Connell v. U.S. Steel Corp., 74-2156

• Decision Date: 25 July 1975
• Docket Number: No. 74-2156,74-2156
• Citation: 516 F.2d 401
• Parties: 89 L.R.R.M. (BNA) 3089, 77 Lab.Cas. P 11,019 Willie CONNELL, Plaintiff-Appellee, v. UNITED STATES STEEL CORPORATION et al., Defendants-Appellants.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 401

516 F.2d 401

89 L.R.R.M. (BNA) 3089, 77 Lab.Cas. P 11,019

Willie CONNELL, Plaintiff-Appellee, v. UNITED STATES STEEL CORPORATION et al., Defendants-Appellants.

No. 74-2156.

United States Court of Appeals, Fifth Circuit.

July 25, 1975.

William C. Knight, Jr., D. Frank Davis, Birmingham, Ala., for defendants-appellants.

George C. Longshore, Birmingham, Ala., for plaintiff-appellee.

Appeal from the United States District Court for the Northern District of Alabama.

Before MURRAH ^*, WISDOM and AINSWORTH, Circuit Judges.

WISDOM, Circuit Judge:

This is a class action brought by Willie Connell on behalf of mine foremen who went out on strike in 1945 in support of efforts of the Foremens' Association of America (FAA) to organize supervisors. Foremen at the Wylam Coal Mine in Alabama were denied, in part or in whole, pensions because of the ten-day break in their service caused by the strike. Now they sue to receive their pensions.

Willie Connell started work at the mine as an hourly worker in 1928. He was promoted to foreman in 1940. In 1943 the Foremens' Association of America began to organize supervisors. At that time unions of supervisors were legal. The district court found that by April 1945 between 75 percent and 80 percent of the foremen at the Wylam Mine were members. On April 1, 1945, the United Mine Workers of America (UMWA) struck all mines in the United States then under contract. On April 12, 1945, the President, under authority of the War Labor Disputes Act, seized the mines. See United States v. United Mine Workers, 1947, 330 U.S. 258, 67 S.Ct. 677, 91 L.Ed. 884. That very day the foremen joined the UMWA on strike. The same day the Tennessee Coal and Iron Company (TCI), predecessor to United States Steel, sent a letter to all striking foremen informing them that if they were not back to work by April 16, they would be considered as having resigned without notice. When they failed to return, the notation "quit without notice" was placed on each striking foreman's personnel record. No such action was taken against the striking workers. On April 23, the strike ended, and the members of both the UMWA and the FAA returned to work. The foremen, however, were reemployed only after they signed notices saying, "I understand that I am employed as a new employee and that the continuity of my service has been broken". They were taken back to their same jobs at the same pay as they had before the strike. On August 14, 1954, Connell was laid off. In accordance with the company policy, he was carried as an employee for two more years, at which time his continuous service ended. He was an employee for twenty-eight years. There is evidence that he was told by a company official in 1954 that he would not receive a pension. On February 1, 1963, he was officially so informed by United States Steel, when it refused to bridge his gap in service. ¹ On December 9, 1972, he filed this lawsuit.

The district court held that Connell had not quit, that his discharge would have been illegal under the Wagner Act, that the trustees of the United States Steel and Carnegie Pension Fund were, by relying on an illegal act, themselves acting arbitrarily and capriciously under Alabama law, and that neither laches nor the statute of limitations barred Connell's action. N.D.Ala., 1974, 371 F.Supp. 991.

On appeal, the trustees argue that the issue of Connell's rights under the Wagner Act is preempted by the National Labor Relations Board; that, for this reason, the district court was without jurisdiction; that the law nationalizing the mines made Connell a government employee, without the right to strike; that their action in denying Connell his pension was not taken in reliance on an illegal act by TCI; that, in any case, they repudiated the trust in 1945 when Connell was informed that he was hired as a new employee; and that his claim is barred by laches or the limitation period. We find no merit in these contentions, and affirm the district court.

For the most part, we adopt the reasoning of the district court. We hold, particularly, that the court's findings were not clearly erroneous under Fed.R.Civ.P. 52(a). Because, however, preemption is a jurisdictional question, we address ourselves to this issue, which was not put forward in the court below.

