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Local 1545 v. Vincent

December 19, 1960


Author: Friendly

Before CLARK, MOORE and FRIENDLY, Circuit Judges.

FRIENDLY, C. J.: Plaintiff-appellant, Local 1545, United Brotherhood of Carpenters and Joiners of America, entered into an agreement, dated May 1, 1957, with Pilgrim Furniture Company, Inc., a New York corporation operating in Kingston, N. Y., whereby, inter alia, Pilgrim recognized Local 1545 as the exclusive bargaining representative for all Pilgrim's production and maintenance employees. On May 1, 1959, the agreement was amended to make it effective until May 1, 1961, and for annual periods thereafter unless notice of termination was given sixty days prior to any expiration date. By Article III Pilgrim agreed "that after notice by the Union it will not purchase materials from any Company where a bona fide labor dispute exists to which the Carpenters Union is a party." Article XX, entitled "Federal or State Laws," contained a provision which we quote in the margin.*fn1 Article III, hereafter referred to as a "hot-cargo" clause, was not unlawful in May, 1957 or 1959. See Brotherhood of Carpenters and Joiners v. NLRB, 357 U.S. 93 (1958).

On February 5, 1960, intervenor-appellee, United Furniture Workers of America, filed a petition pursuant to § 9(c) of the National Labor Relations Act, 29 U.S.C.§ 159(c), requesting a representation election of Pilgrim's production and maintenance workers. The Board assigned the petition for hearing; Local 1545 was permitted to intervene. The Local and Pilgrim contended that the subsisting collective bargaining agreement precluded a new election under the Board's "contract-bar" rule. However, on August 24, 1960, the Board, by a 3-2 vote, issued its decision and direction of election.

The majority of the Board declined to recognize the agreement between Pilgrim and Local 1545 as a bar because Article III was held to be a clause of the type proscribed by § 8(e), 29 U.S.C. § 158(e), added to the National Labor Relations Act by the Landrum-Griffin Act, effective November 13, 1959, 73 Stat. 519, 543, § 704(b), providing, insofar as here pertinent:

"It shall be an unfair labor practice for any labor organization and any employer to enter into any contract or agreement * * * whereby such employer * * * agrees to cease or refrain from handling * * * the products of any other employer * * * and any contract or agreement entered into heretofore or hereafter containing such an agreement shall be to such extent unenforcible and void * * *"

The majority held that the statute constituted a declaration that, save for exceptions not here applicable, hot-cargo clauses were against the policy of Congress and, hence, that a contract containing such a clause ought not be given effect as barring an election, even if it were to be assumed that, as distinguished from contracts with invalid union security clauses, "Section 7 rights are not involved."*fn2 Dissenting opinions were filed by Chairman Leedom and Member Fanning, on the ground that the majority's application of § 8(e) to a hotcargo clause antedating the effective date of the Landrum-Griffin Act went beyond the action of Congress, which had simply made such a clause invalid, and served no public purpose.

Local 1545 thereupon brought this action, in the District Court for the Southern District of New York, against the Regional Director for the region including Kingston to enjoin the enforcement of the Board's decision and direction of election and the holding of an election thereunder. United Furniture Workers of America was permitted to intervene as a defendant. The District Court temporarily restrained the election pending the hearing of a motion for a temporary injunction. The Regional Director moved to dismiss on the grounds that the Court was without jurisdiction of the subject-matter, that the complaint failed to state a claim warranting judicial relief and that the Court lacked jurisdiction over the members of the National Labor Relations Board who were indispensable parties. Judge Dimock found the third ground of the motion to be without merit, citing Williams v. Fanning, 332 U.S. 490 (1947), a point upon which we do not pass, but upheld the first two which he considered to be interrelated. Local 1545 appealed from his order of dismissal. A motion for a stay having been argued to a court of three judges, the Court, with the agreement of the parties, directed that briefs be filed and the appeal be deemed submitted on the merits; meanwhile the election was stayed. We affirm Judge Dimock's decision that the relief sought by appellant was beyond the jurisdiction of the District Court.

Fitzgerald v. Douds, 167 F.2d 714 (2d Cir. 1948), held that, in general, the District Court was without jurisdiction to enjoin directions by the Board with respect to representation matters, there the holding of a hearing, under § 9(c) of the National Labor Relations Act, 29 U.S.C. § 159. Judge Swan, writing for Judge Learned Hand and himself, pointed out that § 10, 29 U.S.C. § 160, was the only section of the Act which conferred jurisdiction on the courts, in that instance the courts of appeals; that such jurisdiction related only to "orders" restraining unfair labor practices, see American Federation of Labor v. NLRB, 308 U.S. 401, 409 (1940); and that § 9(d) directed that when an order under § 10(c) prohibiting an unfair labor practice, based in part upon a certification following an investigation pursuant to § 9(c), is to be enforced or reviewed under § 10(e) or § 10(f), the certification and the record of the investigation shall be included in the record required to be filed with the court of appeals. This the majority conceived to be the only judicial relief that Congress intended to grant with respect to certification or steps antecedent thereto.

