INTERNATIONAL BROTH. OF EW, L. 336 v. ILLINOIS BELL T. CO.

• Decision Date: 02 May 1974
• Docket Number: No. 73-1452.,73-1452.
• Citation: 496 F.2d 1
• Parties: INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, LOCAL 336, Plaintiff-Appellant, v. ILLINOIS BELL TELEPHONE COMPANY, Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

496 F.2d 1 (1974)

INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, LOCAL 336, Plaintiff-Appellant, v. ILLINOIS BELL TELEPHONE COMPANY, Defendant-Appellee.

No. 73-1452.

United States Court of Appeals, Seventh Circuit.

Argued February 27, 1974.

Decided May 2, 1974.

Gilbert A. Cornfield and Thomas W. Duda, Chicago, Ill., for plaintiff-appellant.

Edward W. Bergmann, Chicago, Ill., for defendant-appellee.

Before SWYGERT, Chief Judge, and STEVENS and SPRECHER, Circuit Judges.

SPRECHER, Circuit Judge.

Plaintiff IBEW sued Illinois Bell Telephone Co. to prevent it from financing the defense of IBEW members in a state court suit for enforcement of union fines. The question on appeal is whether section 101 of the Labor-Management Reporting and Disclosure Act (29 U.S.C. § 411) confers on a labor union the right to resolve its disputes with dissident members without financial support of those members by their employer.

The dispute between IBEW and certain of its members dates back to the 1968 strike against Illinois Bell. IBEW alleges that some of its members crossed picket lines and continued to work during the strike. The union filed charges in an intra-union proceeding against those members and conducted hearings which resulted in the assessment of fines of $100 to $500 against those found guilty. The fined members paid installments on their fines in order to appeal to the international vice president. After losing their appeals, the members refused to pay the balance of their fines.

The local president brought suit in the Circuit Court of Cook County to collect the fines. The members asserted seven affirmative defenses and filed a counter-claim to recover the installments they had paid. Illinois Bell admits that it is paying the legal fees and court costs of defendants in the state suit. It has also reimbursed the members for the installment payments.

IBEW filed an unfair labor practice charge of improper interference in internal union affairs with the NLRB. The regional director dismissed the charge on the basis of the Board's view that an employer does not violate the National Labor Relations Act by offering legal and financial assistance to strikebreakers. Leeds & Northrup Co., 155 NLRB 1292 (1965); Standard Plumbing & Heating Co., 185 NLRB No. 63 (1970).¹

IBEW's complaint in the district court alleges jurisdiction under section 102 (29 U.S.C. § 412) and charges Illinois Bell with violation of the second proviso of section 101(a) (4). Section 102 states: "Any person whose rights secured by the provisions of this subchapter have been infringed by any violation of this subchapter may bring a civil action in a district court of the United States for such relief (including injunctions) as may be appropriate. . . ."²

Since a union is a "person" (29 U.S.C. § 402(d)), the question is what rights the union has under section 101(a) (4):

Protection of the right to sue.—No labor organization shall limit the right of any member thereof to institute an action in any court, or in a proceeding before any administrative agency, irrespective of whether or not the labor organization or its officers are named as defendants or respondents in such action or proceeding, or the right of any member of a labor organization to appear as a witness in any judicial, administrative, or legislative proceeding, or to petition any legislature or to communicate with any legislator: Provided, That any such member may be required to exhaust reasonable hearing procedures (but not to exceed a four-month lapse of time) within such organization, before instituting legal or administrative proceedings against such organizations or any officer thereof: And provided further, That no interested employer or employer association shall directly or indirectly finance, encourage, or participate in, except as a party, any such action, proceeding, appearance, or petition.

We know of only three cases which deal with the second proviso of section 101(a) (4): UAW v. National Right to Work, 366 F.Supp. 46 (D.D.C.1973); Adamszewski v. Machinists Local 1487, 496 F.2d 777, No. 73-1166 (7th Cir., 1974); and Farowitz v. Musicians Local 802, 241 F.Supp. 895 (S.D.N.Y.1965).³

UAW v. National Right to Work is the only affirmative suit by a union to vindicate its right under the second proviso. The union asked for equitable relief against a private foundation which solicited contributions from employers to finance legal actions brought by employees against their unions. The court found that section 101 confers substantive rights on the union which "include express assurance to labor organizations that they shall be immune from `interested employer' intrusion in their judicial disputes with workers." 366 F.Supp. at 48. Judge Richey found that, absent jurisdiction in the district courts, "the proviso would be a dead letter and the express congressional intent to safeguard intra-union affairs from employer interference would be frustrated." 366 F.Supp. at 49. The court ruled it had subject matter jurisdiction over the suit.

IBEW urges us to carry the broad interpretation of section 101 in National Right to Work to its logical conclusion, that the proviso prohibits employer support of union members as defendants. We believe, however, that the expansive language of National Right to Work must be read in the context that the defendant foundation was financing suits by members against unions. Judge Richey may be correct in saying that Congress intended to prevent any form of management interference in internal disputes between unions and their dissident members.⁴ But the language Congress chose prohibits the financing of "any such action," which refers back to the right of a member "to institute an action in any court." We can only presume that Congress meant what it said, that an interested employer may not finance the institution of a suit by employees, but is free to finance a defense or a counterclaim.

We reach this conclusion reluctantly, because we recognize that the harm to the union is the same whether the employer finances defensive resistance to union discipline or underwrites...