3. Why is not the vital interest of the railway company in the competence of yard employees a sufficient justification for the interference in this case? 4. What is the difference between malice in law and malice in fact? 5. Do you think the court justified in reading "maliciously" into the statute?

6. "No company, partnership or corporation in this state shall authorize, permit or allow any of its or their agents to, nor shall any of its or their agents blacklist any discharged employee, or by word or writing seek to prevent, hinder or restrain such discharged employee or any employee who may have voluntarily left such company's or person's service from obtaining employment from any other person or company." Is this unconstitutional as class legislation?

7. Has your state a statute dealing with blacklisting? If so, compare it with the Minnesota law.

8. If there is such a statute in your state, ascertain whether the courts have passed upon its constitutionality.

(c) Service Letters

PRUDENTIAL INS. CO. v. CHEEK

United States Supreme Court. 1922. 259 U. S. 530.

MR. JUSTICE PITNEY delivered the opinion of the court:

....

The first count was based upon section 3020, Missouri Revised Statutes 1909, which reads as follows: "Whenever any employee of any corporation doing business in this state shall be discharged or voluntarily quit the service of such corporation, it shall be the duty of the superintendent or manager of said corporation, upon the request of such employee (if such employee shall have been in the service of said corporation for a period of at least ninety days), to issue to such employee a letter, duly signed by such superintendent or manager, setting forth the nature and character of service rendered by such employee to such corporation and the duration thereof, and truly stating for what cause, if any, such employee has quit such service; and if any such superintendent or manager shall fail or refuse to issue such letter to such employee when so requested by such employee, such superintendent or manager shall be deemed guilty of a misdemeanor, and shall be punished by a fine in any sum not exceeding five hundred dollars, or by imprisonment in the county jail for a period not exceeding one year, or by both such fine and imprisonment."

The argument in support of the contention that the Service Letter

Act is repugnant to the due process of law clause of the 14th Amendment, in brief, is that, at common law, an employer is under no obligation to give a testimonial of character or clearance card to his employee; that no man is compelled to enter into business relations with another unless he desires to do so, and upon the dissolution of such relations no man can be compelled to divulge to the public his reasons for such dissolution; that it is a part of every man's civil rights that he be at liberty to refuse business relations with any other person, whether the refusal rests upon reason or is the result of whim, caprice, or malice; and with his reasons neither the public nor third persons have any legal concern; and that, in the absence of a contract, either employer or employee may sever the relation existing between them for any reason or without reason, and may not be compelled to divulge the reason without material interference with his fundamental rights. Assuming the rules of the common law to be as stated, it is obvious, that to say they have an unqualified and universal application, alterable by statute, begs the question at the outset.

....

un

The right to conduct business in the form of a corporation, and, as such, to enter into relations of employment with individuals, is not a natural or fundamental right. It is a creature of the law; and a state, in authorizing its own corporations or those of other states to carry on business and employ men within its borders, may qualify the privilege by imposing such conditions and duties as reasonably may be deemed expedient, in order that the corporation's activities may not operate to the detriment of the rights of others with whom it may come in contact.

The statute in question is of this character; in it the legislature has recognized that, by reason of the systematic methods of engaging and dismissing employees that employing corporations themselves established, "letters of dismissal," or something of the kind, are not only customary, but a matter of necessity to those seeking employment, as well as to the corporations themselves; perhaps more necessary to those seeking employment, because of their want of organization, than to the corporations.

Can it be called an unreasonable or arbitrary regulation that requires an employing corporation to furnish to an employee who, after having served it for a time, is discharged or voluntarily quits the service, a letter signed by the superintendent or manager, setting forth the nature, character, and duration of the service rendered, and for what cause, if any, he left the service? It does not prevent the corporation

from employing whom it pleases on any terms that may be agreed upon. So far as construed and applied in this case it does not debar a corporation from dismissing an employee without cause, if such would be its right otherwise, nor from stating that he is dismissed without cause, if such be the fact. It does not require that it give a commendatory letter. There is nothing to interfere, even indirectly, with the liberty of the corporation in dealing with its employee, beyond giving him, instead of what formerly was called a "reference" or "character," a brief statement of his service with the company according to the truth, a word of introduction, to be his credentials where otherwise the opportunity of future employment easily might be barred or impeded. . . .

The cases cited from Georgia, from Kansas, and from Texas, place material dependence upon provisions of the several state constitutions guaranteeing freedom of speech, from which is deduced as by contrast a right of privacy called the "liberty of silence;" and it seems to be thought that the relations between a corporation and its employees and former employees are a matter of wholly private concern. But, as we have stated, neither the 14th Amendment nor any other provision of the Constitution of the United States imposes upon the states any restrictions about "freedom of speech" or the "liberty of silence;" nor, we may add, does it confer any right of privacy upon either persons or corporations.

