Fibreboard Paper Prod. Corp. v. EAST BAY U. OF MACH., LOC. 1304

• Decision Date: 20 April 1965
• Docket Number: No. 19006.,19006.
• Citation: 344 F.2d 300
• Parties: FIBREBOARD PAPER PRODUCTS CORPORATION, a Corp., Appellant, v. EAST BAY UNION OF MACHINISTS, LOCAL 1304, etc., et al., Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

344 F.2d 300 (1965)

FIBREBOARD PAPER PRODUCTS CORPORATION, a Corp., Appellant, v. EAST BAY UNION OF MACHINISTS, LOCAL 1304, etc., et al., Appellees.

No. 19006.

United States Court of Appeals Ninth Circuit.

February 3, 1965.

Rehearing Denied April 20, 1965.

Marion B. Plant, Charles E. Hanger, E. Judge Elderkin, Brobeck, Phleger & Harrison, San Francisco, Cal., for appellant.

Irwin Leff, Darwin, Rosenthal & Leff, San Francisco, Cal., for appellees.

Before POPE, KOELSCH and DUNIWAY, Circuit Judges.

POPE, Circuit Judge.

This is an action brought by the appellee Unions¹ against the appellant, here called Fibreboard, to recover damages on account of an alleged breach by Fibreboard of a collective bargaining agreement between the Union on the one hand and Fibreboard on the other. Answering the complaint, Fibreboard, in addition to denying certain of its allegations, pleaded three separate affirmative defenses which we shall describe shortly. The Union moved to strike these three affirmative defenses and the court sustained the motion to strike the second and third and denied the motion to strike the first of such defenses. Pursuant to the trial court's determination that an immediate appeal from such order would materially advance the ultimate termination of the litigation, this court pursuant to the provisions of 28 U.S.C. § 1292(b), granted appellant's application to take this appeal which has now been briefed and argued and is before us for decision.

The record upon which the trial court made its ruling was not limited to the pleadings alone. The ruling took into account other facts, as we shall note. These disclosed that Fibreboard had a manufacturing plant at Emeryville, California; that it carried on its own maintenance work in and about the plant, and its maintenance employees were represented, for purposes of collective bargaining, by the East Bay Union of Machinists, Local 1304, one of the appellee Unions. During the year August 1, 1958 through July 31, 1959, the Union and Fibreboard had a collective bargaining contract in effect which contained a provision for automatic renewal "from year to year thereafter between the respective parties unless either party hereto shall give written notice to the other of its desire to change, modify, or cancel the same at least sixty (60) days prior to expiration." On May 26, 1959, the Union notified Fibreboard that it desired "to modify as of August 1, 1959 the collective bargaining contract dated July 31, 1958, now in effect between the Company and the Union. The Union offers to meet with the Company at such early time and suitable place as may be mutually convenient, for the purpose of negotiating a new contract."

Under date of June 15, 1959, the Union wrote to Fibreboard requesting a meeting to discuss certain "proposed changes in the working arrangement between the parties." These proposed changes related to wage scales, seniority, hours of work and overtime, holidays, night differentials, vacations, a welfare plan and new provisions for adjustment of complaints. Fibreboard did not meet with the Union for these purposes because at that time Fibreboard was studying the possibility of effecting savings in its maintenance work by having the work done by an independent contractor specializing in plant maintenance. It made such a contract with Fluor Maintenance Company, effective August 1, 1959. On July 27, 1959, the Union was told of Fibreboard's decision to contract out the work and that hence "negotiations of a new contract would be pointless."²

The complaint alleges that on July 31, 1959, approximately 50 men employed by Fibreboard on maintenance work, who were members of the Union and covered by the collective bargaining agreement, were discharged and locked out by Fibreboard and that this was a breach of the collective bargaining agreement referred to. Defendant, in its answer, alleged that the contract between itself and the Union terminated on July 31, 1959. It admitted that at the end of that day defendant terminated the employment of the individuals theretofore employed in maintenance and power house work in and about its plant. It then pleaded as a separate and first affirmative defense that the contract, of which a copy was attached to the complaint as an exhibit, provided "that all grievances, including claims of the kind asserted in the complaint, shall, if the parties cannot adjust the same by negotiation, be submitted to final and binding arbitration." Its second affirmative defense was as follows: "That plaintiffs and defendant herein were parties to proceedings before the National Labor Relations Board in which plaintiffs claimed and asserted that the contract, of which a copy is attached to the Complaint as Exhibit A, was on July 31, 1959, automatically renewed for another year and in which defendant claimed and asserted that the said contract was not on July 31, 1959, renewed automatically or otherwise for another year but that said contract terminated on said date; that the National Labor Relations Board, on March 27, 1961, made and rendered in said proceedings its Decision and Order in and by which the said National Labor Relations Board found and determined that the said contract terminated on July 31, 1959, and was not automatically renewed; that said Decision and Order so holding has become final and is conclusive of the question whether said contract terminated on July 31, 1959."

