Appendix — Oil Workers v. Mobil Oil Corp.

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APPENDIX

Supreme Court of the Anited States

On, CHuemicat A&D Atomic WorkKERS

InterwationaL UNION AFL-CIO

anp Maritime Loca.

Uxiox No. 8-801

Petitioners,

Monn. On. Corporation

Respondent.

ON WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

— — —

PETITION FOR CERTIORARI FILED

APRIL 4, 1975; CERTIORARI GRANTED

OCTOBER 6, 1975.

<p: =

Supreme Court of the United States

Ocrosger Term, 1975

NO. 74-1254

Ou, CoemicaL anp Atomic Workers

IwrernationaL Unton AFL-CIO

anp Marrrime Local.

Uston No. 8-801

Petitioners,

Most. Om. Corporation

Respondent.

ON WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

PETITION FOR CERTIORARI FILE

APRIL 4, 1975; CERTIORARI GRANTED

OCTOBER 6, 1975.

INDEX

Page

Chronological List of Relevant Docket Entries 1

— — 6

Defendants’ Motion to Dismiss . . 10

Plaintiff’s Objections to Defendants’ Motion

to Dismiss and Memorandum of Authorities 11

Order Denying Defendants’ Motion to Dismiss ............ 13

777 ——1j . . 14

; Page

Distriet Court Findings of Fact and Conelusions

1— . 26

xx 33

Motion for New Trial and Amendment of Judgment 34

Order Amending District Court Findings of Fact

L 36

Appellants’ Designation on Appeal 38

Appellees’ Designation on Appeal ꝗ . Ae

. ——- —- — 41

Opening Remarks for Plaintiff . . ... 42

Opening Remarks for Defendant 9 43

Rebuttal Remarks for Plaint ifi! . . 49

Witnesses:

Jolin Knepper

—, . . ———— tf. 54

8 AA w W eM SEEN TN Oe 116

——W 147

—:. . ⏑⏑— . 168

Donald Sanhueza

— snnescintminniiont — 173

——= . . 187

5K 2 197

KK 2 197

John Perrio

111 ˙ A — ! 198

—— . ices ticiaaitiaiiniimaieeiieuindiintin 199

Closing Arguments for Plaintiff . 205

Closing Argument for Defendants . 212

Rebuttal Argument for Plaintiff . . . . 226

Page

e . 231

1 T- w 236

er —Z2 237

. — . 238

ß 239

˖ HII TTD cuss cinricnintaasscentntdinnmentenenensnnnsatesccteteaiees 241

I —.. 242

re ——————— 259

2 11 ͤ—,,,, 261

1 —— — 268

. — 270

ü · . ˙c 271

4 ͤ . ˙ 275

11 . 279

Order Granting Petition for Certiorari . .. 330

APPENDIX

CHRONOLOGICAL LIST OF RELEVANT

9/16/71

9/17/71

9/20/71

10/ 6/71

10/ 8/71

10/ 9/71

10/ 8/71

DOCKET ENTRIES

Filed Plaintiff’s Original COMPLAINT; issued

summonses and delivered to U.S. Marshal with

$25 check for Marshal’s fees.

Filed Marshal’s Return on Summons: Served J.

Elro Brown, 1500 Jefferson Drive, Port Arthur,

Texas, Office; 3101 11th Street, Port Arthur,

Texas, Home, September 16, 1971.

Filed Marshal’s Return on Summons: Served

Ivan B. Haven, 1500 Jefferson Drive, Port

Arthur, Texas, Office; 1021 Washington, Port

Neches, Texas, Home, September 17, 1971.

Filed Marshal’s Return on Summons: Served

John D. Perrio, 6101 Edgemoor Drive, Houston,

Texas 77036, September 17, 1971.

Filed Defendants’ Motion to Enlarge the Time

to Answer or Plead.

Filed Plaintiff’s Objection to Defendants’ Mo-

tion to Enlarge Time to Answer or Plead.

Filed Defendants’ Motion to Dismiss.

ORDER ENLARGING TIME TO ANSWER

OR PLEAD signed by Judge Fisher and filed,

grants extension to October 27, 1971, to answer

10/13/71

10/25/71

117 3/71

2/ 4/72

2/11/72

2/16/71

3/10/72

3/30/72

or otherwise plead to the complaint in the above

case. Attorneys notified by copies of Order.

Filed Plaintiff’s Objections to Defendants’ Mo-

tion to Dismiss, and Memorandum of Authori-

ties.

ORDER DENYING DEFENDANTS’ MOTION

TO DISMISS, signed by Judge Fisher and filed.

Attorneys notified.

Filed DEFENDANT’S ANSWER.

Filed Plaintiff’s Motion for Summary Judgment.

Filed REQUEST for Extension of Date for Sub-

mission of Plaintiff's Motion for Summary

Judgment.

ORDER, signed by Judge Fisher and filed, or-

dered the submission date for Plaintiff’s Motion

for Summary Judgment and Defendants’ con-

troverting materials is hereby resi t to March 10,

1972. Attorneys notified.

Filed Defendants’ Opposition to Plaintiff's Mo-

tion for Summary Judgment.

Filed Plaintiff’s MOTION for Leave to File

Supplemental Affidavit and Memorandum in

Support of Motion for Summary Judgment.

Filed ORDER signed by Judge Fisher GRANT-

ING Plaintiff’s MOTION to File Supplemental

Affidavit and Memorandum in Support of Motion

for Summary Judgment.

3/30/72

4/ 7/72

6/26/72

6/27/72

7/10/72

7/12/72

Notified Counsel.

ORDER, signed by Judge Fisher and filed, de-

nied motion of Plaintiff for summary judgment.

Attorneys notified.

Filed PRE-TRIAL STIPULATION and OR-

DER signed by Judge Fisher. Counsel Present.

Trial Begins, 10:20 A.M.

Trial in 2nd Day. Trial Ends 2:00 P.M. Counsel

given until July 10, 1972, to prepare Proposed

Findings of Fact and Conclusions of Law to be

submitted directly to Court.

Filed Defendants’ Proposed Findings of Fact

and Conclusions of Law.

Filed Defendants’ MEMORANDUM Re Pro-

posed Findings and Conclusions.

Filed Plaintiff’s BRIEF in Support of Motion

for Judgment.

Filed Plaintiff’s SUPPLEMENTAL MEMO-

RANDUM.

MEMORANDUM WITH FINDINGS OF

FACT AND CONCLUSIONS OF LAW, signed

by Judge Fisher and filed.

JUDGMENT signed by Judge Fisher and filed,

that Article 1, 2b of collective bargaining agree-

ment, dated 11-1-69, with reference that as con-

dition of employment all employees become

7/12/72

7/24/72

7/31/72

8/14/72

8/15/72

9/13/72

members of Union, VOID & UNENFORCE-

ABLE: that Article 1, 2b, is severable from re-

mainder of bargaining agreement, and does not

affect other provisions in contract; and that

costs are taxed against defendant.

Certified copies mailed all counsel of record and

to Judge Fisher.

Filed Defendants’ Motion for New Trial and

Amendment of Judgment and MOTION for

Amended and Additiona! Findings.

Filed Plaintiff’s OBJECTIONS to Defendants’

Motion for New Trial and Amendment of Judg-

ment and Findings.

Filed ORDER signed by Judge Fisher DENY-

ING Defendants’ MOTION for New Trial,

GRANTING an Additional Finding of Fact and

AMENDING a Conclusion of Law.

Filed Court Reporter’s Transcript of Proceed-

ings.

Filed NOTICE OF APPEAL to U.S. Court of

Appeals, Fifth Circuit, by Defendant, OCAW

International Union, et al from Judgment en-

tered on July 12, 1972 and Order overruling

Motion for New Trial by Defendant on August

14, 1972.

Certified copy of Notice of Appeal mailed to

Appellant, Mr. Chris Dixie, Houston, Texas;

Fifth Cireuit Court of Appeals, New Orleans,

9/13/72

8/10/73

11/8/74

4/4/75

10/6/75

Louisiana; Mr. James W. Hambright, Appellee,

Beaumont, Texas; and U.S. Court Reporter,

Beaumont, Texas, with transmittal letter.

Filed APPEAL BOND by Defendant, Mr. Chris

Dixie, Houston, Texas in the sum of $250.00

(Lawyers Surety Corporation).

Opinion of Court of Appeals entered.

Opinion of Court of Appeals en banc entered.

Petition for Certiorari Filed.

Order Granting Certiorari Issued.

Iw tae Unrrep States District Court

IN AND FOR THE EASTERN District or TEXAS

Beaumont Drvision

C. A. No. 7413

Mos. Ow Corporation, Martne TRANSPORTATION

DeparTMENT, GruLF-East Coast OPERATIONS

VS.

Ou, CHeMIcAL AND Atomic Workers INTERNATIONAL

Unton AFL-CIO AND Maritime Loca No. 8-801

or Or, CHEMICAL AND Atomic Workers INTERNATIONAL

Union AFL-CIO

PLAINTIFF’S ORIGINAL COMPLAINT

(Filed: September

: 16, 1971)

COME NOW Mobil Oil Corporation, Marine Transporta-

tion Department, Gulf-East Coast Operations, hereinafter

ealled Plaintiff, complaining of Oil, Chemical and Atomic

Workers International Union AFL-CIO and also Maritime

Local No. 8-801 of Oil, Chemical and Atomie Workers In-

ternational Union AFL-CIO, herinafter called Defendants,

and would show as follows:

Plaintiff, an operating division of said Department of

said Corporation, has its management headquarters and

principal place of business located in an office building on

the premises of the Mobil Refinery in Jefferson County,

Texas, and its mailing address is P.O. Box 3444, Beaumont,

Texas 77704. Mobil Oil Corporation is incorporated under

the laws of the State of New York and has a valid and sub-

sisting permit to do business in Texas.

Defendant Oil, Chemical and Atomic Workers Interna-

tional Union, AFL-CIO, is a labor organization with its

principal headquarters in Denver, Colorado, but does busi-

ness and represents its members in Jefferson County,

Texas, and may be served by service of process upon its

International Representatives who reside in said County,

one being J. Elro Brown whose office address in 1500 Jef-

ferson Drive, Port Arthur, Texas, and home address is 3101

11th Street, Port Arthur, Texas, and another being Ivan B.

Haven whose office address is 1500 Jefferson Drive, Port

Arthur, Texas, and home address is 102 Washington, Port

Neches, Texas.

Defendant, Maritime Local No. 8-801 of said Oil, Chemi-

cal and Atomic Workers International Union, AFL-CIO

(formerly known as Socony Vacuum Tanker Men’s Asso-

ciation) is a labor organization doing business and repre-

senting its members in Jefferson County, Texas, and main-

tains an office located in Room 201 Goodhue Building, Beau-

mont, Jefferson County, Texas, where it may be served by

delivering process to its officer or agent at such address

and may also be served by service upon its president, John

D. Perrio, a resident of Houston, Harris County, Texas,

whose address is 6101 Edgemoor Drive, Houston, Texas

77036, and by service upon its officer, Clinton W. Weeks, a

resident of San Augustine County, Texas, whose residence

and address is Route 1, Box 208-B, San Augustine, Texas

75972.

The Court has jurisdiction of this cause in that the case

is brought under Sec. 301 of the Labor Management Rela-

tions Act of 1947 as amended, 29 U.S.C. 4 185(a) and (e)

for the purpose of securing a declaratory judgment pursu-

ant to the Federal Declaratory Judgment Act, 28 U.S.C.

§ 2201.

Plaintiff and Defendants are parties to a labor contract

dated November 1, 1969, and not expiring until July 31,

1972. Such contract covers many of Plaintiff’s employees

who are represented by Defendants as their collective bar-

gaining representatives for purposes of wages, hours and

working conditions.

In its Union security provisions said labor contract con-

tains what is commonly referred to as an agency shop

clause which requires and compels membership or payment

of regular Union dues and initiation fees by all employees

in the bargaining unit represented by said Defendants.

Said agency shop clause is unlawful under the Right-to-

Work laws of the State of Texas. Plaintiff seeks a declara-

tory judgment that such contract provisions are therefore

invalid and unenforceable.

Said labor contract provides that in the event any provi-

sion thereof shall be declared invalid by any court of com-

petent jurisdiction all other provisions of the contract shall

remain in full force and effect. Plaintiff seeks declaratory

judgment that except for said provisions unlawful under

Texas law the remainder of the labor contract is in full force

and effect.

An actual ( _roversy exists between Plaintiff and De-

fendants in that Plaintiff has advised Defendants that the

subject clause is unlawful and Plaintiff has advised its

employees that Union membership is voluntary, but the De-

fendants have rejected such position and have recently

issued a written notice to Plaintiff’s employees dated July

1971 threatening that Union membership or payment of

Union dues is a condition of their employment because of

such contract clause and that Defendants will cause any

non-complying employee to be fired.

WHEREFORE, premises considered, Plaintiff prays that

Defendants be cited to appear and answer herein, that said

agency shop portion of the labor contract be declared un-

lawful, invalid, and unenforceable, that the remainder of

the contract be declared in full force and effect, that it have

judgment for its costs, and for such other relief as it may be

entitled to receive.

Respectfully submitted,

Warren H. Greene, Jr.

150 E. 42nd Street

New York, New York 10017

Ornearn, Bett A TucKER

By /s/ James W. Humor

Beaumont Savings Bldg.

Beaumont, Texas 77701

Attorneys for Plaintiff

DEFENDANTS’ MOTION TO DISMISS

(Number and title omitted) (Filed: October 8, 1971)

Defendants, Oil, Chemical and Atomic Workers Interna-

tional Union, AFL-CIO, and Maritime Local No. 8-801 of

Oil, Chemical and Atomic Workers International Union,

AFL-CIO, being all Defendants in the above cause, move

to dismiss the complaint in the above case for the following

reasons:

This Court lacks subject matter jurisdiction of this case

because this is not an action to enforce a contract under

Section 301 of the Labor-Management Relations Act of

1947, as amended, 29 U.S.C.A. Section 185.

n. :

The matters to which the complaint is addressed are with-

in the exclusive jurisdiction of the National Labor Rela-

tions Board.

III.

The complaint fails to state a claim upon which relief

can be granted.

Drxre, Wor « Ha

By /s/ Cues Dun

Chris Dixie

Suite 401, 609 Fannin

St. Bldg.

Houston, Texas 77002

713/223-4444

Attorneys for Defendants

PLAINTIFF’S OBJECTIONS TO DEFENDANTS’

MOTION TO DISMISS, AND MEMORANDUM

OF AUTHORITIES

NOW COMES Plaintiff Mobil Oil Corporation, Marine

Transportation Department, Gulf-East Coast Operations

and objecting to motion to dismiss filed herein by Defen-

dants Oil, Chemical and Atomic Workers International

Union, AFL-CIO, and Maritime Local No. 8801 of Oil,

Chemical and Atomic Workers International Union, AFL-

CIO, would respectfully show as follows:

Defendants say that this is not a Section 301 action to

enforce a contract and that the Court lacks jurisdiction.

Such contention is without merit. It is well settled that de-

claratory judgment actions on labor contracts are cog-

nizable by the courts under Section 301 of the LMRA, 29

U.S.C. § 185(a) and (c). Plaintiff’s business is in interstate

commerce, both Defendants are labor organizations, there

is a labor contract between the parties, and Plaintiff seeks

that part of it be cancelled and the rest of it enforced. There

is no question of the Court’s jurisdiction. Unions have fre-

quently brought Section 301 suits to declare their rights

under labor contracts, and so have employees, sometimes

seeking reformation and other ancillary orders. A typical

federal court Section 301 suit brought by a union seeking

declaratory judgment as (o validity of a portion of a labor

contract is Amalgamated Assoc. of Street Electric Railway

€ Motor Coach Employees, Div. 1225 v. Las Vegas—Tono-

pah—Reno Stage Line, Inc. 202 F. Supp. 726 (U.S.D.C.,

Nev. 1962) affirmed at 319 F.2d 783 (9th Cir. 1963). A fed-

eral court Section 301 suit brought by an employer seeking

declaratory judgment and in the alternative reformation of

the labor contract is West Coast Telephone Co. v. Local

Union No. 77, International Brotherhood of Electrical

Workers, AFL-CIO 431 F.2d 1219 (1970).

Defendants rext contend that the case is within the ex-

clusive jurisdiction of the National Labor Relations Board.

Such contention is without merit. Many cases have held that

the courts have jurisdiction of Section 301 suits even though

the case disclosed certain facts which were not only argu-

ably, but concededly, an unfair labor practice. Smith v. Eve-

ning News Association, 371 U.S. 195, 83 S.Ct. 267, 9 L.E.2d

246, 51 LRRM 2646 (1962). Vaca v. Sipes, 386 U.S. 171,

87 S.Ct. 903, 64 LRRM 2369 (1967). In the Smith case the

United States Supreme Court specifically held that the au-

thority of the National Labor Relations Board „does not

destroy the jurisdiction of the courts under Section 301.“

Finally, Defendants contend that the Complaint fails to

state a claim upon which relief can be granted. This conten-

tion is without merit, and amply answered by the author-

ities cited under paragraph 1 above.

WHEREFORE, premises considered, Plaintiff prays that

Defendants’ motion to dismiss be denied.

Respectfully submitted,

Warren H. Greene, In.

150 E. 42nd Street

New York, New York 10017

Orearn, Bei & TUCKER

By /s/ James W. Hampricut

James W. Hambright

Beaumont Savings Bldg.

Beaumont, Texas 77701

Attorneys for Plaintiff

CERTIFICATE OF SERVICE

I, James W. Hambright, attorney for Plaintiff Mobil Oil

Corporation, Marine Transportation Department, Gulf-

East Coast Operations, hereby certify that service of the

above Plaintiff’s Objections to Defendants’ Motion to Dis-

miss, and Memorandum of Authorities was made upon

Ohris Dixie, Dixie, Wolf & Hall, Suite 401, 609 Fannin St.

