Sinclair Refining Company v. Atkinson, No. 13092

• Court: United States Courts of Appeals. United States Court of Appeals (7th Circuit)
• Writing for the Court: SCHNACKENBERG, CASTLE and MAJOR, Circuit
• Citation: 290 F.2d 312
• Parties: SINCLAIR REFINING COMPANY, Plaintiff-Appellant, v. Samuel M. ATKINSON et al., Defendants-Appellees. SINCLAIR REFINING COMPANY, Plaintiff-Appellee, v. Samuel M. ATKINSON et al., Defendants-Appellants.
• Docket Number: 13136,13137.,No. 13092
• Decision Date: 25 April 1961

290 F.2d 312 (1961)

SINCLAIR REFINING COMPANY, Plaintiff-Appellant,
v.
Samuel M. ATKINSON et al., Defendants-Appellees.
SINCLAIR REFINING COMPANY, Plaintiff-Appellee,
v.
Samuel M. ATKINSON et al., Defendants-Appellants.

Nos. 13092, 13136, 13137.

United States Court of Appeals Seventh Circuit.

April 25, 1961.

290 F.2d 313

George B. Christensen, Chicago, Ill., Francis J. Galvin, Hammond, Ind., Fred H. Daugherty, Richard W. Austin, Chicago, Ill. (Winston, Strawn, Smith & Patterson, Chicago, Ill., Galvin, Galvin & Leeney, Hammond, Ind., of counsel), for Sinclair Refining.

Gilbert A. Cornfield, Chicago, Ill., David Cohen, E. Chicago, Ind., William E. Rentfro, Denver, Colo., Abraham W. Brussell, Bernard Kleiman, Chicago, Ill., for Samuel M. Atkinson, and others.

Before SCHNACKENBERG, CASTLE and MAJOR, Circuit Judges.

CASTLE, Circuit Judge.

Sinclair Refining Company, plaintiff-appellant, hereinafter referred to as plaintiff, commenced this action in the District Court. It seeks damages for alleged breach of a no-strike clause of a collective bargaining agreement; a declaration of rights; and a permanent injunction.

Count I of the complaint invokes jurisdiction under Section 301 of the Labor-Management Relations Act (29 U.S.C.A. § 185); names Oil, Chemical and Atomic Workers International Union, AFL-CIO, and Local No. 7-210 of Oil, Chemical and Atomic Workers International Union, AFL-CIO, as defendants; alleges in substance that the International and Local constitute the recognized collective bargaining agent for approximately 1700 production and maintenance employees in a bargaining unit confined to plaintiff's East Chicago, Indiana, refinery, and that said Unions by their officers, committeemen and other agents caused a strike or work stoppage by approximately 999 of the employees within the bargaining unit on February 13 and 14, 1959 over asserted pay claims of three members, aggregating $2.19, and which were arbitrable under the grievance procedure of the current collective bargaining agreement, and that the work stoppage was in violation of the no-strike clause of the agreement and caused damages to plaintiff by way of out-of-pocket expenses in the amount of $12,500.00 for which recovery is sought.

Count II is based on diversity. It names as defendants 24 individuals, employees of plaintiff at the East Chicago refinery, who are committeemen of the Local and agents of the International. It incorporates the allegations of Count I concerning the collective agreement and it seeks damages from the individual defendants in the same amount and for the same work stoppage. It alleges that the individual defendants "contrary to their duty to plaintiff to abide by said contract, and maliciously confederating and conspiring together to cause the plaintiff expense and damage, and to induce breaches of the said contract, and to interfere with performance thereof by said labor organizations and the affected employees, and to cause breaches thereof, individually and as officers, committeemen and agents of the said labor organizations, fomented, assisted and participated" in the strike or work stoppage.

Count III is based on diversity with respect to the same 24 individual defendants named in Count II and asserts jurisdiction under Section 301 of the Labor-Management Relations Act (29 U.S.C.A. § 185), as well as diversity, with respect to the Local and International Unions. In addition to the allegations of Counts I and II it alleges eight previous strikes or work stoppages at the East Chicago refinery during the term of the current collective agreement over matters subject to its grievance procedure and provisions for arbitration, damaging plaintiff greatly

290 F.2d 314

in excess of $10,000.00. It seeks a declaration of the validity and enforceability of the no-strike and grievance provisions of the contract and a permanent injunction restraining and enjoining all of the defendants "from aiding, abetting, fomenting, advising, participating in, ratifying, or condoning any strike, stoppage of work, slowdown or any other disruption of, or interference with normal employment or normal operation or production by any employee within the bargaining unit at plaintiff's East Chicago, Indiana, refinery" covered by the current collective agreement "in support of, or because of, any matter or thing which is, or could be, the subject of a grievance under the grievance procedure of said contract, or any extension thereof, or any other contract between the parties which shall contain like or similar provisions"

The defendants filed a motion to dismiss and a motion to stay. The District Court denied the motion to stay and denied the motion to dismiss as to Count I (action against Unions for damages) but granted the motion to dismiss and entered judgment dismissing Counts II (action against individual defendants for damages) and III (declaratory and injunctive relief).

