Petition — International Brotherhood of Teamsters v. Eazor Express, Inc.

oh. a a

DEC si 1975

= a CLERK

IN THE

Supreme Court of the United States

OcToBER TERM, 1975

No %5-930

INTERNATIONAL BROTHERHOOD OF TEAMSTERS, CHAUF-

FEURS, WAREHOUSEMEN AND HELPERS OF AMERICA, ET AL.,

Petitioners

v.

EAZOR Express, INC., ET AL.,

Respondents

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR

THE THIRD CIRCUIT

SipNEY DICKSTEIN

GEORGE KAUFMANN

1735 New York Avenue

Washington, D.C. 20006

Attorneys for Petitioner International

Brotherhood of Teamsters,

Chauffeurs, Warehousemen and

Helpers of America

BEN PAUL J UBELIRER

2000 Lawyers Building

Pittsburgh, Pennsylvania 15219

Attorney for Petitioner Local No. 249

EUGENE GREEN

602 Stambaugh Building

Youngstown, Ohio 44503

Attorney for Petitioner Local No. 377

Pauses or Brrnon S. Adams Parvrrinc, Inc., Wasmincron, D. C.

=,

TABLE OF CONTENTS

Page

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I oe ep pueden enaaee waueues 1

SE cdc ccascnddvesséseucwensens 2

SraTuTE aND Rute INVOLVED .............cccccccees 3

Srarvesewe OF TMB CaGm ......ccccccccccccccccccces 3

I. The Factual Background .................... 5

A. The Parties and the Agreements .......... 5

B. The Unauthorized Work Stoppage and the

Unions’ Efforts To Terminate It .......... 8

De ee ee SD ies icccdbosedenses 8

2. The Unions’ Efforts To Terminate the

Bde FER tig be ERS Seer Fe 10

ee nnn ic cacensesesdeneees 11

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Ei Cn uxceunhes tdeubanckueuaeusduas 11

ED back c dadkadecakbexkvsencnseue 12

ee ee ee Oe Do vcvcdcdpecsccancen 14

Reasons FOB GRANTING THE WRIT ................:: 16

I. In Imposing Liability on Petitioners the Court

Below Decided Questions of Almost Universal

Impact on the Application and Negotiation of

Collective Bargaining Agreements and Violated ,

the Precepts of Congress and This Court ..... 16

ii Table of Contents Continued

Page

II. In Awarding Damages and Interest in the Ab-

sence of Special Findings as Required by Rule

52(a), F.R. Civ. P. the Courts Below Departed

From the Usual Course of Judicial Proceedings

and the Teachings of This Court ............. 34

D, Geatiee EMGGOD oc cccccccsesccscccccescesces 34

i EE . nt awestdapebssasenensedasenean 36

i 8 onc nen tatnsdadvied daudesceseessanes 39

Arrenpix (Opinions Below, ete.) (Separately Bound) 1a

BearvTony APPBMBEE 2... ccccssccccccccccccccvccees 1b

TABLE OF AUTHORITIES

CASES:

Albermarle Paper Company v. Moody, 422 U.S. 405 .. 37

Alexander y. Nash-Kelvinator Corporation, 261 F.2d _

187 (2 Cir.), modified, 271 F.2d 524 ............ 35

Bangor Punta v. Chris-Craft Industries, pet. for cert.

pending, NO. 75-355 22... ee eee e eee este ene 38

Board of Commissioners v. United States, 308 U.S. = =

Boys Markets v. Retail Clerks, 398 U.S. 235 ........ ; 17

Carpenters Local 1273 v. Hill, 398 F.2d 360 (9 Cir.) . .35, 36

Coronado Coal Co. v. United Mine Workers, 268 U.S. ™

BK oc pu0bssccneasdbaneeeses tees 5 ened teneseees 2

Gateway Coal Co. v. Mine Workers, 414 U.S. 368 .... i7

H. J. Heinz & Co. v. Labor Board, 311 U.S. 514 ...... 17 ’

Hatahlev v. United States, 351 U.S. 173 ............ 35

Howard Johnson v. Hotel Employees, 417 U.S, 249 ‘i?

Labor Board vy. General Motors, 373 U.S. 754 ....... 22

Labor Board v. Insurance 4 gents, 361 U.S. 477 ..... 25

Labor Board v. Sands Mfg. Co., 306 U.S. 332 ...... 21, 23

Lewis v. Benedict Coal Co., 259 F.2d 346 (6 Cir.), aff’d

in part and reversed in part, 361 U.S. 459 ....... 29

Lewis v. Pennington, 400 F.2d 806 (6 Cir.), cert. de- h

nied, 393 U.S. 983 0... 6... cece cece eee e seen es 89

Mastro Plasties Corp. v. Labor Board, 350 U.S. 270... 20

Table of Authorities Continued iii

Page

McCrea v. Harris County Houston Ship Channel Navi-

gation District, 423 F.2d 605 (5 Cir.), cert. denied,

PA ene dudedeivetuked + ciavuateceetens 37

McManus v. Midland Valley Lumber Company, 348

I I a i ad 35

NLRB vy. Allis-Chalmers Mfg. Co., 388 U.S. 175 ..... 22

NLRB v. Burns Security Services, 406 U.S. 272 ..... 25

NLRB v. Draper Corporation, 145 F.2d 199 (4 Cir.) . .20, 23

NLEB v. Weingarten, 420 U.S. 251 ................. 31

eee Popsicle Corp. v. Ieyelair, 119 F.2d 799 (9

| PP aR Sie aS ee cee oneeae as ae 35

Norte & Co. v. Huffines, 288 F. Supp. 855 (S.D.N.Y.),

aff’d, 416 F.2d 1189 (2 Cir.), cert. denied sub nom.

Muscat v. Norte Co., 397 U.S. 989 ............. 37, 38

North American Coal Corp. v. Local Union 2262, etc.,

BE OR RE Se ne ee 16, 29

Plumbers & Fitters, Local 761 v. Matt J. Zaich Const.

oe pe FF le ree 35

Porter Co. v. NLRB, 397 U.S. 99 .................. 25, 27

Quality Mfg. Co., 195 NLRB 197 .................5. 31

Radio Officers v. Labor Board, 347 U.S. 17 ......... 22

Robert C. Herd & Company v. Krawill Machinery

Corp., 256 F.2d 946 (4 Cir.), aff’d, 359 U.S. 297 .. 37

Teamsters Union v. Lucas Flour Company, 369 U.S.

TP <sedienuenbeneiean cine akacon 16, 17, 18, 19, 25, 26

Teamsters Union v. Morton, 377 U.S. 252 ........... 33

Textile Workers v. Lincoln Mills, 353 U.S. 448 ..... 24, 25

Traylor v. United States, 396 F.2d 837 (6 Cir.) ...... 35

United Construction Workers v. Haislip Baking Co.,

223 F.2d 872 (4 Cir.), cert. denied, 350 U.S. 847.. 16,

17, 20, 24, 25, 29, 30

United States v. Federal Insurance Company, 483 F.2d

Fs SRT Pea eee 35

United States v. International Union, 89 F. Supp. 179

CD 6 oGtetelic. . cence keen oe eee eh oS

United States v. United Mine Workers, 77 F. Supp.

563 (D.D.C.), aff’d, 177 F.2d 29 (D.C. Cir.), cert.

UE nee 28

United States Steel Corn. v. United Mine Wkrs. of

PS pe § ff 5 eee 17

Wessel v. Buhler, 437 F.2d 279 (9 Cir.) ............ 37

Wood v. Lucy, Lady Duff-Gordon, 222 N.Y. 88, 118

SE EEE Caddouanedininds Loekedetwiadecaebineu 26

iv Table of Authorities Continued

Page

STATUTES AND RULEs:

Federal Rules of Civil Procedure:

Be GND . oo scceceveusseneennn 2, 3, 4, 34, 35, 36, 37

Judicial Code:

33 UALS. § ISBGERD 2k cccscevenkenaneeee 2

National Labor Relations Act of 1935, 49 Stat. 449:

BBLS) .ccccccccssecscceseesena eee 24

National Labor Relations Act of 1935, as amended by

Labor-Management Relations Act of 1947, 61 Stat.

136, 29 U.S.C. § 151 et seq.:

BMI 25

Cl): Spe 22

Butoh Beer 22

§ DEG) .cccccceccecdncesabouneneue 17, 25

DS OD ncccvcccsccccevvceeeeeceeunnnne 25

Fe 11, 30, 32

G TRECe) ...ccccccescccenesucucunn nl 3

6 SERCD) .ncccccsccsccceseueuueusnaee 2, 3, 27

G FERCO) .cccccccdiccévcescecauaneniee 24, 27, 28

§ SBlep(E)-(B) .. cn cc cvccccecceseuwieneee 17

kk. Pere 33, 35

Norris-La Guardia Act, 47 Stat. 70, 29 U.S.C. § 101

et seq.:

B Perrin 24

MISCELLANEOUS:

American Law Institute, Restatement of Contracts .. 17

Brief for American Federation of Labor and Congress

of Industrial Organizations, U.S. Sup. Ct. No. 73-

GEE occ ccvccceseesensesssn6ke nnn eee 26

Brief for Respondent, U.S. Sup. Ct. No. 73-631 ...... 26

1 Corbin, Contracts (1960) .............c.ccccecces 17

Cox, Some Aspects of the Labor Management Rela-

tions Act 1947, 61 Harv. L. Rev. 274 (1948) ....22, 23

Table of Authorities Continued v

Page

Gould, The Status of Unauthorized and ‘“*Wildcat”’

Strikes under the National Labor Relations Act,

52 Corn. L. Q. 672 (1967) .......-- ee eeeee - “ .

Legislative History of the Labor Management Rela-

“ Cems Bab, BO occ cccausccccecccccccess 21, 23, 24, 27

Prosser, Torts (4th ed., 1971) .......--e cece eeeees 32

S. Rep. No. 105, 80th Cong., 1st Sess. (1947)..... 21, 23, 24

U.S. Bureau of Labor Statistics, Dept. of Labor, Bull.

