning overlooks the principle that acts not in themselves unfair labor practices may support an inference that a party is acting in bad faith. See NLRB v. Insurance Agents’ Union, 361 U.S. 477, 506, 80 S.Ct. 419 (1960) (Frankfurter, J., concurring). While GE may have believed that it was acting within its “rights” in offering a take-it- or-leave-it proposal, doing so may still be some evidence of lack of good faith. Here there was no substantial justification offered for refusing to discuss the matter, other than a niggling — and incorrect — view of the contract and the statute. Cf. NLRB v. Reed & Prince Mfg. Co., 205 F.2d 131 (1st Cir.) (Magruder, J.) (“must make some reasonable effort in some direction”), cert. denied 346 U.S. 887, 74 S.Ct. 139, 98 L.Ed. 391 (1953). Given the effects of take-it- or-leave-it proposals on the Union, already set forth in our review of the specific unfair labor practice charges, the Board could appropriately infer the presence of anti-Union animus, and in conjunction with other similar conduct could reasonably discern a pattern of illegal activity designed primarily to subvert the Union.

We have already discussed at length the Company’s failure to furnish information. As in the instance of the personal accident insurance proposal, GE’s attitude on information was characterized by a pettifogging insistence on doing not one whit more than the law absolutely required, an insistence that eventually strayed over into doing considerably less. GE’s conduct, as the Board’s opinion points out, was all of a piece. It negotiated, to the greatest possible extent, by ignoring the legitimacy and relevance of the Union’s position as statutory representative of its members. Thus it is hardly surprising that IUE requests for information were met (at least once negotiations had begun) with less than enthusiasm, for they reflected the Union’s contrary belief that it had to know the worth of the Company proposals in order to evaluate them for its members.

GE’s reluctance to part with information was not limited to the specific instances complained of as an unfair labor practice. The record discloses that even before the general reopening of negotiations, GE displayed a patronizing attitude towards Union negotiators inconsistent with a genuine desire to reach a mutually satisfactory accord. During the early meetings devoted to employment security, GE’s responses to the Union’s detailed proposals were vague and uninformative, hardly calculated to apprise the IUE of GE’s stand on any of the matters about which it wanted to negotiate. When the Union finished presenting its plan, GE, instead of offering counter-proposals, or commenting specifically on the IUE’s suggestions, offered a prepared lecture series on the general causes of economic instability, a response not at all designed to enlighten the Union on specific bargainable matters. This impression is reinforced by Moore’s consistent refusal to permit the lecturing Employee Relations Managers to answer specific Union inquiries.

More crucial, perhaps, was the Company’s persistent refusal, after publicizing its proposal, to estimate not only the cost of components of its offer, but the total size of the wage-benefit package it would consider reasonable. Responses such as “it hasn’t occurred yet” were interposed when IUE negotiators asked for estimates of the GE offer; yet the trial examiner found (as GE’s bargaining philosophy required) that considerable cost studies had in fact been made, which would have been of substantial assistance to the Union. Without an estimate of the overall size of GE’s offer, the Union was hamstrung in its efforts to decide which substitutions were reasonable, whether to press for more total benefits, or how much redistribution could be accomplished within GE’s cost framework.

*758In addition to its reluctance to make meaningful cost disclosures, GE occasionally took untenable and unreasonable positions and then defended them, with no apparent purpose other than to avoid yielding to the Union. The most flagrant example occurred in setting the date for the beginning of pension and insurance benefits. As indicated in our opening discussion of the negotiating background, GE vacillated back and forth, chose inconsistent and confusing explanations at random, interposed some inconsequential attempts to pass the problem off with banter, and finally settled by characterizing the date it had chosen as “appropriate.” See note 2 supra, and accompanying text. Certainly, GE could insist on any dates that it desired — but its manner of responding to Union inquiries reflected its philosophy of “bargaining.”

When the last act was virtually played out and it had become apparent that the Union would have to end its abortive strike and concede to GE’s terms, the Company continued to display a stiff and unbending patriarchal posture hardly consistent with “common willingness among the parties to discuss freely and fully their respective claims and demands and, when these are opposed, to justify them on reason.” NLRB v. George P. Pilling & Son Co., 119 F.2d 32, 37 (3d Cir. 1941). With the Union, as it were, “on the ropes,” the Company insisted that IUE choose the options that it preferred, and assent to the contract unconditionally, without ever seeing the final contract language. When the Union protested that the memorandum proposed for its signature was too vague, the Company refused to submit more definite language. Four days later, the Union capitulated completely and signed the short form memorandum, still without having seen the final contract to which it was agreeing.

In a similar vein the Company rejected the notion of a bilateral strike settlement agreement. Instead, it proffered a unilateral “letter of intent.” While again, it is true GE did not have to sign a joint settlement agreement, it gave no reason for refusing to do so (other than that this had been its past practice). The Board might reasonably infer that its prime purpose was to avoid recognizing the Union’s status as bargaining representative of the striking employees, and not to further any legitimate business aim.

GE argues forcefully that it made so many concessions in the course of negotiations — concessions which, under section 8(d), it was not obliged to make— that its good faith and the absence of a take-it-or-leave-it attitude were conclusively proven, despite any contrary indicia on which the Trial Examiner and the Board rely. The dissent proceeds under the misapprehension that we consider lack of major concessions as evidence of bad faith. Rather, we discuss them only because while the absence of concessions would not prove bad faith, their presence would, as GE claims, raise a strong inference of good faith. On close examination, however, few of the alleged concessions turn out to have a great deal of substance. Its offer of a wage reopener accompanied its original proposal; the option to choose a vacation instead of a wage increase was included over the Union’s objections (at least during the negotiating meetings), and changes in the Pension Plan were more in the nature of clarifications than actual shifts in position, or in any case involved issues of quite minor significance.13

*759The Company’s stand, however, would be utterly inexplicable without the background of its publicity program. Only when viewed in that context does it become meaningful. We have already indicated that one of the central tenets of “the Boulware approach” is that the “product” or “firm, fair offer” must be marketed vigorously to the “consumers” or employees, to convince them that the Company, and not the Union, is their true representative. GE, the Trial Examiner found, chose to rely “entirely” on its communications program to the virtual exclusion of genuine negotiations, which it sought to evade by any means possible. Bypassing the national negotiators in favor of direct settlement dealings with employees and local officials forms another consistent thread in this pattern. The aim, in a word, was to deal with the Union through the employees, rather than with the employees through the Union.

