Zdanok v. Glidden Company, Durkee Famous Foods Division

• Decision Date: 29 January 1964
• Docket Number: 28277.,Dockets 28276,88,No. 87,87
• Citation: 327 F.2d 944
• Parties: Olga ZDANOK et al., Plaintiffs-Appellees, v. The GLIDDEN COMPANY, DURKEE FAMOUS FOODS DIVISION, Defendant-Appellant. Frank T. ALEXANDER et al., Plaintiffs-Appellees, v. The GLIDDEN COMPANY, DURKEE FAMOUS FOODS DIVISION, Defendant-Appellant.
• Court: U.S. Court of Appeals — Second Circuit

327 F.2d 944 (1964)

Olga ZDANOK et al., Plaintiffs-Appellees, v. The GLIDDEN COMPANY, DURKEE FAMOUS FOODS DIVISION, Defendant-Appellant.

Frank T. ALEXANDER et al., Plaintiffs-Appellees, v. The GLIDDEN COMPANY, DURKEE FAMOUS FOODS DIVISION, Defendant-Appellant.

Nos. 87, 88, Dockets 28276, 28277.

United States Court of Appeals Second Circuit.

Argued October 25, 1963.

Decided January 29, 1964.

COPYRIGHT MATERIAL OMITTED

Frank C. Heath, Cleveland, Ohio (Jones, Day, Cockley & Reavis, Cleveland, Ohio) (Patrick F. McCartan, Cleveland, Ohio, of counsel), for defendant-appellant.

White & Case, New York City (Chester Bordeau and Charles F. G. Raikes, New York City, of counsel), on brief for defendant-appellant.

Morris Shapiro, New York City (Sahn, Shapiro & Epstein, New York City) (Harry Katz, New York City, of counsel), for plaintiffs-appellees.

Before LUMBARD, Chief Judge, and WATERMAN and FRIENDLY, Circuit Judges.

FRIENDLY, Circuit Judge.

The much litigated and discussed case of Zdanok v. Glidden Company,¹ is back with us, along with a companion case, Alexander v. The Glidden Company, after further proceedings in the District Court. The actions grow out of a contract effective for two years from December 1, 1955, between Glidden and a local of the General Warehousemen's Union (hereafter the Union) representing production, maintenance and service employees at the Elmhurst, L. I., plant of Glidden's Durkee Famous Foods Division. We are invited by Glidden, indeed strongly pressed, to reconsider our decision, 288 F.2d 99, in which we construed this contract as entitling the Elmhurst employees to seniority in opportunity for employment at a new plant at Bethlehem, Pa., to which Glidden transferred a considerable part of the Elmhurst machinery and work when the contract expired. Glidden extends the invitation on the grounds of alleged new law and of new evidence. We must decline it so far as these cases are concerned.

What we previously had before us was a complaint of Olga Zdanok and four other former Elmhurst employees, brought in the Supreme Court of New York for New York County and removed by Glidden, on the basis of diverse citizenship, to the District Court for the Southern District of New York, where Judge Palmieri found against the plaintiffs on the merits. In an opinion by Judge Madden of the Court of Claims with Judge Waterman concurring and Chief Judge Lumbard dissenting, we held that the plaintiffs were entitled by the contract "to be employed at the defendant's Bethlehem plant, with the seniority and reemployment rights which they had acquired at the Elmhurst plant" and to recover the damages caused by Glidden's refusal to recognize that entitlement; we remanded the case to the District Court to determine what these damages were. The Supreme Court's refusal to review our decision save as to the legality of participation therein by a judge of the Court of Claims, 368 U.S. 814, 82 S.Ct. 56, 7 L.Ed.2d 22 (1961), and its approval of such participation, 370 U.S. 530, 82 S.Ct. 1459, 8 L.Ed.2d 671 (1962), left our ruling in effect.

There had also been brought in the Supreme Court for New York County an action against Glidden in which Frank T. Alexander and a large number of other employees at the Elmhurst plant sought relief similar to that asked by the five plaintiffs in the Zdanok action. The Alexander action was not removed; it remained quiescent while the Zdanok case took its way up to the Supreme Court of the United States. On June 26, 1962, the day after that Court's decision, Alexander et al. filed in the District Court for the Southern District of New York a complaint, alleging diversity of citizenship, substantially identical with that in the Zdanok case. The state court action was discontinued by stipulation. Counsel for both sets of plaintiffs moved for consolidation of the Zdanok and Alexander actions pursuant to F.R.Civ.Proc. 42(a), for summary judgment on the issue of liability under F.R.Civ. Proc. 56, and for an order directing assessment of damages, this to be done before a Special Master under F.R.Civ. Proc. 53. On December 28, 1962, Judge Palmieri granted the motion for consolidation and reserved decision on the remaining items.