No. 1822, Characteristics of Agreements Covering

1,000 Workers or More, July 1, 1973 (1974)... .16, 18

Williston, Contracts, § 3 (3d ed. 1957) ........-+.+5. 17

IN THE

Supreme Court of the United States

OctToBEerR TERM, 1975

No.

INTERNATIONAL BROTHERHOOD OF TEAMSTERS, CHAUF-

FEURS, WAREHOUSEMEN AND HELPERS OF AMERICA, ET AL.,

e Petitioners

EAzor Express, INC., ET AL.,

Responaents

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR

THE THIRD CIRCUIT

OPINIONS BELOW

The opinion of the District Court on liability is re-

ported at 357 F. Supp. 158 and is reproduced at pp. 2a-

20a. of the separately bound appendix to this petition

(‘‘App.’’). The opinion of the District Court on dam-

ages is reported at 376 F. Supp. 841 and is reproduced

at App. 21a-37a. The opinion of the Court of Appeals

is reported at 520 F.2d 951 and is reproduced at App.

39a-7T7a.

JURISDICTION

The judgment of the Court of Appeals was entered

on July 31, 1975 (App. 78a-79a). A timely petition for

rehearing was denied on August 29, 1975 (App. 80a).

2

On November 7, 1975 and December 19, 1975, Mr.

Justice Brennan entered orders extending the time

within which to file a petition for a writ of certiorari

until December 29, 1975 and December 31, 1975,

respectively. The jurisdiction of this Court rests on

28 U.S.C. § 1254(1).

QUESTIONS PRESENTED

1. (a) Where the members of a union engage in a

work stoppage unauthorized by the union, but in vio-

lation of the no-strike clause of the applicable collec-

tive bargaining agreement, does the union have a duty,

enforceable by the employer in a suit under § 301 of

the Labor Management Relations Act of 1947, to use

every reasonable means to terminate the strike?

(b) In a suit against a labor union permitted by

§ 301(b) of the Act which provides that a union ‘‘shall

be bound by the acts of its agents,’’ may the union be

held liable for an unlawful strike by all its members

employed by a particular employer, when those mem-

bers constitute 6% or less of the union’s total member-

ship and the union did not authorize the strike?

(c) Where a union has a contractual duty, express

or implied, to use every reasonable means to terminate

an unauthorized strike, by what standards should the ~

union’s performance of that duty be measured? In

the event of a breach of that duty, how are the em-

ployer’s damages to be determined ?

2. (a) Where the measure of a plaintiff’s damages

is his loss during a particular period, and trial of that

issue has consumed weeks of conflicting testimony,

does the trial court comply with the requirements of

Rule 52(a), Federal Rules of Civil Procedure, by

simply stating its conclusion as to the amount lost,

without making any subsidiary findings which show

how conflicts were resolved, what competing account-

ing theories were adopted, and what computations

were made to reach that conclusion?

(b) Where an award of prejudgment interest is per-

missible as an exercise of equitable discretion by the

district court, must the court make findings which dis-

close that it has exercised its discretion and the equi-

table basis for granting interest ?

(ec) When a court of appeals substantially increases

the amount of a judgment to which the district court

had appended prejudgment interest, is remand re-

quired for a renewed exercise of the district court’s

discretionary power with respect to the grant or denial

of prejudgment interest? If not, may the court of

appeals grant prejudgment interest on the increased

judgment without disclosing that it has exercised its

discretion and the equitable basis for granting inter-

est ?

STATUTE AND RULE INVOLVED

This case involves §§301(a), (b) and (e) of the

Labor-Management Relations Act of 1947, (hereafter

‘‘the Act’’) 61 Stat. 136, 156, 29 U.S.C. §§ 185 (a), (b)

and (e), and Rule 52(a) of the Federal Rules of Civil

Procedure. These are set forth in the statutory ap-

pendix to this brief at pp. 1b-2b, infra.

STATEMENT OF THE CASE

Introduction

This Petition seeks review of a judgment in excess of

one million dollars plus prejudgment interest, for dam-

ages allegedly suffered by an employer during a work

stoppage which the courts below found was not au-

4

thorized by any of the defendant unions. The theory

of the judgment was that the unions breached their

agreement with the employer by failing to use every

reasonable means to terminate the strike and that they

could also be held liable for the ‘‘mass action”’ of all the

unions’ members employed by a particular employer,

although those members were but a minute fraction of

each defendant’s total membership. In concluding, with

hindsight, that the union should have taken ‘‘stronger

measures’’ to terminate the strike (App. 59a) than de-

claring the strikes to be illegal and instructing and per-

suading the striking members to return to work, the

courts did not take into account the fact that the em-

ployer did not call upon the union to take such meas-

ures, nor other surrounding circumstances which ten-

ded to show that these would have been unsuccessful,

if not indeed, as the union officials believed, counter-

productive. The plaintiff was awarded all its strike

losses after the first two days of the strike, although

there was no finding that if the unions had not breached

the agreement, the strike would have ended then, or any

time before it actually did. Although there was a

lengthy and complicated trial to determine the amount

of the plaintiffs’ strike losses, the District Court sim-

ply stated a figure which represented its conclusion on

that issue, providing the parties and the appellate

courts with no explanation as to how that figure was

reached; the Court of Appeals affirmed despite the spe-

cificity requirements of Rule 52(a) F.R.Civ.P. and al-

though the absence of underlying findings made mean-

ingful review impossible. The District Court added

prejudgment interest, without stating whether it did so

under a felt compulsion of law, or in the exercise of dis-

eretion, and if the latter, the basis of that exercise;

again the Court of Appeals affirmed despite the absence

5

of findings and although its decision on the merits

approximately doubled the original judgment, raising

prejudgment interest alone to above $350,000.

Il. THE FACTUAL BACKGROUND

A. The Parties and the Agreements

Respondent, Eazor Express, Ine. (Eazor) and re-

spondent, Daniels Motor Freight, Inc., (Daniels) which

is now wholly owned by Eazor, are motor carriers en-

gaged in interstate commerce. (They will sometimes

be referred to jointly as ‘‘the employer’’). Petitioners

Loeal 249 and Local 377 are labor organizations aftili-

ated with petitioner International Brotherhood of

Teamsters (hereafter ‘‘IBT’’). Local 377 was the ex-

clusive bargaining representative of the drivers and

other employees at Daniels’ terminal in Warren, Ohio;

Local 249 was the exclusive representative of drivers

and other employees working out of, or at Eazor’s

Pittsburgh terminal. Eazor, Daniels and the locals

were parties to the National Master Freight Agree-

ment in foree between April 1, 1967 and March 31, 1970,

(‘‘NMFA’’); it is, as the name implies, a nationwide

agreement covering employers and unions in the truck-

ing industry. To this master agreement there were

various regional supplements binding upon certain em-

ployers and local unions. The Teamsters Joint Council

No. 40 Freight Division Over-the-Road Supplemental

Agreement and the Teamsters Joint Council No. 40

Freight Division Local Cartage Supplemental Agree-

ment were the supplements binding on Eazor and Local

249: the Central States Area Over-the-Road Motor

Freight Supplement with Ohio rider and the Central

States Area Local Cartage Supplemental Agreement

6

bound Daniels and Local 377." The courts below de-

termine that the IBT was also a party to and obligor

under the NMFA and its supplements (App. 17a-18a

and 46a-48a).?

The NMFA contains no no-strike clause. Moreover,

the NMFA contains the following exculpatory provi-

sion:

‘Job Stewards and alternates have no authority

to take strike action, or any other action inter-

rupting the I:mployer’s business, except as author-

ized by official action of the Local Union. The

Employer recognizes these limitations upon the

authority of job stewards and their alternates, and

shall not hold the Union liable for any unauthor-

ized acts. The Employer in so recognizing such

limitations shall have the authority to impose

proper discipline, including discharge, in the event

the shop steward has taken unauthorized strike

action, slowdown or work stoppage in violation of

this Agreement.’’ (App. 52a-53a)

Each supplemental agreement contains substantially

the following no-strike clause:

‘The Unions and the Employers agree that there

shall be no strike, lockout, tie-up, or legal proceed-

ings without first using all possible means of settle-

ment, as provided for in this Agreement, of any

controversy which might arise.”’ (App. 42a)

The Central States Supplement also contains the fol-

lowing language:

‘Section 2. It is further mutually agreed that the

Loeal Union will, within two weeks of the date of

' They will be referred to herein as the ‘‘Joint Council No. 40

Supplement’’ and ‘‘Central States Supplement’’ respectively.

