Frito-Lay, Inc. v. Local Union No. 137, Intern. Broth. of Teamsters, Chauffeurs, Warehousemen and Helpers of America

• Decision Date: 03 July 1980
• Docket Number: No. 77-2075,INC,FRITO-LA,77-2075
• Parties: 104 L.R.R.M. (BNA) 2931, 89 Lab.Cas. P 12,169 , Plaintiff-Appellee, v. LOCAL UNION NO. 137, INTERNATIONAL BROTHERHOOD OF TEAMSTERS, CHAUFFEURS, WAREHOUSEMEN AND HELPERS OF AMERICA et al., Defendants-Appellants.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1354

623 F.2d 1354

104 L.R.R.M. (BNA) 2931, 89 Lab.Cas. P 12,169

FRITO-LAY, INC., Plaintiff-Appellee, v. LOCAL UNION NO. 137, INTERNATIONAL BROTHERHOOD OF TEAMSTERS CHAUFFEURS, WAREHOUSEMEN AND HELPERS OF AMERICA et al., Defendants-Appellants.

No. 77-2075.

United States Court of Appeals Ninth Circuit.

July 3, 1980.

Kenneth N. Silbert, Brundage, Beeson, Tayer & Kovach, San Francisco, Cal., for defendants-appellants.

Duane C. Aldrich, Kilpatrick, Cody, Rogers & McClatchey & Regenstein, Atlanta, Ga., for plaintiff-appellee.

Appeal from the United States District Court for the Northern District of California.

Before DUNIWAY and KENNEDY, Circuit Judges, and BONSAL, ^* District Judge.

KENNEDY, Circuit Judge:

Frito-Lay, Inc., brought suit against fifteen local unions affiliated with the International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America (the "Union"), seeking monetary relief for damages suffered as a result of the Union's strike against the Company. Frito-Lay alleged the Union struck in violation of sections 8(b)(4)(A) and 303(a) of the Labor Management Relations Act ("Act"), 29 U.S.C. § 158(b)(4)(A) and § 187(a). The Union locals appeal from the district court judgment awarding Frito-Lay $688,518 in damages. Appellants challenge the trial court's interpretation of section 8(b) (4)(A) of the Act and the court's findings of fact relating to both liability and computation of damages. This court has jurisdiction under 28 U.S.C. § 1291. For the reasons set out below, we affirm the findings as to liability, and we remand for further proceedings on the issue of damages.

I

Appellee Frito-Lay manufactures, sells and distributes potato chips, corn chips and other snack food products in California and elsewhere. Granny Goose, Inc., and Laura Scudder's are competitors engaged in the same business. Appellants are local labor organizations that represent route salesmen and warehousemen employed by Frito-Lay, Granny Goose, and Laura Scudder's in Northern and Central California and part of Nevada.

Between 1960 and December 14, 1973, the three employers joined together as an employer organization to bargain for and enter collective bargaining agreements with the Union. The employer organization negotiated on behalf of the employers for five successive collective bargaining agreements with the Union, covering the period between March 1, 1960, and February 28, 1974. Before commencing negotiations for a contract to succeed the agreement set to expire on February 28, 1974, each of the three employers gave timely notice to the Union of their intent to withdraw from multi-employer bargaining and to bargain separately, thereby dissolving the multi-employer bargaining unit. ¹

On January 28, 1974, a union negotiating committee met with Frito-Lay, Laura Scudder's and Granny Goose and submitted a single contract proposal to all three companies. Throughout the subsequent negotiations the Union demanded that the three companies agree either to one contract covering employees of all three companies or to separate contracts containing substantially identical provisions for each company.

During the negotiations the Union conditioned its approval of Frito-Lay's proposals upon the acceptance of those proposals by the other two companies. On four occasions the Union submitted separate contract proposals from each company to the union members for ratification. The employees of all three companies voted together on each company's proposal ("group voting"), despite each company's repeated demands that its employees alone vote on their company's contract proposals.

The Union evidently was dissatisfied with the breakup of the employer organization and frustrated by the inability to negotiate a single contract or substantially identical contracts to cover all its members. Several times during the negotiations union representatives suggested that the employers confer together to work out contract provisions that would be substantially identical for all three companies. ²

On May 12, 1974, the Union, unable to obtain sufficiently similar contract provisions through individual bargaining, commenced a strike against all three companies. On June 3, 1974, the Western Conference of Teamsters ordered the Union to stop using the group voting procedure and allow each company's employees to vote alone on their company's contract proposal. The strike remained in effect against Frito-Lay until June 29, 1974, when Frito-Lay's employees, voting separately, ratified their company's contract proposal.

