FOLEY, HOAG & ELIOT --

FOLEY, HOAG & ELIOT and UNITED FILE ROOM CLERKS, MESSENGERS, AND LIBRARY PERSONNEL OF FOLEY, HOAG & ELIOT, Case No. CR-3488, January 13, 1976, 2 MLC 1302.

Cooper Chairman, and Miceli and Alarie Commissioners

On July 15, 1975 the United File Room Clerks, Messengers, and Library Personnel of Foley, Hoag & Eliot (herein Petitioner) filed a petition for certification of representative pursuant to Massachusetts G.L. c.150A, §5 for a unit of file-room clerks, messengers, and library personnel employed by Foley, Hoag & Eliot (herein Respondent).

Respondent filed a Motion To Dismiss for Lack of Jurisdiction on September 9, 1975. Subsequently, Petitioner and Respondent filed excellent memoranda concerning the question of the Labor Relations Commission's (herein Commission) jurisdiction in this matter.

On the basis of these memoranda and the affidavit of Laurance S. Fordham we accept for purposes of determining the jurisdictional issue Respondent's statements that it is a law firm which employs approximately one-hundred fifty (150) employees. Sixty (60) of Respondent's employees are attorneys and approximately eighty-five per cent (85%) of its business is providing Iegal services to employers who are subject to the National Labor Relations Act (hereinafter "NLRA" or "Federal Act"). Furthermore, ten to fifteen per cent of Respondent's legal services consists of labor relations advice to employers subject to the NLRA. Finally, we accept Petitioner's claim and we find that it is a labor organization within the meaning of G.L. c.150A, §2(5) .

For the reasons set forth herein, we deny the Respondent's Motion To Dismiss and set the matter down for a hearing at 10 o'clock A.M. on February 5, 1976 for the purposes of determining the appropriateness of the unit sought in the petition.[1]

This petition presents the Commission with novel issues. In summary form, the issues are as follows:

1. Whether the Commission has jurisdiction over the employees of a law firm notwithstanding the doctrine of preemption.

2. Whether the Commission has jurisdiction over the employees of a law firm pursuant to G.L. c.150A (hereinafter "c.150A" or "State Act").

3. Assuming the Commission has jurisdiction, whether the Commission may or should decline to assert jurisdiction for reasons of inappropriateness, confidentiality or conflict of interest.

Respondent vigorously argues that this Commission lacks jurisdiction because of the doctrine of preemption. We find the Respondent's reliance on this doctrine to be misplaced and unsupported by binding precedent. The doctrine of preemption has had a long and varied history through numerous decisions of the United States Supreme Court. The doctrine, simplified in the extreme, holds that where there is a grant of power to the federal government in a field which requires a uniform system of regulation,[2] and the federal government has exercised its power, the states are barred from entering and/or regulating the field. Gibbons v. Ogden, 9 Wheat. 1, 6 L.Ed. 23 (1824); Wilson v. The Black Bird Creek Marsh Co., 2 Pet. 245, 7 L.Ed. 412 (1829); Cooley v. Board of Wardens of the Port of Philadelphia, 12 How. 299, I3 L.Ed. 996 (1851); Rice v. Santa Fe Elevator Corp., 331 U.S. 218 (1947); Hines v. Davidowitz, supra, n.2.[3]

The preemptive effect of the National Labor Relations Act, 29 U.S.C. 151 et seq. (hereinafter the "NLRA" or the "Federal Act") on the authority of the states in the field of labor relations was initially developed by Guss v. Utah Labor Relations Board, 353 U.S. 1 (1957), and San Diego Building Trades v. Garmon, 359 U.S. 236 (1959). In Guss, the United States Supreme Court held that section 10(a)[4] of the NLRA was "the exclusive means whereby States may be enabled to act concerning the matters which Congress has entrusted to the National Labor Relations Board," 353 U.S. at 9, even as to cases over which the Board declines jurisdiction. Because the Board never ceded jurisdiction to state agencies under Section 10(a), Guss created a "no-man's land" of cases which the Board declined to hear and which the states were barred from handling, Garmon extended the reach of Guss to activities arguably protected by Section 7 or 8 of the Federal Act fell within the exclusive province of the Board to decide. If the Board declines to assert jurisdiction, under Guss, the states may not regulate the conduct involved.[5]

In 1959, in response to the "no-man's land" created by the Court's rulings in Guss and Garmon,[6] Congress specifically amended the NLRA adding Section 14(c):

(c)(1) 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 of such labor dispute on commerce is not sufficiently substantial to warrant the exercise of its jurisdiction: Provided, The Board shall not decline to assert jurisdiction over any labor dispute over which it would assert jurisdiction under the standards prevailing upon August 1, 1959.

