669 F.2d 171 108 L.R.R.M. (BNA) 2024, 92 Lab - Cas. P 12,944: United States Court of Appeals, Fourth Circuit
669 F.2d 171 108 L.R.R.M. (BNA) 2024, 92 Lab - Cas. P 12,944: United States Court of Appeals, Fourth Circuit
669 F.2d 171 108 L.R.R.M. (BNA) 2024, 92 Lab - Cas. P 12,944: United States Court of Appeals, Fourth Circuit
2d 171
108 L.R.R.M. (BNA) 2024, 92 Lab.Cas. P 12,944
Marleigh Dover Lang, Atty., Civ. Div., U.S. Dept. of Justice, Washington,
D.C. (Alice Daniel, Asst. Atty. Gen., Washington, D.C., Thomas E.
Lydon, U.S. Atty., Columbia, S.C., and James L. Blackburn, U.S. Atty.,
Raleigh, N.C., William Kanter, Atty., Civ. Div., U.S. Dept. of Justice,
Washington, D.C., on brief), for appellant.
Michael Ernest Avakian, North Springfield, Va. (Baker Armstrong Smith,
Atlanta, Ga., Albert Q. Taylor, Jr., Leatherwood, Walker, Todd & Mann,
Greenville, S.C., on brief), for appellees Stevens People and Friends for
Freedom.
John V. Hunter, III, Raleigh, N.C. (Hunter, Wharton & Howell, Raleigh,
N.C., on brief), for appellees John G. Hutchens and J. P. Stevens Emp. Ed.
Committee.
Johnathan R. Harkavy, Smith, Patterson, Follin, Curtis, James & Harkavy,
Greensboro, N.C., Arthur M. Goldberg, Gen. Counsel, Amalgamated
Clothing and Textile Workers Union, AFL-CIO, CLC, Washington, D.C.,
amicus curiae.
Before BUTZNER, PHILLIPS and MURNAGHAN, Circuit Judges.
BUTZNER, Circuit Judge:
The district courts quashed the subpoenas in their entirety on the ground that
enforcement would have a chilling effect on the first amendment rights of the
committees, their members, and contributors. We believe that disclosure of
information identifying Stevens' non-supervisory employees is unwarranted.
We conclude, however, that the district courts should have enforced the
subpoenas with respect to the other information the Secretary sought.
* Appellees in 80-1490 are Stevens People and Friends for Freedom and one of
its officers. The Secretary issued a subpoena to the committee requesting lists
of contributors, records of receipts and disbursements, bank statements,
cancelled checks, correspondence records, minutes of meetings, and any
Upon the Secretary's petition for enforcement, pursuant to 29 U.S.C. 521, the
district court quashed the administrative subpoenas in their entirety because
they would have a chilling effect on appellees' first amendment rights. While
acknowledging that the Secretary is required to investigate violations of the
Act, the court held that the Secretary could not obtain any information from the
committee or its officer until he filed a suit to require a report of persuader
activities as provided by the Act. At that time, the court noted, the government
could rely on "those sanctions that the law normally places upon those who file
deliberately falsified reports to the government."
II
5
Appeals 80-1715 and 80-1716 were consolidated in the District Court for the
Eastern District of North Carolina.1 Appellees are the J. P. Stevens Employees
Education Committee,2 an anti-union association of employees at a Stevens
mill, several persons associated with the committee, and a solicitor of funds for
the committee.
The Secretary issued subpoenas to the committee and the individuals requesting
information similar to that requested from Stevens People and its officers. After
the appellees refused to respond, the Secretary filed suit seeking enforcement of
the subpoenas.
The district court rejected the appellees' statutory contention that since they
have no disclosure duties under the LMRDA, they cannot be investigated by
the Secretary. It ruled that "(e)ven if the respondents had no duty to disclose,
the Secretary still may subpoena and investigate them under his broad powers
to ferret out relevant information wherever it may be found." Further, the court
held that the Secretary's investigative powers are so broad "that he need not
first establish that a contribution or agreement (between the committee and
Stevens) in fact exists before he investigates it." 495 F.Supp. at 558.
