United Steelworkers of America v. New Park Mining Co.

• Decision Date: 30 November 1959
• Docket Number: No. 6106.,6106.
• Citation: 273 F.2d 352
• Parties: UNITED STEELWORKERS OF AMERICA (AFL-CIO), LOCAL UNION NO. 4264, Appellant, v. NEW PARK MINING COMPANY, Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

273 F.2d 352 (1959)

UNITED STEELWORKERS OF AMERICA (AFL-CIO), LOCAL UNION NO. 4264, Appellant, v. NEW PARK MINING COMPANY, Appellee.

No. 6106.

United States Court of Appeals Tenth Circuit.

November 12, 1959.

Rehearing Denied November 30, 1959.

COPYRIGHT MATERIAL OMITTED

A. Wally Sandack, Salt Lake City, Utah (Algerdas N. Cheleden, Los Angeles, Cal., and Jerry D. Anker, Washington, D. C., were with him on brief), for appellant.

Calvin A. Behle, Salt Lake City, Utah (C. C. Parsons, Elliott W. Evans, A. D. Moffat and Keith E. Taylor, Salt Lake City, Utah, were with him on brief), for appellee.

Before MURRAH, Chief Judge, and HUXMAN and PICKETT, Circuit Judges.

MURRAH, Chief Judge.

In this suit by a Labor Union under Section 301 of the Labor Management Relations Act of 1947, 61 Stat. 156, 29 U.S.C.A. § 185, the Union alleged that it was a labor union within the meaning of such Section; that the defendant corporation was a mining company with whom the Union had entered into a collective bargaining agreement to run until June 30, 1958, providing for specific grievance procedure, and also that "before resorting to economic force the Company and the Union shall have completed the procedure provided for herein, or shall further make an effort to agree to dispose of the difference or grievance by means of arbitration." It was then alleged that while the collective bargaining agreement was in effect, the Company discharged its 170 employees, and for the purpose of avoiding its obligations under the bargaining contract, and in violation thereof, entered into a leasing arrangement with some of its employees for the purpose of continuing its mining operations. It was alleged that the Union had protested the discharge of the employees and the entering into the so-called leasing contracts on the grounds that it violated the collective bargaining agreement; that the Union had sought, through prescribed procedure, to arbitrate the grievance; and that the Company had refused to arbitrate. The prayer was, first, for a declaratory judgment requiring the Company to arbitrate the grievances and to appoint an impartial arbitrator for that purpose; and second, a judgment declaring the so-called leasing agreements invalid and subordinate to the prior collective bargaining agreement. In a second count of the complaint, cast under Rule 17(a) F.R.Civ.P. 28 U.S.C.A., the Union sought to recover accrued back wages and vacation pay for the 170 member-employees as provided for in the bargaining contract.

Jurisdiction of the second count was based upon diversity of citizenship and requisite amount in controversy. None of the claims of the individual employees was sufficient in amount to confer federal jurisdiction, but it was alleged that the Union was a party in whose name a contract had been made with the defendant-corporation for the benefit of the 170 members, residents of the State of Utah, and that the defendant was a citizen of the State of Nevada. The prayer was for a declaratory judgment in favor of the Union for the benefit of its 170 members for the amount of the back wages and vacation pay.

The trial court refused to compel arbitration on the grounds that an agreement "to make an effort to agree" to arbitrate did not amount to an enforceable agreement to do so. It refused to invalidate the so-called leasing agreements or to subordinate them to the bargaining agreement, apparently on the grounds that they were made in pursuance of the management's prerogative to hire, discharge, manage and direct the working forces; and apparently for the further reason that the asserted grievance was at most an unfair labor practice within the exclusive jurisdiction of the National Labor Relations Board. It denied the claim for back wages and vacation pay on the grounds that the court was without jurisdiction to entertain the action by the Union based on the individual rights of the Union members, and that Rule 17 (a) F.R.Civ.P. did not operate to authorize the aggregation of the individual claims to confer federal jurisdiction. See the court's opinion, D.C., 169 F. Supp. 107.

