Waterman and Smith, Circuit Judges, and Zampano, District Judge.*fn*
Appeals from orders issued by Judges Frankel and Croake of the United States District Court for the Southern District of New York which have been consolidated for disposition in the Court of Appeals. The district court opinions are reported at 325 F. Supp. 360 (1971) and 329 F. Supp. 151 (1971), respectively. In the former, upon the petition of National Maritime Union, a preliminary injunction was issued on behalf of the petitioner, restraining the transfer of the S.S. Barbara by its owner, Commerce Tankers Corporation, to Vantage Steamship Corporation, a company to which Commerce had contracted to sell it, or to any other person or company, unless there was compliance with certain clauses of the collective bargaining agreement between Commerce and NMU.
In the latter the Regional Director of the National Labor Relations Board sought a temporary injunction restraining the enforcement of those clauses until such time as the Board should have acted upon an unfair labor practice charge filed by Vantage in which it was claimed that the clauses violated 29 U.S.C. § 158(e). Issuance of such an injunction was refused.
Both determinations below are reversed, and both causes are remanded with instructions to issue the temporary injunction requested by the Regional Director, subject, however, to proper safeguards to protect any party who might, after action by the Board, have been then found to have been adversely affected by that injunction.
This is a consolidated appeal from two injunction orders handed down in the United States District Court for the Southern District of New York. In chronological order, the first is an appeal (Docket No. 71-1460) by Commerce Tankers Corporation (Commerce) and Vantage Steamship Corporation (Vantage) from a preliminary injunction granted in a decision filed on March 2, 1971 (opinion reported at 325 F. Supp. 360) and an order entered on March 4, 1971 by Judge Frankel which confirmed an arbitration award in favor of the National Maritime Union (NMU). The second appeal (Docket No. 71-1831) is by Ivan C. McLeod, Regional Director of the Second Region of the National Labor Relations Board, from a lower court refusal to grant a temporary injunction pursuant to Section 10 (1) of the National Labor Relations Act (29 U.S.C. § 160 (1)) which had been sought by the Acting Regional Director in May 1971. Judge Croake ruled as of July 15, 1971 in that action (opinion reported at 329 F. Supp. 151 (SDNY 1971)) that the Regional Director did not have reasonable cause to believe that NMU and Commerce had violated Section 8(e) of the Act (29 U.S.C. § 158(e)).*fn1
We reverse and remand with instructions in both of the appeals. In conformity with the following opinion we order that the district court vacate the injunction issued in Docket No. 71-1460; and we order that, inasmuch as we hold that the Regional Director did have reasonable cause to believe that NMU and Commerce had violated Section 8(e), a just and proper injunction be issued in Docket No. 71-1831.
The facts involved in this most complicated combination of appeals have been amply and adequately developed in the decisions below. The following summary of those facts will suffice for the purpose of this appeal. In July 1969, NMU and Commerce entered into a collective bargaining agreement covering all unlicensed personnel employed by Commerce on its vessels. That agreement contained the customary NMU clause requiring Commerce to recognize NMU as the sole bargaining agent for all unlicensed seamen aboard all the ships that Commerce then owned or that Commerce might thereafter acquire during the life of the agreement. There was also a provision, set forth in the margin,*fn2 which provided that, in the event that Commerce should sell either of its two vessels while the bargaining agreement was in force, Commerce would give NMU timely written notice thereof prior to the sale, and would obtain for the benefit of the NMU an undertaking by the transferee of the vessel that the transferee would recognize NMU as the sole bargaining agent for the ship's complement of unlicensed seamen and would accept the terms and conditions of the collective bargaining agreement with respect to those seamen.
Late in 1970 Vernitron, Commerce's parent company, determined to sell Commerce's two vessels, the Barbara and the Thalia. Without requiring the aforementioned undertaking from its transferee, Commerce attempted in December to sell the tanker Barbara to Vantage, a company which recognizes the Seafarers International Union (SIU) as its exclusive certified collective bargaining agent for all unlicensed seamen on all of the "Vantage group" fleet. That attempt has been followed by an enormous amount of activity by the lawyers for the two rival unions, for the two contracting companies, and for the National Labor Relations Board. That activity is in marked contrast to the inactivity of the subject of the contract, the tanker Barbara, which sits idly in a shipyard in Mobile for the lack of unlicensed seamen to man her.
In view of the underlying commitments affecting the situation Commerce might well have expected events to develop as they did, for there is an intense rivalry between the two major unions representing unlicensed seamen on American flag vessels: NMU and SIU. That rivalry is so acute that it provoked a remark by NMU Secretary-Treasurer Wall to Vernitron's counsel to the effect that he would rather that the Commerce ships "be lost foreign than be lost to the rival union SIU."*fn3 Judge Croake, at 329 F. Supp. 154, outlined the practice that fleet owners had been following:
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 Carrier Corp.), 174 N.L.R.B. 216, 174 NLRB No. 36, 70 LRRM 1150.
Additionally, as demonstrated in the provisions of the Commerce agreement, NMU has introduced its clause which requires that, under threat of strike, signatories to its collective bargaining agreement must obtain an undertaking by any transferee of any of its vessels that the transferee recognize NMU as the bargaining agent for the unlicensed seamen aboard the ship after the transfer.
The contract to sell the Barbara was signed on December 23, 1970 with ownership to be transferred on or before March 31, 1971. Ownership has not yet been transferred, for NMU learned in January 1971 of the contract to sell and took immediate steps to see that Article I, Section 2 of its collective bargaining agreement was complied with. Negotiations between the union and the two companies were unsuccessful and NMU initiated arbitration proceedings. On February 8, 1971 the arbitrator entered an award in favor of NMU without passing on the legality of the clause in question. The award restrained the transfer of the Barbara except pursuant to the provision in the collective bargaining agreement. After an initial skirmish before Judge Wyatt,*fn4 NMU sought and obtained confirmation of that award in the form of a preliminary injunction issued by Judge Frankel.
In the meantime, on February 11, Vantage filed a charge with the National Labor Relations Board that the transfer clause which NMU was seeking to enforce was a "hot cargo" agreement in violation of Section 8 (e) of the National Labor Relations Act (29 U.S.C. § 158(e)). Acting upon these charges, the Regional Director of the NLRB determined that there was "reasonable cause to believe" that Commerce and NMU by agreeing to the clause had engaged in and were engaging in an unfair labor practice and he petitioned the district court for a temporary injunction against the enforcement and maintenance of the transfer clause pending final disposition of the charge before the Board. After an evidentiary hearing upon this petition before Judge Croake on June 4, the court determined, McLeod v. NMU and Commerce Tankers, 329 F. Supp. 151 (1971), that the Regional Director did not have reasonable cause to believe that the clause violated Section 8(e) and the injunctive relief the petition had sought was denied.*fn5 The Regional Director's appeal from that denial has been consolidated with ...