United Construction Workers v. Haislip Baking Co., 6951.

• Decision Date: 13 June 1955
• Docket Number: No. 6951.,6951.
• Citation: 223 F.2d 872
• Parties: UNITED CONSTRUCTION WORKERS and United Mine Workers of America, Appellants, v. HAISLIP BAKING COMPANY, a Virginia Corporation, Appellee.
• Court: U.S. Court of Appeals — Fourth Circuit

223 F.2d 872 (1955)

UNITED CONSTRUCTION WORKERS and United Mine Workers of America, Appellants, v. HAISLIP BAKING COMPANY, a Virginia Corporation, Appellee.

No. 6951.

United States Court of Appeals Fourth Circuit.

Argued April 18, 1955.

Decided June 13, 1955.

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Stuart B. Campbell, Wytheville, Va., and M. E. Boiarsky, Charleston, W. Va. (Stuart B. Campbell, Jr., Wytheville, Va., on brief), for appellants.

Robert T. Winston, Jr., and Wm. T. Bowen, Norton, Va. (Greear, Bowen, Mullins & Winston, Norton, Va., on brief), for appellee.

Before PARKER, Chief Judge, and SOPER and DOBIE, Circuit Judges.

PARKER, Chief Judge.

This is an appeal in an action under section 301 of the Labor Management Relations Act, 29 U.S.C.A. § 185(a), to recover damages for alleged breach of a collective bargaining contract. The plaintiff is the Haislip Baking Company, a corporation of Norton, Virginia, and the defendants are the United Construction Workers and the United Mine Workers of America. The case was heard before a jury which returned a verdict for plaintiff in the sum of $462,611.53. On motion of defendants for judgment n.o.v. or for a new trial, the judgment n.o.v. was denied but a partial new trial awarded, which was limited to damages sustained by plaintiff "by being obliged to liquidate its business". On the new trial thus granted, the jury answered the interrogatory as to damages in the sum of $165,000; and from judgment for plaintiff in this amount, the defendants have appealed. The principal questions presented by the appeal are whether verdict should have been directed for defendants and whether the verdict rendered on the first trial should not have been set aside in its entirety for manifest bias and prejudice on the part of the jury.

Plaintiff began operating a bakery in Norton in 1939 with an initial investment of less than $20,000. Its business grew and prospered during the war years and in 1948 it greatly enlarged its plant, purchased new machinery and began doing business on a much larger scale, but its books showed a loss for the year 1949 and the portion of the year that it operated in 1950. In the latter year, its books showed total assets of $336,776.70 with total liabilities other than capital stock of $211,156.38 or a net worth of $125,620.32. In 1949 it entered into a collective bargaining contract with the United Construction Workers, a division of District 50, which was itself a branch or division of the United Mine Workers of America. The contract was signed by the Construction Workers as affiliated with the Mine Workers. The contract was renewed in April 1950, but a wage increase for which it provided was postponed until June of that year because of the financial condition of plaintiff.

On May 29, 1950 a strike occurred at the bakery because two employees were discharged for unexplained absence on the preceding day. There is no evidence and no contention that either of the defendants instigated, encouraged or had anything to do with this strike in its inception. Plaintiff's officials called on one Morris, Regional Director of the Construction Workers and Belcher, its field representative, to assist in getting the men back to work and both came to the bakery on May 30 where they conferred with Fred Haislip, Sr., plaintiff's president, Fred Haislip, Jr., its general manager, and Fred B. Greear, its attorney, and a number of representatives of employees. After some discussion, the Haislips and Greear withdrew from the meeting so that Morris and Belcher could confer with the employees. They did confer and there is evidence that Belcher advised the men to go back to work without insisting on the reinstatement of the discharged employees but that they voted that they would not do so but would return to work only if the discharged employees were reinstated.

