Foley, Hoag & Eliot

National Labor Relations Board - Board DecisionsMay 4, 1977

229 N.L.R.B. 456 (N.L.R.B. 1977)

456 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Foley, Hoag & Eliot and United File Room Clerks and Messengers of Foley, Hoag & Eliot, Petitioner. Case 1-RC- 14037 May 4, 1977 RULING ON ADMINISTRATIVE APPEAL The Petitioner filed a petition seeking to represent file clerks and messengers employed by the Employ- er, a law firm located in Boston, Massachusetts. Relying on a prior case, Bodle, Fogel, Julber, Reinhardt & Rothschild, in which a majority of the Board declined to assert jurisdiction over law firms,l the Regional Director administratively dismissed the instant petition on jurisdictional grounds. The Petitioner filed a request for review of said dismissal, requesting reconsideration of Board policy on several grounds, including especially the decision by the United States Supreme Court in Goldfarb v. Virginia State Bar.2 The request for review included an offer of proof that the Employer employs about 150 individuals, including some 60 lawyers; that 85 percent of its legal services are provided to clients who are subject to the Act; that its gross fees are in excess of $500,000; and that part of its legal services involves the investment of funds. The Employer filed an opposition urging for stated reasons that the Board adhere to its recent precedent. On April 12, 1976, the Board held oral argument herein, in which the Employer and the Petitioner participated through counsel, on whether it should adhere to its holding in Bodle, Fogel, el a!., supra Thereafter, both parties filed briefs. Women Orga- nized for Employment and Legal Secretaries United also filed a brief, as amicus curiae, urging the assertion ofjurisdiction herein. Having duly considered the matter, the Board has decided to reconsider its prior position and finds as follows: In declining to assert jurisdiction over law firms in Bodle, Fogel, er al., supra, the majority therein relied primarily on the view that "[a] law firm . . . is not itself engaged in the production, distribution, or sale of goods in commerce. . . . [that] it renders advice and services directly related to the law rather than to commerce . . . . [and that its] connection with the 206 NLRB 512 (1973), the majority consisted of Chairman Miller and Members Jenkins and Kennedy. with Members Fanning and Penello dissenting. 2 421 U.S. 773 (1975). I he Board's statutory jurisdlctlon was not disputed by the majority in Bodle, Fogel, er ah, supra. Sec. 14(c) states: (I) The Board, in its discretion, may, by rule of decision or by published rules adopted pursuant to the Administrative Procedure Act. decline to assert jurisdiction over any labor dispute involving any class or category of employers, where, in the opinion of the Board, the effect 229 NLRB No. 80 flow of commerce is incidental, and its primary services relate to law, not commerce or conhercia1 activity." The dissenters in that case, Members Fanning and Penello, concluded, contrary to their colleagues in the majority, that the Board, having statutory jurisdiction over the law firms,3 should, consistent with its statutory responsibility,4 assert jurisdiction over law firms as a class and establish an appropriate standard. In so concluding, Members Fanning and Penello determined that the impact of the employer's operations on interstate commerce was direct and sufficient to warrant the assertion of the Board's jurisdiction. Chairman Fanning and Member Penello adhere to that view, noting that the Supreme Court came to substantially the same conclusions in its decision in the Gola'jarb case wherein it held, inter alia, that an examination of a land title is a "service" and that when such a service is exchanged for money it is "commerce" within the meaning of the Sherman Act. Members Murphy and Walther, who were appointed to the Board after the Bodle case was decided, are in essential agreement with the views of Chairman Fanning and Member Penello. Like them, they find nothing in the language of the legislative history of the Act justifying exempting law firms from the coverage of the Act. In their view, the impact on commerce resulting from the disruption of a law firm's operations by labor strife is not different from that resulting from the disruption of the operations of other service enter- prises over which the Board presently asserts jurisdic- tion. Member Jenluns is of the view that the Supreme Court's decision in the Goldjhrb case undercut the underlying rationale of the Bodle decision that furnishing of legal services is not a commercial activity, and he therefore joins his colleagues in reconsidering the issue and in overruling that decision. An analysis of the factors which have prompted reconsideration of this issue by the Board follows: The primary issue in this case, as was the issue in Bodle, Fogel, ef al., is to what extent, if any, the operations of law firms in general have an impact on interstate commerce. As noted above, the majority in Bodle, Fogel, er al., reasoned that a law firm's of such labor dispute on commerce is not suficicntly substantial to warrant the exercise of its jurisdiction: Provided, lhat the Board shall not decline to assert iurisdiction over any labor dis~ute over which it would aswt i~~risdiction under the standards r-wailing UPOT. Pugwt I. 1959. (2) Nothing in this Act shall be deemed to prevent or bar any agency or the courts of any State or Temtory (including the Commonwealth of Puerto Rim, Guam, and the Virgin Islands), from assuming and asserting jurisdiction over labor disputes over which the Board declines, pursuant to paragraph (I) of this subsection, to assert jurisdiction. FOLEY, 457 connection with the flow of commerce is only incidental and that its primary function is to provide services related to law and not commerce or commercial activity. As stated by the dissenters in Bodle, Fogel: 5 The legal profession plays a vital role at all stages from the act of incorporation through the obtain- ing of licenses or certficates which might be needed, governmental approval of rates and/or routes, the issuance and sale of stocks and bonds, the negotiations and preparation of legal con- tracts necessary for the holding of property, and the purchase and sale of materials and products, to name but a