The CHAIRMAN. It will be printed in the record. (The document referred to is as follows:)

[G. C. (Field) No. 52 (Revised)]

To: Regional office staffs.

From: Robert N. Denham, general counsel.
Subject: Assertion of jurisdiction.

NOVEMBER 23, 1948.

The jurisdiction of this agency depends on whether the business or industry involved "affects commerce.' The term "affecting commerce" has been defined in numerous decisions of the United States Supreme Court and the various circuit courts of appeals, in cases brought under the Wagner Act. These decisions are familiar to you and your legal staff. The language on this point is identical in the Wagner Act and in that act as now amended.

Any case falling within these definitions is within the jurisdiction of the agency, whether it involves a small business or a large business, or a few or many employees.

The general counsel sees no justification in the act, direct or implied, for his office or any of his staff to refuse the processes of the act and the services of the agency to any qualified petitioner or complainant falling within the statutory jurisdiction of the agency, provided, of course, the petition or charge is founded on merit, and is not otherwise barred as a matter of law.

All regional directors, officers in charge, and other personnel of the Office of the General Counsel will be guided accordingly, and will process all petitions and charges filed by qualified parties, dismissing such petitions and charges only for lack of merit on the facts or the law, lack or jurisdiction within the above definition, or noncompliance with section 9 (f), (g), and (h).

Recently, the Board has dismissed a number of representation cases where the business obviously or admittedly affected commerce as above defined, but was found by the Board to be "essentially local in character" and of such nature that "it would not effectuate the policies of the act," for the Board to consider the petition. Should representation petitions be again filed involving the same parties found in such a previously dismissed case, the petition will be dismissed by the regional director, "for the reason that the Board has heretofore ruled on the status of the parties and, in the absence of facts not available when the previous ruling was made, the previous order of the Board with reference to these parties is still controlling."

Where representation cases involve different parties, but industries similar to those with respect to which the Board, notwithstanding the existence of statutory jurisdiction, may have denied the processes of the act because, "it would not effectuate the policies of the act," such cases will be processed at the regional level in regular manner.

However, the fact that the Board has dismissed a representation case because, in its view. "it would not effectuate the policies of the act" to process it even though legal jurisdiction exists, will not bar the acceptance and processing of a meritorious charge involving the same parties or any of them.

This instruction supersedes G. C. (Field) No. 52, dated December 12, 1947. Please destroy all copies of the original instruction.

R. N. D.

Mr. HERZOG. There is an exchange of memoranda between the Board and the general counsel on that subject, friendly in tone, I am glad to say, but which pretty clearly indicates the problem. The situation briefly is this:

The Board delegated to the general counsel in order to make it more effective complete control over the processing of representation or election cases in the regional offices. As the joint committee recalls from its own hearings, there has been a difference of opinion between the members of the Board and the general counsel on the subject of the extent to which this Board should exercise jurisdiction over controversies in relatively local enterprises. It has been the position of the Board members that the Federal Government should not use its. constitutional power right up to the hilt.

In other words, where something has a local flavor to it, the mere fact that we could under the present constitutional doctrines of the Supreme Court take the case would not necessarily mean that we should waste the time of Federal officials or expend Federal funds to proceed with such cases. That was the practice under the Wagner Act and there was nothing in our opinion in the legislative history of the Taft-Hartley Act to require a change, with the possible exception of some variation in secondary boycotts and possibly jurisdietional disputes as well.

The general counsel, looking at it from his view of the law, has taken the position, with which I have already indicated I cannot agree, that is, that it is the business of his office to step into every case, no matter how small, in any part of the United States, provided the constitutional power exists. There has been a difference of opinion on that which has been reflected in part in the hearings of the joint committee on June 11, 1948, and mentioned in the report of the committee.

I have to give that background in order to show where this policy question comes up. The Board has continued to issue decisions, particularly in representation cases, refusing to exercise jurisdiction where something seems pretty small, even though perhaps we had constitutional power to do so. The general counsel has told us many times he thought that an erroneous view of the law, as he has told the joint committee.

I remind the committee that the handling of representation cases in the field is a delegated power by the Board to the general counsel, and not statutory like the handling of unfair labor practices.

