R.M. Perlman, Inc. v. New York Coat, Suit, Dresses, Rainwear & Allied Workers' Union Local 89-22-1, I.L.G.W.U., AFL-CIO

• Decision Date: 18 August 1994
• Docket Number: D,AFL-CIO,No. 1213,1213
• Citation: 33 F.3d 145
• Court: U.S. Court of Appeals — Second Circuit
• Parties: 147 L.R.R.M. (BNA) 2092, 128 Lab.Cas. P 11,163 R.M. PERLMAN, INC., doing business as Rebecca Moses Collection, and Rebecca Moses, Plaintiffs-Appellants, v. NEW YORK COAT, SUIT, DRESSES, RAINWEAR & ALLIED WORKERS' UNION LOCAL 89-22-1, I.L.G.W.U.,; Samuel Byer, as General Manager of N.Y. Coat, Suit, Dress, Rainwear & Allied Workers' Union Local 89-22-1, I.L.G.W.U.; International Ladies' Garment Workers' Union and Jay Mazur, as President of the International Ladies' Garment Workers' Union, Defendants-Appellees. ocket 93-9079.

Page 145

33 F.3d 145

147 L.R.R.M. (BNA) 2092, 128 Lab.Cas. P 11,163

R.M. PERLMAN, INC., doing business as Rebecca Moses

Collection, and Rebecca Moses, Plaintiffs-Appellants, v. NEW YORK COAT, SUIT, DRESSES, RAINWEAR & ALLIED WORKERS'

UNION LOCAL 89-22-1, I.L.G.W.U., AFL-CIO; Samuel Byer, as

General Manager of N.Y. Coat, Suit, Dress, Rainwear & Allied

Workers' Union Local 89-22-1, I.L.G.W.U.; International

Ladies' Garment Workers' Union and Jay Mazur, as President

of the International Ladies' Garment Workers' Union,

Defendants-Appellees.

No. 1213, Docket 93-9079.

United States Court of Appeals, Second Circuit.

Argued March 8, 1994.

Decided Aug. 18, 1994.

Joel E. Cohen, New York City (Mudge Rose Guthrie Alexander & Ferdon, of counsel), for plaintiffs-appellants.

Thomas M. Kennedy, New York City (Lewis, Greenwald, Kennedy, Lewis, Clifton & Schwartz, P.C., of counsel), for defendant-appellee New York Coat, Suit, Dress, Rainwear & Allied Workers' Union, Local 89-22-1, ILGWU.

Brent Garren, New York City (Max Zimny, of counsel), for defendant-appellee International Ladies' Garment Workers' Union.

Before: CARDAMONE, PRATT and MINER, Circuit Judges.

CARDAMONE, Circuit Judge:

We review on this appeal a special proviso inserted in a federal statute to preserve certain union practices believed helpful in combating the blight of sweatshops in the garment industry. Sweatshops may be defined as businesses that regularly violate wage, child labor, safety and health laws. These establishments, which pay workers below living wages for long hours of work under intolerable conditions, have existed in the United States for over 100 years. The evils associated with sweatshops were brought to the public's attention forcibly in 1911 by the tragic fire at the Triangle Shirtwaist Factory in New York City where 150 women who were trapped inside the factory lost their lives. As a result of public outrage, union activity on behalf of garment workers--supported by federal law--ensued.

Plaintiffs R.M. Perlman, Inc., doing business as Rebecca Moses Collection, and Rebecca Moses appeal from a judgment of the United States District Court for the Southern District of New York (Carter, J.) entered September 14, 1993, 833 F.Supp. 238, denying plaintiffs' motion for summary judgment, granting defendants' cross-motion for summary judgment and dismissing plaintiffs' complaint that sought damages from the New York Coat, Suit, Dress, Rainwear, and Allied Workers' Union Local 89-22-1 and the International Ladies' Garment Workers' Union pursuant to Sec. 303(b) of the National Labor Relations Act of 1947, as amended, 29 U.S.C. Sec. 187(b) (1988).

BACKGROUND

A. Facts

R.M. Perlman, Inc., a fledgling fashion designer and wholesale vendor of women's apparel, and Rebecca Moses (collectively Perlman or plaintiffs) commenced operations in January 1988 by marketing a line of designer sportswear under the "Moses Collection" label. In fashion industry parlance, Perlman is known as a "jobber." Its product is manufactured by "contractors" who employ production workers. The jobber designs the garments and turns the design specifications over to a contractor who integrates the fabric and other materials into completed garments. The finished goods are returned to the jobber, who then sells them to retailers, specialty shops and other buyers. Perlman utilized both union and nonunion contractors to make its garments.