. *IBT disagrees with this holding, but in order to narrow the

issues in this Court, does not seek review thereof.

7

the signing of this Agreement, serve upon the Em-

ployer a written notice, which notice will list the

Union’s authorized representatives who will deal

with the Employer, make commitments for the Un-

ion generally, and in particular have the sole auth-

ority to act for the Union in ealling or instituting

strikes or any stoppages of work, and the Union

shall not be liable tor any activities unless so au-

thorized. ... It is further agreed that in all cases

of an unauthorized strike, slow-down, walk-out, or

any unauthorized cessation of work in violation of

this Agreement, the Union shall not be liable for

damages resulting from such unauthorized acts of

its members.

‘*While the Union shall undertake every reason-

able means to induce such employees to return to

their jobs during any such period of unauthorized

stoppage of work mentioned above, it is specifically

understood and agreed that the Employer during

the first twenty-four (24) hour period of such un-

authorized work stoppage shall have the sole and

complete right of reasonable discipline short of dis-

charge, and such Union members shall not be en-

titled to or have any recourse to any other provi-

sions of this Agreement. After the first twentv-

four (24) hour period of such stoppage, and if such

stoppage continues, however, the Employer shall

have the sole and complete right to immediately

discharge any Union member participating in any

unauthorized strike, slow-down, walk-out, or any

other cessation of work, and sueh Union members

shall not be entitled to or have any recourse to any

other provision of this Agreement... .’’ (App.

53a-54a)

The Joint Council No. 40 Supplement contains no un-

dertaking with respect to unauthorized strikes.

8

B. The Unauthorized Work Stoppage and the Unions’ Efforts

To Terminate It

1. The Work Stoppage *

On August 17, 1968, Daniels discharged one Roper, a

member of Local 377, and on the 19th it discharged

another, one Eekley. On the morning of the 20th,

meetings were held to resolve the grievances arising

from these terminations. When they proved fruitless,

Roper and Eckley began to picket the Daniels Warren

terminal. The members of Local 377 then walked off

their jobs and the strike began. The next morning

members of Local 377 established a picket line at

Eazor’s Pittsburgh terminal which the members of

Local 249, employed by Eazor, refused to eross. The

discharged employees did not exhaust the contractual

grievance procedure, the strikes were unauthorized by

the unions, and were in direct violation of the no-strike

clauses of the respective supplements to the NMFA.

The local union stewards and committeemen at the

Warren and Pittsburgh terminals took no steps to dis-

suade their fellow employees from striking, but par-

ticipated in and led them.

The strikes were characterized by an accelerating

pattern of violence which persisted, despite efforts to

enforce injunctions issued by the Court of Common

Pleas at Pittsburgh and the United States District

Court at Cleveland to control it. The violence included

commandeering on the highway plaintiffs’ drivers not

involved in the strikes and compelling them to abandon

their equipment, large scale destruction of Eazor

equipment, threats of violence, and shootings, and,

’ This deseription of the cireumstances of the work stoppage is

taken from the Court of Appeals’ narration ( App. 42a-45a).

finally, on September 16 an open assault by hundreds

of persons on a convoy of Eazor trucks operated from

the Pittsburgh terminal under police protection pur-

suant to a specific order of the Court of Common Pleas.

Eleven of these persons, all members of Local 249, were

arrested, convicted and imprisoned for criminal con-

tempt by the Court of Common Pleas.

Within two or three days of the beginning of the

strike Daniels discharged the two union stewards, two

union committeemen and 26 other employees. At a

hearing before District Judge Lambros in Cleveland

the union officials proposed that Daniels permit all em-

ployees to return to work without penalty, including

the employees whose discharge triggered the work stop-

page, whose reinstatement would then be subject to the

grievance procedure.

Daniels rejected this offer and indicated that it was

unwilling to negotiate the status of the discharged em-

ployees until the employees not discharged returned to

work. Shortly after this meeting the plaintiffs offered

to reinstate all the Local 377 strikers who had been dis-

charged except Roper, Eckley, the stewards and the

ecommitteemen, but this offer, which was recommended

by Local 377’s chief officer and the striking union mem-

bers’ counsel, was rejected by the strikers at Warren.

On the same day Eazor at Pittsburgh discharged a 249

steward, a 249 committeeman and one member of 249.

Daniels and Eazor then sent letters to all striking Local

377 and 249 members, respectively, other than Roper,

Eckley, the stewards and the committeemen, offering

them the opportunity to return to work without pen-

alty if they returned on September 11 and with a three-

day penalty for each day’s participation in the strikes

if they returned on September 16. The strikers, how-

10

ever, rejected this offer and on September 17 Daniels

sent letters of discharge to 157 striking employees at

Warren and permanently closed that terminal thereby

ending the strike there. On September 24 the striking

members of Local 249 took a vote, for the first time by

secret ballot, and voted to return to work. The next

day, September 25, they went back to work at the Pitts-

burgh terminal and the strike there was over.

2. The Unions’ Efforts To Terminate the Strike

The Court of Appeals acknowledged that ‘‘There is

no doubt that officers of the two local unions and of the

Teamsters International Union repeatedly character-

ized the strikes as unauthorized and illegal and made a

series of appeals, both written and verbal, to their strik-

ing members to return to work.’’ (App. 43a) This bland

description fails to convey the vigor of their actions or

the stiff resistance of the members employed by Daniels

and Eazor. From the very first the strikers reacted

angrily against the union officials who urged and di-

rected them to return to work, booing them, and threat-

ening violence against them. (7JA 2537-2538, 2542-

2543, 8JA 2882).* Their defiance of the union of-

ficials, of their employer, and even of the courts, as well

as their widespread violence more than justified the

District Court’s characterization of the strikers’ mood

as ‘‘ugly’’ (App. 16a). It was not until after the strike

leaders had been jailed for contempt of court ¢»d many

of the men discharged, and the Warren terminal «'osed,

that the men who remained realized the futility of con-

tinuing their strike.

Perhaps the strongest evidence that the unions did all

that was expected from them under the contract is what

4** JA" refers to the Joint Appendix in the Court of Appeals.

11

the company said during the strike. Thomas Eazor tes-

tified concerning a meeting with Local 249 and Joint

Council officials on August 21, the day the picket line

was put up in Pittsburgh:

Q. Did you make any specific suggestions to them

(Union officials) as to what they should do to termi-

nate the strike as the strike proceeded ?

A. Yes, sir.

Q. What were some of the suggestions that you

made ?

A. I told them they should have their people go

down and get on that line and do everything in their

power, what I mean, to get these boys to listen to

them, to go back to work. I suggested they call

meetings with them up in the union hall, and per-

suade them, I mean, to listen to them, to take their

orders and go back to work, and handle what griev-

ances they had under the terms and conditions of

the contract. (9JA 3135)

On August 27, Eazor acknowledged both the unions’

role in attempting to end the strike and everyone’s

difficulty in achieving that goal, when it wrote to the

striking employees: ‘‘You have defied the Interna-

tional Union. You have defied the Local Union. You

have defied the law.’’ And on September 6, Eazor’s

labor relations representative wrote to the Assistant

to the International’s General President conveying his

‘*nersonal thanks for your help in this endeavor’’ and

expressing the hope that ‘‘this thing reaches a head

soon.’’ (2JA (Exhibits) 362a; 4JA (Exhibits) 1158a)

II. PROCEEDINGS BELOW

| A. The District Court

1. Liability

Eazor and Daniels brought these actions under § 301

of the Act. Trial in the District Court was without a

12

jury and was bifurcated for separate determination of

liability and damages. On March 30, 1973 the District

Court decided that defendants had breached the agree-

ments. The court rejected plaintiffs’ contention that

Local 377 autuhorized the strike. But he concluded that

defendants were obligated to ‘‘use ‘every reasonable

means’ to end the strike’’ (App. 8a). He concluded

that none of the defendants had satisfied that duty.

In his view ‘‘the circumstances called for the polities

of power rather than the politics of persuasion.’’ (App.

16a). And he expressly refused to give any weight to

the unions’ judgments as to what means were ‘‘rea-

sonable.’’ ®

2. Damages

The damage phase of the trial occupied weeks of

conflicting testimony, including that of accounting ex-

perts, principally dealing with the question as to how

much loss was sustained by Eazor-Daniels during the

strike period. The answer to this question turned on

such subsidiary issues as whether the loss sustained

during the strike should include the full cost of deferred

maintenance performed during the strike; whether

depreciation should be allowed on rolling stock during

the time in which it was not rolling; whether a subse-

quent settlement of warranty claims against Ford

Motor and Mack Truck should be credited back in

part to the strike period; whether losses sustained in

branches of plaintiffs’ operation which were not af-

fected by the strike should be included in strike period

losses; whether monies paid during the strike for ex-

penses incurred before the strike commenced should

be included in strike period losses, and if so, to what

5 App. 18a-19a, n. 18.

13

extent; whether plaintiffs’ or defendants’ accounting

experts were the more credible and the more expert.

