which will produce power on a practical scale for military and civilian pur poses. They also will be valuable in solving some of the problems involved in a "breeder-type" reactor. In addition to producing heat for conversion into power, a successful breeder-type reactor would more than replenish the fissionable fuel consumed in operation by converting non-fissionable Uranium-238 into new fissionable material. This work performed for the Commission by the General Electric Company in the Schenectady Area constitutes a significant portion of the reactor development program of this country.

(c) The General Electric Company also conducts for the Commission in the Schenectady Area a number of atomic energy projects of direct interest or application to other Commission-wide programs.

4. Most of the work conducted for the Commission by the General Electric Company in the Schenectady Area is classified and constitutes "restricted data" as defined by the Atomic Energy Act of 1946. Disclosure of such information to unauthorized persons would adversely affect the common defense and security of the United States.

5. The following is a more specific description of the separate sites in the Schenectady Area where work is conducted for the Commission by the General Electric Company, together with a general statement of the work performed at each site, as well as the number of persons employed:

(a) Temporary Atomic Power Laboratory, 425 Peck Street, Schenectady

This is a Government-owned facility on Government-owned land. The activi ties conducted at this facility ultimately will be transferred to the permanent Government-owned Knolls Atomic Power Laboratory which is under construc tion on another site. It houses the Commission's administrative offices for the Schenectady Area, together with certain of General Electric Company's administrative, laboratory, shop, service and utility facilities. Approximately 672 employees of General Electric Company are engaged there on atomic energy work. This work consists, in general, of research and engineering development relating to (1) more efficient chemical extraction processes; (2) improvement of reactor technology with particular emphasis on the production of useful power; and (3) metallurgical processes and alloys and various heat transfer studies.

(b) The Sacandaga Laboratory

This laboratory, located north of Schenectady, is a Government-owned facility on land now being purchased by the Government pursuant to an option obtained from the General Electric Company. Approximately 89 employees of General Electric Company are engaged there on atomic energy work. This work consists largely of studies directed toward a reactor to produce useful power and a breeder-type reactor.

(c) The Campbell Avenue Plant

This plant, located near Schenectady, is owned by General Electric Company and only a small portion of the space is used for atomic energy work. At this site there are being carried on certain special projects of high im portance to the atomic energy program. A small number of General Electric Company employees are employed full-time on the atomic energy work at this site, and a large number of additional General Electric employees are available on a part-time basis when needed.

(d) AEC Warehouse

This is a United States Navy Installation located at Scotia, New York, ap proximately three miles north of Schenectady, in which the Commission has obtained approximately 25,000 square feet of warehouse space. There are ap proximately 29 General Electric Company employees engaged at this site on atomic energy work.

(e) General Electric Research Laboratory.

A certain amount of atomic energy work (including the full-time services of approximately 19 General Electric Company employees) is carried on for the Commission in the General Electric Research laboratory in Schenectady. (f) Knolls Atomic Power Laboratory

This laboratory is located on River Road, approximately three miles northeast of Schenectady. It is now under construction and will consist of permanent Government-owned buildings on Government-owned land. These permanent structures are at various stages of construction. None of them were ready for

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use by operational personnel on September 27, 1948, but some of them were nearing completion. It is planned that the new reactor and associated equipment, which will be constructed and operated in conjunction with the Knolls Laboratory, will be located at a site near West Milton, Saratoga County, which is in the initial stages of development.

WALTER J. WILLIAMS. Subscribed and sworn to in my presence this 19th day of November 1948. JOHN L. COOK, Notary Public.

My commission expires December 31, 1952.

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

UNITED ELECTRICAL, RADIO AND MACHINE WORKERS OF AMERICA (UE), CIO, ET AL., PLAINTIFFS, V. DAVID E. LILIENTHAL, INDIVIDUALLY AND AS CHAIRMAN OF THE UNITED STATES ATOMIC ENERGY COMMISSION, ET AL., DEFENDANTS

Civil action No. 4427-48

DEFENDANTS' MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF THEIR MOTION TO DISMISS THE COMPLAINT OR IN THE ALTERNATIVE FOR SUMMARY JUDGMENT

PRELIMINARY STATEMENT

This is an action by the United Electrical, Radio and Machine Workers of America, known as UE, Local 301 of that Union, its President, the President of District 3, and three members of the Union to require the Chairman and Members of the United States Atomic Energy Commission to revoke a direction issued to the General Electric Company withdrawing recognition of the Union as a bargaining representative of any employees engaged in work at owned or leased installations of the Atomic Energy Commission in the Schenectady area or engaged in atomic work which is being performed by the General Electric Company and which is defined as classified by the Commission. Alleging that the direction violates the constitutional and contractual rights of the plaintiffs, the complaint also asks for damages in the amount of a million dollars.

