SIDNEY WANZER & SONS v. MILK DRIVERS U.

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

Plaintiff dairy company, Sidney Wanzer & Sons, Inc. ("Wanzer") brings this suit under § 301 of the Labor Management Relations Act (29 U.S.C. § 185) against Milk Drivers' Union, Local 753 ("Local 753") and two officers of the Local. The suit grows out of an alleged demand by Local 753 for overtime wages in accordance with the wage scale of Article 41 of the parties' Collective Bargaining Agreement ("Agreement"). Wanzer has denied its liability for these overtime wages. The complaint alleges that Local 753 has refused to arbitrate this dispute under the Article 6 arbitration clause in the Agreement, and that Local 753 has attempted to compel payment of overtime wages by engaging in periodic work stoppages in violation of Article 6.

Wanzer seeks specific performance of the arbitration clause, and compensatory and exemplary damages for the alleged breaches of the Agreement. Local 753 moves to dismiss on the ground that this dispute is not arbitrable under the terms of Article 6, and that exemplary damages cannot be awarded under § 301. The individual defendants move to dismiss on the ground that they cannot be sued under § 301. The individual defendants' motion to dismiss is denied; Local 753's motion to dismiss is denied; treating the motion to dismiss on the ground that exemplary damages cannot be awarded under § 301 as a motion to strike portions of the complaint, Local 753's motion to strike is denied.

I.

The first question is whether this dispute is arbitrable under the terms of the Agreement. Article 6 reads as follows:

While Local 753 argues that this dispute concerns "wages and hours" and is therefore within the exception to Article 6, Wanzer claims that the dispute turns on Article 20 of the Agreement, the "most favored nation" clause, which reads as follows:

Matters within the scope of Article 20 are, presumably, arbitrable. The question is whether this is a "wages and hours" dispute, or an Article 20 dispute.

Wanzer concedes that it would have to pay overtime wages under normal circumstances. Relief from this obligation is claimed solely on the ground that Article 20 permits Wanzer to avoid overtime payments when Local 753 permits Wanzer's competitors to avoid such payments. The central issue in this dispute is whether Article 20 excuses Wanzer from overtime payments under the circumstances of this case. Once the Article 20 issue is settled, the entire dispute is settled. Overtime wages may be the object of the dispute, but they are not its subject. This is an Article 20 dispute, and therefore within the scope of Article 6.

The motion to dismiss on the ground that the dispute is not arbitrable is denied.

II.

The individual defendants, officers of Local 753, move to dismiss as to them on the ground that individuals cannot be sued under § 301. In support of this argument, Local 753 points out that the language of the statute and its legislative history suggest that the primary focus of Congress was on suits involving labor organizations, not individuals.*fn1 The legislative history is conveniently reviewed in Textile Workers Union of America v. Lincoln Mills, 353 U.S. 448, 77 S.Ct. 912, 1 L.Ed.2d 972 (1957).

The language of the statute was the basis for a holding by the Seventh Circuit that an individual could not sue under § 301. United Protective Workers of America v. Ford Motor Co., 194 F.2d 997 (7th Cir. 1952). In Red Ball Motor Freight, Inc. v. General Drivers Local 961, 202 F. Supp. 904 (D.Colo. 1962), an employer's suit to enforce an arbitration clause, the District Court said:

The conclusions of both United Protective Workers and Red Ball were undermined by the Supreme Court in Smith v. Evening News Association, 371 U.S. 195, 83 S.Ct. 267, 9 L.Ed.2d 246 (1962). The Court held that individuals could sue under § 301 to enforce "individual" rights derived from collective ...