NLRB v. National Maritime Union of America, AFL-CIO

• Decision Date: 10 October 1973
• Docket Number: Docket 72-2268.,No. 2,2
• Citation: 486 F.2d 907
• Parties: NATIONAL LABOR RELATIONS BOARD, Petitioner, and Vantage Steamship Corporation et al., Intervenors, v. NATIONAL MARITIME UNION OF AMERICA, AFL-CIO, Respondent.
• Court: U.S. Court of Appeals — Second Circuit

486 F.2d 907 (1973)

NATIONAL LABOR RELATIONS BOARD, Petitioner, and Vantage Steamship Corporation et al., Intervenors, v. NATIONAL MARITIME UNION OF AMERICA, AFL-CIO, Respondent.

No. 2, Docket 72-2268.

United States Court of Appeals, Second Circuit.

Argued September 11, 1973.

Decided October 10, 1973.

COPYRIGHT MATERIAL OMITTED

John H. Ferguson, Atty., N.L.R.B. (Peter G. Nash, Gen. Counsel, John S. Irving, Deputy Gen. Counsel, Patrick Hardin, Associate Gen. Counsel, Elliott Moore, Acting Asst. Gen. Counsel; William F. Wachter, Atty., Washington, D. C., on the brief), for petitioner.

Martin C. Seham, New York City, (Surrey, Karasik, Morse & Seham, Fred C. Klein, and Susan A. Powers, New York City, on the brief), for intervenor Vantage Steamship Corp.

Benjamin Schlesinger, New York City, (Schulman, Abarbanel & Schlesinger, Howard Schulman, New York City, on the brief), for intervenors Seafarers International Union of North America and Seafarers International Union of North America, Atlantic, Gulf, Lakes and Inland Waters Dist.

Charles Sovel, New York City (Abraham E. Freedman, New York City, on the brief), for respondent.

Before LUMBARD, FRIENDLY and FEINBERG, Circuit Judges.

FEINBERG, Circuit Judge:

For the fourth time in less than two years, the bitter rivalry between two maritime unions gives rise to knotty legal problems in this court. See also McLeod v. National Maritime Union, 457 F.2d 490 (2d Cir. 1972); National Maritime Union v. Commerce Tankers Corp., 457 F.2d 1127 (2d Cir. 1972); NLRB v. National Maritime Union, No. 72-2349 (2d Cir. June 18, 1973), enforcing in open court, National Maritime Union, 198 N.L.R.B. No. 112 (1972). On this occasion, the National Labor Relations Board seeks enforcement of its order holding that the National Maritime Union of America, AFL-CIO (NMU) and Commerce Tankers Corporation violated section 8(e) of the National Labor Relations Act, 29 U.S.C. § 158(e), by enforcing a provision in their collective bargaining agreement so as to prevent Commerce from selling one of its vessels to Vantage Steamship Corporation. Commerce Tankers Corp., 196 N.L.R.B. No. 165 (1972). Vantage was and is party to a labor agreement with the Seafarers International Union of North America (SIU). Both Vantage and the SIU, the latter joined by an affiliate, have intervened in this proceeding in support of the Board. For reasons set forth below, we enforce the Board's order.

I

The clause at issue is Article I, section 2 of the 1969 contract between Commerce and the NMU. This section, which is reproduced in the margin,¹ provides in substance that if Commerce sells a ship to an American flag shipper not already under contract with the NMU, the ship will be sold with a crew provided by the NMU, and Commerce will obtain from the purchaser an undertaking to abide by the NMU contract. At the time of the agreement, Commerce owned two ships and in December 1970 sold one of them, the S.S. Thalia. Since the purchaser was a signatory to the standard NMU contract, no problem of inter-union rivalry arose.

However, later in the same month, Commerce agreed to sell its remaining vessel, the S.S. Barbara, to Vantage, which, together with its subsidiaries, operated a number of vessels whose employees were represented by the SIU. Very soon thereafter, both Commerce and Vantage found themselves caught between the competing demands of the two unions and frantic activity ensued in a variety of forums. Under pressure from the NMU, Commerce asked Vantage to give the undertaking required by Article I, section 2. The SIU threatened to strike all the vessels operated by Vantage if it stopped using the SIU hiring hall as the exclusive source of its unlicensed seamen.² Vantage understandably refused to accede to the NMU-inspired demand, and threatened to sue Commerce if it did not sell the S.S. Barbara, as it had agreed to do. Similarly, the NMU refused to waive its contractual rights and promptly secured an arbitration award restraining Commerce from delivering the Barbara to Vantage without complying with the ship transfer provisions of the NMU contract. A month later, this award was confirmed and a preliminary injunction in favor of the NMU was issued by the United States District Court for the Southern District of New York. 325 F.Supp. 360.³ In the interim, Vantage filed a charge with the National Labor Relations Board alleging that both the NMU and Commerce were violating section 8(e) of the Act. In May 1971, also in the Southern District, the Board's Regional Director sought an injunction under section 10(l) of the Act, 29 U.S.C. § 160(l), on the ground that he had reasonable cause to believe that the NMU and Commerce were violating section 8(e) of the Act. The injunction was denied. 329 F.Supp. 151. Appeals were taken both from this order and from the earlier Southern District order enjoining the sale of the vessel. The appeals were consolidated, and in March 1972 this court reversed both orders. 457 F. 2d 1127. Even before issuance of the 10(l) injunction, however, the Board proceedings went forward. In September 1971, the Trial Examiner found that the contract clause did not violate section 8(e) because it "is purely a work preservation clause." In May 1972, the full Board unanimously concluded to the contrary,⁴ and this petition for enforcement of its order followed.