As has been shown the Missouri statute interposes no obstacle or interference as to either the making or the termination of contracts of employment, and prescribes neither terms nor conditions. The supreme court of the state, having ample knowledge of the conditions which gave rise to the particular legislation, declares with an authority not to be denied that it was required in order to protect the laboring man from conditions that had arisen out of customs respecting employment and discharge of employees introduced by the corporations themselves. It sustains the act as an exercise of the police power; but in truth it requires no extraordinary aid, being but a regulation of corporations calling for an application of the familiar precept, "sic utere tuo," etc., in a matter of general public concern. Except by consent of the state, the corporation, foreign or domestic, would have no right to employ laborers within its borders. . . . . But it has no valid objection to such reasonable regulations as may be prescribed for domestic corporations similarly circumstanced. The state, with good reason, might regulate the terms and conditions of employment, including the methods.

of accepting and dismissing employees, so as to prevent the corporations from producing undue detriment to the individuals concerned, either while employed or when afterwards they are called upon to seek other employment. In our opinion, no danger of "blacklisting" is necessary to justify legislation requiring that corporations dismissing employees furnish them with a certificate stating the period of the service, its nature and character, and the cause, if any, that led to its termination. It might be recognized that, in the highly organized conditions of industry now prevailing,-largely developed by the corporations themselves, and to which their success is greatly due,-it is not to be expected that unemployed men can obtain responsible employment without some credentials proceeding from a former employer. The legislature might believe it to be well understood that a period of employment by a corporation-notably so in the case of insurance companies is a test of capacity, fidelity, and the other qualities that go to make efficiency; that such a corporation may operate as a training school, fitting employees not only for its own but for other lines of employment. Such a training may almost inevitably produce effects upon the individuals in forming both character and reputation,-effects that cannot be brought to an end at the will of the employee or of the corporation, or both of them combined, although the employment may be terminated at the will of either; but may continue while the employee lives; his employment with the corporation remains a part of what is called his "record," by which he must be judged whenever afterwards he may be in search of employment. The reputation of the dismissed employee is an essential part of his personal rights, of his right of personal security (1 Bl. Com. 129; 3 Bl. Com. 119). Even the common law regarded a man's public repute as a fact having a bearing upon his ability to earn a livelihood; looked upon a good reputation in a particular trade or calling as having special pecuniary value; regarded a prospective employer as privileged to make inquiries about what his would-be employee had done in a former place of employment; conferred upon the former employer a privilege to communicate the truth in reply. What more reasonable than for the legislature of Missouri to deem that the public interest required it to treat corporations as having, in a peculiar degree, the reputation and wellbeing of their former employees in their keeping, and to convert what otherwise might be but a legal privilege, or, under prevailing customs, a "moral duty," into a legal duty, by requiring, as this statute does, that when an employee has been discharged or has voluntarily left the

service, it shall give him, on his request, a letter setting forth the nature and character of his service and its duration, and truly stating what cause, if any, led him to quit such service.

It is not for us to point out the grounds upon which the state legislature acted, or to indicate all the grounds that occur to us as being those upon which they may have acted. We have not attempted to do this; but merely to indicate sufficient grounds upon which they reasonably might have acted, and possibly did act, to show that it is not demonstrated that they acted arbitrarily, and hence that there is no sufficient reason for holding that the statute deprives the corporation of its liberty or property without due process of law.

The argument under the "equal protection" clause is unsubstantial. As we are assured by the opinion of the supreme court, the mischiefs to which the statute is directed are peculiarly an outgrowth of existing practices of corporations, and are susceptible of a corrective in their case not so readily applied in the case of individual employers, presumably less systematic in their methods of employment and dismissal. There is no difficulty, therefore, in sustaining the legislature in placing corporations in one class and individuals in another. See Mallinckrodt Chemical Works v. Missouri, 238 U. S. 41. And the act applies to all corporations doing business in the state, whether incorporated under its laws or not. . . . .

....

The judgment under review must be and is affirmed.

The Chief Justice, Mr. Justice Van Devanter, and Mr. Justice McReynolds dissent.

QUESTIONS

1. What is the connection between service letters and blacklisting? 2. Would the decision in the principal case have been the same if the insurance company had been a domestic corporation?

3. Would the law be good if it were limited by its terms to public service corporations?

4. Would it be good if it applied to all employers of labor?

5. Do you think it desirable to make such statutes applicable to all employers?

6. Why should corporations object to the requirements of the statute? 7. Why are the cases cited from Georgia and other states not in point in the principal case?

8. Would the Missouri statute be upheld under a state constitution which guaranteed the right of free speech?

9. Why is the statute in question not an abridgment of the privileges or immunities of citizens of the United States, contrary to Amendment XIV?