Bldg., Houston, Texas 77002, attorney for Defendants Oil,

Chemical and Atomic Workers International Union, AFL-

CIO, and Maritime Local No. 8-801 of Oil, Chemical and

Atomic Workers International Union, AFL-CIO, on the

12th day of October, 1971, by depositing true copy of same

in the United States mail, postage prepaid, in an envelope

addressed to him at the address shown above.

s,, James W. Hamearicut

James W. Hambright

—0o00—

ORDER DENYING DEFENDANTS’

MOTION TO DISMISS

(Number and title omitted) (Filed : October 25, 1971)

Be rr Rememserep that in the above styled cause came on

to be considered motion to dismiss filed herein by Defen-

dants Oil, Chemical and Atomic Workers International

Union, AFL-CIO, and Maritime Local No. 8801 of Oil,

Chemical and Atomic Workers International Union, AFL-

CIO, and the Courts having duly heard and considered

same, along with Plaintiff’s objections thereto, and memo-

randum of authorities, it is therefore ordered that said mo-

tion to dismiss be and the same is hereby in all things de-

nied.

Rendered and signed this 25th day of October, 1971.

/s/ Jor J. Fisner

Judge Presiding

DEFENDANTS’ ANSWER

(Number and title omitted) (Filed: November 3, 1971)

Now Cowes Maritime Local No. 8-801 of Oil, Chemical

and Atomic Workers International Union, AFL-CIO, and

Oil Chemical and Atomic Workers International Union,

AFT.-CIO, and answer the Complaint as follows:

Defendants deny that the Maritime Transportation De-

partment, Gulf-East Coast Operations’’ is such an entity

as can be a plaintiff herein separate from Mobil Oil Cor-

poration, a New York corporation. Upon information and

belief, Defendants also deny that the management head-

quarters and principal place of business of any appropriate

legal entity is located in Jefferson County, Texas. Upon

information and belief, Defendants show the Court that the

top management headquarters, certain labor relations of-

ficials and other personnel responsible for the administra-

tion of the collective bargaining contract are located in

the State of New York.

The second unnumbered paragraph of paragraph I of the

Complaint is admitted.

The third unnumbered paragraph of paragraph I is de-

nied to the following extent: Defendant Local No. 8-801 is

a labor organization which does business and represents

its members in several states, particularly in the State of

New York, as in Jefferson County, Texas. Its members

work on the high seas and at times in most of the ports of

the East Coast of the United States. Defendant Local Union

maintains its main office in the State of New York at 1

Beekman Street where it maintains its financial records,

and receives the proceeds from check-off of dues trans-

mitted to it by Mobil Oil Corporation. Defendant Local

Union is certified as a representative of the unlicensed

personnel in the deck, engine, and stewards departments of

the ocean going vessels operated by Plaintiff under the flag

of the United States. The contract which constitutes the

basis of this suit was negotiated and executed in the State

of New York and is performable in that state, as well as

many other states, including the State of Texas. Defendant

Local Union is administratively a part of the International

Union’s District No. 8 and is not administratively a part

of the International Union’s District No. 4. District 8 is

located in New York State and the East Coast. District

No. 4 is located in parts of the States of Texas and Louisi-

ana. The collective bargaining contract here involved is

performed mostly upon the high seas and in states other

than the State of Texas. The relative percentage of the

working time of the employees in question in the territorial

limits of the State of Texas is relatively minor. Except as

stated above, Defendant Local Union admits that it does

have an office located in Beaumont, Texas, as alleged.

II.

The jurisdietion of the Court is denied.

II.

Paragraph No. III of the Complaint is admitted.

IV.

Defendants admit paragraph IV of the Complaint.

Defendants deny that the clause in question is unlawful

under the right-to-work laws of the State of Texas. De-

fendants deny that Plaintiff has standing to seek a declara-

tory judgment, that such contract provisions are invalid

and unenforceable, respectfully showing the Court that the

agency shop clause affects only covered employees and

their money. It affects no funds or operating conditions or

other legitimate interests of the Plaintiff. In this connec-

tion, Defendants show the Court that Plaintiff executed the

said contract in the State of New York with full knowledge

of the nature of its operations and the location of its em-

ployees’ work. Plaintiff agreed to the clause in question as

a part of many mutual agreements, covenants and conces-

sions by the parties to each other. Plaintiff has taken the

benefit of the covenants and concessions made by Defen-

dants and does not have standing to challenge said clause

before this Court.

VI.

Defendants admit the substance of paragraph VI but

deny that said clause authorizes or gives standing to Plain-

tiff to invalidate the agency shop clause to which it agreed.

Furthermore, the clause provides that the parties will, in

the event of invalidation by a court of competent jurisdic-

tion, meet within ten days to attempt to work out a new

contract on those matters that were invalidated. It was and

is, therefore, the sense of said contract that both parties

will develop any new agreement which is necessary and

appropriate to accomplish the purposes of the agency shop

clause.

VII.

Defendants deny that an actual controversy exists within

the meaning of the Declaratory Judgment Act or that the

matters alleged in paragraph VII of the Complaint consti-

tute such an actual controversy.

AFFIRMATIVE DEFENSES

The collective bargaining contract in question has been

entered into under the requirements and auspices of the

Labor-Management Relations Act of 1947, as amended, an

Act of Congress regulating interstate commerce. The con-

tract was executed following a nationwide strike of the

employees in question in the year 1969. At the time of the

strike Defendant Local Union was certified as the exclusive

bargaining representative by the Regional Office of the

National Labor Relations Board located in New York City

and known as National Labor Relations Board, Region

Two. Therefore, the interpretation and legality of the said

contract is a matter to be decided by reference to federal

law and not exclusively by reference to Texas law.

The collective bargaining contract in question provides

that any question of fact arising out of the interpretation

or misapplication of this agreement or the alleged viola-

tion of the express terms of the agreement shall be sub-

mitted to a board of arbitration. It is provided that a de-

cision of the majority of said board shall be final and bind-

ing upon the employees, the Company and the Union, and

shall conclusively determine the controversy. It is further

provided that if any party refuses to arbitrate or to comply

with an arbitration award, the other party, in addition to

all other rights and remedies, may declare the agreement

null and void. Plaintiff should have, but has failed to, in-

voke the said arbitration procedure to settle the present

controversy which includes questions of fact concerning

the bargaining intention of the parties, questions of fact

concerning the performance locale of the contract, as well

as the legal ramifications of the various clauses of the

contract.

III.

Mobil Oil Corporation is incorporated under the laws of

the State of New Vork. Insofar as the present controversy

is concerned, Mobil Oil Corporation operates a fleet of nine

tankers by which it transports various petroleum products

to and from various ports of the United States. A promi-

nent phase of the Plaintiff’s operations is the shipment of

refined petroleum and chemical products from Plaintiff’s

refinery at Beaumont to various ports of the East Coast.

Most of the products so shipped from the Beaumont refin-

ery go to the Port of New York or New England ports up

to the State of Maine. Another phase of the Plaintiff's

operations concerns the overseas shipment of petroleum

and petroleum products, including Asiastic ports, as well

as European. At the height of the Vietnam war as many

as three of Plaintiff’s nine tankers were under contract to

the United States Ge vernment for such overseas shipments.

The affected employees work 85 days aboard ship fol-

lowed by 37 days off duty. As stated, many of the em-

ployees are engaged in overseas voyages and in other ac-

tivities on the East Coast, but at a maximum, an employee

engaged in uninterrupted round trip voyages to and from

the Beaumont refinery will be docked at Beaumont a maxi-

mum of approximately 18 hours once every 12 days, or

6% of the time. Upon information and belief, Defendants

allege that the average percentage of the_time spent by the

affected employees within the territorial jurisdiction of the

State of Texas in the performance of their duties is sub-

stantially less than 5%. The other 95% or more of their

time is spent working in territories where union security

clauses of the type complained of are lawful.

IV.

Defendants show the Court that in any event the agency

shop clause is not illegal under the laws of the State of

Texas as alleged in the Complaint.

Defendants readopt and reallege all of the matters of

fact set forth above and they show the Court that under the

circumstances above stated, the decision whether the appli-

cation of the agency shop clause in any given situation is

or is not subject to Texas law or is or is not lawful under

federal law is a matter exclusively entrusted by Congress

to the primary jurisdiction of the National Labor Relations

Board to make the first decision.

WHEREFORE, Defendants pray that the Complaint be

Dum, Wo « HLA.

By /s/ Curis Dixre

Chris Dixie

By /s/ James P. Wor

James P. Wolf

Suite 401, 609 Fannin St.

Building

Houston, Texas 77002

713/223-4444

Attorneys for the Defendants

CERTIFICATE OF SERVICE

I, Chris Dixie, certify we Lave served a copy of the fore-

going Defendants’ Answer and Affirmative Defenses on

Mr. James W. Hambright, Attorney for the Plaintiff, by

mailing a copy thereof to his office in the Beamont Savings

Building, Beaumont, Texas, 77701, properly addressed this

Ist day of November, 1971.

/s/ Curis DN

Chris Dixie

PRETRIAL STIPULATION AND ORDER

(Number and title omitted) (Filed: June 26, 1972)

JURISDICTION

Jurisdictional pleas of defendants, Oil, Chemical and

Atomic Workers International, AFL-CIO, and Maritime

Local No. 8-801 of Oil, Chemical and Atomic Workers In-

ternational, AFL-CIO, have been overruled. This Court has

jurisdiction of the parties. Defendants claim the Court

lacks jurisdiction because, they assert, there is no actual

case or controversy between the parties.

PENDING MOTIONS -

There are no pending undisposed of motions.

CONTENTIONS OF PLAINTIFF

Plaintiff contends that the agency shop clause appearing

in its labor contract with defendant Unions is unlawful

under the right-to-work laws of the State of Texas, and

should be declared invalid and unenforceable, while the

remainder of the labor contract is in full force and effect.

CONTENTIONS OF DEFENDANTS

A. There is no actual case or controversy in the consti-

tutional sense sufficient to confer jurisdiction upon the

Court. :

B. The contract in question expires on July 31, 1972 so

that in any case the matter will be moot at that time.

C. A statutory procedure before the National Labor Re-

lations Board exists for the adjudication of the validity

of the agency shop agreement as applied to any particular

employee in any particular state if, as and when an actual

case or controversy concerning any specific employee should

arise. The statutory procedure provides for a precise adjudi-

cation by an agency of experts created by Congress for the

administration of the Labor-Management Relations Act of

1947, as amended. The appropriate scope of the agency shop

clause in an interstate contract is peculiarly appropriate

for determination by the National Labor Relations Board.

Therefore, the Court in the exercise of a sound discretion

should refrain from rendering a declaratory judgment.

D. Under all the circumstances of the case, including the

fact that 95% of the working time of the affected employees

is spent outside the State of Texas, the Texas statutes have

no application to this labor contract.

E. Alternatively, under all the circumstances of the case,

the Texas statute can be applied at most to those employees

who have predominant contact with the State of Texas in

their work and cannot be applied to those employees whose

predominant contact with their jobs occurs outside the

State of Texas.

F. The relevant Texas statutes do not by their own terms

purport to have extra territorial effect.

G. Alternatively, if such statutes purport to have extra

territorial effect, they have been preempted by the Labor-

Management Relations Act of 1947, as amended.

H. Section 8(a) of Article 5154a, Vernon’s Civil Statutes,

prohibits the collection of a fee, assessment, or collection

of a sum of money as a condition of employment only in

circumstances where the employee is denied union member-

ship by the union. This is so because the Manford Act, of

which it is a part, expressly authorizes and preserves closed

shop contracts in Texas.

I. Section 2 of Article 5207a and Section 1 of Article

5154g do not by their terms prohibit the collection of an

agency shop fee where there is no compulsory union mem-

bership.

J. In the exercise of sound discretion, the Court should

decline to render declaratory judgment because any declara-

tion of rights and duties must be specifically tailored to a

specific type employee who works within the State of Texas

sufficiently to justify application of Texas law and no such

specific employee exists as an actual case in controversy.

K. Alternatively, if the Court should conclude to render

a declaration of rights and duties, the same should be

carefully tailored to apply only to those employees who

are subject to Texas statutes and to exclude all employees

who are subject to the laws of other states or who perform

predominant work on the high seas.

Plaintiff does not agree that Defendants’ contentions are

necessarily pertinent to the issues in this case nor that they

present defenses properly cognizable by the Court, nor that

they are necessary to a decision in this case.

It is stipulated that copies of the following documents

will be received in evidence without further proof:

(a) Contract between the parties dated November 1,

1969 and expiring July 31, 1972

(b) Letter of date April 23, 1970, addressed to the De-

fendants and signed by John T. Knepper, Manager, Gulf-

East Coast Operations with enclosed copy of notice to new

unlicensed seamen

(d) MOBIL MARINER, No. 61 dated July, 1971

(e) WELCOME ABOARD! (Handbook given to new em-

ployees)

(f) Photograph of Technical Building, Beaumont Re-

— (Gulf-East Coast Operations Headquarters), from

est

(g) Opinion letter of the Attorney General of Texas No.

WwW-1018 dated March 14, 1961

(h) Copy of Unfair Labor Practice Charge filed with

NLRB on September 30, 1969 in Case No. 23-CA-3440

(i) NLRB letter of date September 30, 1969 to Mr. John

Knepper in Beaumont pertaining to Case No. 23-CA-3440

(j) Letter from Mr. Knepper to Mobil Tankers Officers

Association dated May 7, 1970

(k) Labor contract, Radio Officers’ Union of the United

Telegraph Workers, AFL-CIO, March 1, 1970

(1) NLRB Trial Examiner’s decision in Case No. 23-CB-

1222 dated March 30, 1972

The defendants will offer the following documents which

will be received in evidence without further proof:

1. NLRB Decision in Case No. 2-AC-7 rendered June 17,

1970

2. Memorandum of Understanding executed at New

York, October 30, 1969

3. Agreement between Plaintiff and Deck & Engineer

Officers, executed in New York, December 8, 1969

4. Mobil letter, June 7, 1967

5. Mobil letter, September 19, 1968

6. Mobil letter, January 22, 1969

7. Mobil letter, April 8, 1969

27.

. Mobil letter, August 16, 1971

Mobil letter, June 5, 1969

Mobil letter, June 24, 1969

Mobil letter, January 7, 1970

. Mobil letter, April 1, 1970

. Mobil letter, July 20, 1970

. Mobil letter, October 12, 1970

. Mobil letter, November 16, 1970

. Mobil letter, January 13, 1971

. Mobil letter, April 6, 1971

. Mobil letter, July 19, 1971

Mobil letter, July 20, 1971

Mobil letter, January 27, 1972

. Mobil letter, February 3, 1972

Mobil Mariner, December, 1966

23. Mobil Mariner, March, 1967

Mobil Mariner, February, 1968

Mobil Mariner, October, 1968

Mobil Mariner, November, 1971

Miscellaneous excerpts from ship’s logs furnished

by Company to Union (to show movement of ships and

time to port).

In addition to the documents listed, the parties reserve

the right to offer further evidence and documents as may

be necessary for rebuttal or impeachment or otherwise

relevant.

The probable length of the trial of this case is two days.

Approved, Signed and Entered this 26th day of June,

1972.

/s/ Joe J. Fisner

Chief Judge, United States

District Court

Approved:

Warren H. Greene, Jr.

150 E. 42nd Street

New York, New York 10017

Orearn, Bett & Tucker

By: /s/ James W. Hamsricut

James W. Hambright

Beaumont Savings Building

Beaumont, Texas 77701

Attorneys for Plaintiff

Dum, Woir & Hai

By: /s/ Curis Dix

Chris Dixie

Suite 401, 609 Fannin Street Building

Houston, Texas 77002

Attorneys for Defendants

MEMORANDUM WITH FINDINGS OF FACT AND

CONCLUSIONS OF LAW

(Number and title omitted) (Filed: July 12, 1972)

The above entitled cause came on for trial at a regular

term of court and the cause having been submitted to the

Court and the Court having considered the pleadings, the

evidence, the briefs of the parties, and being fully advised

in the premises, now makes and files its findings of fact and

conclusions of law:

FINDINGS OF FACT

Mobil Oil Corporation, Marine Transportation Depart-

ment, Gulf-East Coast Operations, the Plaintiff herein, op-

erates eight (8) oceangoing tankers documented under the

laws of the United States.

Defendant Maritime Local No. 8-801 of Oil, Chemical

and Atomic Workers International Union, AFL-CIO, which

is affiliated with Defendant Oil, Chemical and Atomic Work-

ers International Union, AFL-CIO, is the exclusive collec-

tive bargaining representative of all unlicensed seamen em-

ployed on board Plaintiff’s tankers.

Mobil Oil Corporation, Marine Transportation Depart-

ment, Gulf-East Coast Operations, which is the Plaintiff

herein, has its management headquarters in Jefferson

County, Texas and has been so located since April 1, 1962.

Mobil Oil Corporation is a New York corporation and has

qualified to do business in the State of Texas.

Defendant Maritime Local No. 8-801 of Oil, Chemical and

Atomic Workers International Union, AFL-CIO maintains

offices in Beaumont, Texas and in New York, New York.

Plaintiff and Defendants negotiated a collective bargain-

ing agreement in the State of New York to be effective

from November 1, 1969 to July 31, 1972.

A draft of the collective bargaining agreement dated

November 1, 1969 was executed in the State of New York.

The collective bargaining agreement was typewritten and

prepared in final form and re-executed in the State of Texas.

The State of Texas collects unemployment compensation

insurance payments on all personnel employed on board

Plaintiff’s tankers, regardless of the designation of home

address or shipping port.

Payments of unemployment compensation insurance have

been made to the State of Texas since April 1, 1962 on ac-

count of all personnel employed on board Plaintiff’s tankers.

10.

Two hundred and eighty-nine (289) unlicensed seamen

are employed by Plaintiff.

11.

One hundred twenty-three (123) unlicensed seamen out

of two hundred eighty-nine (289) have reported to Plaintiff

that Texas is their State of residence.

12.

One hundred fifty-two (152) unlicensed seamen out of

two hundred eighty-nine (289) have requested Plaintiff to

list Beaumont, Texas as their shipping port.

13.