(2) Nothing In this Act shall be deemed to prevent or bar any agency or the courts of any State or Territory (including the Commonwealth of Puerto Rico, Guam and the Virgin Islands), from assuming and asserting jurisdiction over labor disputes over which the Board declines, pursuant to paragraph (1) of this subsection, to assert jurisdiction. 29 U.S.C. §164(c).

This statute allows the Board to decline to assert jurisdiction over any labor dispute involving any class of employers, where the Board finds that the effect of such a dispute on commerce, is not sufficiently substantial to warrant the exercise of Its jurisdiction.[7] The second paragraph of Section 14(c) permits state agencies to assert jurisdiction over labor disputes which the Board has declined to consider.[8]

Thus if Section 14(c) is applicable, the doctrine of preemption does not bar the Commission from asserting jurisdiction. Respondent contends, however, that the present case does not come within Section 14(c) and is therefore controlled by Guss and Garmon. We disagree.

The record shows that on September 18, 1975 the United File Room Clerks, Messengers and Library Personnel of Foley, Hoag & Eliot (Petitioner herein) filed a petition for certification of representative with the NLRB. Case No. 1-RC-14, 037. on September 26, 1975, the Regional Director dismissed the petition, stating "?[I]t appears that further proceedings are not warranted inasmuch as the Board has declined to assert jurisdiction over law firms. Bodle, Fogel, Julber, Reinhardt and Rothschlld, 206 NLRB 512 (1973)."

Although Petitioner has filed an appeal with the Board, the Regional Director's dismissal based upon binding Board precedent provides a sufficient basis for this Commission to proceed with its determination of jurisdiction under the State Act.

The decision of the Board in Bodle, Fogel, Julber, Reinhardt and Rothschild, 206 NLRB 512 {1973), (herein Bodle), relied upon by the Regional Director in his dismissal, is particularly germane to the present case. The Bodle decision concerned a California law firm composed of five partners and seven associates. The firm engaged primarily In the practice of labor law, numbering among its clients various AFL-CIO affiliated local and international unions and other concerns which engaged in interstate commerce. Gross revenues of the firm were stipulated to be in excess of $500,000 of which at least $50,000 was received from clients which meet the Board's jurisdictional standards.

In its majority decision the Board unequivocally stated:

The Employer contends that its operations are essentially local in nature and that any impact its operations might have on interstate commerce Is remote and therefore insufficient to warrant the assertion of the Board's jurisdiction. We agree with the Employer's contention. 206 NLRB at 512.

The Board footnoted the above statement, adding:

In view of this conclusion, we need not consider the Employer's alternate grounds for dismissing the petition, namely that the Petitioner has a direct conflict of interest with the Employer's AFL-CIO affiliated clients and that the employees sought by the petition are confidential employees because they are privy to the Employer's privileged attorney-client communications. 206 NLRB at 512 n.2.

Finally, the Board concluded with the following:

Because, therefore, the professionally legal nature of the work of the profession makes minimal the degree of impact on interstate commerce of potential labor disputes between law firms and their employees, and because there are serious policy and administrative problems suggesting the undesirability and unfeasibility of any attempt on our part to assert Jurisdiction over lawyers and law firms, it is our present determination that the policies of the Act would not be effectuated by our assertion of Jurisdiction over law firms. 206 NLRB at 514.

Respondent argues from Bodle that the present case does not satisfy the requirements of Section 14(c) of the NLRA and therefore we are barred from asserting jurisdiction. Respondent reasons that Section 14(c) is inapplicable because (1) the NLRB has not yet declined jurisdiction over all law firms as a class; (2) the NLRB's failure to assert jurisdiction over law firms is not solely because of the insubstantial effect on commerce; and (3) the NLRB would have asserted jurisdiction if it followed its August 1, 1959 standards.

With Bodle in mind, we meet Respondent's objections to the applicability of Section 14(c). First, the Board, beyond peradventure, declined to assert jurisdiction over law firms as a class.[9] Second, whether the Bodle decision rests solely on the ground of insubstantial impact on commerce or upon alternative grounds is not determinative of the issue before us. Petitioner cites the above quoted footnote 2 of Bodle to support its contention that the discussion of confidentiality, conflict of interest and administrative difficulty is dicta, a view with which we concur. Insufficient impact on commerce is certainly an adequate independent ground for declining jurisdiction, and the Board was firm in its judgment on that issue. The Board was not nearly as firm in dealing with the other problems, lacing its discussion with noncommittal language such as "given pause," "hesitate to certify," and "suggesting the undesirability and unfeasibility." If, as in our judgment, the Board based its decision solely on the insubstantial impact of law firms on commerce, then the requirements of Section 14(c) have certainly been satisfied. If, on the other hand, we were to accept Respondent's contention that the Board based its decision in Bodle on alternative grounds including confidentiality, conflict of interest and administrative difficulties, we again find no bar to the applicability of Section 14(c). While it appears necessary under Section 14(c) for the Board to find an insufficient effect on commerce, a careful reading reveals no requirement that it be the sole reason for declining jurisdiction.[10]