This direction was based upon information concerning alleged Communistic affiliation or association of various officers of UE. The positions occupied within UE by these officers are such that they exercise administrative, negotiating, or disciplinary authority within the Union over General Electric Company employees engaged at atomic energy facilities at Schenectady where UE is the recognized bargaining agency.

This information when taken together with the failure of these officers to file non-Communistic affidavits under the Labor Management Relations Act, led the Commission to conclude that there is a very serious question as to whether representation of atomic energy workers at Schenectady by a union in which such officers occupied important positions is consistent with that full and unqualified adherence and loyalty to the interests of the United States required by national security and the Atomic Energy Act of 1946. Under dates of October 6 and October 22, 1948, the Atomic Energy Commission wrote Mr. Albert J. Fitzgerald, General President of the UE, stating that unless this very serious question should be cleared up satisfactorily the Commission intended to take such further steps "as may be necessary to assure that these officers do not exercise administrative, negotiating or disciplinary authority over General Electric Company employees engaged in atomic energy work, at Schenectady." The Commission offered the officers of UE every opportunity to participate in a fuller exploration of this issue. This they refused

to do.

The defendants have moved to dismiss the complaint or for summary judgment on the following grounds:

1. The complaint fails to state a claim against the defendants upon which relief can be granted;

2. The Court lacks jurisdiction over the subject matter of the action in that the complaint seeks to control executive action committed by law to the discretion of the Atomic Energy Commission, and this Court will not interfere with the exercise of such discretion;

3. Plaintiffs, in seeking relief from their alleged injuries, have failed to exercise the administrative means offered by the Commission, thereby precluding any judicial relief; or in the alternative for summary judgment for the defendants, on the ground that there is no genuine issue as to any material fact, and that defendants are entitled to judgment as a matter of law.

STATEMENT OF THE CASE

The material facts are undisputed as far as defendants' motion is concerned. By way of background, it should be noted that the wartime atomic energy program was carried forward by the Manhattan Engineer District with the highest order of secrecy, and the work was highly compartmentalized. As a result, the wartime atomic energy program proceeded under an agreement between the War Department and the labor unions which held in abeyance the organization by unions of employees of atomic energy operating contractors. Consequently, Secretary of War Patterson requested the National Labor Relations Board to withhold any action in any case involving the Manhattan Engineer District. In March, 1946, the War Department relaxed the ban on union organization at Oak Ridge, but not at other atomic energy installa tions. The War Department then informed the National Labor Relations Board that it was believed to be possible, consistent with the requirements of national security, to work out procedures under which National Labor Rela tions Board cases involving the project at Oak Ridge might be handled. The organization of unions at Oak Ridge was in the nature of an experiment which might later be extended to other atomic energy installations if it was decided that the activities of unions were not inconsistent with the needs of security and uninterrupted production in these plants. Accordingly, the Secretary of War asked that the National Labor Relations Board refrain from affirmative action in cases affecting other units of the atomic energy project.

This was the situation on January 1, 1947, when the Atomic Energy Commission assumed responsibility for atomic energy operations under the Atomic Energy Act of 1946, 42 U. S. C. secs. 1800-1819, and Executive Order 9816, 12 Fed. Reg. 37. With certain minor exceptions this situation remained generally the same until September 27, 1948.

