Genesco, Inc. v. Joint Council 13, United Shoe Wkrs. of Amer.

• Citation: 341 F.2d 482
• Decision Date: 05 February 1965
• Docket Number: No. 228,Docket 29178.,228
• Parties: GENESCO, INC., Plaintiff-Appellant, v. JOINT COUNCIL 13, UNITED SHOE WORKERS OF AMERICA, AFL-CIO, and Max Honig, as President, and Anthony Scimeca, as Treasurer of Joint Council 13, United Shoe Workers of America, AFL-CIO, Defendants-Appellees.
• Court: U.S. Court of Appeals — Second Circuit

341 F.2d 482 (1965)

GENESCO, INC., Plaintiff-Appellant, v. JOINT COUNCIL 13, UNITED SHOE WORKERS OF AMERICA, AFL-CIO, and Max Honig, as President, and Anthony Scimeca, as Treasurer of Joint Council 13, United Shoe Workers of America, AFL-CIO, Defendants-Appellees.

No. 228, Docket 29178.

United States Court of Appeals Second Circuit.

Argued December 2, 1964.

Decided February 5, 1965.

Madeline Balk, New York City (Seligman & Seligman, New York City, Edward F. Seligman, New York City, of counsel), for plaintiff-appellant.

Marshall Rosenberg, New York City (Lieberman, Katz & Aronson, New York City, Isadore Katz, New York City, of counsel), for defendants-appellees.

Before FRIENDLY and SMITH, Circuit Judges, and BLUMENFELD, District Judge.^*

FRIENDLY, Circuit Judge:

In a decision reported in 230 F.Supp. 923 (1964), Judge Bonsal, in the District Court for the Southern District of New York, dismissed the first, third and fourth causes of action in a complaint by Genesco, Inc. against a union representing some of its employees and two union officers. Later, in order to arrive at a final judgment appealable under 28 U.S.C. § 1291, Genesco filed an amended complaint without the second cause of action, and this was dismissed in toto. Since Genesco does not appeal from the dismissal of the third and fourth causes of action, we shall state the case as if only the first had been pleaded.

Basing federal jurisdiction both on diverse citizenship and on § 301(a) of the Taft-Hartley Act, 29 U.S.C. § 185(a), Genesco sought damages for a strike in breach of a no-strike clause in an alleged collective bargaining contract dated as of October 31, 1962. The union moved to dismiss on the ground that by the alleged contract "the parties agreed that any issue or dispute arising out of an alleged breach thereof shall be settled by arbitration"; the motion stated that "the defendants specifically reserve the right, at a future time and in the appropriate forum to assert the defense that no collective bargaining agreement was in fact entered into by the defendants covering the period in question."

After hearing the motion, the judge entered an order reciting that "the existence of the collective bargaining agreements presents a threshold issue which must be determined before defendants' motion * * * can be decided" and directed a hearing before him "for the sole purpose of taking testimony with respect to the existence of collective bargaining agreements" during the period of the strike. We do not understand why this was thought necessary. The court's jurisdiction was not in issue; even if the first cause of action were viewed alone, and apart from the allegation of diversity, the claim of a contract between an employer and a labor organization gave jurisdiction under § 301(a) of the Taft-Hartley Act, although the plaintiff must prove the existence of a contract to obtain relief. Since the contract pleaded by the employer had an arbitration clause, the union was entitled to raise the question whether an action was not barred by its very terms, while reserving the right to deny the existence of the contract if the court decided adversely, F.R.Civ.P. 8(e).

What seems to have happened is that the judge, perhaps recognizing that the existence of an arbitration clause would normally not warrant dismissal as contrasted with a stay, see American Sugar Ref. Co. v. Anaconda, 138 F.2d 765, 767 (5 Cir. 1943), aff'd, without discussion of this point, 322 U.S. 42, 64 S.Ct. 863, 88 L.Ed. 1117 (1944); Swartz & Funston, Inc. v. Bricklayers Union, 319 F.2d 116 (3 Cir. 1963); Gilmour v. Wood Lathers Union, 223 F. Supp. 236, 244 (N.D.Ill.1963); but see Bonnot v. Congress of Independent Unions, 331 F.2d 355, 359 (8 Cir. 1964), treated the case in effect as if he had denied the motion and the union had proffered the alternative defense that no contract existed, which it had reserved. We should have difficulty in approving this course if it had impaired any substantial rights. Not only is it better to let a party do its own pleading, but the collapsing process may have obscured the right to a trial by jury. Whatever the right to jury trial may be when the existence of a contract giving rise to substantive rights is undenied and the dispute, arising on a request for arbitration or for a stay, is solely over the existence of an agreement to arbitrate,¹ it can scarcely be doubted that Genesco was entitled to a jury trial on the existence of the contract on which all of its rights to damages hung. However, no one made any objection to the procedure the judge propounded, and a full evidentiary hearing was had; indeed, although Genesco objects in this court to the procedure that was followed, it still has not complained of deprivation of jury trial. We therefore treat the case as if the union had denied the existence of a collective bargaining agreement and, in the absence of a jury demand, the court had found in its favor.

