Mobile Mechanical Contractors Ass'n, Inc. v. Carlough, Civ. A. No. 74-409-H.

• Decision Date: 11 October 1974
• Docket Number: Civ. A. No. 74-409-H.
• Parties: MOBILE MECHANICAL CONTRACTORS ASSOCIATION, INC., Plaintiff, v. Edward J. CARLOUGH et al., Defendants.
• Court: U.S. District Court — Southern District of Alabama

382 F. Supp. 1134

MOBILE MECHANICAL CONTRACTORS ASSOCIATION, INC., Plaintiff, v. Edward J. CARLOUGH et al., Defendants.

Civ. A. No. 74-409-H.

United States District Court, S. D. Alabama, S. D.

October 11, 1974.

Willis C. Darby, Jr., Mobile, Ala., for plaintiff.

Roderick P. Stout, Mobile, Ala., for defendants.

OPINION

HAND, District Judge.

This is an action for declaratory and injunctive relief under the provisions of Section 302 of the Labor Management Relations Act of 1947, as amended, 29 U.S.C. § 186. The declaratory relief sought rests on the provisions of 28 U. S.C. §§ 2201 and 2202, under jurisdiction conferred by Section 302(e).¹

Plaintiff Mobile Mechanical Contractors Association, Inc. (Mechanical Contractors) filed on October 1, 1974, a complaint and a motion for preliminary injunction. This cause came to be heard on the motion of Mechanical Contractors for a preliminary injunction pursuant to an order entered by this court on October 1, 1974, and the court having continued the hearing from October 4, 1974, to October 8, 1974, at the request of the defendants.

The court has considered the verified complaint, material offered in evidence, stipulations of parties, testimony of witnesses in open court, and the arguments of counsel.

Mechanical Contractors is an association which represents certain employers for the purposes of collective bargaining with certain unions, including Sheet Metal Workers International Association Local Union #441 (Sheet Metal Workers Local 441).

Since July 16, 1974, the defendant Sheet Metal Workers Local 441 has engaged in a strike against employers represented by Mechanical Contractors and other employers for the purpose of collective bargaining; the strike begun on July 16, 1974, is still in progress.

The evidence is overwhelming that the defendants, individually and in concert, have requested and demanded that Mechanical Contractors agree on behalf of employers which it represents to pay money to the National Stabilization Agreement of the Sheet Metal Industry Trust Fund (SASMI).

The evidence is overwhelming that the sole object of the strike now is to force Mechanical Contractors and other employers to agree to pay money to SASMI.

The issue raised by the requests and demands of the defendants, and the strike for SASMI, is whether SASMI is properly established, administered, and maintained under the requirements of Section 302. If SASMI does not meet the requirements of Section 302, the requests and demands of the defendants and the strike for SASMI are unlawful.²

The evidence is overwhelming that SASMI does not comply with the requirements of Section 302 that "employers and employees ... be equally represented in the administration of such fund."

It is abundantly clear from the Agreement and Declaration of Trust Establishing The National Stabilization Agreement Of Sheet Metal Industry Trust Fund (1973 Trust Agreement) and the testimony of defendants' expert witness that the General President of the Sheet Metal Workers International Association (International Association), a position now occupied by defendant Carlough, has the continuing unfettered right to remove and replace any or all union trustees and that no employer has any right to participate in removal or replacement or as a matter practice the appointment of employer trustees. It is uncontroverted that Mechanical Contractors has neither the right to select nor to remove nor to replace nor the right to participate in the selection, removal or replacement of any employer trustee.

ARTICLE III, Section 1, of the 1973 Trust Agreement provides,

Section 1. UNION AND EMPLOYER TRUSTEES. The operation and administration of the Fund shall be the joint responsibility of One Trustee appointed by the Employers and One Trustee appointed by the International Union. The number of Trustees may be changed from time to time but there shall always be an equal number of Employer and Union Trustees.

The union trustee can prevent the appointment of any further employer trustees by refusing to agree to increase in equal number the union trustees.

ARTICLE III, Section 5 of the 1973 Trust Agreement provides,

Section 5. FORM OF NOTIFICATION. In case a Union Trustee shall be removed, replaced, or succeeded, a statement in writing by the Secretary-Treasurer of said International Union shall be sufficient written evidence of the action taken by the General President of the International Union; a statement in writing signed by a majority of the then remaining Employer Trustees shall be deemed sufficient evidence of any action taken with respect to the removal or replacement of an Employer Trustee. Any resignation by a Trustee shall be by Certified or Registered Mail addressed to the Office of the Fund.