The third so-called affirmative defense stated in the answer was as follows: "That the Complaint herein fails to join indispensable parties in that it fails to join any of the individuals who were employed by defendant on and prior to July 31, 1959, in powerhouse or maintenance work and who are claimed in said Complaint to be entitled to benefits under said contract." As above indicated, the motion to strike affirmative defenses filed on behalf of the Union was directed against all three of these defenses just described, the second and third of which were stricken. The appeal now before us is from that order.

Referring to the third affirmative defense, to the effect that there has been a failure to join the individual members of the Union who are indispensable parties, it is our view that the order striking the defense was proper for the reasons set forth in Retail Clerks Union Local 1222 v. Alfred M. Lewis, Inc., 9 Cir., 327 F.2d 442. In that case the plaintiff union brought an action against an employer to require the latter to comply with the provisions of a collective bargaining agreement between the plaintiff union and the defendant employer. It was contended that the action was in essence an attempt by the union to enforce individual wage claims of its members and that such action did not fall within the jurisdiction conferred upon the district court by § 301 (a) of the Labor Management Relations Act, 29 U.S.C. § 185(a). This court held that the action was properly brought and reversed the order of the district court which dismissed the action "`for lack of jurisdiction over the subject matter.'"

Appellant asserts that that case is not in point here since it merely held that the union could bring a law suit to enforce a collective bargaining agreement. It is true that in that case the phrase "indispensable parties" was not used, perhaps because it never occurred to any one to suggest that a problem of indispensable parties existed. But it seems to us that the holding there necessarily controls upon the point we now discuss. The third affirmative defense was properly stricken.

To fully understand the issues relevant to the striking of the second defense, it is necessary first to outline the issues involved in the Labor Board proceedings, upon which the claim of collateral estoppel is based, and in the instant litigation. In this action, if the decision of the district court is affirmed, the issues ultimately to be decided³ will be: (a) Did the contract between the Union and Fibreboard terminate on July 31, 1959? If so, the court cannot hold that the employer's conduct was a breach of any contract for there was none; (b) If the contract did not terminate but continued following July 31, 1959, was the act of contracting out the work in violation of the contract either (1) because it was the basis for a grievance procedure within the meaning of the grievance and arbitration provisions of the contract so that the employer would be obliged to submit the claimed grievance to arbitration within the meaning of United Steelworkers of America v. Warrior & Gulf Nav. Co., 363 U.S. 574, 80 S.Ct. 1347, 4 L.Ed.2d 1409,⁴ or (2), if not a proper subject for grievance procedure, because it was in violation of some other provision of the contract. If it should be found that contracting out was not an act either prohibited by the contract or one required by the contract to be submitted to grievance and arbitration proceedings, then again a conclusion of no breach of contract would appear to be indicated. Again, if it be found that failure of Fibreboard to permit discussions under the grievance procedures was a violation of the contract, then it would be necessary to ascertain what, in the way of damages, could be said to be the consequences of such a breach.⁵

The questions which we thus contemplate as matters to be decided when the present case is heard are not matters properly to be brought before the Labor Board. Recovery in the present suit must be based upon an existing contract, and its obligations. Issues as to those matters were not, and could not be, before the Board. Its decisions deal solely with questions of unfair labor practices as defined in the Act; and breach of a collective bargaining agreement is not an unfair labor practice. International Union, United Mine Workers, etc. v. NLRB, 103 U.S.App.D.C. 207, 257 F.2d 211, 214-215; Independent Petroleum, etc. v. Esso Stand. Oil Co., 3d cir., 235 F.2d 401, 405; N. L. R. B. v. Pennwoven, Inc., 3d cir., 194...