Payroll records are maintained in Texas for all person-

nel employed on board Plaintiff's tankers, and Plaintiff

places funds on board its tankers in Texas for use in pay-

ing wages due to personnel employed on board Plaintiff's

tankers.

14.

Plaintiff makes remittances in Texas of F. I. C. A. taxes

as well as federal income taxes withheld from the pay of

all personnel employed on board Plaintiff's tankers.

15.

Plaintiff employs, or approves the employment of, all

unlicensed seamen at its headquarters in Beaumont, Texas.

16.

Plaintiff makes monthly remittances of union dues de-

ducted pursuant to authorization from the wages of un-

licensed seamen, with such remittance being mailed by

Plaintiff from Texas to the New York office of Defendant

Maritime Local No. 8-801 of Oil, Chemical and Atomic

Workers International Union, AFL-CIO.

17.

All grievances filed on approved grievance forms by un-

licensed seamen employed on board Plaintiff’s tankers are

submitted to and considered by Plaintiff’s manager at his

office in Beaumont, Texas.

18.

All of the unlicensed seamen employed on board Plain-

tiff’s tankers are regularly present in the State of Texas

inasmuch as Plaintiff’s tankers are on voyages beginning

or ending at Texas ports in their normal trade.

19.

At all times some of the unlicensed seamen employed by

Plaintiff are in the State of Texas, either on board tankers

operated by Plaintiff or on paid vacation receiving pay

from Plaintiff.

20.

A more substantial part of the administration of the col-

lective bargaining agreement and the performance thereof

occurs and takes place in the State of Texas than in any

other State.

21.

The acts performed in the State of Texas in the adminis-

tration and performance of the collective bargaining agree-

ment are such that the State of Texas is intimately con-

cerned with the collective bargaining agreement and with

the employees working thereunder.

22.

Plaintiff advised Defendants that the agency shop clause

of the collective bargaining agreement is unlawful and

invalid because of violation of the Texas right-to-work

statutes, and Plaintiff advised the personnel employed on

board Plaintiff’s tankers that membership in labor unions

is voluntary.

23.

Defendants rejected Plaintiff’s position and issued writ-

ten notice in July, 1971 to unlicensed seamen employed on

board Plaintiff’s tankers stating that membership in De-

fendant Maritime Local No. 8-801 of Oil, Chemical and

Atomic Workers International Union, AFL-CIO, or pay-

ment of dues to Defendant Maritime Local No. 8801 of

Oil, Chemical and Atomic Workers International Union,

AFL-CIO is a condition of their employment and that De-

fendants will cause any non-complying employees to be

fired.

A bona fide controversy exists between the parties with

respect to the validity of the agency shop clause (Article I,

{| 2b) in the collective bargaining agreement between Plain-

tiff and Defendants.

25.

The enforcement or attempted enforcement by Defen-

dants of the agency shop clause (Article I, 2b) in the

collective bargaining agreement directly involves Plain-

tiff’s employees in the State of Texas.

The enforcement or attempted enforcement by Defen-

dants of the agency shop clause (Article I, 2b) in the

collective bargaining agreement directly involves Plaintiff’s

operations and activities in the State of Texas.

27.

The enforcement or attempted enforcement by Defen-

dants of the agency shop clause (Article I, {2b) of the

collective bargaining agreement directly involves Plain-

tiff’s administration of said collective bargaining agree-

ment in the State of Texas.

CONCLUSIONS OF LAW

An actual bona fide controversy exists between the

parties so as to give the Court jurisdiction of this cause

under (301 of the Labor-Management Relations Act of

1947, as amended (29 U.S. C., §185(a) and (e)), for the pur-

pose of securing declaratory judgment pursuant to the

Federal Declaratory Judgment Act (28 U.S.C., § 2201).

The controversy is not moot.

The statutury procedure before the National Labor Rela-

tions Board does not preclude the Court’s consideration of

the issues in this case or prevent the Court from entering

a declaratory judgment herein.

The Texas right-to-work statutes have not been pre-

empted by the Labor-Management Relations Act of 1947,

as amended, and the validity of the Texas right-to-work

statutes with respect to the execution or application of a

collective bargaining agreement with an agency shop clause

is upheld by Sec. 14(b) of the Labor-Management Relations

Act of 1947, as amended (29 U.S.C. § 164(b)).

The application and attempted application of the agency

shop clause (Article I, J 2b) of the collective bargaining

agreement to all of Plaintiff’s operations and employees

contravenes the Texas right-to-work statutes, being 4 Sa of

Article 5154a; 42 of Article 5207a; §1 of Article 5154g,

Vernon’s Annotated Civil Statutes.

The agency shop clause (Article I, J 2b) of said collec-

tive bargaining agreement is void and unenforceable.

Accord, Opinion No. WW-1018 of the Texas Attorney Gen-

eral issued on March 14, 1961.

The agency shop clause (Article I, 2b) of said collective

bargaining agreement is severable and its invalidity does

not affect the remaining provisions of the contract.

Plaintiff is entitled to the relief sought, and judgment

should be entered accordingly.

Sicnep AND Enrterep this 12th day of July, 1972.

/s/ Jor J. Fu AER

Chief Judge, United States

District Court

JUDGMENT

(Number and title omitted) (Filed: July 12, 1972)

This action came on to be tried before the Court and the

evidence adduced by the parties having been heard and the

Court having made its findings of fact and conclusions

of law:

It is hereby Orperep, DecLarep and Apsupcep that:

Article I, [2b of the collective bargaining agreement

dated November 1, 1969 between Plaintiff and Defendants,

reading as follows:

2. Union Security

b. For the duration of the Agreement all employees

hired shall, as a condition of employment, become

members of the Union and/or in the alternative

pay the regular union dues and initiation fees

within 31 days from the employment date.“,

is void and unenforceable.

Article I, { 2b is severable from the remainder of the

collective bargaining agreement and the invalidity of said

Article I, 2b does not affect the other provisions in said

contract, all of which remain in full force and effect.

Costs are adjudged against the Defendants.

To which action, order and ruling of the Court Defen-

dants then and there in open court excepted and are al-

lowed their exceptions.

Sicyep and Enrerep this 12th day of July, 1972.

7s, Joe J. FisuHer

Chief Judge, United States

District Court

MOTION FOR NEW TRIAL AND AMENDMENT OF

JUDGMENT AND MOTION FOR AMENDED

AND ADDITIONAL FINDINGS

(Number and title omitted) (Filed: July 24, 1972)

Under Rules 52 and 59, Federal Rules of Civil Procedure,

Defendants, Local No. 8-801, Oil, Chemical & Atomic Work-

ers International Union, AFL-CIO, and Oil, Chemical &

Atomic Workers International Union, AFL-CIO, move for

a new trial and alternatively for amendment of Judgment

and likewise for additional and amended findings as fol-

lows :

Under Rule 52, Defendants request the additional and

amended finding that employees’ work time is spent en-

tirely aboard deep sea tankers and that such vessels are

located on the high seas or in ports other than ports of the

State of Texas approximately 80% to 90% of the time.

II.

Defendants request an amendment of the Judgment

itself, to conform to the findings and conclusions of the

Court and to requested additional findings in this respect:

Nowhere in the findings of fact or conclusions of law does

the Court hold that an agency shop clause may be bargain-

ed for application to any employees in the bargaining unit.

To the contrary, conclusion No. 5 says expressly that the

application and adopted application to all of Plaintiff’s

employees contravenes the Texas statutes. From this it

appears that perhaps a properly tailored contract clause

applicable to some but not all of Plaintiff's employees

would be lawful under the Court’s declaratory judgment.

Neither the findings, the conclusions, nor the Judgment

clarifies to what extent and upon what basis agency shop

provisions may lawfully be applied or how such a clause

mav lawfully be drafted for application to some of Plain-

tiff’s employees.

III.

Because of the deficiencies in the findings and Judgment

above stated, the declaratory judgment has not settled the

controversy. To the contrary, it has induced uncertainty

in the respects stated above.

IV.

In addition, Defendants advise the Court that the declar-

atory judgment has caused disagreements between the par-

ties in the bargaining of a new contract which, of course,

is not before the Court. Because of this consequence of the

declaratory judgment, the same should be set aside. De-

fendants advise the Court that they have proposed a modi-

fied form of agency shop to the Company based upon the

location of work of employees but the Company, so far as

Defendants can tell, does not wish to bargain on this but

adheres to the ruling of this Court as controlling the terms

of the new contract.

Alternatively, the Court's Judgment should be set aside

because it is erroneous in law and in fact in failing to give

effect to the location of work of employees as an appro-

priate, relevant factor which legalizes the clause as to the

employees in question.

Respectfully submitted this 21st Jay of July, 1972.

Dum, Wort & Hai

By: /s/ Curis Dix

Chris Dixie

wave 401, 609 Fannin

St. Building

Houston 2, Texas

713/223-4444

Attorneys for Defendants

ORDER DENYING DEFENDANTS’ MOTION FOR NEW

‘TRIAL, GRANTING AN ADDITIONAL FINDING OF

PACT, AND AMENDING A CONCLUSION OF LAW

(Number and title omitted) (Filed: August 14, 1972)

Defendants’ Motion for a New Trial is hereby in all

things denied.

Defendants’ Motion for Amended Findings is hereby

granted in part, and this Court’s ‘‘ Memorandum with Find-

ings of Fact and Conclusions of Law’’ as signed and en-

tered on July 12, 1972 is amended and supplemented as

follows :

(a) Between Finding of Fact No. 18 and 19 there shall be

addded a new Finding of Fact, numbered 18(a) which shall

state as follows:

‘*Substantially all of the employees’ work time is spent

aboard Plaintiff’s tankers, and such vessels are located

on the high seas or in ports other than ports located

in the State of Texas approximately 80% to 90% of

the time, but at any given point in time one of the

vessels generally is located in Texas or Texas waters.’’

(b) The Conclusion of Law No. 5 shall be amended so as

to add the words any or’’ immediately prior to the words

Wall of Piaintiff’s operations and employees“. As amended

said Conclusion of Law No. 5 will read:

The application and atiempted application of the

agency shop clause (Article 1, J 2b) of the collective

bargaining agreement to any or all of Plaintiff's opera-

tions and employees contravenes the Texas right-to-

work statutes, being § Sa of Article 5154a; 2 of Arti-

ele 5207a; 41 of Article 5154g, Vernon’s Annotated

Civil Statutes.“

Renverep AND Sicyep this 14th day of August, 1972.

/s/ Jon J. Fisner

Judge Presiding

APPELLANT’S DESIGNATION

Date : November 28, 1972

Mr. John Tucker

4th Floor, Beaumont Savings Building

Beaumont, Texas 77701

Re: No. 72-3272—Mobil Oil Corp., et al.

v. OCAW, et al.

Dear Mr. Tucker:

In the above case Appellants transmitted to you today

their Appellants’ Brief.

Under Rule 30, Rules of Appellate Procedure, Appellants

designate the following portions of the Record for printing

in the Appendix:

Original Record

Page No.

Caption 1

Complaint 2-5

Defendants’ Motion to Dismiss 10

Order Denying Defendants’

Motion to Dismiss 16

Defendants’ Answer 17-21

Pretrial Stipulation and Order 90-95

Memorandum With Findings of

Fact and Conclusions of Law 123-129

Judgment 130

Defendants’ Motion for New

Trial and Amendment of

Judgment and Fact Findings 131-132

Order Denying Motion for New

Trial and Making an Addi-

tional Finding and Amending

a Conclusion 145-146

Transcript of Proceedings

(Appendix 147)

Testimony of John Knepper 31, 126, 172, 215-216

Testimony of Donald Sanhueza 219-240-253

Testimony of John Perrio 255-257-263

We have made arrangements with Mr. Jerry Bloxom of

Beaumont, Texas, to print the Appendix and you will,

therefore, please deliver the Record to him when you serve

your brief.

We are sure Mr. Bloxom is familiar with Fifth Circuit

Rules which strictly require the filing of the Appendix

within twenty-one (21) days after Appellee’s brief is filed.

Yours truly,

Dun, Wo & Hatt

By: /s/ Cans Dun

Chris Dixi

CD :eys

ec: Mr. Edward W. Wadsworth, Olerk

U.S. Court of Appeals

Fifth Circuit

Room 408 - 400 Royal Street

New Orleans, Louisiana 70130

Mr. Jerry Bloxom, Court Reporter

Federal Courthouse

Beaumont, Texas 77701

APPELLEE’S DESIGNATION

Date: November 30, 1972

Re: 72-3272—Mobil Oil Corporation, et al v.

OCAW, et al—United States Circuit Court

of Appeals, Fifth Circuit

Mr. Jerry Bloxom, Court Reporter

P.O. Box 3481

Beaumont, Texas 77704

Dear Mr. Bloxom:

We have Mr. Chris Dixie’s letter of November 28, with

respect to instruments to be included in the Appendix.

In behalf of plaintiffs, Mobil Oil Corporation, et al, we

request that you include the following:

(1) Plaintiffs’ objections to defendants’ motion to dis-

miss and memorandum, pages 13 and 14 of the Record;

(2) All of the testimony, both direct, cross, redirect, ete.,

of the witnesses, John Knepper, Donald Sanhueza, and

John Perrio.

Very truly yours,

Oroarn, Bett & Tucker

/s/ Joun G. TuCKER

John G. Tucker

JGT :DFG

ee-Mr. Edward W. Wadsworth, Olerk

U.S. Court of Appeals: Fifth Cireuit

Room 102, 600 Camp Street

U.S. Court of Appeals Courthouse

New Orleans, Louisiana 70130

cee-Mr. Chris Dixie

Dixie, Wolf & Hall

609 Fannin Street Building, Suite 401

Fannin Street at Texas Avenue

Houston, Texas 77002

[1] Ix THe Unrrep Srates Disrricr Court

FoR THE EASTERN Disrricr or Texas

Beaumont Division

Most. On. Corp., Marre

TRANSPORTATION DErr., GuLF-

East OPERATION,

Plaintiffs,

vs. CI Action

Om, CHEMICAL AND ATOM, No. 7418

Workers INTERNATIONAL UNION

AFL- CIO, er u.,

Defendants.

TRIAL PROCEEDINGS

Heard at: Beaumont, Texas

On: June 26 and 27, 1972

[2] APPEARANCES

Hon. James W. Hamsricut

Orgain, Bell & Tucker

Attorneys at Law

Beaumont Savings Building

Beaumont, Texas 77701

For the Plaintiffs

How. Curis Dixie

Attorney at Law

Suite 401, 609 Fannin Street Bldg.

Houston 2, Texas

For the Defendants

Be Ir Rememberep that the following proceedings were

had in the above-styled and numbered civil cause before

the Honorable Joe J. Fisher, United States District Judge,

on June 26 and 27, 1972, to-wit:

[3] INDEX

Witness: Direct Cross Redirect Recross

Opening Remarks

by Mr. Hambright 4

Opening Remarks

by Mr. Dixie 8

Rebuttal Remarks

by Mr. Hambright 20

JoHN KNEPPER 30 126 172

196 212

DonaLp SaNHUEZA 219 240 254 254

JoHN PERRIO 255 257

Closing Argument

by Mr. Hambright 265

Closing Argument

by Mr. Dixie 282

Rebuttal Argument

by Mr. Hambright 316

Court’s Conclusions 327

Court Recessed 335

Reporter’s

Certificate 336

[4] MORNING SESSION

6-26-72

The Court: Please be seated.

Mr. Hambright, we are ready to proceed.

Mr. Hambright: May I make a brief opening statement,

Your Honor?

The Court: Yes. Please go to the lectern.

OPENING REMARKS

BY MR. HAMBRIGHT:

If it please the Court, this case involves a labor contract

between the plaintiff, Mobil Oil Corporation, Marine Trans-

portation Department, Gulf East Coast Operations, and

two Unions, the Local 8-801 of the Oil, Chemical & Atomic

Workers International Union, AFL-CIO, and the Oil,

Chemical & Atomic Workers International Union, AFL-

CIO itself. [5] This labor contract contains, among other

provisions, a section entitled ‘‘ Union Security’’, and in this

section of the contract there appears what is known as an

agency shop clause which requires that employees upon

going to work for the company within thirty-one days must

join the Union or else pay Union dues in lieu thereof and

this appears as Article 1, Section 2-b of the contract. The

Attorney General of the State of Texas has ruled that this

sort of clause is invalid in controvention of the Texas

Right-to-Work statute. There are a number of those stat-

utes. The Taft-Hartley Act of the United States of Amer-

ica provides that it is permissible for states to maintain

their right-to-work law and I think the importance to us

in the case is the wording of the Taft-Hartley Act which

is the Section 14b, it’s quite note [6] worthy, which is wide-

ly known throughout the land in that the Unions have been

attempting to have that revoked for many years and Con-

gress has never seen fit to do so. But what it says can be

capsuled into one sentence, and if the Court would permit

me to quote this, to explain our position, the controlling

sentence in Article 14b says: Nothing in this sub-chapter

shall be construed as authorizing the execution or applica-

tion of agreements requiring membership in a labor or-

ganization as a condition of employment in any state or

territory in which the execution or application is prohibited

by state or territorial law.’’ The statute, therefore, speaks

in the disjunctive, if the labor agreement was either exe-

cuted in the state or received application in the state and

if the state has prohibited that nature of agreement, then

it is [7] void under federal labor law. So in the case at bar

we will show the Court that the labor contract which covers

the employees in this particular bargaining unit does con-

tain this prohibited provision and ought to be declared

invalid and on either one or both grounds we will show

that it was executed within the State of Texas, at least in

part, but we will show independently of that as an alterna-

tive ground for recovery that it received application in

the State of Texas within the meaning of this provision

of law.

So the defendants have raised various defenses, some of

which have been disposed of by this Court already when it

overruled their motion to dismiss this case as not being

properly under the section 301 of the Taft-Hartley Act.

This has been disposed of and other ancillary matters of

that nature. So I believe I have covered [8] the principal

and primary parts of our statement, I would add that it has

been stipulated that the Court does have jurisdiction of the

parties and there is no pending and undisposed of motions.

The Court: All right, do you care to make a statement

at this time, Mr. Dixie?

