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May 18, 1951

DOUDS et al.

The opinion of the court was delivered by: KAUFMAN

This is a motion by plaintiff Worthington Pump and Machinery Corporation for a preliminary injunction restraining defendant Charles Douds, Regional Director for the Second Region, National Labor Relations Board, from issuing a certification that defendant International Brotherhood of Firemen, Oilers, Helpers and Maintenance Men, Local 55, A.F. of L. (hereafter Local 55) is the collective bargaining agent for 28 powerhouse and yard employees in plaintiff's Harrison, N.J. plant. The motion arises out of plaintiff's suit for a declaratory judgment as to the validity of its contract with United Steel Workers of America, C.I.O., Local 1833 (hereafter Local 1833).

Defendant Douds brings a cross motion to dismiss plaintiff's complaint on the grounds that this court lacks jurisdiction over the subject matter and that the National Labor Relations Board members should have been joined as indispensable parties. He opposes plaintiff's motion, alleging that plaintiff has suffered no irreparable injury warranting the issuance of an injunction.

Since 1937, Local 1833 has been the collective bargaining agent for about two thousand hourly rated workers at plaintiff's Harrison Works. On June 15, 1950, the then existing collective bargaining contract between the union and plaintiff expired and a new contract expiring June 15, 1952 was entered into. On the same day, June 15, 1950, Local 55 filed a petition with defendant Douds requesting an election to determine the collective bargaining representative of 23 powerhouse employees at the Harrison Works. On July 11, 1950, Local 55 filed a similar petition with Douds on behalf of 5 yard workers at Harrison.

 The new contract between plaintiff and Local 1833 included a union security clause which stated that it would become operative 'If and when the union complies with that section of the Labor Management Relations Act of 1947 concerned with elections for Union Shop.' In accordance with sections 8(a)(3) and 9(e) of the Taft-Hartley Act, 29 U.S.C.A. §§ 158(a)(3), 159(e), Local 1833 filed a petition with Douds asking that an election be held to determine whether the workers covered by the new agreement authorized the union to make such a clause. The petition was granted June 23, 1950, and on July 20, 1950 Douds certified that a majority of employees in the bargaining unit had authorized Local 1833 to make the union security agreement in conformity with the Act.

 Hearings on Local 55's petition for an election were held in Doud's office during October and November, 1950. It appears that the sole issue raised by Local 55 was whether or not the new agreement entered into by the company and Local 1833 took effect on or after June 15, 1950. Local 55 contended that the agreement dated June 15, 1950 did not in fact become operative until some time after that date when it was approved by Local 1833's parent organization, the United Steel Workers of America, and it therefore could not be a bar to Local 55's petition dated June 15, 1950. Apparently no question was raised at this proceeding as to the illegality of any provision of the agreement.

 On February 28, 1951, the National Labor Relations Board handed down a decision in which it held that the union security clause of the collective bargaining agreement became 'operative' when the board certified the employee's authorization of such a clause on July 20th, that the clause was illegal as being broader in scope than the union security clause permitted by the Taft-Hartley Act, and that therefore the whole collective bargaining agreement was illegal and ineffectual as a bar to the election petition of Local 55. Plaintiff thereafter applied for a rehearing and permission to be heard on the validity of the union security clause. The Board denied the application. On March 30, 1951, an election was held under Doud's supervision and a majority of the powerhouse and yard workers voted in favor of representation by Local 55. Plaintiff then initiated action in this court for a declaratory judgment under Title 28, U.S.C. Secs. 2201-2202 on the validity of the contract and now asks for an injunction pending outcome of that suit.

 Defendant Douds challenges the court's jurisdiction over the subject matter of this action. He contends that the Taft-Hartley Act provides an exclusive method of review of representation proceedings under sections 9 and 10, 29 U.S.C.A. §§ 159, 160, and that the federal district courts have no jurisdiction to review such matters. He argues further that having failed to exhaust its administrative remedies, there is no basis on which the plaintiff can invoke the court's jurisdiction.

