Springer v. Powder Power Tool Corp.

Citation220 Or. 102,348 P.2d 1112
PartiesEdwin A. SPRINGER (substitute plaintiff for Ralph Jones, deceased), Appellant, v. POWDER POWER TOOL CORPORATION, a corporation, Respondent.
Decision Date27 January 1960
CourtSupreme Court of Oregon

Donald S. Richardson, Portland, argued the cause for appellant. With him on the brief were Philip A. Levin and Green, Richardson, Green & Griswold, Portland.

Verne W. Newcomb, Portland, argued the cause for respondent. With him on the brief were Sabin, Dafoe & Newcomb, Portland.

Before PERRY, C. J. * , and ROSSMAN, McALLISTER ** and O'CONNELL, JJ.

McALLISTER, Chief Justice.

This is an action on behalf of three former employees of the defendant, Powder Power Tool Corporation, to recover wages claimed to be due because of a retroactive pay increase granted by a collective bargaining agreement between the defendant and the union representing its employees. The three employees assigned their claims to plaintiff who brought the action as assignee. The circuit court tried the case without a jury and found for the defendant. Plaintiff appeals.

As a result of an election held on March 27, 1953, District Lodge No. 24 of the International Association of Machinists, hereinafter referred to as the 'union', was on April 6, 1953 certified by the National Labor Relations Board as the sole collective bargaining agent for defendant's employees. Immediately after such certification the union and defendant began to negotiate but a collective bargaining agreement was not executed until August 24, 1953. The agreement provided for increased wage rates and further provided that the agreement should be effective as of April 1, 1953. The pertinent portions of the agreement read as follows:

'Article XVII Wages

'The wage rates which shall be effective during the term of this agreement are set forth in Appendix 'A' annexed hereto and made a part hereof, pursuant to provisions incorporated herein.

'Article XVIII Duration of Agreement

'This agreement shall become effective on April 1, 1953, and shall remain in full force and effect for a period of one (1) year. At the end of said year and the end of each yearly period thereafter, this Agreement shall be renewed automatically for periods of one (1) year unless either party gives written notice of a desire to modify, amend or terminate same at least sixty (60) days prior to the yearly effective date of this Agreement in which event such agreement shall terminate.'

The three employees for whose benefit this action was brought were employed by defendant both before April 1, 1953 and for several months thereafter but were no longer in defendant's employ when the agreement was executed on August 24, 1953. They were paid to the time their employment was terminated at the wage scale then in effect. The sole question is whether the retroactive pay increase applied to employees who were employed by defendant after April 1, 1953 but who were no longer working for defendant when the contract was entered into.

Since this is in essence an action by individual employees against their employer to recover retroactive pay claimed to be due under a collective bargaining agreement, we are not deprived of jurisdiction by § 301 of the Labor Management Relations Act of 1947, 29 U.S.C.A. § 185 1, as interpreted in Textile Workers Union of America v. Lincoln Mills, 353 U.S. 448, 77 S.Ct. 912, 1 L.Ed.2d 972. Assuming that § 301 is applicable and that a federal court might also have jurisdiction, the courts seem agreed that the state and federal jurisdiction is concurrent. McCarroll v. Los Angeles County, etc., Carpenters, 49 Cal.2d 45, 315 P.2d 322; Coleman Co. v. International Union, etc., 181 Kan. 969, 317 P.2d 831; Bridges v. F. H. McGraw & Company, Ky., 302 S.W.2d 109; McLean Distributing Co. v. Brewery & Bev. Drivers, 254 Minn. 204, 94 N.W.2d 514, 521; Steinberg v. Mendel Rosenzweig Fine Furs, 9 Misc.2d 611, 167 N.Y.S.2d 685; Anchor Motor Freight N. Y. Corp. v. Local Union No. 445, 5 A.D.2d 869, 171 N.Y.S.2d 511; Gen. Bldg. Contractors' Ass'n v. Local Union No. 542, 370 Pa. 73, 87 A.2d 250, 254, 32 A.L.R.2d 822, and Philadelphia Marine Trade Ass'n v. International Longshoremen's Ass'n, 382 Pa. 326, 115 A.2d 419, 733.

In Lincoln Mills the court, in holding that the substantive law to be applied in suits under § 301 of the Labor Management Relations Act is federal law, said:

