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JENSEN v. FARRELL LINES

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 § ...


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