Foley, Hoag & Eliot

National Labor Relations Board - Board Decisions

May 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,