Textile Workers Union of America v. Cone Mills Corp.

• Citation: 166 F. Supp. 654
• Decision Date: 17 October 1958
• Docket Number: Civ. No. C-63-G-58.
• Court: U.S. District Court — Middle District of North Carolina
• Parties: TEXTILE WORKERS UNION OF AMERICA, an Unincorporated Labor Organization, Plaintiff, v. CONE MILLS CORPORATION, a Corporation, Defendant.

166 F. Supp. 654

TEXTILE WORKERS UNION OF AMERICA, an Unincorporated Labor Organization, Plaintiff, v. CONE MILLS CORPORATION, a Corporation, Defendant.

Civ. No. C-63-G-58.

United States District Court M. D. North Carolina, Greensboro Division.

October 17, 1958.

Robert S. Cahoon, Greensboro, N. C., for plaintiff.

McLendon, Brim, Holderness & Brooks, Greensboro, N. C., for defendant.

STANLEY, District Judge.

The complaint seeks the enforcement of an arbitration award rendered on September 11, 1957, sustaining a claim made by the plaintiff in behalf of several hundred of its members. In November, 1956, the plaintiff, Textile Workers Union of America, an unincorporated labor organization, entered into written collective bargaining agreements with the defendant, Cone Mills Corporation, a North Carolina corporation, covering three of the defendant's textile plants in Greensboro and Reidsville, North Carolina. In January, 1957, various disagreements arose between the parties with respect to the obligation of the defendant to compensate certain employees represented by the plaintiff union for losses suffered by the employees during a vacation period imposed by the defendant from December 21, 1956, to January 1, 1957. The plaintiff union contended that it was a violation of the collective bargaining agreements to impose holidays and vacations during this period, and that the affected employees should be compensated for the amount of unemployment benefits which they failed to receive by reason of the fact that the defendant failed to designate said holidays and vacations as a "shut down".

A majority of the arbitration panel sustained the claim made by the union and found that the defendant was obligated to make the employees whole for the amount of unemployment benefits which they failed to receive because of the alleged breach. The arbitration proceeding was conducted and the award made without the intervention or supervision of any court.

The defendant refused to comply with the arbitration award, and this action was brought to have the court enforce the award. The plaintiff prays (1) that the defendant be restrained and enjoined from failing and refusing to abide by and comply with the award, (2) that the court affirm and enforce the award of the arbitrators, (3) that the court declare the rights of the parties and declare that the arbitration award is lawful and binding upon the defendant, and (4) that the plaintiff be awarded the sum of $80,000 as compensatory damages. The estimated compensatory damage is the amount the plaintiff estimates is due the employees under the arbitration award.

The defendant admits in its answers the essential allegations of facts in the complaint, but contends that the action should be dismissed because the court lacks jurisdiction of the subject matter of the action and of the parties. The defendant further contends that if it is held that the court does have jurisdiction, the complaint fails to state a claim against the defendant upon which relief can be granted, and sets forth reasons why the award should be held invalid, defective and void.

At a pre-trial conference held on July 25, 1958, the parties stipulated that the case might be submitted to and decided by the court on the basis of the pleadings and exhibits thereto attached.

The principal questions presented to the court for determination are (1) whether the Federal Court has jurisdiction under Section 301 of the Labor Management Relations Act, 1947, 29 U. S.C.A. § 185, to affirm and enforce an arbitration award rendered by an arbitration panel, or to render a money judgment in favor of the plaintiff labor union upon the arbitration award here involved, and (2) whether the arbitration award should be enforced and affirmed or should be vacated and set aside as invalid, defective and void, if it is determined that the court has jurisdiction of the action.

The conclusion that has been reached with respect to the first question makes a discussion of the second question unnecessary for a final determination of this action.

The plaintiff alleges various grounds for Federal Court jurisdiction. First, it is alleged that this court has original jurisdiction pursuant to 28 U.S. C.A. § 1337, which provides:

"The district courts shall have original jurisdiction of any civil action or proceeding arising under any Act of Congress regulating commerce or protecting trade and commerce against restraints and monopolies."