The defendant, Carlough as General President of the International Association, has the continuing right to remove and replace any union trustee; no employers have the right to remove or replace any employer trustee.

ARTICLE III, Section 6 of the 1973 Trust Agreement provides,

Section 6. DESIGNATION OF EMPLOYER TRUSTEES BY EMPLOYER PARTIES. Any Employer who is or may become a party to this Agreement and Declaration of Trust agrees irrevocably to designate as its representative in the operation and administration of the Fund such Trustees as are named in said Agreement and Declaration of Trust as Employer Trustees, together with their successors selected in the manner provided herein, and agrees to be bound by all the actions taken by the said Employer Trustees pursuant to this Agreement and Declaration of Trust.

Thus, no employer, except employers who participated in the initial establishment of SASMI, may participate in the selection of any employer trustee; by contrast, the International Association retains such a right to remove and select union trustees from time to time.

From the evidence and statements made in connection with the hearing of this cause it appears that the number of Trustees under the trust agreement was increased from the original one each to two each. Mr. Carlough, under the general powers contained in the agreement appointed an additional Trustee for the Union. Contrary to the powers contained in the trust agreement, Mr. McKenzie appointed an additional trustee for the employers. This leaves serious room to believe that the increase in the number of Trustees can be so manipulated by the union president whereby he could control the majority of Trustees by simply refusing to agree to an increase in the number of Trustees unless he approved the person advanced by Mr. McKenzie, the "employer trustee". This may not be the present vice, but it is not far from the realm of the probably.

This court is amazed that the 1973 Trust Agreement has such systematic unequal representation of employers and employees.

It is also to be noted from the evidence in this case that though the International insisted that SASMI be included in the demands of Local 441, no one for the International ever did the courtesy of explaining to Mr. Rettig, local business agent, what SASMI was or meant or required or would do. Even though negotiations were undertaken, still in August Mr. Rettig knew nothing about SASMI and had to make inquiry of the International to provide him with some information or send him someone who could explain it to him, his members and the employers. It is greatly understandable why the membership was not permitted to consider this or even vote upon it as to whether they really wanted SASMI as a part of their contract and such high-handed treatment of Mr. Rettig and the members of Local 441 is rep-reprehensible. As indicated, it was not until October when Mr. Rettig appeared in this Court that he was ever provided with a copy of the SASMI trust agreement. It is also passing strange that even then it was the plaintiffs' attorneys who made a copy available to Mr. Rettig, not the International.

This court views with some surprise the fact that SASMI has been established, administered, and maintained with so little regard for the purposes of Section 302. As the Supreme Court emphasized in United States v. Arroyo, 359 U.S. 419, 79 S.Ct. 864, 3 L.Ed.2d 915 (1959),

Those members of Congress who supported the amendment were concerned with corruption of collective bargaining through bribery of employee representatives by employers, with extortion by employee representatives, and with the possible abuse by union officers of the power which they might achieve if welfare funds were left to their sole control. Congressional attention was focussed particularly upon the latter problem ... (footnotes omitted) 359 U.S. at 425-426, 79 S.Ct. at 868.

The disproportionate representation on the part of the International Association as compared to that of the employers in general and Mechanical Contractors in particular raises a very real possibility of union domination of SASMI by the International Association.³

As the Court of Appeals quoted in Quad City Builders Association v. Tri City Bricklayers Union No. 7 AFL-CIO, 431 F.2d 999 (8th Cir. 1970),

Considering all the facts of this case, the Court is compelled to hold that this Trust Fund fails to meet the equal representation requirement of § 302(c)(5)(B), 29 U.S.C.A. § 186(c) (5)(B). Under the present circumstances Union domination of the Trust Fund is a very real possibility. Inherent in such domination is the possibility of abuse which § 302 was enacted to prevent. The statutory standard of equal representation under § 302 is a requirement placed upon the parties by law, and to permit the Union `in any degree' to participate in the choice of employer representations violates this specific standard. Local No. 688, International Brotherhood of Teamsters v. Townsend, 345 F.2d 77, 79 (8th Cir. 1965); Blassie v. Kroger Co., 345 F.2d 58, 72 (8th Cir. 1965). 302 F.Supp. 1031, 1035.

This court is mindful of the factors to be considered in determining whether preliminary...