Subsequently, two exceptions to this general rule excluding District Court jurisdiction to enjoin Board directions in representation matters have been recognized.*fn3 The first was this Court's decision in Fay v. Douds, 172 F.2d 720 (2d Cir. 1949), relating to cases where the plaintiff advances a claim of denial of constitutional rights, in that case lack of procedural due process, which is "not transparently frivolous." Thereafter a second exception was announced, first by the Court of Appeals of the District of Columbia and later by the Supreme Court, in Leedom v. Kyne, 249 F.2d 490 (D.C. Cir. 1957), 358 U.S. 184 (1958), where the Board had acted in direct and in that case conceded contravention of a specific mandate of § 9, there § 9(b)(1). The appellant, Local 1545, contends it comes within both exceptions. It says that what it terms a retroactive application of the Landrum-Griffin Act so as to deprive its contract of normal effect has denied it due process, and that the Board has directly contravened § 8(e) by applying to hot-cargo clauses in existing agreements a heavier sanction than Congress imposed.

Determination of the validity of these contentions requires analysis of the Board's contract-bar rule. The rule does not find its source in any express language of the statute. So far as here material, Section 9(c)(1), 29 U.S.C. § 159(c)(1), as amended by the Taft-Hartley Act of 1947, 61 Stat. 143, 144, directs that whenever a petition shall have been filed by a labor organization in accordance with such regulations as may be prescribed by the Board, alleging that the labor organization currently recognized no longer represents a majority, the Board shall investigate such petition and if it has reasonable cause to believe that a question of representation affecting commerce exists, shall provide for appropriate hearing upon due notice, and if the Board finds upon the record of such hearing that such a question of representation exists, it shall direct an election and shall certify the results thereof. The only provision of the Act that may have the effect of protecting existing agreements is § 9(c) (3), 29 U.S.C. § 159(c)(3), which commands that "No election shall be directed in any bargaining unit or any sub-division within which in the preceding twelve-month period, a valid election shall have been held."

In its early days the Board had no "contract-bar" rule. It held rather that the employees were always free to change their representatives "while at the same time continuing the existing agreements under which the representatives must function." New England Transportation Co ., 1 NLRB 130, 138-39 (1936). The rule appears to have emerged, almost imperceptibly, in Superior Electrical Products, 6 NLRB 19, 22 (1938). By 1942 it was sufficiently defined that the Board, in its Seventh Annual Report, p. 155, described it as follows:

"The Board has normally refused to proceed to an election, in the presence of a collective bargaining contract, where the contract, granted exclusive recognition, is to be effective only for a reasonable period and was negotiated by a union representing at the time a majority of the employees, prior to any claim by a rival labor organization."

The contract-bar policy was taken note of when Congress amended the National Labor Relations Act in 1947,*fn4 as it also has been by the courts. However, the policy remains that of the Board and one "which the Board in its discretion may apply or waive as the facts of a given case may demand in the interest of stability and fairness in collective bargaining agreements." NLRB v. Grace Co ., 184 F.2d 126, 129 (8th Cir. 1950); see also Kearney & Trecker Corp. v. NLRB, 210 F.2d 852, 857 (7th Cir.), cert. den. 348 U.S. 824 (1954).*fn5

This is sufficient to dispose of appellant's attempt to bring the case within the exception relating to denial of constitutional rights. The rights conferred upon Local 1545 by the exclusive bargaining agreement were subject to § 9(c) of the National Labor Relations Act. Congress was not bound to establish a contract-bar rule or to require the Board to establish one. See Louisville & Nashville R. Co. v. Mottley, 219 U.S. 467, 483 (1911). The Constitution thus imposes no shackles on the freedom of the Board to limit or not to limit the disestablishment of an exclusive bargaining representative. Having chosen to impose a limit, the Board may from time to time alter its standards, as in fact it has frequently done,*fn6 and make its new standards applicable to existing as well as future agreements. Leedom v. IBEW, 278 F.2d 237, 241-44 (D.C. Cir. 1960). Decision by the Board to withdraw contract-bar protection from agreements containing hot-cargo clauses, existing as well as future, if made without benefit of the ...

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