In deciding the damage issues the trial court de-

clined to explain how it resolved any of the ‘‘disputes

over the intricate mysteries of accounting techniques’”’

(App. 23a), but simply stated that ‘‘ Plaintiff submits

and the Court finds that during the period [of the

strike] Eazor lost a total of $1,079,322.00’’ which be-

came the ‘‘starting point’’ of the strike loss calculation

(Id. 26a). (While plaintiff did so submit on brief, its

own accounting expert had testified, and its own Ex-

hibits showed that those losses were a maximum of

$696,255.° Plaintiff’s post-trial submission was based

on the original consolidated statement which plaintiff’s

counsel had previously represented to the court had

‘*substantially overstated the losses for those months”’

and disregarded all of the adjustments which had been

made by Eazor’s accountants in attributing revenues

and expenses to proper periods.)’ The trial judge then

adjusted this ‘‘starting point’? (App. 26a, 30a) for

two days of non-culpability, for seventeen days of non-

mitigation and for the exclusion of non-recoverable

legal fees, thereby producing the amount of the judg-

ment. Moreover, without a single word of explanation

as to why he was doing so, the trial judge simply tacked

prejudgment interest to the judgment (App. 38a), a

matter of approximately $175,000.

® Eazor Ex. 183 and Int. Ax. Y-2 (prepared by Eazor, 3JA

(Exhibits 855a, 4JA (Exhibits 1176a).

‘Exhibit P-180, 3JA (Exhibits 853a).

14

B. The Court of Appeals

The Court of Appeals held that ‘‘necessarily implied

in the unions’ agreement that there should be no strike

was an obligation on their part to use every reasonable

means to bring to an end a strike begun without their

authorization.’”’ (App. 50a). It also held that the

unions were liable also on the ‘‘so-called mass action

theory[: ] When all the members of a union employed

by a given employer engage in a concerted strike not

formally authorized by the union * * * mass action by

union members must realistically be regarded as union

action.”’ (Id. 57a). The court agreed with the trial

court that the unions had failed to use all reasonable

means to end the strikes, because they did not use

‘‘stronger measures’? which were ‘‘available’’. It

held that these were: to discipline or remove the job

stewards and committeemen who were organizing and

leading the strikes; to suspend or fine the striking

union members; to impose a temporary trusteeship on

the local unions; and to take an earlier secret ballot

vote of the striking members. (App. 59a). The court

asserted also that the unions ‘‘cannot now be heard to

urge that the measures to which they did not resort

would not have proved successful,’’ (App. 64a) that is,

that their ‘“‘breach’’ did not prolong the strike and

ee was not the proximate cause of the strike

osses,

The court held that Eazor was entitled to recover,

as damages, its total strike loss after the unions first

failed to take one of these ‘‘stronger measures.’’ In

so doing, the court in effect converted the ‘‘every rea-

sonable means’’ obligation into a duty to hold Eazor

harmless for any damages resulting from the strike.

15

‘‘The unions’ no-strike pledge was not an aleatory

promise conditional upon the happening of a fortui-

tous event in the future. It was rather an undertaking

that there should be no strike by union members dur-

ing the term of the agreement in violation of the no-

strike pledge.’’ (App. 63a).

The court acknowledged the ‘‘great deal of evi-

dence”’ offered on the amount of plaintiffs’ losses

resulting from the strike and that such ‘‘evidence was

in many respects sharply conflicting’? (App. 65a).

But it both sanctioned the trial court’s failure to make

findings resolving these issues and refused to re-

examine them. Instead, it accepted that court’s

$1,079,332 figure. It then rejected his adjustments

for non-mitigation and disallowed legal fees (App.

74a), allowed the two-day adjustments for non-culpa-

bility and entered a modified judgment for $1,032,580

(App. 76a). Purporting to answer the Unions’ com-

plaint that the trial court’s award of prejudgment

interest was improper and totally unsupported by

findings, the court below tacitly assumed that the award

was the result of trial court’s exercise of its discretion,

and although the basis, if any, upon which the trial!

eourt had exercised that discretion, was unknown, held

that it was not abused. (App. 77a). And it further

determined, without discussion, or even any indication

that this result was not automatic, that interest should

still be awarded although by doubling the judgment on

appeal interest alone was increased to over $350,000.

(App. 79a).

16

REASONS FOR GRANTING THE WRIT

1. IN IMPOSING LIABILITY ON PETITIONERS THE COURT

BELOW DECIDED QUESTIONS OF ALMOST UNIVERSAL IM-

PACT ON THE APPLICATION AND NEGOTIATION OF COLLEC.

TIVE BARGAINING AGREEMENTS AND VIOLATED THE PRE-

CEPTS OF CONGRESS AND THIS COURT.

A. Over 93 percent of major collective bargaining

agreements contain a no-strike clause.* This alone

would warrant review of the unprecedented holding

below that necessarily implied in the union's agreement

that there should be no strike was an obligation on their

part to use every reasonable means to bring to an end

a strike begun by their members without their authori-

zation.

In United Construction Workers v. Haislip Baking

Co., 223 F.2d 872, cert. denied, 350 U.S. 847, the Fourth

Cireuit held unanimously that absent evidence that

its officers ‘‘ participated in, ratified, or encouraged the

continuance of the strike’’ the union could not be held

liable for breach of that promise even if those officers

had done nothing to get the men back to work. Id. at

877. So too, the Sixth Cireuit in North American Coal

Corp. v. Local Union 2262, etc., 497 F.2d 459, 467, n.3

expressly ‘‘decline[d] to follow Eazor’’, referring to

* This figure is calculated from U.S. Burean of Labor Statistics,

Dept. of Labor, Bull. No. 1822, Characteristics of Agreements Cov-

ering 1,000 Workers or More, July 1, 1973 (1974) Table 72, p. 65.

The Labor Department Study revealed that of the 1,339 agree-

ments covering 6.7 million workers analyzed, 779 agreements cov-

ering 4.7 million workers were subject to limited no-strike bans

(defined as ‘‘a statement prohibiting strikes or lockouts except

under given cireumstances or for specific uses.”’ Id. at n.2).

In addition, 474 agreements covering 1.6 million workers contained

absolute no-strike clauses (defined as ‘‘an unmodified statement

prohibiting strikes or lockouts.’’ Jd. at n.1), yielding a total of

1,253 agreements covering 6.3 million workers which contain some

form of express no-strike clause.

17

the District Court’s decision herein. Although the

District Court herein candidly cited Haislip as ‘‘con-

tra’ (App. 12a, n.13), the Court of Appeals sought

to distinguish Haislip on the ground that there the

obligation not to strike had been implied from the

promise to submit contract disputes to final and bind-

ing arbitration (presaging Teamsters Union v. Lucas

Flour Co., 369 U.S. 95, 105), whereas here the no-strike

obligation was expressed in so many words. (App. 51a).

While that distinction has since been endorsed by the

Fifth Cireuit,® it has no basis in Haislip or Lucas

Flour,* has already been rejected by this Court in a

related context, * is contrary to accepted principles of

contract interpretation, ** and represents exceedingly

poor labor relations policy as well, given the impor-

tance which the Act attaches to written agreements,

see §8(d) codifying the rule of H.J. Heinz & Co. v.

Labor Board, 311 U.S. 514, 523-526, and §§ 302(c) (4)

and (5). At best, the validity of the distinction prof-

fered by the Court of Appeals is itself a question of law

under § 301 of the Act which this Court should now

® United States Steel Corp. v. United Mine Wkrs. of Am., 519

F.2d 1249, 1254-1255.

1” Neither Judge Parker in Haislip nor this Court in Lucas

Flour, even remotely suggested that the no-strike duty implied

from the promise to arbitrate contract disputes differs in any

respect from the duty to which the union is subject under an ex-

press promise not to strike over such disputes.

11 Gateway Coal Corp. v. Mine Workers, 414 U.S. 368, 381

squarely decided that the rule of Boys Markets v. Retail Clerks, 398

U.S. 235 governs whether the contractual undertaking not to strike

is express or implied.

12‘*Contracts are often spoken of as express or implied. The dis-

tinction involves, however, no difference in legal effect, but lies

merely in the mode of manifesting assent’’. Restatement of Con-

tracts, §5, Comment a. See also Williston, Contracts, § 3, pp. 8-9

(3d ed. 1957); 1 Corbin, Contracts § 18, pp. 39-42 (1960).

18

decide because it directly affects not only the soundness

of the decision below with respect to agreements which

contain no-strike clauses, but also those 6% of major

agreements which do not, but which do provide for final

and binding arbitration, and from which the no-strike

Obligation is therefore implied under Lucas Flour,

leaving untouched by the decision below only 1% of all

collective bargaining agreements presently in force.

Additionally, the decision below will inevitably bur-

den the negotiation of new collective bargaining agree-

ments. Henceforth unions will be reluctant to aecept

a no-strike clause, lest they thereby unwittingly com-

mit themselves also to the duty to police strikes which

they have not authorized, participated in or ratified.

