AMALGAMATED ASS'N, ETC. v. LAS VEGAS-TONOPAH-RENO STAGE L.

• Citation: 319 F.2d 783
• Decision Date: 02 July 1963
• Docket Number: No. 17812.,17812.
• Parties: AMALGAMATED ASSOCIATION OF STREET ELECTRIC RAILWAY AND MOTOR COACH EMPLOYEES, DIVISION 1225, Appellant, v. LAS VEGAS-TONOPAH-RENO STAGE LINE, INC., Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)

319 F.2d 783 (1963)

AMALGAMATED ASSOCIATION OF STREET ELECTRIC RAILWAY AND MOTOR COACH EMPLOYEES, DIVISION 1225, Appellant, v. LAS VEGAS-TONOPAH-RENO STAGE LINE, INC., Appellee.

No. 17812.

United States Court of Appeals Ninth Circuit.

July 2, 1963.

Neyhart & Grodin and Joseph R. Grodin, San Francisco, Cal., for appellant.

John H. McNamee, Las Vegas, Nev., and Ernest S. Brown, Reno, Nev., for appellee.

Before CHAMBERS, Circuit Judge, MADDEN, Judge of the Court of Claims, and DUNIWAY, Circuit Judge.

MADDEN, Judge.

The union and the employer company made an "agency shop" agreement. That kind of an agreement provides that employees who do not join the union will pay the regular initiation fee and dues to the union, and that if they do not make these payments, the employer will discharge them. The employer, having made this agreement, refused to carry it out by discharging employees who did not join the union and did not make the payments to the union required by the contract.

The union brought this suit in the United States District Court for the District of Nevada, asking for a declaratory judgment that the agency shop agreement was valid, and an order requiring the employer to comply with the agreement.

The National Labor Relations Act, § 8(a) (1) and (3), 29 U.S.C. § 158(a) (1) and (3), makes illegal a closed shop, i. e., an agreement under which an employer can neither hire nor work persons not members of the union, but, by proviso, it expressly permits an agreement requiring employees, after the thirtieth day following their employment, to become members of the union, but by further proviso the employer is forbidden to discharge an employee for nonmembership in the union if the union refused to admit him as a member for any reason other than a failure to tender the regular initiation fee and dues. Thus § 8(a) (3) forbids the closed shop but permits the "union shop."

But the generality of the sanction of the union shop is importantly qualified by § 14(b) of the Act, 29 U.S.C. 164(b), which says:

"Nothing in this subchapter shall be construed as authorizing the execution or application of agreements requiring membership in a labor organization as a condition of employment in any State or Territory in which such execution or application is prohibited by State or Territorial Law."

This section gave to each state the option of outlawing collective bargaining agreements providing for the union shop. Some eighteen states have exercised this option by constitutional or statutory provisions known as "right to work" laws.

The State of Nevada, from which the present controversy comes, has a "right to work" law.

The National Labor Relations Act applies only to enterprises which are in interstate commerce, or whose operations affect interstate commerce. The defendant employer in this case is concededly subject to the National Labor Relations Act.

The district court granted the defendant's motion for summary judgment. In a thoughtful and rather lengthy opinion, in 202 F.Supp. 726, Chief Judge Ross explained his conclusion. He said that, under § 14(b), Nevada had the power to outlaw the union shop; that the "agency shop" involved in the instant case was the legal equivalent of a union shop, and hence Nevada had the power to outlaw it; that the Nevada statute, although it, like § 8(a) (3) and § 14(b) of the National Labor Relations Act, is couched in terms of "membership" in unions, should, like those provisions of the Federal Act, be interpreted as applying to situations such as the instant one, not involving compulsory membership, but involving its legal equivalent, compulsory payment of union charges.

The union has appealed from the district court's decision. In its original brief and at oral argument it urged (1) that § 14(b) of the National Labor Relations Act does not give to the states the option to outlaw agency shop agreements and (2) even if § 14(b) did give Nevada such an option, Nevada's statute, properly interpreted, does not outlaw agency shop agreements.

At the time of the oral argument in this case two cases were pending before the Supreme Court of the United States the decisions in which, it seemed, would be of importance in the consideration of the instant case. It was agreed that when those decisions came down, the parties would submit supplemental briefs. The Supreme Court decisions were issued on June 3, 1963, and the promised supplemental briefs have been submitted. The two cases are National Labor Relations Board v. General Motors Corporation, 83 S.Ct. 1453, and Retail Clerks International Association, Local 1625, AFL-CIO, et al. v. Schermerhorn, 83 S.Ct. 1461.

In General Motors, the union had requested negotiation about an agreement for an agency shop. General Motors refused even to discuss the question, taking the position that the proviso in § 8(a) (3) of the NLRA expressly sanctioning a union shop, did not sanction this agency shop variation of the sanctioned union shop, hence such an agreement if made would be a violation of § 8(a) (3), hence it would not be a lawful subject to bargain about. The National Labor Relations Board, 133 NLRB 451, held that General Motors had unjustifiably refused to bargain, and ordered it to bargain. The United States Court of Appeals for the Sixth Circuit, 303 F.2d 428, disagreed with the Board and refused to enforce its order to bargain. The Supreme Court of the United States, in its June 3, 1963 decision, supra, reversed the Court of Appeals. It adopted the Labor Board's view that if Congress in § 8(a) (3) sanctioned the union shop, it must have also intended to sanction "less vigorous, less compulsory contracts which demanded less adherence to the Union." The Supreme Court said that the proviso in § 8(a) (3), while it spoke of "membership," actually, by reason of its provision that an employee could not be discharged, under a union shop agreement, if he tendered his initiation fees and dues, even though he was denied membership in the union, meant to authorize not only a union shop but any less compulsory variation of such an arrangement. The Court said that although Congress authorized the parties to a labor agreement to make membership in the union a condition of continued employment, it "whittled down" the meaning of membership to "its financial core," by the language of § 8(a) (3).

Perhaps it could be said that since the closed shop was the evil which Congress sought to forbid, and since Congress regarded the union shop as sufficiently different from the closed shop to be expressly permitted, then, a fortiori, the agency shop which differed from the closed shop in the same general manner as the union shop differed, but differed in a greater degree, would also be permitted. So far, then, as § 8(a) (3) is concerned, the agency shop is lawful.

The Schermerhorn case, supra, raised the question of the legality of the agency shop in the state of Florida, a state which had a "right to work" statute. That brought § 14(b) of the federal act, quoted supra, into the case. In § 14(b) Congress authorizes each state, at its option, to forbid any sort of an agreement requiring union membership as a condition of employment. Florida had such a statute. Food Fair Stores, having a chain of stores in Florida, made an agency shop agreement with the union of its employees. Non-union employees of the employer brought suit in a Florida court to enjoin the union and the employer from enforcing the agreement against them, the non-union employees, by requiring them to pay the union initiation fees and dues or suffer discharge. The defendants contended that since the contract did not require "membership" in the union, § 14(b) which is written in terms of membership, did not apply, and hence § 14(b) did not authorize the state to forbid this kind of a contract, which was, in fact, an agency shop contract.

The Supreme Court of Florida held that the Florida right to work law made the contract illegal and that its enforcement should have been enjoined. The Supreme Court of the United States agreed that the contract was illegal. It said that its decision in General Motors, supra, ruled the Schermerhorn case. It said that the agreements requiring "membership" which are expressly...