Trust Fund Services v. Heyman

• Decision Date: 17 May 1976
• Docket Number: No. 3135--I,3135--I
• Parties: , 93 L.R.R.M. (BNA) 3081, 79 Lab.Cas. P 11,525 TRUST FUND SERVICES, a Washington non-profit corporation, Respondent, v. Walter HEYMAN, d/b/a Thriftmart, Appellant.
• Court: Washington Court of Appeals

Page 452

15 Wn.App. 452

550 P.2d 547, 93 L.R.R.M. (BNA) 3081,

79 Lab.Cas. P 11,525

TRUST FUND SERVICES, a Washington non-profit corporation, Respondent, v. Walter HEYMAN, d/b/a Thriftmart, Appellant.

No. 3135--I.

Court of Appeals of Washington, Division 1.

May 17, 1976.

As Changed May 21, 1976.

Rehearing Denied June 30, 1976.

Gordon, Thomas, Honeywell, Malanca, Peterson, O'Hern & Johnson, Eugene R. Nielson, Tacoma, for appellant.

Donaldson & Kiel, P.S., Duane D. Kiel, Seattle, for respondent.

WILLIAMS, Chief Judge.

This action was brought by Trust Fund Services, a nonprofit corporation, as assignee of the Retail Clerks Health & Welfare and Pension Trust Funds, to require Walter Heyman to make certain contributions to a fund it holds for the benefit of his employees. The trial judge decided partially in favor of each party. Heyman appeals and Trust Fund Services cross-appeals. The questions presented concern the existence of and duration of a collective bargaining agreement between Heyman and a labor union and the legality thereof.

In its complaint, Trust Fund Services alleges that Heyman is a party to a collective bargaining agreement formed in October 1969 with a labor union and is thereby obligated to make monthly contributions to Trust Fund Services assignors for the benefit of his employees. It is alleged that he is delinquent in making those contributions. Heyman's answer admits the formation of such a contract on August 9, 1971, but not before, and alleges that the contract requiring contributions applies only to those of his employees who are members of a local Retail Clerks Union. Further in his answer, Heyman avers that the contract is illegal because the union did not represent a majority of his employees when the contract was signed, as required by 29 U.S.C. § 158(a) (1) and (b)(1)(A) (1971).

The trial court found that the only contract between Heyman and the union (the Teamsters Union succeeded in interest to the Retail Clerks Union, a fact not in issue) was made on August 9, 1971, and, except for a Mr. Anderson, contributions were due for all of Heyman's employees regardless of membership in the union.

Heyman's first contention is that the trial court erred in denying his motion to continue the case until a decision on an action involving the legality of the contract then pending in Federal District Court was handed down. The pertinent section of the statute, § 301(a) of the Labor Management Relations Act, 1947, provides that:

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.

29 U.S.C. § 185(a).

This section has been construed to mean that federal and state courts have concurrent jurisdiction to resolve controversies over collective bargaining agreements. Charles Dowd Box Co. v. Courtney, 368 U.S. 502, 82 S.Ct. 519, 7 L.Ed.2d 483 (1962). Heyman argues, however, that because the federal courts are charged with fashioning the substantive law from the national labor policy expressed by Congress, Textile Workers Union of America v. Lincoln Mills, 353 U.S. 448, 77 S.Ct. 912, 1 L.Ed.2d 972 (1957), the law of this case must be settled in the action pending in the Federal District Court rather than in the state court system.

The substantive rules of federal labor law apply to the action whether the proceeding is instituted in federal court or state court. Teamsters Local 174 v. Lucas Flour Co., 369 U.S. 95, 82 S.Ct. 571, 7 L.Ed.2d 593 (1962). Both courts have the power to hear and determine the subject in controversy. Charles Dowd Box Co. v. Courtney, supra, Rooker v. Fidelity Trust Co., 263 U.S. 413, 44 S.Ct. 149, 68 L.Ed. 362 (1923). Therefore, the trial court was correct in continuing to function on the case. If it erred in the application of the substantive labor law as fashioned by the federal court, there is an adequate apparatus for appeal within the state court system. If that should not prove satisfactory to either litigant, the United States Supreme Court may take jurisdiction to make necessary corrections. Rooker v. Fidelity Trust Co., supra.