Third, contrary to the contention of the Respondent, it appears that the Board would not have asserted jurisdiction over law firms had the Board followed its August 1, 1959 standards. The standards define certain categories of employers over which the Board will assert jurisdiction. Respondent advances three such categories as possibly including law firms: nonretail enterprises, retail establishments and national defense enterprises. These categories never included law firms. The practice of law as a retail or defense industry seems far-fetched without further proof. And non-retail enterprises, while seemingly broad, have not been construed by the Board to be all-inclusive.[11] Furthermore, it seems obvious that because the Board declined to assert jurisdiction over law firms as a class, the Board must have determined that it would not have asserted jurisdiction over law firms in 1959. Presumably the Board did that in Bodle, a determination we are not inclined to contest. In sum, the case before the commission fits clearly within the requirements of Section 14(c) and is a classic example of the reason Congress amended the NLRA in this manner.

Respondent further argues that the Supremacy Clause of the United States Constitution (Article VI, Section 2) mandates that the Commission follow the precedents of the National Labor Relations Board. Respondent concludes that the Supremacy Clause requires the Commission to dismiss the instant petition for lack of jurisdiction because the Board dismissed the petition presented to it. We find this argument unsupported[12] and untenable.[13]

Respondent reasons that because this Commission is bound by the decisions of the Board (and not merely federal statutory law and the decisions of the federal courts) we are bound to dismiss this case because the Board did. The logical conclusion of such reasoning would obliterate Section 14(c). Under Respondent's interpretation of the law any case which the Board dismissed would necessarily be dismissed by a state board, reviving the "no-man's land" which Section 14(c) was specifically enacted to eliminate. Clearly that is neither an acceptable reading not in the interest of national labor policy.

Because federal law does not preclude this Commission from exercising jurisdiction over law firms generally and Respondent in particular, we turn to the applicability of state law. The public policy expressed in c.150A, §1 provides employees with the right to bargain collectively with their employer as a means of ameliorating industrial strife or unrest which has the "necessary effect of burdening or obstructing industry or trade." The chapter is specifically applicable to unfair labor practices over which the Board has declined to assert jurisdiction[14] and over representation questions effecting industry, trade or health care.[15]

We do not think that Hathawav Bakeries v. Labor Relations Commission, 316 Mass. 136 (1974) prevents the Commission from asserting jurisdiction. In that case, the Commission was asserting jurisdiction for the purposes of certification of employee representatives of an employer who was acting in interstate commerce and who was clearly subject to the NLRA.[16] The Court found that "Certification is a preliminary step in a legislative plan designed to avert labor controversies. If the Commission is powerless to issue such an order relative to an unfair practice subject to the National Act, it would seem to follow that proceedings for certification in cases subject to that act would be equally beyond the power of the Commission." 316 Mass. at 142. This case does not deny the Commission jurisdiction over employers not subject to the Federal Act. Indeed, Wheaton College v. Labor Relations Commission, 352 Mass. 731 (1967) clearly suggests that the Board's declination of jurisdictionover an employer eliminated the federal bar to the Commission's assertion of jurisdiction.[17] In the absence of applicable case law precluding the Commission from asserting jurisdiction, we turn to Respondent's argument that the Commission lacks jurisdiction within the general policy statement of Section l of c.150A.

Respondent claims that its activities are not "connected with and related to industry and trade" as required by St. Luke's Hospital v. Labor Relations Commission, 320 Mass. 467 (1946). Respondent distinguishes its activities from "industry and trade" stating that it engages in a "learned profession." We reject Respondent's arguments.

Respondent's legal services to its clients is a product for which it is compensated. The delivery of the product is a matter which affects industry and trade. The size and scope of law firms' activities have a direct, material and meaningful impact on the instrumentalities of industry and trade. Interruption of legal activities would certainly obstruct the current of industry and trade. Typically a law firm's services to its clients include filing of incorporation papers, rendering opinions as to the legality of various commercial activity; facilitating the purchase and development of realty; negotiating contracts for commercial enterprises; appearing before state and federal regulatory agencies; and instituting law suits and defending against law suits on behalf of clients. These activities facilitate the business interests of Respondent's clients and interruption of such activities would have a "necessary effect of burdening or obstructing industry and trade." Mass. G.L. c.150A §1.

