Amalgamated Transit Union, Div. 819 v. Byrne
| Decision Date | 22 September 1977 |
| Docket Number | No. 76-2050,76-2050 |
| Citation | 568 F.2d 1025 |
| Parties | 96 L.R.R.M. (BNA) 2440, 82 Lab.Cas. P 10,148 AMALGAMATED TRANSIT UNION, DIVISION 819, Division 820, Amalgamated Transit Union, Division 821, Amalgamated Transit Union, Division 822, Amalgamated Transit Union, Division 823, Amalgamated Transit Union, Division 824, Amalgamated Transit Union, Division 825, Amalgamated Transit Union, Division 880, Amalgamated Transit Union, Division 1248, Amalgamated Transit Union, Division 1276, Amalgamated Transit Union, Division 1317, Amalgamated Transit Union, Division 1358, Amalgamated Transit Union, Division 1478, Amalgamated Transit Union, Division 1530, Amalgamated Transit Union, Division 1541, Appellants, v. BYRNE, Brendan T., Individually and in his capacity as Governor of the State of New Jersey, Alan Sagner, Individually and in his capacity as Commissioner of Transportation of the State of New Jersey and as Chairman of the Commuter Operating Agency, and their agents, assigns, and successors. |
| Court | U.S. Court of Appeals — Third Circuit |
Before ALDISERT and WEIS, Circuit Judges, and HUYETT, District Judge.
Reargued in banc May 12, 1977
Before SEITZ, Chief Judge, and VAN DUSEN, ALDISERT, ADAMS, GIBBONS, ROSENN, HUNTER, WEIS and GARTH, Circuit Judges.
This case poses the question of whether officials of the State of New Jersey violated the federal policy of allowing the content of collective bargaining agreements to be determined "by the free play of economic forces" when they threatened to withdraw State subsidies of private transportation companies which agree with their unions to include unlimited cost of living increases in their collective bargaining agreements. NLRB v. Nash-Finch Co., 404 U.S. 138, 144, 92 S.Ct. 373, 30 L.Ed.2d 328 (1971). The district court concluded that the complaint filed by the plaintiffs-appellants, who are 15 local unions of the Amalgamated Transit Union representing the employees of various transportation companies, failed to state a claim on which relief could be granted. In determining the soundness of the district court's decision, we are thus obligated to accept the allegations of the complaint as true.
The State of New Jersey provides subsidies to certain privately owned transportation companies under the following statute:
The Department of Transportation is hereby authorized to contract with any motor bus carrier operating bus or rail transit service in the State which is in imminent danger of terminating all bus services or all rail transit services provided by said motor bus companies to insure the continuance of that portion of the bus and rail transit services which is essential. Payment by the department under such a contract shall not exceed the actual cost to the motor bus carrier for providing such services and shall not include any return on investment. 27 N.J.Stat.Ann. § 1 A-28.7 (Supp.1977).
During late 1975, individual contract negotiations began between representatives of certain transportation companies and the relevant plaintiff unions, looking toward new labor contracts to succeed those which were about to expire. The complaint asserts that:
In the midst of these negotiations the defendant Commissioner of Transportation, Alan Sagner, injected the State into these negotiations. Specifically, he called a meeting on January 9, 1976 of those local union officials involved in negotiations. He announced on that occasion that the State would not continue its policy of subsidizing troubled private transit companies if the unions insisted on retaining the "uncapped cost of living" clause (whereby wages are periodically adjusted to fully reflect increases in the cost of living as calculated by the Department of Labor) in their contracts with such companies. The defendant Sagner and Lewis Kaden, Counsel to Governor Byrne and his authorized representative, next met with the International President and other union officials . . . in Washington, D. C. on February 6, 1976. Kaden stated to them that the State of New Jersey objected to the cost of living principle as it existed in current contracts and was going to "destroy" it. Further, Kaden and Sagner said that the State would not assist by way of subsidy those private transit companies that agreed to such cost of living increases in any contracts which might result from the then ongoing negotiations.