 Plaintiff concedes that its method is not the normal procedure under the Act for reviewing certifications. Cf. American Federation of Labor v. N.L.R.B., 1940, 308 U.S. 401, 60 S. Ct. 300, 84 L. Ed. 347, but it contends that the 'review' granted in the Act is not only inadequate but illusory in this case, and that since it presents constitutional questions, the district court has jurisdiction to grant equitable relief. See A.F. of L. v. N.L.R.B., supra, 308 page 412, 60 S. Ct. 300, 84 L. Ed. 347.

 The method allegedly open to the plaintiff to contest the Board's decision is as follows: The plaintiff can refuse to bargain with Local 55 when it is certified and thereby plaintiff is open to an unfair labor practice charge. 29 U.S.C.A. § 158(a)(5). As an incident to the hearing of such charge by the Board, and upon review by a United States Court of Appeals, the certification of Local 55 can be inquired into. 29 U.S.C.A. §§ 159(d), 160.

 The fallacy in this method of 'review' is that the plaintiff must await an unfair labor practice charge by Local 55, and plaintiff argues that Local 55 will not file such a charge, but will use its economic strength to enforce its position as bargaining agent. Furthermore plaintiff may have to commit in good faith an unfair labor practice in order to gain such possible review, thereby subjecting itself to grave risks under the Act.

 Plaintiff contends it does not have to rely on such a speculative appeal when a constitutional question is involved. Defendant Douds denies any exception to the employer's regular administrative recourse and further denies the existence of a constitutional question. Both parties rely heavily on the decision of the Court of Appeals for the Second Circuit in Fay v. Douds, 1949, 172 F.2d 720.

 In that case, a union petitioned the district court to enjoin the Board from holding an election or certifying a competitor union. Although the Court of Appeals ultimately sustained the lower court's judgment denying the petition, it upheld the district court's jurisdiction to hear the matter. Judge Learned Hand stated in that case: 'The first question is as to the jurisdiction of the District Court which the defendant disputes, involving our decision in Fitzgerald v. Douds, 2 Cir., 167 F.2d 714. We there held that, since the only review of a 'certification' proceeding under Sec. 9 was as an incident to a petition to review an order of the Board under Sec. 10, the remedy so created was exclusive; although we recognized that the result might be otherwise, if a constitutional question were raised. The plaintiff at bar does raise such a question; * * * If this assertion of constitutional right is not transparently frivolous, it gave the District Court jurisdiction * * * . Although, as will appear, we do not think that the Local was denied any constitutional right, we do think that its contention is not so plainly untenable that the District Court might not proceed to decide the other issues involved.' (Emphasis added.)172 F.2d at page 723.

 Plaintiff herein contends that it raises constitutional questions which are not frivolous. It claims that the Board's decision on an issue not raised in the hearing and its subsequent denial of a rehearing on that issue was an unconstitutional denial of procedural due process. As a result plaintiff says its contractual and property rights, in particular its allegedly valid contract with Local 1833, have been assailed and nullified by what it calls the Board's 'arbitrary disregard' of its constitutional rights.

 Defendant Douds replies that there is no merit to plaintiff's constitutional question. He states that plaintiff had adequate notice that the 1950 agreement with Local 1833 was being challenged as not constituting a bar to the election. The fact that the Board's decision was based on surprise grounds, he says, was not want of due process and he cites Market St. R. Co. v. R.R. Commission, 1945, 324 U.S. 548, 65 S. Ct. 770, 89 L. Ed. 1171, to support this. The case is not in point. The plaintiff there had a proper hearing. In the case at bar, however, the question of the contract's illegality was avowedly never in issue. In its brief, submitted to the Board, Local 55 declared: 'The petitioners (Local 55) do not here claim in any respect that the contract by its terms or conditions, violates any of the rights of individual employees covered thereby, existing by virtue of any state or federal law.' The only question argued in the hearing before the Board was whether or not Local 55's petition antedated the effective date of the contract entered into by plaintiff and Local 1833. The status of the contract as a bar was of course in ...

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