Mead v. Retail Clerks Intern. Ass'n, Local Union No. 839, AFL-CIO

• Decision Date: 02 October 1975
• Docket Number: 72-3044,D,AFL-CI,Nos. 72-3043,s. 72-3043
• Citation: 523 F.2d 1371
• Parties: 77 Lab.Cas. P 11,114 James MEAD and Roger Mead, dba Mead's Market, Plaintiffs-Appellees, v. RETAIL CLERKS INTERNATIONAL ASSOCIATION, LOCAL UNION NO. 839,efendant-Appellant. James MEAD and Roger Mead, dba Mead's Market, Plaintiffs-Appellants, v. RETAIL CLERKS INTERNATIONAL ASSOCIATION, LOCAL UNION NO. 839,efendant-Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1371

523 F.2d 1371

77 Lab.Cas. P 11,114

James MEAD and Roger Mead, dba Mead's Market, Plaintiffs-Appellees, v. RETAIL CLERKS INTERNATIONAL ASSOCIATION, LOCAL UNION NO.

839, AFL-CIO, Defendant-Appellant.

James MEAD and Roger Mead, dba Mead's Market, Plaintiffs-Appellants, v. RETAIL CLERKS INTERNATIONAL ASSOCIATION, LOCAL UNION NO.

839, AFL-CIO, Defendant-Appellee.

Nos. 72-3043, 72-3044.

United States Court of Appeals Ninth Circuit.

Oct. 2, 1975.

Barry S. Jellison, Davis, Cowell & Bowe (argued), San Francisco, Cal., for appellant in No. 72-3043 and for appellee in No. 72-3044.

Ted R. Frame, Frame & Courtney (argued), Coalinga, Cal., for appellee in No. 72-3043 and for appellant in No. 72-3044.

OPINION

Before BROWNING and SNEED, Circuit Judges, and SKOPIL, ^* District Judge.

BROWNING, Circuit Judge:

James and Roger Mead, former partners in Mead's Market, a grocery store, sued under section 303 of the Labor Management Relations Act, 29 U.S.C. § 187, ¹ to recover damages allegedly sustained as a result of a strike conducted by Local 839 of the Retail Clerks International Association in part to compel the Meads to agree to a clause prohibited by section 8(e) of the Act, 29 U.S.C. § 158(e). ²

The Union proposed that the Meads accede to a master agreement between the Union and other grocery stores in the area. This agreement contained a "demonstrator clause" providing that food demonstrators passing out samples of particular products and commending them to the store's customers must be covered by all terms of the agreement, whether the demonstrators were employed by the Meads or by the Supplier of the product being promoted. The Meads rejected the proposed contract, objecting not only to the demonstrator clause but also to provisions relating to wages, health and welfare benefits, pensions, and more. The Union called a strike and commenced picketing.

The Meads filed an unfair labor practice charge with the National Labor Relations Board, contending that the "demonstrator clause" was a "hot cargo" clause prohibited by section 8(e) of the Act, and that the Union was violating section 8(b)(4)(A) of the Act, 29 U.S.C. § 158(b)(4)(A), ³ by exerting economic pressure to compel the Meads to agree to the clause.

The Board agreed that the proposed clause was prohibited by section 8(e) insofar as it applied to demonstrators who were employees of a supplier and not of the Meads. The Board ordered the Union to cease striking to obtain the clause and to notify the Meads it would no longer insist that the clause be included in the contract. Retail Clerks Local 1288, 163 N.L.R.B. 817 (1967). The Board's order was enforced with a modification to make it clear that demonstrators who were employees of the Meads rather than a supplier could be covered by the collective bargaining agreement. Retail Clerks Local 1288 v. NLRB, 129 U.S.App.D.C. 92, 390 F.2d 858 (1968).

The Meads then filed this action to recover damages for injuries sustained as a result of the strike, contending that they were entitled to recover all their losses since one objective of the strike and picketing had been unlawful.

The district court rejected the Union's argument that section 303 does not afford a remedy to an employer who, like the Meads, was engaged in a primary labor dispute with the offending union. The court found that the Union sought lawful objectives as well as the unlawful objective, and that the consequence of these lawful and unlawful motivations was a single, inseparable course of conduct the strike and picketing.

Because the consequence of the Union's lawful and unlawful objectives was inseparable, the court awarded the Meads damages for all losses sustained until the union withdrew its demand for the demonstrator clause, ⁴ a total of $12,798. The court also awarded $750 in attorneys' fees incurred by the Meads in the unfair labor practice proceedings but refused to award attorneys' fees incurred in the prosecution of this action.

The Union appealed both aspects of the damage award. The Meads appealed the denial of attorneys' fees for this lawsuit.

We agree with the district court that section 303 provides a damage remedy in the circumstances of this case. We hold, however, when a union exerts economic pressure to achieve both lawful and unlawful objectives and the consequences are not separable, damages cannot be recovered unless the unlawful objective was a substantial cause of the pressure. We remand for a determination on this factual issue. Finally, we further hold that attorneys' fees cannot be recovered in a section 303 suit.

