Sheet Metal Wkrs. Int. Ass'n, Loc. 223 v. Atlas Sheet Metal Co.

• Decision Date: 10 August 1967
• Docket Number: No. 22626.,22626.
• Parties: SHEET METAL WORKERS INTERNATIONAL ASSOCIATION, LOCAL UNION NO. 223, AFL-CIO, Appellant, v. ATLAS SHEET METAL COMPANY OF JACKSONVILLE, Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

384 F.2d 101 (1967)

SHEET METAL WORKERS INTERNATIONAL ASSOCIATION, LOCAL UNION NO. 223, AFL-CIO, Appellant, v. ATLAS SHEET METAL COMPANY OF JACKSONVILLE, Appellee.

No. 22626.

United States Court of Appeals Fifth Circuit.

August 10, 1967.

COPYRIGHT MATERIAL OMITTED

Seymour A. Gopman, Miami Beach, Fla., for appellant.

Albert S. C. Millar, Jr., Jacksonville, Fla., for appellee.

Before GEWIN and GOLDBERG, Circuit Judges, and SPEARS, District Judge.

GEWIN, Circuit Judge:

Atlas Sheet Metal Company of Jacksonville brought suit against the Sheet Metal Workers International Association, Local Union No. 223, AFL-CIO pursuant to Section 303 of the National Labor Relations Act, 29 U.S.C. § 187,¹ in the United States District Court for the Middle District of Florida alleging that the union had violated Section 8 (b) (4) (i) and (ii) (B) of the Act and that such violation had caused plaintiff damages. The jury returned a verdict for the plaintiff and final judgment was entered by the district court in favor of the plaintiff in the amount of $3,501.56. From this judgment the Sheet Metal Workers Union, Local 223 appeals. We affirm the judgment of the district court as to liability but reverse and remand for a determination as to the proper amount of damages.

Atlas Sheet Metal Company of Jacksonville (Atlas of Jacksonville) is a sheet metal fabricating contractor with its principal place of business in Jacksonville, Florida. In September 1963 Atlas of Jacksonville had a collective bargaining agreement with Sheet Metal Workers International, Local Union No. 435. A sister union, Sheet Metal Workers International Association, Local Union No. 223, has its principal office and place of business in Miami, Florida. Local 223, had since July 1963, picketed Atlas Sheet Metal Works of Miami (Atlas of Miami),² a metal fabrication corporation, in furtherance of their labor dispute with that company. In September, 1963, Local 223 began picketing Atlas of Jacksonville's place of business. The pickets carried signs which read: "Sheet Metal Workers L.U. 223 AFL-CIO on strike against Atlas Industries, Inc., Atlas Sheet Metal Company is affiliated and allied with Atlas Metal Industries, Inc." Due to the picket line, none of Atlas of Jacksonville's sheet metal employees reported to work. Atlas of Jacksonville attempted to compel its employees to return to work by seeking an injunction in the state court against Local 435, but the attempt proved to be unsuccessful. Atlas of Jacksonville then filed with the National Labor Relations Board an unfair labor practice charge against Local 223 alleging violations of section 8(b) (4) (i) and (ii) (B) of the National Labor Relations Act, 29 U.S.C. § 158(b) (4) (i) and (ii) (B). The picketing ceased on September 16, 1963.

Atlas of Jacksonville then brought this suit against Local 223 for damages resulting from the Union's alleged violation of section 8(b) (4) (i) and (ii) (B). At the close of Atlas of Jacksonville's case, Local 223 made a motion for a directed verdict which was denied by the court. Local 223 then elected not to produce any testimony or present any witnesses on the basis that Atlas of Jacksonville had not proved a violation of the Act. The court instructed the jury and both parties filed objections to such instructions. The jury returned its verdict for Atlas of Jacksonville in the amount of $2,634.37. Local 223 filed a motion for a new trial and a motion for a directed verdict and/or judgment notwithstanding the verdict and a motion to alter or amend judgment. All motions were denied and the court, in accordance with the jury verdict and with the stipulation of counsel as to costs and attorney's fees, entered final judgment for Atlas of Jacksonville in the amount of $3,501.56.

The jury found that Local 223 violated Section 8(b) (4) (i) and (ii) (B) of the NLRA which prohibits a union from engaging in activity known as a secondary boycott, although that term is not expressly used in the statute. This section reads:

"8(b) It shall be an unfair labor practice for a labor organization or its agents —

(4) (i) to engage in, or to induce or encourage any individual employed by any person engaged in commerce or in an industry affecting commerce to engage in, a strike or a refusal in the course of his employment to use, manufacture, process, transport, or otherwise handle or work on any goods, articles, materials, or commodities or to perform any services; or (ii) to threaten, coerce, or restrain any person engaged in commerce or in any industry affecting commerce, where in either case an object thereof is —

* * * * * *

(B) forcing or requiring any person to cease using, selling, handling, transporting, or otherwise dealing in the products of any other producer, processor, or manufacturer, or to cease doing business with any other person, or forcing or requiring any other employer to recognize or bargain with a labor organization as the representative of his employees unless such labor organization has been certified as the representative of such employees under the provisions of section 159 of this title: Provided, That nothing contained in this clause (B) shall be construed to make unlawful, where not otherwise unlawful, any primary strike or primary picketing;."

