District 2 Marine Engineers Beneficial Association-Associated Maritime Officers, Afl-Cio v. Grand Bassa Tankers, Inc.

VAN GRAAFEILAND, Circuit Judge,

dissenting.

Jurisdictional disputes between rival maritime unions have been a fertile source of litigation. See, e.g., Commerce Tankers Corp. v. National Maritime Union, 553 F.2d 793 , 796-98 (2d Cir.), cert. denied, 434 U.S. *402 923 , 98 S.Ct. 400 , 54 L.Ed.2d 280 (1977); NLRB v. National Maritime Union, 486 F.2d 907, 909 (2d Cir. 1973), cert. denied, 416 U.S. 970 , 94 S.Ct. 1993 , 40 L.Ed.2d 559 (1974). These disputes often arise out of the transfer of ownership or management of ships, a common occurrence in the maritime industry. NLRB v. National Maritime Union, supra, 486 F.2d at 911 . Collective bargaining contracts are usually fleet-wide in scope, covering the crews of all vessels in an employer’s fleet. National Maritime Union v. Commerce Tankers Corp., 457 F.2d 1127 , 1131 (2d Cir. 1972). Under the doctrine of accretion, when another ship is added to the fleet, the union representing the fleet becomes the representative of the new ship’s crew as well. Id. Because this is not a happy state of affairs for the disenfranchised union, it may attempt to protect its position through a contract which, in effect, mandates its continued representation of the ship’s crew despite a change of ownership or management. Id. at 1129-30.

This litigation concerns an agreement designed to protect plaintiff Union in the event of a change in operating management. Plaintiff alleges in its complaint that, pursuant to the terms of a contract between it and the defendant shipowner, the latter agreed that it would not employ a managing agent to operate two of its ships unless that agent had a labor agreement with plaintiff, covering deck and engineer officers through June 15, 1981. By these allegations, the complaint poses on its face the crucially important question whether the contract violates the National Labor Relation Act’s ban against “hot cargo” agreements. See Danielson v. International Organization of Masters, Mates and Pilots, 521 F.2d 747 (2d Cir. 1975); NLRB v. National Maritime Union, supra, 486 F.2d 907 . However, because the contract was between a union and a shipowner whose vessels were being operated by an independent managing agent, my panel colleagues hold that this question cannot be answered by a federal court. I disagree.

Section 301(a) of the Labor Management Relations Act, 29 U.S.C. § 185 (a), provides for federal jurisdiction in “[sjuits for violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce.” Section 8(e) of the National Labor Relations Act, which was added in 1959, Pub.L.No. 86-257, 73 Stat. 543 -44 (codified at 29 U.S.C. § 158 (e)), makes it an unlawful labor practice for a union and an employer to enter into a contract or agreement under which the employer agrees to cease doing business with any other person, and makes such an agreement unenforceable and void. Defendant moved in the district court to dismiss the complaint, or alternatively for summary judgment, asserting, among other grounds, that its agreement with plaintiff is a “hot cargo” agreement, void and unenforceable under section 8(e). The district court avoided this pivotal issue of illegality by holding that it was without jurisdiction to decide it. This, I suggest, is not what Congress intended when it enacted section 301(a).

Congress and the courts have wrestled for many years with the problem of labor’s excessive involvement in the affairs of persons other than employers’ immediate employees. Early attempts to curb abuses by application of the Sherman Act led to the enactment of section 20 of the Clayton Act, Pub.L.No. 63-212, 38 Stat. 738 (codified at 29 U.S.C. § 52 ), which limits the power of federal courts to issue injunctions in labor disputes. National Woodwork Manufacturers Ass’n v. NLRB, 386 U.S. 612, 620-21 , 87 S.Ct. 1250, 1255-56 , 18 L.Ed.2d 357 (1967). When the Supreme Court held that section 20 was not intended to legalize secondary boycotts, see Bedford Cut Stone Co. v. Journeymen Stone Cutters’ Ass’n, 274 U.S. 37, 50 , 47 S.Ct. 522, 526 , 71 L.Ed. 916 (1927), Congress reacted by enacting the Norris-LaGuardia Act, Pub.L.No. 72-65, 47 Stat. 70 . National Woodwork Manufacturers Ass’n v. NLRB, supra, 386 U.S. at 622 , 87 S.Ct. at 1256 . Section 13(c) of that Act provided that the term labor dispute “includes any controversy concerning terms or conditions of employment, or concerning the association or representation of persons *403 in negotiating, fixing, maintaining, changing, or seeking to arrange terms or conditions of employment, regardless of whether or not the disputants stand in the proximate relation of an employer and employee.” Pub.L.No. 72-65, 47 Stat. 73 (currently codified at 28 U.S.C. § 152 (9)).