Mr. Dixie: Yes, sir, Your Honor.

OPENING REMARKS

By Mr. Dixie:

If the Court please, this is a case for declaratory judg-

ment, that is all the relief they ask for. The contract that

they want the Court to rule upon will expire at the end of

July of this year. The evidence will show that the parties

are bargaining now for a new contract.

I feel constrained to call that to the Court’s attention

because we have not had a pre-trial hearing in [9] this case

and the Court might wish to bear this in mind, the early

termination of this contract.

Now the bargaining unit in question concerns members

of the crews of various tankers operated by the Mobil Oil

Corporation between primarily Beaumont, Texas on the

one end and sometimes other Texas ports, and ports along

the New England Coast, as well as other ports on the

Atlantic Coast. If the Court would like to have just a

thumbnail statement of what this case is about, the plain-

tiffs are attempting to extend the application of Texas law

to the Statue of Liberty, and it is the defendant’s position

that this is not a proper interpretation or holding by this

Court. There is no case, state or federal, that I am aware

of or could find which passes upon the exact problem in

this case, but there are several principles [10] of law that I

think apply to this case which caused this Court in the exer-

cise of sound discretion to decline to render the declaratory

judgment and, in the alternative, if you decide to render

the declaratory judgment then the Court should carve with

great care where you propose to apply the Texas law and

where the law of the United States may apply and where

the law of other states may apply. One of the points that

we raise here is the question of the lack of a case or con-

troversy, sufficient to give this Court jurisdiction to pass

upon the particular issues that the plaintiffs tender to the

Court. Now in one respect it may be said that there is a

case or controversy insofar as the plaintiffs claims that

the contract is unlawful as applied to anybody in the har-

gaining unit.

We will have evidence today that one of these tankers

is under charter [11] to the United States Government. It

hasn’t been in Texas for fifty days, it is over in the Pacific

now and it is on its way to Honolulu and Vietnam and it

won’t be back for six months. We don’t think it is very

sensible to apply Texas law to that situation.

Now the important thing I want to get over to the Court

about this discussion is that we don’t have the case of Joe

Blow, a seaman, who doesn’t want to join the Union. We

don’t have any such case. We just have a discussion be-

tween the parties in which the company says the whole

contract is illegal as applied to everybody. The defendant

says that is not true. The contract does have certain legiti-

mate applications, as to what legitimate applications it

has the Court does not have sufficient facts before it or

events to raise a case or controversy in the constitutional

[12] sense. In the alternative, if there is jurisdiction, we

suggest to the Court that in the exercise of sound discretion

this Court should not render iffy or hypothetical opinions

of Joe Blows that may or may not arise in the future.

Another area of discretion for this Court is the question

of your interpretation of Texas law. No Texas case says

that an agency shop clause is illegal and however much

you might be inclined to think that it is possibly legal you

are called upon in this case to make a decision, a first

impression in a federal court on declaratory judgment.

No Texas case has held that it was the intention of the

Texas legislature to give extra-territorial effect to the

Texas law. Now in this connection there are two questions.

The first one is what is the power of the State of Texas to

apply its law to the high [13] seas or to the Port of New

York. That is one question, but an ever more pertinent ques-

tion here is what was the intention of the Texas Legislature

in enacting this and other laws with reference to extra-

territorial application. We have a later case by the Supreme

Court of Texas to which we respectfully refer the Court.

Marmon v. Mustang Aviation, Inc., 430 S.W. 2d, 182, de-

cided in 1968.

The Court: What is the page?

Mr. Dixie: 182, Your Honor. Where the Texas Supreme

Court holds that as a matter of Texas statutory construc-

tion we do not imply a legislative intention to go outside

the boundaries of the State of Texas. To the contrary, the

statute must show on its face a legislative intention to

have extra-territorial application and so on. So when we get

to that rule of law the Court is called [14] upon to decide in

declaratory judgment for the first time whether or not this

Texas statute was intended to have extra-territorial effect.

By the way, the Texas courts have plenty of jurisdiction

to pass upon the extent of this statute and the validity of

this contract. It is one of the exceptions to the pre-emption

doctrine, they can decide the extent of their state law as

applied to contracts in this state. So we say they are in the

wrong state. I mean the wrong court. There is another

question that we interpose here, and we think that the

Court should consider it and that is, there is a question of

federal law. We are supposed in these federal cases to come

up with contract rules and decisions that reflect a policy of

the federal labor laws and this policy we have drawn from

the statutes, the [15] Supreme Court has told us on many

occasions. We have here a federal law that says that an

agency shop is lawful except where prohibited by a state

law. For example, in the State of New York an agency shop

is lawful. I can think of no reason why an agency shop con-

tract is not lawful on the high seas, and this Court is called

upon to select as between federal law and state law. Al-

though in Texas members of the Texas Bar are disposed to

make that agency shop as intensively morally bad. I hope

the Court will bear in mind that a Union, just like the fed-

eral courts, need money to operate and a Union must serve

the non-Union man as well as the Union man, and there is

not anything so terrible, as I see it, about the idea that

everybody ought to have to pay equal, uniform and reason-

able dues for the services that are provided. Of course, Con-

gress has made a de [16] cision that these s.ates will have

the right to prohibit and the minority of the states do. Now

if this defendant were to request this plaintiff to discharge

anybody for failing to join the Union, if that were to hap-

pen and if that individual were to file a charge before the

National Labor Relations Board, the National Labor Rela-

tions Board will pass upon the proper scope and applica-

tion of the interstate situation and to what extent Texas

law applies and to what extent the law of the high seas

applies and to what extent New York law applies. Here

again, since declaratory judgment is a discretionary

remedy, we outline to the Court that in the exercise of

sound discretion the Court might wish to defer the decision

in this case to the possible case that might arise which can

be adjudicated by the Labor Board. But if you decide to rule

on [17] the case, then we have this suggestion to the Court.

With the evidence we will show that these ships travel

between northern ports and Texas ports with some varia-

tion and that about ten percent of the time of employees is

spent in Texas, about ninety percent of the time of the

employees is spent on the high seas or in port in other

states and if the Court feel absolutely like some law must

be applied to everybody in sight, uniformly, then there is

less contact with Texas than there is with the rest of the

world and we suggest that it is not appropriate under all

of the circumstances of this case for the Court to give com-

plete application to Texas law in the face of the fact that

ninety percent of the time is worked by the men in question

outside the State of Texas, and we will also show the Court

how they are subject to the maritime juris [18] diction as

is the employer of—that the contract was—the Union was

certified in New York, the contract was negotiated in New

York, it was executed in New York. The plaintiff is doing

wish thinking when they try to put the execution of the con-

tract in Texas. It is true that an administrative department

is located in Beaumont, that is one factor that pushes against

us in this case, but when you add up the whole case we say

that the totality of the contract of these men predominates

outside the State of Texas and a small minority of the con-

tracts occur within the State of Texas, and under these

ci cumstances if you get to the merits you ought to render

judgment for the defendant. And that, I believe, will out-

line in general what our position is.

The Court: Mr. Dixie, you made a reference that the

Court might refer [19] this case to what court? I didn’t

follow that. Just before you were talking about the propri-

ety of the Texas Court and of this Court’s deciding the

matter because of slight exposure to Texas.

Mr. Dixie: If the Texas courts, the Texas State Court

has jurisdiction to pass upon the extent of an application

of the Texas Right-to-Work Law, that is the first step. If

the case actually arises of a man who doesn’t want to join

the Union voluntarily, that is subject to the jurisdiction of

the Nationa] Labor Relations Board.

The Court: I see. All right, we will make some decision

as we go along. We will proceed.

Mr. Hambright: If it please the Court, in view of the

large number of points he raised, may I add one more sec-

tion to my opening statement?

The Court: Yes, you may.

[20] REBUTTAL REMARKS

By Mr. Hambright:

In the first instance, Mr. Dixie has emphasized what he

refers to as the time in Texas on the basis of ten percent

versus ninety percent, and we would like for the Court

to understand our position in regard to this. I do not think

this is a proper approach to take. He is selecting one indi-

vidual employee and he is stating that the man, referred

to as, I believe, Joe Blow, may be in Texas ten percent of

the time and the other ninety percent of the time he may

be elsewhere. The true inquiry is in terms of all of the men

in the bargaining unit, Your Honor, and the proof will

show that there are about two hundred ninety odd men in

the bargaining unit, and the proof will show that not ten

percent of the time but probably, well, over half the time

there will be some individual in the [21] bargaining unit

present within the State of Texas, and the proof will, for in-

stance, I understand that day before yesterday perhaps,

maybe three days ago, there were two ships in here at once,

in this eight tanker fleet, and when you add in the time, the

total group of employees in the bargaining unit you get

up well over half the time there are people physically pres-

ent here who are subject to the laws of Texas, working on

these vessels. So I think that would be our first point.

Secondly, the proof would show that one hundred percent

of the time, one hundred percent of their employees are

present in the State of Texas who are in the bargaining

unit in this sense, over half the people are residents of the

State of Texas, and the proof will show that aboard these

ships the men work ninety days and they have a thirty day

vacation, so at all times you have [22] a large number of in-

dividuals subject to this labor contract present within the

State of Texas, either working aboard vessels or on vaca-

tion, but in any event, receiving pay, receiving money from

their employer and so the connection with the State of

Texas is not limited merely to the hypothetical case of one

individual employee. But when you look at the total work

force you perceive that there is one hundred percent con-

nection and a constant connection with the State of Texas.

Now on these authorities and law points referred to by

Mr. Dixie the Court has already passed on about fifty per-

cent of that. The other part we do not consider to be of any

controlling importance against the position taken by the

plaintiffs in this case. We feel confident that the authorities

pose no impairment to the relief requested and we can sup-

port this with a brief at the proper time, if such is [23] nec-

essary. But I think the main point Mr. Dixie attempted to

show was this matter of approaching mootness or contract

termination, and I would like to take just one moment of

the Court’s time to give the Court our feelings about it.

We think it is a very serious matter. It is not rendered

any less serious by the fact that this particular labor

contract will expire July 31st. The fact of the matter is

that this contract began on November Ist, 1969. It was

about two months after that, in January of 1970, that ni

clients advised the Union that they had determined that

there was a void section in their labor contract, just one

void section on the agency shop section and in April of

1970, the facts will show that this was delivered, this objec-

tion was delivered in writing to the Union and the company

repudiated this void section in April of 1970, and with a let-

ter to the Union, copy of the [24] notice to the Union, they

gave notice to all employees who might come and obtain

work for this employer that Union membership was volun-

tary and they asked the employees to sign this specifically

stating he acknowledged that Union membership was vol-

untary. There was no response from the Union in April of

1970, when this was done. There was no response the entire

remainder of the year of 1970, and it was 1971 before the

Union took action on this and at that time, in July of 1971,

the contract being then some midway along its term, the

Union sent out a notice telling the employees they must

join the Union and if they did not they would be fired. So

they would have the company terminate these employees

and this was sent to the members of the bargaining unit.

This happened in July of 71. There is some period of time

necessary for the company to obtain information about this

25] letter, and it was not until about August of 1971 that

the company became aware of the Union’s position and

within thirty days, Your Honor, this case was filed in your

court in September of 1971, and this case was filed and

the reason I am developing this is to show the Union’s

position as I take it now is, well, the contract expires in

July, so this Court shouldn’t have it, but I would like to

just in a very brief way to advise the Court what happened

following the filing of this suit in September of 1971.

The Union was served the same day as the suit was filed.

Service was perfected on the International the very next

day it was perfected on the Local. The President of the

Local, Mr. Perrio, I believe, is in the courtroom, and he

was served in his office in Beaumont, Texas. The Inter-

national representative was served the day before, in Port

Arthur, Texas, so there was no delay there. But then the

Union came in and asked for delay of about five weeks be-

fore they were called up to file an answer in this case and

for various reasons, some of the delay was allowed by the

Court, but this carried us along into October. They moved

to dismiss this case and the Court considered that, ruled

against that, and so it was finally November 2nd before the

Union ever answered. November 2nd was the first time

after the Union filed the answer in November, November

2nd, the Court set this case for pre-trial hearing in Decem-

ber of last year. December of 1971, and Mr. Dixie advised

the Court that there had been no pre-trial hearing and I

must respond to that and say there was a pre-trial hear-

ing, but Mr. Dixie, he did not appear at that pre-trial hear-

ing in December of 71. The Court did conduct a pre-trial

hearing, however, and it was obvious that nothing [26] much

could be done and so nothing was done except we filed a

motion for summary judgment. We got that filed in early

February, I believe, and the first thing that happened, the

Union then moved for additional delay of about one month

to consider this motion for summary judgment and filed

an opposition to it. So this has brought it into March and

April, April came around, at which time the Court estab-

lished this hearing today. So in view of the swiftness with

which this plaintiff moved once the controversy became

obvious and the pains it took to obtain prompt service and

the case moved forward with reasonable dispatch, I think

that it comes as an improper request that the Court decline

to act or delay acting or not act because of the approach-

ing mootness. The mootness was not brought about by the

plaintiff and I also question that there will be a true moot-

ness because, as Mr. Dixie, I [27] believe, has indicated,

these parties are engaged now in collective bargaining to-

ward a successor labor contract for another period of years.

Therefore, to some degree, I think an adjudication of this

matter would be in order for that additional reason.

The Court: All right, do you care to make any further

statements, Mr. Dixie?

Mr. Dixie: I don’t like to get into quarrels with counsel

and I will just concern myself with saying that I just don’t

agree with that whole course of litigation that counsel has

outlined to the Court. This defendant got about two weeks

from this Court time to answer the questions by witnesses

that were in New York and Beaumont, and I was in Hous-

ton, and the papers had to go around. You gave me two

weeks. I got two weeks to answer the motions for summary

judgment. I have been ready at all times, [28] there has

been no delay, but the rule of law doesn’t depend on that. If

the contract expires the case becomes moot as a matter of

law. I have a case here where the contract expires during

the pendency of the appeal of the appellate court, the ap-

pellate court remanded it back with instructions to dismiss,

that the matter was moot.

The Court: All right, we are ready to proceed. Mr. Ham-

bright, who do you have next?

Mr. Hambright: May we invoke the rule at this time?

The Court: We will have all the witnesses who know

themselves to be witnesses and present in the courtroom

at this time to please stand. All of you who know yourself

to be witnesses, if there are any questions, the attorneys

will designate who may not be standing that you want to

be used as witnesses.

[29] Mr. Dixie: I only have two witnesses, Your Honor, and

they are two-party defendants, would I be permitted to

keep one for each?

The Court: Yes.

Mr. Dixie: Is there any objection on keeping Mr. Perrio

and Mr. Sanhereza, neither one of them is actually

The Court: Are they all standing who will be witnesses,

Mr. Hambright: Ves.

The Court: You may lower your hands, Genilemen, the

rule has been invoked, which means you have to remain

out of the hearing of the trial. You may remain about the

court building but not in the courtroom. The Marshal will

show you where you may stay.

Mr. Hambright, you may proceed.

Mr. Hambright: Your Honor, we will call John Knepper.

[30] JOHN KNEPPER, having been first duly cautioned

and sworn to testify the truth, the whole truth and

nothing but the truth, testified as follows:

DIRECT EXAMINATION

By Mr. Hambright:

Q. All right, would you state your name, please, sir?

A. My name is John T. Knepper.

Q. Mr. Knepper, where is your residence, please sir.

A. I live at 965 Wisteria Drive, in Beaumont, Texas.

The Court: Do you have any Problems, Mr. Dixie?

(Reporter’s Note: Whereupon an off-the-record discus-

sion was had at this time.) '

Mr. Hambright: If it please the Court, we will stipulate

that Mr. Perrio and Mr. Sanhereza, I think, have been

ruled to be allowed to remain in the courtroom and Mr.

Knepper and [31] Mr. Shanigan could remain in the court-

room.

The Court: All right. .

By Mr. Hambright:

Q. Mr. Knepper, would you tell us what is your occu-

pation, please, sir?

A. Iam manager of Gulf East Coast Operations, a por-

tion of the main transportation department of Mobil Oil

Corporation.

Q. All right, sir, and where is your office?

A. My office is located within the boundaries of the

Mobil Oil Beaumont Refinery.

Q. Is that in Jefferson Count, Texas?

A. Yes, sir.

Q. Mr. Knepper, I believe that this is a building you

occupy in company with your administrative staff and vari-

ous employees, is this correct?

A. Yes, sir, that’s correct.

Q. Would you describe for the Court briefly where this

building is at the refinery and which offices are used by you

and your people?

A. Well, it is known as the Technical Building, [32] it is

one of a block of three buildings just inside the gate facing

the front of the property and our offices are on the second

floor of the Technical Building.

Q. Mr. Knepper, would you tell me the broad functions

of your organization as conducted at this place?

A. Well, our purpose is to husband and operate a fleet

of eight petroleum tankers.

Q. You say a fleet of eight petroleum tankers?

A. Yes.

Q. All right, sir, do these tankers have a Master on each

vessel?

A. Yes, sir.

Q. All right, sir, and to whom does this Master report

as his immediate authority in the organization?

A. They report to the Marine Superintendent, whose

name is Captain L. A. Papich.

Q. Is this Marine Superintendent, Mr. Papich, is he a

resident of Beaumont?

A. Yes, sir, he is.

Q. All right, does he have an office there in the same

place with you?

133] A. Yes, sir, he has an office adjacent to mine.

Q. All right, to whom does Mr. Papich report?

A. He reports to me.

Q. Are you responsible then through Mr. Papich for

the operation of these eight vessels?

A. lam.

Q. Now does Mr. Papich have an additional staff at this

place?

A. Yes, sir, he does.

Q. Would you tell me the names and titles of some of

these people that work for Mr. Papich?

A. Well, there is Mr. Ollie Johansen, who is the Port

Steward, and who assists him by supervising more or less

the food service and housekeeping functions on the ships

through the Chief Steward, and handles provisioning of

the vessels, taking care of services they need in the way of

laundry, general housekeeping matters. There is also Mr.

Carl Carlson, whose title Inventory Supervisor, and his

job is to coordinate the ordering and delivering of spare

parts and various stores that are required by the ships.