The court next addressed the appellees' claim that enforcement of the
subpoenas would infringe their first amendment rights. It found that the
appellees "have shown a 'reasonable probability' that economic and physical
reprisals will occur upon disclosure of membership and contributors list to the
Secretary." 495 F.Supp. at 561.3 It also ruled that "(t)he information sought by
The court then balanced the appellees' "freedom to come together in privacy for
the purpose of developing their ideas and to receive confidential contributions"
against "(t)he government interest in fairness and above-board dealings during a
labor conflict." 495 F.Supp. at 564. It held that "(t)he rough equivalence in
weight of the competing interests when balanced against each other leads the
court to conclude that the (appellees') First Amendment interests must prevail."
495 F.Supp. at 565. Consequently, the court granted the motion to quash the
subpoenas in their entirety.
III
10
At the outset, we address the appellees' contention that even if the subpoenas
were properly issued, their enforcement is now a moot issue. The Secretary
recently informed the J. P. Stevens Employees Education Committee that it is
required to file a report under the LMRDA. This request for a report, the
committee contends, is an admission that no further investigation is required.
Further, the committee maintains that this case is moot because the Secretary
has already obtained information from its bank account that discloses the
identity of some committee contributors.
11
We cannot agree that these developments render the enforcement issue moot.
While the bank records have provided the Secretary with some of the
information requested in the subpoenas, he continues to seek information about
contributions not disclosed by these records. The Secretary's determination,
based on the bank records, that the committee is required to disclose its
persuader activities does not end his investigation of possible violations of the
Act by Stevens or other persons who also may be required to file reports.
12
Closely related to the appellees' contention that enforcement has been mooted is
their assertion that enforcement of the subpoenas is unnecessary. The Secretary
acknowledged in his brief that Stevens should be able to provide copies of its
agreements, if any, with the committees. Therefore, the appellees contend that
enforcement should be denied because the Secretary has other sources for the
information he seeks. In support of their position, they rely on International
Union, UAW v. National Right to Work Legal Defense and Education
Foundation, Inc., 590 F.2d 1139 (D.C.Cir.1978).
13
under Rule 37 of the Federal Rules of Civil Procedure and remanded the case
for determination of whether the union, which was seeking the names of
contributors to the foundation, had other reasonable sources of information. The
court did not decide whether the information ultimately would be subject to
discovery. 590 F.2d at 1152-53 and n.19. Also, the court held that there was no
private right of action under 203 of the LMRDA, noting that Congress had
conferred exclusive enforcement authority on the Secretary of Labor. Here, in
contrast, we are not reviewing the scope of the Rules' discovery provisions or
the right of a private litigant to enforce 203. The Secretary's investigatory
powers are conferred by 601 of the Act, 29 U.S.C. 521, and are not
circumscribed by the Civil Rules. Moreover, unlike a union, the Secretary is
authorized to institute necessary suits to enforce the Act. Therefore,
International Union, UAW, is not persuasive precedent.
14
IV
15
16
17
(1) to persuade employees to exercise or not to exercise ... the right to organize
and bargain collectively through representatives of their own choosing; or
18
22
The Secretary contends that the committees are persons as defined in 29 U.S.C.
402(d) and may be required to report their persuader activities. But quite apart
from this, he states that he is conducting an investigation to determine if
Stevens, any of its agents, or any other persons have violated or are about to
violate any provision of the LMRDA. He maintains that even if appellees are
not required to report, he did not exceed his broad investigatory powers under
601 of the Act in issuing the subpoenas.4
23
These are not appropriate cases for deciding whether an employees' committee
may be required to file the reports specified in the Act. For the purpose of these
appeals, it is sufficient to observe that the appellees' argument confuses the duty
to report with the Secretary's authority to investigate possible violations of the
Act. Section 601 authorizes the Secretary to conduct an investigation whenever
"he believes it necessary in order to determine whether any person has violated
or is about to violate" the reporting and disclosure provisions of the Act. It also
incorporates 9 of the Federal Trade Commission Act, 15 U.S.C. 49, which
empowers the Secretary to require by subpoena testimony and documentary
evidence relating to any matter under investigation.
