Labor Law and Supreme Court Decisions, 1925–1931

to the boards.⁸ A notice to nominate did not violate an individual’s rights; and allegations regarding the unconstitutionality of the labor statute, or what the administrative board might do in violation of the petitioner’s rights, were premature. An amparo against a law would be issued only if the law had begun to be implemented.⁹ Two weeks later, in Villar, the Court overturned an amparo.¹⁰ The governor, in response to the employer’s petition, had suggested that the requirement of nominating representatives to the boards was a right conferred on capital and labor. The justices disagreed, holding flatly that it was an obligation mandated by Article 123, hence a legal requirement that could not violate any right of the employer.¹¹ In Vélez, the Court rejected the employer’s argument that Puebla’s labor statute was unconstitutional.¹² The opinion cited Hijos de Ángel Díaz Rubín for the proposition that in such a case an amparo was appropriate only if it mandated the petitioner to do something immediately.

More judgments rebuking employers’ avoidance of labor laws or board decisions followed.¹³ In an 8–2 vote, justices overturned the amparo in Tomás Ruiz y Cía., which had been granted to stop profit sharing under Veracruz’s Ley de Hambre.¹⁴ No mention was made of the Court’s earlier amparos predicated on the theory that the law was retroactive. On this occasion the Court found the employer’s argument speculative. The Court also dismissed an amparo to stop the determination of Chihuahua’s minimum wage, since the mere promulgation of a provision could not prejudice anybody.¹⁵ Nor could a board declaring its competence,¹⁶ or requiring a party to submit to its jurisdiction, harm an employer.¹⁷ Parties, too, should address their differences to a labor board before petitioning the federal judiciary for an amparo.¹⁸ A number of published opinions held that the petitioner had consented to the board’s competency and hence should not raise this issue.¹⁹

THE SUSPENSION OF BOARD AWARDS

Ruling that board awards were binding sharpened the issue of whether courts might still order the suspension of the execution of an award as part of the routine amparo procedure. Employers had of course already effectively used this temporary remedy. The case of Hijos de Ángel Díaz Rubín and the challenges to the Ley de Hambre initially reached the Supreme Court as appeals from suspension orders issued by lower court judges. If the federal judiciary normally ordered a board to suspend its enforcement of a decision, board determinations would again become ineffective. Even if the Court eventually rejected an employer’s amparo petition, the postponement of the execution of the award could render the initial administrative ruling largely meaningless when workers normally lacked the resources to litigate indefinitely or survive in the meantime. The authority and very legitimacy of administrative decision making could be corroded as a practical matter if board awards remained unenforceable.

El Águila’s case, decided by the Supreme Court in January 1926, probably was the most celebrated litigation involving the suspension of a board award in the mid-1920s.²⁰ The case arose from a strike at El Águila’s refinery in Minatitlán, Veracruz, in which the British company first had tried to avoid a collective contract that stipulated a union security agreement or closed shop (cláusula de exclusión) and then dismissed workers mostly belonging to one union. The Court opinion and extensive discussions by the justices during two days of public conference did not make law in the strict sense of establishing binding precedent. But the case reflected then current notions not only about the cláusula de exclusión but also about the right to strike, the lockout, and the applicable standard for granting an order of suspension. And the case was politically significant, for the CROM (and its patron, President Calles) and Veracruz’s governor, Heribero Jara, as it involved a major foreign oil company.²¹ An Excélsior headline termed the case a transcendental matter. Workers, labor leaders, and lawyers expectant of the Court’s judgment packed its public conference.²² To pressure the justices, unions threatened a general strike in Mexico City. The steering group, the Consejo de la Federación de Sindicatos del Distrito Federal, when canceling the strike announced that “labor organizations in the federal district had absolute confidence in the justices of the Supreme Court and expected that they would know how to impart justice in this case so transcendental for the labor movement in the country.”²³ Different unions had engaged in solidarity actions against El Águila, while the CROM, attempting to increase its influence in the oil sector, counseled striking workers and organized a boycott of El Águila’s products.²⁴