The Company’s refusal to withhold publicizing its offer until the Union had had an opportunity to propose suggested modifications is indicative of this attitude. Here two interests diverged. The command of the Boulware approach was clear: employees and the general public must be barraged with communications that emphasized the generosity of the offer, and restated the firmness of GE’s position. A genuine desire to reach a mutual accommodation might, on the other hand, have called for GE to await Union comments before taking a stand from which it would be difficult to retreat. GE hardly hesitated. It released the offer the next day, without waiting for Union comments on specific portions.14

The most telling effect of GE’s marketing campaign was not on the Union, but on GE itself. Having told its employees that it had made a “firm, fair offer,” that there was “nothing more to come,” and that it would not change its position in the face of “threats” or a strike, GE had in effect rested all on the expectation that it could institute its offer without significant modification. Properly viewed, then, its communications approach determined its take-it-or-leave-it bargaining strategy. Each was the natural complement of the other; if either were substantially changed, the other would in all probability have to be modified as well. It is only in this context that GE’s incomprehensible insistence on a January 1 starting date for the pension benefits, and the “explanations” that followed it, can be understood.

All this was brought into the open during the September 28 meeting. Virtually on the eve of the strike, Union negotiators were searching for a way to save face by reconstituting their SUB proposal within the outlines of the Company’s costs. Far from being frivolous as the dissent seems to suggest, such last minute attempts at compromise are the *760stuff of which lasting accommodations and productive labor-management relations are made. The substance of the Company’s response to this effort was well put by their chief negotiator, Philip Moore:

“After all our month of bargaining and after telling the employees before they went to vote that this is it, we would look ridiculous to change it at this late date; and secondly the answer is no.”

The Company, having created a view of the bargaining process that admitted of no compromise, was trapped by its own creation.15 It could no longer seek peace without total victory, for it had by its own words and actions branded any compromise a defeat.

GE urges that section 8(c), 29 U.S.C. § 158(c) (1964), prohibits the Board from considering its publicity efforts in passing on the legality of its bargaining conduct. The section reads:

“(c) The expressing of any views, argument, or opinion, or the dissemination thereof, whether in written, printed, graphic, or visual form, shall not constitute or be evidence of an unfair labor practice under any of the provisions of this subchapter, if such expression contains no threat of reprisal or force or promise of benefit.”

GE would have us read that section as a bar to the Board’s use of any communications, in any manner, unless the communication itself contained a threat or a promise of benefit. The legislative history, past decisions, and the logic of the statutory framework, however, indicate a contrary conclusion.

The bald prohibition of section 8(c) invited comment when it was enacted, as well as later. Senator Taft replied to some of the criticism of the bill that bears his name:

“It should be noted that this subsection is limited to 'views, arguments, or opinions’ and does not cover instructions, directions, or other statements that would ordinarily be deemed relevant and admissible in courts of law.” I Legislative History of the LMRA 1947, at 1541.

The key word is “relevant.” The evil at which the section was aimed was the alleged practice of the Board in inferring the existence of an unfair labor practice from a totally unrelated speech or opinion delivered by an employer. Senator Taft later indicated, for example, in the context of a section 8(a) (3) discriminatory firing, that prior statements of the employer would have to be shown to “tie in” with the specific unfair labor practice. I Legislative History of the LMRA 1947, at 1545. Later references to the section described the barred statements as those which were “severable or unrelated,” and “irrelevant or immaterial.” II Legislative History of the LMRA 1947, at 429 (Senate Report), 549 (House Conference Report). The objective of 8(c) then, was to impose a rule of relevancy on the Board in evaluating the legality of statements by parties to a labor dispute.16 Its pur*761pose was hardly to eliminate all communications from the Board’s purview, for to do so would be to emasculate a statute whose structure depends heavily on evaluation of motive and intent. See e.g., §§ 8(a) (1), 8(a) (3), 8(a) (5).

The cases have largely supported this view. The Board may rely on communications to establish discriminatory treatment in violation of sections 8(a) (3) and 8(a) (1). See NLRB v. Lipman Bros., Inc., 355 F.2d 15 (1st Cir. 1966); Hendrix Mfg. Co. v. NLRB, 321 F.2d 100 (5th Cir. 1963). Employer communications were used to evaluate the presence of a state of mind inconsistent with the obligation to bargain in good faith in NLRB v. Fitzgerald Mills Corp., 313 F.2d 260, 268 (2d Cir.), cert. denied, 375 U.S. 834, 84 S.Ct. 47, 11 L.Ed.2d 64 (1963); and NLRB v. Herman Sausage Co., 275 F.2d 229 (5th Cir. 1960).

