INTERNATIONAL LADIES'GW UNION v. Donnelly G. Co., 11605.

Citation119 F.2d 892
Decision Date11 July 1941
Docket NumberNo. 11605.,11605.
PartiesINTERNATIONAL LADIES' GARMENT WORKERS' UNION et al. v. DONNELLY GARMENT CO. et al.
CourtUnited States Courts of Appeals. United States Court of Appeals (8th Circuit)

Emil Schlesinger, of New York City (Nathan Greene, of New York City, Charles A. Horsky, of Washington, D. C., Jerome Walsh, of Kansas City, Mo., and Joseph A. Padway, Graham Claytor, Jr., and Covington, Burling, Rublee, Acheson & Shorb, all of Washington, D. C., on the brief), for appellants.

James A. Reed and William S. Hogsett, both of Kansas City, Mo. (Robert J. Ingraham, of Kansas City, Mo., on the brief), for appellee Donnelly Garment Co. and another.

Frank E. Tyler, of Kansas City, Mo. (Thomas J. Patten and Lucian Lane, both of Kansas City, Mo., on the brief), for appellees Donnelly Garment Workers' Union.

Before GARDNER, SANBORN, and WOODROUGH, Circuit Judges.

Judgment Modified July 11, 1941. See 121 F.2d 561.

SANBORN, Circuit Judge.

This action grows out of an attempt by the International Ladies' Garment Workers' Union (hereinafter called the International) to compel the employees of the Donnelly Garment Company, of Kansas City, Missouri, a large manufacturer of women's dresses, doing a nation-wide business, to join the International and to force the Company to coerce its employees into joining the International, although none of them is a member of that union and all of them have served notice upon the Company that they do not choose to be represented by the International for purposes of collective bargaining. The means which the plaintiffs charge that the International proposes to use to compel the unionization of the Company's employees are, in brief, forceful and mass picketing in order to close the factory, and a secondary boycott against the customers of the Company to induce them to refuse to purchase its product. The Donnelly Garment Company and its affiliate, the Donnelly Garment Sales Company, as plaintiffs, brought this action to enjoin the International, its officers and agents, as defendants, from committing acts of fraud and violence and from boycotting the plaintiffs' customers in furtherance of an alleged conspiracy in restraint of interstate trade and commerce, in violation of the Sherman Act, 15 U. S.C.A. § 1 et seq. The Donnelly Garment Workers' Union, an independent labor organization of the employees of the Donnelly Garment Company, and the representatives of that organization intervened. The interveners asked that the plaintiffs have the relief which they prayed for and that, in addition, the plaintiffs be enjoined from recognizing the International as the representative of the employees for purposes of collective bargaining. After the sufficiency of the plaintiffs' amended complaint to state a claim upon which relief could be granted had been sustained by this Court (99 F.2d 309), issues were joined, and the case was tried. The findings of fact and conclusions of law of the court below were in favor of the plaintiffs and the interveners, and the court entered a decree enjoining the defendants from committing acts of fraud and violence and from conducting a secondary boycott in furtherance of their alleged conspiracy to restrain the interstate trade and commerce of the plaintiffs. From this decree the defendants have appealed.

The decree is challenged upon many grounds, but the question which must first be determined is that of jurisdiction. Jurisdiction is predicated solely upon the Sherman Act, and if that Act is inapplicable, as the defendants assert, the court below was without jurisdiction.

By the terms of the Sherman Act, a federal court has power to enjoin "every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations", 15 U.S. C.A. § 1, subject, of course, to the immunities, conditions and limitations contained in § 20 of the Clayton Act, 29 U.S.C.A. § 52, and in the Norris-LaGuardia Act, 29 U. S.C.A. §§ 101-115. See Milk Wagon Drivers' Union v. Lake Valley Farm Products, Inc., 311 U.S. 91, 100, 61 S.Ct. 122, 85 L. Ed. ___, and United States v. Hutcheson, 312 U.S. 219, 231, 61 S.Ct. 463, 468, 85 L.Ed. ___. A federal court cannot, of course, acquire jurisdiction under the Sherman Act to enjoin contracts, combinations or conspiracies which are not in restraint of trade or commerce within the meaning of the Act. Apex Hosiery Co. v. Leader, 310 U.S. 469, 60 S.Ct. 982, 84 L.Ed. 1311, 128 A.L.R. 1044. Therefore, the controlling issue on the question of jurisdiction is whether the concerted action of the defendants constituted a combination or conspiracy "in restraint of trade or commerce among the several States."

