## Facts

- Phelps Dodge Corp. operated the Copper Queen Mine in Bisbee, Arizona.
- A strike began June 10, 1935; picketing continued until August 24, 1935.
- The National Labor Relations Act became effective July 5, 1935, during the strike period.
- The NLRB found Phelps Dodge refused to hire or rehire certain individuals because of their union affiliations, constituting discrimination under NLRA § 8(3).
- The NLRB ordered Phelps Dodge to offer employment to two post-strike applicants (who were not employees at the time of the strike) and to make them whole for lost pay.
- The NLRB also ordered reinstatement with back pay for multiple strikers and make-whole relief for another individual until he became unemployable.
- The Second Circuit enforced the order with modifications.
- The Supreme Court granted review on the scope of § 8(3), the meaning of “employee,” and the NLRB’s remedial authority under § 10(c), including constitutional objections.

## Issues

1. Whether NLRA § 8(3) prohibits an employer from refusing to hire applicants solely because of union affiliation.
2. Whether NLRA § 10(c) authorizes the NLRB to order offers of employment and back pay for individuals unlawfully denied hiring (not limited to reinstatement of prior employees).
3. Whether requiring offers of employment and back pay, including where the discriminatees later obtain regular and substantially equivalent employment elsewhere, exceeds the NLRB’s remedial power or violates the Fifth Amendment.

## Decision

- The Court held that refusing to hire an applicant solely because of union affiliation is an unfair labor practice under NLRA § 8(3).
- The Court held that § 10(c) authorizes affirmative relief that can include ordering offers of employment and back pay to undo unlawful hiring discrimination.
- The Court construed the “including reinstatement of employees with or without back pay” language in § 10(c) as illustrative, not a limitation on remedies.
- The Court held the NLRB may order such relief even if the discriminated individuals later obtain regular and substantially equivalent employment elsewhere.
- The Court interpreted “employee” broadly for § 10(c) remedial purposes and rejected the argument that the concluding clause of § 2(3) restricts the Board’s remedial authority.
- The Court rejected the Fifth Amendment challenge to the Act’s remedial scheme as applied.

## Legal Principles

- NLRA § 8(3) reaches discrimination in hiring as well as discrimination in discharge or tenure; refusal to hire solely for union affiliation is unlawful.
- NLRA § 10(c) empowers the NLRB to order affirmative actions that effectuate the Act’s policies; “including reinstatement” is an example, not a remedial ceiling.
- The NLRB’s remedial authority may require an employer to offer employment opportunities wrongfully denied and to award back pay to neutralize the effects of discrimination.
- For § 10(c) remedies, “employee” is read broadly; the limiting language in § 2(3) serves other statutory functions (e.g., bargaining and unit determinations) and does not restrict remedial power.
- Remedial orders compelling offers of employment and back pay to correct unfair labor practices do not, on this record, violate the Fifth Amendment.

## Conclusion

The Court confirmed that union-based refusal to hire violates the NLRA and that the NLRB may order offers of employment and back pay as affirmative relief to effectuate statutory labor policy, even when affected individuals later obtain comparable work, without offending the Fifth Amendment.


Phelps Dodge Corp. v. NLRB, 313 U.S. 177 (1941)