The district court concluded that the union's conduct before and during the strike, together with statements of members of the union negotiating committee, evidenced an intent to force the companies to reconstitute the employer organization and to negotiate a multi-employer contract. The court held that the Union had committed an unfair labor practice in violation of section 8(b) (4)(A) because it struck the employers to achieve this goal.

II Liability

Section 8(b)(4)(A) provides, inter alia, that it shall be an "unfair labor practice for a labor organization or its agents . . . to engage in, or to induce or encourage any individual employed by any person engaged in commerce or in an industry affecting commerce to engage in, a strike . . . where . . . an object thereof is . . . (to) forc(e) or requir(e) any employer . . . to join any . . . employer organization." 29 U.S.C. § 158(b)(4)(A). ³

At the outset, we must determine the scope of the prohibition in section 8(b) (4)(A). Appellants argue the section proscribes coercive union conduct here a strike when it is directed at forcing an employer to become an actual member of an existing employer association. It follows, the Union contends, that the section does not prohibit union action taken to require employers to bargain on a group basis. We disagree with the Union's limited construction of the provision.

No NLRB decision we have found reaches the boundaries of the section, as in each case where a violation of section 8(b)(4)(A) was found the Union had struck to require an employer to join an existing employer organization. See United Mine Workers, Local 1854 (Amax Coal Co.), 238 NLRB No. 214 (Sept. 29, 1978); Glass Workers Local 1892 (Frank J. Rooney, Inc.), 141 NLRB 106 (1963); I. L. W. U. Local 8 (General Ore., Inc.), 126 NLRB 172 (1960); United Construction Workers (Kanawha Coal Operators Association), 94 NLRB 1731 (1951). Although these cases all involve existing employer organizations, they do not emphasize formal membership in an existing organization as a necessary component of a section 8(b)(4)(A) violation. In Amax Coal Co., for example, the president of the UMW proposed that twelve western coal mine operators form a multi-employer bargaining association to negotiate a single agreement covering their miners. Four operators agreed to the plan. One operator who rejected the proposal subsequently sued the UMW, charging violations of sections 8(b)(1)(B) and 8(b)(4)(A). The Board ignored a possible distinction between existing and nascent employer organizations and concluded only that the Union had violated section 8(b)(4)(A) by striking the dissident operator, "with the objective of forcing it to engage in multiemployer bargaining . . .." Id. at 15.

There is nothing talismanic about the term "employer organization." Neither the Board nor the courts have ever required that employers organize themselves into a formal association to be considered an employer organization for purposes of the Act. On the contrary, "substance rather than legalistic form is all the Board has ever required in multi-employer bargaining." Town & Country Diary, 136 NLRB 517, 523 (1962); Metz Brewing Co., 98 NLRB 1010, 1012 (1957). To form a multi-employer group, individual employers need only express an unequivocal intention to be bound in collective bargaining by group rather than individual action. Komatz Construction Co. v. NLRB, 458 F.2d 317, 321 (8th Cir. 1972). No formal organizational structure is required. Recognizing the potential informality of multi-employer bargaining units, we think it unlikely that Congress sought in section 8(b)(4)(A) to prohibit a union from forcing an employer to become a formal member of an employer organization but to permit a union to force competing employers to bargain together as an informal group. Attributing that interpretation to the section would allow a union to force employers to engage in multi-employer bargaining so long as the Union did not make the mistake of requiring the employers involved to become members of a formal, existing employer organization.

Our reading of section 8(b)(4)(A) is supported by the legislative history of the Labor Management Relations Act, which indicates that Congress was concerned with forced multi-employer bargaining in general, not merely forced membership in an existing organization. As the district court aptly pointed out, Frito-Lay, Inc. v. International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, 401 F.Supp. 370, 373-76 (N.D.Cal.1975), the proscription of section 8(b)(4)(A) originally encompassed all industry-wide bargaining. The bill, H.R. 3020, was amended later in a compromise measure to ban only involuntary industry-wide bargaining. But throughout the debates the focus was on industry-wide employer bargaining in general and its perceived evils, such as crippling industry-wide strikes, collusive stifling of competition, and "shocking restraints of trade," H.R. No. 245, 93d Cong., 2d Sess., 591 (1947) rather than on the operation of formal employer organizations. ⁴ In view of the legislative history, we conclude that section 8(b)(4)(A) must be construed to prohibit coercive union conduct with the object of forcing employers to engage in multi-employer bargaining, whether as a formal association or informal group.

The Union next contends that the actions...