Todd Shipyards Corp. v. INDUSTRIAL U. OF MARINE & SHIP. WKRS.

• Decision Date: 16 July 1964
• Docket Number: No. 62-C-346.,62-C-346.
• Citation: 232 F. Supp. 589
• Parties: TODD SHIPYARDS CORPORATION, Plaintiff, v. INDUSTRIAL UNION OF MARINE AND SHIPBUILDING WORKERS OF AMERICA, LOCAL 39, AFL-CIO, Defendant.
• Court: U.S. District Court — Eastern District of New York

232 F. Supp. 589

TODD SHIPYARDS CORPORATION, Plaintiff, v. INDUSTRIAL UNION OF MARINE AND SHIPBUILDING WORKERS OF AMERICA, LOCAL 39, AFL-CIO, Defendant.

No. 62-C-346.

United States District Court E. D. New York.

July 16, 1964.

Cullen & Dykman, Brooklyn, N. Y., for plaintiff, Robert B. Lisle, Harry G. Hill, Jr., Brooklyn, N. Y., of counsel.

Gray & Grossman, New York City, for defendant, Herman A. Gray, Harry Merwin, New York City, of counsel.

BARTELS, District Judge.

Defendant-Union filed a grievance pursuant to the terms of its collective bargaining agreement with the plaintiff, claiming a violation of Article XXVII of said agreement. Thereupon plaintiff instituted this action under Section 301 of the Taft-Hartley Act for a declaratory judgment that said Article XXVII was an illegal clause under Section 8(e) of the Labor-Management Reporting and Disclosure Act (LMRDA), 29 U.S. C.A. § 158(e), and for an order staying all arbitration proceedings to the extent that they present claims under said Article. This provision was first embodied in a collective bargaining agreement between the parties in 1944 and appeared in each subsequent agreement including the last one which was signed in August of 1963, subsequent to the filing of the present action. Both parties move for summary judgment.

Article XXVII reads:

"The Company will not use outside contractors except where its own working force is inadequate in number or skill to perform the work promptly and without delay to other work in the yard."

The pertinent portion of Section 8(e) reads as follows:

"It shall be an unfair labor practice for any labor organization and any employer to enter into any contract or agreement, express or implied, whereby such employer ceases or refrains or agrees to cease or refrain from handling, using, selling, transporting or otherwise dealing in any of the products of any other employer, or to cease doing business with any other person, and any contract or agreement entered into heretofore or hereafter containing such an agreement shall be to such extent unenforceable and void * * *."

Plaintiff's complaint rests upon the proposition that Section 8(e) on its face clearly evinces a legislative intent that the employer be unrestricted in the subcontracting of its work and cites certain legislative history and statements of legislators to sustain its contention. Defendant contends (i) that based upon the historical development of the National Labor Relations Act, the Court lacks jurisdiction to entertain this action, and (ii) that Article XXVII does not come within the ban of Section 8(e) because it seeks to protect the job security of employees and not to circumvent the secondary boycott provisions of the Labor Management Relations Act (LMRA).

I

At the outset it is necessary to resolve the jurisdictional question raised by the defendant. The essence of its argument is based upon the fact that Section 8(e) states that it "shall be an unfair labor practice" to enter into the contractual provisions therein described and that before the contract can be denied enforceability, it must be found to be "an unfair labor practice" within the provisions of the LMRA and that this Court has no jurisdiction to determine whether any act constitutes "an unfair labor practice". The historical development recited by the defendant does not sustain its contention. The fact that the resolution of the issue may also involve the determination of whether an unfair labor practice has been committed, will not deprive the Court of jurisdiction. The Supreme Court rejected this contention in Smith v. Evening News Ass'n, 1962, 371 U.S. 195, at page 197, 83 S.Ct. 267, at page 268, 9 L.Ed.2d 246, stating: "In Lucas Flour as well as in Atkinson the Court expressly refused to apply the pre-emption doctrine of the Garmon case; and we likewise reject that doctrine here where the alleged conduct of the employer, not only arguably, but concededly, is an unfair labor practice within the jurisdiction of the National Labor Relations Board." See Textile Workers Union of America v. Lincoln Mills of Alabama, 1957, 353 U.S. 448, at 452, 77 S.Ct. 912, 1 L.Ed.2d 972. Moreover, defendant has misconceived the thrust of the plaintiff's contention. Plaintiff in this action is not charging the defendant with an unfair labor practice but merely seeks a declaration that it has not violated the collective bargaining agreement by failing to arbitrate certain grievances filed by the defendant. Once the defendant has filed a grievance and the plaintiff alleges compliance with the contract and seeks protection by a declaratory judgment against improper demands for arbitration, the Court acquires jurisdiction under Section 301 of the L.M.R.A. Black-Clawson Co., Inc. v. International Ass'n of Machinists, 2 Cir. 1962, 313 F.2d 179; International Tel. & Tel. Corp. v. Local 400, 3 Cir. 1961, 286 F.2d 329; Application of Contessa Lingerie, Inc., S.D.N.Y.1964, 227 F.Supp. 37.

II

Turning to the merits, plaintiff relies upon the so-called plain meaning of the words of the section and attempts to support this meaning with legislative history and the so-called evolution of Section 8(e). There can be little doubt that the purpose of the enactment in 1959 of Section 8(e) was designed to close the loopholes in the then existing secondary boycott provisions of Section 8(b) (4) (A), so that not only were union sponsored secondary boycotts prohibited but agreements accomplishing the same purpose were also prohibited. Consequently, "hot cargo" agreements not to handle the products of another employer and agreements to cease doing business with any other person were invalidated. See Local 1976, United Brotherhood of Carpenters and Joiners of America, A.F.L. v. N.L.R.B., 1958, 357 U.S. 93, 78 S.Ct. 1011, 2 L. Ed.2d 1186; Employing Lithographers of Greater Miami, Florida v. N.L.R.B., 5 Cir. 1962, 301 F.2d 20.

United Steelworkers of America v. Warrior and Gulf Navigation Company, 1960, 363 U.S. 574, 80 S.Ct. 1347, 4 L. Ed.2d 1409, decided after the effective date of the Landrum-Griffin Act, involved the union's right to insist upon arbitration of the employer's practice of "farming out work" which could be performed by its own employees whom the employer was releasing. It would have been a useless gesture for the Supreme Court to enforce arbitration of that question if such "contracting out" could not thereafter have been legally prohibited. See International Union of Electrical, etc. Workers v. General Electric Co., 2 Cir. 1964, 332 F.2d 485, and International Union, etc. Local 391 v. Webster Electric Company, 7 Cir. 1962, 299 F.2d 195, where in the absence of an arbitration clause the court itself held that subcontracting violated the integrity of the collective bargaining agreement.

If without an express clause in the contract that type of subcontracting by the employer may be a violation of the collective bargaining agreement under the LMRA, it is difficult to comprehend how an express clause to that effect would be proscribed by the same Act. In other words, reliance cannot be placed upon a blanket pronouncement that all subcontracting clauses are illegal. Of course if they are addressed to the labor relations of the subcontractor, they are secondary and proscribed. "But not all subcontracting clauses are so designed. The test as to the `primary' nature of a subcontractor clause in an agreement with a general contractor has been...