RM Perlman, Inc. v. LOCAL 89-22-1, ILGWU

• Decision Date: 02 September 1993
• Docket Number: No. 91 Civ. 4828 (RLC).,91 Civ. 4828 (RLC).
• Parties: R.M. PERLMAN, INC., d/b/a Rebecca Moses Collection and Rebecca Moses, Plaintiffs, v. NEW YORK COAT, SUIT, DRESS, RAINWEAR & ALLIED WORKERS' UNION LOCAL 89-22-1, ILGWU, et al., Defendants.
• Court: U.S. District Court — Southern District of New York

833 F. Supp. 238

R.M. PERLMAN, INC., d/b/a Rebecca Moses Collection and Rebecca Moses, Plaintiffs, v. NEW YORK COAT, SUIT, DRESS, RAINWEAR & ALLIED WORKERS' UNION LOCAL 89-22-1, ILGWU, et al., Defendants.

No. 91 Civ. 4828 (RLC).

United States District Court, S.D. New York.

September 2, 1993.

Mudge, Rose, Guthrie, Alexander & Ferdon, New York City, for plaintiffs (Joel E. Cohen and Wendy K. Gelfand-Chaite, of counsel).

Lewis, Greenwald, Kennedy, Lewis, Clifton & Schwartz, P.C., New York City, for defendant Local 89-22-1 (Nicholas F. Lewis, of counsel).

Max Zimny, New York City, for defendant ILGWU (Brent Garren, of counsel).

OPINION

ROBERT L. CARTER, District Judge.

Plaintiffs R.M. Perlman Inc. d/b/a Rebecca Moses Collection ("RMC") and Rebecca Moses commenced this action pursuant to § 303(b) of the National Labor Relations Act of 1947 ("NLRA"), 29 U.S.C. § 187(b). They now move for partial summary judgment on the defendants' liability for damages which the plaintiffs allege they suffered as a result of the defendants' unfair labor practices. Defendants New York Coat, Suit, Dress, Rainwear & Allied Workers' Union, Local 89-22-1, I.L.G.W.U. ("Local 89-22-1") and International Ladies' Garment Workers' Union ("the International") cross-move for summary judgment dismissing the plaintiffs' amended complaint.

Plaintiff RMC, a fashion designer and wholesale vendor of women's garments, is a "jobber" in the garment industry. The term "jobber" refers to companies which design garments but do not actually produce the garments themselves. (Defendants' Joint Rule 3(g) Statement, ¶ 10; Plaintiffs' Joint Rule 3(g) Statement, ¶ 2). Production, including the cutting and sewing of the garments, is performed by independent companies known in the garment industry as "contractors" or "subcontractors." RMC sells the finished garments throughout the United States.

In April, 1989, Local 89-22-1 contacted RMC with the aim of convincing the designer to sign a "Hazantown Agreement," also known as a "Jobber's Agreement."¹ The plaintiffs did not agree to sign such an agreement, and in September, 1990, Local 89-22-1 began to picket outside the premises of RMC. The picket signs indicated that the union was seeking a Hazantown Agreement with RMC.

The parties met twice in October, 1990. At the second meeting Local 89-22-1 provided the plaintiffs with a copy of a broader collective agreement that included the provisions which comprise a Hazantown Agreement. Thereafter, Local 89-22-1 provided the plaintiffs with a copy of a model Hazantown Agreement.

The plaintiffs filed an unfair labor practice charge with the National Labor Relations Board ("NLRB") on November 15, 1990, alleging that four provisions in the proposed Hazantown Agreement were unlawful under § 8(e) of the NLRA, 29 U.S.C. § 158(e), and that therefore Local 89-22-1's picketing violated § 8(b)(4) of the NLRA, 29 U.S.C. § 158(b)(4). (Cohen Aff., Ex. 6). By letter dated December 3, 1990, Local 89-22-1 indicated to the plaintiffs that "any provision of the model agreement tendered to you is subject to good-faith collective bargaining." (Cohen Aff., Ex. 9). The plaintiffs responded that they were not willing to negotiate as long as the four clauses were "on the table." (Cohen Aff., Ex. 10).

On January 15, 1991, the Regional Director of the NLRB dismissed the plaintiffs' unfair labor practice charge. (Defendants' Joint Rule 3(G) Statement, Ex. A). On March 28, 1991, the General Counsel of the NLRB reversed the dismissal without explanation, and remanded the case for a hearing before an Administrative Law Judge. (Id., Ex. B).

Local 89-22-1 ceased picketing in late March, 1991. In July, 1991, a settlement agreement of the NLRB proceeding was executed. The Union agreed not to picket RMC where an object of its picketing was to force RMC to enter into an agreement containing the four clauses. The settlement agreement states that signing shall not constitute an admission by Local 89-22-1 that it violated the NLRA. (Cohen Aff., Ex. 23). Also in July 1991, the plaintiffs commenced this action to recover damages resulting from the defendants' alleged unlawful picketing.