Quite apart from the impact of a law firm's services to its clients as an instrumentality of industry and trade, law firms, in general, have an enormous impact on the economy of the Commonwealth. An interruption in the payroll of law firms in the City of Boston alone would have a significant impact on many individuals.[18] This interruption would have an indirect but equally substantial impact on support industries including banks, restaurants retail stores and other support services required by employees in a white collar industry.

Arguments that the dictionary definitions of "industry" and "trade" do not include the legal profession lack merit. The cases cited do not concern themselves with the meaning of the words as used in c.150A. §§1 and 5.[19] The definition in Black's Law Dictionary are similarly unconvincing. Indeed Bouvier's Law Dictionary (1914), Ballentine's Law Dictionary (1969) and the Random House Dictionary of Engliish Language (1967) do not exclude the "learned profession" from the definition of trade.[20] The Supreme Judicial Court recognized that professionals operate businesses when in Earle v. Commonwealth, 180 Mass. 579, 583 (1902) Chief Justice Holmes wrote:

It is contended that the petitioner was not an individual...owning an established business on land in the Town of West Boylston within the meaning of §14. A majority of the court does not see why not. The defendant cites Ex parte Bruell, 16 Ch.D. 484, for the proposition that the word "business" has no definite technical meaning. We agree, and think it quite wide enough to include the practice of a doctor. 180 Mass. at 583.

Respondent's argument that a law firm's business is not "industry and trade" but a "learned profession" is strikingly similar to the defendant's arguments in Goldfarb v. Virginia State Bar, ___ U.S. ___, 95 Sup. Ct. 2004, 44 L. Ed. 2d (1975). In Goldfarb, the Court rejected this distinction:

In the modern world it cannot be denied that the activities of lawyers play an important part in commercial intercourse, and that anticompetitive activities by lawyers may exert a restraint on commerce. 44 L. Ed. at 585.

The Court arrived at this conclusion after analyzing many of the cases cited by Respondent appropriately commenting that "these citations are to passing references in cases concerned with other issues. ..." 44 L.Ed. at 584 n.15.

While we fully recognize that Goldfarb was an anti-trust case, we do not find that the coverage of the Sherman Act is broader, more comprehensive than the coverage of c.150A.[21] In c.150A the General Court enacted an encompassing statute designed to provide employees with the right to organize and bargain collectively with their employer. The problems recognized by the legislature emanated from employers who refused to accept the procedure of collective bargaining. Such action by employers leads to strikes and other forms of industrial strife and unrest. Other forms of strife and unrest include aspects of the employer-employee relationship clearly applicable to law firms including employee dissatisfaction with hours of work, vacations, sick leave, seniority and wages. A formal grievance procedure culminating, in many instances, in final and binding arbitration before a neutral third party has become a recognized practice in the modern business world. United Steelworkers of America v. American Manufacturing Co. , 363 U.S. 564 (1960); United Steelworkers of America v. Warrior & Gulf Navigation Co., 363 U.S. 574 (1960); United Steelworkers of America v. Enterprise Wheel and Car Corp. , 363 U.S. 593 (1960).

Furthermore, the legislature has recognized in §1 of c. 150A the inequality of bargaining power between employees and employers who are organized in the "corporate or other forms of ownership association." Among the "other" forms of ownership association are partnerships, including law firms.[22] Law firms are subject to a host of Federal and State statutes which are designed to provide employee protection.[23] These statutes recognize that law firms, as employers have obligations to their employees. Neither Congress nor the General Court have statutorily excluded law firms from appropriate regulation.

Nor has the Commission excluded professionals or groups of professionals from coverage under c. 150A except as specifically required by the State Act. The Commission's decisions in Pre-Schools, Inc., CR-3432, 1 MLRR 1015 (9/10/74) and Blue Shield of Massachusetts, Inc. , CR-3459, 2 MLC 1016 (7/3/75) are not inapposite. In Pre-Schools, Inc., supra, we found that a for-profit private school was engaged in an "'industry and trade' within the meaning of Chapter 150A." Pre-Schools, Inc. at 16. We further concluded that the term, "industry and trade", is "not limited to the term 'manufacturing' or 'selling of tangible commodities.'" Pre-Schools, Inc., at 15. In Blue Shield, supra,, we found that professionals employed at non-profit institutions are denied bargaining rights under c.150A. This conclusion was based upon the legislative history which developed from St. Luke's Hospital. v. Labor Relations Commission, supra, and its progeny.

