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February 3, 1966


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.


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

    "ARTICLE 6. Any matter in dispute, between the
  Union and Employer [excepting wages and hours as set
  forth in Articles 4, 37 and 41 and questions of
  jurisdictional matters, as decided by Teamsters Joint
  Council No. 25, which cannot be settled], shall be
  referred by either party to an Industry Labor
  Committee consisting of three [3] representatives of
  Employers, parties to this Agreement, and three [3]
  representatives of the Union. It shall be the duty of
  this Committee to

  hear and dispose of all complaints raised by either
  party to this Agreement concerning violations thereof
  that cannot be settled amicably between the parties.
  If this Committee is equally divided on any such
  complaint, the Chief Justice of the Municipal Court
  of Chicago or his nominee shall be called in to act
  as the impartial member of said Committee, and his
  decision shall be final. No action shall be taken by
  either party to the Agreement pending the decision of
  this Committee."

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:

    "ARTICLE 20. Should the Union hereafter enter into
  any agreement with any milk dealer upon terms and
  conditions more advantageous to such dealer than the
  terms and conditions of this Agreement, or should the
  Union sanction a course of conduct by any milk dealer
  who has signed this form of agreement enabling him to
  operate under more advantageous terms and conditions
  than those provided for in this Agreement, the
  Employer shall be entitled to adopt such terms and
  conditions in lieu of those contained in this

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.


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:

  "This legislative background shows plainly that
  Congress intended to create a remedy applicable to
  unions. It dispels any possible doubt as to whether
  it can be read so as to authorize a remedy by or
  against an individual." Id. at 906.

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 ยง 301 to enforce "individual" rights derived from collective ...

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