The opinion of the court was delivered by: CROAKE
Because of the procedural situation, to be described, this one opinion shall apply as indicated to the two separate but related actions captioned above. A motion is pending in each matter; in the first, the National Labor Relations Board ("NLRB") seeks a preliminary injunction against alleged violations by respondents of 29 U.S.C. § 158(e), pending final determination of the issue by the NLRB itself. In the second action, the court is requested to vacate a preliminary injunction previously entered against defendants.
Both actions grew out of the same factual context. Commerce Tankers Corporation ("Commerce"), a subsidiary of Vernitron Corporation, holds title to the tanker "Barbara," and previously owned a second ship, now sold. Commerce is party to an agreement with National Maritime Union of America, AFL-CIO ("NMU"), under which NMU is recognized as the sole collective bargaining agent for the unlicensed seamen aboard the "Barbara." This agreement contains a provision that if the "Barbara" is sold for operation under the United States flag, Commerce will obtain from the purchaser a written undertaking, for the benefit of NMU, that the agreement between NMU and Commerce will continue to apply to the operation of the Barbara and that the purchaser will comply with the said agreement -- in other words, that NMU will continue to be the collective bargaining agent for the crew. The agreement provides for arbitration.
There are two major unions representing unlicensed seamen on American flag vessels: NMU and the Seafarers' International Union ("SIU") which are intense rivals. To preserve some labor-management stability in the maritime industry, the practice has evolved and has been sanctioned that collective bargaining agreements should usually cover the crew members of all vessels in a fleet owned by a single employer and its related companies. Moore-McCormack Lines, Inc., 139 NLRB 796 (No. 70), 51 LRRM 1361 (1962).
A corollary of this principle is that newly acquired vessels are generally considered as "accretions" to a fleet, with union representation of the crew passing to the union representing the newly augmented fleet. National Maritime Union of America (NMU) (Overseas Carriers Corp.), 174 NLRB No. 36, 70 LRRM 1150 (1969). This would apparently be the case despite the fact that an SIU employer, for example, might set up a new subsidiary or affiliate to own the vessel, so long as the ship was in fact to be operated under common direction with the rest of the fleet.
Commerce, in apparent ignorance of this fleet-wide representation rule, determined to sell both its vessels, without anticipation of labor jurisdictional problems which could thereby be created.
Fortuitously, the sale of the first vessel was to an NMU company, so there was no incident. However, the second contract of sale, dated December 23, 1970, provided that the "Barbara" be sold to Vantage Steamship Corporation ("Vantage") for $2,750,000, with delivery set for February 28, 1971. Vantage recognizes SIU as exclusive bargaining agent for seamen on all the vessels of the "Vantage group" fleet. (Corletta, Transcript of hearing held before the undersigned on June 4, 1971, pp. 32-34.)
Predictable problems then arose. NMU, interested in preservation of the job security and pensions of its members in an industry where changing technology and rising levels of automation have caused a diminution of employment opportunities with consequent strains on the NMU pension plan (Spector, Tr. pp. 100-106), refused to waive its rights. It did attempt to secure a purchaser for the "Barbara" who was under contract with NMU, to whom Vantage could have assigned its contract, but these efforts proved unsuccessful.
Vantage, for its part, was apprehensive, with reason, of difficulties with SIU, so it refused to give any undertaking to protect NMU jurisdiction over the berths aboard the "Barbara" after she should become a Vantage ship. Since an attractive charter for the vessel had already been arranged, Vantage also refused to rescind the contract of sale. (Corletta, Tr. pp. 45-57, and exhibits cited therein.)
Commerce was therefore faced with a dilemma; it would be held in breach of one contract (with NMU) or another (with Vantage) whether it proceeded with the sale or not.
But the choice was not left up to Commerce. On January 25, 1971, NMU instituted arbitration proceedings which resulted on February 8, 1971, in an award in its favor and against Commerce. The permanent arbitrator found that the sales contract by Commerce was a violation of its agreement with NMU because the assurances of Vantage, as required by the NMU contract, were not (and in fact could not) be obtained. The arbitrator refrained from consideration of the validity of the contractual provisions relied upon.
On February 9, 1971, NMU commenced an action against Commerce to enforce the award by an injunction of this Court. On notice to Commerce, Hon. Inzer B. Wyatt of this Court temporarily restrained the transfer. Subsequently, on Friday, February 19, 1971, Judge Wyatt filed an opinion allowing the intervention of Vantage as a defendant, and granting its application for the dissolution of the restraining order, upon compliance with certain conditions therein enumerated. An order to that effect was entered on Monday, February 22, 1971.
However, on February 23, 1971, before performance of the required conditions had been completed, NMU's motion for a preliminary injunction was argued to Hon. Marvin E. Frankel. Judge Frankel, having been apprised of the impending February 28 transfer date, "revived" the temporary restraint by orders of February 24 and 25. Subsequently, by an opinion dated March 2, 1971, and subsequent order, Judge Frankel granted a preliminary injunction against the transfer or any transfer in violation of the agreement with NMU. An appeal by Commerce and Vantage is presently pending from that decision, the order entered in connection therewith, and the denial of an application to resettle that order.
When Vantage sought and obtained permission from Judge Wyatt to intervene in NMU's action then pending before him, it also filed a charge with the NLRB, on February 16, 1971, alleging that NMU and Commerce were engaging in an "unfair labor practice" within the meaning of Section 8(e) of the National Labor Relations Act ("the Act"), 29 U.S.C. § 158(e). The Acting Regional Director for the Second Region of the NLRB, to whom this charge was referred, eventually determined that reasonable cause existed to believe that an unfair labor practice was in fact occurring, and that the effectuation of the public policy expressed in the Act required the injunctive protection of this court. Accordingly, under the procedure mandated by 29 U.S.C. § 160(l), this court was petitioned on May 24, 1971 to grant appropriate relief against NMU pending the final adjudication of the matter by the NLRB itself. An amended petition filed in court on June 1, 1971 added Commerce as a second respondent. The motions for a preliminary injunction by NLRB, and to vacate Judge Frankel's preliminary injunction, by Commerce (without opposition from Vantage), came on before the undersigned on June 2, 1971. A hearing was scheduled and held on June 4, 1971.
To complete the procedural picture, the court was advised at the hearing that the arbitration clause in the contract for the sale of the "Barbara" has now been invoked, and accordingly, Commerce and Vantage are in the process of ...