U.S. Supreme Court NLRB v. RUTTER-REX MFG. CO., 396 U.S. 258 (1969) 396 U.S. 258

[Page 396 U.S. 258, 261]

heard nothing until March 22, 1960, when a Board compliance officer notified the company that the case had been assigned to him, and requested payroll and other records necessary to determine the employment and backpay rights of employees.

On November 16, 1961, the regional office filed a 428-page backpay specification, alleging that the company owed more than $342,000 to some 207 strikers who had either not been reinstated within five days after applying, or who had never been reinstated, in violation of the Board and court orders. The company applied to the Court of Appeals for a permanent stay of further action in the backpay proceedings, alleging that the Board had delayed improperly in issuing the specification. By affidavit, the Board explained that the delay was caused in part by the great complexity of the task of processing the claims of approximately 600 strikers, and in part by the extremely heavy caseload and severe limitations in staff that the New Orleans regional office experienced during the late 1950's. The Court of Appeals noted that the delay was regrettable, but denied the requested stay. NLRB v. J. H. Rutter-Rex Mfg. Co., 305 F.2d 242 (C. A. 5th Cir. 1962).

After a lengthy hearing, a Trial Examiner denied back pay to 35 of the 207 claimants, and reduced the amount due to just over $160,000. He determined that each employee should receive net back pay, computed according to the Board's usual formula,[Footnote 1] for the period running from five days after his application for reinstatement until the company made a complying offer. Where no offer was made, the back pay was to accrue through the last quarter of 1961, the quarter in which the specification was filed. His findings and recommendations were adopted with minor modifications by the Board on June 6, 1966. J. H. Rutter-Rex Mfg. Co.,

[Page 396 U.S. 258, 262]

158 N. L. R. B. 1414 (1966). Both the Examiner and the Board considered and rejected the company's contention that the delay in issuing the specification should bar the backpay award, either in whole or in part.

On review, the Court of Appeals found that the Board had been guilty of "inordinate" delay, in violation of 6 (a) of the Administrative Procedure Act, 60 Stat. 240, 5 U.S.C. 1005 (a), now 5 U.S.C. 555 (b) (1964 ed., Supp. IV), and to the prejudice of the company, which had been "lulled into the belief that the Board was satisfied and that no further action was to be expected." J. H. Rutter-Rex Mfg. Co. v. NLRB, 399 F.2d 356, 363 (C. A. 5th Cir. 1968). Arguing that the purpose of backpay awards is to "deter unfair labor practices," id., at 364, and believing that a substantial award of back pay would be sufficient to achieve such deterrent effect, the court modified the Board order to eliminate all back pay accruing after July 1, 1959, thus reducing the awards of some 37 strikers who had not yet received complying offers of reinstatement by that date. We granted certiorari to consider the propriety of this modification,[Footnote 2] 393 U.S. 1116 (1969), and we reverse the judgment below. II We start with the broad command of 10 (c) of the National Labor Relations Act, as amended, 61 Stat. 147, 29 U.S.C. 160 (c), that upon finding that an unfair labor practice has been committed, the Board shall order the violator "to take such affirmative action including reinstatement of employees with or without back pay, as will effectuate the policies" of the Act. This Court has stated that the remedial power of the Board is "a broad

[Page 396 U.S. 258, 266]

of the delay and the company's illegal failure to reinstate them. It may be that the company could have, through the courts, compelled earlier Board action.[Footnote 3] But the Court of Appeals exceeded the narrow scope of review provided for the Board's remedial orders when it shifted the cost of the delay from the company to the employees in this case.

[Page 396 U.S. 258, 269]