There is u Mr. R. F. McLemore, who helps him in [34] the

operational matters as far as layout of cargoes and sched-

uling and matters of that sort.

Q. Do these gentlemen, through Mr. Papich, work for

you?

A. Yes, sir, they don’t report directly to me, they re-

port to him and he reports to me.

Q. But if something goes wrong on these provisionings

or spare parts or housekeeping services, any of the many

things related to the running of these ships are you not the

man that would be the one to hear about it and have to take

action?

A. Yes, sir, I would be.

Q. Now, Mr. Knepper, do you have other people in the

Beaumont office reporting to you other than Mr. Papich?

A. Yes, sir, I do.

Q. Would you tell me about—would you tell me, for

instance, the administrative supervisor? Could you tell me

what that office is and the functioning of it?

A. Well, my administrative supervisor is Mr. Horace

Streeper, and he serves more or less as the office manager,

he has some girls reporting to him that handle communica-

tions and filings, [35] and he is also—does more or less staff

work regarding budgeting and information regarding our

expenditures and general business matters of that sort.

Q. Would you call him the money man?

A. That’s what I often call him, ves.

Q. So that I understand you, budgeting matters and

expenditures in connection with running these ships are

handled in Beaumont, Texas, under your supervision?

A. Yes, sir, that’s correct.

Q. All right, sir, now in this regard, do you have other

people reporting to you beyond those you have named?

A. Yes, sir, two others that report directly to me. The

superintendent of maintenance and repair and also the per-

sonnel supervisor.

Q. Well, now the maintenance and repairs, is this in the

area of engineering?

A. Yes, primarily it has to do with shipyard overhauls

and various repairs in addition to the general supervision

of the engineering department on the ships as far as main-

tenance and repairs and operations are ccncerned.

[36] Q. Who is the head of that phase of your business?

A. Mr. C. J. Dayton.

Q. And I take it he has people that report to him?

A. Yes, he has an assistant and also a clerical person.

Q. And is his operation conducted wholly here in Beau-

mont, Jefferson County, Texas, under your control?

A. Well, yes, sir, it is controlled here, but, of course,

the repairs might be—

Q. They might authorize them?

A. Well, they may be done elsewhere.

Q. Repairs could be made here or elsewhere?

A. That’s correct.

Q. But their office would have to authorize them to pay

for them and determine how much and to what extent, is

this what you mean?

A. That’s correct, that’s the only way it can be done.

Q. All right, sir, now, Mr. Knepper, let’s talk about em-

ployees for a minute. Do you have a personnel supervisor?

[37] A. Yes, sir, I do, Mr. Shanaghan is personnel super-

visor.

Q. Is that—he is present in the courtroom?

A. Yes, sir, that is he.

Q. All right, sir, where, in brief, what are the duties of

the personnel supervisor?

A. Well, he has a group of employees who schedule the

assignments of the people to ships and make arrangements

for them to join ships and schedule them on vacation, be-

cause our employees work ships for a period of time and

then have a period of paid leave, it is necessary to set up

an effective schedule where you have people rolling over, if

you will.

Q. Do I understand, Mr. Knepper, that the assignment

of employees to the vessels is conducted by Mr. Shanaghan

here in Beaumont, and under your supervision?

A. Yes, sir, that is true.

Q. Is this true of all of these vessels?

A. Yes, all are treated the same.

Q. All right, sir, go ahead with the rest of his duties.

A. Well, as I say, these people plan assignments, [38]

also keep all of the personnel records, the records for each

individual employee as to where he has been employed,

what’s the rate of pay and so on. When they make the

assignments they have to send an assignment letter to the

ship’s Master so he will know what rate of pay to pay the

man and what days he has been paid for and which days

he has not and so on.

Q. Okay.

A. Mr. Shanigan also acts as staff to me in employee

relation matters dealing with arbitration, grievances, nego-

tiations, that sort of thing.

Q. All right, sir, you mentioned that he had assistants,

I will ask you what are some of the—does he have a per-

sonnel assistant and who is this individual?

A. Well, he has Mr. Clarence Toby, who is records

supervisor, and reporting to Mr. Toby are three persons

who make assignments, both for officers and members of

this bargaining unit that we are talking about.

Q. Could it be that—would you tell us how many people

report to Mr. Shanigan?

A. There is five, I believe.

139] Q. All right, sir, in addition to your supervision

over your ship Masters and your budgeting and expendi-

tures, your engineering and repair and your personnel, I

will ask you whether or not you have occasion for a few

additional employees to report to you who may work else-

where than in the Beaumont office?

A. Yes, sir, there are. We have two branch offices, one

in New York City, which has three employees, and one in

Paulsberry, New Jersey, which has three employees.

Q. Do these persons at the branch offices report to you?

A. Not directly, the people in New York report to Cap-

tain Sorrels, who is in Paulsberry, as do other people who

are in Paulsberry, Captain Sorrels reports to Captain

Papich.

Q. So the people in the branch office report to—is that

Captain Papich that you identified a moment ago as living

in Beaumont, Texas?

A. Yes, sir.

Q. Where the office is?

A. That’s correct.

Q. Through Captain Papich do you control the fune-

tions of these branch offices?

[40] A. Yes.

Q. Do these people in the branch offices get their pay

checks from your organization, are they part of your

budgeting or budget?

A. They are part of my budget, our payroll is handled

as a service for us through the company’s computer center.

As a matter of efficiency we are billed for their service. I

don’t write out their pay checks, no, sir.

Q. That computer service for most of your employees

is located in Dallas, Texas?

A. Either Dallas, most of them are in Dallas.

Q. Most of your employees in Dallas?

A. No, sir, on the East Coast it would be elsewhere.

Q. All right, sir, now—

A. On the matter of their pay, I administer their pay,

I determine whether they get raises, when they don’t get

raises. I can hire them and discharge them.

Mr. Hambright: May I ask the Court if the witness is

speaking loud enough?

The Court: He is speaking all [41] right.

Mr. Hambright: I am having a little bit of trouble get-

ting some of those answers, hearing him myself.

Q. All right, Mr. Knepper, in connection with this oper-

ation do you have labor contracts in force with the defen-

dants named in this lawsuit, I won’t go through the tech-

nical identification, but it is Local 8-801 of the OCAW and

also the OCA W International?

A. Yes, sir, we do.

Mr. Hambright: Would you mark that, please.

The Clerk: Plaintiff’s Exhibit No. 1.

By Mr. Hambright:

Q. Do you need any of your other papers?

A. I would like to have the affidavits that are in my

briefcase to refresh my memory.

(Reporter’s Note: At this point in the proceeding there

was a short pause.)

By Mr. Hambright:

Q. Is this a true copy of the labor contract that [42] is

the subject matter of the action here, Mr. Knepper?

A. Yes, sir, this is the working copy that is distributed

generally.

Mr. Hambright: May we have that admitted?

Q. What is the date of that contract, Mr. Knepper?

A. I believe it is—

The Court: November Ist, 69.

The Witness: November 1, 1969.

By Mr. Hambright:

Q. And the expiration date?

A. July 31, 1972.

Q. All right, does that labor contract cover the seamen

who work aboard these eight tankers?

A. Yes, sir, the unlicensed seamen.

Q. What other groups of employees does it cover?

A.. Well, the licensed deck and engineering officers and

radio officers are not covered by this agreement.

Q. Have you compiled data showing the number [43] of

employees as of June 23rd, 1972, who are subject to this

contract?

A. Ves, sir, we did do that.

Q. Have you also checked out the residence of these

employees on a per state basis?

A. Yes, sir, we did that.

Q. Those others appear on your company records in the

Beaumont office!

A. Yes, sir.

Q. What is the difference between a residence of an

employee and a shipping port of an employee?

A. Well, a residence is, of course, where he makes his

home. The shipping port is one of three ports that an em-

ployee selects when he comes to work for us, which may be

Providence, Rhode Island, New York City, or Beaumont,

Texas, and the purpose of designating a shipping port is

to have a data point to compute employees’ expenses in

traveling to join a ship. Very briefly, if the man joined the

ship in Philadelphia, and the shipping point is Beaumont,

he would receive X expenses from Beaumont to Philadel-

phia.

Q. All right, sir, did you prepare a typed-up list of these

different states and the number of [44] employees residing

in each?

A. Yes, sir, I did so.

Q. Also designating the shipping port?

A. Yes, sir.

Mr. Hambright: Would you mark that as P-2?

The Clerk: Plaintiff’s Exhibit No. 2.

(Reporter’s Note: Whereupon it was marked as Plain-

tiff’s Exhibit No. 2.)

Mr. Dixie: Counsel, what number is that in the pre-trial

order?

Mr. Hambright: This is—this may not be numbered, Mr.

Dixie, it has not yet been offered. We are going to offer it

when he identifies it. It is an up-to-date showing of the

number of people from each state brought down to July

23rd.

By Mr. Hambright:

Q. Now, Mr. Knepper, what is the total number of em-

ployees in this bargaining unit under the labor contract

identified as Exhibit 1?

[45] A. As of June 23rd, 1972 it was 289.

Q. Of those employees how many are resident citizens

of the State of Texas?

A. 123.

Q. Do you have the information on several other states

and, if so, would you advise the Court?

A. Yes, sir, there is sixty employees residents of New

York, 21 of New Jersey, 16 of Florida, 13 of Louisiana, 10

of Maine, 10 of Rhode Island, and there were-—excuse me,

36 other employees who lived in 16 other states or terri-

tories. No more than six in any of those.

Q. All right, now, under here the designated shipping

ports of this group of employees, how many is designated

at Beaumont, Texas as their shipping port?

A. Onur records show 152 at Beaumont, Texas.

Q. How many in Providence, Rhode Island and New

York?

A. Thirty for Providence, and One hundred and seven

for New York.

Mr. Hambright: We offer this, Your Honor, as the tabu-

lation of the testimony just given.

[46] The Court: All right, it will be accepted.

(Reporter’s Note: Whereupon it was received in evi-

dence.)

Mr. Dixie: I call the Court’s attention to the fact that

we didn’t have the benefit of this in the pre-trial order.

The Court: All right, you may proceed.

By Mr. Hambright:

Q. Now, Mr. Knepper, have you checked into your ree-

ords to see what the total payroll was during the year of

19717

A. Yes, sir, I have done so.

Mr. Hambright: Mark this, please.

The Clerk: Plaintiff’s Exhibit No. 3.

(Reporter’s Note: Whereupon it was marked for identi-

fication as Plaintiff’s Exhibit No. 3.)

By Mr. Hambright:

Q. If it please the Court, to avoid other objections as

to the appearance of this information [47] on the pre-trial

order, I would propose to prove these items by this witness

before offering the exhibit as to illustrate his testimony,

Your Honor.

The Court: All right, you may do so.

By Mr. Hambright :

Q. Mr. Knepper, the manner of paying these employees,

would you first tell us without using figures just briefly

how are these people paid for their work?

A. Well, when the seaman is assigned to a ship the

Captain is furnished certain payroll data so he can run a

payroll on his crew while they are aboard.

Q. Excuse me, where does the Captain get this data?

A. From our office in Beaumont.

Q. All right, sir.

A. It is generated there.

Q. All right.

A. He then runs a payroll on the ship and periodically

pays bis people in cash and employees who wish to can re-

quest what we call a draw check, [48] which means that the

Captain will send a request to the payroll office in Dallas,

which performs our payroll record-keeping, and some dis-

bursements for it, and they will send a check to his bank

or his wife or his dependent, whoever he may designate.

When he leaves the ship he is entitled to a vacation and

also in almost every case I would say in every case prob-

ably he is entitled to vacation.

“ Court: Keep your voice up, you are letting it trail

The Witness: Yes, sir. He is entitled to vacation. His

vacation check is prepared in our Beaumont office. It is a

check that is drawn on the First Security National Bank

of Beaumont, and transmitted to the man. After his vaca-

tion he comes back to work and there may be a brief period

of time when he is due pay for just standing by waiting to

join the ship. If so, why he would receive a check either

from Beaumont, or perhaps from the New York office, if

he happens to [49] be a man that ships out of the Eastern

ports. This is basically the way they receive their pay.

Q. All right, sir, now looking at those various items, in

1971, about how much money was paid in regard to vaca-

tion, I believe you testified this would be checks drawn on

the First Security Bank in Beaumont, Texas?

The Court: Just a minute.

Mr. Dixie: Your Honor, I want to complain a little bit,

we are fixing to validate a summary exhibit that I haven’t

seen before. I am aware that I have a perfect objection that

the books and records are the best evidence if I haven’t

been given an opportunity to see the summary exhibit. I

don’t want to slow this trial down. I was wondering if I

can at least have the exhibit in my hand while this inter-

rogation is going on.

Mr. Hambright: We have no objection.

The Court: All right, if you will [50] furnish it to counsel,

please, and you may reserve your objection until later, Mr.

Dixie, if you want a little time to study it.

Mr. Dixie: I thank the Court.

By Mr. Hambright :

Q. What are the totals on the vacation checks, Mr.

Knepper?

A. Well, in round numbers, $1,365,000.00.

Q. All right, now is this for the thirty days when a man

is off the vessel after having worked ninety days?

A. Yes, sir, basically.

Q. Is this what you mean when you say vacation?

A. Yes, although I would point out to you that this is

for the entire work force of the fleet, this includes the offi-

cers as well.

Q. lunderstand.

A. Yes.

Q. And this is handled through your office here in Beau-

mont, Texas?

A. That’s correct.

Q. All right, sir, now on the cash supplied to [51] the

Masters aboard ship for disbursement to the employees,

what was the figure on that in 1971?

A. Again in round numbers, $1,994,000.00.

Q. Where did that cash money come from, Mr, Knep-

per?

A. Well—

Q. Here in Beaumont? Where do you get physical pos-

session of the currency?

A. Delivered to the ships by armed guards, who take

the money from the First Security National Band and de-

liver to the Captains of the ships.

Q. All right, sir, now I believe you testified that the

Captain keeps that aboard the vessel and pays the men

aboard ship?

A. That’s correct.

Q. All right, how about these allotments that I—I un-

derstand that it is a device where a man designates so

much of his pay to be mailed to a wife or a dependent or

so forth, how much money was handled through allotments

during the year?

A. Yes, well, allotments are drawn checks on this piece

of paper we had a lot of—some will draw checks, they

totaled $1,117,000.00.

[52] C. Now where did that money come from? What

office originated those checks?

A. Our Dallas payroll office drew those.

Q. Dallas, Texas?

A. Yes, sir.

Q. All right, sir, now was this done pursuant to ar-

rangements from your office here in Beaumont?

A. Yes, sir, it is services for which we pay a service fee.

Q. All right, sir, now how much federal income tax and

social security deductions were made by the Dallas payroll

office during 19717

A. $1,431,00.00.

Q. Now, Mr. Knepper, are these figures to which you

have just testified the same as were included in your affi-

davit attached to the motion for summary judgment fur-

nished to Mr. Dixie last February or March?

A. Les, sir, they are essentially the same except for

some rounding and the fact that we combined the income

tax and the social security figures first.

Q. What is the grand total of those amounts of [53]

money that were handled through your office or through the

Dallas office under your direction for 1971?

A. $5,907,000.00.

Q. All right, sir, now turning your attention to the New

York office for a moment. I believe you testified that cer-

tain payments were handled out of the New York office. I

think you said they were for stand-by time and I will ask

you also if your claims section for maintenance and cure

and disability, sickness, things of that nature, is that han-

dled out of the New York office?

A. Yes, sir, in the marine department claims section

there are claim adjusters who perform the service to us,

they handle the sickness and accident, injury claims. They

do draw vouchers and pay money to our employees as a

service for us.

Q. Well, with respect to your organization here in Beau-

mont, is this New York claim handling on sickness and

maintenance and cure, is this in the nature of or similar to

what an insurance company might do for Texas employers?

[54] A. Yes, sir, I believe so.

Q. What is the total amount of money in 1971 that was

handled by the New York office for all causes in respect to

these employees?

A. My records show $69,700.00 is the sum.

Q. All right

The Court: Just a minute, Mr. Hambright, I think we

will recess here. We will recess the trial that is in progress

at this time until 1:00, or 1:15. We will say 1:15. We will

resume the trial at that time. The witness and the parties

and the attorneys may be excused until that time.

Mr. Hambright: Thank you.

The Court: The Marshal will advise the witnesses out-

side, if there are some.

(Reporter’s Note: Whereupon the Noon recess was taken

and Court resumed. )

[55] AFTERNOON SESSION

The Court: Please be seated.

Have you seen Mr. Dixie?

The Marshal: No, Your Honor, I haven’t.

The Court: You might take a look out there, he may be

around. Have you seen him, Mr. Hambright?

Mr. Hambright: No, sir, Your Honor.

(Reporter’s Note: At this point there was a short pause

in the proceedings.)

Mr. Dixie: I am sorry, Your Honor, I got lost on the

freeway. I made a wrong turn. Please excuse me.

The Court: That is all right. You may proceed.

By Mr. Hambright :

Q. Just prior to the Noon recess, Mr. Knepper, we were

talking about some financial disburse [56] ments, I believe,

and we have a document marked Plaintiff’s Exhibit 3, which

you have identified as being a calculation prepared under

your direction, and for the purposes of my questions. I

will again ask you what is the total dollar figure, do you

have a copy of that before you, sir?

A. Yes, sir.

Q. What is the total dollar figure which was attributed

to Texas?

A. $5,907,000.00.

Q. And what is the total dollar figure that we have

attributed to New York through the main office?

A. $69,700.00.

Q. Have you made a calculation as to the ratio and per-

centage between those two figures and, if so, what did you

find?

A. The ratio between New York expenditures and the

Beaumont expenditures is approximately one to ninety-

nine.

— — oe

. So that the New York figure would be somewhere

around one percent of the total?

A. Yes, sir.

1571 Q. I will ask you, Mr. Knepper, is this in general

typical of the way it has been going thus far in 1972?

A. Yes, sir, as far as I know.

Q. Is it fairly representative of the way it wen“ in 1970

and i969?

A. Yes, sir, I believe these are typical figures for this

operation.