When the Haislips and Greear returned to the conference, Morris stated that the men would return to work at once if the discharged employees were put to work, and that the question of plaintiff's right to discharge them would be arbitrated under the provisions of the collective bargaining agreement. Haislip, Sr. agreed that the plaintiff's right to discharge the two men might be referred to arbitration, but declined to put them to work in the meantime, saying that this would be a violation of the contract. Upon his persisting in this position, Morris withdrew, saying that he would not discuss the contract. As he withdrew Haislip, Sr. stated "You are putting us out of business, and we will hold you responsible." There is also evidence that, as Morris left the meeting, one of the employees asked him when they were going back to work and that he replied "You will go back to work when I tell you to and not before"; but this was after they had voted not to return to work unless the discharged employees were reinstated and after the conference had broken up because of Haislip's insistence that he would not reinstate them. There is no evidence that at this, or any other time, either Morris or Belcher attempted to prevent their returning to work and the evidence is that Belcher advised them to return to work without insisting on the reinstatement of the discharged employees and, after the vote was taken, told them they had made a mistake.

There is no evidence of any further effort on the part of plaintiff to operate the bakery or to negotiate with defendants. A meeting of the employees was called by Belcher for the following day at Dorchester, which is two and one-half miles from Norton and is the place at which the local union had its meetings. At this meeting it was decided by the employees to return to work without requiring the reinstatement of the two who had been discharged, and immediately after the meeting Belcher went to the office of Greear, the attorney, to notify him of the action taken. At that time, although it was on the day immediately following the meeting at the bakery, Haislip, Sr. had returned to Logan, W. Va. and Haislip, Jr., the manager of the business, had gone to Florida on a fishing trip. Greear showed Belcher a copy of a letter which he had written that morning addressed to Belcher, Morris and one Starnes, the president of the local union, which he had written at the direction of Haislip and which was signed by Greear as "Attorney for Haislip Baking Company". That letter was as follows:

"Due to the fact that the members of Local Union ....... of the United Construction Workers has refused to abide by the terms of its contract with the Haislip Baking Company in defiance of the specific instructions of the Regional Director of the Union and its local field representative, and have thereby, through their present wildcat strike, destroyed the business of the Haislip Baking Company so that its customers have necessarily turned to other baking companies for their supplies, the Haislip Baking Company has decided that it will not be possible to operate the Bakery at a profit in the future. Accordingly, I am directed to advise that the Haislip Baking Company has gone out of business. All of the employees of the Company may call at the Company\'s office between 11:00 a.m. and 12:00 noon on Saturday, June 3, 1950, at which time they will receive any and all wages due them to the date on which they quit."

Belcher testified that he told Greear of the action of the employees in the Dorchester meeting at the same time he was shown the letter. Greear says it was two days later that he was told. Which is correct is not important, nor is it important whether the Haislips learned of the results of the Dorchester meeting, although it is inconceivable that they should not have learned of it promptly. The important fact is that immediately following the meeting on May 30, plaintiff went out of business and so notified the officers of the union, without making any further attempt to reach an agreement with the employees or to minimize the damages resulting from their action. Certainly damages resulting from such a precipitate closing out of business could not reasonably have been within the contemplation of the parties upon entering into the contract upon which plaintiff relies. It is a most pertinent circumstance, as bearing upon the bona fides of plaintiff's claim, that action was not instituted until more than two years after the occurrences now relied upon as constituting breach of contract and giving rise to the damages claimed.

The collective bargaining agreement does not contain a "no strike" clause. It does, however, provide for the handling of grievances by a procedure which it outlines with provision for arbitration, if this procedure does not result in a settlement of differences within 7 days. Another provision is that this procedure, or collective bargaining, shall furnish the exclusive method of settling disputes and grievances.

That section is as follows:

"The contracting parties agree, that as a part of the consideration of this agreement, any and all disputes, stoppages, suspensions of work, and any and all claims, demands or actions growing therefrom or involved therein shall be by the contracting parties, settled and determined exclusively by the machinery provided in the `Settlement of Disputes\', in Articles IX and X of this agreement, or by the full use of free collective bargaining as heretofore known and practiced."

Plaintiff's contention is that, even though the contract did not contain a no strike clause, it constituted a breach for employees to strike on account of a grievance, such as the discharge of the two employees, instead of handling same through the grievance procedure and arbitration, as the contract provided. The District Judge so held and held also that the strike here amounted to a breach of the contract by the local union. He submitted to the jury the question as to whether the defendants became liable for the breach through participation in the strike by their agents Morris and...