Jensen v. Farrell Lines, Inc.

• Decision Date: 13 July 1979
• Docket Number: No. 79 Civ. 1372 (RWS).,79 Civ. 1372 (RWS).
• Parties: William JENSEN, Edwin Kremer, John Gardella, William Kuyl, Dominick Bisbano, Lindsay Hoyt, Francis S. Haggerty, Richard Trippe, Anthony Lore, and Gary W. Lueck, Plaintiffs, v. FARRELL LINES, INC., International Organization of Masters, Mates and Pilots, AFL-CIO, Brotherhood of Marine Officers, District 1, MEBA, AFL-CIO, and American Federation of Labor and Congress of Industrial Organizations, Defendants.
• Court: U.S. District Court — Southern District of New York

477 F. Supp. 335

William JENSEN, Edwin Kremer, John Gardella, William Kuyl, Dominick Bisbano, Lindsay Hoyt, Francis S. Haggerty, Richard Trippe, Anthony Lore, and Gary W. Lueck, Plaintiffs, v. FARRELL LINES, INC., International Organization of Masters, Mates and Pilots, AFL-CIO, Brotherhood of Marine Officers, District 1, MEBA, AFL-CIO, and American Federation of Labor and Congress of Industrial Organizations, Defendants.

No. 79 Civ. 1372 (RWS).

United States District Court, S. D. New York.

July 13, 1979.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Proskauer, Rose, Goetz & Mendelsohn, New York City, for Farrell Lines, by Alexander Gigante, New York City, of counsel.

Burton M. Epstein, Waldman & Waldman, New York City, for MMP, by Seymour M. Waldman, New York City.

Gordon & Schechtman, P. C., New York City, for Jensen, et al., by Murray A. Gordon, Helene M. Freeman, New York City, of counsel.

SWEET, District Judge.

This action has presented an intricate tapestry of issues concerning contractual rights, legislative construction, and constitutional interpretation, all in the framework of labor law, itself elaborate and highly specialized. The defendants urge that these issues are beyond the reach of this court, principally because plaintiffs, who are supervisors, are outside the protections of the relevant statutory law and of the constitution. According to defendants, plaintiffs have extinguished their only rights, those grounded in contract, because those rights have been abrogated by arbitration. One strand in this tapestry, emphasized by plaintiffs, is that there is a constitutional right to associate which includes a right to be represented by a majority-selected union. While a district court might prefer to avoid these difficult issues, they have been squarely presented by highly skilled counsel for the parties. Because of this court's belief that "ordered liberty", (remarks, Chief Justice Burger, Law Day, May 1, 1979), A.B.A. Journal, June 1979, at p. 932, is an essential ingredient of our complex society, the court is unwilling to declare that plaintiffs are without recourse to relief in their effort to assert organizational rights in a labor dispute. The court will therefore grant declaratory relief for the plaintiffs as set forth more fully below.

The Parties

Plaintiffs are ten licensed deck officers and engineers who are supervisory employees in the maritime shipping industry, members of defendant Brotherhood of Marine Officers, District 1, National Marine Engineers Beneficial Association, AFL-CIO ("BMO").¹ They have all been employed for a substantial period of time aboard certain vessels formerly owned and operated by American Export Lines, Inc. ("AEL") and since on or about January, 1978, owned and operated by defendant Farrell Lines, Inc. ("Farrell"). "Farrell" is a New York corporation which owns and/or operates merchant cargo and bulk carriage vessels as a U.S.-flag ocean carrier; the defendant "BMO", is an affiliate of the National Marine Engineers' Beneficial Association, ("MEBA"); the defendant International Organization of Masters, Mates and Pilots, AFL-CIO ("MMP"), is an affiliate of the International Longshoreman's Association ("ILA"); and the defendant American Federation of Labor-Congress of Industrial Organizations ("AFL-CIO"), is the national umbrella association of which MMP and BMO are members, which was served with a copy of the amended complaint but did not appear at trial, no relief having been sought against it.

The Claims and Prior Proceedings

Plaintiffs' claims, as broadly pleaded in their amended complaint, resolved after the course of trial down to three basic assertions.²

First, the plaintiffs allege that Farrell and MMP, by enforcing an arbitration award handed down in a proceeding between the ILA and MEBA, committed unfair labor practices as defined in the National Labor Relations Act, 29 U.S.C. § 158. In their second claim, plaintiffs allege that BMO breached its statutory duty of fair representation under 29 U.S.C. § 185 to the plaintiffs by the BMO's conduct following Farrell's purchase of the AEL ships including, inter alia, its failure to raise a constitutional claim at arbitration and to sue to prevent enforcement of the award. In their third claim, the plaintiffs allege that Farrell's enforcement of the award is a violation of their First Amendment freedom of association in that it forces them to join a union not of their own choosing as a condition of their continued employment.

