Corvallis Sand & Gravel Co. v. Hoisting and Portable Engineers

• Decision Date: 12 October 1966
• Docket Number: No. 701,701
• Citation: 419 P.2d 38,247 Or. 158
• Parties: CORVALLIS SAND & GRAVEL CO., an Oregon corporation, Appellant, v. HOISTING AND PORTABLE ENGINEERS Local Unionet al., Respondents. EUGENE SAND & GRAVEL, INC., an Oregon corporation, Appellant, v. HOISTING AND PORTABLE ENGINEERS Local Unionet al., Respondents. WILDISH SAND & GRAVEL CO., an Oregon corporation, Appellant, v. HOISTING AND PORTABLE ENGINEERS Local Unionet al., Respondents.
• Court: Oregon Supreme Court

Page 38

419 P.2d 38

247 Or. 158

CORVALLIS SAND & GRAVEL CO., an Oregon corporation, Appellant, v. HOISTING AND PORTABLE ENGINEERS Local Union No. 701 et al.,

Respondents.

EUGENE SAND & GRAVEL, INC., an Oregon corporation, Appellant, v. HOISTING AND PORTABLE ENGINEERS Local Union No. 701 et al.,

Respondents.

WILDISH SAND & GRAVEL CO., an Oregon corporation, Appellant, v. HOISTING AND PORTABLE ENGINEERS Local Union No. 701 et al.,

Respondents.

Supreme Court of Oregon, In Banc.

Argued and Submitted June 6, 1966.

Decided Oct. 12, 1966.

James H. Clarke, Portland, argued the cause for appellants. With him on the brief were McColloch, Dezendorf & Spears and Lewis K. Scott, Portland.

Clifford D. O'Brien, Portland, argued the cause for respondents other than trustees. With him on the brief was Bernard Jolles, Portland.

Hugh L. Barzee, Portland, argued the cause for respondent trustees. On the brief were Barzee, Leedy & Tassock, Portland.

Before McALLISTER, C.J., and PERRY, SLOAN, GOODWIN, DENECKE, HOLMAN, and LUSK, JJ.

HOLMAN, Justice.

Three identical suits in equity have been combined for the purpose of this appeal. In each instance the defendants are the Hoisting and Portable Engineers Local Union No. 701, the trustees of the union's health and welfare fund, and the trustees of its pension fund. The plaintiffs are three employers who individually entered into collective bargaining agreements with the defendant union. The relief sought is rescission of the agreements, restitution of the sums paid thereunder, and an accounting to determine the amounts so paid. Plaintiffs sought to recover from the union the additional wages paid to its members, and from the health and welfare trustees and pension trustees the sums paid to their respective funds for the benefit of members of the union. Plaintiffs have appealed in each case from the trial court's dismissal of their complaints when they refused to plead further following the sustaining of defendants' demurrers.

Plaintiff's complaints in each instance alleged as follows:

'V.

'* * * defendant, Local 701, engaged in a course of conduct involving threats, duress and coercion against plaintiff. Such conduct consisted of picketing, threats of picketing, strike action and threats of strike action. By such conduct, Local 701 * * * obtained and coerced a separate contract or purported contract from plaintiff * * *.

'VI.

'Said course of conduct of defendant Local 701 * * * was found to be illegal and in violation of federal law by the National Labor Relations Board by its determination which was duly made and which was issued March 13, 1963. The National Labor Relations Board * * * ordered that said separate contract or purported contract was illegal, voided, set aside and of no effect.

'VII.

'As a consequence of said * * * voided contract, and as a direct and proximate consequence of defendant Local 701's conduct * * * as above described, plaintiff has paid to * * *.'

The grounds for the demurrers were that the court did not have jurisdiction over the subject matter and that the complaints did not state causes of suit. Defendants claimed the trial court lacked jurisdiction because the subject matter is pre-empted by the Labor Management Relations Act (L.M.R.A.) to the exclusive jurisdiction of the National Labor Relations Board (the Board) and that the complaint did not state a cause of suit because it showed plaintiffs sought, obtained and accepted relief from the Board without asking for the relief sought by the present suits.

The principal issue involved in this case is whether Congress has so pre-empted to the Board the field of labor relations as to deprive state courts of authority to grant the relief of rescission here sought. The plaintiffs charged before the Board, and the Board found, that the union was guilty of unfair labor practices under the Labor Management Relations Act, 61 Stat. 141, § 8(b)(1)(B) and (3) (1947), 29 U.S.C. § 158(b)(1)(B) and (3) (1964). The unfair practices were refusing to bargain collectively with a multiemployer group of which plaintiffs were members, and by strikes and threats of strikes coercing plaintiffs into breaking away from such group and contracting with the union independently.

