Gompers v. Bucks Stove

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Gompers v. Bucks Stove

United States 1911

Synopsis

In Gompers v. Bucks Stove and Range Company, the U.S. Supreme Court upheld the ruling of a lower court enjoining the American Federation of Labor from including the Bucks Stove and Range Company on its "unfair" and "We Don't Patronize" lists and from thereby promoting an illegal secondary boycott. Additionally, the Court overturned a ruling by the lower court sentencing AFL president Samuel Gompers and two of his associates to jail terms for contempt for violating the terms of the injunction. The Bucks Stove decision was a setback to organized labor's efforts to develop legal means, including boycotts, to press its demands.

Timeline

1891: Construction of Trans-Siberian Railway begins. Mean while, crop failures across Russia lead to widespread starvation.
1896: First modern Olympic Games are held in Athens.
1901: U.S. President William McKinley is assassinated by Leon Czolgosz, an anarchist. Vice President Theodore Roosevelt becomes president.
1904: Russo-Japanese War, which lasts into 1905 and results in a resounding Japanese victory, begins. In Russia the war is followed by the Revolution of 1905, which marks the beginning of the end of czarist rule; meanwhile, Japan is poised to become the first major non-Western power of modern times.
1911: Turkish-Italian War sees the first use of aircraft as an offensive weapon. Italian victory results in the annexation of Libya.
1911: In China revolutionary forces led by Sun Yat-sen bring an end to more than 2,100 years of imperial rule.
1911: Revolution in Mexico, begun the year before, continues with the replacement of the corrupt Porfirio Diaz, president since 1877, by Francisco Madero.
1911: Ernest Rutherford at the University of Manchester correctly posits that the atom contains a positively charged nucleus surrounded by negatively charged electrons. (Discovery of the protons that give the nucleus its positive charge, and of the neutrons that, along with protons, contribute to its mass, still lies in the future.)
1911: Norwegian explorer Roald Amundsen and his team of four other Norwegians are the first men to reach the South Pole, on 14 December. A month later, a group of British explorers led by Robert F. Scott will reach the Pole, only to die of starvation soon afterward.
1915: A German submarine sinks the Lusitania, killing 1,195, including 128 U.S. citizens. Theretofore, many Americans had been sympathetic toward Germany, but the incident begins to turn the tide of U.S. sentiment toward the Allies.
1919: With the formation of the Third International (Comintern), the Bolshevik government of Russia establishes its control over communist movements worldwide.
1919: Treaty of Versailles is signed by the Allies and Germany but rejected by the U.S. Senate. This is due in part to rancor between President Woodrow Wilson and Republican Senate leaders, and in part to concerns over Wilson's plan to commit the United States to the newly established League of Nations and other international duties. Not until 1921 will Congress formally end U.S. participation in the war, but it will never agree to join the league.

Event and Its Context

Background of the Case

The Bucks Stove decision is one of a sequence of events that charted the difficult road that was traveled by organized labor in the early decades of the twentieth century, particularly in a court system that seemed more sympathetic to the wishes of employers than to the needs of labor. Of particular relevance to a full understanding of the case are the passage of the Sherman Antitrust Act in 1890, the U.S. Supreme Court's decision in the so-called Danbury Hatters case of 1908, and, following Bucks Stove, the passage of the Clayton Act in 1914.

Sherman Antitrust Act

In the late nineteenth and early twentieth centuries, the public and legislators were observing with alarm the growing economic power of corporations, trusts, pools, trade associations, and similar business combinations whose purpose was to stifle competition. Business leaders in such industries as oil, sugar, whiskey, tobacco, and industrial machinery were learning that by cooperating rather than competing, they could eliminate smaller competitors, control output and the supply of products, establish market territories, raise prices to maximize profits, and impose penalties on members who violated the anticompetitive policies of the combination. The result was an industrial system that denied freedom of entry to the smaller competitor—or that drove the competitor out of business.

To curb the predatory monopolistic practices of corporations and trusts, Congress passed the Sherman Antitrust Act in 1890. Section 1 of the act made illegal "Every contract, combination, … or conspiracy, in restraint of trade or commerce among the several States." The act, however, failed specifically to mention labor unions, leaving it an open question whether Congress intended unions to be subject to the act and whether their activities in some circumstances could be construed as "combinations … in restraint of trade or commerce." A federal court in Louisiana offered an early answer to this question in 1893, when, in United States v. Workingmen's Amalgamated Council, it applied the act to a group of New Orleans unions that had gone out on strike in support of the local draymen's union. In issuing an injunction against the unions—a tool employers frequently sought and won in their efforts to thwart organized labor during these years—the court declared that the intent of Congress was to "include combinations of labor, as well as capital; in fact, all combinations in restraint of commerce, without reference to the character of the persons who entered into them." Similarly, a federal court in United States v. Agler(1897), ruling on a suit brought in the wake of the Pullman railroad strike of 1894, asserted its authority under the Sherman Act to "apply the restraining power of the law for the purpose of checking and arresting all lawless interference with … the peaceful and orderly conduct of railroad business between the States."

