Herbert Burman, Inc. v. Local 3 Inter. Bro. of Elec. Wkrs.

• Decision Date: 30 January 1963
• Parties: HERBERT BURMAN, INC., Plaintiff, v. LOCAL 3 INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, AFL-CIO, Local 144, Hotel & Allied Services Employees Union, Local Joint Executive Board of New York City Hotel & Restaurant Employees & Bartenders International Union AFL-CIO, John Doe, Jane Doe, Richard Roe, John Smith and Sally Smith said last five names being fictitious, the persons intended being employees of the Hotel New Yorker, and members, employees and/or agents of the first three named defendants, Defendants.
• Court: U.S. District Court — Southern District of New York

214 F. Supp. 353

HERBERT BURMAN, INC., Plaintiff, v. LOCAL 3 INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, AFL-CIO, Local 144, Hotel & Allied Services Employees Union, Local Joint Executive Board of New York City Hotel & Restaurant Employees & Bartenders International Union AFL-CIO, John Doe, Jane Doe, Richard Roe, John Smith and Sally Smith said last five names being fictitious, the persons intended being employees of the Hotel New Yorker, and members, employees and/or agents of the first three named defendants, Defendants.

United States District Court S. D. New York.

January 30, 1963.

Frackman & Robins, New York City, for plaintiff; Leonard M. Frackman, New York City, of counsel.

Harold Stern, New York City, for defendant Local 3 International Brotherhood of Electrical Workers AFL-CIO.

Boudin, Cohn & Glickstein, New York City, for defendant Local 144, Hotel & Allied Services Employees Union; Jerome B. Lurie, New York City, of counsel.

McLEAN, District Judge.

This is an action for damages allegedly sustained by plaintiff as the result of a secondary boycott. Plaintiff claims that defendants, in violation of Section 8(b) (4) (ii) (B) of the National Labor Relations Act, as amended (29 U.S.C. § 158 (b) (4) (ii) (B)) threatened and coerced the Hotel New Yorker into cancelling its contract with plaintiff, an electrical contractor, for the performance of certain electrical work at the hotel.

Local Joint Executive Board, named a defendant, was not served and did not appear. Defendants Local 3 International Brotherhood of Electrical Workers AFL-CIO ("Local 3") and Local 144 Hotel & Allied Services Employees Union ("Local 144"), moved to dismiss the complaint at the close of plaintiff's case, and rested on that motion, without offering any evidence. I find the facts established by plaintiff's evidence to be as follows:

Plaintiff is a New York corporation engaged in the electrical contracting business. Its gross volume of business was approximately $1,000,000 in each of the years 1960 and 1961. In each of those years it purchased materials having a value of approximately $400,000. It purchased a substantial portion of those materials from manufacturers and jobbers located in states other than New York by whom they were shipped to job sites in New York.

Plaintiff's employees were not members of defendant Local 3. They belonged to another union known as Industrial Workers of Allied Trades, Local 199, with which plaintiff had a collective bargaining agreement.

On April 14, 1961 plaintiff entered into a contract with the Hotel New Yorker to supply all labor and materials necessary to create additional power facilities at the hotel. The work was to consist primarily of installing 15 sets of heavy cable in pipes in connection with an existing switchboard, installing risers containing cables, and installing outlets for window air conditioners on certain of the upper floors of the hotel. The total contract price of the work was $55,000.

After the contract was signed, plaintiff applied to the city authorities for the necessary permits and began some preliminary survey work. On April 28, 1961 the Hotel New Yorker wrote to plaintiff cancelling the contract. In this letter the hotel stated as its reason for cancelling that:

"We are under an agreement with the New York Hotel Trades Council whereby all electrical work on our premises is to be performed by members of Local 3 exclusively."

By reason of this cancellation, plaintiff was deprived of the gross profit which it would have made on this job, which plaintiff estimates at 20 per cent of the contract price. Although plaintiff suggested that, but for the cancellation, plaintiff would have received additional contracts from the hotel, the evidence on this subject does not rise above the level of conjecture.

The Hotel New Yorker is a member of the Hotel Association of New York City, Inc. On July 8, 1959 that association, on behalf of its members, entered into a collective bargaining agreement with the New York Hotel Trades Council, acting on its own behalf and on behalf of a number of local unions affiliated with it, two of which were defendants Local 3 and Local 144. The agreement was signed by the Council and also by each of its affiliated locals. The agreement established wages, hours and working conditions for all hotel employees, with certain exceptions not material here. Electricians were included. Section 4 of the agreement provided that all employees covered by the agreement should be members of the union. Section 24(A) of the agreement entitled "Concessionaires," provided that:

"* * * the provisions of Section 4 of this Agreement shall apply to any contractor, concessionaire or lessee doing business or rendering services incidental to hotel operations within the hotel which employs employees in job classifications covered by this Agreement. The wages, hours and other conditions of employment provided for in this agreement shall be applicable to such employees."