Heyman's second contention is that the contract is illegal because it violates § 8(a)(1) and (b)(1)(A) of the National Labor Relations Act of 1947, in that the union did not represent a majority of Heyman's employees when the contract was made. There are three reasons why this contention must be rejected. The first reason is that the determination of an unfair labor practice under the National Labor Relations Act of 1947--the illegality claimed here--is exclusively a function of the federal system. As was said in San Diego Building Trades Council v. Garmon, 359 U.S. 236, 244, 79 S.Ct. 773, 79, 3 L.Ed.2d 775 (1959),

When it is clear or may fairly be assumed that the activities which a State purports to regulate are protected by § 7 of the National Labor Relations Act, or constitute an unfair labor practice under § 8, due regard for the federal enactment requires that state jurisdiction must yield. To leave the States free to regulate conduct so plainly within the central aim of federal regulation involves too great a danger of conflict between power asserted by Congress and requirements imposed by state law. Nor has it mattered whether the States have acted through laws of broad general application rather than laws specifically directed towards the governance of industrial relations. Regardless of the mode adopted, to allow the States to control conduct which is the subject of national regulation would create potential frustration of national purposes.

(Footnote omitted.)

Thus, although the State has authority to construe and enforce labor contracts, it does not have the authority to invalidate a labor contract, proper on its face, because one of the parties has engaged in an unfair labor practice. Heyman had the right to litigate this question in federal court. 28 U.S.C. § 1441 (1971). He did not make timely application to do so.

The second reason is that Heyman's claim of an unfair labor practice was made too late Section 10(b) of the Act, 29 U.S.C. § 160(b) (1971) reads as follows:

Provided, That no complaint shall issue based upon any unfair labor practice occurring more than six months prior to the filing of the charge with the Board and the service of a copy thereof upon the person against whom such charge is made, . . .

The United States Supreme Court in fashioning a common law to support the natioal labor policy has decided that this section applies to suits on collective bargaining agreements. Local 1424, Int'l Ass'n of Machinists, AFL-CIO v. NLRB, 362 U.S. 411, 80 S.Ct. 822, 4 L.Ed.2d 832 (1960). Heyman made his charge of an unfair labor practice long after the 6-month period had expired. Amalgamated Ass'n of St., Elec. Ry. & Motor Coach Employees of America v. Lockridge, 403 U.S. 274, 91 S.Ct. 1909, 29 L.Ed.2d 473 (1971).

The third reason is that an unfair labor practice is not available as a defense to an action by trustees for contributions based upon hours of labor already performed. Lewis v. Benedict Coal Corp., 361 U.S. 459, 80 S.Ct. 489, 4 L.Ed.2d 442 (1960); Lewis v. Seanor Coal Co., 256 F.Supp. 456 (W.D.Pa.1966).

In its cross-appeal, Trust Fund Services makes two assignments of error: the first is directed to the finding of the court that Heyman did not contract with the union in 1969 the second is that the court erred by reforming the contract to exclude Mr. Anderson from its operation because the parties had that unwritten understanding.

The following findings of fact are pertinent:

The Employer did not sign a collective bargaining agreement in 1969 with the Union as the Employer denied signing such an agreement, no signed agreement could be produced and no contemporaneous correspondence concerning the signing of the agreement could be produced.

Finding of fact No. 3.

The Employer paid contributions beginning in October 1969, through February 1974, on behalf of his employees who were, and became members of the union and the Retail Clerks Welfare Trust paid benefits to such employees and their dependents, and pension credit were (sic) earned by such employees.

Finding of fact No. 4.

During the period October 1969 through February 1974, the Employer deleted and added certain of his employees from reports made to the Retail Clerks Welfare and...