Interunion rivalry had vitiated industrial relations at the refinery.²⁵ When the company discharged employees at the behest of the Unión de Obreros de Minatitlán, with which it had made the collective contract stipulating the closed shop, other unions complained to Veracruz’s governor. Then the refinery reduced its production and discharged one shift of workers, most of whom belonged to the Unión de Obreros. This union was able to rally a coalition of workers’ groups at the refinery (the league or liga de agrupaciones obreras) to support its position and demand the company’s strict adherence to the collective contract and its extension to the coalition, as well as the reinstatement of the discharged workers, among other things. The company refused to accept the demands, contending that the contract was unconstitutional (because it established the closed union shop, violating the right to work). Workers struck on September 5, 1925, basically seeking the reinstatement of the 149 discharged workers.²⁶ The company opted to submit the dispute to Veracruz’s central labor board.²⁷ The coalition of striking workers received advice from the CROM, including through the SICT.²⁸

On October 27, Veracruz’s central board ruled against El Águila on six main points. First, the strike was lawful. Second, the collective contract was valid (the implication being the validity of the cláusula de ex-clusión). Third, the discharge of one shift of workers in one department was approved as of the date of the board’s decision. Fourth, the company had to pay workers wages until the date of the board’s award because it had not obtained the agency’s prior authorization for the partial lockout. Fifth, the company was to pay wages for the duration of the strike to the Unión de Obreros and other affiliated groups. Sixth, workers were afforded fifteen days to return to work.²⁹

On November 9, El Águila petitioned for an amparo and a preliminary suspension of the execution of the board’s resolution alleging the violation of its rights under Articles 4, 14, and 16 of the constitution. A federal judge issued the suspension order, and the central board appealed it to the Supreme Court. The Court considered the applicable legal standard (whether suspending the award would prejudice the state or society; and whether without the suspension order the petitioner-company would suffer harm difficult to repair).³⁰

The justices felt the pressure being exerted on them. The justice who presented the opinion at the public conference, Jesús Guzmán Vaca, began with the assertion that he would fully explain his position, “without fear of any kind and without letting the possible epithets about [his] ideas affect him.”³¹ The attention focused on the Court appeared to have encouraged justices to articulate their positions carefully. Guzmán Vaca said that the amparo regulatory statute was not appropriate for labor matters: the amparo was created to protect individual rights and was reflective of the triumph of individualism. In contrast, the present constitutional regimen distanced itself from individualism; the 1917 constitution had taken into account the transformation that had occurred especially in public law. Article 123 posed the contradiction between individualist and socialist principles. Guzmán Vaca hardly defined the latter; rather, he alluded to what socialism was not, Soviet law. He reiterated that Article 123 was completely opposed to individualism. Given that the amparo suit was instituted to protect individual rights, it was difficult therefore to adjust it to labor law, which earlier Guzmán Vaca had opined remained incomplete, both as to case law and legislation.³²

More precise were the qualms the justice expressed about the applicability of the suspension standard to labor matters. Guzmán Vaca found the legal standard completely inadequate for resolving El Águila’s suit. His was a straightforward acknowledgment of the discretion the justices had to determine an outcome: “These articles, we know very well, are conceived in a completely ambiguous form, and they lend themselves as much to deny as concede the suspension, giving opportunity, ultimately, for the Supreme Court to resolve as it wishes, which is contrary to the constitutional regime.”³³ The consideration of individualism, Guzmán Vaca added, was a Pandora’s box, as the federal judiciary used it, especially in connection with the standard of irreparable harm. Furthermore, the collective contract, the new legal institution, could not fit into the framework of the old law—and here the reference was to the closed shop clause that affected third parties, that is, nonunionized workers: “And one asks: how does one want to adjust a labor contract to the old framework, if there are phenomena which produce effects against third parties . . . in the collective contract, there are clauses that affect third parties who have not had anything to do with it.”³⁴

Guzmán Vaca did not settle the questions he posed. He did justify upholding the suspension order against the central board’s determination on the fourth point, which instructed El Águila to pay workers laid off due to the partial lockout until the company had obtained the board’s approval for the layoffs. It was in the public interest for the board to adhere to labor law. Neither Article 123 nor the state labor law afforded monetary compensation to workers locked out. Still, the public interest in the resolution of strikes justified refusal to suspend the board’s order on the fifth point, which had ordered strikers paid.

