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GILMOUR v. WOOD

October 9, 1963

WILLIAM D. GILMOUR, PLAINTIFF,
v.
WOOD, WIRE AND METAL LATHERS INTERNATIONAL UNION, LOCAL NO. 74, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Decker, District Judge.

  This is a complaint in three counts, alleging in Count I the breach of a collective bargaining agreement between the plaintiff and defendant Union; in Count II, a secondary boycott by the defendant against the plaintiff; and in Count III, a conspiracy in violation of the Sherman Anti-Trust Act to the damage of the plaintiff. The jurisdiction of the Court is based on Section 301 of the National Labor Relations Act (29 U.S.C. § 185) — Count I; Section 303 of the National Labor Relations Act (29 U.S.C. § 187) — Count II; and Sections 1 through 8 of the Sherman Anti-Trust Act (15 U.S.C. § 1-7) — Count III.

Before getting into a detailed examination of the complaint, it is well to notice the basic inconsistency of the three counts which plaintiff alleges here. The first count alleges that the plaintiff became a party to a collective bargaining agreement both individually and as a member of an employers association to which the defendant Union was the other party. Count I demands damages for the breach of that agreement by the Union.

Count II alleges that, notwithstanding the collective bargaining agreement, the defendant Union caused a secondary boycott of the plaintiff by refusing to send or to allow union members to work for plaintiff.

Count III alleges that the very contract for whose breach plaintiff seeks damages in the first two counts is itself a conspiracy, in violation of the Anti-Trust laws of the United States.

Plaintiff Gilmour is a lathing contractor and an employer of the members of Local 74. Local 74 is a union which represents approximately 700 employees, commonly called lathers, and whose members are employed by the plaintiff and by other members of the Employing Lathers Association of Chicago and Vicinity, which Association is also joined as a defendant because it refused to join the action as a plaintiff. Also joined as a defendant is Jerome D. Kennedy, the President of Local 74, who is sued individually and on behalf of all the members of his Union.

Motion to Dismiss or for Summary Judgment

The defendants Kennedy and Local 74 have made a detailed motion to dismiss each of the three counts of the complaint and have filed voluminous briefs in support thereof. Their motion attacks the jurisdiction of the Court over the subject matter and the sufficiency of the complaint to state a cause of action in each of the three counts.

Although it will unduly extend this opinion, I can see no other way to dispose of the motion than to examine each defect the defendants allege in the complaint and to comment briefly upon it.

Count I:

Gilmour alleges that on May 1, 1960, the Employing Association entered into a written contract with Local 74 which was to remain in effect until May 31, 1963, but which could be reopened on the issue of wages only after June 1, 1961, on 60 days' notice. On May 1, 1960, Gilmour was not a member of the Association, but on that date he entered into a written agreement with Local 74, which was identical to the one which the Association executed on behalf of its members with Local 74. Gilmour's individual agreement was to remain in effect until November 30, 1960. On August 18, 1960, Gilmour became a member of the Association, and Gilmour alleges that by so becoming a member, he adopted and ratified all the acts of its bargaining representative in executing the earlier collective bargaining agreement. However, plaintiff's individual agreement was extended to run until May 31, 1961. On June 1, 1961, the plaintiff alleges both the individual and the Employing Association agreement with Local 74 were in effect because of Section 8(d)(1) and (3) of the National Labor Relations Act (N.L.R.A.) (29 U.S.C. § 158(d)(1) & (3)). Since Local 74 failed to give the requisite 60 days' notice of termination prior to the expiration date of the contract, the individual contract continued to be in effect notwithstanding its termination date of May 31, 1961.

Under either agreement, both of which the plaintiff alleges were to remain in effect through May 31, 1963, it was the duty of Local 74 not to engage in a strike or boycott during the period of the agreement without first submitting any disputed question to arbitration in the manner provided for in the agreement. Notwithstanding this agreement to submit disputes to arbitration, plaintiff alleges that Local 74 has engaged in a strike against Gilmour, has directed its members not to perform services for Gilmour, has directed its members to report to the Union the locations at which Gilmour has contracted to perform any work, and has coerced its members to follow its instructions by threats of fines for any member who disregarded the orders of Local 74; it has also refused to issue "work permits" to any of its members who were employed by Gilmour. While allowing its members to finish work which was begun by Gilmour prior to May 31, 1961, Local 74 has ordered its members to engage in "slow-down activities" on these jobs, and has otherwise breached one or both of the two collective bargaining agreements alleged to be in effect through May 31, 1963.

