The opinion of the court was delivered by: HERLANDS
Plaintiff's motion for a preliminary injunction and defendant's cross-motion to dismiss the complaint present novel and important questions in the field of labor law.
The primary question concerns the extent to which a labor union (the plaintiff, hereinafter referred to as 'Federation') can effectively assert a contract claim against the employer (the defendant) and negotiate with the employer after the expiration of their collective bargaining agreement and after the union has been superseded by another duly certified bargaining representative (The Musicians Guild of America, hereinafter referred to as the 'Guild').
The controversy originates out of a provision -- contained in a number of basic collective bargaining agreements between plaintiff and defendant, the last expiring on February 19, 1958 -- by the literal terms of which plaintiff had the right in perpetuity to require defendant to negotiate with plaintiff concerning the terms and conditions on which plaintiff might give its written consent to defendant's use on television of the music sound tracks made for theatrical movies produced at any time prior and up to February 19, 1958.
Because the provision is the crux of the case, it is set forth in full as follows (Exhibit A annexed to the complaint, p. 4):
'The Producer agrees that he will not, without the prior written consent of the Federation, license, lease, lend, give, sell, utilize, or in any other way whatsoever authorize the use, in whole or in part, of the music sound track containing the recorded music made by members of the Federation, or scenes or shots containing pictures of members of the Federation performing on musical instruments or conducting, heretofore made or which will be made prior to the expiration of this agreement, on or in connection with television, during the life of this agreement and thereafter; except only after separate negotiations are entered upon and after a separate written agreement has been reached between the Federation and the Producer with respect to the use of such music sound track or such scenes or shots on or in connection with television, can such use be made, and then only upon the terms and conditions agreed upon by the Federation and the Producer in such separate agreement.'
The key words are 'and thereafter.' The provision is part of a detailed contract article entitled 'Sound Track Regulations'.
In 1960 -- more than two years after the last agreement between plaintiff and defendant expired -- defendant entered into negotiations with Creative Telefilms and Artists, Ltd. to distribute for television use its movie feature films produced in the period prior to 1958 and the music sound tracks for those films. The proposed transaction (involving an $ 11 million contract) became a matter of public knowledge in June 1960. This triggered correspondence between plaintiff and defendant.
Plaintiff asserted its claim that its written consent was required by defendant and that it expected defendant to negotiate with it (Exhibit 2 annexed to the Kenin affidavit, sworn to August 11, 1960). Defendant repudiated plaintiff's asserted claim (Exhibit 3 annexed to said Kenin affidavit).
Plaintiff's complaint was filed on August 15, 1960. Its motion for a preliminary injunction was filed on August 18, 1960; made returnable August 23rd; and adjourned to August 30th when it was argued.
Under the basic collective bargaining agreements between plaintiff and defendant, defendant was required to enter into exclusive personal service contracts with not less than a certain number of recording musicians. The form of personal service contract ('Motion Picture Production Recording Musicians Personal Service Contract') was attached to the collective bargaining agreement. The personal service contract form contained two provisions relating to the use of music sound tracks on television. One provision was virtually identical with the above-quoted provision and read as follows (Exhibit A annexed to the complaint, p. 22):
'The Producer agrees that he will not, without the prior written consent of the Federation, license, lease, lend, give, sell, utilize, or in any other way whatsoever authorize the use, in whole or in part, of the music sound track containing the recorded music made by the Employee, or scenes or shots containing pictures of the Employee performing on musical instruments or conducting, heretofore made or which will be made prior to the expiration of this agreement, on or in connection with television, during the life of this agreement and thereafter; except only after separate negotiations are entered upon the after a separate written agreement has been reached between the Federation and the Producer with respect to the use of such music sound track or such scenes or shots, on or in connection with television, can such use be made, and then only upon the terms and conditions agreed upon by the Federation and the Producer in such separate agreement. '
The other provision in the form of personal service contract irrevocably authorized plaintiff to act on behalf of the musicians with respect to their rights under the basic collective agreement and the personal service contracts. That provision read as follows (Exhibit A annexed to the complaint, p. 23):
'In consideration of the common interests of all the members of the A.F. of M. in the terms and conditions of this personal service contract and the basic agreement between the Producer and the A.F. of M., incorporated herein, the Employee authorizes the A.F. of M. exclusively and irrevocably to take any and all steps and proceedings in its name and behalf and/or the employee's behalf and/or in behalf of any of its members for the enforcement of all rights under this contract and/or the said basic agreement, all of which rights of the Employee are hereby assigned to the A.F. of M., and said A.F. of M., in behalf of any of its members is irrevocably authorized to agree to any change, modification and/or substitution of any or all of the provisions of this contract and/or the said basic agreement, except that nothing herein contained shall deprive the Employee of any money compensation agreed to be paid to such Employee for services in connection with the making of such motion picture and sound track.'
Plaintiff's last basic agreement with defendant terminated on February 19, 1958. On March 31, 1958, the Guild petitioned the N.L.R.B. for an election. On June 13, 1958, plaintiff, defendant and the Guild entered into an agreement for a consent election. (Exhibit A annexed to the Boren affidavit sworn to August 19, 1960). On July 22, 1958, the N.L.R.B. certified the Guild as the exclusive bargaining representative for defendant's musicians. (Exhibit B annexed to the said Boren affidavit).
Since July 22, 1958 the Guild has been the certified representative of defendant's musicians. Defendant and the Guild entered into a basic collective bargaining agreement for the period from September 3, 1958 to December 3, 1961 (Exhibit C annexed to the Boren affidavit, sworn to August 19, 1960). The September 3, 1958 agreement with the Guild does not contain a definitive provision concerning the terms and conditions under which defendant may sell or distribute for television use its music sound tracks recorded prior to September 3, 1958. Instead, a letter dated September 3, 1958, executed simultaneously with the basic collective bargaining agreement, contains a statement of the respective positions of defendant and the Guild, as follows (Exhibit D annexed to the Boren affidavit, sworn to August 19, 1960):
'It is your (defendant's) position that as to all music sound track recorded prior to the effective date of said Basic Agreement (September 3, 1958) you have the unrestricted right to use the same for any purpose.
'It is our (Guild's) position that the individual musicians employed by you prior to February 9, 1958 (sic) under the terms of agreements heretofore entered into by you with the American Federation of Musicians presently have certain legal and/or equitable property rights in and to all music sound track recorded under the terms of such agreements.'
Under date of June 22, 1960, the Guild advised defendant in writing (Exhibit B annexed to the Kalmenson affidavit, sworn to August 22, 1960) as follows:
'This letter is written on behalf of the Musicians Guild of America and its members.
'We are advised that members of the Association of Motion Picture Producers presently are engaged in negotiating for licensing of feature motion pictures originally produced for theatrical exhibition subsequent to 1948.
'As you know the Guild represents substantially all of the musicians who were employed in the original production of said feature motion pictures and who reserved all rights on their behalf in connection with the licensing of said feature motion pictures for television.
'On their behalf the Guild hereby requests each of you to negotiate with it the terms and conditions of releasing any of said pictures by you for television exhibition prior to your entering into any agreements therefor and pending the conclusions of said negotiations to refrain from licensing said feature motion pictures for television exhibition.
'We shall appreciate your reply at the earliest possible convenience.'
The Guild has not been made or brought in as a party to this litigation nor has it intervened. It is not before the court in any capacity.
Pursuant to plaintiff's petition of April 18, 1960 (Exhibit E annexed to the Boren affidavit), the N.L.R.B. has ordered an election to be held on September 7, 1960 ...