Jewel Tea Co. v. ASSOCIATED FOOD RETAILERS OF GTR. CHICAGO

• Decision Date: 14 May 1964
• Docket Number: No. 14119,14196.,14119
• Citation: 331 F.2d 547
• Parties: JEWEL TEA COMPANY, Inc., a New York corporation, Plaintiff-Appellant, v. ASSOCIATED FOOD RETAILERS OF GREATER CHICAGO, INC., an Illinois corporation, and Charles H. Bromann, Defendants-Appellees. JEWEL TEA COMPANY, Inc., a New York corporation, Plaintiff-Appellant, v. LOCAL UNIONS NOS. 189, 262, 320, 546, 547, 571 AND 638, AMALGAMATED MEAT CUTTERS AND BUTCHER WORKMEN OF NORTH AMERICA, AFL-CIO, et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

331 F.2d 547 (1964)

JEWEL TEA COMPANY, Inc., a New York corporation, Plaintiff-Appellant, v. ASSOCIATED FOOD RETAILERS OF GREATER CHICAGO, INC., an Illinois corporation, and Charles H. Bromann, Defendants-Appellees.

JEWEL TEA COMPANY, Inc., a New York corporation, Plaintiff-Appellant, v. LOCAL UNIONS NOS. 189, 262, 320, 546, 547, 571 AND 638, AMALGAMATED MEAT CUTTERS AND BUTCHER WORKMEN OF NORTH AMERICA, AFL-CIO, et al., Defendants-Appellees.

Nos. 14119, 14196.

United States Court of Appeals Seventh Circuit.

April 27, 1964.

Rehearing Denied May 14, 1964.

George B. Christensen, Theodore A. Groenke, Fred H. Daugherty, Samuel Weisbard, Chicago, Ill., for appellant.

Allen Whitfield, Harley A. Whitfield, Des Moines, Iowa, Whitfield, Musgrave, Selvy & Kelly, Des Moines, Iowa, of counsel, for National Livestock Feeders Ass'n, amicus curiae.

Bernard Dunau, Washington, D. C., Sidney M. Libit, Lester Asher, Leo Segall, Robert C. Eardley, Chicago, Ill., for appellees.

Before HASTINGS, Chief Judge, and DUFFY and SCHNACKENBERG, Circuit Judges.

Rehearing Denied in No. 14119 May 14, 1964.

SCHNACKENBERG, Circuit Judge.

Jewel Tea Company, Inc., a New York corporation, plaintiff, has appealed from judgments entered by the district court, after our remand in case No. 12653.¹

This action is for a declaratory judgment and seeks relief under the Sherman Act. 15 U.S.C.A. §§ 1 and 2.

At a trial, the district court dismissed defendants Associated Food Retailers of Greater Chicago, Inc., an Illinois corporation, and Charles H. Bromann, its secretary, at the close of plaintiff's case,² which action is attacked in No. 14119, and dismissed the complaint as to the defendants Local Unions Nos. 189, 262, 320, 546, 547, 571 and 638 of Amalgamated Meat Cutters and Butcher Workmen of North America AFL-CIO and certain officers and representatives of the unions as named in our opinion in case No. 12653, at the close of all the evidence,³ which action is attacked in No. 14196. The appeals have been consolidated here.

Plaintiff contends that the district court erroneously failed to follow the law of the case and the principles of antitrust law, and disregarded the arbitrary and unreasonable nature of the restraint (imposed by defendants on plaintiff's business) and the magnitude of its effect on trade. Defendants urge that plaintiff failed to prove a conspiracy, and that union activity to attain market operating hours is a reasonable regulation of trade not within the prohibition of the Sherman Act, and does not restrain interstate commerce. Also, they argue that plaintiff failed to prove injury to its business or property and that it is in pari delicto.

In our prior opinion, 274 F.2d at 221, we said:

"Facts set forth in the complaint show a `wide-spread public demand in the Chicago area that meat be available for retail purchase at Jewel stores during one or more evenings of the week.\' Plaintiff has an untrammeled right to determine its course of action in respect to this matter.

"Whether one system of marketing or another offers the greater good and better prices in any given community is to be determined by the public: the laws of free competition may not be thwarted by a combination of employers and unions who conspire to prevent commercial development."