After a pre-trial hearing where it was agreed to postpone consideration of the proof of the willingness and ability of individual plaintiffs to work at Bethlehem, of the effect on the rights of certain plaintiffs of discharge, resignation and retirement, and of the damages suffered, the parties proceeded to a trial before Judge Palmieri. Plaintiffs' counsel called two witnesses: Katz, an attorney, presented a survey showing the length of service of the plaintiffs and the rights they had or had not attained under Glidden's pension plan when the Elmhurst plant closed. Wiemann, a plaintiff in the Alexander action, the only Elmhurst employee who was later employed at Bethlehem, testified that he was hired there "to work at a reduced rate and start as a new man," after unsuccessful efforts to obtain employment in New York. After Wiemann had been cross-examined, plaintiffs rested, their counsel referring to the pre-trial understanding indicated above. Counsel for Glidden then moved to dismiss, arguing that this court had erroneously assumed the issue of the construction of the contract to be one of state law whereas federal law, held by Smith v. Evening News Ass'n, 371 U.S. 195, 83 S.Ct. 267, 9 L.Ed.2d 246 (1962), to be applicable in such a case, demanded a different result. Judge Palmieri denied the motion, stating it to be his "firm belief * * * that this case should be thoroughly, adequately and finally tried, so that if and when it goes up to an appellate court of sic the second time it need not come back to the trial court." He added "It may be that some of the evidence to be received before this Court will prove ultimately to be unnecessary, but I prefer to have a record that is too full than one that is inadequate."

Glidden then called Weeks, its vice president in charge of personnel, who testified to two matters of importance: One was that in 1956 Glidden transferred certain operations then being conducted at Elmhurst to Louisville, Ky.; that approximately 40 Elmhurst employees were laid off as a result; but that no claim was made that any employees were entitled to transfer to Louisville.² The other concerned discussions as to the Elmhurst shut-down, including employment opportunities and severance pay, beginning about March, 1957. Weeks testified that, at a meeting in June, Crotty, the Union's representative, "wanted to know if we wouldn't give some kind of seniority" at Bethlehem, but Weeks took the position that this would be something to discuss with the union there. The meeting was followed by a letter of July 9, 1957, in which Hoppman, counsel for the Union, noted that "the Union has formally requested that the Company enter into negotiations pertaining to a severance pay allowance for these employees and has requested the Company to give these employees first option on employment at its new plant in Pennsylvania"; the letter made reference to "the legal rights of the Union to insist upon negotiations with respect to severance pay."³ Weeks then testified as to a meeting early in August where, after Hoppman and Crotty urged a grant of severance pay which Weeks refused, "Mr. Hoppman also brought up this question of seniority and requested we grant some seniority or preference to employees who might go to Bethlehem. He did not indicate there was any claim under the contract; in fact, he said there wasn't, as Mr. Crotty also told me that there was nothing under the contract that would require us to do it, but he thought we ought to give some consideration to the people who went to Bethlehem." Glidden's other witness, Groves, testified concerning the 1957 discussions to much the same effect as Weeks, whom he had served as assistant. In his testimony as to the August meeting, he went only so far as to say, on the crucial point, that the union representatives made no statement "that under the collective-bargaining agreement the employees had any right to go to Bethlehem," but he gave evidence as to a latter meeting, not attended by Weeks, where Crotty's assistant, Makowski, "stated that they had been advised by their counsel that they had no right to employment opportunities at Bethlehem or to severance pay but they wished the company to negotiate on these provisions * * *."⁴ Glidden also sought to elicit from Groves testimony as to the negotiations for the 1955 contract and for a predecessor of 1953. On objection, the judge admitted evidence only as to the later contract. The testimony was that in the 1955 negotiations Glidden had advised Crotty that the continuing increase in labor costs at Elmhurst threatened the continuance of that operation, whereupon Crotty added to the Union's wage demands one for severance pay, which was refused. An offer of proof with respect to the 1953 negotiations was of the same tenor, alleging additionally a statement by Crotty "that the Union recognized the possibility of shutdown of the Elmhurst plant, transfer of its operations and termination of employees at Elmhurst, and that the Union intended to `get it while the getting was good.'"

The district judge said in his opinion, 216 F.Supp. at 480, that "On the evidence that was adduced before it, this Court finds that the parties entertained no expectation that the employees' rights would survive the removal of the Elmhurst plant to another state." Believing that "The Court of Appeals, however, has taken a different view on the basis of the contract itself and the implications to be drawn from its terms," he concluded that he was "bound by the Court of Appeals' interpretation notwithstanding the import of the evidence referred to." Noting defendant's "desire to take an immediate appeal from an adverse ruling on the question of liability," he made the certificate specified...