I. Garment Industry Proviso

The parties dispute whether four clauses in the model Hazantown Agreement which Local 89-22-1 presented to the plaintiffs are protected by the garment industry proviso to § 8(e) of the NLRA. Both parties believe the court can decide this conflict by summary judgment. Pursuant to Rule 56(c), F.R.Civ. P., summary judgment is appropriate where there is no genuine issue of material fact; the "mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986) (emphasis in original).

Section 8(e) of the NLRA prohibits a union and an employer from entering into any express or implied agreement, often called "hot cargo" agreements, whereby the employer promises a union not to do business with other employers who refuse to operate under union contracts.² Congress provided two exemptions in § 8(e) to the ban on hot cargo agreements, the garment industry and construction industry provisos. The garment industry proviso states as follows:

For purposes of ... § 8(e) and § 8(b)(4)(B) the terms "any employer," "any person engaged in commerce or an industry affecting commerce," and "any person" when used in relation to the terms "any other producer, processor, or manufacturer," "any other employer," or "any other person" shall not include persons in the relation of a jobber, manufacturer, contractor or subcontractor working on the goods or premises of the jobber or manufacturer or performing parts of an integrated process of production in the apparel and clothing industry.... 29 U.S.C. § 158(e) (emphasis added).³

The plaintiffs acknowledge that RMC is a "jobber" within the meaning of § 8(e), and concede that all but the four challenged clauses of the Hazantown Agreement are protected by the garment industry proviso. According to the plaintiffs, however, the four clauses are facially overbroad because each, for various reasons, restricts RMC's dealings with third persons and entities even where such persons are not contractors or subcontractors "performing parts of an integrated process of production in the apparel and clothing industry."⁴

Similar versions of each of the four challenged clauses appeared in collective bargaining agreements between I.L.G.W.U. affiliates and multi-employer associations in the dress, cloak and skirt industries in 1959 when the garment industry proviso was adopted, as well as in many other contracts throughout the United States covering workers in other branches of the garment industry. (Aff. of Walter Mankoff, Assoc. Director of I.L.G.W.U. Research Dept., I.L.G.W.U. binder, Ex. 12, ¶¶ 4, 5). The legislative history of the garment industry proviso contains numerous statements from Congressmen that the exemption was intended to permit the I.L.G.W.U. and its local affiliates to continue their "present unionization practices throughout the integrated process of production." Danielson, 494 F.2d at 1235.⁵ Therefore, although the plaintiffs' specific attacks on each of the four clauses will be carefully explored below, there is a strong presumption that these provisions were part of the status quo Congress intended to protect in enacting the garment industry proviso.

Although the NLRB did not reach a decision on the merits regarding the four clauses at issue, it has established some basic rules of construction for determining whether a collective bargaining clause is facially overbroad and not within the protection of the construction industry proviso. Donald Schriver, Inc. v. N.L.R.B., 635 F.2d 859, 886 (D.C.Cir.1980) (deference must be given to the NLRB's interpretation of the NLRA); Blyer v. N.Y. Coat, Suit, Dress, Rainwear & Allied Workers' Union, 522 F.Supp. 723, 727 (S.D.N.Y.1981) (Sofaer, J.) (same). The NLRB has found clauses challenged as facially overbroad to be lawfully restricted to on-site construction work, as required by the construction industry proviso,⁶ even though the challenged clause itself is not explicitly limited to on-site work. In such cases, the NLRB looks to whether the parties and or related clauses of the agreement manifest an intent to so restrict the clause. See, e.g., General Teamsters, Local 982 (J.K. Barker Co.), 181 NLRB 515, 517-520 (1970), enf'd, 450 F.2d 1322 (D.C.Cir.1971); Southern Cal. District Council of Hod Carriers, 158 NLRB No. 28, 303, 305 (1966); Ets-Hokin Corp., 154 NLRB No. 52, 839, 841 (1965), enf'd, 405 F.2d 159 (9th Cir.1968).⁷

These rules of construction should be equally applicable to determining whether a clause is protected by the garment industry proviso. Thus, with respect to the garment industry proviso, a clause is not facially overbroad simply because it is not expressly limited to instances where a contractor or subcontractor is working on "the goods or premises of the jobber" or where the employer is "performing parts of an integrated process of production." 29 U.S.C. § 158(e). Rather, the parties' intent and related clauses must be considered. Since the four clauses at issue are contained in a Hazantown Agreement, which as a whole applies only to jobbers within the garment industry, the plaintiffs have a tough task in proving that the clauses are intended to apply to entities outside the integrated process of production in the garment industry. See Jou-Jou Designs v. I.L.G.W.U., 643 F.2d 905, 909-910 (2d Cir.1981) (Hazantown Agreements are affirmatively sanctioned by garment industry proviso).

1. Continuing Obligations Clause

The plaintiffs challenge Article Fourth, the "Continuing Obligations Clause," which states as follows:

The Employer and its transferee, successors and assigns shall be bound by and be personally and individually

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