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
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
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)
"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."
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.
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
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.
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. ...