Neal v. Reliance Elec. & Engineering Co.

• Decision Date: 31 August 1967
• Citation: 41 O.O.2d 284,12 Ohio App.2d 183,231 N.E.2d 882
• Court: Ohio Court of Appeals
• Parties: , 41 O.O.2d 284 NEAL et al., Appellants, v. RELIANCE ELECTRIC & ENGINEERING CO., Master Electric Division, Appellee.

Page 183

12 Ohio App.2d 183

231 N.E.2d 882, 41 O.O.2d 284

NEAL et al., Appellants, v. RELIANCE ELECTRIC & ENGINEERING CO., Master Electric Division, Appellee.

Court of Appeals of Ohio, Second District, Montgomery County.

Aug. 31, 1967.

Syllabus by the Court

1. State and federal courts have concurrent jurisdiction in cases arising under Section 301(a) Labor Management Relations Act (1947), 29 U.S.Code, 185(a), involving controversies between employer and employees over rights of the latter under collective bargaining agreements.

2. Rights accruing to employees under collective bargaining agreements may be pursued individually.

3. Employees have no vested seniority rights unless their agreement with the employer so provides. In the absence of such provisions, employees have no seniority rights beyond the term of the contract, nor in a new plant in another state to which the employer moves its operation.

4. Seniority and other rights of employees may be bargained away through their authorized representatives.

5. Courts seldom, and only reluctantly, interfere with the internal affairs of an association such as a labor union until all remedies within the association have been exhausted, and will not disturb action taken by its officers or representatives unless they exceed their powers or there is fraud or collusion.

6. General acquiescence of employees in the provisions of a termination agreement negotiated by their union representatives with the employer may be considered as a recognition of the authority of the representatives and, if need be, a ratification of it.

Sharts, Singer & Brown, Frank, Thomas, Brumbaugh & Corwin and Ronald H. McDonnell, Jr., Dayton, for appellants.

Pickerel, Schaeffer & Ebeling, Maurice J. Leen, Jr., and Gordon H. Savage, Dayton, for appellee.

CRAWFORD, Presiding Judge.

This case is before the court for a second time. We previously held that plaintiffs-appellants had stated a cause of action for declaratory judgment sufficient against demurrer. Neal v. Reliance Electric and Engineering Co. (1963), 118 Ohio App. 501, 196 N.E.2d 128.

As former employees of the defendant corporation, plaintiffs brought this as a class action to determine their rights under collective bargaining agreements made on their behalf by the local labor union of which they were members. The issues arise from the employer's moving its entire operation to a new plant in Columbus, Indiana.

The principal right claimed is that of seniority, which plaintiffs contend is a vested and permanent right so as to entitle them as employees in defendant's Dayton plant, now closed, to be transferred to defendant's new plant in Columbus, Indiana, with the same seniority rights as they had attained in Dayton under the collective bargaining agreements.

The Court of Common Pleas decided the issues in favor of the defendant and against plaintiffs' claimed rights. Plaintiffs have appealed on questions of law.

On January 16, 1941, defendant corporation was known as The Master Electric Company. In July, 1957, it was purchased by The Reliance Electric and Engineering Company and was thereafter designated as in the caption.

From January 16, 1941, until September 5, 1956, defendant's employees belonged to and were represented by a local labor union, known successively as The United Electrical Radio and Machine Workers Local 754, CIO, The United Electrical Radio and Machine Workers Local 754 AFL-CIO, and the United Electrical Radio and Machine Workers Local 754. On September 5, 1956, the employees disffiliated themselves from that union and joined and were continuously thereafter represented by the International Association of Machinists AFL-CIO Local No. 2154 as their bargaining representative.

Continuous collective bargaining agreements, each for a specified period, have existed from March 17, 1941, up to and including July 1, 1960, on which date another two-year agreement was entered into.

Early in 1960, preceding the negotiations for this last agreement, the defendant laid before its employees what appeared to be an unfavorable business and financial situation, calling for changes by both employer and employees, including an incentive wage arrangement. No such arrangement was included in the agreement of July 1, 1960.

On July 27, 1960, defendant notified its employees of its intention to discontinue the operation in Dayton and to move it to a new plant at Columbus, Indiana. The members of Local 2154 IAM elected certain of their number as officers, and as members of a negotiating committee. They, together with the attorney for the local, and a Grand Lodge representative from AFL-CIO, negotiated with the defendant a 'Memorandum of Understanding' or preliminary agreement, dated October 17, 1961. This provided that present employees might apply for transfer as new employees without their existing seniority, at the new plant, the company to have discretion, to be reasonably exercised, to select those whom it could use, and so far as possible to employ such applicants ahead of local Indiana personnel.

