Oil, Chemical and Atomic Workers, International Union v. Mobil Oil Corporation

• Decision Date: 14 June 1976
• Docket Number: AFL-CIO,No. 74-1254,74-1254
• Citation: 96 S.Ct. 2140,48 L.Ed.2d 736,426 U.S. 407
• Parties: OIL, CHEMICAL AND ATOMIC WORKERS, INTERNATIONAL UNION,, et al., Petitioners, v. MOBIL OIL CORPORATION, etc
• Court: U.S. Supreme Court

426 U.S. 407

96 S.Ct. 2140

48 L.Ed.2d 736

OIL, CHEMICAL AND ATOMIC WORKERS, INTERNATIONAL UNION, AFL-CIO, et al., Petitioners,

v MOBIL OIL CORPORATION, etc.

No. 74-1254.

Argued March 29, 1976.

Decided June 14, 1976.

Syllabus

Section 8(a)(3) of the National Labor Relations Act permits union- or agency-shop agreements between employers and unions, but § 14(b) authorizes States to exempt themselves from § 8(a)(3) and to enact "right-to-work" laws prohibiting union or agency shops. About two years after petitioner unions and respondent employer had entered into an agency-shop agreement covering seamen employed on respondent's oil tankers, respondent brought suit claiming that the agreement was invalid and unenforceable because it violated Texas' right-to-work laws. Since, Inter alia, all final decisions for hiring the seamen are made in Texas, the majority of the then employed seamen reside in Texas, and respondent's personnel records are maintained and payroll checks are written there, the District Court held that Texas had an "intimate concern" with the agreement, notwithstanding that the seamen spend the vast majority of their working hours away from Texas on the high seas, and that therefore Texas' right-to-work laws were applicable under § 14(b) and rendered the agreement void and unenforceable. The Court of Appeals affirmed, stressing that Texas was the place of hiring. Held:

1. It is the employees' predominant job situs rather than a generalized weighing of factors or the place of hiring that triggers operation of § 14(b), and under § 14(b) right-to-work laws cannot void agreements permitted by § 8(a) (3) when the situs at which all the employees covered by the agreement perform most of their work is located outside of a State having such laws. Pp. 412-419.

(a) Insofar as § 8(a)(3) deals with union- and agency-shop agreements, it focuses both in effect and purpose on Post -hiring conditions, conditions that have a major impact on the job situs. Pp. 414-416.

(b) Similarly, § 14(b)'s primary concern is with state regulation of the Post -hiring employer-employee-union relationship, the center of which is the job situs, I. e., the place where the work that is the very Raison d' etre of the relationship is performed; and because of this close relationship between § 14(b) and job situs, § 14(b) does not allow enforcement of right-to-work laws with regard to an employment relationship whose principal job situs is outside of a State having such laws. Pp. 416-418.

(c) Under the job situs test, as opposed to a place of hiring test, the possibility of patently anomalous extraterritorial applications of any given State's right-to-work laws will be minimized and parties entering a collective-bargaining agreement will easily be able to determine in virtually all situations whether a union- or agency-shop provision is valid. Pp. 418-419.

2. Under the job situs test Texas' right-to-work laws cannot govern the validity of the agency-shop agreement in question, because most of the employees' work is done on the high seas, outside the territorial bounds of Texas. It is immaterial that Texas may have more contacts than any other State with the employment relationship involved, since there is no reason to conclude under § 14(b) that in every employment situation Some State's law with respect to union-security agreements must apply, and it is fully consistent with national labor policy to conclude, if the predominant job situs is outside the boundary of any State, that no State has a sufficient interest in the employment relationship and that hence no State's right-to-work laws can apply. Pp. 420-421.

504 F.2d 272, reversed.

Laurence Gold, Washington, D. C., for petitioners.

James W. Hambright, Beaumont, Tex., for respond- ent.

Mr. Justice MARSHALL delivered the opinion of the Court.

Section 8(a)(3) of the National Labor Relations Act, 49 Stat. 452, as amended, 61 Stat. 140, 29 U.S.C. § 158(a)(3), permits employers as a matter of federal law to enter into agreements with unions to establish union or agency shops. ¹ Section 14(b) of the Act, 61 Stat. 151, 73 Stat. 541, 29 U.S.C. § 164(b), however, allows individual States and Territories to exempt themselves from § 8(a)(3) and to enact so-called "right-to-work" laws prohibiting union or agency shops.² We must de- cide whetherunder § 14(b), Texas' right-to-work laws can void an agency-shop agreement covering unlicensed seamen who, while hired in Texas and having a number of other contacts with the State, spend the vast majority of their working hours on the high seas.

