The opinion of the court was delivered by: COOPER
OPINION ON LIABILITY PHASE AFTER NON-JURY TRIAL
This is a damage action against a local union under Section 303 of the National Labor Relations Act, as amended ("the Act") (29 U.S.C. § 198)
for injuries to plaintiff allegedly arising from defendant's violations of Section 8(b)(4) of the Act 29 U.S.C. § 158(b)(4).
It was bifurcated into a first phase non-jury trial on liability, now completed, and a second phase on damages, to be scheduled.
This opinion, which disposes of motions made during trial, contains the Court's findings of fact and conclusions of law as required under Rule 52 of the Federal Rules of Civil Procedure.
Defendant is Local 3, International Brotherhood of Electrical Workers, AFL-CIO (Local 3). It is an unincorporated association in which employees participate and which exists for the purpose, in whole or in part, of dealing with employers concerning grievances, labor disputes, wages, rates of pay, hours of employment or conditions of work. (Stipulation of Fact 1) Local 3's principal office is at 158-11 Jewel Avenue, Flushing, New York and it is engaged within this judicial district in transacting business and in promoting and protecting the interest of its employee-members. (Stipulation of Fact 2)
Plaintiff is United Technologies Communication Company ("UTCC"), a Delaware Corporation. Since July 23, 1982, it has been engaged in the business of selling, installing and maintaining private telephone systems with premises located at 420 Lexington Avenue, Suite 540, New York, New York. UTCC, in the normal course of business operations, receives goods and products directly from suppliers located outside the State of New York valued annually in excess of $50,000. It is an employer engaged in commerce and in business affecting commerce within the meaning of § 2(1), (2), (6), and (7), § 8(b)(4), and § 303 of the National Labor Relations Act ("the Act"). (Stipulation of Fact 5).
Plaintiff's technical employees, though not covered by Local 3, have union affiliation. It has collective bargaining agreements with communication Workers of America, AFL-CIO (CWA), which are administered, insofar as they cover employees at their New York facilities in the classifications of installer technicians, communications technicians and senior communications technicians, by Local 1109. (Stipulation of Fact 10). Local 1109 is an organization in which employees participate and which exists for the purpose, in whole or in part, of dealing with employers concerning grievances, labor disputes, wages, rates of pay, hours of employment and conditions of work. (Stipulation of Fact 3). Its principal office is in Brooklyn, New York and it is engaged in this judicial district in transacting business and in promoting and protecting the interests of its employee-members. (Stipulation of Fact 4).
The Complaint and Pre-Trial Order
Plaintiff's complaint sets forth two separate causes of action for damages. The first arises from allegedly illegal secondary boycotts in violation of § 8(b)(4)(B) of the Act, 29 U.S.C. § 158(b)(4)(B). The second is for allegedly illegal jurisdictional disputes in violation of § 8(b)(4)(D) of the Act, 29 U.S.C. § 158(b)(4)(D).
Under these causes, plaintiff must plead and prove defendant's secondary boycott or jurisdictional objective and either that defendant induced or encouraged one or more individuals employed by any person engaged in commerce to engage in "a strike or a refusal in the course of his employment to use, manufacture, process, transport, or otherwise handle or work on any goods, articles, materials, or commodities or to perform any services" (§ 8(b)(4)(i)), or "threaten[ed], coerce[d], or restrain[ed] any person engaged in commerce or in an industry affecting commerce" (§ 8(b)(4)(ii)).
More specifically, the essential allegations of the complaint state that:
(a) at one site, Two Broadway, New York City, the defendant "repeatedly interrupted [GDCC's] employees and prevented them from work" and "refused to continue work on their jobs if [GDCC] and its employees were permitted to continue installing a telephone system," and "have cut light cables, have caused temporary lighting to be cut off in the area of [GDCC's] work, and otherwise have harassed and threatened [GDCC]," (Complaint PP10-15), resulting in damages of "approximately $30,000 by virtue of the delays and installation schedule disruptions caused by defendants." (Complaint P20)
(b) at a second site, One Broadway, New York City, the defendant "refused to continue work on the job if [GDCC's] subcontractor Triboro were permitted to continue installing the telephone system," and "cut electrical cables," as a result of which "the party with whom [GDCC] had contracted to install a telephone system cancelled the work," resulting in damages of approximately $100,000 (Complaint PP16-20).
(c) GDCC further claimed damages of "a not yet determined loss of potential business" (Complaint PP21 and 24).
(d) one purpose of defendant's conduct was to force employers and their employees to cease doing business with GDCC (Complaint PP22 and 26).
(e) another purpose of defendant's conduct was to force GDCC to assign particular work to employees that Local 3 represents (Complaint PP23 and 26).
Defendant's answer generally denies knowledge of and responsibility for the acts alleged in the complaint and claims that plaintiff failed to state a claim upon which relief may be granted.