As to those not transferred to Indiana, it provided severance pay, accumulated vacation pay, and distribution of retirement funds which had accumulated partly from contributions of the employees and in greater part from contributions of the employer, and that the individual employees, as a condition of receiving severance payment, would 'sign a release of all rights accruing to them under the collective bargaining agreement whether vested or not vested, and whether accrued in the past or contemplated in the furture by said agreement, including seniority, together with all rights to which they may be entitled under the pension agreement'; and that 'the agreement itself dated July 1, 1960, shall be automatically terminated' when work stops in the Dayton plant.

According to the minutes of Local 2154, a special meeting of the membership was held on October 17, 1961, at which this 'Memorandum of Understanding' was recommended by the negotiating committee and adopted by the members. Pursuant to this action, the negotiating committee entered into a formal 'Supplemental Agreement' with the defendant on November 7, 1961, embodying these provisions.

These releases which were to be signed by the employees released: (a) the defendant 'from any and all claims of whatsoever nature arising out of the collective bargaining agreement dated July 1, 1960, between said company and Local 2154, of the International Association of Machinists, AFL-CIO and all prior such agreements between said parties, whether vested or not vested, and whether accrued in the past or contemplated in the future by any said agreement, including seniority'; (b) Local 2154 and the International Union, their officers and agents 'from any and all claims of whatsoever nature arising out of my membership in said Union and/or its representation of me in connection with my employment at (defendant plant) or termination thereof, to the date of this release'; and (c) 'The Cleveland Trust Company of Cleveland, its officers or agent, from any and all claims of whatsoever nature arising out of my participation in The Reliance Electric and Engineering Company, Master Electric Division, contributory retirement plan, dated July 1, 1960, and trust agreement.'

Nearly all of the approximately 1,250 employees and members of Local 2154 signed the releases and presumably received their severance pay and the other considerations agreed upon. Of the twenty-five plaintiffs, fourteen signed these releases. The remaining eleven, one of whom is now deceased, did not, and neither, apparently, did three others.

Plaintiffs contend that as individual employees they may assert the rights secured to them by a collective bargaining agreement. This right is not challenged. The issue is what rights do the plaintiffs actually have.

There are two assignments of error: first, that the trial court erred in finding that plaintiffs did not have vested rights; and, second, that the trial court erred in holding the purported supplemental agreement valid.

The case arises under Section 301(a) Labor Management Relations Act of 1947 (June 23, 1947, c. 120, Title III, Section 301(a), 61 Stats. at L. 156; 29 U.S.Code, Section 185(a)). That provision vested jurisdiction, but not exclusive jurisdiction, in any District Court of the United States having jurisdiction of the parties. The state courts have concurrent jurisdiction with the federal courts in such cases, but all must apply federal substantive law. The statute has been so construed. Charles Dowd Box Co. v. Courtenay (1962), 368 U.S. 502, 82 S.Ct. 519, 7 L.Ed.2d 483; Humphrey v. Moore (1964), 375 U.S. 335, 84 S.Ct. 363, 11 L.Ed.2d 370; Smith v. Evening News Assn. (1962), 371 U.S. 195, 83 S.Ct. 267, 9 L.Ed.2d 246; Local 174, Teamsters etc. v. Lucas Flour Co. (1962), 369 U.S. 95, 82 S.Ct. 571, 7 L.Ed.2d 593; Vaca v. Sipes (1967), 87 S.Ct. 903, 17 L.Ed.2d 842; Textile Workers Union of America v. Lincoln Mills of Alabama (1957), 353 U.S. 448, 77 S.Ct. 912, 1 L.Ed.2d 972; Atkinson v. Sinclair Refining Co. (1962), 370 U.S. 238, 82 S.Ct. 1318, 8 L.Ed.2d 462.

As to the first assignment of error, plaintiffs rely heavily upon the protracted and much-debated case of Zdanok v. Glidden Co. (S.D.N.Y., 1960), 185 F.Supp. 441; reversed by a divided court (2nd Cir., 1961), 288 F.2d 99; rehearing (S.D.N.Y., 1963), 216 F.Supp. 476; affirmed (2nd Cir., 1964), 327 F.2d 944; certiorari denied (1964), 377 U.S. 934, 12 L.Ed.2d 298.

On the original appeal of that case it was held by a majority of the court that employees acquired vested rights under a seniority provision of a collective bargaining agreement, which could be enforced after termination of the agreement and in the employer's transferred plant in another state. The opinion noted, however, that the employee or his authorized agent could bargain away this right. A vigorous dissent by Lumbard, Chief Judge,...