I

The Meads had a right to sue for damages under the literal language of section 303. Subsection (a) of section 303 provides that it is unlawful, for purposes of that section, for a labor organization "to engage in activity or conduct defined as an unfair labor practice in section (8(b)(4))." Subsection (b) of section 303 provides that whoever is injured "by reason of any violation of subsection (a) of this section shall recover the damages by him sustained and the cost of suit." The Board and the Court of Appeals for the District of Columbia Circuit have determined that the proposed demonstrator clause was illegal under section 8(e) and that the Union's insistence on the clause violated section 8(b)(4)(A). This determination is binding upon us. Paramount Transport Systems v. Teamsters Local 150, 436 F.2d 1064 (9th Cir. 1971). The literal conditions for suit under section 303(b) are therefore satisfied. Moreover, we have affirmed a finding of liability under section 303 under circumstances quite similar to those presented here, though without discussion. Carpenters Local 1273 v. Hill, 398 F.2d 360 (9th Cir. 1968).

The Union argues, nonetheless, that section 303 does not give the Meads a remedy. As the Union correctly points out, the secondary boycott provisions of the Act are not to be read literally, if to do so would frustrate Congress' purpose (Connell Construction Co. v. Plumbers & Steamfitters Local 100, 421 U.S. 616, at 628, 95 S.Ct. 1830, 44 L.Ed.2d 418 (1975)); and since the applicability of section 303 was not contested in Carpenters Local 1273, supra, that case is not controlling on the issue. United States v. Tucker Truck Lines, 344 U.S. 33, 37-38, 73 S.Ct. 67, 97 L.Ed. 54 (1952); Webster v. Fall, 266 U.S. 507, 511, 45 S.Ct. 148, 69 L.Ed. 411 (1925); Soyka v. Alldredge, 481 F.2d 303, 306 (3d Cir. 1973).

The Union contends that section 303 does not apply for two reasons: (1) because section 303 was intended to provide relief for a neutral employer injured by secondary activity employed by the union in a struggle against another employer, and not to provide relief for a primary employer, like the Meads, injured by a primary picket line; and (2) because section 303 was intended to apply to "traditional secondary boycotts" and not to pressures exerted in support of "hot cargo clauses."

The first argument rests upon factual assumptions rejected by the Board and the Court of Appeals in the unfair labor practices proceeding, as well as by the trial court in this action. At all relevant times the demonstrators in Mead's Market were employed by the suppliers whose product they promoted and not by the Meads. The demonstrator clause would have made these employees subject to all of the terms of the collective bargaining agreement, including a union security clause. The Meads were not concerned with the Union affiliation of employees of the suppliers. With respect to this issue they were innocent bystanders in a present or potential quarrel between the Union and other employers, the suppliers. The Union's activity to compel adoption of the proposed clause was therefore secondary, not primary, in its aim. National Woodwork Manufacturers Association v. NLRB, 386 U.S. 612, 644-45, 87 S.Ct. 1250, 18 L.Ed.2d 357 (1967). It was the purpose of section 8(b)(4)(A) to prohibit this kind of secondary activity. As the unfair labor practice proceedings in the case demonstrate, such activity is no less unlawful when it is directed against an employer with whom the union is also engaged in a primary dispute. Similarly, existence of a primary dispute affords no reason for denying the statutory remedy to an employer injured by secondary activity prohibited by section 8(b)(4)(A). ⁵

The argument that section 303 was intended to provide a remedy only for damages from "traditional secondary boycotts," and not from union efforts to secure a contract clause prohibited by section 8(e), rests entirely upon the fact that in the Senate Committee analysis of the 1959 Act and in statements on the floor of the Senate and House, the amendments to section 303 were described as conforming the remedy provided by that section to concurrent modifications of the "secondary boycott provision," and of section 8(b)(4) generally, without specific mention of the "hot cargo" provision or of section 8(e). ⁶ The argument is insubstantial.

General references to "secondary boycott provisions" and to section 8(b)(4) were sufficient to include the "hot cargo" clause prohibitions in sections 8(e) and 8(b)(4)(A). These prohibitions were adopted to close a potential loophole in the anti-boycott provisions disclosed by Carpenters Union v. NLRB, 357 U.S. 93, 107-08, 78 S.Ct. 1011, 2 L.Ed.2d 1186 (1958). See Connell Construction Co. v. Plumbers & Steamfitters Local 100, supra, 421 U.S. at 628, 95 S.Ct. 1830. They are an integral part of Congress' scheme to proscribe conduct commonly identified by the generic tag, "secondary boycott," i. e., "pressure tactically directed toward a neutral employer in a labor dispute not his own." National Woodwork Manufacturers Association v. NLRB, supra, 386 U.S. at 623, 87 S.Ct. at 1257. The references to section 8(b)(4) necessarily included subsection 8(b)(4)(A), which prohibits economic pressures exerted in support of clauses prohibited by section 8(e).

Section 8(e) imposes a duty on an employer to...