Nathanson v. Labor Board, 344 U.S. 25 (1952)

Nathanson v. Labor Board

No. 33

Argued October 23, 1952
Decided November 10, 1952
344 U.S. 25

CERTIORARI TO THE UNITED STATES COURT OF APPEALS

FOR THE FIRST CIRCUIT

Syllabus

The National Labor Relations Board ordered a company to pay certain employees backpay. After an involuntary petition in bankruptcy had been filed against the company, the Court of Appeals decreed enforcement of the Board’s order. The Board filed in the bankruptcy proceeding a proof of claim for the backpay.

Held:

1. The Board is a "creditor" as respects the backpay awards, within the meaning of the Bankruptcy Act. Pp. 26-27.

2. The Board’s backpay order is a provable claim in bankruptcy -- as a debt founded upon an "implied" contract within the meaning of § 63(a)(4) of the Bankruptcy Act. P. 27.

3. The Board’s claim is not a debt due to the United States within the meaning of R.S. § 3466, and it is not entitled to priority under § 64(a)(5) of the Bankruptcy Act, though it is entitled to such priority as wage claims enjoy under § 64(a)(2). Bramwell v. United States Fidelity Co., 269 U.S. 483, distinguished. Pp. 27-29.

4. Computation of the amount of the backpay award was properly referred to the Board by the bankruptcy court. Pp. 29-30.

(a) The fixing of the backpay is one of the functions confided to the Board as an administrative matter. Pp. 29-30.

(b) Wise administration demands that the bankruptcy court accommodate itself to the administrative process and refer to the Board the liquidation of the claim, giving the Board a reasonable time for its administrative determination. P. 30.

194 F.2d 24 reversed.

A proof of claim filed by the National Labor Relations Board, based on a backpay award against the bankrupt, was disallowed by the referee in bankruptcy. The District Court set aside the disallowance. 100 F.Supp. 489. The Court of Appeals affirmed. 194 F.2d 248. This Court granted certiorari. 343 U.S. 962. Reversed and remanded, p. 31.