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JENSEN v. FARRELL LINES

UNITED STATES DISTRICT COURT, SOUTHERN DISTRICT OF NEW YORK


July 13, 1979

WILLIAM JENSEN, EDWIN KREMER, JOHN, GARDELLA, WILLIAM KUYL, DOMINICK BISBANO, LINDSAY HOYT, FRANCIS S. HAGGERTY, RICHARD TRIPPE, ANTHONY LORE, and GARY W. LUECK, Plaintiffs,
v.
FARRELL LINES, INC.; INTERNATIONAL ORGANIZATION OF MASTERS, MATES AND PILOTS, AFL-CIO; BROTHERHOOD OF MARINE OFFICERS, DISTRICT 1, MEBA, AFL-CIO; and AMERICAN FEDERATION OF LABOR AND CONGRESS OF INDUSTRIAL ORGANIZATIONS, Defendants.

The opinion of the court was delivered by: SWEET

This action has presented an intricate tapestry of issues concerning contractual rights, legislative construction, and constitutional interpretation, all in the framework of labor law, itself elaborate and highly specialized. The defendants urge that these issues are beyond the reach of this court, principally because plaintiffs, who are supervisors, are outside the protections of the relevant statutory law and of the constitution. According to defendants, plaintiffs have extinguished their only rights, those grounded in contract, because those rights have been abrogated by arbitration. One strand in this tapestry, emphasized by plaintiffs, is that there is a constitutional right to associate which includes a right to be represented by a majority-selected union. While a district court might prefer to avoid these difficult issues, they have been squarely presented by highly skilled counsel for the parties. Because of this court's belief that "ordered liberty", (remarks, Chief Justice Burger, Law Day, May 1, 1979), A.B.A. Journal, June 1979, at p. 932, is an essential ingredient of our complex society, the court is unwilling to declare that plaintiffs are without recourse to relief in their effort to assert organizational rights in a labor dispute. The court will therefore grant declaratory relief for the plaintiffs as set forth more fully below.

The Parties

 Plaintiffs are ten licensed deck officers and engineers who are supervisory employees in the maritime shipping industry, members of defendant Brotherhood of Marine Officers, District 1, National Marine Engineers Beneficial Association, AFL-CIO ("BMO"). *fn1" They have all been employed for a substantial period of time aboard certain vessels formerly owned and operated by American Export Lines, Inc. ("AEL") and since on or about January, 1978, owned and operated by defendant Farrell Lines, Inc. ("Farrell"). "Farrell" is a New York corporation which owns and/or operates merchant cargo and bulk carriage vessels as a U.S.-flag ocean carrier; the defendant "BMO", is an affiliate of the National Marine Engineers' Beneficial Association, ("MEBA"); the defendant International Organization of Masters, Mates and Pilots, AFL-CIO ("MMP"), is an affiliate of the International Longshoreman's Association ("ILA"); and the defendant American Federation of Labor-Congress of Industrial Organizations ("AFL-CIO"), is the national umbrella association of which MMP and BMO are members, which was served with a copy of the amended complaint but did not appear at trial, no relief having been sought against it.

 The Claims and Prior Proceedings

 Plaintiffs' claims, as broadly pleaded in their amended complaint, resolved after the course of trial down to three basic assertions. *fn2"

 First, the plaintiffs allege that Farrell and MMP, by enforcing an arbitration award handed down in a proceeding between the ILA and MEBA, committed unfair labor practices as defined in the National Labor Relations Act, 29 U.S.C. § 158. In their second claim, plaintiffs allege that BMO breached its statutory duty of fair representation under 29 U.S.C. § 185 to the plaintiffs by the BMO's conduct following Farrell's purchase of the AEL ships including, Inter alia, its failure to raise a constitutional claim at arbitration and to sue to prevent enforcement of the award. In their third claim, the plaintiffs allege that Farrell's enforcement of the award is a violation of their First Amendment freedom of association in that it forces them to join a union not of their own choosing as a condition of their continued employment.

 This action was originally brought on by a motion seeking a preliminary injunction pursuant to Rule 65, Fed.R.Civ.P. Plaintiffs at that time alleged, pursuant to Section 502 of the Employee Retirement Income Security Act of 1974, ("ERISA"), 29 U.S.C. § 1132, that certain contract and pension rights were being denied them as a result of defendants' actions. This court, by Order dated March 16, 1979, issued an opinion denying that motion. After acquiring new counsel, plaintiffs filed an amended complaint and again moved pursuant to Rule 65, Fed.R.Civ.P., for a preliminary injunction. In making the new motion plaintiffs alleged irreparable injury arising out of the violation of their statutory and constitutional rights. The original ERISA claim was then withdrawn, and the exhibits previously introduced at the first hearing were deemed to be received in evidence at the new hearing.

 After evidentiary hearings on the latter application for preliminary relief, the court, exercising its discretion pursuant to Rule 65(a)(2), Fed.R.Civ.P., ordered that the trial of the action on the merits be advanced and consolidated with the preliminary injunction hearing. *fn3"

 The Facts

 The plaintiffs' claims challenge a long standing industry practice dealing with the resolution by arbitration of inter-union jurisdictional disputes and arise out of the following facts.