Genesco was a member of the Shoe Manufacturers Board of Trade of New York, Inc., an association of employers, which for many years had acted for its members in bargaining with the union through a negotiating committee on which each member was represented. On August 29, 1962, the union addressed identical letters to the members of the Board of Trade, giving notice of the termination of the current contract on October 31 and offering to meet the members at the office of the Board to negotiate a new one. At the same time it sent a copy of the notice to Benjamin Seligman, attorney for the Board of Trade, and recited its understanding that the members "will be represented by your organization in the coming negotiations for a collective bargaining contract."

In addition to the issues common to all the members, Genesco had a particular problem with the union, namely, whether manufacture of a shoe called "Act II," by its I. Miller & Sons Co. division, should continue at its plant on 11th St. in Long Island City or be transferred to its plant on 23rd St. — an issue which concerned the union because of a radical decrease of production at the 23rd St. plant where there were many senior employees. Two union officials testified that after several unsuccessful efforts to discuss this question with Genesco's local plant manager, they had met at his suggestion with Seligman, who assured them that if agreement could be reached on other matters, Genesco would not stand a strike on the place of manufacture of Act II; Seligman denied this, and the judge did not resolve the conflict. Upon the expiration of the contracts on October 31, the union struck all members of the Board of Trade.

A day or so later the union informed Seligman of a settlement with another group of shoe manufacturers. On November 5, the Board of Trade sent the union a telegram saying that this settlement was acceptable and "we will meet with you to work out contract language"; the union was asked to have the employees back at work on November 6.

Later on November 5 officers of the union appeared at Seligman's law office with a number of unsigned contracts. The form, providing for a two-year extension of the basic agreement with various modifications, was entitled "Memorandum of Understanding * * * between ........ on behalf of its members and Joint Council No. 13, USWA, AFL-CIO," and concluded with a blank subscribed "Firm" and a line for an officer's signature, and "Joint Council 13, United Shoe Workers of America, AFL-CIO, By ......................" Whatever ambiguity may have existed in the form, the practice was to have contracts executed individually by each member firm. Seligman read the form and pronounced it acceptable to the Board of Trade. As the union officers began to sign the contracts, they informed him that none would be entered into with the two I. Miller factories unless the Act II issue was settled as they desired. Seligman insisted that the union was already committed to Genesco; at the same time, however, he arranged for a vice-president to come from its Nashville headquarters for a conference in New York the following morning. The union officers left the signed contracts with Seligman. They testified he promised these would not be presented to Genesco for signature; he denied this. Although the judge made no specific finding as to such a promise, we gather from his decision that he found the union had made quite clear its unwillingness to contract unless the Act II question was settled. The conference on November 6 proved fruitless. On that day the employees of the other Board of Trade members returned to work, but I. Miller's did not. On November 6 also I. Miller sent a long telegram to the union, taking the position that a contract had been made and that the continued strike was in breach of its no-strike clause. The next day the Board of Trade despatched a telegram along the same lines, and Seligman transmitted to the union the contracts signed by the employers, including the two with I. Miller. The union promptly returned the latter.

On November 15 Genesco notified the union that it considered the contracts terminated by the union's material breach and that it had been compelled by the union's action to withdraw from the Board of Trade. Later it filed a charge with the National Labor Relations Board, whose Regional Director, on Feb. 28, 1963, issued a complaint alleging, inter alia, that the union had refused to sign a collective bargaining contract with Genesco to which it had agreed and by this and other acts had violated §§ 8(b) (1) (A), 8(b) (1) (B), and 8 (b) (3) of the National Labor Relations Act. In April, the Regional Director approved a settlement, consented to by the union and the employer, wherein the union, disclaiming any admission it had violated the Act, agreed that it would not refuse to bargain with the Board of Trade by striking to compel I. Miller "to modify any collective bargaining agreements, during the effective term thereof, by...