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Douds v. Milk Drivers and Dairy Employees Union Local 584

October 2, 1957


Author: Moore

Before MEDINA, LUMBARD and MOORE, Circuit Judges. This is an appeal from an order granting a temporary injunction pursuant to Section 10(1) of the National Labor Relations Act, as amended, pending final disposition by the National Labor Relations Board (referred to as the "Board"), of various charges filed with the Board alleging that the respondent-appellant (referred to as the "Union") had committed unfair labor practices within the scope of Sections 8(b)(4)(A) and (4)(B) of the Act, popularly called the "secondary boycott" provisions.

The proceeding was initiated by a petition filed in the District Court on June 5, 1957 by the petitioner-appellee (referred to as the "Director") on behalf of the Board praying for a temporary restraining order against the Union. Sufficient cause having been shown, the District Court issued a temporary restraining order and expeditiously held hearings on June 7th and 10th. On June 13th the Court rendered its decision with findings of fact and conclusions of law granting a temporary injunction in favor of the Director. However, before any order thereon was entered this Court on June 19, 1957 handed down its decision in Milk Drivers & Dairy Emp. v. National Lab. Rel. Bd., 245 F.2d 817 (2 Cir. 1957), petition for certiorari filed Aug. 29, 1957, 26 U.S. Law Week 3093, a case which was said by the Union during the hearings to be very similar to the case now before us. On its own motion the District Court requested reargument in the light of that decision. Extensive argument took place on June 24th and on June 27th the Court filed its "Opinion on Rehearing" with additional conclusions of law in favor of the Director. On July 2nd the order granting a temporary injunction against the Union was made and entered. On July 3rd the Union appealed and although a stay was denied this Court advanced the appeal for argument.

To understand the issues now before this Court at this stage of the proceedings, a brief review of the Act,*fn1 the procedures prescribed by Congress thereunder and the facts in necessary.

When Congress passed the Act it incorporated therein its "Congressional declaration of purpose and policy" which clearly evinced its concern not only for the rights of labor and the employer but also for "the public health, safety, or interest," 61 Stat. 136; 29 U.S.C. § 141.

To safeguard these rights a comprehensive set of procedural rules was enacted, Section 10(1) of the Act; 29 U.S.C. § 160(1). Acting within the framework of these rules, on May 29, 1957 Chesterfield Farms, Inc., a milk distributor, filed charges with the Board alleging that the Union was engaging in unfair labor practices, i.e., in substance, creating a secondary boycott. On June 4, 1957 Home Milk Delivery Association filed similar charges. The Director thereafter filed his petition in the District Court alleging that he had conducted an investigation and that he had "reasonable cause to believe that said charges are true" (Petition, pars. 5 and 6). The Union answered and proof upon the issues was taken.

The Union (Local 584) is the bargaining representative for the employees of many milk dealers in New York City. There are three classes of milk dealers in this area: Class A, Class B, and Class C. They are licensed by the New York State Department of Agriculture and the New York City Department of Health, Class A to receive raw milk, and to bottle and sell it to Class B dealers and wholesale and retail customers; Class B dealers to receive their milk from Class A dealers and resell it to Class C dealers and retail customers; and Class C dealers to receive their milk from Class B dealers. By license Class C dealers are restricted to operating a single truck and to servicing a single retail route.

In May of 1957, Local 584, which then represented employees of A and B dealers, embarked on a drive to organize the employees of C dealers.

There are approximately 350 home delivery C dealers in New York City servicing about 600,000 people. Some of the C dealers operate without help, but a substantial number have one or two part-time or full-time employees. About half of these C dealers load and unload their trucks at B dealers' platforms, while the other C dealer trucks are loaded and unloaded at B dealer platforms by employees of B dealers. Never is the transfer of milk from a B dealer to a C dealer done at any place other than the platform of the B dealer.

Some time in May 1957, the Union demanded that C dealers having employees sign a contract covering such employees although the Union had not been certified by the Board as the collective bargaining agent for the C employees.

To achieve its objective of organizing the C dealers the Union decided to use concerted economic pressure (and so admitted during the hearings and on argument here) against the C dealers having employees by cutting off their sole supply of milk from the B dealers. This it did by notifying the B dealers not to load milk for, or even permit milk to be taken out by, such C dealers. In addition the Union told certain A dealers not to bottle milk for the B dealers involved. If these instructions were violated, the Union threatened to take its men out. The B dealers, however, insisted that their employees handle milk destined for the C dealers. As a result of the Union's instructions none of these C dealers obtained milk for its customers from Chesterfield on June 5, 1957 and some twelve C dealers failed to obtain milk from Whitestone Farms, Inc., another B dealer.

There was presented more than sufficient proof that if C dealers did not obtain milk even for a few days their routes would disappear and that the business of the C dealers and their suppliers, the B dealers, would be irreparably damaged.

The Union, in effect, concedes that its actions would constitute concerted economic pressure of a type proscribed by Sections 8(b)(4)(A) and (4)(B) but contends that by its Milk Industry Collective Bargaining Agreement with A and B dealers, more particularly Paragraph 18, commonly referred to as the "hot cargo" clause, that the employers (the A and B dealers) voluntarily agreed in advance that such activities by the Union should be in effect excepted from the terms of the statute and not be deemed to be a violation of the Agreement which provides that:

"18. (a) No strikes, lockouts, walkouts or slowdowns shall be ordered sanctioned or enforced by either party hereto against the other during the life of this ...

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