Renewed abuses by labor under the permissive terms of this provision led to the enactment of section 8(b)(4)(A) of the Labor Management Relations Act, Pub.L. No. 80-101, 61 Stat. 141 (currently codified at 29 U.S.C. § 158 (b)(4)(B)), the intent of which was to eliminate the use of secondary boycotts. National Woodwork Manufacturers Ass’n v. NLRB, supra, 386 U.S. at 623-25 , 87 S.Ct. at 1257-58 . This section provides in pertinent part that it is an unfair labor practice for a labor organization to threaten, coerce, or restrain any person engaged in an industry affecting commerce with the object of forcing or requiring any person to cease doing business with any other person. However, in Local 1976, United Brotherhood of Carpenters and Joiners v. NLRB, 357 U.S. 93, 107-111 , 78 S.Ct. 1011, 1020-22 , 2 L.Ed.2d 1186 (1958), the Court held that the mere inclusion of a “hot cargo” clause in a union contract was not an unfair labor practice under section 8(b)(4)(A). To eliminate this loophole in the law, Congress enacted section 8(e), which made the “hot cargo” agreement itself unlawful except in construction industry on-site contracts and certain garment industry contracts. National Woodwork Manufacturers Ass’n v. NLRB, supra, 386 U.S. at 633-34 , 87 S.Ct. at 1262-63 .

The keen congressional interest displayed in the above summarized development of unfair labor agreements makes it most unlikely that Congress intended federal courts to have jurisdiction in an action to enforce a “hot cargo” agreement only where that agreement concerns an employer’s immediate employees. I believe that this conclusion is amply supported by established case law.

In Connell Construction Co. v. Plumbers & Steamfitters Local Union No. 100, 421 U.S. 616 , 95 S.Ct. 1830 , 44 L.Ed.2d 418 (1975), Connell was a. general contractor engaged in the construction industry, none of whose employees was a member of the defendant Union. The Union demanded nonetheless that Connell enter into an agreement with the Union not to do any business with any plumbing or mechanical firm unless that firm had a collective bargaining agreement with the Union. Coerced into signing by Union picketing, Connell sued for violation of the State and federal antitrust laws.

Construing the term “any employer” as used in section 8(e) to mean only the immediate employer of the employees represented by the Union, Connell argued that the agreement was not a classic “hot cargo” clause protected by the section 8(e) construction industry exception, because there was no bargaining relationship between it and the Union. See Connell Construction Co. v. Plumbers and Steamfitters Local Union No. 100, 483 F.2d 1154, 1172 (5th Cir. 1973). The Fifth Circuit implicitly rejected this argument by holding that the contract created an issue of labor law which should be determined in the first instance by the National Labor Relations Board. Id. at 1174 .

When Connell reached the Supreme Court, every judge on the Court agreed that the Union’s conduct involved a possible violation of section 8(e). The majority, in an opinion by Justice Powell, held that, while section 8(e) did not permit this type of agreement, id. 421 U.S. at 626 , 95 S.Ct. at 1837 , Congress did not intend that labor law remedies for section 8(e) violations would preclude additional remedies under the federal antitrust laws. Id. at 634-5 , 95 S.Ct. at 1841 . Justice Stewart, writing for the dissent, agreed that “the subcontracting agreement under which Connell agreed to cease doing business with nonunion mechanical contractors is covered by the provisions of § 8(e).” Id. at 639, 95 S.Ct. at 1843 . His disagreement with the majority was based on the belief that Congress intended regulation of secondary boycott activity, such as that of the Plumbers and Steamfitters Local, to be exclusively under the Na *404 tional Labor Relations Act. Id. at 654-55 , 95 S.Ct. at 1850-51 .

It is obvious that the entire Court considered Connell to be an “employer” under section 8(e) despite the fact that the contract in dispute involved none of its employees. 9 This has been the Supreme Court’s consistent position under the National Labor Relations Act and its amending statutes, wherever the specific language of the statutory provision involved did not indicate a contrary congressional intent.