Challenged in the conference by one justice who voted to revoke entirely the suspension order, Guzmán Vaca emphasized that the determinative criterion was whether suspension of the award would affect the social interest. Again he said that the irreparability of the harm caused one individual or the other was secondary.³⁵ Guzmán Vaca less successfully responded to the justice’s skepticism that the substantive remedy to pay strikers their wages had any textual or legal foundation. He fell back on a policy argument, one based on a contractual notion that the strike was a suspension but not the termination of employment: “Since the moment that the Constitution has permitted workers to declare themselves on strike, they are defending a right of which they can make use, and this right would be nugatory if they came to lose the right to the payment of their wages . . . but if the strike has been declared licit they can return to complete their work without this being terminated; this is the reach that they have, it is what all writers on labor matters indicate.”³⁶ Guzmán Vaca acknowledged that otherwise, there was no legal source for the conclusion that wages of strikers should be paid; as for the company’s termination of jobs, the justice was more sympathetic to the position of the company; from his perspective, there had been not a lockout but rather justified layoffs—which the board had implicitly acknowledged in its award.

During the second day devoted to El Águila, Francisco Modesto Ramírez, Garza Pérez, Padilla, acting as president of the Court, and Francisco Díaz Lombardo spoke in the public conference. The same issues predominated. Ramírez argued that the lockout was illicit until the company obtained the approval of the board, conjecturing that the contrary ruling would make it easier for employers to lock out workers and avoid their compensation. He further suggested that the order to pay workers in the interim merely posited that they remained employed until the board issued its finding, analogizing the situation to that of workers entitled to pay while striking lawfully.³⁷

Garza Pérez concurred with Guzmán Vaca, underscoring the importance of the case, not for the pressure being exerted on the Court by both El Águila and labor organizations, which he mentioned, but because it was the first case in which the federal judiciary was considering suspending a board’s resolution of a major strike. The effect of suspension of the award would be to prolong the strike.³⁸ For Garza Pérez, cases that involved only one worker did not affect the social interest; in contrast, the strike clearly affected society, and the justice elaborated what he believed was obvious, referring to the social interest in “harmony between the factors of production.”³⁹ He stated the precedential value of El Águila, even if alone it did not amount to binding case law:

Consequently, I believe that this case is very distinct from previous ones and they cannot be compared. It is an entirely new case, and the resolution that the Court pronounces will establish a precedent that will naturally be received attentively by the entire nation; but principally by those interested in this class of conflicts and by the federal district judges, who will have to take into account the resolution that the Supreme Court pronounces in this case so that it serves them as a norm to apply, if they so esteem it convenient, while there is no jurisprudencia over the particular, in the same sense.⁴⁰

Garza Pérez added that the only really determinative criterion for refusing to grant a suspension order was whether it implicated the social interest.

Padilla voiced the alternate theory that even the suspension of board orders concerning just one worker affected social interests. According to him, society was keenly interested in all people having employment. He emphatically favored overturning the federal judge on all points. Granting a suspension, even in the case of individual disputes, effectively denied the rights of workers. He realistically noted that employers could sustain an amparo action until its completion but that workers barely subsisting could not. In this respect, he returned to Guzmán Vaca’s initial comments of the previous day regarding the inadequacy of the amparo and civil law to realize the aim of Article 123, to guarantee workers the rights affecting their very life. Society had an interest that the worker and his family not suffer.⁴¹

Díaz Lombardo, the last justice to speak before the vote was taken, as well as the only one who had sat on the high bench before 1917, disputed Padilla.⁴² Society had an interest in the amparo remaining available as an effective remedy; and if suspensions were disallowed, the amparo often would be rendered ineffective. The law was simple: the judiciary should enter the suspension order whenever the petitioner risked incurring harm difficult to repair, unless the order would cause prejudice to society or the state.⁴³