Their reluctance will be compounded by the standard

which the court below established for judging perform-

ances of that duty, a standard which does not take into

account the surrounding cireumstances, such as the legal

limitations on union’s authority, the failure of the em-

ployer to demand action by the union or the reasonable-

ness of the union officials’ judgment that their actions

would aggravate rather than terminate the work stop-

page. Nor will unions readily jeopardize their assets

by submitting to the regime imposed by the court below,

whereunder the plaintiff employer is relieved of the

need for establishing that the breach proximately

caused the damages claimed, because the union ‘‘cannot

13 See the Labor Department Study cited at p. 16, n.8, supra at

Tables 70-72. Petitioners obtained a computer print-out of the

data underlying these tables and determined therefrom that of

the 1,339 contracts covering 6.7 million workers ineluded in the

Study, 83 contracts, or 6 percent of the total (covering 411,000

workers) did not contain no-strike clauses, but provided for binding

arbitration of some or all issues.

19

be heard to say’’ (App. 64a) that the strike would have

continued even if it had emp'oyed all reasonable means

to terminate it.

On the other hand, it will frequently be impossible

for parties to express their full intentions without

including some express no-strike commitment in the

agreement. For example, since Lucas Flour did ‘‘not

** * suggest that a no-simke agreement is to be implied

beyond the area which it has been agreed will be

exclusively covered by compulsory terminal arbitra-

tion’’ 369 U.S. at 106, parties who intend to submit

only some disputes to final and binding arbitration, but

intend to forbid the union from striking over any

disputes, can do so only by spelling out that no-strike

obligation in terms. Precisely because of their im-

portance to both sides, no-strike clauses are commonly

drafted in considerable detail to define the kinds of

work stoppages which the union may not authorize.

The process will be complicated enormously, if, by

including an express no-strike obligation (without

which such definition is impossible), the parties will

run the risk that they will be deemed to have created

the additional union duty to terminate unauthorized

strikes. ** That risk will be nationwide because even a

eourt which disagrees with the Third Cireuit’s analysis

in Eazor might well reason that parties who, while

14The opinion below leaves considerable doubt as to how the

parties could, by the express terms of their agreement, successfully

exclude such liability. For while the court accorded the fullest

sweep of implication to the no-strike clause, it gave the narrowest

possible breadth to the contractual language of exoneration, such

as, for example, the employers’ disavowal of claims against the

union for unauthorized acts (App. 52a-54a). This erroneous and

unbalanced approach to contract interpretation raises additional

problems for collective bargaining which independently merit this

Court’s attention and correction.

20

Eazor is on the books, enter into an agreement which

contains a no-strike clause, thereby intend to create

the duty which Eazor implies. ‘‘Like other con-

tracts, [a labor agreement] must be read as a whole

and in the light of the law relating to it when made.”’

Mastro Plastics Corp. v. Labor Board, 350 U.S. 270,

279.

B. On the merits, we submit that the court below

was wrong in this case, and Judge Parker was right in

Haislip, where he wrote:

There is nothing in the contract making defend-

ants liable for ‘‘wild cat”’ strikes or requiring that

they take any action with regard to them. This

court has pointed out that employees who engage in

‘wild eat’’ strikes lose the protection of the [Na-

tional Labor Relations] Act and may be discharged

by their employers with impunity for so doing.

N.L.R.B. v. Draper Corporation, 4 Cir., 145 F.2d

199, 156 A.L.R. 989. We have never held, however,

that there is any respousibility on the part of a un-

ion for a strike with which it has had nothing to do;

and there manifesily is no such liability. If [the

union agents] had done nothing when plaintiff

called on them to get the men back to work, there

would have been no liability on the part of the de-

fendants. This being true, defendants were not

rendered liable by the efforts which these men

made to bring about an adjustment of the diffi-

culty, even if they did not do everything that they

might have done to that end. The question is not

whether they did everything they might have done,

but whether they adopted, encouraged or prolonged

the continuance of the strike. There is no evidence

of any sort that they did. (223 F.2d at 877-878,

emphasis added).

But the Court of Appeals herein said that:

a no-strike agreement would be illusory indeed

were a union to be permitted to avoid all respon-

21

sibility under it for the duration of a prolonged

strike which was being carried on by the concerted

action of all its members employed in the struck

operation, merely because the strike was not

initially authorized or called by the union as an

organization or by those of its officers who were

specially empowered to do so. Rather than to con-

strue a contract as producing such a result, the

courts will favor a construction making the mutual

promises binding and giving the contract legal

effect.’’ (App. 50a)

The principle of contract interpretation invoked by

the court is entirely sound, but has no proper appli-

eation to this case, for a no-strike agreement is far

from ‘‘illusory”’ if it is understood, as it hitherto has

been, as a promise by the union that it will not author-

ize, participate in or ratify work stoppages during the

life of the agreement. That management regards this

promise to be a substantial benefit is evidenced most

clearly by the prevalence of no-strike clauses, and the

almost universal insistence thereon by employers in the

many years before the Court of Appeals implied

therefrom the additional union duty to police un-

authorized strikes. Management has relied for protec-

tion against unauthorized strikes on its privilege to

discharge or otherwise discipline those who lead or

participate therein. That privilege was confirmed in

1947 by an amendment to §13 of the Act which pre-

served the ‘“‘limitations’’ and ‘‘qualifications’’ on the

right to strike, one of which is the rule of Labor

Board v. Sands Mfg. Co., 306 U.S. 332, 344, that the Act

does not prohibit the discharge or other discipline of

‘“employees who strike in breach of contract.’’** It is

15 §. Rept. No. 105 on S.1126, 80 Cong. Ist Sess., p. 28, 1 Legis-

lative History of the Labor Management Relations Act, 1947 (here-

after ‘‘Leg. Hist.’’) 434.

22

in this sense that the no-strike promise was **binding

upon the individual union members on whose behalf the

union signed the agreement”’ (App. 52a); to reason as

the court below did, that the union (the bargaining

agent) was responsible for the breach by the members

(its principal) is to create liability on the novel prin-

ciple of respondeat inferior. Moreover, the court be-

low also failed to appreciate that in 1947 Congress re-

duced the disciplinary powers of unions even over their

own members. As was explained in NLRB v. Allis Chal-

mers Mfg. Co., 388 U.S. 175, 184-185 (the case mis-

takenly relied on below (App. 52a)), Congress by

§§8(a)(3) and 8(b)(2) deprived unions of the

right to cause their members to lose their jobs because

they violated a membership obligation.

Professor Cox accurately prophesied the effect of

this enactment on the problem of unauthorized strikes:

The most disturbing aspect of Section 8(a) (3),

however, is the provision making it an unfair labor

practice to discharge an employee pursuant to an

authorized union shop agreement for any reason

other than non-payment of dues. By depriving

the majority representative of power to expel

from the plant individuals seeking to under-

mine its position, this provision eneourages the

growth of the dissident groups and dual unionism:

that breed jurisdictional strife. By depriving the

union of its most effective means of disciplining

workers who disregard their obligations under a

collective agreement, the provision also disables

the union from accepting responsibility for the

employees’ observance of the other terms of a

collective agreement. For example, under a true

union shop arrangement, a labor union could take

See also Radio Officers v. Labor Board, 347 US. 17, 40-41;

Labor Board v. Gencral Motors, 373 U.S. 734, 742-743.

23

ive action to halt wildeat strikes. It could

po the men back to work and, if they disobeyed,

suspend or expel them, thus bringing about their

lay-off or discharge. Under Section 8(a)(3) the

back-to-work order would be an empty gesture,

for the union would have no effective sanction by

which it could be enforced. Under such cireum-

stances it is unlikely that unions will voluntarily

accept any responsibility for the conduct of the

employees they represent. **

In this legal context it cannot be maintained that in

order to ‘‘mak[e] the mutual promises binding and to

give the contract legal effect’? (App. 50a) the union

must be bound to enforce the no-strike clause through

its sharply circumscribed authority ; rather it becomes

clear that, as the Fourth Circuit understood, parties

who place a no-strike commitment into their agree-

ment intend that it will be enforced against the strik-

ing employees by the employer, who may discharge

them ‘‘with impunity’? 223 F.2d at 877, citing \ TRB

v. Draper 145 F.2d at 199, a case which followed Sands,

id. at 204.

rv to the view of the court below, the impli-

ge duty to police unauthorized strikes does

not ‘“‘accord with the Congressional intent.” (App.

57a). The only legis!ative material on which the court

relicd to discover that policy, a section of the 1947

Senate Report referred to at App. 56a and quoted at

App. 52a, does not even remotely support that step.

This section is entitled ‘‘ Enforcement of Contract Re-

sponsibilities’’."* It shows that Congress’ primary

eoneern”’? was that collective bargaining agreements

17 Cox, Some Aspects of the Labor-Management Relations Act,

1947, 61 Harv.L.Rev. 274, 298-299 (1948).

