Appeal by the Masters, Mates & Pilots from an order of the United States District Court for the Southern District of New York, Constance Baker Motley, Judge, granting a preliminary injunction under § 10(1) of the National Labor Relations Act, 29 U.S.C. § 160(1), restraining defendants from seeking to enforce, by arbitration or otherwise, a provision of the union's collective bargaining agreement after a finding by the court that there was reasonable cause to believe that the clause violated § 8(e) of the Act, 29 U.S.C. § 158(e). Affirmed.
Anderson, Mansfield and Oakes, Circuit Judges.
MANSFIELD, Circuit Judge :
The International Organization of Masters, Mates and Pilots ("MM&P" or "the Union") appeals from a preliminary injunction restraining it from seeking to arbitrate or otherwise enforce a provision in its collective bargaining agreement with Seatrain Lines, Inc. ("Seatrain"), obligating Seatrain, as condition precedent to sale or transfer of a vessel, to insure that the transferee will bind itself to MM&P's collective bargaining agreement. The injunction granted below was sought, pursuant to § 10(1) of the National Labor Relations Act ("the Act"), 29 U.S.C. § 160(1),*fn1 by plaintiff Danielson, Regional Director of the National Labor Relations Board ("the Board") and was based on a charge filed with the Board by Seatrain on October 1, 1974, alleging that MM&P's attempt to enforce this provision constituted an unfair labor practice in violation of § 8(e) of the Act, 29 U.S.C. § 158(e),*fn2 the so-called "hot cargo" provision. The Board, after investigation, concluded that there was reasonable cause to believe that MM&P was engaging in the unfair labor practice charged and accordingly sought relief under § 10(1) pending final disposition of the charge by the Board. After a hearing on December 6 and 9, 1974, Judge Motley of the Southern District of New York found that the Regional Director had shown reasonable grounds to believe that the Union was engaged in the charged unfair labor practice and granted the injunctive relief. We affirm.
Seatrain, a Delaware corporation based in New York, is engaged through subsidiaries in operating, owning and constructing seagoing vessels. One of the wholly-owned subsidiaries is Seatrain Shipbuilding Corp. ("Shipbuilding"), a corporation engaged in the business of building and selling ships. Shipbuilding began operations in 1969 and has engaged in the construction of four vessels, at least one of which has been completed.
Shipbuilding's first vessel, the T/T Brooklyn, was constructed pursuant to a construction contract by Langfitt Shipping Corp., another Seatrain subsidiary. On December 31, 1973, the Brooklyn was sold to Wilmington Trust Company as agent for General Electric Credit Corporation ("GECC"). Wilmington concurrently bareboat-chartered (i.e., chartered without crew) the Brooklyn to East River Steamship Corp., which entered into a management agreement with Anndep Shipping Corp. Finally, Anndep entered into an agreement with Westchester Marine Shipping Co. ("Westchester"), a labor contractor, which undertook to supply the crew for the Brooklyn.
Shipbuilding's second vessel, the T/T Williamsburg, was constructed under a construction contract held by another Seatrain subsidiary, Tyler Tanker Corp. Seatrain has obtained from GECC a commitment letter to purchase this vessel and GECC intends to bareboat-charter the vessel to Kingsway Tankers, Inc. Kingsway also has a management agreement with Anndep Corp., and thus Westchester will also supply the crew of the Williamsburg.
This case arises because Westchester entered into a collective bargaining agreement with MM&P's rival union, Marine Engineers Beneficial Association, District 2, and through that organization it has hired some 28 licensed deck officers for the Brooklyn and has begun hiring for the Williamsburg. The MM&P had a collective bargaining agreement with Seatrain and its affiliates and subsidiaries, in effect from June 16, 1972 to June 15, 1975, which covered the licensed deck officers of all U.S.-flag vessels owned, operated, or bareboat chartered by Seatrain and contained the following provisions:
" Section V. VESSELS BOUND BY THE AGREEMENT
"a. With regard to any sale, charter (but not including a vessel which the Company may be operating under a bareboat charter and the charter is terminated) or any manner of transfer (except sales to foreign flag) of the Company's vessel:
"i. At least seventy-two (72) hours prior to the date of the effective transfer of the vessel, written notice must be given to the Organization by the Company.
"ii. The execution by the purchaser, charterer or transferee of the Organization's collective bargaining agreement shall be a condition precedent to any sale, charter or transfer.
"iii. If the Company violates subsection 2(a)(ii) above, the Arbitrator may include as part of his award, loss of wages and ...