The Manhattan Engineer District entered into a contract with the General Electric Company, No. W-31-109-Eng-52, effective May 15, 1946, which provided for the operation by the General Electric Company of atomic energy installations at Hanford, Washington, and in the Schenectady area. (A declassified copy of this contract with the amendments is attached as an exhibit to the motion.) While no action was taken involving union recognition of the operating personnel at Hanford, the General Electric Company has treated its over-all collective bargaining agreement with the United Electrical Workers as applicable to atomic energy work in the Schenectady area. Contract No. W-31-109-Eng-52 between the Manhattan Engineer District and the General Electric Company was adopted by the Atomic Energy Commission on January 28, 1947, and has been amended from time to time since that date. The contract is a cost-reimbursable type contract, under which the Government reimburses General Electric for all direct and indirect expenses arising out of the work, with a nominal fee of $1. and agrees to hold General Electric harmless against contingent liabilities arising from any cause other than the bad faith or willful misconduct of corporate officers acting within the scope of their authority. In the amendment dated June 25, 1947, there is a provision that "the contractor agrees to conform to all security regulations and requirements of the Atomic Energy Commission". The current collective bargaining agreement between the General Electric and the United Electrical Workers, which is attached as "Exhibit A" to the complaint in the present action, is dated June 11, 1948.

The development of adequate labor policies for atomic energy plants has been a matter of continuing consideration by the Atomic Energy Commission, and is discussed in some detail in the testimony and the exhibits contained in the hear ings before the Joint Committee on Atomic Energy, held in March, 1948. As appears from those hearings, the Commission in its report to the Joint Committee on Atomic Energy, dated January 16, 1948, set forth as one of the objectives of a labor policy the "development of procedures to assure (1) that all participants in the program are loyal to the United States, including those whose participation involves the exercise of negotiating and disciplinary authority over bargaining units, and (2) that determination of unit, jurisdiction, and similar questions

will not breach security". Another objective stated by the Commission was "continuity of production at vital AEC installations".1

On September 27, 1948, the Commission in a letter to Chairman Herzog of the National Labor Relations Board, made a substantial change in the labor policy which had been followed by the Manhattan Engineer District and which had previously been continued in effect by the Commission. A copy of that letter is attached to the motion. In this letter the Commission, after reviewing the earlier history of labor policy at atomic energy installations, stated:

"Under the circumstances, the Commission has decided to withdraw the request that your Board refrain from affirmative action in cases involving other atomic energy projects. While the Commission now fully approves the principle of Board proceedings at atomic energy projects in cases falling within the scope of the Labor Management Relations Act, for the present the Commission requests that National Labor Relations Board representatives clear each case as it arises with local Atomic Energy Commission representatives, in order that security considerations may be carefully reviewed. It is our judgment that under this arrangement it should be possible to process many, if not all, of the hearings and elections which have been postponed at the request of the Manhattan Engineer District and the Atomic Energy Commission."

The Commission felt, however, that this action necessitated certain safeguards if the security of the atomic energy installations was to be assured. It must be recognized that union officers exercising administrative, negotiating, and disciplinary authority over members working on atomic energy projects could, if they were so disposed, affect the labor relations on an atomic energy project so that the work could be slowed down or curtailed.

Thus, a union officer or one who was not loyal to the interests of the United ́States could precipitate a strike actually in the interests of a foreign power, but avowedly for legitimate trade union purposes and accepted as such by the union members. Similarly, negotiating authority to deal with questions arising under the contract might be used (and for similar purposes) to slow down operations by magnifying petty disagreements and creating ill will between employers and employees. At the present juncture of world affairs, such a risk is too dangerous to be run in our atomic energy program. Accordingly, it is a matter of the deepest concern to the Commission-and to the whole country-to be assured that. there is no serious unresolved question concerning the loyalty of such union officers and their adherence to the interests of the United States.

After careful consideration of the whole problem, the Commission has concluded that, in order that any such security question may be properly resolved, those union officers exercising administrative, negotiating, and disciplinary authority over members working on atomic energy projects should be recognized as themselves participating in the atomic energy program and be subject to scrutiny from a security standpoint, generally similar to those applicable to the members themselves, in order to assure that they have full and unqualified adherence and loyalty to the interests of the United States.

In addition, from the standpoint of control of information, the Commission's action has the effect of safeguarding restricted data, inasmuch as the union officers, by their continuing contact with the atomic energy program, come into close proximity to restricted data and, as in the case of adjustment of grievances, may demand access to classified working facilities.