The complaint also asserts that:
In March, 1976, company negotiators told their Union counterparts at the bargaining table that their companies had been instructed by state officials that the current cost of living clauses in their contracts could not be retained in future contracts. In at least one instance a company official said that he had also been told by state officials that any wage increases for employees of the companies could not exceed those granted State employees or else there would be no further state subsidy assistance for those financially troubled companies. The unions in each case vigorously objected to such positions and negotiations reached an impasse. As a result, strikes occurred (at the companies in March of 1976).
During the strikes the defendant Brendan T. Byrne, Governor of New Jersey, publicly reiterated the prior statements of the defendant Alan Sagner . . . that the State would not assist a private transit company which retained the cost of living clause in its labor agreements. In addition, the defendant Sagner distributed to both management and labor a written statement which indicated that increases in salaries and benefits beyond those granted State employees would not be permissible if the companies desired to continue receiving state financial assistance. 1
Plaintiffs request a judgment declaring that the conduct of defendants Byrne and Sagner violated the Supremacy Clause of the Constitution because it infringed on federal labor policy as embodied in the National Labor Relations Act. They also seek parallel temporary and permanent injunctive relief.
We note preliminarily that the allegations of the complaint are sufficient to sustain subject matter jurisdiction under 28 U.S.C. § 1337, since the NLRA is an "Act of Congress regulating Commerce." Our conclusion is supported by American Federation of Labor v. Watson, 327 U.S. 582, 66 S.Ct. 761, 90 L.Ed. 873 (1946), where the Court took § 1337 jurisdiction of a case in which the plaintiffs alleged "a conflict between the Florida law and the National Labor Relations Act." 327 U.S. at 591, 66 S.Ct. at 765.
Turning to the legal sufficiency of the claims, we first note that plaintiffs do not contend that the defendants have violated the specific terms of any provision of the NLRA. Consequently, we consider whether their claim can be said to be otherwise incompatible with the NLRA.
As Justice Frankfurter stated in International Ass'n. of Machinists v. Gonzales, 356 U.S. 617, 619, 78 S.Ct. 923, 924, 2 L.Ed.2d 1018 (1958): "the statutory implications concerning what has been taken from the States and what has been left to them are of a Delphic nature, to be translated into concreteness by the process of litigating elucidation." Moreover, Supreme Court cases on preemption in the labor field do not seem precisely on point here because they have apparently all involved direct state regulation of private conduct, whereas in the present case New Jersey has not directly commanded or prohibited the conduct of third parties but has merely sought to influence private conduct by threatening to withhold discretionary subsidies.
Nevertheless, the Supreme Court's statements on the preemption question, within and without the field of labor relations, do provide a framework for the resolution of the question before us. The Court recently addressed the scope of preemption in the labor field in Lodge 76, International Ass'n. of Machinists v. Wisconsin Employment Relations Commission, 427 U.S. 132, 96 S.Ct. 2548, 2552, 49 L.Ed.2d 396 (1976). The Court stated that its preemption cases fall into two categories cases involving the primary jurisdiction of the NLRB, where the concern is that "one forum would enjoin, as illegal, conduct which the other forum would find legal," and cases in which state law has infringed upon "rights guaranteed by the Federal Acts" even though the state may not have attempted to regulate conduct which is specifically protected or prohibited under federal law. Automobile Workers v. Russell, 356 U.S. 634, 644, 78 S.Ct. 932, 2 L.Ed.2d 1030 (1958), quoted in Lodge 76, International Ass'n. of Machinists v. Wisconsin Employment Relations Commission, 427 U.S. at 138, 96 S.Ct. 2548.
Plaintiffs' argument here rests on the second line of cases. 2 Their contention is, in essence that New Jersey has endeavored to dictate the substantive terms of collective bargaining agreements when the NLRA envisages that the substance of such agreements will be determined "by the free play of economic forces." NLRB v. Nash-Finch Co., 404 U.S. 138, 144, 92 S.Ct. 373, 377, 30 L.Ed.2d 328 (1971); see NLRB v. Insurance Agents, 361 U.S. 477, 80 S.Ct. 419, 4 L.Ed.2d 454 (1960). It cannot be doubted that New Jersey would be barred under the Supremacy Clause from prohibiting private parties from agreeing to unlimited cost of living clauses in their collective bargaining agreements. But New Jersey has merely threatened to withdraw subsidies from companies that grant such clauses, and this circumstance requires us to scrutinize more closely the nature of the...
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