 Until January, 1978, Jensen and the other nine plaintiffs were employed as licensed deck officers on vessels owned or operated by AEL, a subsidiary of American Export Industries, Inc., ("AEI"), a New York shipping corporation. Pursuant to a reorganization plan resulting from proceedings under Chapter XI of the Bankruptcy Act, 11 U.S.C. §§ 701 Et seq., AEL agreed to sell the 25 AEL owned or operated ships to Farrell. At all pertinent times prior to the sale, AEL and BMO had a valid collective bargaining agreement with a union shop provision under which the approximately 180 AEL supervisors working on AEL ships were members of, and exclusively represented by, the BMO. Farrell, the purchaser in bankruptcy, owned or operated fourteen of its own ships immediately prior to the sale. At all times pertinent to this suit, Farrell has been a party to a multi-employer collective bargaining agreement with the MMP. That agreement provides that all licensed deck officers employed by Farrell shall be members of the union.

 Shortly after Farrell purchased the AEL ships and integrated them into its normal operations, Farrell signed an agreement acknowledging the contract between the BMO and AEL. Afterwards, Farrell and BMO representatives negotiated a wage increase for the employees covered under the old contract which, in its prefatory language, acknowledged the validity of the BMO contract and Farrell's assumed obligations respecting collective bargaining. Based upon its own contract with Farrell, however, the MMP, shortly after the sale in bankruptcy, asserted that it, not the BMO, was entitled to represent the men working on the newly acquired ships.

 The MMP, by its parent, (ILA) submitted the dispute over representation rights to arbitration under Article XX of the AFL-CIO constitution. *fn4" In the arbitration proceedings the parent organizations of BMO and MMP (MEBA and ILA, respectively) introduced extensive briefs, all of which were introduced in evidence at trial. Arbitrator Daniel Q. Mills found that the Farrell purchase constituted an accretion *fn5" of the BMO/AEL fleet to the MMP/Farrell fleet and that, primarily because the MMP contract provided for accretions whereas the BMO contract did not, the MMP contract *fn6" was to be given effect.

 Following two internal AFL-CIO appeals pursuant to Article XX, *fn7" the arbitration award was finalized by the AFL-CIO executive committee on February 28, 1979, approximately a year after the initial arbitration began. *fn8" Farrell discontinued its pension, health, and vacation pay contributions under the BMO contract and began to make its contributions to the MMP plan. *fn9" Farrell also informed its BMO supervisors that they would have to join MMP as a condition of continued employment with Farrell.

 Thus, if the plaintiffs and other BMO members had accepted the terms of the arbitration award they would, in effect, have been bound to a union shop agreement between MMP and Farrell and to the terms of the MMP constitution. *fn10" They would thereby have been bound to accept the MMP as their exclusive representative. MMP offered the BMO members, including plaintiffs, membership in the union *fn11" on terms, Inter alia, granting them the highest available seniority status of three grades accorded employees under the MMP contract for jobs on former AEL ships. *fn12" Certain of the BMO members, obviously excluding the plaintiffs, accepted the MMP offer. However, because communication with the 21 ships was by cable, and because the ultimatum pursuant to the arbitration award (concerning joining the MMP) could be implemented only as the former AEL ships reached port, it was unclear at the time of trial exactly how many members of the BMO intended to join the MMP. *fn13"

 On March 12, plaintiffs received notice of the Farrell order when their ship, the CV Staghound, docked in Baltimore. On March 15, when their ship reached the port of New York, plaintiffs were informed of the effect of the arbitration award and of the requirement that they join the MMP as a prerequisite to continued employment with Farrell. Upon refusing to sign MMP membership cards, plaintiffs were forcibly removed from the Farrell ships by the New York City police. This action was filed shortly thereafter.

 The First Claim

 Plaintiffs have articulated two versions of their first (unfair labor practice) claim. In the first version, plaintiffs assert that defendants committed an unfair labor practice under the literal terms of 29 U.S.C. § 158. The obvious and fatal flaw of this first version is that plaintiffs are "supervisors" *fn14" under the definitional sections of the National Labor Relations Act (as amended) (NLRA) and, as supervisors, they are not statutory "employees" who are entitled to protection against statutory unfair labor practices. *fn15" Plaintiffs have also ingeniously urged this court to add to the body of federal common law in the labor area by urging that the identical conduct which would support a finding (by the NLRB) of an unfair labor practice under 29 U.S.C. § 158 (if non-supervisory personnel were involved) constitutes by implication a breach of contract which, plaintiffs assert, should be found to be actionable in a district court pursuant to 29 U.S.C. § 185. In effect, then, plaintiffs seek to surmount the Congressionally mandated bar to a 29 U.S.C. § 158 unfair labor practice claim face by non-employees such as supervisory personnel by reading into it a contract claim based on 29 U.S.C. § 185. The federal common law in this area commands no such result, and the plaintiffs' status as supervisory personnel deprives them of the right to assert an unfair labor practice claim in this court.