24
cause to believe that the Act has been violated. See United States v.
Budzanoski, 462 F.2d 443, 451 (3d Cir. 1972); International Brotherhood of
Teamsters v. Wirtz, 346 F.2d 827, 830-831 (D.C.Cir.1965); Goldberg v. Truck
Drivers Local Union No. 299, 293 F.2d 807, 811-12 (6th Cir. 1961). He is not
required to first determine that appellees have violated a duty to disclose nor
must he rely exclusively on the sanctions provided for non-disclosure in 29
U.S.C. 439. The Secretary's administrative powers of investigation have been
likened to a grand jury, which unlike a court, "does not depend on a case or
controversy for power to get evidence but can investigate merely on suspicion
that the law is being violated, or even just because it wants assurance that it is
not." United States v. Morton Salt Co., 338 U.S. 632, 642-43, 70 S.Ct. 357,
363-64, 94 L.Ed. 401 (1950).
25
26
Section
601(a) empowers the Secretary to question any person he may deem
necessary to enable him to determine the facts relative to the violation. The language
of the statute shows that Congress also intended to give the Secretary of Labor the
authority to question persons other than those directly charged with duties and
responsibilities under the Act ...
27
The Supreme Court has stated in a similar context that "it is sufficient if the
inquiry is within the authority of the agency, the demand is not too indefinite
and the information sought is reasonably relevant." United States v. Morton
Salt Co., 338 U.S. 632, 652, 70 S.Ct. 357, 368, 94 L.Ed. 401 (1950). The
Secretary's subpoenas satisfy these requirements.
28
V
29
The appellees contend that enforcement of the subpoenas would infringe their
privacy of association and right of advocacy which are guaranteed by the first
amendment. In support of their position, the appellees introduced evidence that
satisfied both district courts that disclosure of the identities of their members
and contributors would have a chilling effect on their associational rights.
30
We accept the district court's findings about the chilling effects of disclosure,
and with this factual premise established, we will apply the governing
principles of law. In NAACP v. Alabama, 357 U.S. 449, 78 S.Ct. 1163, 2
L.Ed.2d 1488 (1958), and subsequent cases, the Supreme Court has recognized
that compelled disclosure of affiliation with groups engaged in advocacy may
constitute an effective restraint on freedom of association. E.g., Buckley v.
Valeo, 424 U.S. 1, 96 S.Ct. 612, 46 L.Ed.2d 659 (1976) (campaign contributor
lists); Gibson v. Florida Legislative Investigation Committee, 372 U.S. 539, 83
S.Ct. 889, 9 L.Ed.2d 929 (1963) (membership lists); Bates v. Little Rock, 361
U.S. 516, 80 S.Ct. 412, 4 L.Ed.2d 480 (1960) (membership lists and financial
contributions).
31
In Buckley v. Valeo, 424 U.S. 1, 64-65, 96 S.Ct. 612, 656, 46 L.Ed.2d 659
(1976), the Court summarized the general principles for ascertaining whether
compelled disclosure can be justified:
32
33
The district courts found a deterrent effect on the exercise of the appellees' first
amendment rights through the unintended but inevitable results of government
disclosure, despite administrative and statutory safeguards to retain the
confidentiality of the information. Therefore, scrutiny of the government's
interest in the information it seeks is required even though there has been no
proof of direct government action to deter the appellees' exercise of their first
amendment rights.
34
Unlike the district courts, we believe that application of the principles stated in
Buckley requires separate consideration of the different types of information
the Secretary seeks.
35
36
37
38
40
Our analysis of the governmental interests that the Secretary seeks to vindicate
begins with the legislative history of the reporting requirements of the Act. The
Senate Committee explained the necessity for compelled disclosure in the
following excerpt from its report:5
41
The committee notes that in almost every instance of corruption in the labormanagement field there have been direct or indirect management involvements.
