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Chapter 15 of 943 · Business Tides: The Newsweek Era of Henry Hazlitt by Henry Hazlitt

Foremen under Judicial Legislation

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March 24, 1947

Once more, as in the Mount Clemens “portal-to-portal” case, the Supreme Court has handed down a decision that, unless it is quickly nullified by Congress, must do immense practical harm. Once more the Supreme Court affects to be “interpreting” a law when it is in fact amending it. Once more we have a flagrant case of judicial legislation superseding the actual legislation passed by Congress.

In holding that employers are forbidden under the Wagner Act to object to the unionization of their own foremen, Mr. Justice Jackson, speaking for the five-to-four court majority, sets aside the plain wording of the Wagner Act itself: “The term ‘employer’ includes any person acting in the interest of an employer, directly or indirectly.” If foremen aren’t put in charge for the very purpose of acting in the interest of the employer, who is?

Yet even if the Wagner Act had gone on to list foremen specifically by name among “employers,” it is clear that Justice Jackson’s reasoning would have set aside even this. After citing from the law the very definition just quoted, he blandly goes on to say: “Even those who act for the employer in some matters...still have interests of their own as employees.” No doubt. But as Mr. Justice Douglas pointed out for the court minority, if on such reasoning, foremen are “employees,” then “so are vice presidents, managers, assistant managers...indeed all who are on the payroll of the company including the president.”

Though his decision flies in the face of the plain definition in the Wagner Act, Justice Jackson affects to be able to find no other possible interpretation of the law. “It is for Congress, not for us,” he solemnly declares, to create exceptions to the present “plain terms” of the Wagner Act. Yet if there were any doubt in the act itself about the intent of Congress, it was completely removed last spring when both Houses of Congress passed the Case bill. This explicitly excluded foremen as employees under the Wagner Act. But this measure was vetoed by the President.

Justice Jackson dismisses the argument of the Packard Co. by declaring: “In other words, it wants to be free to fight the foremen’s union in the way that companies fought other unions before the Labor Act.” Are these the words of a judge trying only to interpret the Wagner Act as written? Or are they the bitter words of a man legislating his personal feelings?

The unionization of foremen under this decision will do immense harm to production. The foreman cannot faithfully serve two masters. He cannot act at the same time as the agent of the employer in dealing with labor and as himself a unionized employee hostile to the employer. His divided loyalty to his employer and to his union must go far to nullify the ability of management to manage. It must lead to growing indiscipline and further tension and chaos in labor relations.

The National Labor Relations Board itself, in the Maryland Drydock case, recognized “the dangers inherent in the commingling of management and employee functions.” It acknowledged that unionizing foremen under the Wagner Act would “disrupt established managerial and production techniques.” As Gerard D. Reilly, a former member of the NLRB, pointed out in dissenting in the Packard case, in which the board reversed itself, foremen’s unions cannot really secure their bargaining aims “unless they ally themselves in their policies and tactics with representatives of the employees whom they are hired to supervise.”

But beyond its immediate practical dangers, the foremen’s decision of the Supreme Court majority once more raises a serious constitutional issue. Congress will no doubt now try to undo the harm of the Supreme Court’s foremen decision as it is trying to undo the harm of the same court’s “portal-to-portal” pay decision. But even a new bill faces not only the hurdle of another Presidential veto, but the possibility of still another “interpretation” by the Supreme Court saying that the new law means the opposite of what it says.

If the Supreme Court has unlimited power to say what a law means, even though its “interpretation” flatly contradicts the plain words of that law, then the real power of legislation has passed from the hands of the Congress elected directly by the people to an unelected and irremovable set of nine unpredictable men.

Business Tides: The Newsweek Era of Henry Hazlitt

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