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ISBRANDTSEN CO. v. DISTRICT 2

June 27, 1966

Isbrandtsen Company, Inc., Petitioner
v.
District 2, Marine Engineers Beneficial Association, AFL-CIO, Respondent


Zavatt, Ch. J.


The opinion of the court was delivered by: ZAVATT

ZAVATT, Ch. J.

A collective-bargaining agreement between the petitioner, Isbrandtsen Co., Inc. (hereinafter the employer) and the respondent, District 2, Marine Engineers Beneficial Association, AFL-CIO (hereinafter the union), contains an arbitration clause. The agreement resulted from negotiations between the employer and the union, as representative of the employer's supervisory employees. A dispute arose between the employer and union when the employer sold certain of its vessels to American Export Lines which was a party to a collective-bargaining agreement (as to its supervisory employees) with a different union. As Isbrandtsen sold its vessels, it discharged those of its supervisory employees who were employed aboard those vessels. The union questioned the right of the employer to discharge them, claiming that Isbrandtsen held a substantial stock interest in American Export Lines and should have insisted that one of the terms of the sale of its vessels require American Export Lines to employ these supervisory employees. The employer refused the demand of the union that this dispute be arbitrated under the arbitration clause of the contract between the union and Isbrandtsen. Whereupon, the union commenced an action in the Supreme Court, Kings County, to compel arbitration. That court made an order compelling arbitration of that dispute and thereafter confirmed the award of the arbitrator on November 21, 1962. Thereafter, the union and Isbrandtsen settled that dispute by a written agreement dated February 25, 1963. On March 7, 1966 (three years later) the union petitioned the same state court to compel arbitration of another dispute which it claimed arose out of the sale by Isbrandtsen of the same vessels. This time it claimed that the discharged supervisory employees were entitled to severance pay. On March 18, 1966, Isbrandtsen petitioned this court for removal of that petition from the Supreme Court, Kings County, to this court on the ground that, under section 301 of the Labor-Management Relations Act of 1947, 29 U.S.C. § 185 (hereinafter LMRA), this court has original jurisdiction; that the proceeding in the state court was removable under 28 U.S.C. § 1441 (b). *fn1" After removal, Isbrandtsen filed its answer to that petition in which, among other defenses, it pleads res judicata. Whether or not the petitioner is barred from asserting now the present claim for severance pay is not before the court.

 After the removal, the union moved to remand to the state court upon the grounds (1) that there is no diversity of citizenship; (2) that this court does not have jurisdiction under LMRA § 301, because the union is not a "labor organization representing employees in an industry affecting commerce" within the meaning of § 301 LMRA.

 Section 301 LMRA, 29 U.S.C. § 185, provides in part, that:

 
"(a) Suits for violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce as defined in this Act, or between any such labor organizations, may be brought in any district court of the United States having jurisdiction of the parties, without respect to the amount in controversy or without regard to the citizenship of the parties." *fn2"

 It is conceded that Isbrandtsen is an employer in an industry affecting commerce; that the members of the union are employed in an industry affecting commerce; that the membership of the union includes approximately 150 members who reside in New York State and that, since Isbrandtsen is a New York corporation, there is no diversity of citizenship, see United Steel Workers of America v. R. H. Bouligny, Inc., 382 U.S. 145, 86 S. Ct. 272, 15 L. Ed. 2d 217 (1965); that all members covered by the collective-bargaining agreement in dispute are supervisory personnel. The union contends that (1) LMRA § 301 jurisdiction does not lie in a contract dispute where the collective-bargaining unit is composed strictly of supervisory personnel and (2) even if this court has jurisdiction, it should exercise its discretion to remand the case to the state court where, it claims, federal law can and will be applied. The central issue is whether the union is a "labor organization representing employees in an industry affecting commerce . . . ." It is clear that, in ordinary usage, it is a labor organization and as such represents employees. The union argues, however, that under the LMRA the terms "employee" and "labor organization" have statutory meanings which exclude it from the operation of LMRA § 301, because it is a union composed of supervisory personnel. *fn3"

 The Labor-Management Relations Act of 1947, 61 Stat. 136, was preceded by the National Labor Relations Act (NLRA), popularly referred to as the Wagner Act, 49 Stat. 449. When the LMRA of 1947 was enacted, it absorbed the seventeen sections (as amended) of the NLRA. They became Title I of the LMRA. Titles II, III, IV and V constitute the new matter in the LMRA of 1947. Title I contains a definition of "labor organization" and "employee." Title V provides that the meanings of these two terms are to be the same for LMRA purposes as they are for NLRA purposes.