We readily agree with the trial court that there was no agreement to arbitrate, and the court can only compel arbitration when the parties have agreed to do so. See Local 1912 International Association of Machinists v. United States Potash Co., 10 Cir., 270 F.2d 496. So too, we agree that the trial court lacked jurisdiction of the claims for accrued back wages and vacation pay. The wages and vacation pay were undoubtedly negotiated by the Union on behalf of its members, and were a part of the subject matter of the bargaining contract. And, Section 301(a) provides that "Suits for violation of contracts between an employer and a labor organization representing employees * * * 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." And, Section 301(b) provides in material part that "* * * 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. * * *." But federal court jurisdiction thus conferred has been restricted to contract violations of "peculiar concern" to the Union as an organization, such as agreements to arbitrate wages, hours and conditions of employment, United Steelworkers of America v. Pullman-Standard Car Mfg. Co., 3 Cir., 241 F.2d 547; and to the enforcement of collective awards made pursuant to arbitration of grievances arising out of the labor contract. A. L. Kornman Co. v. Amalgamated Clothing Workers, 6 Cir., 264 F.2d 733; Item Co. v. New Orleans Newspaper Guild, 5 Cir., 256 F.2d 855; Textile Workers Union of America v. Cone Mills Corp., 4 Cir., 268 F.2d 920; Enterprise Wheel & Car Corp. v. United Steelworkers of America, 4 Cir., 269 F.2d 327. Federal jurisdiction does not extend to the enforcement of rights which are "uniquely personal" to the employees, such as back wages and vacation pay. See Association of Westinghouse Salaried Employees v. Westinghouse Electric Corp., 348 U.S. 437, 75 S.Ct. 489, 99 L.Ed. 510; United Steelworkers of America v. Pullman-Standard Car Mfg. Co., supra; Local Lodge 2040 International Association of Machinists v. Servel, Inc., 7 Cir., 268 F.2d 692.

While Rule 17(a), F.R.Civ.P. authorizes the Union to bring suit as the party in whose name the contract was made for the benefit of the employees, it does not operate to confer jurisdiction which does not otherwise exist. 3 Moore Federal Practice, 2d Ed., p. 1311, § 1703. As we have seen, the interest of the Union in the lawsuit is as the bargaining agent of the individual employees. The claimed benefits ran to the employees, not to the Union, and they could not aggregate them for purposes of federal jurisdiction.

But apart from the claimed back wages and vacation pay, the Union has asserted an interest in the collective bargaining contract which is of peculiar concern to it as a labor organization, i. e. the discharge of all employee-Union members and the leasing of its mining operations to some of its employees for the purpose of avoiding its obligations under the labor contract and in direct violation thereof. This claim goes to the very heart of a bargaining contract "between an employer and a labor organization representing employees", of which the court undoubtedly has jurisdiction.

This brings us directly to the question whether the shifting of the mining operations under an employer-employee relationship to one of the lessor-lessee as characterized by the so-called leasing agreements, was in violation of the collective bargaining agreement. No one can doubt the inherent right of the employer to quit business without prejudice to the bargaining contract. See Local Lodge 2040 International Association of Machinists v. Servel, Inc., supra; Textile Workers Union v. Lincoln Mills, 353 U.S. 448, 77 S.Ct. 912, 1 L.Ed.2d 972. And, courts have affirmed the right, whether inherent or expressed, to subcontract work usually performed by employees, without violating its bargaining contract, in the absence of an expressed agreement not to do so. United Steelworkers v. Warrior & Gulf Navigation Co., 5 Cir., 269 F.2d 633; Amalgamated Association of St. Elec. Ry. and Motor Coach Emp. of America, Division 1326 v. Greyhound Corp., 231 F.2d 585, 57 A.L.R.2d 1394; Annotation 57 A.L.R. 2d 1399.

And so, there is good authority for saying that whether the Company actually quit business or merely decided to subcontract its work by a leasing arrangement, it had the absolute right to do so, even though its action brought the...