National Labor Relations Board v. Fansteel Metallurgical Corp.

Fansteel Metallurgical Corp. (Fansteel) (plaintiff) operated a manufacturing plant in North Chicago, Illinois. In 1936, a minority of Fansteel employees organized a union called Lodge 66. Fansteel’s superintendent refused to recognize Lodge 66. By February 17, 1937, a majority of Fansteel’s employees had joined Lodge 66, but Fansteel still would not bargain with Lodge 66. Lodge 66 then began a sit-down strike. Employees occupied two of Fansteel’s main buildings. When the occupiers refused to leave, Fansteel fired them. The next day, Fansteel obtained an injunction against the occupiers, which the occupiers ignored. The occupiers were then served a contempt order, and the sheriff tried and failed to arrest them. Finally, on February 26, the sheriff successfully arrested the occupiers, most of whom were fined and jailed. Later, Fansteel offered some of the strikers reinstatement and backpay but still would not recognize Lodge 66. In April 1937, over 90% of Fansteel employees, supported by Fansteel, voted to form a new union, Rare Metal Workers of America, Local No. 1. The National Labor Relations Board (NLRB) (defendant) found that Fansteel had interfered in the formation of Rare Metal Workers and that most of Fansteel’s actions regarding Lodge 66 constituted unfair labor practices (ULPs). The NLRB ordered Fansteel to stop interfering with its employees’ right of self-organization, as guaranteed by the Wagner Act; to recognize and bargain exclusively with Lodge 66; and to offer all striking employees full reinstatement with backpay. Fansteel petitioned to overturn the NLRB order in the United States Court of Appeals for the Seventh Circuit. The NLRB argued that the portion of its order requiring reinstatement of all striking workers was valid because Fansteel’s ULPs caused the strike and, under the act, employees striking to protest ULPs retained employee status. The NLRB also contended that it had the authority to reinstate rightfully discharged employees to “effectuate the policies of the act.” The Seventh Circuit overturned the NLRB order. The Supreme Court granted certiorari.