The judgment was fractured after two days of open discussion, but the Court ultimately denied the order of suspension except as to the fourth point of the board’s award.⁴⁴ The CROM claimed victory.⁴⁵ Strikers actually languished after the Court’s decision, receiving only a fraction of the retroactive pay indicated by the Court’s judgment. SICT minister and CROM leader Morones reached an agreement with El Águila compromising the amount to be paid. The CROM probably pocketed most of this sum.⁴⁶ One of the strike leaders soon thereafter was assassinated, and many workers, dispirited by the outcome, departed from Minatitlán.⁴⁷ The political equation of the Minatitlán strike was complex: in 1926, Calles and Morones were sensitive to the extent that they could press a major oil company; in turn the oil companies were capable of influencing directly or indirectly the federal judiciary.⁴⁸ The state governor Jara was then an ally of labor (he had been one of the strongest advocates of labor rights in the constitutional convention as a delegate from Veracruz), as was generally the board of conciliation and arbitration in the state. The CROM had supported the governor and his predecessor; but they also became rivals and antagonists; and Calles was interested in asserting his control over a powerful governor. In this case, the CROM’s influence was manifestly more visible and successful.⁴⁹ But the justices’ assertions of their position need not be discounted as epiphenomenal; indeed, they acknowledged the pressure exerted by organized labor and then proceeded to address the difficulties inherent in deciding a case such as the suspension order entered against the state labor board in favor of the oil company. And the rules that they articulated as to the payment of wages while workers were on strike, or regarding the consequences of a lockout, as well as to the limits of board decision making, would remain operative, and continue to evolve, throughout the decade. In this case, as one leading industrial relations scholar has noted, the Court had implicitly recognized the legal validity of the union security agreement (or closed shop), to which El Águila had been strongly opposed and which by the end of the litigation benefited the CROM.⁵⁰ If the judgment was not an explicit ruling on this legal point, which would continue to trouble the Court, the issue surely had concerned the justices, as Guzmán Vaca’s ruminations about the labor contract reflect.

In any event, despite the attention that El Águila received, the judgment did not settle the specific question of when to issue an order suspending a board award in amparo litigation. Justices remained divided in subsequent decisions, a bare majority tending to rule against suspending board determinations.⁵¹ Some opinions stressed the theory that suspensions of awards would prolong labor conflict, even where a single worker had made the initial claim, and that there was a social interest in the quick determination of workers’ claims.⁵² Others said that the public interest favored workers receiving their awards in view of their pressing needs; not paying them would cause extreme prejudice.⁵³ Suspensions against similar awards by the federal board, once established, were denied, too.⁵⁴ Using the same rationales, the Court denied suspensions requested against board orders to reinstate workers.⁵⁵ Through 1931, the case law generally disfavored the suspension of orders to pay wages. On September 26, 1931, the Court refused to suspend a board order to pay wages to a professional employee, citing its case law.⁵⁶ But a counterposition existed among the justices; in three separate dissenting opinions, one severely criticized prevalent doctrine.⁵⁷

In American Smelting and Refining Co., a slim majority of the Court held that the suspension of an award, in this case to pay one worker, caused grave prejudice to society.⁵⁸ A single worker’s livelihood affected not just his interest but larger ones, too, beginning with the union to which he belonged, since suspending the board order would encourage employers to act similarly toward other workers and their families, the unit integrative of the social organism. The opinion mentioned the new orientations of legal doctrine to support the proposition that an individual’s personal interest implied the larger interests of the class to which he belonged. The rationale that the social and collective interest disfavored suspension of an award for basic sustenance would recur in subsequent cases.⁵⁹ The Court similarly declined to suspend awards in workers’ accident cases.⁶⁰ These decisions were to be distinguished.⁶¹

In Welch, the Court tailored its position, restating points made in the case of El Águila and advancing a principle it deemed relevant to the new labor law, the privileging of group rights.⁶² A dispute between a single worker and capitalist did not implicate social and state interests. A group conflict and a board order resolving a strike, as in this case, obviously did: “and above all, when it is a sentence that puts an end to a strike that is challenged, one cannot negate that society is interested in the execution of the award.”⁶³ The board award had instructed the employer to pay 50 percent of the wages accruing during the strike, admit to the factory all strikers, pay workers their salaries if there were a lack of work, and, last, restart production within three days of the notice of the award. After recounting the employer’s arguments and the legal standard, the Court countered with the principle that the group’s rights prevailed over the individual’s: “It is indisputable that in the conflict between rights, those of the larger entity should always prevail and this character corresponds in every case to collective ones before individual ones.”⁶⁴ It was not a position shared by all justices; they divided in a 6–5 vote denying the suspension order.⁶⁵