While it is clear that the Board is not to control the substantive terms of a collective bargaining contract, nonetheless the parties must do more than meet.17 Our brother Friendly makes much of the point that General Electric did bargain and reach an “agreement” with the Union. He says that prior 8(a) (5) cases demanded nothing less than a showing of no such desire to reach an agreement, and opines that without such a “definite standard” an 8(a) (5) violation may not be made out. Some cases have indeed spoken of the evil of a “desire not to reach an agreement with the Union” as crucial. While the dissenting opinion cites NLRB v. Reed & Prince Mfg. Co., 205 F.2d 131, 134 (1st Cir.), cert. denied, 346 U.S. 887, 74 S.Ct. 139, 98 L.Ed. 391 (1953), for that authority, we hasten to note that Judge Magruder was careful in his opinion not to be misled, as our dissenting brother appears to be, by words that seem on the surface quite simple but in practice require a highly pragmatic and individualized interpretation. Judge Magruder did not suggest that “desire not to reach an agreement” could be found, as the dissent suggests, by a clearly delineated series of steps, Xi, X2, X3, taken to “point Y, plus a number of additional items, Zi, Z2, Z3.” Far from being a devotee of the new math, he would have agreed with Learned Hand that numbers, even more than words, “are utterly inadequate to deal with the fantastically multiform occasions which come up in human life.” In the case before Judge Magruder, Reed & Prince submitted a woefully inadequate and demeaning “offer” of a contract. Presumably, the Union could have seen no alternative but to accept it, and had it done so, our brother Friendly .would have held that the Company bargained with a “desire to reach an agreement,” and thus had not violated the proscriptions of § 8(a) (5). Judge Magruder, on the other hand, said that the “employer is obliged to make some reasonable effort in some direction to compose his differences with the union, if § 8(a) (5) is to be read as imposing any substantial obligation at all.” 205 F.2d at 135. His point, of course, was that “desire to reach agreement” may mean different things to different people, but in the context of a meaningful and purposeful reading of section 8(a) (5) it must mean more than a willingness to sign a piece of paper. The statute does not say that any “agreement” reached will validate whatever tactics have been employed to exact it. To imply such a Congressional purpose would be to encourage parties to make their vi*762olation so blatant that it would be impossible for the other side to continue to exist without signing. Instead the statute clearly contemplates that to the end of encouraging productive bargaining, the parties must make “a serious attempt to resolve differences and reach a common ground,” NLRB v. Insurance Agents’ Int’l Union, 361 U.S. 477, 486, 487, 488, 80 S..Ct. 419, 425, 4 L.Ed.2d 454 (1960), an effort inconsistent with a “predetermined resolve not to budge from an initial position.” NLRB v. Truitt Mfg. Co., 351 U.S. 149, 154-155, 76 S.Ct. 753, 757, 100 L.Ed. 1027 (1956) (Frankfurter, J., concurring). These are not simple tests; they will not be resolved by formular incantations. Sadly, neither will they be so precise that one will always know the exact limits of what is allowed, and what forbidden — but this is a problem hardly unknown in the law or to judges. The difficulty here, however, arises out of the herculean task of legislating a state of mind. Congress has ordered the Board- — and this court — to effectuate its policy of encouraging good faith bargaining, and not to avoid it because the mandate is difficult to apply. The Board has done just that. And, on the basis of substantial evidence we agree. A pattern of conduct by which one party makes it virtually impossible for him to respond to the other — knowing that he is doing so deliberately— should be condemned by the same rationale that prohibits “going through the motions” with a “predetermined resolve not to budge from an initial position.” See NLRB v. Truitt Mfg. Co. supra (concurring opinion).

The employer who leaves for a long vacation, giving his negotiator instructions not to budge is no different from the employer who remains on the scene and commands the same behavior daily. Cf. Cox, The Duty to Bargain in Good Faith, 71 Harv.L.Rev. 1401, 1418 & n. 61 (1958). We are assumed to intend the natural and probable consequences of our acts.

The Company and the dissenting opinion seem to take the novel position that the holding in Insurance Agents’ — that the Board might not forbid a partial strike during bargaining-rousts the Board’s control over bargaining tactics. But in NLRB v. Katz, 369 U.S. 736, 82 S.Ct. 1107, 8 L.Ed.2d 230 (1962), the Court held that at least one tactic — instituting unilateral changes during bargaining — was forbidden, for it put a bargainable topic outside the reach of the bargaining process. GE has done no less; it has, if anything, done more. By its communications and bargaining strategy it in effect painted itself into a corner on all bargainable matters.

In order to avoid any misunderstanding of our holding, some additional discussion is in order. We do not today hold that an employer may not communicate with his employees during negotiations. Nor are we deciding that the “best offer first” bargaining technique is forbidden. Moreover, we do not require an employer to engage in “auction bargaining,” or, as the dissent seems to suggest, compel him to make concessions, “minor” or otherwise. See p. 44, supra.

Our dissenting brother’s peroration conjures up the dark spectre that we have taken a “portentous step” which “ ‘contains seeds of danger for unions’ ” as well as employers. This picturesque characterization is unfortunate for it is a scare-phrase which tends to distract from the facts in this case. It paints over with a broad stroke the care we have taken to spell out the bounds of our opinion. We hold that an employer may not so combine “take-it-or-leave-it” bargaining methods with a widely publicized stance of unbending firmness that he is himself unable to alter a position once taken. It is this specific conduct that GE must avoid in order to comply with the Board’s order, and not a carbon copy of every underlying event relied upon by the Board to support its findings. Such conduct, we find, constitutes a refusal to bargain “in fact.” NLRB .v. Katz, 369 U.S. 736, 743, 82 S.Ct. 1107 (1962). It also constitutes, as the facts ‘ of this action demonstrate, an absence *763of subjective good faith, for it implies that the Company can deliberately bargain and communicate as though the Union did not exist, in clear derogation of the Union’s status as exclusive representative of its members under section 9(a). See NLRB v. Herman Sausage Co., 275 F.2d 229, 234 (5th Cir. 1960).

We have considered the Company’s other arguments, including those in favor of disqualifying Board Member Fanning, and against reinstating the replaced workers, but we find them unavailing.18 The petition for review is denied, and the petition for enforcement of the Board’s order is granted.19

WATERMAN, Circuit Judge

(concurring).

I fully concur with my brother Kaufman. Without differing from the majority opinion in any way and without reiterating its arguments, I would challenge my brother Friendly’s dissenting assertion that the standard set forth by Judge Kaufman for determining overall bad faith is vague or difficult to apply. A company may make a firm, fair offer to the union and may stand by that offer, but the company should not be permitted *764to advertise to its employees that it believes in the firmness of its offers for the sake of firmness.

We recognize that a company is entitled to insist on the terms of its original offer if it believes that the union can be made to accept that offer. That GE refused to yield to union demands without giving reasons based upon cost, maintained a “stiff and unbending” posture, used a unilateral letter of intent when final agreement was reached, failed to make significant concessions, and publicized its offer without waiting for union suggestions do not indicate anything except that GE made and stood by what it conceived to be a fair, firm offer.

What makes these practices unfair is GE’s “widely publicized stance of unbending firmness,” that is, GE’s communications to its employees that firmness was one of the company’s independent policies. Two distinct evils derive from such publicity. First, publicity regarding firmness tends to make the company seal itself into its original position in such a way that, even if it wished to change that position at a later date, its pride and reputation for truthfulness are so at stake that it cannot do so. Second, publicity regarding firmness fixes in the minds of employees the idea that the company has set itself up as their representative and therefore that the union is superfluous. Doubtless these evils exist to some extent whenever a company makes, and stands by, a firm fair offer even when there is no company publicity of the kind here involved. However, it seems clear that publicity tends to amplify these undesirable tendencies to the point that, in a case such as this one, the amplification can well be construed to have been activated by a company motive not to bargain in good faith.