Mr. Hambright: We do offer then what has been marked

as Plaintiff’s Exhibit 3 to illustrate this testimony.

The Court: All right, you may make the offer.

(Reporter’s Note: Whereupon Plaintiff's Exhibit No. 3

was received in evidence.)

By Mr. Hambright: Would you mark this, please?

The Clerk: That will be Plaintiff’s Exhibit 4.

(Reporter’s Note: Whereupon it was marked Plaintiff's

Exhibit 4 for identification.)

By Mr. Hambright:

Q. Mr. Knepper, I show you what has been marked [58]

as Plaintiff’s Exhibit 4, and I will ask you to identify that,

please, sir.

A. This is a booklet entitled, Welcome Aboard’’, which

we produced to give some orientation to new employees.

That gives them some information that is useful to their

dealings with us.

Q. Is this handed out to all new employees?

A. Yes, sir, it is.

Q. Is it published under your direction and control?

A. Yes, sir, it was written and published in Beaumont.

Q. Can you tell us where this is printed up?

A. I believe this particular booklet was printed for us

in Dallas. It was written in Beaumont.

Written in Beaumont and printed in Dallas?

Yes, sir.

You are referring to Dallas, Texas?

Yes, sir.

S FOr

Would you please refer to page 11 of this publication

entitled ‘‘ Welcome Aboard’’?

A. Yes, sir.

[59] . What does it say on page 11, with regard to new

employees?

A. Well, page 11 tells them how they will get their mail.

Q. What does it say?

A. It says: ‘‘Mail—mail is forwarded to each port in

advance of arrival of the ship. Your mailing address is

John Doe, S/S and the name of the ship, Mobi] Oil Cor-

poration, Gulf-East Coast Operations, Post Office Box 3444,

Beaumont, Texas 77704.“

Mr. Hambright: We offer this as Plaintiff’s Exhibit 4.

The Court: It wiil be accepted in evidence.

(Reporter’s Note: Whereupon Plaintiff’s Exhibit No. 4

was received in evidence.)

By Mr. Hambright:

Q. Is there any other kind of pamphlet similar to ‘‘ Wel-

come Aboard’’ that is put out in one of your branch offices

or is this the only one you use?

A. No, sir, this is the only one.

160] Mr. Hambright: Would you mark that as P-5, please?

The Clerk : Plaintiff’s Exhibit No. 5.

(Reporter’s Note: Whereupon it was marked Plaintiff’s

Exhibit No. 5 for identification. )

By Mr. Hambright:

Q. Mr. Knepper, I show you what is marked Plaintiff’s

Exhibit 5, and would you please identify that for the Court?

A. This is a copy of a paper we call the ‘‘Mobil Mari-

ner’’. The ‘‘Mobil Mariner’’, which is like an employee’s

newspaper for the people in the fleet. This particular one

is No. 61, July, 1971.

Q. All right, sir, would you exhibit that so that the

Cour might see the face of it for the purposes of my ques-

tion, somehow, maybe I can give you—will you tell me

where this is published?

A. Well, this is written and published in Beaumont,

Texas.

Q. Under your supervision and direction?

[61] A. Yes, sir, that is correct.

Q. Does this go to all employees in the bargaining unit,

covered by the labor contract that is the subject matter of

this lawsuit?

A. Yes, sir, it does.

Mr. Hambright: We offer that, Plaintiff’s Exhibit 5.

The Court: All right, it will be received.

(Reporter’s Note: Whereupon Plaintiff’s Exhibit No. 5

was received in evidence. )

By Mr. Dixie: What was the particular part of that that

you called his attention to?

Mr. Hambright: I asked the witness to identify it and

the place of publication and on page 1, I called his atten-

tion to.

Mr. Dixie: Thank you.

By Mr. Hambright:

Q. Would you clarify that, please? State where that is

published and what it says at the top of the front page.

[62] A. I am not sure

Q. On page I, at the top, does it show—

A. Published for employees, Gulf-East Coast Opera-

tione and under that it says Mobil Oil Corporation, Post

Office Box 3444, Beaumont, Texas, 77704. Does that

Q. Yes.

Now, Mr. Knepper, speaking about your employees for

a moment, I believe you testified that all personnel proce-

dures are conducted in your office in Beaumont, Texas, by

yourself and various assistants, is this correct?

A. Yes.

Q. Where are your employees hired?

A. Well, in Beaumont, Texas, and also in our New York

office.

Q. If someone was hired in Beaumont, Texas, would the

matter be exclusively within your control?

A. Yes, sir.

Q. Would you make the decision whether this man was

hired or refused employment?

A. Well, I would or the subordinate might be [63] dele-

gated.

Q. Mr. Shanigan is your personnel director that you

identified this morning. Is he a resident of Beaumont,

Texas?

A. He is, yes.

Q. Now if someone were hired in the New York office

would that come within your jurisdiction in any way, and,

if 0, how?

A. If he had been hired from the New York office he

would be hired by one of the many people in our branch

office there who reports to Captain Papich and Captain

Papich reports to me.

Q. Captain Papich being the Beaumont resident who

works in your office?

A. Yes, sir.

Q. And you say he would be hired by the personnel in

the branch office in New York, is that one of these individ-

uals you identified this morning that works for you in New

York?

A. That is correct, yes, sir.

Q. And you set their own pay scale and so forth?

A. That is correct, yes.

Q. All right, sir, now looking back over the [64] period

of time let’s say since the inception of the present labor con-

tract on November Ist, 1969, and stretching from that time

down to today, would it be fair to say that you have em-

ployed as new employees or re-employed, employees, as

many as two or three hundred people?

A. This is over the entire life of this agreement?

Q. Yes.

A. Yes, sir, that is a fair statement.

Q. All right, sir, would 300 come closer than 200?

A. I would think it would, yes.

Q. All right, sir, out of this group would you give the

Court your best estimate as to the number hired in Beau-

mont directly and those hired in New York by your branch

man who reports to you?

A. Well, it is a very difficult problem, probably sixty

percent in Beaumont, and forty percent in New York.

Q. All right, sir, now those who are hired in New York,

are they or not in many cases reemployees of persons who

formerly worked for your company?

[65] A. Ves, sir, that happens very frequently in our

business.

Q. Is it a fact that the New York applicant who seeks

employment at your branch office have to obtain clearance

from Beaumont? Do you approve the application before

they are hired?

A. Yes, the applications are approved and also before

the offer of employment is made, determination is made in

Beaumont whether or not any vacancy we have is more

conveniently filled from New York or from Beaumont.

Q. All right, sir, now over this same period of time,

November of 69 to date, can you give me an estimate of

how many employees are subject to the labor contract in

question who has been terminated for just cause?

A. I think I have a notice, but I need to take a look at it.

(Reporter’s Note: Whereupon there was a short pause.)

A. Yes, I believe 79 employees have been terminated for

cause during that period.

Q. 797

A. Yes, sir.

[66] Q. Would you please tell the Court where the deci-

sion was made to terminate each one of these 79 people?

Who made the decision and how it was effectuated?

A. Well, the final decision is made in Beaumont. Maybe

a case or two where a Captain would discharge someone on

ship and then we would review the case and the final de-

cision is made in Beaumont, and on some occasions the ini-

Q. Who would be the likely participant in such a de-

cision in Beaumont?

A. Well, we have a personnel committee who reviews

the case and then come to me with their recommendations

and I make the final decision yea or nay.

Q. Does that personnel committee consist of employees

who reside in Beaumont, and work in the office here?

A. Yes, sir, they all are people that I mentioned this

morning, as reporting to me.

Q. I don’t know if you put a total on that, the number

of people that report to you here [67] locally.

A. No, I didn’t.

Q. Would you enlighten me on that, Mr. Knepper?

A. There is four people that report directly to me.

Q. Lam speaking total working force in your office here,

that’s in your engineering, budgeting, personnel, all of

those different groups.

A. There are eighteen such people.

Q. All right, sir, now on these decisions to discharge a

person, are those decisions exclusively within your control

here in Beaumont, Texas?

A. Yes, sir.

Mr. Hambright: If it please the Court, I am laboring

under my first bifocal glasses, which I got last Friday. It is

clogging me down on my finding my way through some of

these documents.

The Court: We will be as understanding as necessary.

By Mr. Hambright :

Q. Now, Mr. Knepper, in regard to your testimony that

some monetary expenditures are made for [68] sickness and

disability, maintenance and cure, things of this nature,

which I believe you testified was handled by a claims divi-

sion in New York City, is this correct?

A. Yes, sir, that is correct.

Q. Would you tell me, and I think you said that was a

minute part of the overall expenditure, but directing your-

self to that, did you or not have an occasion within the last

few months to have a man by the name of Parsons, who did

have such a claim?

A. Yes, sir, that’s correct.

Q. Where is Mr. Parsons’ residence, what is his home

address, if you know?

A. I don’t know the city, he lives in Florida though.

Q. All right, sir, did he become disabled or alleged that

he was disabled within the last say year or so?

A. Yes, sir, he had a cardiac condition.

Q. All right, sir, excuse me, did you add something to

that?

A. No.

Q. Did he receive certain payments from this [69] claim

division in New York?

A. Yes, he did.

Q. Did your office in Beaumont, Texas have any part in

the determination of how much he got and this sort of

thing?

A. Yes, part of it, you know, the basic schedule of ben-

efits is included in the labor agreement and part of it is

statutory.

Q. Did you or not have an occasion to issue any instruc-

tions to the New York branch as to the manner of handling

payment with Mr. Parsons?

A. Yes, sir, they can only administer a claim if we as-

signed—don’t assign a man to them for a claim, the claims

administration won’t do anything.

Q. Is your assignment of this matter to New York, is

that similar to what we sometimes refer to as employing a

claim adjuster?

A. Yes, sir, I believe that is a good one.

Q. Did Mr. Parsons, therefore, receive any payments

by the company letters from New York?

A. Yes, he did.

Q. How did Mr. Parsons get along with his [70] dis-

ability?

A. Well, it was disability that really meant that he had

to find a different kind of work. He couldn't do—he couldn’t

exert himself any longer and I would say he was very un-

happy about losing his—

Q. Ultimately was it necessary to take any action in

this case?

A. Well, we had to terminate his employment because

he was unable to be a seaman any longer.

Mr. Hambright: Would you mark this, please?

The Clerk: Plaintiff’s Exhibit No. 6.

(Reporter’s Note: Whereupon it was marked Plaintiff's

Exhibit No. 6 for identification. )

By Mr. Hambright:

Q. Mr. Knepper, I show you what has been marked as

Plaintiff’s Exhibit 6. Would you please identify that for the

Court?

A. Yes, sir, this is a letter that we wrote to Mr. Par-

sons, which we had to explain to him [71] that because of

medical opinions we had received we couldn’t continue his

employment any longer.

Q. I notice the letter is dated February 25th, 1972, and

it is signed by you.

A. That is correct.

Q. Is this part of the ordinary sequence on matters of

this nature?

A. Yes, sir, this is our regular practice.

Q. Are you the man that made the ultimate decision or

not to fire him?

A. Well, lam. l

Q. Or to terminate him for disability?

A. lam.

Q. I notice your letter refers to an examination by a Dr.

Stewart. Would you please identify Dr. Stewart?

A. Dr. Stewart is a physician employed by Mobil Oil

Corporation, whose clinic is in the Beaumont Refinery.

Q. Is he a native or at least a resident citizen of Jef-

ferson County, Texas?

A. Yes, sir.

Q. Dr. Stewart?

A. Yes.

[72] Q. All right, I notice your letter refers to a Dr.

Lombardo. Would you please identify Dr. Lombardo?

A. Dr. Lombardo is a heart specialist, also a resident of

Beaumont.

Q. He is likewise a resident of Beaumont?

A. Yes, sir.

Q. Did he examine this man at someone’s request,

your’s or the man’s?

A. Yes, sir, at our request actually.

Mr. Hambright: May we offer that as Plaintiff’s Exhibit

The Court: All right.

(Reporter’s Note: Whereupon Plaintiff’s Exhibit 6 was

received in evidence. )

By Mr. Hambright :

Q. Mr. Knepper, do you recall an occasion back in Sep-

tember of 1969, when your organization here in Beaumont

and the Union representing the employees had a disagree-

ment?

A. Well, I venture to say we may have had one then, I

don’t know what you are alluding to.

[73] C. With specific reference to an alleged complaint

by the Union in regard to vacation benefits which resulted

in an NLRB charged filed by the Union. Do you recall that

incident?

A. A Labor Board judge?

Mr. Hambright : Would you mark this, please?

The Clerk: Plaintiff’s Exhibit No. 7.

A. Yes, sir, I recall this incident now.

Q. All right, sir, the document has been marked for

identification as Plaintiff’s Exhibit 7. It is dated Septem-

ber 30, 1969. Did you receive that from the Houston, Texas

Regional Office of the National Labor Relations Board?

A. Yes, sir, this was transmitted to us.

Q. I believe your name is on there in Paragraph (d) as

—is that your name?

A. Yes, John Knepper, Manager.

Q. And the address of the employer is stated on there.

What address do they give for the employer?

A. Our mailing address, P.O. Box 3444, Beau [74] mont,

Texas.

Q. And who signed this charge with the Labor Board,

down under the declaration?

A. James R. Watson, Jr.

Q. Do you know of your own knowledge that he is an

attorney in Houston, Texas? Do you know that, Mr.

Knepper?

A. I believe that is the case, yes, sir.

Q. Do you know of your own knowledge that he was

then a partner or at least an associate of Mr. Chris Dixie?

A. I believé that could be true.

Q. Did you get a letter from the Labor Board trans-

mitting this charge and telling you to defend yourself? Did

that letter show a copy went to Mr. Dixie’s law firm in

Houston ?

A. I believe it did, yes, sir.

Mr. Hambright: We offer this Labor Board charge as

P-7, Your Honor.

The Court: All right.

(Reporter’s Note: Whereupon Plaintiff’s Exhibit No. 7

was received [75] in evidence.)

By Mr. Hambright:

Q. Now, Mr. Knepper, following the execution of the

labor contract marked Plaintiff’s Exhibit 1, or at least its

effective date on November Ist, 1969, did you thereafter

come into information that one section of that contract

was in question?

A. Yes, sir, I did.

Q. What was the information that you received!

A. Well, I was advised that a review of Mobil counsel

had reason to believe that that clause was illegal in the

State of Texas, and that as the Texas employer we would

be violating Texas law if we continued with it.

Q. All right, sir, now in that regard could we just take

a copy of Plaintiff’s 1 and draw a box around the provi-

sion in there that they said was—lI think it’s page 2—the

section is the second on 2b. Would you just draw a box

around that, please?

A. (Witness indicating).

Q. All right, now, Mr. Knepper, in connection [76] with

this, did you receive a copy of the Texas Attorney General’s

opinion No. WW1018?

A. Yes, sir, I did.

Mr. Hambright: Mark this, please.

The Clerk: Plaintiff’s Exhibit No. 8.

Mr. Hambright: Thank you, ma’am.

(Reporter’s Note: Whereupon it was marked Plaintiff’s

Exhibit No. 8 for identification. )

By Mr. Hambright:

Q. Did you receive a copy of this opinion?

A. Yes, sir.

Q. Now, Mr. Knepper, about what month did you first

learn of this problem?

A. Well, it was late in December or early in January of

1969, or early January of 1970.

Q. Did you take any action with the Union represen-

tatives?

A. Yes, sir, we did meet with the local Union officers

and—

Q. Did you tell them what your position was?

A. Yes, sir, we did.

Q. Did you tell them that you were or were not [77]

going to enforce this clause, what did you tell them?

A. Well, we told them that we didn’t think that either

they or we should, they or we should be in position of doing

something that’s illegal, that we had, as far as we could

see, no choice but to discontinue the enforcing of that par-

ticular section of the contract. .

. Do you recall the names of the Union representatives

who you met with in January of 1970 and gave this word to?

A. I believe this was the International representative

named Ed Steiger. Mr. Perrio, Mr. Sanhueza.

Q. All right, sir.

A. There were two other Union officers but I am not a

little—I am a little unclear at the moment but as to whether

Mr. Maston was there or not.

Q. Did the Union make any immediate reply?

A. Well, of course, they were unwilling to abandon the

charges and they wanted to really look into it to see what,

I suppose, their people say [78] about the legality of it and

so forth.

Q. Did they ever get back to you in writing or officially

about that prior to April of 1970?

A. No, although we discussed it informally from time

to time.

Q. In April of 1970 did you or not deem it necessary

to take further action?

A. Yes, sir, we wrote them in a letter in April of 70,

saying we just could no longer honor that particular clause.

Q. And did you at this time, when you wrote this letter,

did you enclose anything with it?

A. Yes, sir, we enclosed a form letter which we would

inform them that we would hav. handed to each new em-

ployee and ask them to sign it as evidence he had received

it. That form letter said that the membership, at ihe bottom

there, was voluntary, but they would continue to be mem-

bers.

Mr. Hambright: Mark this, please.

The Clerk: This is Plaintiff’s No. 9.

(Reporter’s Note: Whereupon it was marked Plaintiff’s

No. 9 for identi [79] fication.)

By Mr. Hambright:

Q. This is marked Plaintiff’s 9, is that a true copy of

what you sent to the Union on April 23rd, 19707

A. Yes, sir.

Mr. Hambright: I call the Court’s attention to a state-

ment in the letter of April 23rd, 1970, to the Union advis-

ing the Union that Article 1, Section 2b of the collective

bargaining agreement is invalid under Texas law and the

company’s statement that it believed that neither itself nor

the Union should put itself in the position of enforcing

provisions contrary to law.

Q. Is this the substantial import of that letter?

A. Yes, sir.

Q. Now the certificate that you have on there, is this

what you present to employees and ask them to sign?

A. Yes, we do.

[80] Q. Would you—it is very short, would you just read

that, Mr. Knepper, and keep your voice up at the end of

each sentence there?