 Jurisdiction and Standing

 Subject matter jurisdiction over the plaintiffs' second claim is properly in this court under 29 U.S.C. § 185 *fn16" even though supervisory personnel were excluded from the statutory definition of employees in the 1947 Taft-Hartley Act amendments to Section 2(3) of the Wagner Act, 29 U.S.C. § 152(3). *fn17" This conclusion derives primarily from the court's reading of cases which have analyzed the policies underlying the Act's supervisory exclusion, and which lead the court to conclude that a claim based on 29 U.S.C. § 185 is cognizable when plaintiffs are supervisory personnel. See generally District 2 Marine Engineers Beneficial Association v. Amoco Oil Co., 554 F.2d 774 (6th Cir. 1977); Globe Seaways, Inc. v. National Marine Engineers' Beneficial Association, 451 F.2d 1159, 1160 n.1 (2d Cir. 1971); United States v. National Marine Engineers' Beneficial Association, 294 F.2d 385, 392 (2d Cir. 1961); Isbrandtsen Co. v. District 2, Marine Engineers' Beneficial Association, 256 F. Supp. 68, 76-77 (E.D.N.Y.1966), (Zavatt, C. J.); Accord Dente v. International Organization of Masters, Mates and Pilots, Local 90, 492 F.2d 10, 12 (9th Cir.) Cert. denied, 417 U.S. 910, 94 S. Ct. 2607, 41 L. Ed. 2d 214 (1974). *fn18"

 Furthermore, where subject matter jurisdiction is based on 29 U.S.C. § 185, as is the case with plaintiffs' second claim, the court's jurisdiction is also invoked under 28 U.S.C. § 1337. See generally Avco Corp. v. Aero Lodge 735, 390 U.S. 557, 88 S. Ct. 1235, 20 L. Ed. 2d 126, Rehearing denied, 391 U.S. 929, 88 S. Ct. 1801, 20 L. Ed. 2d 670 (1968): "Title 28 U.S.C. § 1337 says that "The district courts shall have original jurisdiction of any civil action or proceeding arising under any Act of Congress regulating commerce . . . .' It is that original jurisdiction that a § 301 action invokes." Id., 390 U.S. at 561-62, 88 S. Ct. at 1238 (citation omitted). *fn19"

 Subject matter jurisdiction over the third claim exists under 28 U.S.C. § 1331. *fn20" See Evans v. American Fed. of Television and Radio Artists, 354 F. Supp. 823, 837 (S.D.N.Y.1973), Rev'd on other grounds, Buckley v. American Fed. of Television and Radio Artists, 496 F.2d 305 (2d Cir. 1974), Rehearing denied 420 U.S. 956, 95 S. Ct. 1342, 43 L. Ed. 2d 433 (1975). *fn21" In Evans, as here, the analysis of subject matter jurisdiction under 28 U.S.C. § 1331 was based on the reasoning that plaintiffs' rights ultimately depended upon an interpretation of the Constitution. See Id. at 837 and cases cited therein.

 Because the constitutional claim raises the question of whether enforcement of the arbitration award would be an impermissible infringement of plaintiffs' First Amendment rights and therefore void as against public policy, subject matter jurisdiction over this claim is proper and a cause of action is stated. *fn22"

 Plaintiffs have standing to challenge the arbitration award under their second claim. See generally Santos v. Dist. Council of New York City, 547 F.2d 197 (2d Cir. 1977) (suit brought by union members seeking enforcement of an Article XX arbitral award). In Santos the court rejected the contention that only unions, not individual union members, have standing to seek enforcement of an Article XX arbitration award. Id. at 200. Here, as in Santos, plaintiffs have not suffered "mere "emotional disappointment'; they have lost their jobs . . . ." Id. at 200. That they are not signatories to the relevant contracts does not deprive them of standing to sue for contractual enforcement under 29 U.S.C. § 185. Id. at 200, n.3. Plaintiffs have sufficiently alleged that they have sustained injury from enforcement of the arbitration award and that they " "personally would benefit in a tangible way from the courts' intervention' ." Santos at 199, quoting from Warth v. Seldin, 422 U.S. 490, 508, 95 S. Ct. 2197, 45 L. Ed. 2d 343 (1975).

 Plaintiffs have also sufficiently shown a definite injury and personal stake in the outcome of this litigation to maintain their constitutional claim, principally because the action arises out of events culminating in their loss of employment and forced removal from place of employment, allegedly for asserting the right they now seek to have vindicated. *fn23" In the instant case, the forced removal of plaintiffs from the ships on which they served and their loss of employment was occasioned by their assertion of a First Amendment right and constitutes, therefore, the requisite objective harm. *fn24" Cf. McQueen v. Druker, 438 F.2d 781 (1st Cir. 1971) (loss of tenancy occasioned by assertion of First Amendment right). Furthermore, according to the contract, the MMP, even if it does not represent a majority, is in a position to bind the plaintiffs to any agreement it might make. This threat of future harm is sufficiently "specific" in the First Amendment context to rise above the level of a mere "specific chill". See Carey, supra note 23.

 The defendants have asserted that plaintiffs do not have standing, arguing that the MMP benefits equal or exceed those of the BMO, and that because plaintiffs had the opportunity to join MMP, no injury resulted. Initially, of course, this fails to meet plaintiffs' principal contention, viz, their loss of the right to be represented by a majority-selected union. In addition, however, the proof at trial established significant differences between the operation of the two collective bargaining agreements as to vacation benefits, seniority, selection of billets, and overtime payments, among other benefits. The loss or modification of these rights constitutes an independent basis for standing.