In its letter to Chairman Herzog, of September 27, 1948, therefore, the Com"Consistent with the national policy as stated in the Atomic Energy Act of 1946 and the Labor Management Relations Act, 1947, it is the settled policy of the Atomic Energy Commission that the atomic energy facilities be operated in a manner best calculated to assure that those who participate in the program are loyal to the United States, including those who, though not employees of contractors, exercise administrative negotiating and disciplinary authority over such employees of contractors as are members of union bargaining units."

The Commission on the same date, September 27, 1948, sent a letter to the General Electric Company containing the instruction referred to in paragraph 17 of the first amended complaint. In that letter the Commission stated that: "It is noted that UE officers have failed to comply with the section of the Labor Management Relations Act, 1947, which provides for filing of affidavits that they are not members of the Communist Party or affiliated 1 Hearings before the Joint Committee on Atomic Energy, 80th Cong., 2d Sess., p. 117.

with such Party. In addition, information is available, much of it a matter of open public record, of alleged Communist affiliation or association of var ious officers of UE. It appears that some of these UE officers are in a position within this union whereby they exercise administrative, negotiating or disciplinary authority over General Electric Company employees engaged in atomic energy work at Schenectady. The failure to file non-communist affidavits and the information concerning alleged Communist affiliation of these officers of UE when taken together present a very serious question as to whether representation of atomic energy workers at Sche nectady by a union in which such officers occupy important positions is consistent with that full and unqualified adherence and loyalty to the interests of the United States that the security of the Nation and the policy of the Atomic Energy Act of 1946 require."

As a result, the Commission, as a first step towards improving the situation, directed that:

"The General Electric Company not recognize United Electrical, Radio and Machine Workers of America, CIO at the New Knolls II Atomic Power Laboratory, Schenectady, New York. The Commission will communicate with you with respect to other steps that may need to be taken."

It will be noted that, at the time this direction was issued, the Knolls II Atomic Energy Power Laboratory was under construction, and that some of the permanent structures at the Laboratory site were nearing completion. The Laboratory was thus a new atomic energy installation not yet in operation, and the effect of the Commission's instruction was to maintain the status quo (ie., not allow the union to begin representation of the employees to be employed at this new installation) unless the serious problem of security involving UE officers was solved.

On September 30, 1948, Mr. Fitzgerald, President of the UE, wrote to Mr. Lilienthal, protesting against this action.

On October 6, 1948, the Commission replied to Mr. Fitzgerald, stating the reasons for its action, and stating further:

"Unless the serious question concerning various of the officers of UE should be cleared up satisfactorily, the Commission intends to take such further steps as may be necessary to assure that those officers of UE shall not exercise administrative, negotiating and disciplinary authority over General Electric Company employees engaged in atomic energy work at Schenectady."

The Commission also stated in this letter to Mr. Fitzgerald:

"If the officers of UE desire, the Commission will afford them every op portunity to participate in a fuller exploration of this issue. It should be understood, however, that the AEC would expect the UE officers to be prepared to give full and candid statements concerning present or past affilia tions of any kind with the Communist Party or Communist-dominated or ganizations. In addition, the same personnel data will be requested of the UE officers as has been furnished by employees and by various officers of other unions who represent employees in the atomic energy program." On October 22, 1948, the Commission wrote a second letter to Mr. Fitzgerald, indicating that they had received no reply to the letter of October 6, and requesting information as to whether it should be assumed that the officers of UE did not desire to avail themselves of the offer proffered to them in the letter of October & to participate in a resolution of the questions presented as to the UE. In that letter it was stated that:

"The Commission wishes to emphasize that it intends to move promptly on this matter. In the event that the serious question that exists is not satisfactorily answered in the manner indicated above, the Atomic Energy Commission intends to direct the General Electric Company to withdraw and withhold recognition from the United Electrical, Radio and Machine Workers of America as the bargaining representative of any employees engaged on work at AEC-owned or AEC-leased installations in the Schenec tady area or engaged on atomic work which is defined as classified by the AEC and being performed by the General Electric Company. This action would be in effect unless and until the union's officers did submit personal data, as has been done by other union officers at other establishments, and the questions concerning such officers had been resolved."

On October 26, 1948, Mr. Fitzgerald wrote to the Atomic Energy Commission rejecting the Commission's offer to participate in any further exploration of the Serious question concerning the UE officers. There then followed on October 28 e complaint in this case.