INTERNATIONAL U., UNITED A., A. & AI WKRS. v. Textron, Inc.

• Decision Date: 31 January 1963
• Docket Number: No. 14926.,14926.
• Parties: INTERNATIONAL UNION, UNITED AUTOMOBILE, AIRCRAFT & AGRICULTURAL IMPLEMENT WORKERS OF AMERICA, UAW, AFL-CIO, and its Local 647, Plaintiffs-Appellants, v. TEXTRON, INC., and Union Central Life Insurance Company, Defendants-Appellees.
• Court: U.S. Court of Appeals — Sixth Circuit

312 F.2d 688 (1963)

INTERNATIONAL UNION, UNITED AUTOMOBILE, AIRCRAFT & AGRICULTURAL IMPLEMENT WORKERS OF AMERICA, UAW, AFL-CIO, and its Local 647, Plaintiffs-Appellants, v. TEXTRON, INC., and Union Central Life Insurance Company, Defendants-Appellees.

No. 14926.

United States Court of Appeals Sixth Circuit.

January 31, 1963.

Lowell Goerlich, Washington, D. C., Richard N. Koehler, Hamilton, Ohio, on brief; Harold A. Cranefield, Detroit, Mich., of counsel, for appellants.

Jack G. Evans, Cincinnati, Ohio, Thomas S. Calder, Dinsmore, Shohl, Barrett, Coates & Deupree, Cincinnati, Ohio, on brief, for appellees.

Before CECIL, Chief Judge, and MILLER and O'SULLIVAN, Circuit Judges.

CECIL, Chief Judge.

This action was begun in the United States District Court for the Southern District of Ohio, Western Division, by International Union, United Automobile, Aircraft & Agricultural Implement Workers of America, UAW, AFL-CIO, and its Local 647. They are the appellants and will be referred to hereinafter as the Unions. The Unions are unincorporated labor organizations within the meaning of the Labor Management Relations Act, Title 29 U.S.C. § 151 et seq., and represent employees in an industry affecting commerce as defined in the Act.

Textron, Inc., one of the appellees, hereinafter sometimes referred to as the employer, is a corporation organized and existing by virtue of the laws of Rhode Island, employing employees in an industry affecting commerce within the meaning of the Labor Management Relations Act.

The action is brought under Section 301 of the Act and arises out of a written contract between the Unions and The Randall Company, which governed the collective bargaining relationship between the parties hereto. Textron, Inc., in June 1959, acquired all of the assets of the Randall Company and the name of the Randall Company was changed to The Randall Company, Division of Textron, Inc. Textron, Inc. assumed all of the obligations of the agreement and for the purposes of this action it is an agreement between Textron and the Unions.

The agreement in question provided for a pension plan for employees. The Union Central Life Insurance Company, one of the defendants in the District Court, was the trustee or insurance company to whom payments or contributions were to be made by the employer. At the time the action was started, the fund under its control was in excess of $250,000.

On November 16, 1959, the employer gave notice of termination of the contract and pension plan. Section 2 of Article VIII of the Plan outlined the method and procedure to be followed in the event the pension plan was terminated. It provided that the assets of the fund should be first allocated to the expenses of administration or liquidation and thereafter for pension purposes to employees, who were divided into four groups or classifications. The employees were given preferential standing in the allocation of the trust fund assets, to the extent of the sufficiency of the funds, and according to the classification for which particular employees were qualified. If the assets of the trust fund were insufficient to fully pay the pensions of all of the employees in the first class, then reductions were to be made by the actuary in a uniform manner.

The Unions charge that the employer has refused to execute the provisions of the contract for the termination of the pension plan. They seek an adjudication in the District Court of the rights of the employees under the contract.

Counsel for the employer contend that the subject of the action involves peculiarly personal rights of the individual members of the Union and that the District Court did not have jurisdiction under the Labor Management Relations Act to hear and determine the case. The District Judge dismissed the action on motion of counsel for the employer. This appeal followed.

The question presented is whether Section 301 of the Act (Sec. 185, Title 29 U.S.C.) confers federal jurisdiction upon the District Court to entertain the action. Subdivision (a) of that section provides, "Suits for violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce as defined in this chapter, or between any such labor organizations, may be brought in any district court of the United States having jurisdiction of the parties, without respect to the amount in controversy or without regard to the citizenship of the parties."

In Association of Westinghouse Salaried Employees v. Westinghouse Electric Corp., 348 U.S. 437, 75 S.Ct. 488, 99 L.Ed. 510 (1955), the court held that section 301 did not confer jurisdiction on a federal court over a suit brought by the union against the employer to recover one day's lost wages for four thousand employees. The court took the position that the employees' claims for wages arose out of separate hiring contracts between the employer and employees and not from the collective bargaining agreement between the employer and the union. The court considered that there was no federal substantive law to apply to such suits and that they would necessarily be governed by the substantive law of the state in which the court was sitting. The court held that the legislative history of section 301 did not indicate that Congress intended to confer jurisdiction on the federal courts in such cases and it therefore concluded that no such jurisdiction was conferred on the courts by the enactment of the section. The basic concept underlying this decision is that there was no federal substantive law by which such cases could be determined.

In 1957, the Supreme Court decided that under section 301 collective bargaining agreements were equally binding and enforceable against both the union and the employer. The court further decided that the substantive law which federal courts were to apply in the enforcement of collective bargaining agreements was federal law which the courts must fashion from the policy of our national labor laws, and that section 301 authorized the creation of such a body of...