On the other side of the ledger there is very little positive good which can derive from company publicity which indicates that a company believes in firmness for firmness’ sake. The free speech benefits of publicity in labor negotiations lie in the fact that, informed employees will better know whether to vote for or against a strike and how to evaluate the union’s performance on their behalf. These benefits can all be reaped by a company which advertises the terms of an offer and its belief that these terms are fair, without also stating that as a matter of policy it can never be persuaded to change the advertised terms. Such advertisement could only ténd to convince employees that because firmness is a company policy it is also a company policy to ignore the union. A company, of course, can advertise its belief that its offer is fair, and that, at the particular time, it sees no reason to change its offer even to forestall a strike. This kind of statement is different from advertising that it is company policy never to change any offer in response to union pressure.

This view does not differ from that of the NLRB, nor does it indicate that the Board reached the right result for the wrong reasons. The trial examiner, whose opinion the Board adopted, specifically condemned GE’s declarations that “a union could obtain no added benefits that it would not otherwise grant.” 150 N.L.R.B. at 279. Because of this dominant wrong, we agree with the trial examiner that other aspects of the communications program also evidenced bad faith on the facts of this ease although not as a matter of law. 150 N.L.R.B. at 274. It does no violence to the doctrine of SEC v. Chenery Corp., 318 U.S. 80, 95, 63 S.Ct. 454, 87 L.Ed. 626 (1943) to point out which of those factors correctly relied upon by an agency in the case at hand will also be instrumental in determining decisions in the future.

FRIENDLY, Circuit Judge

(concurring and dissenting).

I .agree with my brothers that by refusing to furnish cost information and by bargaining with locals during the strike, GE violated § 8(a) (5) of the National Labor Relations Act. I do not believe it also violated the Act by submitting a contributory personal accident insurance plan to the Union and de*765clining to bargain about it until the time for reopening of negotiations. I think also, along lines similar to Member Jenkins’ concurring opinion, that other specific conduct of the Company, such as that in regard to the effective date of the pension plan, pp. 12-13, and the form of the strike settlement agreement, p. 17, could properly have been condemned and an appropriate order framed. However, the majority of the Board was at pains to emphasize that its finding of overall bad faith was not based upon identifiable acts or failures to act that GE could avoid in the future but rather

upon our review of (1) the Respondent’s entire course of conduct, (2) its failure to furnish relevant information, (3) its attempts to deal separately with locals and to bypass the national bargaining representative, (4) the manner of its presentation of the accident insurance proposal, (5) the disparagement of the Union as bargaining representative by the communication program, (6) its conduct of the negotiations themselves, and (7) its attitude or approach as revealed by all these factors.1

Such attempts to restrict communications (item 5) and lay down standards with respect to bargaining techniques, attitudes and approaches (items (6) and (7)), bring the Board into collision with § 8(c) and (d) and the important policies they embody. It is easy to understand that anyone reviewing this enormous record would emerge with a good deal of sympathy for the situation of the Union and distaste for the tactics of the employer; no one likes to see a person who regards himself as in a strong position pushing it unduly, even though the fairness of GE’s offer is not challenged. But the Act does not empower the Board to translate such feelings into a finding of an unfair labor practice, and judicial sanction of such efforts to intrude into areas which Congress left to the parties may in the long run be quite as detrimental to unions as to employers. See N. L. R. B. v. Insurance Agents’ Int’l Union, 361 U.S. 477, 80 S.Ct. 419, 4 L.Ed.2d 454 (1960).

I.

Before I elaborate my doubts with respect to the determination of overall bad faith, it will be desirable to outline the basis for my disagreement with the conclusion that GE’s proffer of a personal accident insurance plan on a contributory basis, before the beginning of the contractual period for bargaining, constituted an independent violation of § 8 (a) (5). While the Board’s order contains no specific reference to this, at least three members relied heavily upon it for their conclusion of overall lack of good faith (see item (4)), as does the lead opinion here. If this conclusion is wrong, as I think it to be, such an important element is removed from the “totality of the circumstances” on which the Board relied that, on this ground alone, we could not properly enforce the order as to overall bad faith.

Discussion of the issue must begin by clearly delineating what it is not. No one is suggesting, as the majority intimates, p. 747, that GE could unilaterally change the terms of an agreed insurance plan to the detriment of its workers. Still less is anyone suggesting, see p. 748, that GE could confer a benefit only on non-union members. It is not even claimed that the Company could make a benefit effective for employees represented by a union without advising the union and obtaining the latter’s consent. The narrow issue is whether an employer is prohibited from even putting such a proposal to a union at a time when bargaining is not required under the contract unless he is willing to bargain about it then and there.

Section 8(a) (5), as elaborated in § 8(d), requires the employer and the representatives of the employees “to meet at reasonable times and confer in good faith with respect to wages, hours, and other terms and conditions of em*766ployment, or the negotiation of an agreement, or any question arising thereunder * * When an agreement has been i’eached, its provisions define what constitute “reasonable times” for bargaining. Here GE and the Union provided in the 1955 Pension and Insurance Agreement in the most explicit terms that “each of the parties voluntarily and unqualifiedly hereby waives any and all rights to require that the other party or parties hereto bargain collectively during the terms of this Agreement, with respect to any such subjects or matters whether or not such matters are covered by this Agreement.” See n. 4 to the majority opinion. Unless language in a labor agreement is to be denied its plain meaning, this protects GE’s conduct here. I wholly fail to perceive how the Company's further insistence on a specific renunciation by the Union of strikes, etc., to enforce modifications of insurance and pension benefits outside of a bargaining period in any way qualifies the language I have quoted.

N. L. R. B. v. Katz, 869 U.S. 736, 82 S.Ct. 1107, 8 L.Ed.2d 230 (1962), the decision relied upon to support the conclusion that GE’s proffer of a contributory personal accident insurance plan violated § 8(a) (5), is more striking in its differences than in its resemblances. There, during a period of bargaining, the employer made three unilateral changes with respect to terms and conditions of employment; the Court’s decision, scarcely a surprising one, was that this constituted “a refusal to negotiate in fact.” 369 U.S. at 743, 82 S.Ct. at 1111. Here GE merely submitted a proposal and did this at a time when it had no duty to bargain at all.