few aspects, and all these have their impact on how, where, and when a business may operate. To brush all this aside with the observa- tion that a law firm renders services related to law rather than to commerce and that such assistance "has, however, but little direct or immediate impact on the commerce in which their clients are engaged" is unrealistic, indeed. It is more realistic to say that without such services their clients would be unable to engage in such commerce and that there is a very direct and very immediate impact which must be recognized. [Footnote omitted.] It has long been held that the sale of personal services, as well as commodities, is within the category of t ~ a d e , ~ and that the Congress, in passing the National Labor Relations Act, "intended to and did vest in the Board the fullest j&isdictional breadth constitutionally permissible under the Commerce Clause."7 With regard to the sale of personal services, the Board has always applied its jurisdio tional standards to employers furnishing intangible services to enterprises engaged in interstate com- merce.8 In the Goldfarb case, the petitioners brought a class action suit against the state and county bar associa- tions seeking injunctive relief and damages and alleging that the "operation of the minimumfee schedule, as applied to fees for legal senjces-relating to residential real estate transactions, constitutes price fvring in violation of $ 1 of the Sherman Aetw9 In finding for the petitioners, the supreme CoCourt rejected the view that the practice of law, as a learned profession, is not "trade or commerce" within the meaning of section 1 of the Sherman Act and held that the fvring of fees by a bar association for legal services relating to residential real estate transactions being financed from funds originating outside the State constitutes a restraint on interstate commerce, within the meaning of the Shennan Act. The Supreme Court specifically rejected the view that "legal services, which are performed wholly intra- state, are essentially local in nature and therefore a restraint of trade -&th respect to them can never substantially affect interstate commerce," and af- firmatively stated "that the activities of lawyers play an important part in commercial intercourse, and that anticompetitive activities by lawyers may assert a restraint oncommerce."lo - With regard to the case at hand, the Board is convinced that the holding of the Supreme Court in Goldfarb is equally applicable to the word "com- merce" as used in Section 2(6) and (7) of the Act, for as the Board recently stated in Van Camp Sea Food Company11 "in reguiating labor relations under the Act, the Congress intended to exercise fully the same plenary and comprehensive commerce power which it had exercised in regulating commerce under the Sherman Act." Since it is clear that law firms, as a class, do have a substantial impact on interstate commerce, we shall assert jurisdiction over them as required by Section 1qc) of the Act, subject to their meeting the appropriate jurisdictional standard which will be determined in the Board's posthearing decision.12 See Bodle, Fogel, el al., supra at 515. See American Medico1 Assoriotion v. United States, 317 US. 519 (1943); Rdovich v. National Fwtball League, 352 US. 445 (1 957). ' N. L. R B. v. Reliance Fuel Oil Corp., 37 1 US. 224,226 (1963). U.S. Testing Co., Inc., 5 NLRB 6% (1938) (chemical and physical analysis of industrial commodities); W. J. Cochrnne, d /b /a Cochrane Laboratories, 44 NLRB 617 (1942) (assaying and analyzing lead and zinc ores); Salmon and Cowin, Inc., Minlng Engineen & Contractors, 57 NLRB 845 (1944) (appradng of mining property); Electrical Testing Loborator@ Inc.. 65 NLRB 1239 (1946) (testing of electrical products); Frmque A. Dirkem, ef a]., Engineers, 64 NLRB 797 (1945) (engmeemg services); The Aurtin Company, 70 NLRB 851 (1946) (branch engineering office making layo&, hluepnnts, spec~ficat io~) DP ~ P U I : C a t h & Cnr?r)nyv 77 Nl RB 191 (1947) (appraisal, investigation, and surveys of property); Gray, Rogers, Graham & Osborne, 129 NLRB 450 (1960) (architecture, engineering, m d surveying); Hatelton Laboralories, Inc., 136 NLRB 1609 (1962) (research and development services); Browne and Buford Engineers and Surveyors, 145 NLRB 765 (1963) (surveying, design, and inspection services); Tnrmn Schlup. Consulting Engineer, 145 NLRB 768 (1963) (engineering and surveying services). 0 Goldfarb, q r a at 778. 10 Id at 783,788. " 212 NLRB 537(1974). Chairman Fanning and Members Jenkins and Penello are aware, no less than Members Murphy and Waltha, of the privileged and fonf~dential relationship which exists between an attorney and his or her client but would not, based on the mere speculation that in certain unusual situations self-organization of a law firm's staff employees may in some way conflict with that relationship, treat law fm employees differently lhan they would treat any other group of employees mered under the National Labor Relations Act. Members Murphy and Walther are greatly concerned by the problem of confidentiality. Member Murphy, based upon her many yean of private practice in the field of labor relauons, agees with Member Walther that attorneys-whether representing management or labor-who particlpatc in the formulation and effectuation of their clients' labor relations policies perform the same function for their clients as would labor relations officials employed directly by the clients. Therefore, when ernployca of anorncys assist in such matters, they-no less tban axles of labor relations officials- are arguably "confidential employees" within the meaning of Board precedent. (Conrinued) 458 DECISIONS OF NATIONAL LABOR RUATlONS BOARD Accordingly, the petition herein is hereby reinstat- ed and the case remanded to the Regional Director 8 for a prompt hearing. In the view of Members Murphy and Walther, however, these concerns contrary to their colleagues, they h o w from personal experience that the 1 may be dealt with on a case-bycase bans In the context of determning concept of confidentiality inherent in the attorney-client relabonship cannot t appropriate bargainmg units and do not constitute justlfication for be deemed to be a matter of "speculation." :. continued declination ofjurisdiction over law fim as a class. Furthemom,