 The Second Claim

 As stated above, plaintiffs urge this court to vacate the Article XX arbitration award on two grounds over which this court has subject matter jurisdiction. *fn25" In their second claim plaintiffs allege that the BMO breached its duty of fair representation, primarily by not raising certain legal issues at the Article XX proceeding and by recognizing the collective bargaining agreement between MMP and Farrell Lines rather than enforcing BMO's own contract with Farrell. It is well settled that in reviewing an arbitrator's award, "the court's function in confirming or vacating an arbitration award is severely limited. If it were otherwise, the ostensible purpose for resort to arbitration, i. e., avoidance of litigation, would be frustrated." Amicizia Societa Navegazione v. Chilean Nitrate & Iodine Sales Corp., 274 F.2d 805, 808 (2d Cir.), Cert. denied, 363 U.S. 843, 80 S. Ct. 1612, 4 L. Ed. 2d 1727 (1960) (citation omitted). This is an outgrowth of the Supreme Court's endorsement, in the "Steelworker's Trilogy", of the notion that arbitration is the preferred method of settling disputes which arise from collective bargaining agreements. See United Steelworkers v. America Mfg. Co., 363 U.S. 564, 80 S. Ct. 1343, 4 L. Ed. 2d 1403 (1960); United Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 574, 80 S. Ct. 1347, 4 L. Ed. 2d 1409 (1960); United Steelworkers v. Enterprise Wheel & Car Corp., 363 U.S. 593, 80 S. Ct. 1358, 4 L. Ed. 2d 1424 (1960). In light of these decisions a court will vacate an arbitrator's award only where it has been shown that the award was tainted with impropriety. In no circumstances will a court substitute its judgment for that of the arbitrator merely because the court disagrees with the arbitrator concerning the merits of the action. Timken v. Local 1123, United Steelworkers, 482 F.2d 1012, 1014 (6 Cir. 1973). As stated in Enterprise Wheel & Car Corp., supra :

 

the question of interpretation of the collective bargaining agreement is a question for the arbitrator. It is the arbitrator's construction which was bargained for; and so far as the arbitrator's decision concerns construction of the contract, the courts have no business overruling him because their interpretation of the contract is different from his.

 363 U.S. at 599, 80 S. Ct. at 1362.

 It is equally well settled, however, that an arbitration award may be vacated on the ground that there was fraud, partiality or other misconduct on the part of the arbitrator, or that the award was based upon a manifest disregard of the law. See, e.g., Botany Industries, Inc. v. Amalgamated Clothing Workers of America, 375 F. Supp. 485, 490 n.6 (S.D.N.Y.1974), and cases cited therein. In addition, it is within the province of the court to overturn an award if the award is contrary to public policy, Local 453, Int'l Union of Electrical, Radio & Machine Workers v. Otis Elevator Company, 314 F.2d 25, 29 (2d Cir. 1963), or if a union has failed to provide the aggrieved employee(s) with fair representation in the course of the grievance or arbitration process. Vaca v. Sipes, 386 U.S. 171, 184-86, 87 S. Ct. 903, 17 L. Ed. 2d 842; Suissa v. American Export Lines, Inc., 507 F.2d 1343, 1347 (2d Cir. 1974). Only this last ground has been advanced here.

 The phrase "duty of fair representation" is a term of art which is incapable of precise definition. Griffin v. International U., U.A.W., 469 F.2d 181, 182 (4th Cir. 1972). Thus, in determining whether a union has breached its duty of fair representation, a court must examine the relevant facts of each case. Simberlund v. Long Island Railroad Company, 421 F.2d 1219, 1225 (2d Cir. 1970), and cases cited thereat.

 The "duty of fair representation" doctrine was first articulated in Steele v. Louisville & N. R. R., 323 U.S. 192, 65 S. Ct. 226, 89 L. Ed. 173 (1944), a case involving the Railway Labor Act. In Steele the Supreme Court indicated that a union has a statutory duty to represent fairly all members of the employee bargaining unit. Soon thereafter, the Court extended this doctrine to cases arising under Section 301 of the NLRA, as amended, 29 U.S.C. § 185. Ford Motor Company v. Huffman, 345 U.S. 330, 73 S. Ct. 681, 97 L. Ed. 1048 (1953). In representing its employees, declared the court, a union is permitted "(a) wide range of reasonableness," but this latitude is "subject always to complete good faith and honesty of purpose in the exercise of its discretion." Id. at 338, 73 S. Ct. at 686. The duty is premised on the theory that because the union is the exclusive bargaining representative of the employees, it has a statutory duty to represent fairly all employees in its collective bargaining with the employer and in its enforcement and administration of the resulting contract. Ford Motor Company, supra.

 In Vaca v. Sipes, supra, the Court said: "A breach of the statutory duty of fair representation occurs only when a union's conduct toward a member of the collective bargaining unit is arbitrary, discriminatory, or in bad faith." 386 U.S. at 190, 87 S. Ct. at 916. The Court went on to say that "(under) this doctrine, the exclusive agent's statutory authority to represent all members of a designated unit includes a statutory obligation to serve the interests of all members without hostility or discrimination toward any, to exercise its discretion with complete good faith and honesty, and to avoid arbitrary conduct." Vaca, 386 U.S. at 177, 87 S. Ct. at 910, Citing Humphrey v. Moore, 375 U.S. 335, 342, 84 S. Ct. 363, 11 L. Ed. 2d 370 (1964).