While I can understand that an employer’s refusal to bargain about a benefit he has voluntarily proffered during the term of an agreement may not be pleasing to a union, that does not violate the Act, at least when the contract expressly permits it. The majority attempts to escalate the problems by suggesting that the course here followed would create “divisive tendencies within the Union,” and even enable the “Company to pick the Union apart piece by piece.” P. 747. These comments, unsupported by the record, are singularly inappropriate as applied to the offer of a contributory personal accident insurance plan which employees with hazardous occupations were free to accept and those with routine duties to decline, which could hardly affect the Union’s position on the next negotiating round since it cost GE nothing other than the costs of administration, where the Company refused to make capital of the Union’s rejection, and when the Union considered the issue so unimportant that it did not even bring the matter up for negotiations during the formal bargaining sessions. One could also argue, in opposition to the majority’s position, that the Board’s determination offends the policy, although not indeed the letter, of the lengthy proviso to § 8(d), since requiring an employer to bargain in a situation such as that presented here, with the corollary that the union may support its bargaining demands with strike threats or strikes, see NLRB v. Lion Oil Co., 352 U.S. 282, 77 S.Ct. 330, 1 L.Ed.2d 331 (1957), undermines the broad purpose of enabling such modifications as are made during the term of an agreement to be made peaceably. However, it is enough for me that nothing in the Act or the court decisions under it can fairly be read to prohibit an employer, during the period of a contract when bargaining would not otherwise be required, from asking a union whether it will consent to his giving a benefit to the employees whom it represents. Cf. N. L. R. B. v. Honolulu Star-Bulletin, Inc., 372 F.2d 691 (9 Cir. 1967).

II.

The objective of § 8(a) (5), as stated by the Senate Committee on Education and Labor, S.Rep. No. 573, 74th Cong. 1st Sess. 12 (1935), was to impose a duty on employers “to recognize such representatives as they have been designated *767* * * and to negotiate with them in a bona fide effort to arrive at a collective bargaining agreement * * * ” In 1947 the fear was expressed in Congress that the N. L. R. B. “has gone very far, in the guise of determining whether or not employers had bargained in good faith, in setting itself up as the judge of what concessions an employer must make and of the proposals and counterproposals that he may or may not make.” H. R.Rep. No. 245, 80th Cong. 1st Sess. 19 (1947). As a result Congress enacted § 8(d), expressly providing that the obligation to bargain “does not compel either party to agree to a proposal or require the making of a concession.” See N. L. R. B. v. American Nat’l Ins. Co., 343 U.S. 395, 402-404, 72 S.Ct. 824, 96 L.Ed. 1027 (1952). At the same time, in the light of other actions of the Board, Congress added § 8(c), declaring in unequivocal terms that:

“The expressing of any views, argument, or opinion, or the dissemination thereof, whether in written, printed, graphic; or visual form, shall not constitute or be evidence of an unfair labor practice under any of the provisions of this subchapter, if such expression contains no threat of reprisal or force or promise of benefit.”

The great bulk of the Board’s salutary decisions under § 8(a) (5) have been in areas far removed from any possibility of conflict with § 8(c) or (d). Perhaps the most important single group consists of cases where the employer has refused to deal with a union at all or, as in GE’s dealing with locals, has negotiated over its head; in such instances, although the Board normally issues a broad order to bargain in good faith, no one supposes that the order dictates just how the bargaining shall be conducted. Beyond that the Board, with the approval of the Supreme Court, has usefully identified a considerable number of practices constituting per se violations. These include refusal to sign a written contract embodying an agreement, H. J. Heinz Co. v. N. L. R. B., 311 U.S. 514, 61 S.Ct. 320, 85 L.Ed. 309 (1941), a practice now specifically prohibited by § 8(d); offering employees, during the course of negotiation, more than was offered through the union, N. L. R. B. v. Crompton-Highland Mills, Inc., 337 U.S. 217, 69 S.Ct. 960, 93 L.Ed. 1320 (1949) ; making unilateral changes while bargaining is in process, N. L. R. B. v. Katz, supra, 369 U.S. 736, 82 S.Ct. 1107; refusing to furnish available information needed by the union to evaluate a bargaining position, N. L. R. B. v. Truitt Mfg. Co., 351 U.S. 149, 76 S.Ct. 753, 100 L.Ed. 1027 (1956); and insisting as a condition of agreement upon a subject outside the area of mandatory collective bargaining, N. L. R. B. v. Wooster Division of Borg-Warner Corp., 356 U.S. 342, 78 S.Ct. 718, 2 L.Ed.2d 823 (1958).

The danger of collision with § 8(c) or (d) arises only when the Board makes a finding of violation although the parties have sat down with each other and have not engaged in any proscribed tactic. Still I have no difficulty with the Board’s making a finding of bad faith based on an entire course of conduct so long as the standard of bad faith is, in Judge Magruder’s well-known phrase, a “desire not to reach an agreement with the Union.” N. L. R. B. v. Reed & Prince Mfg. Co., 205 F.2d 131, 134 (1 Cir.), cert. denied, 346 U.S. 887, 74 S.Ct. 139, 98 L.Ed. 391 (1953). In such instances, the difficulties inevitable in an examination of the “totality of the circumstances” and an order based upon them are outweighed by the definiteness of the standard, the consequent feasibility of compliance, and the necessity for such an order if the employer’s duty to recognize the union is to be carried out in substance as well as in form. See, e. g., N. L. R. B. v. Montgomery Ward & Co., 133 F.2d 676, 146 A.L.R. 1045 (9th Cir. 1943).la However, as Professor Cox re*768marked in a notable article which has been cited with approval by the Supreme Court, N. L. R. B. v. Insurance Agents’ Union, supra, 361 U.S. at 489-490, 80 S.Ct. 419, and has not suffered from the lapse of a decade, it is “doubtful whether much is gained by retrospective review of the negotiations when the parties have actually bargained together.” The Duty to Bargain in Good Faith, 71 Harv.L. Rev. 1401, 1439 (1958). Here the General Counsel conceded that GE entertained no such prohibited desire and, despite the majority’s innuendoes concerning antiunion animus, the Trial Examiner rightly observed that no claim was “made in this case that the respondent was seeking to rid itself of the Union,” with which it had been dealing for many years and expected to deal for many more.

