476 F.2d 1388 (Fed. Cir. 1973), 10-2, Associated General Contractors of America, Inc., Oklahoma Chapter Builder's Division v. Laborers Intern. Union of North America, Local 612

Docket Nº:10-2.
Citation:476 F.2d 1388
Party Name:The ASSOCIATED GENERAL CONTRACTORS OF AMERICA, INC., OKLAHOMA CHAPTER-BUILDER'S DIVISION, Plaintiff-Appellant, v. LABORERS INTERNATIONAL UNION OF NORTH AMERICA, Local 612, Defendant-Appellee, and Laborers International Union of North America, Intervenor-Appellee.
Case Date:April 12, 1973
Court:United States Courts of Appeals, Court of Appeals for the Federal Circuit

Page 1388

476 F.2d 1388 (Fed. Cir. 1973)



LABORERS INTERNATIONAL UNION OF NORTH AMERICA, Local 612, Defendant-Appellee, and Laborers International Union of North America, Intervenor-Appellee.

No. 10-2.

Temporary Emergency Court of Appeals.

April 12, 1973

Page 1389

[Copyrighted Material Omitted]

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Edward E. Soule, Oklahoma City, Okl. (Lytle, Soule & Emery, Oklahoma City, Okl., with him on the brief), for appellant.

Jules Bernstein, Washington, D. C. (Robert J. Connerton and Arthur M. Schiller, Washington, D. C., and Maynard Ungerman, Tulsa, Okl., with him on the brief), for appellees.

Paul T. Michael, Atty., Civ. Div., Dept. of Justice, Washington, D. C. (Harlington Wood, Jr., Asst. Atty. Gen., and William E. Nelson and William C. White, Attys., Dept. of Justice, Washington, D. C., with him on the brief), for the United States, amicus curiae.

C. W. Schwoerke, Oklahoma City, Okl., atty. for individual members of Local 612, amicus curiae.



In connection with the Phase II program for stabilization of wages in the construction industry, 1 there has been presented here the unique questions of whether agencies charged with responsibility for requiring conformance to established standards had authority to disapprove a collective bargaining agreement in its entirety, or at all, because the wage increase it would have provided was too small rather than too large, and whether the other reasons assigned to support the agency action were collateral or otherwise so insufficient as to cast this question in no different light.

Unfortunately jurisdictional and procedural problems of first impression in the context of the Economic Stabilization Acts have complicated the case and in one respect have precluded its final disposition here. The latter problems can be properly understood only in light of the largely undisputed facts of the case and the controlling law and regulations. Indeed they become significant largely because the court below 2 failed to recognize the limitations of agency authority under the peculiar legal and factual situation involved. 3 We have elected, therefore, to reserve discussion

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of what ordinarily are regarded as threshold issues until later.


The record indicates that for 25 years or more Local 612 of the Laborers International Union of North America has collectively bargained and concluded agreements with the Oklahoma Chapter -Builders' Division of the Associated General Contractors of America, Inc. (AGC), all with little or no work stoppage. The Local's parent International Union (International) has in recent years established a District Council having jurisdiction over the entire State of Oklahoma in an attempt to unify the bargaining efforts of its locals in the state. Apparently Local 612 has resisted affiliation with the District Council of the International Union, at least insofar as preserving its practice of directly bargaining with AGC. This is a problem not before us. The Local and AGC formally signed a collective bargaining agreement on March 13, 1972. International claimed before the trial court that this collective bargaining agreement was invalid because the Local was not represented by a proper bargaining agent. The trial court did not resolve this issue and we do not reach it here. The parties to the collective bargaining agreement forwarded the agreement the day of its execution to the Laborers National Craft Board (Craft Board) to obtain its approval of the wage increase of 5.5% therein provided. Upon receipt of the agreement the Craft Board's research director sent a copy of the proposed agreement to the International's general counsel along with a memorandum dated March 20, 1972, suggesting that the International take the agreement out of the hands of the Craft Board because, among other reasons, of Local's failure to negotiate through the District Council, and that certain other provisions be included in conformity with District Council policies. The Craft Board then received a letter dated March 22, 1972, from the President of the Union's District Council for Oklahoma which asserted that it, the Council, was the sole bargaining agent for all of its affiliated unions, that the agreement submitted by the AGC and the Local was invalid and that no action could be taken on it by the Craft Board. In a letter dated April 7, 1972, from the Board's management co-chairman to AGC's business manager, it was stated that the " 'results of recent negotiations' between the Building Division and Local 612 . . . do not square with the current recommendations of the Craft Board insofar as the restructuring of bargaining in the State of Oklahoma is concerned." The statement continued:

