Brennan v. Emerald Renovators, Inc.

• Decision Date: 23 May 1975
• Docket Number: No. 74 Civ. 2817 (WCC).,74 Civ. 2817 (WCC).
• Citation: 410 F. Supp. 1057
• Parties: Peter J. BRENNAN, Secretary of Labor, United States Department of Labor, Plaintiff, v. EMERALD RENOVATORS, INC., a Corporation, Defendant and Third-Party Plaintiff, v. SERVICE EMPLOYEES INTERNATIONAL UNION, LOCAL 200, AFL-CIO, et al., Third-Party Defendants.
• Court: U.S. District Court — Southern District of New York

410 F. Supp. 1057

Peter J. BRENNAN, Secretary of Labor, United States Department of Labor, Plaintiff, v. EMERALD RENOVATORS, INC., a Corporation, Defendant and Third-Party Plaintiff, v. SERVICE EMPLOYEES INTERNATIONAL UNION, LOCAL 200, AFL-CIO, et al., Third-Party Defendants.

No. 74 Civ. 2817 (WCC).

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

May 23, 1975.

Francis V. LaRuffa, Regional Solicitor, U.S. Dept. of Labor, New York City, for plaintiff.

Aranow, Brodsky, Bohlinger, Benetar & Einhorn, New York City, for defendant and third-party plaintiff Emerald Renovators, Inc.

Corcoran & Brady, Local Counsel, New York City, for third-party defendants Service Employees Int'l, Union Local 200, and others.

MEMORANDUM AND ORDER

CONNER, District Judge:

This action was commenced on June 28, 1974 by the Secretary of Labor (the Secretary) pursuant to the provisions of the Fair Labor Standards Act of 1938, 29 U.S.C. § 201 et seq. (the Act), as amended by Section 6 of the Equal Pay Act of 1963, 29 U.S.C. § 206 (the Equal Pay Act). Defendant is charged with having violated Section 6(d)(1) of the Equal Pay Act, 29 U.S.C. § 206(d)(1),¹ when it allegedly discriminated between employees on the basis of sex by paying higher wages to certain male employees than it pays to female employees although the tasks performed by both require equal skill, effort and responsibility under similar working conditions.

The Secretary seeks a judgment pursuant to Section 17 of the Act, 29 U.S.C. § 217,² restraining defendant from violating the Act and ordering the payment of any back wages found by the Court to be due to the employees affected by defendant's prior violations. After serving its answer, defendant impleaded the Service Employees International Union, Local 200, AFL-CIO, and a number of its agents (the Union) claiming that any violation of Section 6(d)(1) by it was the result of pressure by the Union in violation of Section 6(d)(2) of the Equal Pay Act, 29 U.S.C. § 206(d)(2).³ It is defendant's position that any judgment against it recovered or recoverable by the Secretary should ultimately be satisfied by the Union.

Presently before the Court are motions by the Secretary and the Union pursuant to Rule 12(b), F.R.Civ.P., to dismiss the third-party complaint. The issues raised by both motions are substantially the same so that the motions may be treated together.⁴

The question presented is whether an employer sued for violating Section 6(d)(1) can seek contribution or indemnity from a labor organization which has violated Section 6(d)(2). A review of the language and structure of the Act leads to the inescapable conclusion that it affords no legal basis for recovery by the employer against a labor organization or its principals in a private action for contribution or otherwise.⁵

Defendant concedes that there exists no statutory authority in the Act or its legislative history, see 1963 U.S. Code Cong. & Admin.News, p. 687 et seq.; see also, Love v. Temple University, 366 F.Supp. 835, 837 (E.D.Pa. 1973), which specifically provides for a civil cause of action enabling an employer to recover damages against a labor organization. It contends, however, that employers are members of the class intended to be protected by Section 6(d)(2), which places a specific duty upon a labor organization not to cause an employer to violate Section 6(d)(1), and therefore the Court, either through common law tort or general equitable principles should fashion a remedy to enforce what defendant views as its federally protected right not to be coerced into executing illegal collective bargaining agreements.⁶

It is beyond peradventure that, even in the absence of a specific statutory provision, where federally protected rights have been invaded, the courts may use any available remedy to make good the wrong done. Bell v. Hood, 327 U.S. 678, 684, 66 S.Ct. 773, 776, 90 L.Ed. 939, 944 (1946). This includes inferring a cause of action against an individual whose conduct has been proscribed by legislation where 1) the party seeking to recover is a member of the class for whose protection and benefit the statute was promulgated, Restatement of Torts, Second § 286 (1965); see Gomez v. Florida State Employment Service, 417 F.2d 569 (5th Cir. 1969), and 2) damages are necessary to effectuate the congressional policy underpinning the substantive provisions of the statute. Bivens v. Six Unknown Federal Narcotics Agents, 403 U.S. 388, 402, 91 S.Ct. 1999, 2007, 29 L.Ed.2d 619, 630 (1970) (Harlan, J., concurring); J. I. Case Co. v. Borak, 377 U.S. 426, 433, 84 S.Ct. 1555, 1560, 12 L.Ed.2d 423, 428 (1964). Defendant's purported claim over against the Union does not satisfy either of these requirements.