Section 17 of the agreement provided that the union would not call or engage in any strike or work stoppage or picketing or any other interference with the conduct of the employer's business for any reason whatsoever.

A supplementary letter dated on the day on which the collective bargaining agreement was executed provided:

"The UNION and the employees agree that they will not, at any time, either directly or indirectly, interfere with or prevent the EMPLOYER from purchasing merchandise or any service requirements which it may desire from any source whatsoever because of the employment by the said source of non-members of a union or non-union workers, and the UNION and the employees further agree that they will not refuse to handle, sell, deliver or work on any such merchandise which may be so purchased."

On April 24, 1961, James L. O'Hara, secretary of the New York Hotel Trades Council and also an officer of defendant Local 3, called upon Harvey Schwartz, the vice president of the Hotel New Yorker. O'Hara said that he had heard that the hotel was contemplating having certain electrical work done at the hotel by a contractor whose employees did not belong to Local 3. He said that under the terms of the collective bargaining agreement members of Local 3 were to do all the work at the hotel, and that consequently, the Hotel New Yorker would violate its contract if it did business with this contractor. This was the sum total of O'Hara's statement, as far as plaintiff's evidence discloses. O'Hara and Schwartz, each called as witnesses by the plaintiff, each testified to this conversation to substantially the same effect. This conversation was the cause of the action taken by the hotel on April 28 in cancelling its contract with the plaintiff.

Before we reach the merits of this controversy, a preliminary question of jurisdiction must be considered. I find that plaintiff was engaged in interstate commerce. McLeod v. Chefs, Cooks, Pastry Cooks and Assistants, etc., 181 F. Supp. 742 (S.D.N.Y.1960), modified on appeal on another point 280 F.2d 760 (2d Cir., 1960).

Before the 1959 amendments to the National Labor Relations Act, this fact alone would have been sufficient to confer jurisdiction in a secondary boycott case. As the statute read prior to the amendments, Section 158(b) (4) prohibited certain activities in the way of a secondary boycott directed against "any employer," with no qualification of that phrase. Jurisdiction depended upon the general provisions of Section 187(a) and (b) which made the Act applicable to "an industry or activity affecting commerce." The jurisdictional requirement was satisfied if the primary employer, in this case the plaintiff, was engaged in interstate commerce. N. L. R. B. v. Denver Building & Construction Trades Council, et al., 341 U.S. 675, 71 S.Ct. 943, 95 L.Ed. 1284 (1951); International Brotherhood of Electrical Workers, et al. v. N. L. R. B., 181 F.2d 34 (2d Cir., 1950), affirmed 341 U.S. 694, 71 S.Ct. 954, 95 L.Ed. 1299 (1951).

In amending 29 U.S.C. § 158(b) (4) in 1959, however, Congress added qualifying language which made the secondary boycott provisions relating to a secondary employer, in this case the Hotel New Yorker, applicable only to an employer who is "engaged in commerce or in an industry affecting commerce." Plaintiff has offered no evidence in this case which would support a finding as to the nature of the business activities of the Hotel New Yorker. In this respect the record differs from that in a proceeding referred to by plaintiff which was brought by the Board for a preliminary injunction restraining defendant Local 3 from alleged violations of the section. The Board's petition in that case contained allegations describing the hotel's business. The fact that this court took jurisdiction of that proceeding, therefore, is of no relevance in the present case. The question is here presented as to whether this complaint must be dismissed for failure of proof of a necessary jurisdictional fact.

The National Labor Relations Board has taken jurisdiction in secondary boycott cases where there was no proof of the activities of the secondary employer. Sheet Metal Workers Int'l. Assn., Local 299, etc., 131 N.L.R.B. p. 1196 (1961); Plumbers Union of Nassau County, Local 457, 131 N.L.R.B. p. 1243 (1961).

The assumption of jurisdiction by the Board in the second of these cases was expressly affirmed by the Court of Appeals in N. L. R. B. v. Plumbers Union of Nassau County, Local 457, etc., 299 F.2d 497 (2d Cir., 1962).

As the Board pointed out in the Sheet Metal Workers case, supra, the legislative history of the 1959 amendments does not reveal the reason for the inclusion of the new language relating to secondary employers in Section 158(b) (4). The legislative history does indicate, however, that Congress was primarily concerned with strengthening the prohibition of secondary boycotts, and that it acted in the belief that the statute, as...