A. Ves, sir. It says: ‘‘ Unlicensed employees in the Gulf-

East Coast fleet are represented for collective bargaining

purposes by SVTMA Local 8-801, OCAWIU. As an un-

licensed employee, the Collective Bargaining Agreement

between the Union and the Company determines your

wages, hours, and other conditions of employment. In order

that you may have a voice in these matters you may wish

to become a member of this Union. Such a membership is

voluntary on your part and the Company neither encour-

ages nor discourages membership. Under the current agree-

ment if you become a member of the Union, you must con-

tinue to be a member and/or pay the regular Union dues

during the term of the Agreement. I acknowledge and

understand the foregoing.’’ And there is a place for signa-

ture and the date.

Q. All right, sir, now the last sentence tells them, as I

read it, that membership was voluntary, [81] but if they do

become a member then they have to stay a member or else

pay the dues?

A. Yes, that’s correct.

Q. Is this your interpretation of that?

A. Yes, sir.

Q. Now looking at your—

Mr. Dixie: May I clarify a point here for the court? In

this Article 2 the witness drew a blovk around Paragraph

(b) and it is my understanding that Paragraph (b) is the

one that is in issue before this Court, is that right, and not

the rest of Article 2?

Mr. Hambright: I am not so sure of your terminology

of what may be in issue, but I will say that the one with

the box around it is the invalid portion which we seek to

have declared invalid in this case. Other parts of the labor

contract could become an issue in the case for various

reasons.

Mr. Dixie: Then you are not trying to declare invalid

Paragraph (a) or (c)?

[82] Mr. Hambright: May I have one moment?

The Court: All right.

Mr. Hambright: The portion of Article 1, Section 2, with

the box drawn around it is Paragraph (b), little (b). This

is what we have asked the Court to declare void and un-

enforceable. It is an agency shop clause and may we stipu-

late that it is a typical shop clause before I finish the

response— :

Mr. Dixie: I think we can call it that, Your Honor. I

can’t answer counsel, you will say that you are not attack-

ing (a) or (c)?

Mr. Hambright: I will continue with the statement of

admission if that is all right.

The agency shop clause of said paragraph (b) is what

we are attacking. Sub-paragraph (a) is what we term as

maintenance of membership clause. It ties in with the letter

Mr. Knepper [83] wrote which says if they once become a

member of the Union, which is voluntary under the com-

pany’s position, but once they become a member they will

continue to be a member or pay dues. The company is not

seeking to set aside that in this litigation. Paragraph (a) is

not under attack in the pleadings on file in this case.

I have personal reservations about that, but the Court

may, on its own motion, decide that Paragraph (a) should

be adjusted, but this has not been a question.

Paragraph (c), the escape clause, likewise is not under

attack.

May I continue now with Mr. Knepper?

The Court: Yes.

By Mr. Hambright:

Q. Now, Mr. Knepper, have you used this certificate in

connection with hiring each new employee since the date

you notified the Union you were going to do so in April

of 19707

[84] A. Yes, sir, the people who actually have the per-

sonal contact with the new employees have been instructed

to do so under my knowledge and have not failed to do so.

Q. All right, sir, now to clarify one thing about your

letter and terminology, your letter is addressed to the

Sacony-Vacuum Tankermen’s Association Local 8-801

OCAW IU. The Union has changed its name since that

date, has it not?

A. Yes, that’s right.

Mr. Hambright: May we stipulate, Mr. Dixie, that the

addressee of that letterhead is in fact the Local Union,

which is the defendant in this case?

Mr. Dixie: Yes.

By Mr. Hambright :

Q. Now, Mr. Knepper, after you inaugurated this pro-

cedure in April of 1970, of obtaining this acknowledgment

from the employees as to the voluntary nature of Union

membership, did you receive thereafter for the rest of the

vear 1970 receiv? any dispute or controversy from the

Union about the letter?

[85]A. Well, they complained.

Q. The remainder—excuse me.

A. They complained about it, yes, they didn’t like it,

they would have liked us not to use it or something dif-

ferent.

Q. Was this in the nature of an oral or verbal com-

plaint or did they write you?

A. They wrote and asked for a meeting, which we dis-

cussed it and we discussed it at other meetings.

Q. All right, sir, did they take any final action the rest

of 1970 and on down until July of 1971?

A. No, they didn’t really take any action on the matter.

Q. During that period of time, which I guess would be

from April of 70 to April of 71, plus another two or

three months, did you continue to use the voluntary cer-

tificate ?

A. Yes, sir.

Q. All right, sir, what happened in July and August of

1971?

A. Well, I am not absolutely sure of the date, but some

time late in August, either late in [8%] July or early in

August, we received a copy of a news letter that the Union

had put out to their people, to their membership.

The Clerk : Plaintiff’s 10.

(Reporter’s Note: Whereupon it was marked as Plain-

tiff’s Exhibit No. 10 for identification.)

By Mr. Hambright:

Q. Plaintiff's 10 was marked, Mr. Knepper, is that the

news letter?

A. Yes.

Q. Is it in the ordinary course of life between you and

your company and the Union, is this, to your knowledge,

circulated among the employees in the bargaining unit?

A. Yes, this is, you know, fairly common form of com-

munication, from my observation. The Union does write to

the membership under this sort of format.

Q. Would this be an expression of news items from the

defendant Unions in this case to their members?

A. Yes, the method of communication.

Q. Will you please read for us the second para- [87]

graph in that letter?

A. The second paragraph states: ‘‘We wish to resolve

at the onset the question regarding Union membership.

Our contract is clear on this point and should be read by

all members. Section 2 of the contract provides in effect

that persons who are members when the contract was

signed or any new employees must remain or become mem-

bers of the Union or pay dues to the Union, and then under-

lined it says: This is a condition of employment“.

Q. All right, sir, I am going to offer that in a moment,

so we don’t lose our place would you draw a box around

that paragraph that I have asked you to read?

A. (Witness indicating.)

Q. Now the second line up from the bottom of that

document, Mr. Knepper, I believe you stated they must

remain or become a member, is that correct?

A. Yes, it says any new employees must remain or

become members of the Union.

Q. Will you underline the words there?

A. (Witness indicating.)

Q. Now what was the second paragraph following [88]

that?

A. The next paragraph says: As far as this Union is

concerned any employee in our division of Mobil will either

join our Union or pay dues to the Union. We intend to

exercise our right to have the employment of any unlicensed

seaman terminated who does not join or pay dues to the

Union. We hope this answers all questions regarding this

point.

Q. Would you draw a box around that and then we

will etop drawing?

A. (Witness indicating.)

Q. Now, Mr. Knepper, I take it the rest of that news

letter pertains to non- relevant matters not connected with

this lawsuit, is that correct?

A. Yes, sir, it deals with other matters of interest to

the Union and their membership.

Q. All right, sir, now I believe you testified you weren’t

positive as to the exact date that you got that, but it could

have been around the early part of August, 1971, is this

correct?

A. Yes, sir.

Q. Do you know of your own knowledge that thereafter

this lawsuit was instituted in Septem [89] ber of 1971?

A. Ido, yes.

Q. All right, have you continued during the pendency of

this lawsuit to use the voluntary certificate for all new hired

employees that you identified a moment ago?

A. Yes, sir, we have.

Q. Mr. Knepper, do you know of your own knowledge

when this suit was instituted, was it in September of 1971,

— Union, the International Union was served the same

te?

A. Yes, sir, I know that is true.

Q. And the Local Union was served the next day?

A. That’s correct.

Q. Now who was served as a representative of the Local

Union? |

A. The Local Union?

The Local Union.

Mr. John Perrio.

Is Mr. John Perrio one of your employees?

Yes, sir, he is.

Does he occupy a position with the Union?

Yes, sir, he is the President of the Local.

[90] Q. The President of the Local?

A. Yes, sir.

Q. Do you know where he was served, the process, of

your own knowledge?

A. In his office in the Goodhue Building.

Q. Do you speak of the Goodhue Building in Beaumont,

Jefferson County, Texas?

Yes, sir.

Does the Union also have an office there?

Yes, sir.

Is Mr. Perrio a resident of the State of Texas?

rFOoP OPS

a a

Yes, sir.

Q. I believe the Union also maintains an office in New

York City, is this correct?

A. That’s correct, yes, sir.

Q. Is this for purposes of anything to do with finances,

by any chance?

A. I don’t believe I understand your question.

Mr. Hambright: Strike that question, we will develop

it later.

By Mr. Hambright:

Q. Now, Mr. Knepper, on these employees in this [91]

bargaining unit, which you have said numbered some 279, I

believe, is unemployment compensation benefits payable

from any state?

A. Yes, sir, we pay a contribution to the Texas Employ-

ment Board.

Q. All right, sir, is Texas the only state that adminis-

ters the unemployment compensation for all of these em-

ployees?

A. Yes, sir, it is. If an employee lives in another state

he must return to Texas for employment benefits.

Q. All right, sir, is it your practice on an annual basis

to make a payment to the Texas Employment Commission

in regard to the premium on this unemployment insurance?

A. Yes, sir, we are required to pay one-half of one per-

cent of the first $3,000.00 the man earns every year.

Q. Do you know how much money you paid, for instance,

in 1971, to the State of Texas?

A. Yes, sir, $1,776.42.

Q. As I understand your testimony, you made no such

payment to any other state and that the State of Texas

exclusively administers this in [92] surance coverage?

A. Yes, that’s correct.

Q. I will ask you also on your physical plant out here

in Beaumont, where your office is located, do you know of

your own knowledge that ad valorem property taxes on that

facility is paid to the State of Texas and County of Jeffer-

son and perhaps the school district!

A. Yes, that is true, they are.

Q. Now, Mr. Knepper, again referring to the labor con-

tract, would you—

Mr. Hambright: Your Honor, may I approach the wit-

ness to show him this?

The Court: All right.

By Mr. Hambright:

Q. Would you identify Section 11 on page 6 of this

contract?

AL Yes, sir, Section 11 is termed ‘‘ validity clause’’.

Q. For purposes of my question may I read this para-

graph, Your Honor?

The Court: It isn’t necessary. If you will call it to the

Court’s at [93] tention, the Court can read it.

Mr. Hambright: I don’t know where the other copy—

excuse me, Your Honor, I didn’t know you had the other

copy.

Q. All right then, in regard to that, Mr. Knepper, I

see that provision is made that in case something is de-

clared invalid the parties will again meet within ten days

to work out a new agreement on those matters that were

invalidated.

I will ask you if this Court does declare that the agency

shop clause or provision on page 2 is invalid as manager

of this organization would you carry out the mandate of

Paragraph 11 and meet with the Union on request in order

to attempt to work out some type of other provision?

A. Yes, sir, I would.

Q. While we are on the labor contract and the Court

has the document, if I may, could I refer to the preamble

of the contract on page 1, which states that the agreement

is between Mobil Oil Corporation Marine Transportation

Department, Gulf-East Coast Operations and that that

organization [94] I just described as stated to be the com-

pany for purposes of this labor contract. Is this true, Mr.

Knepper, in the sense that that organization I just de-

scribed of which you are the manager, is known throughout

this document as the company? :

A. Yes, that’s correct.

Q. Now, Mr. Knepper, in this labor contract is there a

provision in here in regard to the grievance procedures?

A. Yes, sir, there is.

Q. You probably know this one from memory, on page

7, under the heading ‘‘Grievance Procedures’’, in Section

13, I will ask you how many steps are enumerated there?

A. There are five steps.

Q. Now the fifth step, is that the top level?

A. Yes, that is as far as the grievance goes.

Q. All right, sir, now at the fifth level is that the last

chance that either the company or the Union has ordinarily

to resolve the grievance before it goes into arbitration?

A. Yes, sir, that is the last step short of arbitration.

[95] And I notice that your labor contract is not, does not

specify in Section 13 that any of the preliminary levels,

first, second and third, or fourth, have to be gone through

in any particular location. Is this true, there is no geog-

raphy specified as to where this can happen?

A. Yes, sir, that’s true.

Q. But the fifth and top level is stated to be at Beau-

mont, Texas?

A. That is correct.

Q. Is this the way it actually works?

A. Yes, sir.

Q. All right, sir, now going back over a period of time

of maybe two or three years, how many of those fifth level

grievance meetings have actually been conducted in Beau-

mont, Texas?

A. Well, I don’t have the accurate count, but quite

frequently.

Q. Would you—

A. Several times a month.

Q. Would you say that you actually had a formal top-

level grievance meeting under the fifth level here as often

as maybe twenty times in the last [96] two or three years?

A. Yes, I would say so, yes, sir.

Q. Were you present on those occasions?

A. Ves, sir.

Q. Out of those some twenty top-level grievances, how

many in fact proceeded on with—on to arbitration, the last

phase, say since November of 1969, under the present labor

contract?

A. Well, grievances that arose under the present con-

tract I believe four have been arbitrated.

Q. Four have been arbitrated?

A. We have had during the term of this contract, we

have had some arbitrations that were carry-overs and

grievances that were under the prior contract.

Q. All right, sir, now where were the actual arbitration

hearings on these cases, these four cases that arose under

this contract and perhaps one or two carry-over cases from

a prior labor contract?

A. Where were they held?

Q. Yes.

A. In the American Arbitration Association offices in

New York City.

[97] Q. All right, sir, was this hearing at the Triple A

office in New York City, was that conducted by the—or spon-

sored by the Triple A, as the organization that supplied

the arbitrator?

A. Yes, under our agreement, the agreement calls for it

to be done under Triple A auspices.

Q. Does your agreement, does your labor contract say

where you must go to arbitrate?

A. No sir, I don’t believe it says, it doesn’t specify any

locale for our hearings.

Q. All right, sir, now in reference to these twenty or

more fifth level grievances in Beaumont, Texas, were you

the man that heard those twenty odd fifth-level grievances?

A. Ves, sir.

Q. Did you have perhaps Mr. Shanigan or some other

member of your staff to assist you?

A. Yes.

Q. Sir?

A. Sometimes several members fell in with the daily

work, Captain Papich and Mr. Dayton, why I would have

them help me.

Q. At the last time of these top-level hearings, as the last

step in the grievance process, did [98] you have the option,

if you so desired, to make a settlement or adjustment with

the Union?

A. Yes, sir.

Q. Did the Union, likewise, have an option to agree

with you on some solution?

A. I believe, yes, sir.

Q. If my arithmetic is correct then, the twenty odd

case, only four of them, perhaps only four of them pro-

ceeded to arbitration within this last some two-year period

of time, is that correct?

A. That’s correct.

Q. Would it have been your function, if you had so

desired, to settle all of them if you had decided to do sof

A. Yes, sir, I could have done so.

Q. Would this decision be solely and exclusively up to

you, Mr. Knepper?

A. Yes, sir.

Q. Did anybody else have any say-so one way or the

other on how you decided to dispose of that claim other

than your own staff here or perhaps your advisors?

A. Well, I live with it, I have the decision- [99] making

authority for that.

Q. All right, sir, now in addition to these grievances,

are there other business matters which Mr. Perrio of the

Union, the President and perhaps other Union officers have

discussed with you at your office in Beaumont, Texas?

A. Yes.

Q. Sir—go ahead.

A. There are a number of subjects that come up that

could be grievances that haven’t formalized and carried

through the steps and we discuss those and often we can

dispose of them easily. Sometimes we can’t and they do

become formalized and come back as written here.

Q. Would you give me any estimate of how many sep-

arate, independent subject matters in the day-to-day ad-

ministration of this labor contract have been so presented

to at your office in Beaumont, by these Union officers since

November of 1969?

A. Well, I haven’t kept a running record. I would guess

maybe 80 or 100.

Q. All right, sir.

A. Ihave no accurate count.

[100] . All we are asking is your best judgment.

In addition to that have you at your office in Beaumont

received long-distance telephone calls from the Union offi-

cers, perhaps when they were in New York or elsewhere?

A. Yes, sir, that occurred.

Q. Over this same period of time which I am selecting

for convenience, of course, from November, 69 down to

date would you give me an estimate of how many separate,

individual long-distance telephone calls that you or Mr.

Shanigan or one of your other staff members in Beaumont,

has received from Union officers either in New York or

elsewhere, concerning employee relation matters under this

labor contract?

A. Well, conservatively, maybe two or three a month.

Probably more than that but it was two a month, about

sixty, I guess. This is not from any records.

Q. Now further reference to these arbitrations, you

testified that four cases had been arbitrated under this par-

ticular labor contract and maybe some carry-over cases.

Have you checked to see the total number of labor arbi-

trations between [101] these parties, say back in 1965 or

1966, somewhere in that area down to date?

x... Well, I count nine from 1966 through the present

2. Nine cases?

A. Yes, sir.

Q. All right, sir, do you know whether or not one of

those cases involved an employee named Kohler (sic) ?

A. Yes, sir.

Q. Go ahead.

100

A. There was a case actually prior to my tenure here

but I am familiar with the case.

Q. All right, can you tell us what the stipulated issue

was in the Kohler (sic) arbitration case?

A. This was a case that involved port overtime and it

was stipulated that it would be something along the lines

that if the ship loaded in Corpus Christi, and then pro-

ceeded to Houston, and loaded further and then proceeded

to Beaumont for further loading and then a man joined in

Beaumont, would he be entitled to the loading [102] over-

time, as it is called, for the full cargo.

The idea of the case that he wasn’t really—

Q. Speak louder, please.

A. I say the idea of the case being that he wasn’t on

board during the time the full cargo was loaded and there

was a question whether he was entitled to full overtime or

only a part or none.

Q. And that—would you say that the question of

whether or not he got overtime or straight time would have

to be decided by construction of the labor contract?

A. Definitely, yes, sir.

Q. And the stipulated issue in the Coler case was sub-

mitted to the Board of Arbitration on the examples you

just gave me or substantially the example you gave me?

A. Yes, sir, as I recall it.

Q. Will you give me the approximate date of that case,

please, sir?

A. My notes say that it was heard in April, 1966, so I

presume it must have arisen early in 1966.

Q. All right, now I would like to ask you about [103] an-

other arbitration involving Nelson Cash, C-a-s-h, do you re-

call the approximate date of the Nelson Cash arbitration?

101

A. That was heard in September, 1968.

Q. What was the nature of the dispute, without stating

the issue again, was it a work assignment or some other—

A. Yes, it had to do with what work a pumpman could

be assigned within the meaning of the agreement.

