Jou-Jou Designs v. International Ladies Garment Workers Union, AFL-CIO
| Decision Date | 25 February 1981 |
| Docket Number | AFL-CIO,No. 360,D,AFL-CI,JOU-JOU,360 |
| Citation | 643 F.2d 905 |
| Parties | 106 L.R.R.M. (BNA) 2626, 90 Lab.Cas. P 12,616, 1980-81 Trade Cases 63,853 DESIGNS, INC.; Coco Boutique Inc.; Topaz Boutique, Inc.; and Topaz Boutique of Lexington Avenue, Inc., Plaintiffs-Appellants, v. INTERNATIONAL LADIES GARMENT WORKERS UNION,; Sportswear Joint Board, International Ladies Garment Workers Union,; Local 23-25, International Ladies Garment Workers Union; Local 155, International Ladies Garment Workers Union; and General Trades Employees Union, Local 5A, , Defendants-Appellees. ocket 80-7588. |
| Court | U.S. Court of Appeals — Second Circuit |
Jonathan L. Sulds, New York City (Herman E. Cooper, P.C., New York City, of counsel), for plaintiffs-appellants.
Max Zimny, New York City (Chaikin & Chaikin, Eric B. Chaikin, Seth M. Kupferberg, New York City, of counsel), for defendants-appellees.
Before MOORE, NEWMAN and KEARSE, Circuit Judges.
The origins of this case lie in the sweatshops of early Twentieth Century America. "It has its genesis in a fiercely competitive struggle by manufacturers of garments at the turn of the century which caught the workers in the industry, at that time mostly recently arrived immigrants, in between, depressed their wages and resulted in intolerable working conditions." Greenstein v. National Skirt and Sportswear Association, 178 F.Supp. 681, 687 (SDNY 1959), appeal dismissed, 274 F.2d 430 (2d Cir. 1960).
Low wages and bad working conditions spurred the workers in those sweatshops to organize and unionize.
Greenstein v. National Skirt and Sportswear Association, 178 F.Supp. at 687.
The workers, however, responded with equal ingenuity and resolve. To achieve effective union representation, garment workers picketed and pressured jobbers, who controlled production, to farm out their work only to contractors who employed union workers. Union pressure would lead to an agreement between a jobber and a union to farm out production only to shops represented by that particular union. These
agreements are called "Hazantown Agreements", named after the jobber involved in the case in which this Circuit ruled that picketing to achieve them is not an unfair labor practice. Danielson v. Joint Board, 494 F.2d 1230 (2d Cir. 1974).
Plaintiff Jou-Jou Designs, Inc. ("Jou-Jou") is engaged in the apparel and clothing industry within the Southern District of New York. Jou-Jou is a jobber, and does not produce or manufacture the garments that it sells. Instead, Jou-Jou designs sample garments and patterns, which it furnishes to outside contractors together with material and manufacturing specifications. Jou-Jou garments are then made by the outside contractors, delivered to Jou-Jou, and sold by Jou-Jou to retailers.
On May 5, 1978, Jou-Jou and Local 155 of the International Ladies Garment Workers Union (ILGWU), entered into a Hazantown Agreement. That agreement did not purport to affect Jou-Jou's relations with its six inside employees, who were not then represented by any union. In February, 1979, Local 155 expressed a desire to negotiate with Jou-Jou concerning representation of Jou-Jou's inside employees. Negotiations concerning renewal of the Hazantown Agreement and coverage of Jou-Jou's inside employees went forward. A final integrated agreement was apparently contemplated but never consummated.
The negotiations between Local 155 and Jou-Jou were derailed on July 9, 1979. On that day Local 5A of the General Trade Employees Union, an affiliate of the United Brick and Clayworkers Union of America, AFL-CIO, filed a petition with the National Labor Relations Board (NLRB) requesting an election to determine whether it should be certified as the bargaining representative of Jou-Jou's inside employees. Shortly thereafter, Local 155 informed the NLRB by letter that it was withdrawing its interest in representing Jou-Jou's employees, but that it did have a Hazantown Agreement with Jou-Jou.
The Hazantown Agreement between Local 155 and Jou-Jou provided that it would continue from July 31 to July 31, from year to year, automatically, unless either party gave notice 60 days prior to July 31 of its desire to terminate the Agreement. On July 25, 1979, only six days before July 31, Jou-Jou notified Local 155 of its desire to terminate the contract. Counsel for Local 155 responded by a letter stating that Local 155 considered the contract already renewed. Counsel for Jou-Jou wrote a letter disputing that contention.
