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Fitzgerald v. Catherwood

decided: January 2, 1968.


Moore, Smith, and Kaufman, Circuit Judges.

Author: Kaufman


The issue before us on this appeal is the validity of those provisions of New York's Labor and Management Improper Practices Act which make it a misdemeanor for an officer of a labor organization to hold a financial interest in an employer whose employees the organization represents.*fn1 The appellant, Thomas H. Fitzgerald, sought a declaratory judgment in the court below decreeing that the challenged legislation is preempted by the Labor Management Reporting and Disclosure Act of 1959 [LMRDA], 29 U.S.C. § 401 et seq., and that it constitutes a Bill of Attainder in violation of Article I, Section 10 of the United States Constitution.*fn2 In addition, the complaint sought to restrain the state official charged with administering the act from enforcing the legislation. Judge Cannella denied appellant's motion for the convening of a three-judge district court and granted summary judgment for the appellee. We affirm.


The facts are undisputed and can be stated briefly. Fitzgerald concededly wears two hats. He is the duly elected president of Theatrical Union Number One [union] (affiliated with International Alliance of Theatrical Stage Employees, A.F.L.-C.I.O.), and is also president and sole stockholder of Sound Associates, Inc., a corporation which has a collective bargaining agreement with the union and employs union members. The union represents workers in the theatrical and television broadcasting industries and is certified by the National Labor Relations Board; Sound Associates is engaged in several phases of these industries concerned in the main with electronic auditory equipment. The state concedes that the union membership was aware of Fitzgerald's position with Sound Associates when he was elected union president. Indeed, his dual position appears to have been a major issue in the election. It is also conceded that Fitzgerald's relationship with the union and the corporation constitutes a violation of the New York act. It is clear, moreover, that the appellee has threatened to enforce the penal provisions of the act and has called upon Fitzgerald to divest himself of his interest in Sound Associates (or, we presume, resign his union office). Thus, this is not a case in which a litigant seeks to enjoin a state prosecution which may never materialize. We are squarely faced, therefore, with the need to evaluate the merits of appellant's contentions.


Whatever may have been the law in the past, no authority need be cited for the clearly accepted principle that Congress has the power to regulate labor relations -- including the qualifications for, and the fiduciary obligations of, union office -- in industries affecting interstate commerce. We state this at the outset to clarify what we are not concerned with -- the extent of national power. Instead, we must direct our attention to the scope and limitations of the actual regulation. There is little doubt that when Congress indicates an intent to preempt an area over which there is federal jurisdiction, the Supremacy Clause of the Constitution precludes the states from legislating in that field. Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 229-30, 91 L. Ed. 1447, 67 S. Ct. 1146 (1947). But, the Supreme Court has given us this caveat:

"in areas of the law not inherently requiring national uniformity . . . state statutes, otherwise valid, must be upheld unless there is found 'such actual conflict between the two schemes of regulation that both cannot stand in the same area, [or] evidence of a congressional design to preempt the field.'" Head v. New Mexico Board of Examiners, 374 U.S. 424, 430, 10 L. Ed. 2d 983, 83 S. Ct. 1759 (1963).

That the federal and state enactments may serve the same end is not determinative of the question. Before finding preemption "we must be able to conclude that the purpose of the federal statute would to some extent be frustrated by the state statute." Colorado Anti-Discrimination Comm'n v. Continental Air Lines, 372 U.S. 714, 722, 10 L. Ed. 2d 84, 83 S. Ct. 1022 (1963). See also Nash v. Florida Industrial Commission, 389 U.S. 235, 88 S. Ct. 362, 19 L. Ed. 2d 438, 36 L.W. 4046 (Dec. 5, 1967). With this principle in mind, we conclude that there is no conflict between the LMRDA and the challenged provisions of the New York act.

The federal and state statutes -- both passed in 1959 -- were designed to impose curbs on a variety of corrupt practices by union officials which had come to light in various investigations. Compare 29 U.S.C. § 401 with N.Y. Labor Law § 720. Accordingly, both statutes contain provisions dealing with the fiduciary responsibilities of officers and agents of labor organizations. 29 U.S.C. § 501; N.Y. Labor Law §§ 722-23. We do not understand the appellant to maintain that there is a conflict between the fiduciary provisions of the two laws. Indeed, such a contention would have little merit. Section 501 of the LMRDA imposes a duty on all union officials "to refrain from dealing with such organizations [the unions they represent] as an adverse party . . . and from holding or acquiring any pecuniary or personal interest which conflicts with the interest of such organization." And, the Congressional debates disclose that "the principle of fiduciary responsibility is violated whenever a union officer acquires an interest in a business concern with which he engages in collective bargaining as an employees' representative."*fn3 Since the New York legislation merely imposes an additional remedy if a union officer acquires such an interest, it can hardly be said to frustrate the Congressional purpose.

Appellant's contention, however, has more subtlety. He argues that the state law conflicts with the election provisions of the LMRDA. In particular, he urges that Section 401(e), 29 U.S.C. § 481(e), which provides in relevant part, that

"every [union] member in good standing shall be eligible to be a candidate and to hold office"

and Section 403, 29 U.S.C. § 483, which states that

"no labor organization shall be required by law to conduct elections . . . in a different form or manner than is required by its own constitution or by-laws, ...

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