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
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:
"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
"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 § 301 to enforce
"individual" rights derived from collective ...