This allegation raises the question as to whether this action does arise under an Act of Congress regulating commerce. The plaintiff alleges that three acts are involved:

(1) Labor Management Relations Act, 1947, Section 301, 29 U.S.C.A. § 185. The provisions of this Act, and its application to the controversy here involved, will later be discussed in some detail.

(2) The United States Arbitration Act, 9 U.S.C.A. § 1 et seq. While there is authority in other circuits to the contrary, the Court of Appeals for this circuit has specifically held that the provisions of the United States Arbitration Act do not apply to collective bargaining agreements such as the agreement involved in this case. International Union, etc., v. Colonial Hardwood Floor Co., 4 Cir., 1948, 168 F.2d 33; United Electrical, etc., v. Miller Metal Prod., 4 Cir., 1954, 215 F.2d 221.

(3) Declaratory Judgment Act, 28 U.S.C.A. §§ 2201 and 2202. This Act is merely procedural and confers no jurisdiction where none otherwise exists. Skelly Oil Co. v. Phillips Petroleum Co., 1950, 339 U.S. 667, 70 S.Ct. 876, 94 L.Ed. 1194.

The plaintiff finally alleges that this court has jurisdiction pursuant to 28 U.S.C.A. § 1332, on the asserted ground that the matter in controversy exceeds the sum of $3,000, exclusive of interest and costs, and is between citizens of different states. It is clear that this section does not confer jurisdiction because the rights are personal to the individual employees and the value of their individual rights is not in excess of $30, and there is no diversity of citizenship because the plaintiff, an unincorporated labor organization, is composed of the employees of the defendant who are citizens of North Carolina, and the defendant is a North Carolina corporation. For jurisdictional purposes, the citizenship of an unincorporated association is determined by the citizenship of its members. Underwood v. Maloney, 3 Cir., 1958, 256 F.2d 334.

In view of the foregoing, it is clear that if the district court has jurisdiction in this action it must be founded upon the provisions of Section 301(a) of the Labor Management Relations Act, 1947, 29 U.S.C.A. § 185, as follows:

"(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."

Before discussing the federal jurisdiction conferred by the above section, it should be pointed out that this action in reality seeks to compel the employer to pay individual compensation to its employees. The award of the arbitrators provided that the defendant was "obligated to make the employees whole" for "the amount of unemployment benefits which they failed to receive." In Paragraph 6 of the complaint it is alleged that the employees were entitled to certain losses allegedly suffered by them as a result of a violation of the contract by the defendant, and in Paragraph 8 it is alleged that the award required the defendant to make the employees whole for the amount of unemployment benefits which they failed to receive. In Paragraph 12 it is alleged that the employees of the defendant have been wrongfully denied the benefits of the collective bargaining agreement. It was stipulated that in the event the court determines the questions of law favorable to the plaintiff, steps will be taken by the parties to determine the amount that "the defendant should pay to each employee listed in the exhibit attached to the complaint." At no time has the plaintiff asserted that it was entitled to receive any part of the award it seeks to enforce. By whatever name called, the benefits sought move directly to the employees, and any benefit to the union is the indirect benefit of seeing that employees are made whole for their individual loss of compensation. Thus, it is abundantly clear that the real parties in interest in this action are the employees of the defendant and not the plaintiff who is their agent. The award which the plaintiff seeks to enforce in this action is for personal benefits due the individual employees.

We turn now to the scope of jurisdiction conferred upon the federal courts by Section 301 of the Labor Management Relations Act. In Association, etc. v. Westinghouse Electric Corp., 1955, 348 U.S. 437, 75 S.Ct. 489, 99 L.Ed. 510, the Supreme Court of the United States held that federal courts did not have jurisdiction in a suit brought by a union in behalf of employees for an alleged breach of a collective bargaining contract where the alleged breach was the failure of the employer to pay accrued wages due the employees under such contract. The court, in the Westinghouse case, 348 U.S. at page 460, 75 S.Ct. at page 500 stated:

"There was no suggestion that Congress, at a time when its attention was directed to congestion in the federal courts, particularly in the heavy industrial areas, intended to open the doors of the federal courts to a potential flood of grievances based upon an employer's failure to comply with terms of a collective agreement relating to compensation, terms peculiar in the individual benefit which is their subject matter and which, when violated, give a cause of action to the individual employee. The employees have always been able to

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