"Since we are seeking the special consideration which the CISC [Construction Industry Stabilization Committee] may give to agreements which provide for significant changes in the geographical structure of bargaining, including the development of wage zones under one agreement in the firm belief such changes would promote stabilization of collective bargaining and the effective utilization of manpower and management resources, the management's side of the Laborers' Craft Board finds the joint petition from the Oklahoma Chapter and Laborers' Local 612, Oklahoma City, not in conformance with these objectives and will not look favorably on your petition."

The Craft Board, over the signatures of both co-chairmen by letter dated June 29, 1972, notified AGC's business manager that it rejected the proposed agreement for the following specific reasons:

"The proposed agreement failed to meet the Craft Board criteria for Oklahoma on the following counts. First, the agreement covers a threeyear period and would stand as an absolute bar to necessary restructuring. Second, the agreement fails to narrow the economic gap between Tulsa and Oklahoma City and indeed, widens the margin. Third, we have reservations concerning the fact that no provisions have been made for welfare and pension benefits. Even though the rest of Oklahoma is covered by agreements

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calling for these benefits negotiated by the Oklahoma Laborers' District Council and the Oklahoma Chapter, AGC.

"The Craft Board also raised a question concerning the representative status of the Committee purportedly representing the interests of Local Union 612."

The CISC then reviewed the Board's action and communicated its agreement therewith in a letter to the Craft Board dated July 13, 1972. Rather than submit to the agency requests to renegotiate the contract with the District Council as Local 612's bargaining agent, AGC sought judicial relief by the filing of the action below.


No. 72-544 Civil, the above-entitled case in which this appeal is being prosecuted, was commenced in the district court August 8, 1972. Without concerning itself with the trusteeship problem involved in a prior action, No. 70-520 mentioned hereafter, the complaint alleged the negotiation in good faith of "a valid collective bargaining agreement" between the AGC and the Local, the claims of others that it was "not valid and . . . binding on the defendant and its members" and prayed for a judgment declaring the contract to be valid, and for general relief. Plaintiff AGC took the position that it was not concerned with the intra-union squabble involved in the prior action and relied exclusively upon the asserted lack of authority of the Craft Board and the CISC to disapprove the collective bargaining agreement for the reasons stated. The prior action had been filed Oct. 20, 1970 by five Local members against the Local, and certain of its officers together with the Oklahoma Laborers District Council, and sought by an amended complaint termination of a trusteeship the International had imposed upon the Local. On the grounds that the cases involved common questions of fact and law, the district court ordered their consolidation for the purposes of trial. 4

Following trial to the court of the consolidated actions, the judgment of the trial court segregated the relief granted as between the two cases, holding as to No. 70-520 Civil that the injunction it had theretofore granted against the operation of the trusteeship in question should be dissolved and that the parties were "restored to their respective positions as of the time the preliminary injunction was issued"; as to the issues in No. 72-544 Civil (involved in the present appeal) the trial court held "that the purported contract of March 13, 1972, between Local 612 of Laborers' International Union of North America and the Associated General Contractors of America, Inc., Oklahoma Chapter-Builder's Division is void and unenforceable."

In discussing the latter action the district court observed that "it was instituted pursuant to Section 301(a) of the Labor Management Relations Act of 1947, 29 U.S.C. § 185, which authorizes the federal district courts to entertain '[s]uits for violation of contracts between an employer and a labor organization . . . without respect to the

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amount in controversy or without regard to the citizenship of the parties' ", citing Black-Clawson Co., Inc. v. International Association of Machinists, 313 F.2d 179, 181-182 (2d Cir. 1962) as to declarations of rights. The trial court stated: "It is clear that in the instant case the task of fashioning the applicable 'common law of labor contracts, ' see United Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 574, 579, 80 S.Ct. 1347, 4 L.Ed.2d 1409 (1960), must be undertaken in contemplation of the imposition of comprehensive economic controls over the economy by the Federal government."

The court noted that "at the time the alleged contract was signed...

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