Danbury Hatters

A major blow to organized labor was the U.S. Supreme Court's 1908 decision in the landmark Danbury Hatters case; officially, the case was Loewe v. Lawlor, but it took on the name of the location of the Loewe and Company hat factory in Danbury, Connecticut. In 1902 the United Hatters of North America—a 9,000-member union and an affiliate of the American Federation of Labor (AFL) since the 1896 merger of the International Trade Association of Hat Finishers of America and the National Hat Makers' Association of the United States—attempted to organize workers at the Loewe plant. The union's recent successes had included organizing 70 out of 82 firms in the felt hat industry, but these firms operated at a competitive disadvantage because they had to sell their products at a higher price than those that used nonunion labor. These nonunion shops, in fact, were threatening the very existence of the union, which was in danger of collapsing unless it could organize every shop in the felt hat industry. The union trained its sights on Loewe, but when it asked the company to recognize it as the bargaining agent for the company's workers and to hire only union workers, Loewe refused. In response, the union called about 250 workers out on strike.

The strike did not have its desired effect, for the company was able to conduct business using nonunion workers and the number of strikers constituted only a small percentage of the firm's workforce. In desperation, the union adopted a different tactic: it called for a nationwide boycott. The union pressured retailers and wholesalers to stop carrying Loewe hats, and it urged the public not to buy from any store that sold the company's products. The boycott gathered steam when the union obtained the support of the AFL, which publicized the boycott in pamphlets, union newspapers, and the public press. Many retailers and wholesalers, fearing that they too would become the targets of a boycott, stopped doing business with Loewe. So successful was the boycott that the company claimed that in one year it lost $85,000.

Accordingly, the company sued the union and its members in 1903, alleging a violation of the Sherman Act. After the circuit court of appeals ruled in the union's favor, the company appealed to the U.S. Supreme Court. Five years after the initial suit, the Court overturned the court of appeals and ruled that the union's activities, particularly its use of a secondary boycott, were in fact a restraint of trade within the meaning of the Sherman Act. The Court held that the union met the definition of "combination" and acted "in restraint of trade or commerce among the several states" in the manner intended by the act, which "prohibits any combination whatever to secure action which essentially obstructs the free flow of commerce between the States, or restricts in that regard, the liberty of a trader to engage in business."

Thus, the Danbury Hatters case removed from labor's hands one of its most effective tools, the "secondary boycott," or pressure on one firm to persuade it to stop doing business with another firm. The decision also established the principle that individual union members, not just union officials and the union itself, were jointly liable to pay any judgment levied against the union in successful antitrust suits. It was not until the passage of the Taft-Hartley Act in 1947 that successful litigants were able to collect damage awards only from union funds.

The Bucks Stove Case

If the Danbury Hatters decision was a sharp blow to labor, the Bucks Stove decision three years later could be characterized as nearly a knockout punch. The Bucks Stove and Range Company, whose president, J. W. Van Cleave, was also president of the American Manufacturers' Association, had a dispute with the company's workers over hours. In connection with this dispute, Bucks Stove refused to recognize the Molders and Foundry Workers Union of North America, another affiliate of the AFL, as the workers' bargaining agent. Accordingly, the AFL, publisher of the American Federationist newspaper, placed the company's name on the paper's "unfair" and "We Don't Patronize" lists. As had the hatters union, the AFL pressured retailers not to carry the company's products and threatened to boycott those that did. It also urged the public not to buy Bucks Stove products. The union's actions were successful, and sales at the company dropped.

In response the company filed suit against the officers of the AFL, including its president, Samuel Gompers; its vice president, John Mitchell, who was also president of the United Mine Workers; and Frank Morrison, the AFL secretary who ran the newspaper. The company sought a temporary injunction against the boycott, which the Court of Appeals for the District of Columbia granted on 8 December 1907 and made permanent on 23 March 1908. The defendants appealed, but before a decision was reached on the appeal, the company began contempt proceedings, alleging that Gompers, Mitchell, and Morrison had violated the injunction and continued to include the company's name on its "unfair" and "We Don't Patronize" lists and to publicize the boycott in speeches, editorials, and other publications. Company representatives alleged that the three had deliberately rushed publication of an issue of the newspaper containing the boycott lists so that it would be distributed before the effective date of the injunction. On 23 December the court found the three men guilty of contempt and sentenced them to jail. They appealed to the U.S. Supreme Court, which heard the case on 27 and 30 January 1911 and rendered its decision on 15 May.

Justice Joseph R. Lamar delivered the majority opinion. Much of the opinion concerned the contempt-of-court issue, and on technical and procedural grounds the Court dismissed the charges against the three men. The Court reasoned that the matter should have been handled as a separate civil proceeding in which the plaintiff sought damages from the union officials. Instead, the lower court treated it as a criminal proceeding and ordered the men jailed rather than fined, which would have been a more appropriate penalty. The more far-reaching, though briefer, part of the decision was that bearing on whether the Sherman Act was applicable to the case. The Court, citing Loewe v. Lawlor, declared that it was and that any boycott or blacklist promoted by printed matter or by words violated the act. In an assault not just on labor but on free speech and freedom on the press, the Court noted that the use of its "protective and restraining powers" were intended to "extend to every device whereby property is irreparably damaged or commerce is illegally restrained. To hold that the restraint of trade under the Sherman antitrust act … could be enjoined but that the means through which the restraint was accomplished could not be enjoined, would be to render the law impotent."