Q. All right, sir, can you tell me where Mr. Nelson Cash

lives or then did live?

A. He was a resident of Vidor, Texas.

Q. Vidor, Texas?

A. Yes.

Q. Do you recall an arbitration involving a case in

1969—

A. Yes, sir, that was a matter involving promotion

under the seniority provision of the agreement.

Q. Is that promotions, is that covered by this labor con-

tract?

A. Yes, sir, it is.

Q. A party sometimes disagrees as to what those [104]

provisions actually mean?

A. Yes, sir.

Q. Did this particular case involve a man who wanted

to be promoted to boatswain?

Yes, that’s correct.

That was Mr. Libe?

Yes, sir.

Where did that—where did he live?

He lived in Crockett, Texas.

Q. Do you know of an arbitration in 1970, involving a

Mr. Bell, Mr. Phillip Bell?

102

A. Yes, sir.

Q. Can you tell me what the nature of the dispute was

in the case of Mr. Bell?

A. This was a dispute over his status, whether there

was a disciplinary status or a vacation status and it arose

because Mr. Bell left his ship in Baytown, Texas, without

being properly relieved and subsequently his relief didn’t

show up. He had proceeded home to Nederland, and we

didn’t have a man—

The Reporter: Keep your voice up, it is trailing off.

A. Iam sorry. So we didn’t have a man to [105] relieve

him at the time, so we said that he was on a disciplinary

status until we decided what should be done with him and

his claim that he was on a vacation status.

Q. You say he left the ship in Texas City or Baytown

somewhere and went to Nederland, you are talking about

Nederland, Jefferson County, Texas?

A. Yes, sir.

Q. Is that his home?

A. Yes, sir.

Q. Did you hear this grievance at the fifth level before

it proceeded on to arbitration?

A. No, sir, I did not, my predecessor did.

Q. Your predecessor?

A. This was a carry-over.

Q. That was one of the carry-overs?

A. Ves, sir.

Q. Do you know of your own knowledge it was heard in

Beaumont, Texas?

A. Yes, sir, I believe it was from reviewing the record.

103

Q. All right, sir. Do you know about an arbitration in-

volving one cook, Wayne Kortz?

A. Yes, sir.

[106] Q. What type of case was that?

A. Well, this was a case involving a discharge, whether

or not the man had been discharged justifiably. We said

that he had and the Union thought he had not.

Q. Do you know where Mr. Wayne Kortz makes his

home?

A. Yes, sir, he is from Vidor, Texas.

Q. Now, Mr. Knepper, t the outset of this trial we

discussed the labor contract’s place of execution, were you

a party to the collective barga’ning negotiations that led

up to this labor contract?

A. Yes, sir, I negotiated for the company for this con-

tract.

Q. Where did the negotiations take place?

A. New York City.

Q. Why, if you know, did they take place in New York?

A. Partly because that has always been our practice and

a more large part, I believe, for the convenience of the

Union.

Q. You say the convenience of the Union?

A. Yes, sir.

[107] Q. Are you now engaged in collective bargaining

negotiations for a successor contract to the present con-

tract.

A. Weare.

Q. Where are those taking place?

A. In New York City.

104

Q. Have you requested anything in regard to the site

of those negotiations?

A. Yes, sir, I have stated that it is very unwieldy for

me to run my business and be in New York City both, and

I requested that we remove the negotiations or at least

have a portion of them in Beaumont, where I can be close

to my Office.

Q. What response did you receive?

A. Well, the Union is reluctant to do this. As a matter

of opinion, I think primarily because their advisors are

based in New Jersey.

Q. All right, sir, back in the 1969 negotiations were you

at that time a resident citizen of Beaumont?

A. Yes, I was just in the process of moving, sir.

Q. Well, during the continuing of these negotia- [108]

tions did you have an occasion to travel to New York to

attend these meetings?

A. Yes, sir.

Q. Did you take Mr. Shanigan from Beaumont with you

on any of those trips?

A. Yes, sir, all of them.

Were you the chief negotiator for the company?

I was.

Was the strike in progress during any of this time?

PePe

Yes, sir.

Q. Did you then have eight tankers or nine tankers, or

do you recall?

A. We had nine ships at that time.

Q. Did you ultimately sign with the Union a hand

written document at the end of these negotiations?

105

A. Yes, sir, we did.

The Clerk: Plaintiff’s Exhibit 11.

(Reporter’s Note: Whereupon it was marked Plaintiff’s

Exhibit No. 11 for identification. )

1109] By Mr. Hambright :

Q. I show you what has been marked as Plaintiff's

Exhibit 11, which consists of two handwritten sheets on

legal size paper, Xeroxed. Is this a copy of the 1: xemoran-

dum that was signed in New York, at the conclusion of

those negotiations in 1969?

A. Yes, sir.

Q. Now attached to that there is a typed-up instrument,

one and a fraction pages long, which purports to be a more

clear portrayal of the agreement, was this typed up under

your instructions to provide quick reading of those hand-

written sentences?

A. Yes, sir.

Q. On Plaintiff’s Exhibit 11 I notice the signature

„John T. Knepper’’; the date, October 30, 1969; and a

couple of names for the Union, F. J. A. and D. H. S. Who

are those people, please, sir?

A. Well, F. J. A. would be Frenk Avery, who was then

President of the Union, and D. H. S. would be Donald

Sanhereza, who was financial secretary at the present.

[110] Q. I also notice it is signed by a gentleman, R. L.

Clark, who is he?

A. Mr. Clark is the International representative for

OCAW. I believe he is based in Providence or Boston,

somewhere in the East.

Q. All right, sir, I notice the first item has to do with

retaliation against people who took part in a strike or

activities during strike. That seems to be item one. Did

106

you have an agreement that you would let them come back

to work and not take any retaliation?

A. Yes, mutual agreement, I mean no retaliation on

either side.

Q. And would you state whether or not there was any

picketing or violence or blocking of ingress or egress dur-

ing this strike?

Mr. Dixie: You would think this is a jury trial, Your

Honor, I object to that as not relevant to any issue in this

case as to what happened during the strike.

The Court: Do you insist on it?

Mr. Hambright: No, sir, I do not, I was only trying to

develop it [111] because of this pencil and handwritten

notation. I don’t think it is essential.

The Court: The objection will be sustained.

By Mr. Hambright:

Q. All right, now, Mr. Knepper, I see that when you get

down to Item 2 there you talk about the terms and the

provisions of the collective bargaining agreement between

the parties and state that that is subject to ratification by

the Union. Do you recall this?

A. Yes, sir.

Q. Is this reference in Paragraph 2 intended to mean

collection or work sheets and pages and part handwritten,

perhaps part types ai art Xeroxed that might have been

viewed for some period of many weeks of collective bar-

gaining?

A. Yes, sir, it was.

Q. What was the understanding you had about all of

that collection of pages that you state here that was going

to be submitted for ratification to the Union?

A. Well, that document would be put into a [112]

107

smooth, final form and when ratified that both sides would

sign it consummating the agreement.

Q. Do you know of your own knowledge whether or not

the document was in fact placed in smooth form?

Yes, ir, it was.

Where was this done?

In Beaumont, Texas.

Under whose direction was this done?

Under mine.

Q. Do you know of your own knowledge whether the

Union did proceed to ratify this new contract?

A. Yes, sir, they informed us that it was ratified.

Q. Where was this information delivered to you, Mr.

Knepper, that it was ratified?

A. I really don’t recall.

Q. All right, sir, did you then proceed to have the docu-

ment placed in final form here in Beaumont, Texas?

A. Yes, sir.

Q. Did you then meet with the Union officials for any

purposes and, if so, where? Tell the [113] Court what it was.

A. Mr. Perrio came to our office when we had it in

final form, we gave him copies to approve and be sure that

it had what it should, and on that day, I can recall that

Mr. Shanigan and I and Perrio, signed, the other Union

officers were not in Beaumont and they had to sign their

copies also.

Q. I notice that on Page 50 of what is marked Plaintiff’s

Exhibit 1, there appears to be a signature page and it shows

the execution by John T. Knepper, L. A. Papich, and W. J.

— for the company. Do you recall this signature

page

PoP Pp

108

Yes, sir.

Was this the page that was signed in your office?

Yes, sir.

Now I notice right above that it says the parties

have caused these presents to be executed by their duly

authorized officers this 18th day of November, 1969. That’s

the date that you actually signed the document in your

office ?

A. Yes, sir, but, as I say, all of the people [114] couldn't

have signed on that day because some of them weren’t in

Beaumont.

Q. I understand, but you say that Mr. Perrio did come

to your office and physically sign it in your presence at that

time?

A. That is my recollection, yes.

Q. All right. While the document was signed on Novem-

ber 18th, in your office, I notice that it relates back and

becomes effective November Ist, 1969, is this something

that is customarily done in the dealings of labor relations

to make the agreement become effective on some even day

of the month that the parties so desire to do so?

A. Yes, sir, we have negotiated a number of contracts

that were effective retroactively.

The Court: I believe we will have a little recess, Mr.

Hambright.

Mr. Hambright : Thank you, Judge.

The Court: We will stand in recess for fifteen minutes.

(Reporter’s Note: Whereupon a fifteen-minute recess

was taken and court re [115] sumed.)

The Court: Do you have any further questions of this

witness, Mr. Hambright?

ees s:

109

Mr. Hambright: Yes, sir, just a few, Your Honor.

The Court: All right, you may proceed.

By Mr. Hambright:

Q. I would first like to make sure that we have Plain-

tiff’s Exhibit 11 in evidence, which was this memorandum

dated October 30, 1969, appearing in handwritten form and

with the typed page and a fraction on the front of it saying

what it says.

Pn Court: All right, the Court will consider it in evi-

nee.

(Reporter’s Note: Whereupon Plaintiff's Exhibit No. 11

was received in evidence. )

By Mr. Hambright:

Q. May I also make sure that the record reflects that

Plaintiff’s Exhibits 1 through 11 have all been received in

evidence?

_ The Court: Yes, sir, the Court has admitted them

Mr. Hambright : Thank you.

By Mr. Hambright:

Q. Mr. Knepper, the labor contract, the little, red book-

let there, I don’t believe I asked you where that was

printed up?

A. It was printed in Beaumont, Texas.

Q. Mr. Knepper, about what year did your organization

establish the headquarters in Beaumont, Texas?

A. In 1962.

Q. The function to which you testified this morning in

regard to the engineering services, the housekeeping ser-

vices, the budgeting, the personnel, were all of those vari-

110

ous services organized and brought here about ten years

ago?

A. That’s correct, yes, sir.

Q. All right, sir, now, Mr. Knepper, do you have a labor

contract in existence with a Union called the Mobil Tankers

Officers Association?

A. Yes, sir, I do.

Mr. Hambright: Mark this, please.

The Clerk: Plaintiff’s Exhibit [117] No. 12.

(Reporter's Note: Whereupon it was marked Plaintiff's

Exhibit No. 12 for identification. )

By Mr. Hambright:

Q. This has been marked Plaintiff’s Exhibit 12, and

would you examine that and is that a true copy of the

contract?

A. Yes, sir, this is.

Mr. Hambright: May we have that admitted in evidence,

Your Honor?

The Court: All right.

(Reporter’s Note: Whereupon Plaintiff’s Exhibit No. 12

was received in evidence. ) .

By Mr. Hambright:

Q. Mr. Knepper, does this contract bear an effective

date of January Ist, 1970?

A. It does.

Q. Does this contract on page 3 under the maintenance

of membership provision, subparagraph (e), does it con-

tain what is commonly referred to as an agency shop provi-

sion which is similar to the one in controversy in this law-

suit?

111

1118] A. Yes, sir, Paragraph 3(c) of this contract is sub-

stantially similar to 2(b) of the OCAW agreement.

Q. Would you look, did you say 3(c) ?

A. 3(c), yes, sir.

Q. All right, thank you. Now did you as manager of

this organization learn of the invalidity of the agency shop

clause in this officers contract at about the same time you

found out about the one on the seamen?

A. Yes, sir, the information we had applied to both.

Q. All right, sir, did you thereafter have an occasion

to discuss this with the Union representing these officers?

A. Yes, sir, I discussed this with the advisors to this

Union early in May of 1970.

Q. And what did you tell them—did you tell them that

you were—-you had discovered the invalidity of this clause?

A. Yes, sir, I did.

Q. What response did you receive?

A. Well, substantially they agreed that if it were illegal

we ought not to enforce it.

[119] . Has that Union representing those officers ever

taken any action toward enforcing the agency shop clause

in that contract?

A. No, sir, they have not.

Q. Did you have an occasion to write them a letter in

regard to the invalidity of that clause?

A. Yes, sir, I wrote them a letter on I believe the 7th

of May, 1970, confirming our conversation on the subject.

Q. You never heard anything back from them by way of

an attack on our position or a threat to the employees or

any written documents whatever?

112

A. No, sir, nothing of that sort.

Mr. Hambright: Mark this, please.

The Clerk: Plaintiff’s Exhibit 12.

(Reporter’s Note: Whereupon it was marked Plaintiff’s

Exhibit 12 for identification.)

By Mr. Hambright:

Q. Now, Mr. Knepper, do you have a contract, labor

contract with the radio officers Union?

A. Yes, sir.

[120] Mr. Hambright: Mark this, please.

The Clerk: Plaintiff’s Exhibit No. 13.

(Reporter’s Note: Whereupon it was marked Plaintiff’s

Exhibit No. 13 for identification.)

By Mr. Hambright:

Q. Would you look at this Plaintiffs Exhibit 13, Mr.

Knepper, and tell us if that is a true copy of the Radio

Officers contract?

A. Yes, sir, it is.

Q. And what is the beginning date of that labor con-

tract?

A. This contract is dated March Ist, 1970. Actually

it was signed in July of 1970, and retroactive to March Ist.

Q. Does that agency, was an agency shop clause in it

or not?

A. No, sir, it does not have one.

Q. At the time that contract was negotiated you dis-

covered the invalidity of the agency shop clause?

A. Yes, sir, I did. There was a strong demand for that

clause but we didn’t accede to it.

113

[121] C. Did the Radio Officers perform this service

aboard these vessels, the same vessels that you have de-

scribed this morning?

A. Yes, sir, they do.

Q. Mr. Knepper, would you state whether or not some

of your employees who are subject to the labor contract

involved in this lawsuit, the seamen’s contract, are physi-

cally present in the State of Texas one hundred percent of

the time, some employees?

A. You are not saying as an individual here?

Q. I am not talking about John Doe, who may be here

or somewhere else, but T am saying are there some indi-

viduals always in the State of Texas who are subject to

this labor contract?

A. Yes, sir, definitely.

Q. If you took a calendar and laid it down on a table

and it was marked off January, February and March, et

cetera, would all of those months and dates be covered by

employees physically present in the State of Texas, receiv-

ing money from your organization, either as wages or

vacation or what-have you?

A. Yes, sir, there would always be somebody.

[122] Q. Would you name some of the typical or ordi-

nary ports of call in the State of Texas where your tankers

come inte port other than Beaumont?

A. Well, Brownsville, Corpus Christi, Baytown, Texas

City, Houston, and Beaumont, Port Arthur.

Q. Could it be that the same vessels might call at sev-

eral of those ports on one oceasion or one trip?

A. Yes, sir, that happens.

Q. Would you describe the general, ordinary pattern of

the movement of your vessels, not being the one that might

114

temporarily be sent off to Guam or somewhere else or some

foreign port, but the typical, ordinary pattern of one of

your vessels?

A. Well, the typical pattern would be loading in Beau-

mont and discharging in a port on the Eastern seaboard,

Paulsberry, New Jersey; New York City; New Haven;

Providence, Rhode Island; Boston; Portsmouth.

Q. How about Florida and Alabama and some of those

states?

A. We recently have had business starting in [123]

Florida. Occasionally we might have a ship chartered that

would go to Florida. We have ships loading in Alabama.

Q. Would there be an occasion for one of your vessels

to be in a port in North Carolina or South—

A. Yes, sir, it is not frequently, but we have had ships

call there.

Q. How about Mississippi?

A. I don’t recall a voyage there. It is not impossible

but I don’t recall one.

How about Virginia?

Yes, Virginia.

Georgia?

Yes, we have had ships call there.

Delaware and Maryland?

Yes, sir, to both.

Q. Now in the normal course of events, bearing in mind

the men work ninety days and are off thirty days on vaca-

tion, would they thereafter go and catch their ship or some

other ship at some United States port ordinarily?

A. Yes.

PP Pe PS

115

Q. Does your office in Beaumont, Texas deter- [124]

mine where he goes and which ship he will catch?

A. Yes, the determination is made in Beaumont. If he

should be a man that designates Providence or New York

as his shipping port he may have his orders transmitted to

him through my branch office in New York, but the decision

as to which ship he would go to is made in Beaumont.

Q. Suppose you told him to catch a ship in Beaumont

or Corpus Christi, and his shipping port happened to be

designated in Providence, Rhode Island. Would he or not

receive special transportation allowance and so forth?

A. Yes, sir, he would travel from his home to the ship

and he would receive transportation from the shipping

port to the ship.

Q. Mr. Knepper, in the ordinary course of events would

it be true that all of your 279 present employees subject to

the labor contract involved in this lawsuit, would be ex-

pected to catch a ship in Beaumont or some other Texas

port if they were with the company long enough to do so?

A. Yes, I think the probability is very high in the course

of a man’s career he would catch [125] a ship in Texas, in a

Texas port.

Q. And some of them would catch it here perhaps more

often than others?

A. True.

Q. Now, Mr. Knepper, once again, this agency shop

clause and present labor contract with these defendants,

what do you conceive to be the problem from an operating

point of view with this clause in your labor contract and

with the Union demanding the enforcement of that clause,

as they have done in this case. What effect does that have

on the company itself?

A. Well, I was advised by counsel that if we had this

clause and if we enforced it we would be in violation of the

116

Texas Right-to-Work Law and being in violation could have

some bad consequences for us, beyond bad citizenship that

we could endanger our privilege of doing business in Texas,

and we could also be subject to a suit by a

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