Reid v. McDonnell Douglas Corporation

• Decision Date: 08 June 1971
• Docket Number: No. 417-70.,417-70.
• Citation: 443 F.2d 408
• Parties: E. R. REID et al., Plaintiffs-Appellants, v. McDONNELL DOUGLAS CORPORATION and International Union, United Automobile Aerospace and Agricultural Implement Workers of America (UAW-AFL-CIO) District Lodge 1093, Defendants-Appellees.
• Court: U.S. Court of Appeals — Tenth Circuit

443 F.2d 408 (1971)

E. R. REID et al., Plaintiffs-Appellants, v. McDONNELL DOUGLAS CORPORATION and International Union, United Automobile Aerospace and Agricultural Implement Workers of America (UAW-AFL-CIO) District Lodge 1093, Defendants-Appellees.

No. 417-70.

United States Court of Appeals, Tenth Circuit.

June 8, 1971.

Jonathan C. Gibson, San Diego, Cal. (Welsh, Gibson & Legro, San Diego, Cal., John L. Kilcullen, Gall, Lane, Powell & Kilcullen, Washington, D. C., E. John Eagleton, Kothe & Eagleton, Inc., Tulsa, Okl., on the brief), for plaintiffs-appellants.

Richard W. Gable, Tulsa, Okl. (Gable, Gotwals, Hays, Rubin & Fox, Tulsa, Okl., on the brief), for defendant-appellee McDonnell Douglas Corp. Stephen I. Schlossberg, Gen. Counsel, Detroit, Mich. (Joseph L. Rauh, Jr., John Silard, Washington, D. C., on the brief; McMath, Leatherman, Woods & Youngdahl, Little Rock, Ark., Ungerman, Grabel, Ungerman & Leiter, Tulsa, Okl., of counsel), for defendant-appellee International Union (UAW).

Before LEWIS, Chief Judge, and PICKETT and ADAMS^*, Circuit Judges.

ADAMS, Circuit Judge.

This case presents a difficult question concerning the jurisdiction of the federal courts to hear a dispute regarding whether a union may spend dues for political purposes over the objection of non-union members compelled to pay such dues pursuant to an agency shop agreement between their employer and the union.

Plaintiffs purport to represent a class of employees of McDonnell Douglas Corporation who are not members of the United Auto Workers (UAW) but who are required to pay dues as a condition of employment under an agency shop clause in the contract between the UAW and McDonnell Douglas.¹

In a complaint filed in the United States District Court for the Northern District of Oklahoma in 1967, plaintiffs allege that the UAW spends a portion of the plaintiffs' dues for political candidates and causes which are opposed by the plaintiff-employees. However, these employees do not allege that they protested such expenditures, or that they have demanded a pro rata refund or reduction in their dues. The alleged injury is the imposition on such employees of political and ideological conformity in violation of the first, fifth, ninth and fourteenth amendments to the Constitution, the UAW's duty of fair representation, a duty implied under § 9(a) of the National Labor Relations Act² ("the Act") and of an implied condition in the collective bargaining agreement.³ Jurisdiction is alleged under 28 U.S.C. § 1331(a) and 29 U.S.C. § 185 (§ 301 of the Labor-Management Relations Act).⁴ The complaint requested a declaratory judgment, monetary damages and injunctive relief. Upon defendants' separate motions to dismiss, District Judge Allen E. Barrow dismissed the action against the UAW on the ground that the preemption doctrine created exclusive jurisdiction to hear the matter in the National Labor Relations Board and dismissed the claim against McDonnell Douglas on the ground that the complaint failed to state a claim against McDonnell Douglas for which relief may be granted.

The plaintiff-employees here recognize that the Supreme Court in San Diego Building Trades Council, Millmen's Union, Local 2020 v. Garmon, 359 U.S. 236, 79 S.Ct. 773, 3 L.Ed.2d 775 (1959), held that whenever a party challenges union activity arguably protected by § 7 or prohibited by § 8 of the Act, the doctrine of primary jurisdiction requires "federal courts to defer to the exclusive competence" of the NLRB. Id. at 245, 79 S.Ct. at 780. Plaintiffs contend, however, that their claim comes within one of the several exceptions to primary jurisdiction.