He initiated this general field letter No. 52, dated November 23, 1948, paragraph 6 of which is as follows. This is his instruction to the people in the field, instructing them in effect to pay no attention to prior Board decisions on parallel situations, but to go right ahead and follow his doctrines. I will read this one paragraph, although it should be seen in its entire context. I repeat that this is said with no feeling of personal annoyance at all, but simply as a beautiful example of how this thing can break down:

Where representation cases involve different parties—

that is, parties not involved in the prior Board decision

but industries similar to those with respect to which the Board, notwithstanding the existence of statutory jurisdiction, may have denied the processes of the act because, "it would not effectuate the policies of the act," such cases will be processed at the regional level in regular manner.

In other words, the regional offices have been instructed to pay no attention to prior decisions of the Board except when precisely the same companies are involved.

Senator TAFT. The time will come when you can overrule him. Mr. HERZOG. We can overrule him by getting each of these cases up. They are instructed to go ahead. The Board gets them months later and then when we get it, we throw it out, which is what we are doing

Senator TAFT. If you do that once, it has to be followed.

Mr. HERZOG. That has not happened. That is the significance of this field letter. It was a challenge on that particular issue.

Now Mr. Denham has pointed out, and I should say this in fairness to him

Senator TAFT. I think he has assumed much too broad jurisdiction in small intrastate cases. There is always likely to be a difference if you have two people separated, but some court is going to settle it finally.

Mr. HERZOG. I doubt it, because I think it is a question of the exercise of jurisdiction and not of constitutional power. I am not sure it will.

Senator TAFT. Then we can properly define it in the statute to eliminate such a difference.

W

Mr. HERZOG. It is an example of the difficulty that arises. I mention it because it has to do with a subject that the committee is familiar with. I should say in fairness to him that he has indicated that he thinks the Board's decisions are so varied, that it is pretty hard to give instructions of that kind to the field because he doesn't know what we will do next.

Senator TAFT. That, of course, is true. It is hard to distinguish between one kind of bakery and another kind of bakery or one kind of retail store and another kind of retail store.

Mr. HERZOG. The Board asked him this question on January 7:

Where the Board has stated that it will not exercise jurisdiction in a particular industry because of its character, or because the inflow and/or outflow are too small in amount or percentage, does the general counsel intend to instruct the regions to decline to exercise jurisdiction over similar companies where the amount or percentage is even less than in the case already decided by the Board?

We have had no answer to that yet.

Senator TAFT. I would be perfectly willing to define his jurisdiction in that respect and clear up that particular point.

Mr. HERZOG. But that is just one example of some of the difficulties you get into. Meanwhile our customers, who are also his customers in the field, don't know which way to turn.

Senator TAFT. Over and over again prosecutors throughout the United States have been upset by the courts after they have gone through a long period of prosecution of a case, and sooner or later the thing is straightened out.

Mr. HERZOG. I think it gets down really to a question of whether one believes in using the administrative process in this field or court procedures. If court procedures are best, I suppose this system is best. I don't think they are.

Senator TAFT. You testified that the Board had been reversed in very few cases. I want to suggest a reason why. I read from the opinion of the circuit court of appeals in the case of Wilson Company versus National Labor Relations Board. That is Case No. 126, Fed. 2d, 114, reading:

We have recognized or tried to that findings must be sustained even when they are contrary to the great weight of the evidence, and we have ignored or at least endeavored to ignore the glaring injustices which such findings oppose to the overwhelming weight of the evidence produced. We must confess at times we have apparently failed to recognize that evidence which would not appeal to any normal. rational appraiser of the facts, may yet fall within this field of some evidence on the assumption that such evidence would not be sufficient to sustain a finding in an ordinary civil suit, we have rejected it.

The Supreme Court ruled under the old law that there was practically no injustice for which a ruling of the Board could be reversed. Isn't that one of the reasons the Board has been reversed in such a small number of cases?

Mr. HERZOG. Senator, I would like

Senator TAFT. Isn't that one of the reasons that the Board has been reversed in

Mr. HERZOG. That may be one of the reasons, Senator, why the Board has not been reversed very often on the question of the sufficiency of evidence to support a finding. But Senator Douglas' question, as I recall it, and my reply, were devoted not to the question of the substantiality of evidence but to the question of whether the procedures themselves were fair, and I said that I thought very few cases had been reversed on that ground.

The statistics that I gave, of course, were on an over-all basis, but the question of the substantial evidence rule is quite a different question from the one of due process.

