Sinclair Oil Corp. v. OIL, CHEMICAL & ATOMIC WKRS. INT. U.

• Decision Date: 06 October 1971
• Docket Number: 18268.,No. 18267,18267
• Citation: 452 F.2d 49
• Parties: SINCLAIR OIL CORPORATION, Plaintiff-Appellant and Cross-Appellee, v. OIL, CHEMICAL AND ATOMIC WORKERS INTERNATIONAL UNION, et al., Defendants-Appellees and Cross-Appellants.
• Court: U.S. Court of Appeals — Seventh Circuit

452 F.2d 49 (1971)

SINCLAIR OIL CORPORATION, Plaintiff-Appellant and Cross-Appellee, v. OIL, CHEMICAL AND ATOMIC WORKERS INTERNATIONAL UNION, et al., Defendants-Appellees and Cross-Appellants.

Nos. 18267, 18268.

United States Court of Appeals, Seventh Circuit.

October 6, 1971.

George B. Christensen, Fred H. Daugherty, John Malugen, Chicago, Ill., for plaintiff-appellant and cross-appellee; Winston, Strawn, Smith & Patterson, Chicago, Ill., of counsel.

Barbara J. Hillman, Chicago, Ill., John R. Tadlock, Denver, Colo., Kleiman, Cornfield & Feldman, Chicago, Ill., for defendants-appellees and cross-appellants.

Before KILEY, STEVENS and SPRECHER, Circuit Judges.

KILEY, Circuit Judge.

Sinclair's appeal presents the issue whether union members bound by a no-strike clause are liable individually, under Section 301 of the Taft-Hartley Act, 29 U.S.C. § 185, for damages resulting from their refusal, in defiance of express directions of the union, to cross a picket line maintained by members of the same union who are in a different bargaining unit. The issue is of first impression. We hold that the individual members are not liable.

Defendants' motion to dimiss admits relevant well-pleaded facts: The International Union¹ and Sinclair in January, 1969, were negotiating a new contract for both the production and maintenance employee unit and the clerical employee unit at Sinclair's East Chicago, Indiana plant. Employees in both units were members of the defendant International Union and Local 7-210 (Union). Pending agreement, all employees in both units struck the plant. An agreement was eventually reached as to the production and maintenance unit, but not as to the clerical unit. The agreement reached contained a no-strike clause. The clerks remained on strike and picketed the plant. The production and maintenance employees refused to cross the picket line. This suit followed.

The complaint is in three counts. Count 1, brought under Section 301, charges the Union with violation of the no-strike clause and seeks damages for causing the work stoppage. That count is not before us on appeal. Count 2, also under Section 301, is against six named individual members of the Union and seeks damages also for breach of the no-strike clause. Count 3, a state law diversity action, seeks damages for the same alleged breach against the six individuals named in count 2.

On defendants' motion the district court dismissed count 2 as stating no claim on which relief could be granted. Sinclair has appealed from the judgment of dismissal. The court denied defendants' motion with respect to counts 1 and 3. Defendants have appealed—with leave given by us under 28 U.S.C. § 1292 (b)²—only from the denial of their motion to dismiss count 3.

SINCLAIR'S APPEAL

The substance of Sinclair's complaint is an assertion of Union liability because the Union authorized the work stoppage resulting from its members refusing to cross the picket line (count 1), and the alternative assertion of individual liability on the part of the members because of their refusal to cross the picket line "despite, and contrary to, the express instructions" of the Union (counts 2 and 3). The complaint is framed, so far as counts 2 and 3 are concerned, to cover the question expressly reserved by the Supreme Court in Atkinson v. Sinclair Refining Co., 370 U.S. 238, 249, n. 7, 82 S.Ct. 1318, 1325, 8 L.Ed.2d 462³ (1962).

The complaint indicates the difficulty which faced Sinclair and the Union where the Union represents two separate units, one of which had agreed on a contract with Sinclair, the other of which was still on strike. Sinclair is deprived of the work force settled in the bargaining agreement as well as being plagued with the clerks picket line while negotiating for an agreement to obtain their employment. The Union, having made an agreement covering the production and maintenance unit, is bound to comply with the no-strike clause and to direct, encourage and order members of that unit also to comply. But compliance requires Union members to cross the picket line of the clerks unit. This is not only anathema to union members generally, but is especially so here where the picket line is maintained by fellow members.

Yet the Union must support the picketing clerks. The result is that it has authorized the strike by the clerks, which has induced a wildcat strike of the production and maintenance men. This tangle confronted Sinclair in seeking an appropriate legal remedy to correct what it considered a grave injustice. If dismissal of count 2 were sustained, Sinclair would be put to proving, in order to recover on count 1, that the Union officials ordered the production and maintenance employees to cross the picket line.