 For one to understand the relationship between the various titles of the Labor-Management Relations Act of 1947 one must first break down the structure of that Act into its component parts. It is composed of five titles. Title I, an entity unto itself, is entitled "Amendment of National Labor Relations Act" and contains the entire revised version of that Act. It deals primarily with unfair labor practices, union certification and the jurisdiction of the National Labor Relations Board. Title II deals with labor disputes during a national emergency. Title III encompasses a number of subjects including federal court jurisdiction over breach of contract actions; boycotts; restrictions on political contributions; strikes by government employees. Title IV concerns the establishment of a committee on labor relations. Title V contains a definition section, a savings provision and a separability clause. When one refers to the "National Labor Relations Act," therefore, he is referring only to Title I of the Labor-Management Relations Act, whereas Titles II, III, IV and V are properly referred to as the "Labor-Management Relations Act."

 Definitional difficulties are created by this structure. For example, § 301, the first section of Title III uses the phrase "industry affecting commerce as defined in this Act." To find this definition one looks to Title V, § 501(1). The problem of finding the statutory definition of the word "employee," also used in Title III, § 301 is slightly more involved. Again one looks to the definition section, § 501(3) of Title V, which provides that the term "employee" "shall have the same meaning as when used in the National Labor Relations Act as amended by this Act." One then looks to Title I and finds in § 2(3) of the amended National Labor Relations Act, 29 U.S.C. § 152(3), a definition of "employee" for purposes of the National Labor Relations Act. There, "employee" is defined as follows:

 
"The term 'employee' shall include any employee, and shall not be limited to the employees of a particular employer, unless the Act explicitly states otherwise . . . but shall not include . . . any individual employed as a supervisor . . . ."

 Title I § 2(5) of the amended National Labor Relations Act, 29 U.S.C. § 152(5), defines "labor organization" as follows:

 
"The term 'labor organization' means any organization of any kind, or any agency or employee representation committee or plan, in which employees participate and which exists for the purpose, in whole or in part, of dealing with employers concerning grievances, labor disputes, wages, rates of pay, hours of employment, or conditions of work."

 LMRA, Title V, § 501(3), 29 U.S.C. § 142 (3), provides that the terms "employee" and "labor organization" shall have the same meaning "as when used in the National Labor Relations Act as amended by this Act."

 The reading of LMRA § 301 to exclude unions representing supervisors, as suggested by the union, was approved by the Second Circuit Court of Appeals in A. H. Bull Steamship Co. v. National Marine Engineers' Beneficial Ass'n, 250 F.2d 332 (2d Cir. 1957), cert. denied, A. H. Steamship Co. v. Seafarers' International Union, 355 U.S. 932, 78 S. Ct. 411, 2 L. Ed. 2d 414 (1958). Two other courts, in dictum, so interpret this section. International Organization of Masters, Mates and Pilots of America, Inc. v. National Labor Relations Board, 122 U.S. App. D.C. 74, 351 F.2d 771, 775 (D.C. Cir. 1965); Retail Clerks, Local 330, Pharmacists & Retail Drug Store Employees Union v. Lake Hills Drug Co., 255 F. Supp. 910 (W. D. Wash. 1964). In Bull, National MEBA was sued by Bull Steamship Company for specific performance of a collective-bargaining agreement, which contained a no-strike clause. Notwithstanding that clause, it called a strike. Bull Steamship Company moved for an injunction pendente lite enjoining National MEBA from continuing the strike in violation of the no-strike clause. The district court granted the injunction. 156 F. Supp. 190 (E.D.N.Y. 1957). On appeal, two questions were presented: (1) whether the dispute was a "labor dispute" within the meaning of the Norris-LaGuardia Act, which prohibits a federal court from enjoining a peaceful strike, and (2) ...


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