The evidence admitted by the district court on remand is in the record now before us. It sustains the material allegations of the complaint. There are no factual disputes revealed by the evidence. No question as to the credibility of any witnesses on any issue which we consider relevant, has been raised. Therefore, our holding of the law on the facts as stated in the complaint we now adopt as our holding of the law as applied to the evidence upon remand. Especially do we reaffirm our rejection of defendants' contention that an agreement pertaining to market operating hours is exempt from the antitrust laws since it was entered into in the self-interest of the employees to attain or maintain conditions deemed by the union relevant to the employees' working welfare. Significantly, we then quoted from Allen Bradley Co. v. Local Union No. 3, IBEW, 325 U.S. 797 at 808-810, 65 S.Ct. 1533 at 1539, 89 L.Ed. 1939 (1945), where the exemption was qualified, the court stating:

"* * * Congress never intended that unions could, consistently with the Sherman Act, aid non-labor groups to create business monopolies and to control the marketing of goods and services.

* * * * * *

"Our holding means that the same labor union activities may or may not be in violation of the Sherman Act, dependent upon whether the union acts alone or in combination with business groups. * * *" (Emphasis supplied.)

The district court sought to support its decision by citing the fact that, as a result of collective bargaining between the meat butchers and the retailers in 1920, they entered into an agreement which covered many questions in dispute, including a limitation on marketing hours. The court points out that when plaintiff came into the Chicago area in 1933, it entered into similar agreements with defendant unions. Such agreements did follow in succession until 1957 when plaintiff raised and insisted upon the position it takes in this case. Plaintiff in 1957, 1959 and 1961 sought an agreement on evening operations. It was unsuccessful.

The district court states as its principal finding that the "restriction against evening hours was imposed after arm's length bargaining, * * * These are not objects which the antitrust laws proscribe. They are conditions of employment, and as such are clearly within the labor exemption of the Sherman Act. * * *" We cannot agree. To make a business succeed, thereby furnishing employment to persons engaged in its operation, the responsibility rests upon the employer to determine where the business will be located, his acquisition of necessary buildings and fixtures, the installation of the business and its subsequent maintenance, his establishment of credit with suppliers of commodities and the various other responsibilities resting upon a proprietor. One of the proprietary functions is the determination of what days a week and what hours of the day the business will be open to supply its customers. Among the decisions which the proprietor must make and upon which his success and the livelihood of his employees depend is how to attract customers, which must be accomplished by the quality of merchandise offered at such times as shall be convenient to the public.⁴ It follows clearly that whether fresh meats are to be sold after 6 P.M. depends upon the convenience and requirements of the people living within shopping distance of the place of business. The hours of the day when his business is to be open to accommodate the demands of customers, in the judgment of the owner of the business, is not a condition of employment, contrary to the district court's finding. As long as all rights of employees are recognized and duly observed by the employer, including the number of hours per day that any one shall be required to work, any agreement by a labor union, acting in concert with business competitors of the employer, designed to interfere with his operation of a retail business, engaged in handling products in the course of interstate commerce, is a violation of the Sherman Act, and not entitled to the exemption therefrom claimed by the defendant unions in this case.

The district court overlooks the fact that whether the butchers have jobs at all depends on whether they will serve the demands of the public. It also overlooks that the furnishing of a place and advantageous hours of employment for the butchers to supply meat to customers are the prerogatives of the employer. As we said (274 F.2d at 221):

"* * * An employer has the right and it is his duty, if he is to survive commercially, first to determine the needs of the public, second to provide a time, a place and facilities for meeting those needs, and third to provide, under the terms of the National Labor Relations Act, the services of employees to accomplish the foregoing objectives. The rights of labor attach only to the third, and if any effort is made by labor to infringe rights of the employer in the first or second field, it is not shielded from the sword of the anti-trust laws. Determining the needs of the public and meeting those needs are inherent proprietary rights and obligations of the employer and must be clearly distinguished from his rights and duties as master in the master and servant relationship. Setting marketing hours is one such proprietary function which an employer has the exclusive right to determine as dictated by economic factors

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