In March 1930, the Court overturned a judge’s refusal to suspend the federal board’s decision directing a telephone company to sign a collective contract.⁶⁶ The high tribunal now asserted that all individuals and collective entities, such as a corporation, equally enjoyed constitutional rights and affected the social and state interest. Another judgment issued in June 1930 concluded that although the case law had favored the enforcement of board awards in conflicts between capital and labor, the operative principles differed where the dispute was between two unions and there was a public interest in the economic regimen of the company—such as Ferrocarriles Nacionales de México.⁶⁷

Differing stances toward suspensions were evident in three published opinions dated between the middle of 1930 and March 1931. In one the Court held that suspension of a board order was inappropriate when the board had instructed the company to reinstate workers, as the company was not prejudiced.⁶⁸ In Cinco Minas, the Court amended the federal judge’s decision and suspended the board’s order in respect to a wage increase but upheld the recognition of the union since the state interest favored the organization of workers.⁶⁹ The application for a suspension order failed in La Suiza, where the board order was for the wage payments during a strike.⁷⁰ Consistent with the opinion in El Águila, the Court surmised that a resolution ending a strike was in the public interest and should not be suspended.

The Court further modified case law regarding board awards for the payment of basic wages to individuals or, in the case of accidents, medical expenses. It initially tended to refuse petitions to suspend such awards; then its decisional law became more porous.⁷¹ Many judgments did not attempt to distinguish the result from prevalent case law, or they did so very tersely.⁷² The alternate position of the Court sympathetic to the suspension of board awards was already prevailing sometimes by the end of 1927. Opinions were qualifying earlier categorical statements in favor of the execution of awards for workers. The number of published decisions approving the suspension of awards increased in 1930 and 1931. Many of them involved the national railway company and the federal board created in September 1927. Only awards clearly providing sums for necessary sustenance largely remained immune from a suspension order.⁷³

In two cases involving Ferrocarriles Nacionales de México, the Court distinguished the presumed impact of the board orders it suspended from the kind of destitution its case law had aimed to avoid.⁷⁴ In one, the employees would remain employed, receiving some wages to cover the costs of sustenance. In the other, the Court said each case had to be evaluated on its facts to ascertain if precedents applied. One more judgment involving the railways distinguished between the order to pay wages owed, which could be suspended, and reinstatement, which did not harm the company.⁷⁵ Suspensions of wage payments remained in principle inappropriate,⁷⁶ unless deemed unnecessary for sustenance.⁷⁷ The Court affirmed the suspension of orders to terminate employment that boards probably issued at the behest of unions intent on maintaining the closed shop.⁷⁸

Suspensions in a number of cases reflecting different factual patterns evidence new considerations. An award by the Veracruz central board relating to vacation was believed to cause sufficient prejudice to the employer and, outside the case law favoring workers, to warrant its suspension.⁷⁹ In Cía. Tra[n]scontinental de Petróleo, S.A., the opinion said that the presumption of denying suspensions because labor law was in the public interest was rebuttable.⁸⁰ In this case, the Court found that the federal board should have had jurisdiction over the labor dispute, since it affected the oil industry. Here the public interest favored granting the suspension and a federal board hearing the matter. Another case, Vásquez, related to a lockout by the employer; the Court analyzed the labor law on this subject and suspended the award.⁸¹ The partial suspension in Sindicato Revolucionario de San Bruno concerned the reinstatement of workers.⁸² In Oteiza, the Court suspended the Oaxacan central board’s determination that a strike was lawful.⁸³ Awards affecting third parties only indirectly implicated in the labor disputes might be more easily distinguished from the prevailing legal standards, although such actions could affect a worker’s pay.⁸⁴ Resolutions of the federal boards involving interunion conflict and a union security deposit were also suspended at the end of 1931.⁸⁵ By then the case law was pointing toward suspending board resolutions on the application of employers.

THE SOVEREIGNTY OF THE BOARDS OF CONCILIATION AND ARBITRATION AND ITS LIMITS

The federal judiciary’s recognition of the imperio of board decisions repeatedly led to questions about the deference that should be accorded to their evaluation of evidence, in the framework of the amparo proceeding. The