 More recently, in Motor Coach Employees v. Lockridge, 403 U.S. 274, 91 S. Ct. 1909, 29 L. Ed. 2d 473, Rehearing denied, 404 U.S. 874, 92 S. Ct. 24, 30 L. Ed. 2d 120 (1971), the Court said: "(f)or such a claim (breach of duty of fair representation) to be made out, . . . (plaintiff) must have proved "arbitrary or bad-faith conduct on the part of the Union,' Vaca v. Sipes, supra, (386 U.S.) at 193 (87 S. Ct. 903). There must be substantial evidence of fraud, deceitful action or dishonest conduct." Id. at 299, 91 S. Ct. at 1924, Citing Humphrey v. Moore, supra. See also Ryan v. New York Newspaper Printing, Inc., 590 F.2d 451, 455 (2d Cir. 1979). Based upon the authorities just referred to, this court has concluded that plaintiffs have not shown that BMO acted arbitrarily or in bad faith, and therefore, that, plaintiffs have not shown a failure on the part of BMO to represent them fairly at the arbitration proceeding. *fn26" BMO's forceful and persistent representation of its constituents in the Article XX proceeding and its conduct in the appeals from that proceeding can in no way be termed arbitrary conduct. At most, the BMO's failure to raise certain arguments might be said to amount to negligence, but proof that a union acted negligently or exercised poor judgment is not enough to make out a claim of unfair representation. Franklin v. Southern Pacific Transp. Co., 593 F.2d 899, 901 (9th Cir. 1979); Cannon v. Consolidated Freightways Corp., 524 F.2d 290, 293 (7th Cir. 1975); Bazarte v. United Transportation Union, 429 F.2d 868, 872 (3d Cir. 1970). *fn27" Furthermore, this court finds that BMO's recognition and acceptance of the contract between MMP and Farrell did not amount to a breach of the duty of fair representation. That BMO adopted an agreement which particular employees did not favor does not amount to hostile or discriminatory conduct and therefore does not constitute a breach of the duty of fair representation. The complete satisfaction of all who are represented by a union is hardly to be expected. See Simburland v. Long Island Railroad, supra, at 1227; Ford Motor Company v. Huffman, 345 U.S. at 330, 73 S. Ct. 681, 97 L. Ed. 1048. As stated in Humphrey v. Moore, ". . . we are not ready to find a breach of the collective bargaining agent's duty of fair representation in taking a good faith position contrary to that of some individuals whom it represents nor in supporting the position of one group of employees against that of another." 375 U.S. at 349, 84 S. Ct. at 371.

 The Third Claim

 In their third claim plaintiffs seek injunctive relief against Farrell's enforcement of the Article XX arbitration award on the ground that giving effect to the collective bargaining agreement between Farrell and MMP, including its exclusive representation provisions, would do violence to their First Amendment freedom of association. The argument thus presented challenges the maritime industry's practice of engaging in pre-hire collective bargaining contracts. Under this practice, a shipowner and a union enter into an exclusive representation agreement covering supervisory employees before any ships are actually built or any men are hired. *fn28" Before it can reach the merits of this third claim, however, the court must first determine that governmental action is involved. See U.S.Const. Amend. I; Public Utilities Commission v. Pollak, 343 U.S. 451, 461-62, 72 S. Ct. 813, 96 L. Ed. 1068 (1952); Powe v. Miles, 407 F.2d 73 (2d Cir. 1968).

 State Action

 Whether the government has or has not acted in a given circumstance is not an easy determination. *fn29" At least two primary strands of the government action doctrine can, however, be identified: the "interdependence' or "symbiotic relationship, view articulated in Burton v. Wilmington Parking Authority, 365 U.S. 715, 722, 725, 81 S. Ct. 856, 6 L. Ed. 2d 45 (1961), under which a court carefully "sift(s) facts and weigh(s) circumstances" and, the "sufficiently close nexus with the challenged action' view articulated in Jackson v. Metropolitan Edison Co., 419 U.S. 345, 95 S. Ct. 449, 42 L. Ed. 2d 477 (1974). In Jackson, the Supreme Court set forth a view of state action not wholly consistent with the Court's earlier discussion in Burton. While apparently restricting Burton's scope, the Jackson Court did not, however, overrule Burton. Indeed, the Jackson Court's language indicates that at least something, of uncertain dimension survives of the "symbiotic relationship (test) presented in Burton . . . ." Jackson, 419 U.S. at 357-58, 95 S. Ct. at 457. Thus, the Burton analysis of state action, as refined in Jackson, is still in force.

 Under the Jackson analysis, a finding that Farrell's actions constitute governmental action would turn on whether there is a "sufficiently close nexus between the (government) and the challenged action of the (private) entity so that the action of the latter may be fairly treated as that of the (government) itself." Jackson, supra, at 351, 95 S. Ct. at 453 (citation omitted). See also Graseck v. Mauceri, 582 F.2d 203, 209 (2d Cir. 1978), Cert. denied, 439 U.S. 1129, 99 S. Ct. 1048, 59 L. Ed. 2d 91 (1979). In Jackson the Court held that the authorization and approval by the government of a private utility company's procedures did not transform the company's acts into governmental action. The Court indicated the government must "put its . . . weight" behind the challenged action to meet the test. 419 U.S. at 357, 95 S. Ct. 449. Prior to the Jackson decision, the Supreme Court had held that when governmental and private entities were so intertwined and their activities so interdependent that it could fairly be said that they were symbiotic, there was state action. Burton, supra.