The pre-trial order, dated November 1, 1982, identifies, in addition to the two sites on Broadway, New York, ten potential customers in New York City by name as to which plaintiff claims damages for lost sales under the complaint (Complaint PP21 and 24). Certain evidence as to them was adduced at trial over defendant's objection that plaintiff had failed to move for leave to amend its complaint, thereby depriving defendant of an opportunity to move to dismiss on the pleadings for lack of statutory jurisdiction and for failure to state a claim (Defendant's Post-Trial Memorandum, p. 3). Defendant's objection is rejected. It has neither claimed nor shown prejudice in discovery or in asserting legal defenses; the complaint had put it on notice that the damages sought included lost sales and were not limited to the Broadway sites; and plaintiff's discovery early addressed the claimed lost sales. In any event, plaintiff's complaint is deemed amended to conform to the proof at trial and any effort to show absence of statutory jurisdiction can be renewed at the phase II trial proceedings in this action.
In addressing the multiple contentions and factual issues raised by the parties, we will divide this opinion, after some background comments and findings, into six additional sections. The first two contain factual findings relating to the Broadway sites where GDCC had contracts to sell and install telephone equipment which were terminated or modified allegedly because of Local 3's unlawful actions.The third addresses collateral estoppel issues arising from prior decisions of the National Labor Relations Board (NLRB) which discussed these Broadway sites. The fourth turns to evidence of claimed lost sales to potential GDCC customers. The fifth contains discussion of legal issues and certain ultimate legal conclusions. The final section sets forth the Court's direction as to further proceedings in this action.
Plaintiff makes much of the long history of Local 3's conduct as shown by legislative materials,
administrative and judicial proceedings
and agency findings in recent administrative cases arising from facts at issue here,
all of which found Local 3 to be in violation of law. Indeed, as Judge Edward Weinfeld noted early in this case in an injunctive context (requiring only a finding of reasonable grounds to believe the facts alleged) concerning defendant's conduct at the One Broadway site at issue, there is evidence to show that "at different sites in the Metropolitan [New York] area where [workers of CWA, plaintiff's employees' union] were engaged in telephone installation work, respondent and its members pursued a persistent and recurrent pattern of conduct in the enforcement of its total job policy which resulted in strikes or stoppages and other conduct proscribed by the Act. [Citing Fed. R. Evid. § 404(b) and U.S. v. Chestnut, 533 F.2d 40, 49 (2d Cir.), cert. denied, 429 U.S. 829, 50 L. Ed. 2d 93, 97 S. Ct. 88 (1976)]." Silverman v. Local 3, IBEW, 110 LRRM 2242, 2245 (S.D.N.Y. 1981).
The "total job policy" finds expression in section 12 of Article XIII of the by-laws of Local 3 which are given to members of the Local (Pl. Trial Ex. 25, Sections 10 and 12, at 21):
"No member is to give away work coming under the jurisdiction of this Local, or to allow any other tradesmen to do work coming under this Local's jurisdiction."
In effect for many years (Stipulation of Fact 16), this by-law has been the subject of rulings by the National Labor Relations Board (the "Board") and Courts of Appeal, and has been specifically held by the Board to be an illegal inducement to strike in violation of § 8(b)(4)(i). Local No. 3, IBEW (LMM. Ericsson Telecommunications, Inc.), 257 NLRB 1358 (1981) enforced by consent order, No. 82-4030 (2d Cir. 1982). See IBEW v. NLRB, 341 U.S. 694, 701-02, 71 S. Ct. 954, 95 L. Ed. 1299 (1951) ("The words "induce or encourage" are broad enough to include in them every form of influence and persuasion."); NLRB v. Local 3, 730 F.2d 870 (2d Cir. 1984); Joliet Contractors Ass'n v. NLRB, 202 F.2d 606, 611-12 (7th Cir.), cert. denied, 346 U.S., 824, 98 L. Ed. 349, 74 S. Ct. 40 (1953).
In this context, defendant properly cautions that the Court should not find Local 3's proclivity for violation of § 8(b)(4) as evidence of liability in the damage action here. We agree that liability here is not, nor should it be, predicated upon a history, even if extensive, of prior violations or the fact, alone, that the by-law continues to exist. See Glasser v. NLRB, 395 F.2d 401 (2d. Cir. 1968). Aside from partial collateral estoppel discussed below, as to the One Broadway site, we nonetheless do find Local 3's prior conduct relevant and material in evaluating the specific evidence adduced at trial, including evidence as to the Broadway sites, practices in the New York Metropolitan area marketplace and the practical effects of that history in conditioning customers' perceptions of risks in securing non-Local 3 labor and products -- factors to be evaluated with the total mix of circumstances which plainly affect plaintiff's business and business opportunities.
Plaintiff's Contract With Fox Glynn & Melamed at One Broadway
The following facts are not in dispute. On or about March 20, 1981, Fox Glynn & Melamed, a New York law partnership, contracted with GDCC for the installation of a telephone system at offices which Fox Glynn & Melamed leased on the sixth and seventh floors at a building being renovated and located at One Broadway, New York, New York.