I

Petitioners (hereinafter Union) ³ represent the unlicensed seamen who work on respondent employer's oil tankers. In November 1969 the Union and respondent entered into a collective-bargaining agreement which provided for an agency shop: "For the duration of the Agreement all employees hired shall, as a condition of employment, become members of the Union and/or in the alternative pay the regular union dues and initiation fees within 31 days from the employment date." App. 281. Almost two years after entering into the agreement, respondent filed suit in the United States District Court for the Eastern District of Texas under § 301 of the Labor Management Relations Act, 61 Stat. 156, 29 U.S.C. § 185, claiming that the agency-shop provision was invalid and unenforceable because it violated Texas' right-to-work laws.⁴

Uncontested evidence was presented at trial concerning the relevant locations of various aspects of the rela- tionship between the Union, the respondent, and the seamen. Because this evidence bears heavily on the contentions of the parties, we shall summarize it in some detail. Respondent is a division of Mobil Oil Corp., New York corporation, and operates a fleet of eight oceangoing tankers which transport respondent's petroleum products from Texas to Atlantic coast ports. Respondent is headquartered in Beaumont, Tex., and maintains its personnel records there. Sixty percent of the applications to be unlicensed seamen on respondent's ships are made in Beaumont and 40% in New York. The final hiring decisions are made in Beaumont. Of the 289 unlicensed seamen who are employed to man the tankers, 123 maintain residence in Texas, and 60 in New York.⁵ One hundred and fifty-two of the seamen list Beaumont as their shipping port a designation that determines travel allowances to and from a seaman's residence and the remainder list either New York or Providence, R. I. Seamen can elect to be paid their wages aboard ship, to have their paychecks sent from the Beaumont office to designated recipients, or to use a combination of these two schemes. The collective-bargaining agreement whose agency-shop provision is at issue here was negotiated and executed in New York. It was re-executed in Texas.

A typical trip by one of respondent's tankers from Beaumont, the Texas port, to Providence or New York, the Atlantic ports, takes from 41/2 to 5 days. Loading and unloading in port takes from 18 to 30 hours. No more than 10% To 20% Of the seamen's work time is spent within the territorial bounds of Texas.

Based on the above evidence, fully reflected in its findings of fact, the District Court concluded that "(the acts performed in the State of Texas in the administration and performance of the collective bargaining agreement are such that the State of Texas is intimately concerned with the collective bargaining agreement and with the employees working thereunder." App. 29. Relying on this "intimate concern," the court held that the Texas right-to-work laws were applicable under § 14(b) and that the agency-shop provision was therefore void and unenforceable.

A three-member division of the United States Court of Appeals for the Fifth Circuit, one judge dissenting, reversed. 483 F.2d 603 (1973). The court concluded that the Texas right-to-work laws could not apply since the employees' principal job situs is not in Texas but rather is on the high seas. On rehearing en banc the full court, over the dissent of six of its members, vacated the division opinion and affirmed the judgment of the District Court. 504 F.2d 272 (1974). The court identified and analyzed the interests that Texas has in the employment relationship at issue, placing special stress on the fact that all final hiring decisions take place in Texas. It held that "the federal labor legislation, the predominance of Texas contacts over any other jurisdiction, and the significant interest which Texas has in applying its right to work law to this employment relationship warrant application of the Texas law and, consequently, invalidation of the agency shop provision." Id., at 275. We granted certiorari, 423 U.S. 820, 96 S.Ct. 32, 46 L.Ed.2d 37 (1975), and we now reverse.

II

All parties are agreed that the central inquiry in this case is whether § 14(b) permits the application of Texas' right-to-work laws to the agency-shop provision in the collective-bargaining agreement between the Union and respondent.⁶ Only if it is to be so read is the agency-shop provision unenforceable.⁷ The parties are similarly agreed that a State can apply its right-to-work laws only with respect to employment rationships with which the State has adequate contact. The crux of the differences between the parties concerns whether the contacts between Texas and the employment relationship in this case are sufficient to come under § 14(b).

The Union, as well as the United States as Amicus curiae, argues that the nature of the concerns at which § 14(b) is directed mandates that job situs be the controlling factor in determining the applicability of § 14(b), and that since in this case the employees' principal job situs is on the high seas outside the territorial bounds of the State the agency-shop provision at issue is valid. Respondent contends that "(t)he sufficiency of a state's interest in applying its law is to be determined by looking to the whole employment...