The opinion of the court was delivered by: RAYFIEL
The plaintiff sues Ivan C. McLeod, Regional Director of the National Labor Relations Board, hereinafter called the Board, for a permanent injunction restraining him from conducting a representation election among certain employees of one Harold Schoenfeld, doing business as S. & S. Sheet Metal Company, hereinafter called S. & S., the said injunction to be effective 'until such time as an election will be appropriate in relation to the expiration of the existing contract between S. & S. and plaintiff.'
The Board, by its decision dated January 29, 1960, directed that an election be held, and the plaintiff moved for a preliminary injunction enjoining the defendant, his agents, servants, employees, attorneys, etc., from conducting the same pending the determination of the action, and asked that the election be stayed until the motion for a preliminary injunction had been determined. This Court denied the request for a stay of the election and permitted it to be held, but directed that the ballots cast thereat be impounded until such determination.
The defendant cross-moved to dismiss the complaint on the grounds that
(1) the Court is without jurisdiction of the subject matter of this action,
(2) the complaint fails to state a claim warranting judicial relief, and
(3) this Court lacks jurisdiction over the members of the Board who are indispensable parties to the action.
The plaintiff is the successor of Metal, Plastic, Miscellaneous Sales Novelty and Production Workers, Local No. 222, I.G.W.U., hereinafter called Local 222, which on September 6, 1957 entered into a collective bargaining agreement with S. & S. covering the latter's production, shipping and maintenance workers then or thereafter to be employed by it. That agreement, by its terms, was to remain in full force and effect until August 31, 1959.
On August 13, 1959 International Union of Electrical, Radio and Machine Workers, AFL-CIO, hereinafter called I.U.E., filed its petition with the Board, requesting that a representation election of certain employees of S. & S. be conducted by the Board. At the hearing on said petition the plaintiff claimed that the contract between Local 222, its predecessor, and S. & S. was a bar to such an election.
On January 29, 1960 the Board issued its Decision and Direction of Election, wherein it found, inter alia, that the aforementioned agreement of September 6, 1957 'gave preferential treatment to union members in that certain pay increases under the wage schedule were limited to members of the union and similarly, benefits under the welfare plan were also limited to union members'. The bases of the Board's said findings were Articles 6 and 24 of the contract of September 6, 1957.
The plaintiff argues that when, as stated in paragraph 6 of the complaint, it learned in July, 1959 that the said two Articles 'might prevent the contract from constituting a bar to an election' if petitions were filed by other unions, it 'agreed to amend the contract, so as to eliminate the language deemed' by the Board to be illegal, and on July 14, 1959 entered into an agreement with S. & S. eliminating or modifying the language upon which the Board's decision was grounded. The Board rejected that argument and held, referring to said amendatory agreement of July 14, 1959, 'that a subsequent amendment purporting to cure an otherwise invalid contractual provision will not be given the effect of sustaining the contract as a bar,' citing Keystone Coat, Apron and Towel Company, et al., 121 N.L.R.B. 880.
In Keystone, supra, which was decided on September 17, 1958, the intervenor claimed that its contract with the employer, which, by its terms, was effective from November 1, 1955 to October 31, 1958, constituted a bar to the petitioner's proceeding, but the Board held that the contract, which it found to contain a union security clause which did not on its face conform to the requirements of the National Labor Relations Act, 29 U.S.C.A. § 151 et seq., could not serve as a bar to an election. Further, it cited as one example, among others, of clauses in contracts which will be deemed to be invalid for contract bar purposes a clause which requires an employer to give a preference on the basis of union membership in hiring, tenure, seniority, wages or other terms and conditions of employment, which appears to be precisely what each of the aforementioned Articles 6 and 24 on its face purports to do.
The plaintiff argues that its agreement with S. & S. was entered into on September 6, 1957, about a year prior to the Keystone decision, and was amended and modified on July 14, 1959, about a month prior to the filing by I.U.E. of its petition for a representation election, and that the Board, by its action, made retroactive application of the change in its contract bar rule, nullified plaintiff's agreement with S. & S., as well as its amendment and modification, and thereby deprived the plaintiff and its members of their property rights without due process of law and without affording the plaintiff an opportunity, as was the Board's rule and practice prior to Keystone, to establish 'that the allegedly illegal clauses were inadvertent, and that actually no discrimination existed or was intended.'
The case of Leedom v. International Brotherhood of Electrical Workers, Local Union No. 108, AFL-CIO, 278 F.2d 237, decided by the Court of Appeals, District of Columbia Circuit, on March 24, 1960, appears to be clearly in point. This was an appeal from a District Court decision cited by the plaintiff, granting the Union a preliminary injunction restraining the Board from holding a representation election on the petition of an employee not a member of the union which was a party to the then existing contract with the employer. The pertinent facts, in brief, follow. On May 1, 1957 Local No. 108 entered into a three-year collective bargaining agreement with General Cable Corp. covering certain of its employees. The contract-bar rule then in effect provided, under conditions not here relevant, that during the life of a bargaining agreement with a term up to five years no representation proceedings could be instituted by a labor organization not a party to such contract. In September, 1958, some 16 months after said contract was entered into, the Board revised its rules, and announced that a contract would not bar an election after two years, regardless of its terms -- see Pacific Coast Ass'n. of Pulp & Paper Mfgs., 121 N.L.R.B. 990.
In June, 1959, some 10 months before the expiration of the contract with General Cable Corp., the Board applied the reduced bar term in a representation proceeding instituted by an employee of General Cable, and ordered an election to be held. The District Court, on application of Local No. 108, issued a temporary order which permitted the election to be held, but directed that the uncounted ballots by impounded in the custody of the Board, pending the determination of the action. After a hearing the District Court granted a preliminary injunction because the action of the Board 'amounted to a retroactive ...