Morse Diesel, Inc., the general contractor involved in the renovation of the building,
subcontracted the electrical work, sometime prior to June 1981, to Henry Paul, Inc., an electrical contractor using Local 3 labor in the construction industry.
GDCC, on or about June 26, 1981, subcontracted a portion of the telephone installation work to Triboro Telephone Planning and Interconnect, Inc. who used CWA labor.
(Stipulations of Fact 6-9, 12-13).
Fox Glynn & Melamed cancelled its contract with GDCC because of the alleged delays in installing the phone system and GDCC's alleged use of "incompatible labor." (Stipulation of Fact 27).The project for Fox Glynn & Melamed was completed by Telecom, a competitor of GDCC, whose technicians were members of Local 3 (Stipulation of Fact 28).
The precipitating events for the cancellation began on Tuesday, June 30, 1981, when James DiTusa, a Local 3 member and foreman for Henry Paul, Inc., with his apprentice (also represented by Local 3) absented themselves from the seventh floor for two days. "The motivating reason for Mr. DiTusa's not working on the sixth (sic) floor was the fact that non-Local 3 personnel had performed work to install a telephone system which DiTusa felt should have been performed by themselves." UTCC and its subcontractor Triboro were requested by the customer to stay away from the job site because the electricians would not work alongside them. (Stipulation of Fact 24).
The following day, on July 1, 1981, Morse Diesel, the general contractor at One Broadway, informed Muna Realty, Fox Glynn & Melamed's landlord, by telex that a work stoppage had occurred on the seventh floor at One Broadway because "Fox, Glynn & Melamed has employed a non-Local 3 approved telephone installer from General Dynamics to perform work on the seventh floor." The telex, which defendant stipulates was sent, but not that it was accurate, had instructed Muna to "advise" its tenant. (Stipulation of Fact 25). Fox Glynn & Melamed was concerned because its lease had a "harmonious labor" clause. (Tr. 110).
Approximately one week later, on July 9, 1981, GDCC met with Fox Glynn & Melamed to determine what steps could be undertaken to recommence the telephone installation work; during this meeting, a close examination of the status of the project was made (Stipulation of Fact 6). Shortly thereafter, GDCC's contract was terminated.(Tr. 67, 79).
These facts in place, the parties disagree both as to their import and other matters concerning the events leading to the termination of the contract as shown by testimony at trial.
In view of our finding below that Local 3 is collaterally estopped from denying liability with respect to its conduct at One Broadway, we do not discuss all material aspects of the evidence in the record which, alternatively and independently, we find supports a finding of liability under Section 8(b)(4)(B) as to this site.
The credible testimony, beyond the stipulated facts, however, shows that, prior to cancelling plaintiff's contract, Fox Glynn & Melamed were informed or observed and believed that:
(a) James diTusa, Local 3's electrician foreman, complained that unauthorized labor, referring to GDCC, "not local approved," referring to Local 3, was pulling telephone cables on the seventh floor at One Broadway and, for that reason, walked off the job (Tr. 102, 121, 123).
(b) Temporary lights were out in the seventh floor work area on June 30, 1981 where no electricians were working and GDCC employees were pulling cable (Tr. 124).
(c) Local 3 personnel would not return to the seventh floor while non-Local 3 personnel were doing the GDCC job, (Tr. 124) and thus Fox Glynn & Melamed, to avoid delay in electrical work, asked plaintiff on July 1 not to send their nonLocal 3 employees to pull more telephone cables. Fox Glynn & Melamed then thought the schedule for completing telephone installation could still be met. (Tr. 128).
(d) Merrill, Lynch was having a problem concerning use of non-Local 3 labor, as of June 28, 1981, at space across the street from Fox Glynn & Melamed where GDCC was installing a private telephone system. (Tr. 53).
(e) About 30 telephone cables found cut on the seventh floor at One Broadway on July 9, 1981, jeopardized GDCC's meeting of the rescheduled August 14, 1981 installation date (Tr. 71). Fox Flynn & Melamed treated the contract with GDCC as breached and terminated it. (Tr. 131-2).
Plaintiff's Operations Supervisor at One Broadway, Peter Sarni, testified that he called the police on July 9 to report that the seventh floor telephone cable was cut, which Sarni's testimony convinces us it was, but the record is devoid of credible evidence as to whether the police responded, what investigation, if any, was conducted, and what, if anything, eventuated from any investigation.
Further, there is no direct evidence that any officer or business agent of Local 3, prior to July 10, 1981, was advised specifically of what problems existed concerning GDCC's work at One Broadway.
Plaintiff did, however, notify defendant's counsel, trial counsel in this action who did not testify on June 30, 1981, by telephone of a walkoff by Local 3 from the job at "One or Two Broadway" involving Morse Diesel. We infer from the circumstances and content of the discussions that defendant was "on notice" in fact on June 30, 1981. (Tr. 510, 512-4.) Defendant's reliance on plaintiff's failure to send a confirmatory letter, clearly a step which foresight should have prompted, does not lead us to conclude ...