The exclusion of professionals by the Commission was based upon the amendments to c.150A specifically including nurses and non-professional employees of non-profit institutions. This legislation has never lead to the exclusion of any employees of an employer who operates for profit whether the employee is a professional or a nonprofessional.

The Commission has asserted jurisdiction over many employers who have far, far less impact on industry and trade than Respondent. Havah Nagilla, UP-2246 (11 employees); Cronin's, UP-2201 (15 employees); Mitrano Chevrolet, CR-3498 (37 employees); Blue Hill Spring Water, UP-2289 (15 employees) ; and Meola's Mount Wachusett Dairy Co., CR-2572 (20 employees). Furthermore, the Commission has never measured its jurisdiction on a case by case basis -- questioning in each instance the impact of a strike or other concerted activity on the Commonwealth's industry and trade. The burdens or obstructions on industry and trade ennumerated in Section 1 of c.150A are not jurisdictional requirements which must be determined in each case before the Commission.[24] These findings and policy represent the general contours of the purpose of the State Act. To find that the overall purpose of the act is met by this Commission's assertion of jurisdiction over every minuscule employer in the Commonwealth but to deny an assertion of jurisdiction over Respondent would require the Commission to admire the employer's new suit.

For these reasons we find that the State Act clearly provides protection to the employees of a law firm and vests this Commission with jurisdiction to protect those employees' rights.

Haying determined that the Commission has jurisdiction over law firms we must decide whether the Commission may or should decline to assert jurisdiction for reasons of inappropriateness, confidentiality or conflict of interest. The State Act unlike the NLRA does not provide a discretionary basis for asserting or declining jurisdiction. Because we have decided to assert jurisdiction herein, we need not reach the issue of whether we may statutorily decline to assert jurisdiction over a class of employers who clearly fall within the confines of c.150A. However, that determination does not answer the question of whether there exists any unit among the Respondent's employees which would effectuate the purposes of the State Act. Respondent's arguments are that because of problems of confidentiality and conflict of interest, and because of the policies of the Board In the area of law firms that we should and must find that there Is no unit appropriate for the purposes of collective bargaining.

We do not find the potential conflict of interest among organized law firm employees to be so great as to preclude designating an appropriate unit. We are In full concurrence with the general position of the Board on this issue, as expressed in Dun and Bradstreet. Inc., 194 NLRB 9 (1971):

The law has clearly rejected the notion that membership in a labor organizatIon is in itself incompatible with the obligations of fidelity owed to an employer by its employees. To the contrary, employees placed in positions of trust by employers engaged in a wide variety of financial activities have exercised the fundamental rights guaranteed by the Act without raising the spector of divided loyalty or compromised trust. 194 NLRB at 9, 10.

The Board has consistently rejected the notion that membership in, or representation by, a labor organization will result in such a conflict of interest that the employee' must be denied their statutory right to bargain collectively. Credit Bureau of Greater Boston, 73 NLRB 410 (1947); Pacific Maritime Association, 185 NLRB 780 (1951). We find the Board's reasoning in these cases persuasive. Furthermore the Board has asserted jurisdiction over lawyers employed in other industries. Lumberman's Mutual Casualty Co. of Chicago, 75 NLRB 1132 (1948); Syracuse University, 204 NLRB 641 (1973).[25] We find persuasive the reasoning of the dissenting members of the Board in Bodle wherein they stated:

We are hard pressed to understand why clerical employees working for lawyers have a more confidential status than lawyers themselves; if lawyers directly subject to "the peculiarly confidential relationship between lawyer and client" may themselves organize under the protection of the Act, it cannot seriously be maintained that their clerical employees cannot appropriately exercise the same rights because of their relationship to the lawyers they serve. 206 NLRB at 517 [footnote omitted].

We do not find that the problem of conflict of interest to be insurmountable, nor do we find that it requires the denial of statutory rights to petitioners.

We find it unnecessary to reach the issue of confidentiality at the present time. At the hearing scheduled for the purposes of determining the appropriate unit we will hear evidence on the exact nature, duties and responsibilities of those persons which the Respondent seeks to exclude. After we have examined these facts, the Commission will determine which employees, if any, will be excluded as confidential.[26]

In sum, we conclude that the Commission has jurisdiction over Respondent and trhat such jurisdiction has not been preempted by the NLRB. Finally, we find that questions concerning the scope of the appropriate bargaining unit and exclusions therefrom are premature and we do not reach them. Therefore, it is hereby Ordered that a hearing for the purpose of determining the appropriate unit is hereby scheduled to commence at the Commission's offices at 10 o?clock A.M. on February 5, 1976.