Although Section 6(d)(2) prohibits a union from seeking to force an employer to discriminate against employees on the basis of sex, it is the employees, the victims of the discrimination, and not the employer, who comprise the class intended to be protected. Nothing in Section 6(d)(2) creates any rights in favor of a discriminatory employer. Rather, it provides the basis for an equitable action under Section 17 by the Secretary to obtain civil redress against an offending union. To infer a remedy on behalf of employers would allow them to accede to the illegal demands of a labor organization with complete impunity. If the Secretary brings an action, the employer (who has violated Section 6(d)(1) ) would be indemnified by the offending union, whose treasury is funded by the affected employees' union dues. This is hardly conducive to enforcement of the Act.

On the other hand, if the employer is aware that it and it alone must bear the economic consequences for any violation of the Act, there would be an added incentive to resist the type of economic pressure the Union allegedly placed on defendant in this case. Moreover, if in fact a labor organization attempts to coerce an employer to agree to illegal and discriminatory wage practices, the employer has a readily available remedy before the National Labor Relations Board (the N.L.R.B.).

Section 8(b)(3) of the National Labor Relations Act, 29 U.S.C. § 158(b)(3), (the N.L.R.A.) makes it an unfair labor practice for a labor organization or its agents to refuse to bargain collectively with an employer. Section 8(d) of the N.L.R.A., 29 U.S.C. § 158(d), requires the parties to collective bargaining to meet and confer in good faith. Either party's insistence upon the inclusion of illegal contract provisions within the collective bargaining agreement amounts to a refusal to bargain collectively in good faith within the meaning of Sections 8(b)(3) and (d). Associated General Contractors of America, Evansville Chapter, Inc. v. N.L.R.B., 465 F.2d 327, 334 (7th Cir. 1972), cert. denied, 409 U.S. 1108, 93 S.Ct. 907, 34 L.Ed.2d 689 (1973); N.L.R.B. v. Amalgamated Lithographers of America, 309 F.2d 31, 42 (9th Cir. 1962), cert. denied, 372 U.S. 943, 83 S.Ct. 936, 9 L.Ed.2d 968 (1963); In re Maritime Union, 78 N.L.R.B. 971, enforced, 175 F.2d 686 (2d Cir. 1949), cert. denied, 338 U.S. 954, 70 S.Ct. 620, 94 L.Ed. 589 (1950); see International Typographical Union, Local 38 v. N.L.R.B., 278 F.2d 6, 12 (1st Cir. 1960), rev'd in part and aff'd in part, 365 U.S. 705, 81 S.Ct. 855, 6 L.Ed.2d 36 (1961) (reversal on question of legality of contract provision involved).

Therefore, since the alleged conduct of the Union was arguably an unfair labor practice under Section 8 of the N.L.R.A., defendant's proper and exclusive remedy was to have petitioned the N.L.R.B. to enjoin the Union's illegal activities. See San Diego Building Trades Council v. Garmon, 359 U.S. 236, 79 S.Ct. 773, 3 L.Ed.2d 775 (1959).

Furthermore, if the sole purpose of the Act was to recover unpaid wages for the benefit of employees protected by the statute, it might make little difference from whom the withheld wages were recovered. However, that is not the case. The Act's restitution provisions are, in the words of then Senator John F. Kennedy, to

"serve as a source of protection to employers who pay a decent wage and who must compete with employers who pay a substandard wage." U.S. Code Cong. & Admin.News, 87th Cong., 1st Sess. 1961, Vol. 2 at p. 1621.

Thus, employers violating the provisions of the Act may be required to disgorge wages which were wrongfully withheld and deposit them in the Treasury of the United States even when the affected employees cannot be located. Hodgson v. Wheaton Glass Co., 446 F.2d 527, 535 (3d Cir. 1971); Wirtz v. Jones, 340 F.2d 901, 904-5 (5th Cir. 1965); Love v. Temple University, supra, and cases cited therein. Therefore, to allow discriminating employers to shift their financial responsibility to a labor organization would not effectuate but rather, would subvert the congressional policies sought to be advanced.

The maintainability of an implied third-party action against a union by an employer alleging violations of Section 6(d)(2) was first considered in Wirtz v. Hayes, 58 C.C.H.Lab.Case, ¶ 32,085 at 43,556 (N.D.Ohio 1968). Although refusing to rule out the possibility of recovery on a common law basis, or upon "the evolving body of federal labor law being fashioned by the federal courts," the Court concluded that civil liability on the part of a union is unavailable in private actions under the Act, and observed:

"A reading of the statute Section 6(d) and its legislative history does not disclose a purpose to make the union jointly liable in damages, but rather to give the Secretary of Labor power to enjoin violations of the Fair Labor Standards Act where a union is responsible, as well as power to enjoin employers from future violations and require payment for past ones. 29 U.S.C. § 215(a)(2) makes it unlawful for any person to violate any of the provisions of Section 206, and 29 U.S.C. § 217 gives the District Courts jurisdiction to restrain violations of section 215(a)(2) where there has been a withholding of payments

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