Plaintiff alleges that because of the general practice among substantially all of the general contractors in the Chicago area to employ only subcontractors who employ members of A.F.L.-C.I.O. Unions, unless defendant is restrained from continuing its breach of the two collective bargaining agreements, plaintiff will continue to suffer irreparable injury to his business.

In addition to seeking injunctive relief, plaintiff seeks damages in the amount of $500,000.00.

To begin with, Section 301 of the N.L.R.A. (29 U.S.C. § 185) provides:

  "Suits for violation of contracts between an employer
  and a labor organization representing employees in an
  industry affecting commerce as defined in this
  chapter, or between any such labor organizations, may
  be brought in any district court of the United States
  having jurisdiction of the parties, without respect
  to the amount in controversy or without regard to the
  citizenship of the parties."

Firstly, Section 301 does not allow suits against individual union members or officers, even though it does allow individual union members or officers to bring suits for breach of contract against their employer. This does not seem to be equal treatment, but nevertheless, it is the law.

In Smith v. Evening News Association, 371 U.S. 195, 83 S.Ct. 267, 9 L.Ed.2d 246 (1962), a suit by several individual members against an employer under Section 301 for breach of contract was allowed. However, in Atkinson v. Sinclair Refining Co., 370 U.S. 238, 82 S.Ct. 1318, at 1324-1325, 8 L.Ed.2d 462, at 470-471 (1962), it was held that while a suit for breach of a no-strike clause of a collective bargaining agreement could be brought by an employer against the union under Section 301, a suit would not lie against individual union members and officers for the same breach of contract. The Court stated:

    "When Congress passed § 301, it declared its
  view that only the union was to be made to respond
  for union wrongs, and that the union members were not
  to be subject to levy. Section 301(b) * * * exempts
  agents and members from personal liability for
  judgments against the union (apparently even when the
  union is, without assets to pay the judgment). The
  legislative history of § 301(b) makes it clear
  that this third clause was a deeply felt
  congressional reaction against the Danbury Hatters
  case (Lowe [Loewe] v. Lawlor, 208 U.S. 274 [28 S.Ct.
  301, 52 L.Ed. 488]; * * *) * * *.
    "* * * We have already said in another context
  that § 301(b) at least evidences `a congressional
  intention that the union as an entity, like a
  corporation, should in the absence of agreement be
  the sole source of recovery for injury inflicted by
  it' * * *. This policy cannot be evaded or truncated
  by the simple device of suing union agents or
  members, whether in contract or tort, or both, in a
  separate count or in a separate action for damages
  for violation of a collective bargaining contract for
  which damages the union itself is liable. The
  national labor policy requires and we hold that when
  a union is liable for damages for violation of the
  no-strike clause, its officers and members are not
  liable for these damages. Here, Count II, as we have
  said, necessarily alleges union liability but prays
  for damages from the union agents. Where the union
  has inflicted the injury it alone must pay. Count II
  must be dismissed."

On the basis of this recent Supreme Court opinion, I must dismiss Count I as against Kennedy.

Secondly, an employer cannot enjoin the union's activity, which, by breaching a no-strike clause of a collective bargaining agreement, is in breach of that agreement if that activity amounts to a "labor dispute" under the Norris-LaGuardia Act.*fn1 It has recently been held that a union work stoppage and strike which were also in breach of a collective bargaining agreement, clearly constituted a "labor dispute" within the meaning of the Norris-LaGuardia Act. Sinclair Refining Co. v. Atkinson, 370 U.S. 195, 82 S.Ct. 1328, 8 L.Ed.2d 440, 451 (1962).

While an employer or union can seek a declaratory judgment of its rights under a collective bargaining agreement or can compel specific performance of a contract provision which calls for arbitration, the Supreme Court has distinguished these permissible types of equitable relief from the injunction of a union's conduct which would be prohibited under the N.L.R.A. Therefore, if any relief is granted to this plaintiff at all under Section 301, it must be limited to the damages sought.

(1) Defendants' first point is that the complaint does not set forth sufficient facts to show that Gilmour is engaged in an industry affecting commerce within the meaning of Section 301. Section 2(7) of the N.L.R.A.*fn2 defines affecting commerce as "* * * in commerce, or burdening or obstructing commerce or the free flow of commerce, * * *."

Paragraphs 2 through 5 of Count I are the paragraphs which set forth the jurisdictional allegation. It should be remembered that plaintiff is not only suing individually but is suing as a member of an employers association, which association he has joined as a party defendant because it refused to join as a party plaintiff with him in this action. This is pursuant to Federal Rule 19(a).