This action was originally brought on by a motion seeking a preliminary injunction pursuant to Rule 65, Fed.R.Civ.P. Plaintiffs at that time alleged, pursuant to Section 502 of the Employee Retirement Income Security Act of 1974, ("ERISA"), 29 U.S.C. § 1132, that certain contract and pension rights were being denied them as a result of defendants' actions. This court, by Order dated March 16, 1979, issued an opinion denying that motion. After acquiring new counsel, plaintiffs filed an amended complaint and again moved pursuant to Rule 65, Fed.R.Civ.P., for a preliminary injunction. In making the new motion plaintiffs alleged irreparable injury arising out of the violation of their statutory and constitutional rights. The original ERISA claim was then withdrawn, and the exhibits previously introduced at the first hearing were deemed to be received in evidence at the new hearing.

After evidentiary hearings on the latter application for preliminary relief, the court, exercising its discretion pursuant to Rule 65(a)(2), Fed.R.Civ.P., ordered that the trial of the action on the merits be advanced and consolidated with the preliminary injunction hearing.³

The Facts

The plaintiffs' claims challenge a long standing industry practice dealing with the resolution by arbitration of inter-union jurisdictional disputes and arise out of the following facts.

Until January, 1978, Jensen and the other nine plaintiffs were employed as licensed deck officers on vessels owned or operated by AEL, a subsidiary of American Export Industries, Inc., ("AEI"), a New York shipping corporation. Pursuant to a reorganization plan resulting from proceedings under Chapter XI of the Bankruptcy Act, 11 U.S.C. §§ 701 et seq., AEL agreed to sell the 25 AEL owned or operated ships to Farrell. At all pertinent times prior to the sale, AEL and BMO had a valid collective bargaining agreement with a union shop provision under which the approximately 180 AEL supervisors working on AEL ships were members of, and exclusively represented by, the BMO. Farrell, the purchaser in bankruptcy, owned or operated fourteen of its own ships immediately prior to the sale. At all times pertinent to this suit, Farrell has been a party to a multi-employer collective bargaining agreement with the MMP. That agreement provides that all licensed deck officers employed by Farrell shall be members of the union.

Shortly after Farrell purchased the AEL ships and integrated them into its normal operations, Farrell signed an agreement acknowledging the contract between the BMO and AEL. Afterwards, Farrell and BMO representatives negotiated a wage increase for the employees covered under the old contract which, in its prefatory language, acknowledged the validity of the BMO contract and Farrell's assumed obligations respecting collective bargaining. Based upon its own contract with Farrell, however, the MMP, shortly after the sale in bankruptcy, asserted that it, not the BMO, was entitled to represent the men working on the newly acquired ships.

The MMP, by its parent, (ILA) submitted the dispute over representation rights to arbitration under Article XX of the AFL-CIO constitution.⁴ In the arbitration proceedings the parent organizations of BMO and MMP (MEBA and ILA, respectively) introduced extensive briefs, all of which were introduced in evidence at trial. Arbitrator Daniel Q. Mills found that the Farrell purchase constituted an accretion⁵ of the BMO/AEL fleet to the MMP/Farrell fleet and that, primarily because the MMP contract provided for accretions whereas the BMO contract did not, the MMP contract⁶ was to be given effect.

Following two internal AFL-CIO appeals pursuant to Article XX,⁷ the arbitration award was finalized by the AFL-CIO executive committee on February 28, 1979, approximately a year after the initial arbitration began.⁸ Farrell discontinued its pension, health, and vacation pay contributions under the BMO contract and began to make its contributions to the MMP plan.⁹ Farrell also informed its BMO supervisors that they would have to join MMP as a condition of continued employment with Farrell.

Thus, if the plaintiffs and other BMO members had accepted the terms of the arbitration award they would, in effect, have been bound to a union shop agreement between MMP and Farrell and to the terms of the MMP constitution.¹⁰ They would thereby have been bound to accept the MMP as their exclusive representative. MMP offered the BMO members, including plaintiffs, membership in the union¹¹ on terms, inter alia, granting them the highest available seniority status of three grades accorded employees under the MMP contract for jobs on former AEL ships.¹² Certain of the BMO members, obviously excluding the plaintiffs, accepted the MMP offer. However, because communication with the 21 ships was by cable, and because the ultimatum pursuant to the arbitration award (concerning joining the MMP) could be implemented only as the former AEL ships reached port, it was unclear at the time of trial exactly how many members of the BMO intended to join the MMP.¹³

On March 12, plaintiffs received notice of the Farrell order when their ship, the CV Staghound, docked in Baltimore. On March 15, when their ship reached the port of New York, plaintiffs were informed of the effect of the arbitration award and of the requirement that they join the MMP as a prerequisite to continued employment with Farrell. Upon refusing to sign MMP...