On or about August 1, 1979, Local 155 began to picket Jou-Jou to compel adherence to the Hazantown Agreement. In response, Jou-Jou filed with the NLRB an unfair labor practice charge against Local 155, asserting that Local 155's picketing was recognitional and so proscribed by § 8(b)(7) of the National Labor Relations Act (NLRA), 29 U.S.C. § 158(b)(7). The NLRB refused to issue a complaint, concluding that the picketing was to secure a jobbers' agreement, and not to represent Jou-Jou's inside employees.
At about the time Local 155 commenced picketing at Jou-Jou, the representation election respecting the inside employees went forward. On August 7, 1979, the NLRB certified the results of the election, and certified Local 5A as the collective bargaining representative of Jou-Jou's inside employees. That same day, Jou-Jou and Local 5A entered into a collective bargaining agreement covering Jou-Jou's employees in a separate Hazantown Agreement. The new Hazantown agreement with Local 5A was essentially identical to the earlier Hazantown Agreement with Local 155. The major difference was that Jou-Jou bound itself to deal only with outside jobbers having labor relations with Local 5A of the General Trade Employees Union, rather than outside shops having labor relations with Local 155 of the ILGWU. Shortly thereafter, Local 155 ceased picketing Jou-Jou.
All was quiet from August, 1979 to March, 1980.
In March 1980, another ILGWU local became involved in the situation. Local 23-25 of the ILGWU became involved in a dispute with Jou-Jou and Local 5A, claiming that their pressure on a contractor (Tomlino) had led to that contractor's repudiating his contract with Local 23-25 and instead establishing labor relations with Local 5A. Local 23-25 began to picket Jou-Jou. Local 155 joined the picketing to further its own Hazantown demands, an objective Local 23-25 is said to have embraced. The picketing grew violent, and was enjoined in state court proceedings. Those state court proceedings were only one of the many NLRB and state court proceedings arising from the troubles delineated above. 1
Finally, on April 10, 1980, Local 155 caused the ILGWU, its parent organization, to commence a proceeding under Article XX of the AFL-CIO constitution, charging that Local 5A had violated Local 155's established bargaining and work relationship with Jou-Jou. This proceeding in no way sought to disturb the collective bargaining agreement between Local 5A and Jou-Jou respecting Jou-Jou's inside employees. Since the ILGWU has won the arbitration, Local 5A might be impelled by the threat of inter-union sanctions to forgo its Hazantown relationship with Jou-Jou, leaving Jou-Jou open to renewed ILGWU Hazantown demands.
Plaintiffs Jou-Jou and three affiliated companies allege that the efforts of Locals 23-25 and 155 to secure a Hazantown Agreement, and the initiation by Locals 155 and 23-25 of inter-union arbitration of the dispute between Locals 23-25 and 155 on the one side, and Local 5A on the other, violate the anti-trust laws. Federal jurisdiction is asserted on the basis of § 1 of the Sherman Act. Jou-Jou seeks treble damages and an injunction against the arbitration. A second claim, based on pendent jurisdiction, seeks a declaration that Locals 155 and 23-25 acted in tortious interference with plaintiffs' contractual relations, and seeks damages and injunctive relief. The District Court found no viable anti-trust claim and dismissed the complaint. (490 F.Supp. 1376 (SDNY 1980)). We affirm.
1. Hazantown Agreements were a logical focus of anti-trust attack; they are, after all, contracts in restraint of trade, and so seemingly violate § 1 of the Sherman Act. They exclude from the market contractors who are not affiliated with the union that has signed a Hazantown Agreement with the jobber. Similar agreements resulting from secondary pressure have been condemned in the construction industry. In Connell Construction Company, Inc. v. Plumbers and Steamfitters Local Union No. 100, 421 U.S. 616, 95 S.Ct. 1830, 44 L.Ed.2d 418 (1975), a building trades union supported its efforts to organize mechanical subcontractors by picketing certain general contractors. The union's sole objective was to compel the general contractors to agree that in letting subcontracts for mechanical work they would deal only with firms that were parties to the union's current collective bargaining agreement. The union disclaimed any interest in representing the general contractors' employees. The union stationed a single picket at one of the company's major construction sites. About 150 workers walked off the job, and construction halted. Management signed the agreement the union had desired, but then sought to void the resulting agreement as an illegal restraint on competition.
The Supreme Court found an anti-trust violation.
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