In the language of Section 301, plaintiff alleges in paragraph 2 that the "Defendant * * * Local 74 * * * is a labor organization * * * in an industry affecting commerce, to-wit, the business of applying wood and metal lathing to buildings * * *. This industry affects commerce between the States of the United States for the reason that metal lathing materials are produced and fabricated for the most part in States other than the State of Illinois and are shipped into Illinois in interstate commerce."

In paragraph 3 plaintiff alleges that he is a lathing contractor and an employer of members of Local 74. In paragraphs 4 and 5 plaintiff alleges that the employers association is composed of lathing contractors, each of whom employs members of Local 74, and each of whom conducts his business in substantially the same way as plaintiff, purchasing and using metal lathing materials which are largely manufactured outside the State of Illinois. "Plaintiff is informed and verily believes that the aggregate amount of purchases of materials and supplies by members of the Association in interstate commerce during the most recent calendar year immediately prior to the doing of the acts complained of was substantially in excess of $50,000.00."

It would seem to me that these allegations in the complaint are sufficient allegations of jurisdiction under Section 301.

The defendant objects to the failure of plaintiff to include allegations as to the dollar volume of purchases of goods manufactured outside the State of Illinois which he himself purchases as distinguished from what the Employing Association purchases. I do not think that this objection is well taken in that the Employing Association is an involuntary party plaintiff under the Federal Rules with Gilmour, and in several cases Federal courts have held that the dollar volume of purchases in interstate commerce of the total members of the employers association, rather than of only one individual employer, is to be considered when testing Federal jurisdiction. Katz d/b/a Lee's Department Store v. N.L.R.B., 196 F.2d 411 (9 Cir. 1962), and Joliet Contractors Association v. N.L.R.B., 193 F.2d 833 (7 Cir. 1952).

Therefore, while I think that Gilmour as an individual employer might make so few purchases in interstate commerce as to not substantially affect it because of the operation of the "de minimis" rule, as a member of an employers association, his purchases, when aggregated with all the other members of the Association, can be taken into account. These purchases are alleged to exceed $50,000.00 per year, and I think that this is sufficient allegation of jurisdiction. The Union does not contest the allegations as to the Association's dollar purchases. It merely says that only Gilmour's purchases in interstate commerce ought to be considered. On this the Union is wrong.

(2) Secondly, Local 74 argues that if it has acted wrongfully, as alleged, jurisdiction is exclusively in the N.L.R.B. and not in the Federal courts. Originally, Gilmour filed unfair labor practice charges with the N.L.R.B. However, it should be noted that contrary to Local 74's implication, the jurisdiction of the N.L.R.B. and of the United States District Courts are quite independent of each other. Under Section 301 of the N.L.R.A. the United States District Courts are given jurisdiction for hearing "[s]uits for violation of contracts between an employer and a labor organization * * *", and the mere fact that the same conduct by a union which is alleged to breach a contract might also constitute or give rise to charges of unfair labor practice before the N.L.R.B., is not sufficient to divest Federal courts of jurisdiction to hear the breach of contract suits. Smith v. Evening News Assoc., 371 U.S. 195, 83 S.Ct. 267, 9 L.Ed.2d 246 (1962).

Since this is a Section 301 suit, the "pre-emptive" doctrine of the Garmon case, by which all courts, state and Federal, are divested of jurisdiction over suits involving unfair labor practices which are reposed in the exclusive primary jurisdiction of the N.L.R.B., is inapplicable. The Court in the Smith case followed Local 174, Teamsters, etc. v. Lucas Flour Co., 369 U.S. 95, 101, at Footnote 9, 82 S.Ct. 571, 575, 7 L.Ed.2d 593; Charles Dowd Box Co. v. Courtney, 368 U.S. 502, 82 S.Ct. 519, 7 L.Ed.2d 483; and Atkinson v. Sinclair Refining Co., 370 U.S. 238, 245, at Footnote 5, 82 S.Ct. 1318, 1323, 8 L.Ed.2d 462. All of these were Section 301 suits where it was held that the pre-emptive doctrine had no place. The Court expressly refused to apply the pre-emptive doctrine of San Diego Bldg. Trades Council, etc. v. Garmon, 359 U.S. 236, 79 S.Ct. 773, 3 L.Ed.2d 775; Garner v. Teamsters, etc., Union, 346 U.S. 485, 74 S.Ct. 161, 98 L.Ed. ...


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