In determining the intent of Congress concerning pre-emption the Supreme Court of the United States used the following language in Garner v. Teamsters, Chauffeurs etc. Union, 346 U.S. 485, 490--491, 74 S.Ct. 161, 166, 98 L.Ed. 228 (1953), which was quoted with approval in San Diego Bldg. Trades Council v. Garmon, 359 U.S. 236, 242--243, 79 S.Ct. 773, 3 L.Ed.2d 775 (1959):

'Congress did not merely lay down a substantive rule of law to be enforced by any tribunal competent to apply law generally to the parties. It went on to confide primary interpretation and application of its rules to a specific and specially constituted tribunal and prescribed a particular procedure for investigation, complaint and notice, and hearing and decision, including judicial relief pending a final administrative order. Congress evidently considered that centralized administration of specially designed procedures was necessary to obtain uniform application of its substantive rules and to avoid these diversities and conflicts likely to result from a variety of local procedures and attitudes toward labor controversies. * * * A multiplicity of tribunals and a diversity of procedures are quite as apt to produce incompatible or conflicting adjudications as are different rules of substantive law * * *'

There can be no doubt that the Board had the exclusive authority to determine whether the actions of the union were unfair labor practices under the Act. Plaintiffs do not otherwise contend. Having found that the union was guilty of unfair labor practices, is the fashioning of the remedy for these infractions of labor ethics within the sole province of the Board, or may state courts decree the contract is rescinded from its inception?

In San Diego Bldg. Trades Council v. Garmon, supra, the court said:

'. . . Our concern is with delimiting areas of conduct which must be free from state regulation if national policy is to be left unhampered. Such regulation can be as effectively exerted through an award of damages as through some form of preventive relief. The obligation to pay compensation can be, indeed is designed to be, a potent method of governing conduct and controlling policy. Even the States' salutary effort to redress private wrongs or grant compensation for past harm cannot be exerted to regulate activities that are potentially subject to the exclusive federal regulatory scheme. See Garner v. Teamsters, etc Union, 346 U.S. 485, 492--497, 74 S.Ct. 161, 166--169, 98 L.Ed. 228. It may be that an award of damages in a particular situation will not, in fact, conflict with the active assertion of federal authority. The same may be true of the incidence of a particular state injunction. To sanction either involves a conflict with federal policy in that it involves allowing two law-making sources to govern. In fact, Since remedies form an ingredient of any integrated scheme of regulation, to allow the State to grant a remedy here which has been withheld from the National Labor Relations Board only accentuates the danger of conflict.' (359 U.S. 246--247, 79 S.Ct. 780--781.) (Emphasis added.)

Again, in International Ass'n of Machinists, etc. v. National Labor Relations Board, 311 U.S. 72, 82, 61 S.Ct. 83, 85 L.Ed. 50 (1940), the court without any dissent said as follows:

'* * * Where as a result of unfair labor practices a union cannot be said to represent an uncoerced majority, the Board has the power to take appropriate steps to the end that the effect of those practices will be dissipated. That necessarily involves an exercise of discretion on the part of the Board--discretion involving an expert judgment as to ways and means of protecting the freedom of choice guaranteed to the employees by the Act. It is for the Board not the courts to determine how the effect of prior unfair labor practices may be expunged. National Labor Relations Board v. Pennsylvania Greyhound Lines, Inc., 303 U.S. 261, 271, 58 S.Ct. 571, 576, 82 L.Ed. 831, 115 A.L.R. 307; National Labor Relations Board v. Falk Corp., 308 U.S. 453, 461, 60 S.Ct. 307, 311, 84 L.Ed. 396. * * *' (Emphasis added.)

The determination of the relief to which a party to a collective bargaining agreement may be entitled, where the agreement was obtained by unfair labor practices, is sufficiently important in the regulatory process as to be within the sole province of the Board. There would be no logical distinction between regulation by a remedy such as injunction or an action for damages, on the one hand, and a remedy such as the return of benefits received under the contract through rescission on the other.

This is not a situation where the activity regulated was a merely peripheral concern of the LMRA, ¹ nor did it relate to the vindication of interests which were deeply rooted in local feeling and responsibility in which there were, therefore, overriding state interests. ² No one has called to our attention any Oregon regulation or common law requiring a union to bargain collectively with a multiemployer group or preventing a union from striking for the purpose of making an employer bargain separately with it where a labor dispute exists. There is no state right which the court is requested to vindicate.

The plaintiffs urge that the rescission of the agreements and recovery of the additional sums paid thereunder 'are contractual consequences of the Board's determination' and that the granting by a state court of the relief sought would not interfere with, but rather aid and be in conformance with the Board's policy. They point out that state courts are always available to vindicate federally-created rights.

If it was the Board's belief that the 'expunging' of the union's prior unfair labor practices required...