The only prior court decision that has approved a finding of overall bad faith when there was a desire to reach an agreement is United Steelworkers of America v. N. L. R. B., 390 F.2d 846 (D.C. Cir. 1967), cert. denied, Roanoke, Iron & Bridge Works v. N. L. R. B., 391 U.S. 904, 88 S.Ct. 1654, 20 L.Ed.2d 419 (1968), a decision rendered over the dissent of Chief Justice (then Judge) Burger. However one may regard that decision, the Board’s case was far stronger than here. The employer had refused to budge from an adamant position against a voluntary check-off although it had granted this to a more favored union three years before, had propagandized the employees that a previous similar refusal on its part had destroyed a union, and had advanced no business reasons whatever, “all in a context of vigorous anti-union animus.” 390 F.2d at 852. There was thus considerable basis for inferring that the employer was seeking eventually to rid itself of the union despite its desire to reach an agreement at the moment. Yet even in that context Judge Burger referred to the Board’s postulating “the novel and internally inconsistent proposition that a bargainer can be found to have refused to bargain in good faith even while at the same time it is found to have engaged in bargaining in a good faith effort to reach an agreement and has actually reached a final and binding contract,” 390 F.2d at 853.2

Although both the Board and the majority here have been quite explicit in describing what they are not deciding, they are far less informative with respect to what they are. The closest the lead opinion comes to this is its statement (p. 762) that its basis for upholding the order with respect to overall bad faith is “that an employer may not so combine ‘take-it-or-leave-it’ bargaining methods with a widely publicized stance of unbending firmness that he is himself unable to alter a position once taken.” My brother Waterman, though avowedly concurring fully, takes what seems to me a quite different view, namely, that GE’s “bargaining methods” were entirely lawful and only its allegedly publicization of a “stance of unbending firmness” was unfair.

While the lead opinion makes much use of the “take-it-or-leave-it” phrase, it never defines this. I should suppose it meant a resolve to adhere to a position without even listening to and considering the views of the other side. To go further and say that a party, whether employer or union, who, after listening to and considering such proposals, violates § 8(a) (5) if he rejects them because of confidence in his own bargaining power, would ignore the explicit command of § 8(d) — as Judge Waterman recognizes. Although the taking of such a hard position may be unattractive, the attitude is one which the law allows an employer or a union to take, despite the dictum in *769Justice Frankfurter’s concurring opinion in N. L. R. B. v. Truitt Mfg. Co., supra, 351 U.S. at 154, 76 S.Ct. 753.

It surely cannot be, for example, that a union intent on imposing area standards violates § 8(b) (3 if it refuses to heed the well-documented presentation of an employer who insists that acceptance of them will drive him out of business. Neither can it be that a union violates § 8(b) (3) if it insists on its demands because it knows the employer simply cannot stand a strike.3 It must be equally true that an employer is not to be condemned for “take-it-or-leave-it” bargaining when, after discussing the union’s proposals and supporting arguments, he formulates what he considers a sufficiently attractive offer and refuses to alter it unless convinced an alteration is “right.” Hence the Board correctly declined to affix the “take-it- or-leave-it” label which my brother Kaufman uses.

Once we rid ourselves of the prejudice inevitably engendered by this catchphrase, we reach the argument that a party violates § 8(a) (5) if he gets himself into a situation where he is “unable to alter a position once taken,” even though he would otherwise be willing to do so.

While this sounds fair enough, as does the Board’s somewhat similar remark about the continuing duty to give “unfettered consideration,” it would seemingly outlaw practices that no one has considered illegal up to this time. A union that has won a favorable contract from one employer and has broadcast that it will take no less from others seems to me to be quite as “unable to alter a position once taken” as GE was here, yet I should not have supposed this violated the Act. So also with an employer who has negotiated a contract with one union and has proclaimed that he will do no better for others. To say that taking such positions violates § 8(b) (3) or 8(a) (5) is steering a collision course with § 8(d).

Moreover, I find no substantial evidence that GE got itself into the predicament the majority depicts. The best evidence to the contrary consists of the changes the Company in fact made. In response to Union objections to the offer as initially presented informally, GE modified it to include a wage reopener on April 1, 1962, as an alternative to the automatic 4% increase it had proposed. On September 9, after it had publicized its offer and in response to feelers from some Union negotiators, it advanced the option of substituting an additional holiday and a fourth week of vacation for employees with 25 years of service in exchange for 1% of this 4%.4 Twelve days later it agreed to reduce the costs of the Union’s representatives’ pension plan from 6% of the first $4800 and 15% thereafter to 4% and -10% — which the Union’s chief negotiator called “an excellent proposition.” Even though, as the majority states, the reduction was responsive to new actuarial calculations, this shows that GE was not using a mere form of words when it said it would make a change if convinced one was “right.” Finally, GE yielded on a clause, Exclusion K, in its insurance plan5 which the chairman of the Union negotiating committee had characterized as having “caused more dissatisfaction *770among the people than anything else.” The Union's insurance specialist called this “a good improvement.”

The Union’s appraisals of the value of these concessions at the time is more impressive than the depreciation of them nine years after the event. Moreover, in appraising such concessions it is important to remember Judge Burger’s caution that, although it may sometimes be necessary to consider “the reasonableness of parties’ positions on particular issues to determine whether, under all the circumstances of the negotiation, a particular bargaining position was adopted for the purpose of frustrating negotiation generally and thus preventing an agreement,” “the courts have been vigilant lest the examination of parties’ positions to test good faith become a process of judging, directly or indirectly, the substantive terms of their proposals." United States Steelworkers of America v. N. L. R. B., swpra, 390 F.2d at 853 (dissenting opinion). By characterizing some of the changes as “of quite minor significance,” the lead opinion does precisely that.