Union members are bound by a no-strike clause, Sinclair Refining Co. v. Atkinson, 290 F.2d 312, 317 (7th Cir. 1961). See Republic Steel Corp. v. Maddox, 379 U.S. 650, 658-659, 85 S.Ct. 614, 13 L.Ed.2d 580 (1965); Vaca v. Sipes, 386 U.S. 171, 184, 87 S.Ct. 903, 17 L.Ed.2d 842 (1967); Atkinson v. Sinclair Refining Co., 370 U.S. 238, 246, 82 S.Ct. 1318, 8 L.Ed.2d 462 (1962). And employees have been held to have standing to sue an employer under Section 301 for breach of the collective bargaining agreement. Smith v. Evening News Ass'n, 371 U.S. 195, 83 S.Ct. 267, 9 L.Ed. 2d 246 (1962). Individual employees, however, are not liable in damages for breach of a no-strike clause if the union is liable. Atkinson v. Sinclair Refining Co., 370 U.S. 238, 82 S.Ct. 1318, 8 L.Ed. 2d 462 (1962). In NLRB v. Rockaway News Supply Co., 345 U.S. 71, 73 S.Ct. 519, 97 L.Ed. 832 (1953), the Court decided that absent a provision in the collective bargaining agreement that no member should be required to cross a picket line, the refusal of an employee to cross the picket line of another union amounts to breach of the no-strike clause justifying discharge. However, it is conceded by Sinclair that no case has decided that a union member may be liable under Section 301 for damages for refusing to cross a picket line in violation of a no-strike clause.⁴

Sinclair argues that the language and legislative history of Section 301 clearly evidence a Congressional intention to provide a damage remedy for individual unauthorized breaches of a no-strike clause. We reject the argument as invalid.

It is true that the language of Section 301 does not expressly prohibit employer damage suits against employee union members who engage in a wildcat strike. But Section 301 does not expressly authorize suits between an employee union member and his employer arising from bargaining contracts. And Section 301 (b) prohibits enforcement against employees or their assets of employer judgments against unions. We do not see how, in view of subparagraph (b) and the "Danbury Hatters" notion discussed hereinafter, an implication can reasonably arise from the terms of Section 301 that Sinclair may recover damage against the individual defendants.

The legislative history of Section 301 does not disclose a Congressional purpose to authorize, in Section 301, an employer's suit against employee union members arising from a wildcat strike in violation of the bargaining agreement. The implied authorization urged by Sinclair cannot be reconciled with the intention of Congress shown in the debates in both Houses during consideration of the proposed Section 301. The legislative history of the Act indicates that the principal concern of Congress was with making unions, as parties to collective bargaining agreements, responsible for breaches of agreements and to avoid subjecting individual union members to fiscal ruin that was visited upon members as a result of the "Danbury Hatters" decision.⁵

A pertinent Senate Committee Report, which appears in the majority and dissenting opinions in Textile Workers Union v. Lincoln Mills, 353 U.S. 448, 454, 531-532, 77 S.Ct. 912, 1 L.Ed.2d 972 (1957), expresses this dual purpose as follows:

If unions can break agreements with relative impunity, then such agreements do not tend to stabilize industrial relations. The execution of an agreement does not by itself promote industrial peace. The chief advantage which an employer can reasonably expect from a collective labor agreement is assurance of uninterrupted operation during the term of the agreement. Without some effective method of assuring freedom from economic warfare for the term of the agreement, there is little reason why an employer would desire to sign such a contract.

Consequently, to encourage the making of agreements and to promote industrial peace through faithful performance by the parties, collective agreements affecting interstate commerce should be enforceable in the Federal courts. Our amendment would provide for suits by unions as legal entities and against unions as legal entities in the Federal courts in disputes affecting commerce.

The amendment specifically provides that only the assets of the union can be attached to satisfy a money judgment against it; the property of the individual members of the organization would not be subject to any liability under such a judgment. Thus the members of the union would secure all the advantages of limited liability without incorporation of the union. (Emphasis added.)

S.Rep.No. 105, 80th Cong., 1st Sess., p. 16.

To the same effect is the House report on the Bill⁶ and the report of the Joint Conference.⁷

In Senate debate on Section 301 Senator Taft made the following statement upon which Sinclair relies: "If there is a collective bargaining agreement and the men are bound by it, they ought to carry it out. If the union wants to carry it out, and some of the men say, `We will not do it,' they ought to be liable." 92 Cong.Rec. 5706 (1946). However, in context the statement clearly refers to liability for a fine upon wildcat strikers by the union, a subject mentioned by Senator Capehart just before the Taft statement.⁸ Furthermore, in discussing a proposed ...