INTERNATIONAL U., UNITED AUTO., ETC. v. Webster Elec. Co.

• Decision Date: 07 February 1962
• Docket Number: No. 13428.,13428.
• Citation: 299 F.2d 195
• Parties: INTERNATIONAL UNION, UNITED AUTOMOBILE, AIRCRAFT AND AGRICULTURAL IMPLEMENT WORKERS OF AMERICA, LOCAL 391, Plaintiff-Appellee, v. WEBSTER ELECTRIC COMPANY, a corporation, Defendant-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

299 F.2d 195 (1962)

INTERNATIONAL UNION, UNITED AUTOMOBILE, AIRCRAFT AND AGRICULTURAL IMPLEMENT WORKERS OF AMERICA, LOCAL 391, Plaintiff-Appellee, v. WEBSTER ELECTRIC COMPANY, a corporation, Defendant-Appellant.

No. 13428.

United States Court of Appeals Seventh Circuit.

February 7, 1962.

Lawrence E. Gooding, Jr., Milwaukee, Wis., Harold M. Keele, Chicago, Ill., Halbert O. Crews, Chicago, Ill., Peebles Greenberg & Keele, Chicago, Ill., Quarles, Herriott & Clemons, Milwaukee, Wis., of counsel, for appellant.

Max Raskin, Milwaukee, Wis., Raskin & Zubrensky, Milwaukee, Wis., Bratt & Shapiro, Milwaukee, Wis., of counsel, for appellee.

Leon B. Lamfrom, Milwaukee, Wis., Lamfrom & Peck, Milwaukee, Wis., of counsel, for Employers Ass'n of Milwaukee, amicus curiae.

Before SCHNACKENBERG, KNOCH and SWYGERT, Circuit Judges.

SCHNACKENBERG, Circuit Judge.

Defendant Webster Electric Company, a corporation, appeals from a declaratory judgment of the district court in favor of International Union, United Automobile, Aircraft and Agricultural Implement Workers of America, Local 391, plaintiff.

The case was tried on plaintiff's complaint, defendant's answer and a stipulation of facts.

Plaintiff is a voluntary labor organization within the meaning of § 2(5) of the National Labor Relations Act and § 301 of the Labor Management Relations Act, 29 U.S.C.A. §§ 152(5), 185. Defendant is engaged at Racine, Wisconsin, in activities affecting commerce within the meaning of the latter act.

On or about August 8, 1956, defendant entered into a collective bargaining agreement with plaintiff, which was in force and effect at all times material to the issues in this case.

In June, 1958, defendant contracted with the Racine Police Protective Association, an independent contractor, for the performance of defendant's office janitorial work which theretofore had always been performed by employees of the defendant within the bargaining unit. Defendant thereupon laid off three employees who had formerly performed the janitorial services, all of whom were covered by the union contract. The action was taken without the consent of plaintiff.

The individuals who have performed the janitorial work after June 1958 are not employees of defendant, but are employees of the Association. They are not members of plaintiff union and are not covered by the provisions of the collective bargaining agreement.

Plaintiff has complied with all grievance provisions of the agreement with reference to these events, but defendant has refused to grant the relief requested. Defendant refused to reinstate the three laid-off employees. This action followed.

By article I of the collective bargaining agreement, defendant agreed to recognize plaintiff as the sole bargaining agency for all its employees, and it was stipulated that the agreement is to cover all persons employed at the Racine plants of defendant, with certain exclusions not here relevant.

By article II defendant agreed that there would be no lockout of the employees and plaintiff agreed that there would be no strike until all prescribed bargaining procedure had been exhausted.

By article IV seniority was recognized, while article XI provided for a union shop.

Plaintiff asked the district court to declare by its judgment that defendant does not have the right to "subcontract" work ordinarily and customarily performed on its premises in the Racine plant by its employees, members of and represented by, the defendant¹ union.

Plaintiff makes the assertion, which is not denied, that there is no clause in the collective bargaining agreement specifically reserving this right to defendant, nor is there any "management prerogatives clause" in said agreement.

1. We approach the problem presented to us by noting that, until June 20, 1960, when United Steelworkers of America, AFL-CIO v. Warrior & Gulf Nav. Co., 363 U.S. 574, 80 S.Ct. 1347, 4 L.Ed.2d 1409, was decided, according to plaintiff's brief, most federal courts, including this court (Independent Petroleum Workers of America v. Standard Oil Co., 275 F.2d 706) held that management had a right to contract out² work, and, according to defendant's brief, before Steelworkers and since, management has had such right unless it is limited by the terms of the bargaining agreement.

It is therefore not surprising that plaintiff now asserts that Steelworkers is authority for its contention that employers do not have a unilateral right to contract out work on company premises, in the absence of an express provision in the collective bargaining agreement.

We disagree with this contention even though the district court was in accord with it.

Steelworkers did not decide the question of substantive law, i. e., whether an employer does have a unilateral right to contract out work, where there is no express controlling provision in the existing collective bargaining agreement.

Steelworkers did decide, 363 U.S. at 585, 80 S.Ct. at 1354, that whether contracting out violates an existing bargaining agreement is a question which is for the arbiter and not for the courts, if there be an arbitration clause in the agreement.

Steelworkers recognizes that the judiciary sits to bring into operation an arbitral process which, in that case, was provided for by the bargaining agreement.

Lacking an arbitration clause in the case at bar, the question of whether contracting out violated the agreement is a question for the judiciary.

2. These teachings which we get from Steelworkers leave us without any suggestion as to how to decide the substantive question now before us: Has the right of defendant to contract out work, concededly recognized (except for the unfounded reliance of plaintiff on Steelworkers), been modified or abrogated by the provisions, express or implicit, of the bargaining agreement?

Plaintiff and defendant have an agreement which, while it is in effect, fixes the rights of each against the other. Any right not effectually asserted by either in negotiations leading to the execution of the agreement cannot now be insisted upon during the stated life of the agreement if it be inconsistent with the purpose and scope of that document. There is no express prohibition of contracting out to be found in the agreement. But for the agreement, defendant would have that right, as an incident of management. However, there is an agreement providing for a union shop. The employees covered by that agreement are described as all defendant's employees, with certain irrelevant exceptions. This classification includes the office janitorial employees. Thus they are required to be members of plaintiff union. If they were to be excluded the agreement should have said so. By...