In April 1989 the New York Coat, Suit, Dress, Rainwear, and Allied Workers' Union Local 89-22-1 (Local) learned that Perlman was using contractors that employed production workers represented by the International Ladies' Garment Workers' Union (I.L.G.W.U. or International). The Local Nearly a year and a half later, without further discussion regarding the sample jobber's agreement it had sent to Perlman in April 1989, the Local began picketing Perlman in September 1990, to induce it to sign the agreement. At a meeting to discuss this subject Perlman expressed reservations because it had worked with union contractors who were unable to meet its quality and/or delivery specifications. Plaintiffs had several other concerns about entering into a jobber's contract: potential pension fund withdrawal liability, liability for liquidated damages for imported production, and the possibility that the clause forbidding it from using nonunion truckers might subject it to an unfair labor practice charge.

corresponded with Perlman and urged it to enter into what has become known as a "jobber's or Hazantown agreement." "Hazantown agreement" is a term derived from Danielson v. Joint Board of Coat, Suit & Allied Garment Workers' Union, 494 F.2d 1230, 1231-32 (2d Cir.1974), a case in which the jobber's name was Hazantown, Inc. We ruled in Danielson that secondary picketing to achieve a jobber's agreement was not an unfair labor practice. See id. at 1236; Jou-Jou Designs, Inc. v. I.L.G.W.U., 643 F.2d 905, 907 (2d Cir.1981). A Hazantown agreement regulates the relationship between a jobber and its contractors, requiring the jobber to hire only those contractors whose employees are members of the I.L.G.W.U. Such an agreement has no effect on the relationship between a jobber and its own employees. Thus, Perlman's 15 employees--designers, samplemakers and sales and administrative staff--were not the target of the Local's efforts to have the employer enter such an agreement.

On October 23, 1990 the Local sent Perlman a copy of a model jobber's agreement, which Perlman said it would not sign. It proposed instead a different type of contract, one permitting it to use both union and nonunion contractors in the same percentages in the future as it had in the past, and not to be held responsible for direct contributions to the employee pension fund. A few days later the Local informed Perlman its suggestions were unacceptable and that the Local would picket a fashion show featuring the Moses Collection scheduled to begin the following Monday at the Plaza Hotel in New York City. This seasonal fashion show, attended by major retailers and representatives of international fashion publications, is the key to a fashion designer's ability to sell its line. In addition--because of plaintiffs' refusal to sign a jobber's agreement--the Local informed union contractors that they would be in violation of their labor contracts if they assembled garments for Perlman. Reports of Perlman's dispute with the Local appeared in both Women's Wear Daily and New York Woman, publications with wide readership in the garment trade.

As a consequence of the Local's actions, Perlman filed an unfair labor practice charge against it with the National Labor Relations Board (Board). Plaintiffs complained, pursuant to the National Labor Relations Act of 1947, as amended, 29 U.S.C. Sec. 158(b)(4)(A) (1988) (Act), that the Local was picketing to obtain Perlman's signature on a jobber's agreement that contained four clauses in violation of Sec. 8(e) of the Act, 29 U.S.C. Sec. 158(e). Those clauses are:

Article Fourth: Employer's Continuing Obligations

The Employer and its transferees, successors and assigns, shall be bound by and be personally and individually liable for the performance of all of the provisions of this agreement during its entire term.

The Employer shall not enter into any partnership or consolidate or merge with or become the successor or assign of another person, firm or corporation unless the resulting firm assumes all accrued and future obligations to the Union and the benefit funds towards which payments are required to be made under this agreement on the total gross amount paid or due to his contractors.

Article Seventh: Struck Work--Labor Dispute

(Trimmings Clause)

2. Whenever the Union notifies the Employer that it has [trimmings, belts, buttons, buckles, etc.] or any other accessories ... manufactured by, or is purchasing such articles or services from contractors

which are not in contractual relations with [the] International or any of its affiliates, or against whom the International or an affiliate thereof has declared a strike or with whom any of them has a labor dispute, the Employer shall cease further dealings until the strike is settled and/or the contractor enters into an agreement with the International or an affiliate thereof.

Article Seventh: Struck Work--Labor Dispute

4. To the extent permitted by law, it shall not be considered a breach of this agreement on the part of the Union or the International or on the part of any worker of any of its contractors if such worker refuses to cross any picket line recognized by the Union or the International or to enter upon the picketed premises of the contractor, either of his own violation or by direction of the Union or the International.

Article Eighteenth: Trucking

To the extent permitted by law, the Employer shall have all of its trucking of garments and of cut and uncut goods done exclusively by workers who are employed in collective bargaining agreements with Local 102, I.L.G.W.U., which are observed and fully complied with.

In response to the unfair labor practice charge, the Local assured Perlman that the recited clauses in the proposed jobber's agreement were subject to good faith collective bargaining, and that "no provision in the agreement ... represent[ed] an absolute to the Union." Even after receiving these assurances, Perlman refused to bargain further unless the Local removed the offending clauses. As the parties were at an impasse, resolution of this dispute was left to the Board.

The Board's Regional Director dismissed Perlman's charge, finding the clauses did not violate Sec. 8(e) of the Act and, even if they did, the Local was not insisting on, but simply negotiating for, them. Perlman appealed to the Board's General Counsel, who sustained the appeal and remanded the case to the Regional Director with instructions to issue an unfair labor practice complaint against the Local and to make a...