The plaintiff appealed the dismissal of Counts II and III.¹ The defendants appealed the denial of the motion to stay.² The plaintiff's appeal (Nos. 13092 and 13136) has not been consolidated with defendants' appeal (No. 13137). However, to avoid unnecessary repetition we elect to treat them as consolidated for the purpose of disposition in one opinion.

The main contested issues presented by plaintiff's appeal are:

(1) Whether 29 U.S.C.A. § 185 precludes suit for recovery of damages from individual union officer-company employees for inducing or participating in a strike or work stoppage in violation of a no-strike clause of a collective bargaining agreement covering the unit to which they belong.

(2) Whether 29 U.S.C.A. § 101 precludes injunctive relief to restrain a future breach of a no-strike clause of a collective bargaining agreement.

Those presented by defendants' appeal are:

(1) Whether the collective bargaining agreement here involved required the employer to submit to arbitration any claim he might make for damages caused by breach of the agreement\'s no-strike clause.

(2) Had the employer submitted the claim to arbitration?

We will first consider the issues raised by defendants' appeal. The defendants contend that since the cause of action against the Local and International is based on an alleged violation of the no-strike clause of the collective agreement, the dispute is first subject to adjustment and determination under the arbitration procedure of the agreement and that no action can be brought until these procedures are exhausted. Defendants further contend that the causes of action against all of the defendants must be stayed until a determination of the issues raised in pending arbitrations is made because such issues are the same as those "which the plaintiff has sought the court to decide under the allegations of its complaint". This latter contention is based in part on the contents of an affidavit filed in support of the motion to stay. The affidavit recites that as a result of the work stoppage which occurred February 13 and 14, 1959 certain grievances are pending, pursuant to the grievance and arbitration procedure of the contract, involving disciplinary action taken against some of the individual defendants for allegedly fomenting, assisting and participating in such strike or

290 F.2d 315

work stoppage, and that the disputes which caused the eight previous work stoppages referred to in Count III of plaintiff's complaint have all been disposed of pursuant to the grievance procedure of the contract except the question of the compensation of one worker, which is the subject of a pending grievance. A counter-affidavit filed by plaintiff discloses that the grievances of the individual defendants were filed subsequent to the work stoppage of February 13 and 14, 1959 and involve either the three pay claims aggregating $2.19 concerning deductions made by the plaintiff from compensation of the employees because of their reporting for work late, which deductions allegedly caused the work stoppage, or relate to the plaintiff's refusal to compensate individual defendants for time spent processing grievances contrary to disciplinary restrictions imposed by plaintiff, because of the work stoppage, on their engaging in such activity. It is further recited that the parties have been unable to agree on a settlement or disposition of the grievances, that both the Union and the plaintiff have named arbitrators but that a third or impartial arbitrator had not as yet been selected

The collective bargaining agreement here involved is for a term beginning June 15, 1957 and continuing to June 14, 1959 and thereafter unless terminated by either party on sixty-days' written notice. The agreement contains both a no-strike clause and an arbitration clause.

The no-strike clause is as follows:

"Union further agrees that during the term of this Agreement there shall be no strikes or work stoppages:

"(1) For any cause which is or may be the subject of a grievance under Article XXVI of this Agreement, or

"(2) For any other cause, except upon written notice by Union to Employer provided:

"(a) That Employer within thirty (30) days from the receipt of such notice will meet with the representatives of the Union and endeavor to reach an agreement on the matter in dispute.

"(b) In the event an agreement is not reached within forty-five (45) days after the expiration of the thirty (30) day period specified in (a) hereof, Union, upon the expiration of such forty-five (45) day period, may exercise its right to strike by serving fifteen (15) days\' notice in writing upon Employer of Union\'s intention to strike at the expiration of such notice".

Article XXVI of the agreement sets forth the grievance and arbitration procedure. It defines "grievance" as follows:

"A grievance is defined to be any difference regarding wages, hours, or working conditions between the parties hereto or between the Employer and an employee covered by this working agreement which might arise

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