Senator TAFT. Well, let's get to that for a moment. This bill eliminates, I think, any reference to evidence at all; doesn't it?

Mr. HERZOG. Oh, no, it still requires some.

Senator TAFT. Requires some. In other words, it goes back to the scintilla rule, so to speak, that the court was criticizing; doesn't it? Mr. HERZOG. Well, there are some changes, Senator, in the statute in section 10 which have not yet been very satisfactorily construed by the courts.

Senator TAFT. In which statute?

Mr. HERZOG. Of the Taft-Hartley Act. Oh, you mean Senator Thomas' substitute bill?

Senator TAFT. Senator Thomas' bill has no reference to it.

Mr. HERZOG. No. Well, that simply

Senator TAFT. Reincorporates the rule under the Wagner Act which was criticized by the circuit court of appeals, as I have just read.

Mr. HERZOG. That is right, but we, of course, have to follow the Supreme Court.

Senator TAFT. So that you eliminate this rule which is inserted in the Taft-Hartley Act:

The findings of the Board with respect to questions of fact if supported by substantial evidence on the record considered as a whole shall be conclusive.

Do you see any reason why we should eliminate that attempt to deal with the previous situation?

Mr. HERZOG. I have given no particular thought to that, Senator. I do know that the circuit courts in attempting to construe that sec tion so far have not reached any very clear conclusion as to what it means. I don't know whether it changes the rule of review or whether it doesn't. I have seen four or five decisions.

Senator TAFT. Obviously, it changes it. How much, I do not know, Mr. HERZOG. I would think so. I think there is one circuit court opinion that suggested it did not change it, but I can't remember the name of the case, and I may be in error. I venture to say, though, that the Labor Board should not be a leper and that the principles of the Administrative Procedure Act should apply to us.

Senator TAFT. Well, the Wagner Act to which we return says, "The findings of the Board as to the fact if supported by evidence shall be conclusive."

Mr. HERZOG. Yes.

Senator TAFT. Which has been construed as meaning any evidence. Mr. HERZOG. No, I am sorry, Senator. I dislike disagreeing with you, but it has been construed by the courts as meaning substantial evidence. That began very early in the circuit courts and Supreme Court of the United States.

- Senator TAFT. Bnt in effect they held that no matter how many witnesses testified one way, if you had one fellow who testified the other way that was evidence, no matter what his character might be, or what they thought of his credibility. That was sufficient to sustain that

Mr. HERZOG. Well, if the Supreme Court thinks that is the law, I am not going to question it.

Senator TAFT. I am only paraphrasing about what I think it is. Mr. HERZOG. Yes. Well, I think that is probably an extreme case. The fact of the matter is, as we are arguing a certiorari proceeding in the Supreme Court right now, that it is always conceivable that the trier of the facts finds one witness a credible fellow and that 44 witnesses the other way are not credible. It is unusual, but it is not impossible.

Senator TAFT. But the Board may find that and then they cannot be reversed by anybody if they once find that. That is, under the Wagner Act.

Do you see any real objection to this? We worked this out. It is a compromise out of a dozen different proposals, and we finally had this thing which seems to me at least better than the preexisting law, and I can't see any reason for appealing it.

Findings of the Board with respect to questions of fact if supported by substantial evidence on the record considered as a whole shall be conclusive.

Mr. HERZOG. I prefer the Administrative Procedure Act, Senator. I prefer the Wagner Act definition as modified by the Administrative Procedure Act, the exact language of which, I am sorry to say I don't have in front of me, but which does apply to all agencies.

Senator TAFT. Of course, it makes it less likely that the Board will be reversed.

Mr. HERZOG. Well, again, Senator, speaking personally-which I suppose is presumptuous of me-I wouldn't mind that, because I think any man who has the job of judging evidence, if he has got any sense at all, likes the feeling that somebody is really going to scrutinize it and see if he is wrong, instead of having to take complete responsibility for it. But I think on a matter of the proper operation of Government and of not holding up cases forever, that the other procedure is better.

Senator TAFT. We return under this law now to the rule of the Wagner Act on evidence, rules of evidence. I assume that this provision of the Taft-Hartley Act is supposed to be repealed:

Any such proceedings shall so far as practicable be conducted in accordance with the rules of evidence applicable in the district courts of the United States and the rules of civil procedure.