I find nothing on the other side substantial enough to outweigh this evidence that GE remained able to adopt changes it thought to be “right.” Much is made of the September 28 exchange between Jandreau, Moore, and Hilbert over a Union proposal that the Income Extension Aid funds and part of the money for a wage increase provided in the Company offer be used instead for Supplementary Unemployment Benefits (SUB). The lead opinion, following the Trial Examiner, misinterprets Hilbert’s remarks. Hilbert’s objection to the Union proposal was that it came at so late a date that the Union could not seriously expect the Company to act upon it. He said that there were only three reasons why the Company might change its offer at such a time; if they had deliberately held something back for horse-trading; if they had made an error in deciding what was “right”; or if they were so afraid of a strike that they would give in even though they continued to believe that -their offer was “right.” If the first or last reasons had applied, he said, GE would indeed look foolish in the eyes of its employees and the public at large, but they did not apply.6

III.

An essential element to the Board’s conclusion of GE’s offending was the Company’s publicity campaign. “The disparagement of the Union as bargaining representative” is item (5) in the Board’s bill of particulars. The Board elaborated this by saying it is unlawful “for an employer to mount a campaign, as Respondent did, both before and during negotiations, for the purpose of disparaging and discrediting the statutory representative in the eyes of its employees, to exert pressure on the representative to submit to the will of the employer, and to create the impression that the employer rather than the union is the true protector of the employees’ interests.”

I find no warrant for such a holding in the language of the statute, its legislative history or decisions construing it. GE’s communications fit snugly under the phrase “views, argument, or opinion” in § 8(c). The very archetypes of what *771Congress had in mind were communications by an employer to his workers designed to influence their decisions contrary to union views, and communications by unions to workers designed to influence their decisions contrary to employer views. The statute draws no distinctions between communications by an employer in an effort to head off organization 7 and communications after organization intended to show that he is doing right by his employees and will do no more under the threat of a strike. Congress had enough faith in the common sense of the American working man to believe he did not need — or want — to be shielded by a government agency from hearing whatever arguments employers or unions desired to make to him. Freedom of choice by employees after hearing all relevant arguments is the cornerstone of the National Labor Relations Act.

As for the legislative history of § 8(c), the full text of Senator Taft’s remarks in this context was:

The purpose of this language is to make it clear that the Board is not to use any utterances containing [no] threats or promises of benefits as either an unfair practice standing alone or as making some act which would otherwise not be an unfair labor practice, an unfair labor practice. It should be noted that this subsection is limited to “views, argument, or opinions” and does not cover instructions, directions, or other statements which might be deemed admissions under ordinary rules of evidence. In other words, this section does not make incompetent, evidence which would ordinarily be deemed relevant and admissible in courts of law. 2 Legislative History of the LMRA, 1947, at 1541 (1948).

It is plain that GE’s communications came under the protection of the statute, and not the exception which Senator Taft described. The word “relevant” in Senator Taft’s speech cannot be blown up to such a degree as to render the amendment largely nugatory. The case is in sharp contrast with NLRB v. Fitzgerald Mills Corp., 313 F.2d 260, 268 (2 Cir.), cert. denied, 375 U.S. 834, 84 S.Ct. 47, 11 L.Ed.2d 64 (1963), cited by the Board and the majority, where the company’s general manager said that he would “die and go to hell before he would sign a contract” and told his employees to “get those union agitating sons of bitches out of Fitzgerald.” NLRB v. Herman Sausage Co., 275 F.2d 229 (5th Cir. 1960), the only other case cited by the Board in support of this part of its opinion, is equally inapposite.

The Trial Examiner’s criticisms of GE’s communications as being one-sided and “massive,” and as portraying the union negotiators in an unfavorable light, which were endorsed by the Board and are reflected in the lead opinion, see fn. 14, ignore the whole thrust of § 8(c). Although Mr. Justice Black was in dissent in Linn v. United Plant Guard Workers, 383 U.S. 53, 67-68, 86 S.Ct. 657, 665, 15 L.Ed.2d 582 (1966), there was no disagreement with his statement:

When Congress passed the National Labor Relations Act, it must have known, as almost all people do, that in labor disputes both sides are masters ' of the arts of vilification, invective and exaggeration.

It is for unions and employers, not for a government agency, to determine how “massive” their communications shall be.

The Examiner coined a phrase, echoed both by the Board and in the lead opinion, see p. 759, namely, that GE’s communications program was an attempt “to deal with the Union through the employees rather than with the employees through the Union.” Somewhat parallel to this is the opinion’s statement that the Company “deliberately bargain [ed] and communicate [d] as though the Union did not exist, in clear derogation of the Union’s status as exclusive representative of its members under section 9(a),” p. 763. *772Picturesque characterizations of this sort, at such sharp variance with the record, scarcely aid the quest for a right result. Members of Congress would probably be surprised to learn that being “exclusive representatives” means that interested parties may not go to constituents in an endeavor to influence the representatives to depart from positions they have taken. There can be nothing wrong in an employer’s urging employees to communicate with their representatives simply because the communication is one the representatives do not want to hear. I thus find it impossible to accept the proposition that, by exercising its § 8(c) right to persuade the employees and by encouraging them to exercise their right to persuade their representatives, GE was somehow “ignoring the legitimacy and relevance of the Union’s position as statutory representative of its members” (p. 757).

Apparently accepting this, Judge Waterman would narrow GE’s offending, not only with respect to the publicity program but on the whole issue of overall bad faith, to its communicating “that firmness was one of the company’s independent policies.” The first thing to be said about this is that even if my brother were right, we would not be justified in enforcing the Board’s order on that basis. “An administrative order cannot be upheld unless the grounds upon which the agency acted in exercising its powers were those upon which its action can be sustained.” S. E. C. v. Chenery Corp., 318 U.S. 80, 95, 63 S.Ct. 454, 462, 87 L.Ed. 626 (1943), and the Board’s opinion leaned so heavily on the Company’s disparagement of the Union that we cannot disregard this on the basis that it would have ruled the same way even had it known it was wrong in its reliance. Moreover, GE certainly could not be sure it would be in compliance if it desisted merely from the one tactic that Judge Waterman condemns. My second difficulty is that his position would seemingly outlaw conduct such as in the eases I have put — where a union “finally” tells workers that it will not take less from one employer than .it has won from another or an employer “finally” proclaims he will give no more to one union than he has to another. The third is that if his or the lead opinion implies that GE's publicity got it into a position where it could not yield even if it was convinced that it should, the necessary factual support does not exist. There is no need to repeat what has been said in the previous section of this opinion on that score. I add only, in response to Judge Waterman’s proposed rationale, that, as I read the Trial Examiner’s report, he made no finding that the publicity had produced any such result. His condemnation of the Company’s “finality” campaign referred solely to communications following the resumption of negotiations after the strike vote, and the sense in which he understood the term “finality” is clarified by his statement that “The repeated mentions of the finality of the offer * * * were coupled throughout * * * [this period] with declarations pointing up the inevitable futility of a strike, regardless of its duration, in the light of the Company’s policy not to give more simply to avert a strike.” (Emphasis added.)