I PREEMPTION

It is well settled that if claims are even arguably unfair labor practices, both federal and state courts must decline jurisdiction in favor of the NLRB. San Diego Building Trades Council v. Garmon, 1959, 359 U.S. 236, 79 S.Ct. 773, 3 L.Ed.2d 775. Motor Coach Employees v. Lockridge, 1970, 403 U.S. 274, 91 S.Ct. 1909, 29 L.Ed.2d 473; Prepmore Apparel, Inc. v. Amalgamated Clothing Workers, 5 Cir. 1970, 431 F.2d 1004. The purpose of this doctrine is to insure a uniform national labor policy. See The Developing Labor Law 782 (Morris ed. 1971). Congress created the National Labor Relations Board as the agency to interpret the National Labor Relations Act and to administer the national labor policy. Of course, the parties must first be subject to the jurisdiction of the Board before adjudication by a court is preempted. See Windward Shipping (London) Ltd. v. American Radio Association, AFL-CIO, 1974, 415 U.S. 104, 94 S.Ct. 959, 39 L.Ed.2d 195; American Radio Association, AFL-CIO v. Mobile Steamship Association, 1974, 419 U.S. 215, 42 L.Ed.2d 399, 95 S.Ct. 409.

The trustees argue that the discharge of a striking employee is on its face an unfair labor practice and that Connell's failure to assert his claim before the Labor Board in 1945 bars him from doing so now. ² We disagree for several reasons.

First, while United States Steel is a party defendant to this suit, the true defendant party in interest is the United States Steel and Carnegie Pension Fund. This defendant is not subject to Labor Board jurisdiction, except insofar as it is an employer of its own employees. ³ Certainly Connell was not an employee of the Fund and therefore the Fund could not be guilty of violating Section 8(a)(1) or (3) "It shall be an unfair labor practice for an employer (1) to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in Section 7 . . . (3) by discrimination in regard to hire or tenure of employment or any term or condition of employment to encourage or discourage membership in any labor organization . . .".

Second, Connell is a retiree and no longer an employee of United States Steel. In Allied Chemical and Alkali Workers v. Pittsburgh Plate Glass Company, 1971, 404 U.S. 157, 92 S.Ct. 383, 30 L.Ed.2d 341, the Supreme Court held that retired workers are not employees under the National Labor Relations Act, and therefore the employer need not bargain over benefits of retirees. Consequently, no liability for unfair labor practices can now result from a suit by a retired worker for interference with the "employees ' . . . right to self organization Finally, there is an exception to the preemption doctrine for "matters of peripheral concern to federal labor law". See The Developing Labor Law 797-800 (Morris ed. 1971). The Taft-Hartley Act did not remove all areas of labor law from the purview of state law. 3 K. Davis, Administrative Law, § 19.04 (1957). Indeed, Congress affirmatively provided that state law govern pension and welfare trust matters. II Legislative History of the Labor Management Relations Act of 1947, 1304, 1311; Bricklayers, Masons and Plasterers Int'l Union v. Stuart Plastering Company, Inc., 5 Cir. 1975, 512 F.2d 1017, 1025; Snider v. All State Administrators, Inc., 5 Cir. 1973, 481 F.2d 387, 390.

. . .". NLRA § 7, 29 U.S.C. § 157 (1970). Thus Connell's claim is not even "arguably subject to § 7 or § 8 of the Act . . .". Garmon, 359 U.S. at 245, 79 S.Ct. at 780. See United Mine Workers, 202 NLRB 734 (1973). ⁴

In Retail Clerks International Association Local 1625 v. Schermerhorn, 1963, 375 U.S. 96, 11 L.Ed.2d 179, 84 S.Ct. 219, the Supreme Court faced the issue whether the Taft-Hartley Act's prohibition of the agency shop ⁵ vested the Labor Board with exclusive jurisdiction to determine the validity of these arrangements. A unanimous Supreme Court held that Congress did not intend to displace state authority by enacting this provision. ⁶ In light of the congressional objective of having state courts (or federal diversity courts) regulate pension and welfare trust relationships in accordance with state trust law, we hold that the court's incidental construction of a provision of federal labor law to determine if trustees have relied in their decision on an illegal act is not in itself sufficient to divest the court of jurisdiction.

Connell's right to a pension could not vest until he retired from active service. His cause of action against the trustees did not arise until then. It would be a strained and unnecessary interpretation of the preemption doctrine, reaching an unjust result, to say that Connell somehow waived all future rights against third parties by failing to file an unfair labor practice charge with the NLRB in 1945. We decline to do so. After all, the issue before the district court was not whether TCI committed an unfair labor practice in 1945, but whether Connell is entitled to a pension as of 1972.

II THE WAR LABOR DISPUTES ACT

Alternatively the trustees argue, as they did in the district court, that the War Labor Disputes Act of 1943, 57 Stat. 163, superceded the Wagner Act and made the miners government employees without the right to strike. Therefore, they assert, Connell and others were rightly discharged by TCI, and the trustees were accordingly entitled to rely on the discharge in determining that the foremen's service was broken. The district court fully considered and discussed this issue and correctly determined that (1) employees did not lose their § 7 rights during the mine seizures and (2) in any case, the foremen's strike did not disrupt production, an action that would have been...