18. Rept. No. 105, p. 15, 1 Leg. Hist. 421.

24

should be legally binding and judicially enforceable

png Bap sides; see Textile Workers v. Lincoln

Mills, 353 U.S. 448, 453-454, discussing and quoting the

Senate Report in extenso. This was, of course, achieved

primarily by providing in § 301 for federal jurisdic-

_ over suits to enforce union-employer contracts

by effectuate § 301 (a), Congress declared in § 301(b)

at any (covered) union ‘“‘shall be bound by the acts

of its agents” and ‘‘may sue or be sued as entity;”’ in

§301(e) it provided that the common law of agen

shall govern ‘‘in determining whether one person is

acting as an ‘agent’ for another person’’. Congress

thereby eliminated both the very loose test of res ~

bility under § 2(2) of the original NLRA and the diff

culties of establishing union responsibility under $6

of the Norris-LaGuardia Act. See the explanation b

Senator Taft at 2 Leg Hist. 1622 quoted in full in

sta A Prtagte 223 F.2d at 878-879, and his deserip-

ows A ows

ed : <i a — responsibility quoted at p.

. ‘Congress was also interested in pr

tive bargaining that ended with i ae é‘

strike”, Lincoln Mills, 353 U.S. at 453. But ev ;

this major objective was not to be accomplished by

reading a no-strike promise into every agreement;

hs

consistent with the overall philosophy of the Bill, the

Senate Report made clear that inclusion or exclusion

ofa no-strike promise was ‘‘a point to be bargained

over. All the less can that Report be read as just-

ifying the imposition of the more onerous d fj

police unauthorized strikes. mail

~~ short, § 301 is concerned with the procedure for

enforcing collective agreements, not with their content

a —_

9 Td. p. 424.

25

That is left to collective bargaining. For, ‘‘the funda-

mental premise on which the Act is based [is] private

bargaining under governmental supervision of the pro-

eedure alone, without any official compulsion over the

actual terms of the contract.’’ Porter Co. v. NLEB,

397 U.S. 99, 108 quoted with approval in NLRB v.

Burns Security Services, 406 U.S. 272, 287. That

policy, embodied in § &(d), (and implicit in §§ 7 and

13, see Labor Board v. Insurance Agents, 361 U.S.

477) is binding on the judiciary in suits under § 301.

In Howard Johnson v. Hotel Employees, 417 U.S. 249,

this Court met and rejected the contention that § 8(d)

(and thus the rule of the Burns case, su pra) was appli-

eable only to the NLRB. This court held:

Although this distinction was in fact suggested

by the Court’s opinion in Burns, we do not believe

that the fundamental policies outlined in Burns

can be so lightly disregarded. In Textile Workers

y. Lincoln Mills, 353 U.S. 448 (1957), this Court

held that § 301 of the Labor Management Rela-

tions Act authorized the federal courts to develop

a federal common law regarding enforcement of

eollective-bargaining agreements. But Lincoln

Mills did not envision any free-wheeling inquiry

into what the federal courts might find to be the

most desirable rule, irrespective of congressional

ronouncements. Rather, Lincoln Mills makes

clear that this federal common law must be ‘*fash-

ionfed] from the policy of our national labor

laws.’’ Id., at 456. (417 U.S. at 255, emphasis

The court below acknowledged that there are limita-

tions to the courts’ authority to imply contractual

obligations, but found precedent for its course in

Teamsters Union v. Lucas Flour Co. 369 U.S. 95 and

Haislip, supra. But Lucas Flour was heavily and

26

unsuccessfully relied on by the respondent union and

the amicus AFL-CIO in Howard Johnson.” In Lucas

Flour itself, the Court took pains to stress that its

holding was applicable in only a narrow class of cases;

See p. 19, supra, quoting 369 U.S. at 106, and id. at

105, n.14, expressly rejecting the proposition ‘‘that a

strike during the term of a collective bargaining agree-

ment is ipso facto a violation of the agreement’’.

The basis for distinguishing between those obliga-

tions which may and those obligations which may not

be implied is not articulated in Lucas Flour, Howard

Johnson or any other decision of this Court, but

the line can be discerned from what has actually been

decided: Where the implication of a duty is necessary

in order to give meaning to a promise which is made

that duty may properly be implied, but not otherwise.

Thus the promise to submit disputes to final and bind-

ing arbitration is ‘instinct with an obligation imper-

fectly expressed’’ not to strike over such disputes. ™

On the other hand, since a collectiv. bargaining agree-

ment provides benefits to both sides even absent a no-

strike obligation, and provides benefits to a union even

if a successor employer is not bound thereby, this Court

properly refused to go further in Lucas Flour or to

adopt the union’s interpretation in Howard Johnson.

Since, contrary to the view of the court below, the

implication of a duty to use every reasonable means

to terminate unauthorized strikes is not necessary to

give meaning and effect to the no-strike clause, see

p. 21, supra, such implication is not permitted, but

*°See Brief for Respondent, No. 73-631, pp. 32-37; Brief for

American Federation of Labor and Congress of Industrial Organ-

izations, td., p. 7.

*1 Cf. Cardozo, J. in Wood v. Lucy, Lady Duff-Gordon, 222 N.Y.

88, 90, 118 N.E. 214 (1917).

27

rather gives one party to the agreement more than it

was able to obtain in collective bargaining, contrary to

the ‘‘fundamental premise of the Act’’. Porter Co.,

supra.

C. The ‘‘so-called mass action theory’? (App. 57a)

which was also invoked by the Court of Appeals,

imposes liability on unions for the action of its mem-

bers, notwithstanding Congress’ determination in

§301(b) and (e) that they would be liable only for

the acts of their ‘‘agents’’ according to the common

law. See p. 24, supra. In describing union liability

under his bill, Senator Taft twice gave the most ex-

plicit assurance possible that unions would not be held

responsible for the actions of their members. In re-

sponse to a direct inquiry by Senators Smith (N.J.)

and Ferguson (who took the same view) he said:

I think the word ‘‘agent’’ used here, as used in the

contract section, and as used in other places in the

bill, means an agent under the ordinary rules of

agency, an agent of the labor union, the organiza-

tion, as such. The fact that a man was a member

of a labor union in my opinion would be no evidence

whatever to show that he was an agent. 2 Leg.

Hist. 1204-1205. See also id. at 1026-1027, repro-

duced in the margin. ™

22 Mr. Tart. What is a labor organization? It is an organiza-

tion with officers, exactly like a corporation.

I admit it may be difficult to prove the responsibility of a union.

It is sometimes difficult to prove in the case of an employer. If the

wife of a man who is working at a plant receives a lot of telephone

messages, very likely it cannot be proved that they came from the

union. There is no case then. There must be legal proof of

ageney in the case of unions as in the case of corperations; but I

do not think there is anything in the fact that a union is an un-

incorporated association which would bring about a condition in

law that the act of every member is necessarily charged to the

labor organization. No; I think not.

The foregoing leaves no room under this Act for

imposing liability on the premise that ‘‘large groups

of men do not act collectively without leadership and

that a functioning union must be held responsible for

the mass action of its members.’”’ (App. 57a). Even

if it is to be accepted as an immutable truth, subject to

judicial notice, that men do not act without leaders, it

is still a matter of proof whether in a particular work

stoppage those leaders were the officers and agents

chosen and authorized to act by the union rather than

ad hoe leaders whose illegal acts generated a sponta-

neous following among the men. Only for the acts of

the former has Congress subjected unions as entities

to liability. Neither the court below nor any of the

other courts which have adopted the ‘‘mass action”’

theory mention § 301(e), or Senator Taft’s explanation

thereof; they do not even stop to consider that by its

action Congress has withdrawn from the courts the

authority to impose liability on some judicially created

‘“‘theory’’.* It is not surprising, therefore, that the

*3 In the court below, we described the unruly growth of the

‘‘mass action theory’’ in detail which cannot be duplicated in

a Petition for Certiorari. Suffice it to say that the eases which ac-

cept the theory are almost entirely devoid of analysis, resting al-

most exclusively on the supposed authority of earlier cases in the

line tracing back to Judge Goldsborough’s oral opinion in U.S. v.-

United Mine Workers, 77 F.Supp. 563, 566. Those decisions failed

even to consider whether his reasoning was sapped of all authority

when the case was ‘‘affirmed on other grounds’’ (App. 57a) by the

Court of Appeals (177 F.2d 29 (D.C. Cir.) cert. denied, 338 U.S.

871). It will be remembered that in Mine Workers, the District

Court had originally enjoined continuation of a strike and ex-

pressly mandated the UMW to ‘‘forthwith instruct its members to

cease the strike and immediately return to their employment”’

(id. at 33). It was the union’s failure to obey that mandate which

the Court of Appeals deemed to be contemptuous. That court

also said that if Lewis, the President, had at the beginning sent

the members a telegram directing or advising their return ‘‘nei-

ther he nor the Union would have been guilty of contempt of the

29

result which they reach is diametrically opposed to

that reached by the courts which have decided accord-

ing to the statute, such as the Fourth Circuit in

Haislip, supra, and the Sixth Circuit in a series of

eases including Lewis v. Benedict Coal Co., 259 F.2d

346, 351-352 (Stewart, J.)** and North American Coal

Corp. v. Local Union 262, 497 F.2d 459, 467. Even if

Senator Taft had not been so explicit, the federal law

of agency as declared by Chief Justice Taft in Coro-

nado Coal Co. v. United Mine Workers, 268 U.S. 295,

would be controlling:

In our previous opinion we held that a trades

union, organized as effectively as this United Mine

Workers’ organization was, might be held liable,

and all its funds raised for the purpose of strikes

might be levied upon to pay damages suffered

through illegal methods in carrying them on; but

certainly it must be clearly shown in order to im-

pose such a liability on an association of 450,000

men that what was done was done by their agents

in accordance with their fundamental agreement

of association. Id. at 304.