 In Jackson v. Statler Foundation, 496 F.2d 623 (2d Cir. 1974), the Court of Appeals for the Second Circuit enunciated five factors which are particularly important to a determination of whether private conduct will be considered governmental action:

 

(1) the degree to which the "private" organization is dependent on governmental aid; (2) the extent and intrusiveness of the governmental regulatory scheme; (3) whether that scheme connotes government approval of the activity or whether the assistance is merely provided to all without such connotation; (4) the extent to which the organization serves a public function or acts as a surrogate for the State; (5) whether the organization has legitimate claims to recognition as a "private" organization in associational or other constitutional terms.

 

Each of these factors is material; no one factor is conclusive.

 Id. at 629.

 These authorities, taken together, compel the court to conclude that the requisite state action exists, whether viewed in terms of "interdependence", "symbiosis", or "nexus". The competing rights at issue are those among union members Inter sese, and among union members and their employers all in an industry where the government subsidy to the employer is based upon, or perhaps more accurately stated results from the differential between the wages paid the union members and the wages paid to employees performing similar functions in foreign fleets. Exhibits which were received in evidence at trial indicate that Farrell received a cumulative sum exceeding $ 56 million in subsidies for operating costs, principally the cost of collective bargaining contracts. *fn30" Other exhibits indicate that at the time of trial Farrell was receiving approximately $ 3.75 million to defray the expense of operating the Farrell fleet. The United States government also provides construction differential subsidies for the construction of ships operated by Farrell, *fn31" and guarantees the payment of bonds and notes issued to provide financing for construction of such ships. *fn32" The routes for which subsidies are received must be approved by the government; *fn33" the United States also regulates extensively the manning and wage scales of officers and seamen serving aboard Farrell ships. *fn34" Indeed, the Merchant Marine Act of 1970 requires the existence of bona fide collective bargaining contracts before a fleetowner is eligible for the so-called Operating Differential Subsidy (ODS) and provides for Maritime Administration (MARAD) review of the fleetowners' collective bargaining costs. 46 U.S.C. §§ 1173(b), 1183. *fn35" Furthermore, the legislative history of the Merchant Marine Act of 1970, the statute which permits the subsidies received by Farrell, establishes that a primary purpose of the subsidies is to ensure a national maritime industry as an element in our national security. *fn36" See 1970 U.S.Code Cong. & Admin.News, p. 4188.

 In this court's view, the perceived need for this subsidization stems largely from our nation's high standard of living and enlightened industrial democracy. These factors in some measure account for the greater cost of operating U.S.-flag vessels as compared with operating foreign vessels. Indeed, the nexus between union rights and government subsidy is direct and demonstrable. Consequently, the court finds that there is governmental action. The reasoning of McQueen v. Druker, 438 F.2d 781 (1st Cir. 1971), where action by a private landlord of a heavily-subsidized federal housing project was held to constitute state action, applies here. In that case, the court reasoned that:

 

at least when a specific governmental function is carried out by heavily subsidized private firms or individuals whose freedom of decision-making has, by contract and the reserved governmental power of continuing oversight, been circumscribed substantially more than that generally accorded an independent contractor, the coloration of state action fairly attaches.

 438 F.2d at 784-85 (citations omitted). *fn37"

 In the context of the instant case Congress has recognized that the merchant marine carries out a specific governmental function of vital interest to the national defense. *fn38" Farrell is a heavily subsidized private firm which has had its decision-making power greatly circumscribed by an extensive governmental regulatory scheme. *fn39" It is subject to continuing oversight because in order to receive the subsidies on which its survival depends, Farrell must subject basic decision-making regarding, Inter alia, routes, cargo and working conditions, to Marad approval. *fn40"

 The Constitutional Rights of Plaintiffs

 It is conceded that Congress can deny supervisors the same right to organize that it grants to statutory employees. *fn41" Therefore, there is no absolute right *fn42" for supervisors to bargain collectively. Presented here, however, is the issue of whether once an employer agrees to bargain collectively with supervisors and sets the terms and conditions of employment, the supervisors have constitutional rights to exercise in that process. There is at least at the date of this writing, a First Amendment right in the context of collective bargaining to a determination that the union representing the members is, in fact, a majority-chosen union.

 It is, of course, settled that among the panoply of individual rights protected by the First Amendment is the freedom of association. *fn43" NAACP v. Alabama, 357 U.S. 449, 78 S. Ct. 1163, 2 L. Ed. 2d 1488 (1958). See also, Abood v. Detroit Board of Education, 431 U.S. 209, 233, 97 S. Ct. 1782, 52 L. Ed. 2d 261, Rehearing denied, 433 U.S. 915, 97 S. Ct. 2989, 53 L. Ed. 2d 1102 (1977) (and cases cited thereat). Although less commonly conceived, that freedom includes its converse, the freedom Not to associate, the right Not to be compelled to join a group of association against one's will. The right to associate and the right not to associate are complementary aspects of the broader freedom subsumed by the concept of liberty. Cf. Wooley v. Maynard, 430 U.S. 705, 714, 97 S. Ct. 1428, 51 L. Ed. 2d 752 (1977) (freedom of speech includes freedom to refrain from speaking); Railway Employes' Dept. v. Hanson, 351 U.S. 225, 76 S. Ct. 714, 100 L. Ed. 1112 (1956) (by implication). *fn44"