Thus, any boycott that restrained trade within the meaning of the Sherman Act was against the law, and any union official or member who took part in such a boycott, either by spoken words or in print, was breaking the law. In reaching its decision the Court pointed to the "vast power" of labor unions, with their "multitudes of members." It distinguished between the "right of speech" of a single individual and the "verbal acts" of a multitude that can come under court scrutiny as much as "the use of any other force whereby property is unlawfully damaged." In following this line of reasoning, the Court continued to do what many earlier courts had done: to define as "property" not just tangible items such as plant and equipment but, more expansively, to include intangibles such as the right to trade. Accordingly, any "property" that faced "irreparable damage" such as lost profits because of the activities of a labor union could be protected by the courts through the issuance of an injunction.

The Court's decision was not without precedent. Similar cases had come before lower courts in several states, including Massachusetts, Georgia, Minnesota, Missouri, Michigan, and New Jersey. These courts had concluded that the use of letters, circulars, and other printed matter constituted a means by which a boycott could be unlawfully continued and could be enjoined.

The Clayton Act of 1914

Discussion of the Clayton Act is relevant to Bucks Stove in that its passage constituted a kind of postscript to the decision. After their defeat in Danbury Hatters, the labor unions concluded that the judiciary was no ally and that they had to support candidates for elective office who were sympathetic to their goals. Thus, the unions became markedly more politically active than they had been previously. In the 1908 and 1910 congressional elections, the unions closely questioned Democratic and Republican candidates and concluded that their best hope lay with the Democratic Party. In the wake of the Bucks Stove setback, the unions redoubled their efforts to elect supporters to office. In 1912 they actively supported Woodrow Wilson in his successful quest for the presidency, based on campaign pledges he made that were endorsed by the AFL. With Wilson in the White House and the Democrats controlling both the legislative and executive branches of government for the first time in two decades, the unions called in their markers and pressed for legislation that would protect their interests.

Congress responded in 1914 by passing the Clayton Act. The Clayton Act, like the Sherman Act before it, was an antitrust law, but Section 6 tried to fill the gap the Sherman Act had left regarding labor unions that had led to court decisions such as that in Bucks Stove. It declared "that the labor of a human being is not a commodity or article of commerce. Nothing contained in the anti-trust laws shall be construed to forbid the existence and operation of labor … organizations … or to forbid or restrain individual members of such organizations, from lawfully carrying out the legitimate objects thereof; nor shall such organizations … be held or construed to be illegal combinations or conspiracies in restraint of trade, under the anti-trust laws."

Labor was jubilant, for it felt that finally the federal government recognized the right of labor organizations not just to exist but to engage in concerted economic action to press their demands. As it turned out, this jubilation was premature, for in the years that followed, the courts, adopting their own view of what constituted "lawfully carrying out the legitimate objects thereof," rendered the Clayton Act worthless to labor. Labor had to wait until 1932 and the passage of the Norris-La Guardia Act to see a law that would succeed in reducing the influence of the courts in labor disputes.

Key Players

Gompers, Samuel (1850-1924): Gompers was born to Dutch-Jewish immigrants in London, where he began his working life at age 10 as a cigar maker. He immigrated to the United States in 1863 and in 1886 was elected vice president of the Cigarmakers' International Union. That year he was a founder of the American Federation of Labor (AFL) and served as its president from 1886 to 1895, then from 1896 to 1924. In 1919 Gompers was appointed to the American delegation at the Paris Peace Conference following World War I. His autobiography, Seventy Years of Life and Labor, was published in 1925.

Lamar, Joseph R. (1857-1916): Lamar, who was born in Elbert County, Georgia, served in the Georgia legislature from 1886 to 1889 and on the Georgia Supreme Court from 1904 to 1906. In 1911 President William Howard Taft appointed Lamar to the U.S. Supreme Court, where he served until his death.

Mitchell, John (1870-1919): Mitchell was born in Braidwood, Illinois, and worked in the coal mines beginning at age 12. He rose through the ranks of the United Mine Workers of America (UMWA) until he was elected vice president in 1898. He became acting president that year and served as president until 1908. Under his leadership the UMWA's membership grew from 34,000 to 300,000. He also served as vice president of the AFL from 1899 to 1913.

Morrison, Frank (1859-1949): Morrison was born in Frankton, Ontario, Canada, and began his working life as a printer. While employed as a printer in Chicago, he studied law and was admitted to the Illinois bar in 1895. In 1896 he was elected secretary of the AFL and served in that post until 1935. From 1936 until his retirement in 1939 he was secretary-treasurer of the AFL. During World War I he chaired the wages and hours subcommittee of the Committee on Labor of the Advisory Commission of the Council of National Defense.