The wisdom of this rule, and the dangers of a harsher

standard of responsibility, are given point by facts

of this ease of which the court below took no note. The

consequence of holding the unions responsible for ‘‘all

the members of a union employed by a given employer”’

court’s order’’ (id. at 36), even though the members continued

to strike. For this reason, Judge Keech two years later refused to

hold the same International in contempt of court for violating an

almost identical strike injunction although 370,000 members were

on strike, United States v. International Union, 89 F.Supp. 179,

181 (D.D.C. 1950).

24 This case was affirmed in part and reversed in part on other

issues in 361 U.S. 459.

30

(App. 57a, emphasis added) is that only 200 of Local

249’s approximately 10,000 members (5JA1704) and

395 of Local 377’s approximately 6500 members (6JA

2011; 7J.A2509) have subjected their unions’ treasury

to judgments of $655,793 and $366,786 respectively ; and

while these empleyees are but 1/40 of 1% of the IBT’s

total membership, their ‘‘mass action’’ has subjected

the IBT to a judgment of over one million dollars. *

D. Part and parcel of a contractual duty te use

‘‘every reasonable means”’ to terminate a strike .3 the

standard by which performance of that duty is to be

measured. * We submit that the term ‘‘reasonable”’

in an agreement, or in any rule of law created under

§ 301, must be interpreted as declaring an objective

7° See also, Gould, The Status of Unauthorized and ‘‘Wildeat”’

Strikes Under the National Labor Relations Act, 52 Corn. L. Q.

672 (1967). In applauding the Haislip decision, supra, Professor

Gould wrote:

** * While it would seem proper to say that a union must

vigorously disavow striking stewards, section 301 cannot be

read to require that the union purge itself and discipline the

offending members.

As a matter of good sense, there are very sound reasons for

a narrow concept of union liability. The union bargains for

all employees in an appropriate unit, but it does not neces-

sarily have the loyalty of all employees. Even in a union

shop, the willingness to follow union leadership on economic

questions, as well as matters of discipline of individual em-

ployees, may be of varying degrees and intensity. The union

may not even be in a position to discipline employees who are

non-members. And it is somewhat extreme to hold the union

liable for damages when it takes a position opposite to that

taken by the striking employees and does not encourage the

strike. °° ®

*6 Of course, we believe that the standard is the same whether the

duty is express or implied, see text at p. 17, n.12, supra.

31

standard which requires consideration of all the cir-

cumstances. This is the meaning which this Court

recently gave the term in another context under this

Act: ‘‘ ‘Reasonable ground’ will of course be meas-

ured, as here, by objective standards under all the

circumstances of the case.’”’ NDIRB vy. Weingarten,

Ine., 420 U.S. 251, 257, n.5 quoting with approval,

Quality Mfg. Co., 195 NLRB 197, 198, n.3.

This is not remotely the test applied by the court

below. It held that the fact that ‘‘ [n]Jo stronger meas-

ures from the unions’ arsenal [than instructions and

persuasions] were ever employed, * * * although they

were available’? (App. 59a) was sufficient to establish

the breach.” The court did not consider that Con-

eress had depleted the unions’ ‘‘arsenal of powerful

weapons” (App. 63a) in 1947, and had left only the

employers with the heavy hardware—the power to de-

prive strikers of their jobs. Nor did it consider that

neither Eazor’s threats to exercise that power nor its

actual exercise brought the strike to a halt; nor did

the court consider that while government’s disciplinary

authority is far greater than that of any private party,

neither an injunction, which of course threatened

fines and jail as sanctions for contempt, nor even the

imposition of those sanctions terminated the strike.

27 Later, the court actually held that only ‘‘[i]f the unions had

made a showing of the use of strong and punitive measures with-

out result it would have been for the district court to determine

whether they had exhausted all reasonable measures available to

them to end the strike,’’ and even then, ‘‘the sole test would be

whether available measures were within the power of the unions

to employ and might be likely to be effective to end the strikes.’’

(App. 64a).

32

In short, the court looked only to whether ‘‘stronger

measures’’ were ‘‘available’’, not to those external cir-

cumstances which showed that they would be bootless.

Nor did the court consider whether use of ‘‘stronger

measures’” would be counter-productive—that is,

would risk prolonging the strike, or at least dis-

abling the unions from taking any useful role. Rea-

sonable men do consider all the circumstances when

they plan a course of conduct; specifically, they con-

sider the potential risks as well as the potential benefits

of their actions.* Moreover, it is obviously not in the

interest of promoting industrial peace or any of the

other publie policies which must be considered under

§ 301, to induce union officials to take actions which

might exacerbate strikes, at the risk of damage suits if

they fail to act.”

The same error of law also infected the court’s de-

cision to hold the unions liable for Eazor’s total strike

damages after the first two days. Having approved

the finding that ‘‘the unions used only rhetorie and

wholly abstained from the use of any more powerful

measures, thus, in practical effect, acquiescing in the

28 That is the standard to which the law holds our cld friend,

‘*the reasonable man’’: ‘*The standard of conduct which the com-

munity demands must be an external and objective one, rather

than the individual judgment, good or bad, of the particular

actor; and it must be, so far as possible, the same for all persons,

since the law can have no favorites. At the same time, it must

make proper allowance for the risk apparent to the actor, for his

capacity to meet it, and for the circumstances under which he

must act.’’ Prosser, Torts § 32, ‘‘The Reasonable Man”’ p. 150

(4th ed. 1971).

*° A further objective manifestation of the reasonableness of the

unions’ approach is Eazor’s contemporaneous approval, see p. 11,

supra.

strike situation,’’ it held that ‘“‘they cannot now be

heard to urge that the measures to which they did not

resort would not have proved successful.’’ (App. 64a,

emphasis added). Thus, although the court acknowl-

edged that ‘‘the liability which the unions incurred was

for the damages proximately caused by the breach of

their contractual obligation to use every reasonable

means to end the strikes,’’ (App. 62a-63a) it not only

relieved the plaintiff of the duty to establish that dam-

ages flowed from that breach, but refused even to hear

the unions’ contention that the strike would have con-

tinued and the strike losses incurred, even if the unions

had fully performed.”

But most serious of all, the court proceeded from its

erroneous view of the union’s powers to a further en-

largement of the union’s promise:

In view of the arsenal of powerful measures

available to them it is highly probable that the

unions could have ended the strikes promptly,

given the will to do so. We think that the plain-

tiffs were entitled to rely upon the unions’ doing

so, this being the only way in which, in the case

of unauthorized strikes such as these, they could

perform their no-strike promise. To hold other-

wise would make a hollow mockery of the unions’

no-strike pledge and would leave the plaintiffs

without any remedy in damages if, as it has been

held, the individual union members are not answer-

able in damages for illegal strike activity. (App.

63a-64a)

3° There is no warrant in the record, or the findings, for the

eourt’s innuendoes, here and elsewhere (App. 59a, 63a) that

the unions’ breach was willful, but the point is irrelevant since

proof of proximate cause may not be dispensed with even where

there is a willful breach of contract or even where defendants’

conduct is tortious. Cf. under § 303 of this Act, Teamsters Union

v. Morton, 377 U.S. 252, 261-262.

34

Thus, in order that the employer could recover its

strike losses from someone, the court having first read

the no-strike pledge as including a duty to use every

reasonable means to terminate a strike, transmuted it

into a promise to hold the employer harmless for the

members’ breach of the agreement.

In Howard Johnson, p. 25, supra, this Court ad-

monished against just such a ‘‘free-wheeling inquiry

into what the federal courts might find to be the most

desirable rule’’ and thereupon to give a party protec-

tion it could not secure at the bargaining table. 417

U.S. at 255.

Il. IN AWARDING DAMAGES AND INTEREST IN THE

ABSENCE OF SPECIAL FINDINGS AS REQUIRED BY

RULE 52(a), F.R. CIV. P. THE COURTS BELOW DE-

PARTED FROM THE USUAL COURSE OF JUDICIAL

PROCEEDINGS AND THE TEACHINGS OF THIS

COURT.

A. Strike Losses

Rule 52(a), F.R.Civ.P., unequivocally requires that:

‘*Tn all actions tried upon the facts without a jury

... the court shall find the facts specially ... .”

But in this ease, the trial court’s resolution of weeks

of conflicting evidence simply states that Eazor had

lost $1,079,332. The court sought to justify its failure

to specially find the facts by saying that the task would

be ‘‘of Augean dimensions.’’ (App. 23a).