 The First Amendment's protection extends beyond its exercise for purely political purposes; it encompasses association in the economic context. See e.g. Thomas v. Collins, 323 U.S. 516, 65 S. Ct. 315, 89 L. Ed. 430 (1945); NAACP v. Alabama, supra, 357 U.S. at 460-61, 78 S. Ct. 1163. It includes the protection of an individual's right to join with his fellows in a labor organization for the purpose of asserting mutual and collective economic interests. See N.L.R.B. v. Jones and Laughlin Steel, 301 U.S. 1, 32, 57 S. Ct. 615, 81 L. Ed. 893, Et seq. (1937). Where Congress has decided by statute that an overriding governmental interest exists in enhancing the security of unions, the courts have held that such legislation, e.g. authorizing agency shops, is a permissible infringement of the associational rights. See e.g. Railway Employees' Dept. v. Hanson, supra; International Association of Machinists v. Street, 367 U.S. 740, 81 S. Ct. 1784, 6 L. Ed. 2d 1141 (1960). These holdings are based on the settled principle that First Amendment rights are not absolute. CSC v. Letter Carriers, 413 U.S. 548, 567, 93 S. Ct. 2880, 37 L. Ed. 2d 796 (1973); Abood v. Detroit Board of Education, 431 U.S. 209, 97 S. Ct. 1782, 52 L. Ed. 2d 261, Rehearing denied, 433 U.S. 915, 97 S. Ct. 2989, 53 L. Ed. 2d 1102 (1977). *fn45" In Abood, *fn46" Supra, Justice Powell said:

 

"Neither the right to associate nor the right to participate in political activities is absolute . . . ." CSC v. Letter Carriers, 413 U.S. 548, 567 (93 S. Ct. 2880, 37 L. Ed. 2d 796) (1973) . . . Nevertheless, . . . a significant impairment of First Amendment rights must survive exacting scrutiny." Elrod v. Burns, supra, (427 U.S.) at 362 (96 S. Ct. 2673, 49 L. Ed. 2d 547) (plurality opinion); accord, Id., at 381 (96 S. Ct. 2673) (POWELL, J., dissenting). "The (governmental) interest advanced must be paramount, one of vital importance, and the burden is on the government to show the existence of such an interest. . . . (C)are must be taken not to confuse the interest of partisan organizations with governmental interests. Only the latter will suffice. Moreover, . . . the Government must "(employ) means closely drawn to avoid unnecessary abridgment . . . .' Buckley v. Valeo, supra, (424 U.S.) at 25 (96 S. Ct. 612)." Id., (427 U.S.) at 362-363 (96 S. Ct. 2673) (plurality opinion).

 

431 U.S. at 259, 97 S. Ct. at 1812 (Powell, J., concurring in the Judgment).

 Thus, the required balancing is between the seriousness of the restriction on plaintiffs' rights and the governmental interest in leaving the challenged practice intact. On balance, the effect of the defendants' actions here is to impose a union shop agreement on the plaintiffs as a condition of their continued employment. Absent the safeguard of majority representation, the practice is overly and unnecessarily restrictive. In other contexts courts have held that statutorily authorized union security agreements, in conjunction with the statutory requirement *fn47" that a majority of the affected employees designate their chosen representative, are permissible infringements of the First Amendment right to associate. See generally, Railway Employes' Dept. v. Hanson, ("Hanson"), 351 U.S. 225, 76 S. Ct. 714, 100 L. Ed. 1112 (1956), Frankfurter, J. concurring. The Supreme Court in Hanson, supra, upheld the constitutionality of Section 2, Eleventh of the Railway Labor Act, 45 U.S.C. § 152, on the ground that the choice of a union shop in furtherance of the goal of labor peace was a permitted exercise of Congressional power under the Commerce Clause, U.S.Const. Article I, Section 8. Hanson, 351 U.S. at 225 at 233-35, 76 S. Ct. 714, 100 L. Ed. 1112. Remarked the Hanson court,

 

Congress has authority to adopt all appropriate measures to "facilitate the amicable settlement of disputes which threaten the service of the necessary agencies of interstate transportation." Texas & N.Q.R. Co. v. Railway Clerks, 281 U.S. 548, 570 (50 S. Ct. 427, 74 L. Ed. 1034). These measures include provisions that will encourage the settlement of disputes "by inducing collective bargaining with the True representative of the employees and by preventing such bargaining with any who do not represent them" (Virginian R. Co. v. Federation, 300 U.S. 515, 548 (57 S. Ct. 592, 81 L. Ed. 789)) and that will protect the employees against discrimination or coercion which would interfere with the free exercise of Their right to self-organization and representation. Labor Board v. Jones & Laughlin, 301 U.S. 1, 33 (57 S. Ct. 615, 81 L. Ed. 893).