In Hudgens v. NLRB, 424 U.S. 507 , 96 S.Ct. 1029 , 47 L.Ed.2d 196 (1976), the Court held that the owner of a shopping center who attempted to prevent picketing by employees of one of his tenants was a statutory “employer” under the Act. Id. at 510 n.3 & 522 n.11, 96 S.Ct. at 1032 n.3 & 1037 n.11. In support of this holding, the Court cited Austin Co., 101 NLRB 1257 . There, the employer, a construction company, was held to have violated section 8(a)(3) of the Act, 29 U.S.C. § 158 (a)(3), by terminating the guard services of three Pinkerton Company employees. The Board, holding that section 8(a)(3) does not limit its prohibitions to acts of an employer against his own employees, observed that, when Congress intended such limitation, it made its intentions clear. Id. at 1258-59 . See, e.g., section 8(a)(5), 29 U.S.C. § 158 (a)(5), in which the term “his employees” is used, and compare with section 301(a), which concerns contracts between an employer and a labor organization representing, not “his employees”, but “employees in an industry”.

In the Austin Trial Examiner’s intermediate report, he stated that if a broad interpretation of “employees” was not adopted, a dominant union in the construction industry “might uniformly insist that employees of another employer and with other representation, not work on the project without becoming its members.” Austin Co., supra, 101 NLRB at 1258-59.

This theme was echoed by the Fifth Circuit in Connell Construction Co. v. Plumbers and Steamfitters Local Union No. 100, supra, 483 F.2d at 1172 n.9, when it said:

If the word “employer” is read to exclude Connell in the proviso, then it seems that the word “employer” in the general ban of section 8(e) would have to be read in the same manner, thus, leaving this activity totally unregulated by this section of the statute.

The ends which Congress sought to attain in prohibiting “hot cargo” agreements are the same, regardless of whether the union represents the immediate employees of the party with whom it contracts. Pacific Northwest Chapter of the Associated Builders & Contractors, Inc. v. NLRB, 609 F.2d 1341, 1350 (9th Cir. 1979). As Judge Mansfield, himself, aptly stated in Danielson v. International Organization of Masters, Mates and Pilots, supra, 521 F.2d at 756 , the plain language of section 8(e) “proscribes the making of a ‘hot cargo’ agreement by ‘any labor organization and any employer.’ ” See also Donald Schriver, Inc. v. NLRB, 635 F.2d 859 , 878 (D.C.Cir.1980). Indeed, the fewer immediate employees represented by the union, the less justification there is for the union’s anti-competitive efforts. NLRB v. National Maritime Union, supra, 486 F.2d at 913-14 .

A “contract” for purposes of section 301 is “an agreement between employers and labor organizations significant to the maintenance of labor peace between them”, Retail Clerks International Association v. Lion Dry Goods, Inc., 369 U.S. 17, 28 , 82 S.Ct. 541, 548 , 7 L.Ed.2d 503 (1962), and need not *405 be a collective bargaining contract. Id. See Drywall Tapers and Pointers v. Operative Plasterers and Cement Masons International Association, 537 F.2d 669, 672-73 (2d Cir. 1976); Deaton Truckline, Inc. v. Local Union 612, 314 F.2d 418, 422 (5th Cir. 1963); International Association of Machinists, Lodge 1652 v. International Aircraft Services, Inc., 302 F.2d 808 , 815 — 16 (4th Cir. 1962).

The contract in the instant case was not for the purchase of an automobile. 10 Its undisputed objective, as testified to by defendant’s vice-president, was to secure labor peace between the shipowner and operator on one hand and the Union on the other. However, in furthering this objective, the parties created a clear issue of unfair labor practice. Because I am convinced that Congress could not have intended that a defendant be treated as something other than an “employer” where enforcement of a contract is sought, but as an “employer” where enforcement of the contract is sought to be precluded, I respectfully dissent.

It should be noted that the issue before the Court in Connell was not whether all labor contracts relating to employees other than those of the contracting employer are outside the coverage of the National Labor Relations Act, but rather whether the Connell contract was excepted from the coverage of the “hot cargo” provisions of the Act by the construction industry exception of section 8(e). If the general rule is, as my colleagues suggest, that “labor-law provisions covering agreements between employers and unions will not be read to cover agreements between employers and unions which do not have a mutual employer-employee relationship”, there was no need for the Connell Court to focus on section 8(e)’s limited exception from “hot cargo” coverage. If, as the Court held, the contract in Connell did not qualify for the section 8(e) exception, it must of course have been covered by the Act.

. The automobile-purchase illustration in the majority opinion carries appellant’s argument to an “extreme”, but it is not a “logical” one. There is nothing “fuzzy” in the concept of labor peace, especially where, as hére, the parties concede that to be the purpose of the agreement.