II

Now that the dust has settled somewhat,⁵ the precise legal question before us is simple to state but difficult to decide: Did the NMU violate section 8(e) of the Act by maintaining and enforcing Article I, section 2 (see note 1 supra) of the NMU-Commerce collective bargaining agreement? Section 8(e) makes it an unfair labor practice for a union and an employer

to enter into any contract or agreement, express or implied, whereby such employer ceases or refrains or agrees to cease or refrain from handling, using, selling, transporting or otherwise dealing in any of the products of any other employer, or to cease doing business with any other person . . ..

Before examining the judicial gloss on section 8(e) most pertinent here, we must note a preliminary problem. In finding a violation of the section in this case, the Board relied on the portion that makes it an unfair labor practice for a union (NMU) and an employer (Commerce) to agree to "cease doing business with any other person" (Vantage). It may at least be doubted whether an isolated sale of a capital item such as a ship comes within this language. It is arguable that such a transaction does not fit either the letter of the statute or the probable congressional purpose. However, although the Board faced the issue squarely and held that sales of ships occurred "in the normal course of doing business in the maritime industry," NMU counsel, at oral argument, expressly disclaimed reliance upon this point. Accordingly, we will assume — without deciding for the future — that in the ship-sale transaction, Commerce and Vantage were "doing business" with each other and that the disruption of the transaction was a cessation of this.

Section 8(e) was enacted in 1959 as part of the Landrum-Griffin amendments to the National Labor Relations Act, which were designed to correct what many employers and members of Congress thought were statutory deficiencies in dealing with secondary boycotts.⁶ In Carpenters Local 1976 v. NLRB, 357 U.S. 93, 78 S.Ct. 1011, 2 L. Ed.2d 1186 (1958) (Sand Door), the Supreme Court had held that an employer's voluntary observance of a clause in his agreement with his employees not to handle nonunion goods was lawful under what was then section 8(b)(4)(A) of the Labor Act. 357 U.S. at 98-99, 78 S. Ct. 1011. Section 8(e) was designed "to plug this gap in the legislation by making the . . . clause itself unlawful." National Woodwork Mfrs. Ass'n v. NLRB, 386 U.S. 612, 634, 87 S.Ct. 1250, 1263, 18 L.Ed.2d 357 (1967). But section 8(e) like other sections designed to curb secondary activity, does not shimmer with clarity, and it has been a source of much litigation. See The Developing Labor Law, note 6 supra, at 645-74.

The Board held in this case that because Article I, section 2 of the contract prevented Commerce from selling a ship to Vantage, the clause was prohibited as one

whereby an employer agrees, in substance, to cease or refrain from doing business with any other person within the meaning of Section 8(e) of the Act.

The NMU argues to us, as it did before the Board, that the clause was entirely proper because its objective was to preserve work for its members. Both parties, and the intervenors, support their positions with language from National Woodwork, supra, the only section 8(e) case decided by the Supreme Court.

National Woodwork involved a contract provision negotiated by the Carpenters Union under which its members would not "handle" doors which had been "fitted" prior to being furnished on the job. Such precut and prefitted doors could be obtained from manufacturers, but doing so eliminated preparatory work which had been "traditionally performed in the . . . area by the carpenters employed on the jobsite." 386 U.S. at 615-616, 87 S.Ct. at 1253. The Supreme Court held in a 5-4 decision that the contract clause was lawful because it was intended to protect and preserve work customarily performed by employees in the bargaining unit. The Court pointed out that Congress did not intend to obliterate the longstanding distinction between union pressures directed toward "primary" objectives and identical pressures aimed at "secondary" objectives. Id. at 620, 633-635, 87 S.Ct. 1250. According to the Court:

The touchstone is whether the agreement or its maintenance is addressed to the labor relations of the contracting employer vis-à-vis his own employees.

Id. at 645, 87 S.Ct. at 1268. Putting it another way, the test is

whether, under all the surrounding circumstances, the Union\'s objective was preservation of work for the employer\'s employees, or whether the

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