 351 U.S. at 233, 76 S. Ct. at 718-719.

 The various statutorily authorized union security provisions, *fn48" have been held constitutional by this reasoning. See, e.g., Abood v. Detroit Board of Education, 431 U.S. 209, 225, 97 S. Ct. 1782, 52 L. Ed. 2d 261, Rehearing denied, 433 U.S. 915, 97 S. Ct. 2989, 53 L. Ed. 2d 1102 (1977). In Abood, which held, Inter alia, that an agency shop agreement is valid when the members' dues are used for collective bargaining expenses but that individual union members may not be compelled to make expenditures for political purposes with which they do not agree, the court said:

 

The designation of a union as exclusive representative carries with it great responsibilities . . . Moreover, in carrying out these duties, the union is obliged "fairly and equitably to represent all employees . . ., union and non-union," within the relevant unit. A union-shop arrangement has been thought to distribute fairly the cost of these activities among those who benefit, and it counteracts the incentive that employees might otherwise have to become "free riders" to refuse to contribute to the union while obtaining benefits of union representation that necessarily accrue to all employees.

 

To compel employees financially to support their collective-bargaining representative has an impact upon their First Amendment interests. An employee may very well have ideological objections to a wide variety of activities undertaken by the union in its role as exclusive representative. His moral or religious views about the desirability of abortion may not square with the union's policy in negotiating a medical benefits plan. One individual might disagree with a union policy of negotiating limits on the right to strike, believing that to be the road to serfdom for the working class, while another might have economic or political objections to unionism itself. An employee might object to the union's wage policy because it violates guidelines designed to limit inflation, or might object to the union's seeking a clause in the collective-bargaining agreement proscribing racial discrimination. The examples could be multiplied. To be required to help finance the union as a collective-bargaining agent might well be thought, therefore, to interfere in some way with an employee's freedom to associate for the advancement of ideas, or to refrain from doing so, as he sees fit. But the judgment clearly made in Hanson and Street is that such interference as exists is constitutionally justified by the legislative assessment of the important contribution of the union shop to the system of labor relations established by Congress.

 Id. at 221-22, 97 S. Ct. at 1792-1793 (citations and footnotes omitted). *fn49"

 It does not follow that because an employer is under no compulsion to accord his supervisors the "anomalous status of employees," *fn50" and thus may fire them if they join a union, that supervisory employees have no rights to select their representative by majority vote when and if the employer elects to and does recognize a union of supervisors. Here, the defendants argue that Hanna Mining Co. v. District 2, Marine Engineers Beneficial Ass'n., AFL-CIO, 382 U.S. 181, 86 S. Ct. 327, 15 L. Ed. 2d 254 (1965) and Beasley v. Food Fair of North Carolina, Inc., 416 U.S. 653, 94 S. Ct. 2023, 40 L. Ed. 2d 443 (1973), mandate a holding that BMO licensed deck officers, no matter by how much they outnumber their MMP counterparts, must either accept MMP or lose their jobs, being devoid of any protection under the Act. The Hanna Court dealt with a union's efforts to unionize supervisors, and held, Inter alia, that "activity designed to secure organization or recognition of supervisors cannot be protected by § 7 of the Act" 382 U.S. at 188, 86 S. Ct. at 331. In Beasley the Court held that supervisors, who are not protected by the Act, cannot be awarded damages for discharge by their employer. Neither case is based upon either an alleged constitutional right or the concept of majority representation. Moreover, unlike the instant case, the employers involved in Hanna and Beasley had not recognized the relevant union nor bargained with it. Therefore, these cases do not bar a holding that under the First Amendment plaintiffs are at least entitled to have their representative chosen by a majority vote, irrespective of whether they may be required to join a union as a condition of employment. The majority representation principle as it is reflected in statutes *fn51" and case law *fn52" constitutes a fundamental right in the labor relations context.

 Relief

 As indicated above, plaintiffs have been determined to be entitled to a declaration that representation by a union, not majority selected, constitutes a violation of their First Amendment rights. However, the protection of those rights should not result in the immediate disruption of the relationship between Farrell and MMP.

 The relief here granted to enforce plaintiffs' constitutional rights will be analogized to the relevant practice which is followed with respect to statutory employees who are "covered" by the NLRA.

 Plaintiffs represented in open court that an election might not be the only way to determine which union has majority status. If the parties are able to agree on a process, such as union card authorization, which would establish the majority status of the unions involved, such process would be satisfactory to this court, for as the Supreme Court has indicated in NLRB v. Gissel Packing Co., 395 U.S. 575, 597, 89 S. Ct. 1918, 23 L. Ed. 2d 547 (1969), Quoting from United Mine Workers v. Arkansas Flooring Co., 351 U.S. 62, 76 S. Ct. 559, 100 L. Ed. 941 (1956) when the NLRA applies,

 

"Board election is not the only method by which an employer may satisfy itself as to the union's majority status," 351 U.S. at 72, n.8, (76 S. Ct. 559), since § 9(a), "which deals expressly with employee representation, says nothing as to how the employees' representative shall be chosen," 351 U.S., at 71, (76 S. Ct. 559.)

 395 U.S. at 597, 89 S. Ct. at 1931. *fn53"

 In the event that the parties fail to agree on such a process, the statutory rules and National Labor Relations Board regulations relating to decertification proceedings will constitute a vade mecum for the court. *fn54" This declaration should therefore not serve to dislodge the present status quo or to alter the existing contractual terms and conditions of employment. If it is subsequently determined that MMP is not supported by the majority of the personnel in the relevant fleetwide unit, then, and only then, will it be determined that plaintiffs' constitutional rights, here declared, have been violated.

 The plaintiffs are directed to submit a judgment consistent with this opinion, on notice, to the clerk of this court within 14 days hereof.

 IT IS SO ORDERED.


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