Essentially this statute means that it is unlawful for a labor organization to induce employees of a neutral employer to strike or for a labor organization to pressure a neutral employer where the object of the union is to force such employer to cease doing business with another employer or to force any other employer to recognize or bargain with an uncertified labor union. Therefore in order for a labor organization to violate this statute, it must engage in unlawful activity against a neutral employer for an unlawful objective.

It is contended by Local 223 that the evidence presented to the jury clearly showed that Atlas of Jacksonville was not a neutral employer. Local 223 also contends that the evidence fails to prove that its picketing of Atlas of Jacksonville was for an illegal purpose. In addition, the union submits that the court's instructions to the jury enlarged the stated illegal objectives of the statute so as to include lawful objectives. And finally Local 223 contends that the damages awarded were excessive.

In order for an employer who is the subject of a secondary boycott to avail itself of the protection afforded by the statute, it must be neutral and not affiliated or allied with the primary employer. The secondary employer must be, in the words of Senator Taft, the sponsor of the legislation, "wholly unconcerned" in the dispute between a primary employer and his employees. This neutrality of the secondary employer is destroyed and it is deemed to be an ally of the primary employer for the purpose of section 8(b) (4) where there is actual common control exemplified by domination of the secondary by the primary employer or an overlapping of management functions and not merely potential common control inherent in common ownership.³ NLRB v. Milk Drivers & Dairy Employees Local 584, 341 F.2d 29 (2 Cir. 1965); Miami Newspaper Pressmen's Local 46 v. NLRB, 116 U.S.App. D.C. 192, 322 F.2d 405 (1963); Truck Drivers & Helpers Local Union 728 v. Empire State Express, Inc., 293 F.2d 414 (5 Cir. 1961); Bachman Machine Co. v. NLRB, 266 F.2d 599 (8 Cir. 1959); Local 24 Int. Bro. of Teamsters, etc. v. NLRB, 105 U.S.App.D.C. 271, 266 F.2d 675 (1959); J. G. Roy & Sons v. NLRB, 251 F.2d 771 (1 Cir. 1958); NLRB v. Denver Bldg. & Constr. Trades Council, 219 F.2d 870 (10 Cir. 1955).

The record reveals numerous facts bearing on the issue of whether Atlas of Miami exercised the necessary control over the business affairs of Atlas of Jacksonville. Atlas of Miami owns 100 percent of the stock of Atlas of Jacksonville and the two corporations have an identical Board of Directors and identical officers:⁴ Goodwin Salkoff — president and director, Gladys Salkoff — secretary-treasurer and director, Benjamin Salkoff — vice president and director. The two corporations make different products, have only one common customer, and only about 3½% of the gross business of Atlas of Jacksonville is with Atlas of Miami. Although Atlas of Jacksonville advertises separately and pays for its own advertising, Atlas of Miami has loaned Atlas of Jacksonville equipment and money without security and without corporation meetings to authorize same. President Goodwin Salkoff lives in Miami and is not paid a salary as president of Atlas of Jacksonville. Only one employee, Mr. Marion Robert Renfroe, has been interchanged between the two corporations. Renfroe was transferred from Atlas of Miami in 1960 and installed as Assistant Manager of Atlas in Jacksonville. In 1962 he was promoted to General Manager. Renfroe holds his job at the will of the corporation and has the responsibility for hiring and firing Jacksonville employees. Renfroe calls the president in Miami at least once or twice a week. In fact when the pickets appeared, he immediately called Salkoff and kept in touch with him by telephone throughout the picketing. President Salkoff travels to Jacksonville at least once each month for a 1 to 3 day visit and Atlas of Jacksonville pays his hotel bill while he is in Jacksonville. During his stay at Atlas of Jacksonville he would discuss business with Renfroe, speak to and instruct the employees, and visit job sites.

Several cases have been before the courts with factual circumstances quite similar to those outlined above. In J. G. Roy & Sons v. NLRB, supra, J. G. Roy & Sons Co. (Roy Construction) and Roy Lumber Co. (Roy Lumber) were owned by the five Roy brothers. All five brothers constituted the Board of Directors of Roy Construction but only four were directors of Roy Lumber. The brothers were also the officers of both companies but no brother was an officer in both. This common ownership produced potential common control of the two...