In considering the question of jurisdiction, we accept as established the following facts: That the Donnelly Garment Company has a large manufacturing plant at Kansas City where it employs some 1,300 persons and makes women's dresses which are sold in interstate commerce through the Donnelly Sales Company to retailers throughout the United States. That the Donnelly Garment Company's annual sales amount to approximately $5,000,000. That its relations with its employees have always been harmonious. That the hours which they are required to work, the wages paid to them, and the working conditions in the factory are better than those in similar factories which have been unionized by the defendants. That the defendants have at all times during the existence of their controversy with the plaintiffs insisted that the Donnelly Garment Company disregard the wishes of its employees with respect to representation for purposes of collective bargaining, that it recognize the International as the exclusive bargaining agent for all of the Company's employees, and that the Company disregard the contracts which it has entered into with its employees, through their independent union, relative to representation, hours, wages and working conditions. That the plaintiffs have determined that they will not coerce the employees of the Donnelly Garment Company with respect to representation and will not compel them to join the International. That, unless restrained, the defendants will, through acts of fraud and violence and the use of a secondary boycott, destroy the interstate trade and commerce of the plaintiffs, in furtherance of the determination of the International to unionize the employees of the Donnelly Garment Company.

Since fraud and violence do not condition jurisdiction under the Sherman Act (Apex Hosiery Co. v. Leader, 310 U. S. 469, 513, 60 S.Ct. 982, 84 L.Ed. 1311, 128 A.L.R. 1044), those factors will be left out of consideration. The question, then, is whether a labor union which proposes to effect the unionization of the employees of an employer engaged in interstate commerce by stopping production and distribution of his goods through closing his factory and inducing his customers in other states, by picketing their places of business, not to purchase his goods, constitutes a vilation of the Sherman Act in the absence of proof that the intention of the union, or the necessary effect of its threatened activities, is to control or substantially to affect, to the detriment of consumers, the market for the class of goods which the employer produces.

If the efforts of the International were directed solely at stopping production at the plant of the Garment Company at Kansas City, Missouri, the court below would clearly have been without jurisdiction, under Apex Hosiery Co. v. Leader, supra, which, so far as such efforts are concerned, is not distinguishable from this case. The question, then, is whether the activities of the International which were directed at inducing the customers of the Company to refuse to purchase its goods constituted such a restraint upon interstate commerce as to bring the entire combination or conspiracy within the Sherman Act and to enable the court below to enjoin all acts of fraud and violence affecting either production or distribution.

This case was tried upon the theory that the plaintiffs' interstate commerce was protected by the Sherman Act against all restraints which obstructed the free flow of commerce between the states or which restricted "the liberty of a trader to engage in business." Loewe v. Lawlor, 208 U.S. 274, 293, 28 S.Ct. 301, 303, 52 L.Ed. 488, 13 Ann.Cas. 815. The plaintiffs regarded as applicable to their situation the principles announced in that case and in other like cases which followed it. Lawlor v. Loewe, 235 U.S. 522, 35 S.Ct. 170, 59 L. Ed. 341; Duplex Printing Press Co. v. Deering, 254 U.S. 443, 41 S.Ct. 172, 65 L. Ed. 349, 16 A.L.R. 196; Bedford Cut Stone Co. v. Journeymen Stone Cutters' Association, 274 U.S. 37, 47 S.Ct. 522, 71 L.Ed. 916, 54 A.L.R. 791; Coronado Coal Co. v. United Mine Workers, 268 U.S. 295, 45 S. Ct. 551, 69 L.Ed. 963. The plaintiffs did not attempt to show that the destruction of their interstate commerce would materially reduce the supply of women's dresses upon the market, or would affect the market prices of such dresses, or would confer market control of women's dresses upon the International, or would destroy or substantially affect competition in the dress market; nor was there any evidence that the International had any motive for its threatened activities other than to force the employees of the Donnelly Garment Company to become members of the International and be represented by it for purposes of collective bargaining.

When this case was tried it was generally believed that concerted action by a labor union to compel an employer to yield to its demands under threat of destruction of his interstate trade and commerce through a secondary boycott or otherwise was prohibited by the Sherman Act, regardless of whether that interstate trade was large or small and regardless of the effect of its destruction upon the general market for the class of goods which the employer...

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  • Donnelly Garment Co. v. INTERNATIONAL LADIES'GW UNION
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