Textile Workers Union of America v. Cone Mills Corp., 7840.

• Decision Date: 16 June 1959
• Docket Number: No. 7840.,7840.
• Citation: 268 F.2d 920
• Parties: TEXTILE WORKERS UNION OF AMERICA, Appellant, v. CONE MILLS CORPORATION, Appellee.
• Court: U.S. Court of Appeals — Fourth Circuit

268 F.2d 920 (1959)

TEXTILE WORKERS UNION OF AMERICA, Appellant, v. CONE MILLS CORPORATION, Appellee.

No. 7840.

United States Court of Appeals Fourth Circuit.

Argued April 16, 1959.

Decided June 16, 1959.

David E. Feller, Washington, D. C. (Robert S. Cahoon, Greensboro, N. C., Arthur J. Goldberg and Jerry D. Anker, Washington, D. C., on brief), for appellant.

Thornton H. Brooks, Greensboro, N. C. (C. T. Leonard, Jr., and McLendon, Brim, Holderness & Brooks, Greensboro, N. C., on brief), for appellee.

Before SOBELOFF, Chief Judge, and SOPER and HAYNSWORTH, Circuit Judges.

SOPER, Circuit Judge.

This case involves the power of the District Court to entertain a suit to enforce an arbitration award which was made under a collective bargaining agreement between the Cone Mills Corporation of North Carolina and the Textile Workers Union of America, an incorporated labor organization which represented the Company's employees. A dispute by the parties to the agreement as to the compensation due the employees during a vacation or layoff period was referred to arbitration and decided against the Company; but it refused to comply with the award. The present suit was then brought under § 301(c) of the Labor Management Relations Act, 29 U.S.C.A. § 185, and the Federal Declaratory Judgment Act, 28 U.S.C. §§ 2201-2202, to secure a declaratory judgment determining the rights of the parties and to enforce the award, but the court was of the opinion that it had no jurisdiction to grant the relief and dismissed the complaint.

In December 1956, the Company declared a Christmas-New Year's vacation period from December 21, 1956 to January 1, 1957, and closed its plants. The employees received no payment during this period, since the paid vacations for the employees prescribed in the agreement had already taken place, and they were refused compensation by the State Employment Security Commission under § 96-13 of the North Carolina Employment Security Act, which provides that no person shall be considered available for work for any week, not to exceed two weeks, in any calendar year in which the Commission finds that his unemployment is due to a vacation.

In this situation the Union claimed that the enforced vacation was really a layoff but had been designated a vacation by the Company in order to avoid payment of increased amounts under the compensation act and that by this action the Company violated the collective bargaining agreement. Accordingly, the Union filed grievances under the provisions of the collective bargaining agreement with regard to the settlement of disputes. The agreement provided that in case these procedures failed to produce a settlement, either party could submit the dispute to a Board of Arbitration, consisting of a representative chosen by each party and one impartial member chosen jointly, and that in the absence of unanimity the decision of the impartial member should be final and binding on the parties and all employees. In the present case the impartial arbitrator ruled that the declaration of the vacation without pay violated the bargaining agreement. He pointed out that the usual award in cases of layoffs in violation of bargaining agreements is the full amount of pay lost as a result of the layoff; but, since the injury caused was the employees' loss of unemployment benefits, he held in his award that the employer should make the employees whole for the loss of this compensation. Subsequently the Supreme Court of North Carolina affirmed the denial of unemployment benefits, but the Company failed to comply with the award and the present suit was brought.

Jurisdiction is based on § 301 of the Labor Management Relations Act, 29 U.S.C.A. § 185, which provides:

"(a) Suits for violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce as defined in this chapter, or between any such labor organizations, may be brought in any district court of the United States having jurisdiction of the parties, without respect to the amount in controversy or without regard to the citizenship of the parties.

"(b) Any labor organization which represents employees in an industry affecting commerce as defined in this chapter and any employer whose activities affect commerce as defined in this chapter shall be bound by the acts of its agents. Any such labor organization may sue or be sued as an entity and in behalf of the employees whom it represents in the courts of the United States. Any money judgment against a labor organization in a district court of the United States shall be enforceable only against the organization as an entity and against its assets, and shall not be enforceable against any individual member or his assets."

Although the suit was brought by the Union against the employer and the complainant seeks relief for the violation of a contract between them, the District Judge reached the conclusion that the action was in effect a suit to recover from the employer sums of money due the employees for wages as compensation and was therefore, in effect, a suit for breach of contract between the employer and employees which might be brought in the state courts but was not cognizable in the federal court under the decision in Ass'n of Westinghouse Salaried Employees v. Westinghouse Elec. Corp., 348 U.S. 437, 75 S.Ct. 488, 99 L.Ed. 510. In that case a labor union representing 4000 employees brought suit against their employer under § 301 of the Labor Act and the Federal Declaratory Judgment Act to enforce a bargaining agreement between the parties and specifically to obtain a judgment against the employer in favor of individual employees for unpaid wages alleged to be due them. The collective bargaining agreement did not require arbitration of industrial disputes, so that in case of an unresolved dispute as to the application of the agreement the only remedy of the employees was to engage in a strike or to seek relief by suit in an appropriate court. The Supreme Court held that the case should be dismissed for lack of jurisdiction. Three members of the Court were of the opinion that § 301 did not imply the existence or the establishment of a body of general federal substantive law for application in suits under it, and since a serious constitutional question would arise if the statute were construed to authorize a suit in a federal court it should not be so interpreted. The opinion stressed the improbability that Congress, at a time when the congestion of litigation in the federal courts in certain areas was particularly heavy, intended to open the federal courts to a flood of grievances based on industrial disputes.

Two justices concurred in the result on the ground that the statute was not sufficiently explicit to indicate that Congress intended to authorize a union to enforce in a federal court the uniquely personal rights of employees to recover compensation for services rendered; and a sixth justice concurred in the result on the ground that, although Congress had constitutional power to give the federal courts jurisdiction over a cause of action for breach of contract between a union and an employer, the question before the Court involved a claim for wages under separate hiring contracts between the employer and each employee and did not involve a violation of a contract between the union and the employer.

These divergent views naturally gave rise to doubts as to the proper interpretation of the statute and the decision became authority only for the conclusion that the federal courts were not open to suits by a union on behalf of individual employees for back wages even if they were covered by contract between the union and the employer. However, it was not long before the Court, in Textile Workers Union of America v. Lincoln Mills, 353 U.S. 448, 77 S.Ct. 912, 923, 1 L.Ed. 2d 972, cast a clearer light on this field of litigation. That suit was brought by a union against an employer for violation of a collective bargaining agreement by refusing to submit to arbitration a dispute between the parties as to work loads and work assignments of the employees that had been processed in accordance with the procedures laid down in the agreement and had failed of settlement. The contract...