'The question then is, what is the substantive law to be applied in suits under § 301(a)? We conclude that the substantive law to apply in suits under § 301(a) is federal law, which the courts must fashion from the policy of our national labor laws. See Mendelsohn, Enforceability of Arbitration Agreements Under Taft-Hartley Section 301, 66 Yale L.J. 167. The Labor Management Relations Act expressly furnishes some substantive law. It points out what the parties may or may not do in certain situations. Other problems will lie in the penumbra of express statutory mandates. Some will lack express statutory sanction but will be solved by looking at the policy of the legislation and fashioning a remedy that will effectuate that policy. The range of judicial inventiveness will be determined by the nature of the problem. See Board of Commissioners of Jackson County v. United States, 308 U.S. 343, 351, 60 S.Ct. 285, 288, 84 L.Ed. 313. Federal interpretation of the federal law will govern, not state law. Cf. Jerome v. United States, 318 U.S. 101, 104, 63 S.Ct. 483, 485, 87 L.Ed. 640. But state law, if compatible with the purpose of § 301, may be resorted to in order to find the rule that will best effectuate the federal policy. See Board of Commissioners of Jackson County v. United States, supra, 308 U.S. at pages 351-352, 60 S.Ct. at pages 288-289. Any state law applied, however, will be absorbed as federal law and will not be an independent source of private rights. * * *' [353 U.S. 448, 77 S.Ct. 918.]

In the following cases it has been recognized that under the doctrine of Lincoln Mills federal law must be applied. See Karcz v. Luther Manufacturing Co., 1959, 338 Mass. 313, 155 N.E.2d 441; McCarroll v. Los Angeles County, etc., Carpenters, supra; Tool & Die Makers Lodge No. 78 Int. Ass'n of Mach. v. General Electric Co., D.C.E.D.Wis., 170 F.Supp. 945 and Ingraham Co. v. Local 260, Int. Union of E. R. & M. Workers, D.C.Conn., 171 F.Supp. 103, 107.

However, it is not necessary to choose between state and federal law in this case. We find ourselves in the same position as the supreme court of Massachusets in Karcz v. Luther Manufacturing Co., supra, which, like the case at bar, was a suit by individual employees to enforce their rights under a collective bargaining agreement. In that case the court said [338 Mass. 313, 155 N.E.2d 444]:

'* * * We have been guided in the decision of the present cases by general principles of contract law which appear to be applied with uniformity in this and other jurisdictions and would presumably form a part of any body of Federal law which may be developed under any view of what wa said in the Lincoln Mills case at pages 456-457 of 353 U.S., at pages 917-918 of 77 S.Ct.'

The impact of Lincoln Mills on cases in this field was not raised in the trial court or in this court and we will not extend our discussion of it here. The case has provoked much comment. See Gregory, The Law of the Collective Agreement, 57 Mich.L.Rev. 635; Bickel and Wellington, Legislative Purpose and the Judicial Process: The Lincoln Mills Case, 71 Harv.L.Rev. 1; Meltzer, The Supreme Court, Congress, and State Jurisdiction Over Labor Relations, 59 Col.L.Rev. 269, 276; Hays, State Courts and Federal Preemption, 23 Mo.L.Rev. 373, 398; and Note, 71 Harv.L.Rev. 1169, 1172.

Although there are several theories on which the right is granted it is now generally recognized that an employee may sue his employer to collect benefits accruing to the employee under a collective labor agreement made between his employer and the union. See 2 Williston, Contracts (3rd ed.) 985, § 379A and Annotation, 18 A.L.R.2d 352. The various theories which have been applied are succinctly summarized in 3 Buffalo L.Rev. 270, as follows:

'Several theories were developed early under which the individual employee could secure access to the courts. First, a collective agreement, while not thought to be itself enforceable by anyone, was considered to be a 'custom or usage' which could be incorporated by the individual into his personal employment contract. Second, the agreement was treated by a few courts as a 'mutual general offer to be closed by specific acceptance.' Third, some courts thought the collective agreement itself was enforceable by the individual on the ground that the employees were parties to the agreement, the union merely negotiating it on their behalf as a duly authorized agent. Fourth, a majority of courts allowed the individual to sue on the agreement itself on the theory that it was a third party beneficiary contract between the union and the employer for the benefit of the individual members of the union.'

The great weight of modern authority adopts the legal theory that the employee is a third-party beneficiary of the labor agreement. MacKay v. Loew's Inc., 9 Cir., 1950, 182 F.2d 170, 18 A.L.R.2d 348; Marranzano v. Riggs Nat. Bank, 1950, 87 U.S.App.D.C. 195, 184 F.2d 349; Sublett v. Henry's Turk & Taylor Lunch, 21 Cal.2d 273, 131 P.2d 369; Dierschow v. West Suburban Dairies, Inc., 276 Ill.App. 355; Yazoo & M. V. R. Co. v. Sideboard, 161 Miss. 4, 133 So. 669; Hudak v. Hornell Industries, 304 N.Y. 207, 106 N.E.2d 609; Gulla v. Barton, 164 App.Div. 293, 149 N.Y.S. 952; H. Blum & Co. v. Landau, 23 Ohio App. 426, 155 N.E. 154; Johnson v. American Railway Express Co., 163 S.C. 191, 161 S.E. 473; Cross Mountain Coal Co. v. Ault, 157 Tenn. 461, 9 S.W.2d 692; 2 Williston, Contracts (3rd ed.) 985, § 379A and Annotation, 18 A.L.R.2d 352. There are also many cases holding that...

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