The first exception invoked by the plaintiffs regards their claim that "the exaction of compulsory agency fee payments * * * abridges rights guaranteed to them under the First and Fifth Amendments * * * of the United States Constitution." Plaintiffs assert this claim is sufficient to bring them within the "arising under" jurisdiction of 28 U.S.C. § 1331(a).⁵ By their terms, the first and fifth amendments proscribe federal governmental action, not the actions of private persons. In International Association of Machinists v. Street, 367 U.S. 740, 81 S. Ct. 1784, 6 L.Ed.2d 1141 (1961), the Supreme Court met this issue by relying on its analysis in Railway Employees Department v. Hanson, 351 U.S. 225, 231-232, 76 S.Ct. 714, 100 L.Ed. 1112 (1956). In Hanson, Justice Douglas reasoned that the Railway Labor Act expressly superseded state laws prohibiting the union shop. Accordingly, contracts negotiated with a union shop provision necessarily carry the "imprimatur of the federal law", the element which provides the required governmental action. Indeed one may argue further that the union shop is a device which Congress had decided to encourage in the railway industry by nullifying any state laws to the contrary. Union activity pursuant to such encouragement is thus within the traditional ambit of "state action" analysis under the fourteenth amendment⁶ — a concept bearing close analogy to the federal governmental action required to invoke the first and fifth amendments. Whatever the wisdom of this reasoning for the Railway Labor Act, it has no applicability to the National Labor Relations Act. For in Retail Clerks International Association, Local 1625, A.F.L.-C.I.O. v. Schermerhorn, 373 U.S. 746, 83 S.Ct. 1461, 10 L.Ed.2d 678 (1963), the Court held that the agency shop, authorized by §§ 7 and 8(a) (3) of the Act, is limited by § 14(b) of the Act, thus permitting the states to forbid it. Unlike the union shop in Hanson and Allen, the agreement here could be "made illegal or vitiated by * * * the laws of a State." Hanson,supra, 351 U.S. at 232, 76 S.Ct. at 718. While the union shop provision in the Railway Labor Act is not compulsory in the sense that management and labor are not required to establish such a shop, the provision does give management and labor the right to bargain for a union shop and mandates that states not interfere with that right. This mandate is part of a most comprehensive regulatory scheme whose entire history has been one of very active governmental supervision and treatment. See Street,supra, 367 U.S. at 750-764, 81 S.Ct. 1784. Moreover, the rail unions have been given extremely broad responsibilities for their union members beyond anything permitted or mandated under the National Labor Relations Act.⁷See e. g., 45 U.S.C. §§ 152, 156.

By contrast, the policy with respect to union security agreements expressed in the NLRA is more neutral and permissive than the policy of the RLA. See the analysis of governmental action in Reitman v. Mulkey, 387 U.S. 369, 373-381, 87 S.Ct. 1627, 18 L.Ed.2d 830 (1967); cf. Burton v. Wilmington Parking Authority, 365 U.S. 715, 81 S.Ct. 856, 6 L.Ed.2d 45 (1961). In NLRA matters, the federal government does not appear to us to have so far insinuated itself into the decision of a union and employer to agree to a union security clause so as to make that choice governmental action for purposes of the first and fifth amendments.⁸ In Seay v. McDonnell Douglas Corp., 427 F.2d 996 (9th Cir. 1970), the Ninth Circuit relied on Hanson and Street as demonstrating the existence in the federal courts of jurisdiction to hear the type of constitutional claim raised here. However, the Seay court did not consider the question of governmental action, and for the reasons stated above, we cannot agree that the rationale of the Railway Labor Act cases applies to the present controversy.⁹

Plaintiffs alleged in their brief on appeal that the NLRA is unconstitutional if its effect is to allow the UAW to spend the plaintiffs' dues on political purposes opposed by them. However, the plaintiff's complaint nowhere attacks the constitutionality of the Act on this or any other basis. If such an attack were made, it might well be insubstantial in light of National Labor Relations Board v. General Motors Corp., 373 U.S. 734, 83 S.Ct. 1453, 10 L.Ed.2d 670 (1963), which held the agency shop to be valid, and International Association of Machinists v. Street, 367 U.S. 740, 81 S.Ct. 1784, 6 L.Ed.2d 1141 (1961), which held the RLA does not permit political expenditures by unions contrary to the philosophy of their members. Although the Supreme Court has not examined the NLRA in the context of the constitutionality of union political expenditures, it may be contended that the Court's reasoning in Street is applicable by analogy.¹⁰

Plaintiffs next claim that the UAW has breached its duty of fair representation, thereby invoking the doctrine of Vaca v. Sipes, 386 U.S. 171, 87 S.Ct. 903, 17 L.Ed.2d 842 (1967), to establish jurisdiction in the federal courts. As the exclusive bargaining representative for the employees here, the UAW does have the statutory duty to represent fairly all employees within the unit. Ford Motor Co. v. Huffman, 345 U.S. 330, 73 S.Ct. 681, 97 L.Ed. 1048 (1953). Plaintiffs' claim on this theory is couched in terms of a breach of the UAW's "fiduciary duty * * * to use the plaintiffs' dues for purposes reasonably necessary and germane to collective bargaining only" and that expenditures for political "doctrines and candidates" opposed by plaintiffs constitutes a violation of that fiduciary duty.¹¹ A related jurisdictional claim of plaintiffs depends on finding a similar implied duty of fair representation in the collective bargaining agreement, thereby making possible a suit under § 301 of the Labor Management Relations Act.¹² Again, the Ninth Circuit suggests that such an allegation is sufficient to invoke federal court jurisdiction. Seay,supra, 427 F.2d at 1000-1001. Plaintiffs have cited no other cases where a union was held to violate its duty of fair representation by its actions regarding an employee with respect to internal union matters as contrasted with its actions vis-a-vis the employer. In cases such as Brady v. Trans World Airlines, Inc., 401 F.2d 87 (3rd Cir. 1968), and Cunningham v....