Since a policy not to give in just because of a strike is not a violation of § 8 (a) (5), I cannot understand why communication of that policy to employees should be. The fact that strikes to coerce acceptance of union demands are “part and parcel of the process of collective bargaining,” NLRB v. Insurance Agents’ Union, supra, 361 U.S. at 495, 80 S.Ct. at 430, does not forbid the employer’s doing his best to avoid being coerced by them. This, of course, does not change his duty to continue negotiations and to negotiate in good faith. But so far as economic warfare and vulnerability to it are concerned, the Act allows the parties a maximum of self-protection. No one denies that § 8(c) protects employer communications attempting to persuade employees that they should not strike because the offer fully meets their needs, because union leaders are seeking a strike for personal reasons, or because *773a strike will cost too much in lost pay. To prohibit an employer from adding that the mere fact of a strike would gain nothing in the way of further concessions would remove his most important and most relevant argument. Yet this is all that GE’s much discussed finality campaign amounted to and, with one insignificant exception, the campaign made the point in the narrowest way it could. GE did not say “If you strike we will automatically lock ourselves into our offer,” but only that GE was not deliberately holding anything back and had to be convinced that its original offer was no longer “right” before it would make a change.8

It is doubtless true in labor as in other negotiations that the louder people shout, the harder it becomes for them to change their positions without unacceptable loss of face. In that sense any positive public declaration, whether by an employer or by a union, may run counter to the objective of securing industrial peace by promoting agreement. But the Board has been expressly prohibited from promoting peace by restricting speech. Conformably with the dictates of the First Amendment, Congress, when it enacted § 8(c), determined the dangers that free expression might entail for successful bargaining were a lesser risk than to have the Board police employer or union speech.

IV.

Even if one were to take the benevolent view toward the portion of the Board’s opinion and order relating to overall bad faith that is done by the majority, it is beyond debate that if this decision should stand, it would open up wholly new problem areas in the application of §§ 8(a) (5) and ¿(b) (3). I cannot perceive any sufficient reason for doing this when, as I see it, the order cannot be enforced in any practical sense and deals with events of half a generation ago.

The only standard of conduct set for GE by the Board’s opinion is that a mix of the “fair, firm offer” technique pursued to an unknown point X, plus a communications program pursued to an equally unknown point Y, plus a number of additional items, Zi, Z2, and Z3, is proscribed. This already sufficient confusion is now compounded by the difference in my brothers’ efforts at elucidation.

In view of the general obscurity of what GE is and is not permitted to do, the Company could take little comfort from the majority’s assurance that it will be given a full opportunity to show it has made a good faith effort at compliance before it is held in contempt. In fact, however, no contempt proceeding could be successfully maintained. For the Supreme Court has very recently declared, in the closely related context of an equitable decree with respect to work stoppages, that “The most fundamental postulates of our legal order forbid the imposition of a penalty for disobeying a command that defies comprehension.” International Longshoremen’s Ass’n Local 1291 v. Philadelphia Marine Trade Ass’n, 389 U.S. 64, 76, 88 S.Ct. 201, 208, 19 L.Ed.2d 236 (1967).9

The venerable age this ease has attained is a further reason for declining to churn up waters that already are troubled enough. We are dealing with an *774alleged unfair labor practice of nine years ago. Four years were taken by the Board to render a decision — itself some indication that Congress never intended to impose any such “herculean task.” Passing over the two years spent in quarrels in the courts over venue and the Union’s right to intervene, three more elapsed before the case was argued to us. Since then there have been two further negotiations, in 1963 and 1966. Another, in which the IUE’s bargaining position has been significantly bolstered by a decision of this court in which I joined, General Electric Co. v. NLRB, 412 F.2d 512 (1969), is now in progress. Although the unions have called a strike and filed unfair labor practice charges, in part because of GE’s adhering to a “fair, firm offer” of a first year increase less than the unions sought and with annual wage reopeners instead of automatic increases, many of the principals in the 1960 negotiations are no longer on the scene and it is scarcely possible that the Company’s actions are so nearly parallel to those of 1960 that an order in this case, even had it been made earlier, would have supported a contempt proceeding.

I am well aware of the Supreme Court’s statement that “Congress has introduced no time limitation into the Act except that in § 10(b),” NLRB v. Katz, 3¿9 U.S. 736, 748, 82 S.Ct. 1107, 1114, n. 16 (1962). Still, as it seems to me, a court must have some discretion to decline to enforce a Labor Board order relating to practices nearly a decade in the past when, as here, the parties have engaged in bargaining, any harmful effect of the alleged unfair labor practice has been dissipated, the case was one of first impression, and there has thus been no “stubborn refusal to abide by the law.” Franks Bros. Co. v. NLRB, 321 U.S. 702, 705, 64 S.Ct. 817, 819, 88 L.Ed. 1020 (1944).

In conclusion, I respectfully suggest, as Judge Burger did in United Steelworkers of America v. N. L. R. B., supra, 390 F.2d at 858, “that today’s holding contains the seeds of danger for unions in their collective bargaining rights” as well as for employers in the exercise of theirs. It constitutes also a serious indentation of § 8(c) and (d), if not, indeed, of the First Amendment. For the reasons I have indicated, I believe the majority’s decision to be deeply mistaken — the familiar instance of a hard case producing bad law. In any event, I think that, because of the confusion as to what the Board’s order, means and the lapse of time, the case is exceedingly inappropriate for taking such a portentous step.

I would grant enforcement with respect to the failure to furnish information and the bargaining with locals, and would otherwise deny.