Of course, the complexities of the evidence and

multiplicity of subordinate issues made finding the

facts specially all the more indispensable as part of

the decision-making process of the trier and to make

meaningful appellate review possible. It was grave

error for the Court of Appeals to excuse the trier’s

35

non-compliance with Rule 52(a). As this Court held

in Hatahley v. United States, 351 U.S. 181:

‘“*[I]t is necessary in any case that the findings of

damages be made with sufficient particularity so

that they may be reviewed.’’ (Jd. at 182)

Absent relevation of the trial judge’s subordinate

factual findings, there is no way for an appellate court

to know whose testimony he credited, which accounting

theories he found to be appropriate, how he resolved

the challenges to expenses for deferred maintenance

and for items purchased prior to the strike; in short,

whether he made missteps as he ‘‘threaded [his] way

through this maze.’’ (App. 65a).

The decision of the court below is also in conflict

with the decisions of other courts of appeals, which

have been meticulous in their policing of trial courts

to assure adequate compliance with Rule 52(a). See,

e.g., Alexander v. Nash-Kelvinator Corporation, 261

F.2d 187, 190 (2 Cir.), modified 271 F.2d 524; MeManus

v. Midland Valley Lumber Company, 348 F.2d 898,

900 (4 Cir.) ; United States v. Federal Insurance Com-

pany, 483 F.2d 153, 158 (5 Cir.); Lewis v. Penning-

ton, 400 F.2d 806, 817-18 (6 Cir.), cert. denied 393 U.S.

983; Traylor v. United States, 396 F.2d 837, 839 (6

Cir.) ; National Popsicle Corp. v. Icyclair, 119 F.2d

799, 800 (9 Cir.) ; Carpenters Local 1273 y. Hill, 398

F.2d 360 (9 Cir.) ; and Plumbers & Fitters, Local 761

v. Matt J. Zaich Const. Co., 418 F.2d 1054 (9 Cir.).

In each of these cases the Court of Appeals concluded

that the district courts had failed to find the facts with

the specificity mandated by Rule 52(a) and reversed

and remanded with instructions to make such findings.

Plumbers and Carpenters, both of which involved

damages for violations of § 303 of the Act, are espe-

36

cially instructive. Here, as in Carpenters, “‘the testi-

mony and trial briefs [were] of a highly detailed and

technical nature.’’ 398 F.2d at 363. In Plumbers, the

court said:

Our court has held that when damages are claimed

for several distinct elements and the trial court

has made a lump sum award, the case should be

remanded for supplemental findings of fact on the

issue of damages. Carpenters Local 1273 of

United Brotherhood of Carpenters and Joiners

of America v. Hill, 398 F.2d 360 (9th Cir. 1968).

In that case, the lump sum was less than the total

of each of the claimed elements of damages so that

we had no adequate basis for review as to each

element. Here, the award was equal to that

claimed, but there is nothing which reveals a

specified amount attributable to each element.

418 F.2d at 1059.

A remand for supplemental findings of fact on the

issue of damages, as was ordered in Plumbers, was all

the more necessary here since ‘“‘the award was equal

to that claimed”’ originally by plaintiff, an amount

totally discredited by plaintiff’s own accountant and

exhibit. See p. 13 supra.

B. Interest

This Court has not heretofore decided whether the

findings requirement of Rule 52(a) applies to the basis

for a discretionary award or denial of prejudgment

interest. The question is obviously of continually re-

curring importance in suits under a whole panoply of

federal statutes which give one private party a cause

of action for damages against another. ‘‘The cases

teach that interest is not recovered according to a rigid

theory of compensation for money withheld, but is

given in response to considerations of fairness. It is

37

denied when its exaction would be inequitable.’’ Bd. of

Commissioners v. United States, 308 U.S. 343, 353. This

Court has recently reminded that “discretionary choices

are not left to a court’s inclination, but to its judgment;

and its judgment is to be guided by sound legal prin-

ciples. * * * That the court’s discretion is equitable

in nature * * * hardly means that it is unfettered by

meaningful standards or shielded from thorough ap-

pellate review.”’ (Albemarle Paper Company v. Moody,

422 U.S. 405, 416). Accordingly, Rule 52(a), which

makes meaningful appellate review possible, should

be adhered to with respect to prejudgment interest, at

least where the amount is not de minimis. And so the

courts of appeals other than the court below, have

held and have reversed and remanded where a district

eourt failed to adequately delineate the basis for the

grant or denial of prejudgment interest. Robert C.

Herd & Company v. Krawill Machinery Corp., 256

F.2d 946, 953 (4 Cir.), aff’d on another question, 359

U.S. 297; McCrea v. Harris County Houston Ship

Channel Navigation District, 423 F.2d 605, 610 (5 Cir.)

cert. denied 400 U.S. 924; Wessel v. Buhler, 437 F.2d

279, 284 (9 Cir.).

The decision below is in even sharper conflict with

Norte & Co. v. Huffines, 416 F.2d 1189, 1191-92 (2

Cir.), where a district court’s elaborate articulation of

the basis for an award of prejudgment interest (288

F.Supp. at 865), was held inadequate since it did not

show that the district court had considered all the

factors which the Court of Appeals deemed relevant.

Yet here, the Court of Appeals approved the award

of pre-judgment interest although it could not know

whether the District Court had considered any, much

less all, relevant factors (or for that matter, factors

38

which were impermissible), and also could not even

know that the District Court had exercised its discre-

ton, and had not awarded prejudgment interest on the

erroneous premise that it was required to do so.

This case also presents an important and recur-

ring variant on the problem of findings concerning

discretionary prejudgment interest awards—whether

a Court of Appeals which substantially increases a

judgment may award prejudgment interest on the

total judgment, rather than remand to the trial court

for renewed exercise of its discretion, in light of the

changed circumstances, and if the appellate court may

act, whether it must set forth the basis for its decision.

Here, the Court of Appeals doubled the judgment,

raising the interest to $350,000 and the entire total

award against the defendants in excess of $1,400,000.

Even if the original award of interest was proper, it

by no means follows that the award on the much greater

judgment still ‘‘is compensatory and * * * , in light

of the substantial sum involved, [and] is in accord

with ‘fundamental fairness.’’’ Norte & Co., supra,

416 F.2d at 1191, following Board of Commissioners,

supra.

Since it is the trial court’s discretion which is called

for, we submit, as do petitioners in Bangor Punta

Corp. v. Chris-Craft Industries, now pending on peti-

tion for certiorari No. 75-355 (id. pp. 3, 33) that the

court should have remanded the question of interest

to the trial court for the exercise of that court’s dis-

eretion. But if it was proper for the Court of Ap-

peals to decide the issue in the first instance, that Court

should surely have set forth the basis, if any, for its

belief that the award was still equitable. Yet for

aught that appears, that Court thought the award was

39

automatic given its approval of the trial court’s (sup-

posed) exercise of discretion on the original judgment.

The award of such substantial sums without the slight-

est indication that the equitable standard declared by

this Court has been followed is the antithesis of proper

judicial procedure, and calls for correction by this

Court.

CONCLUSION

For the foregoing reasons this Petition for Certior-

ari should be granted.

SIDNEY DICKSTEIN

GEORGE KAUFMANN

1735 New York Avenue

Washington, D. C. 20006

Attorneys for Petitioner International

Brotherhood of Teamsters,

Chauffeurs, Warehousemen and

Helpers of America

BEN Pav. JUBELIRER

2000 Lawyers Building

Pittsburgh, Pennsylvania 15219

Attorney for Petitioner Local No. 249

EUGENE GREEN

602 Stambaugh Building

Youngstown, Ohio 44503

Attorney for Petitioner Local No. 377

‘Ib

STATUTORY APPENDIX

This case involves § 301 of the Labor-Management

Relations Act of 1947, 61 Stat. 136, 156, 29 U.S.C. § 185,

which provides in pertinent part:

(a) Suits for violation of contracts between an

employer and a labor organization representing

employees in an industry affecting commerce as de-

tined in this chapter, or between any such labor or-

ganizations, may be brought in any district court

of the United States having jurisdiction of the par-

ties, without respect to the amount in controversy

or without regard to the citizenship of the parties.

(b) Any labor organization which represents

employees in an industry affecting commerce as

defined in this chapter and any employer whose

activities affect commerce as defined in this chapter

shall be bound by the acts of its agents. Any such

labor organization may sue or be sued as an entity

and in behaif of the employees whom it represents

in the courts of the United States. Any money

judgment against a labor organization in a district

eourt of the United States shall be enforceable

only against the organization as an entity and

against its assets, and shall not be enforceable

against any individual members or his assets.

* * *

(e) For the purposes of this section, in deter-

mining whether any person is acting as an ‘‘agent’”’

of another person so as to make such other person

responsible for his acts, the question of whether

the specifie acts performed were actually author-

_ or subsequently ratified shall not be control-

ing.

Rule 52(a) of the Federal Rules of Civil Procedure

provides in pertinent part:

(a) Errectr. In all actions tried upon the facts

without a jury or with an advisory jury, the court

2b

shall find the facts specially and state separately

its conclusions of law thereon * * * Requests for

findings are not necessary for purposes of review.

Findings of fact shall not be set aside unless clearly

erroneous, and due regard shal! be given to the op-

portunity of the trial court to judge the credibility

of the witnesses.* * * If an opinion or memorandum

of decision is filed, it will be sufficient if the find-

ings of the fact and conclusions of law appear

therein. * * *