The report of the McClellan committee describes management middlemen
flitting about the country on behalf of employers to defeat attempts at labor
organization. In some cases they work directly on employees or through
committees to discourage legitimate organizational drives or set up companydominated unions. These middlemen have been known to negotiate sweetheart
contracts. They have been involved in bribery and corruption as well as unfair
labor practices. The middlemen have acted, in fact if not in law, as agents of
management. Nevertheless, an attorney for the National Labor Relations Board
has testified before the McClellan committee that the present law is not
adequate to deal with such activities.
42
44
The findings of the Senate Committee are reflected in the Act's declaration of
findings, purposes, and policy, 29 U.S.C. 401(c):
45
The Congress ... finds and declares that the enactment of this chapter is
necessary to eliminate or prevent improper practices on the part of labor
organizations, employers, labor relations consultants, and their officers and
representatives which distort and defeat the policies of the Labor Management
Relations Act, 1947 ...
46
47
48
seeks about these contributions that brings this case within the general
principles set forth in Buckley v. Valeo, 424 U.S. 1, 64, 96 S.Ct. 612, 656, 46
L.Ed.2d 659 (1976), where the Court upheld a statutory requirement for
disclosure of the identity of contributors to political campaigns. Also, it is this
substantial relationship that distinguishes these appeals from Gibson v. Florida
Legislative Investigation Committee, 372 U.S. 539, 83 S.Ct. 889, 9 L.Ed.2d
929 (1963), Bates v. Little Rock, 316 U.S. 516, 80 S.Ct. 412, 4 L.Ed.2d 480
(1960), and NAACP v. Alabama, 357 U.S. 449, 78 S.Ct. 1163, 2 L.Ed.2d 1488
(1958), where no similar relationship was established.
49
C
50
Consideration of the other business and financial records the Secretary seeks
need not detain us inasmuch as the district court may provide for the deletion of
the names of Stevens' non-supervisory employees. This type of information is
routinely furnished in government investigations of possible violations of the
law, and the appellees have adduced no evidence that its disclosure will
infringe their first amendment rights. Indeed, similar information was produced
in the investigation under consideration in NAACP v. Alabama, 357 U.S. 449,
78 S.Ct. 1163, 2 L.Ed.2d 1488 (1958), and ultimately resistance was offered
only to the production of membership lists. For the reasons stated in Part B,
dealing with contributors, we believe that the Secretary is entitled to subpoena
the business records and minutes of the committees and to question the
individuals associated with the committees and the individual who solicited
funds.
VI
51
In summary, our exclusion of the disclosure of the names of Stevens' nonsupervisory employees who are either members of, or contribute to, the
committees sufficiently protects the associational rights of the appellees. The
governmental interest served by the Secretary's statutory investigation and the
relationship of this interest to the information he seeks justify enforcement of
the subpoenas subject to the restriction we have mentioned.
52
future events may establish that enforcement of the subpoenas does in fact deter
contributors from supporting the committees because of economic or other
forms of reprisal. Developments such as these would allow either the appellees
or the Secretary to seek in the district courts restriction or amplification of these
and subsequent subpoenas. Cf. Buckley v. Valeo, 424 U.S. 1, 74, 96 S.Ct. 612,
661, 46 L.Ed.2d 659 (1976).
53
We affirm the judgments of the district courts to the extent that they deny
enforcement of those parts of the subpoenas that require disclosure of the
names of Stevens' non-supervisory employees. We vacate the judgments to the
extent that they deny enforcement of the subpoenas with respect to the other
information that the Secretary seeks. The cases are remanded to the respective
district courts for further proceedings consistent with this opinion. Each party
shall bear its own costs.
The historical background of the committee's formation and its purposes are
described in J. P. Stevens Employees Educ. Comm. v. NLRB, 582 F.2d 326,
328 (4th Cir. 1978)
The Secretary subpoenaed the committees' lists of contributors but not their
membership lists. The Supreme Court, however, has "not drawn fine lines
between contributors and members but (has) treated them interchangeably."
Buckley v. Valeo, 424 U.S. 1, 66, 96 S.Ct. 612, 657, 46 L.Ed.2d 659 (1976)
Senate Committee on Labor and Public Welfare, S. Rep. No. 86-187, 86th
Cong., 1st Sess. (1959), reprinted in (1959) U.S.Code Cong. & Admin.News
2318, 2326-2327