# Petition — Local Union No. 373, International Ass'n of Bridge, Structural, & Ornamental Ironworkers v. Mundy > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385005_2135%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition - **Published:** January 1, 1979 - **Citation:** 440 U.S. 980 ## Text y~ Supreme Court, U. S FILED DEC 1 1978 IN THE Supreme Court of the United. Ocroser Term, 1978 No. " =“ 80 LOCAL UNION NO. 373, e¢ al., Petitioners, MICWAEL ROUAK, JR,, CLERK | vs. PHILIP MUNDY, et ai., Respondents. PETITION FOR A WRIT OF CERTIORARI TO THE SUPERIOR COURT OF NEW JERSEY, APPELLATE DIVISION Tomas J. O’Ner, Counsel for Petitioners, 60 Park Place, Newark, New Jersey 07102. (201) 6438-6300 Notan, Lynes, Beit & Moore, Attorneys for Petitioners. Joun J. MuLVrerLe, On the Petition. Adams Press Corp., 5 Commerce Street, Newark, N. J. 07102 ag 110 TABLE OF CONTENTS PAGE THE OPINIONS BELOW ............:c.ccccccccccceceecsses 2 JURISDICTION a . 3 ES RA NTO 3 FEDERAL STATUTE INVOLVED ...............cecsccsessscscscecesenencetaees 4 SPUATIRERIT GR THER CAGE n.ececccezecscecescccecscescscsssssteccssenmnese 5 Be I ND erectntitenscnisinntnseininsinenaesennciin 6 B. The New Jersey Courts’ decisions .................. 9 REASONS FOR GRANTING THE WRIT .............000..cccececceeseeeees 14 Conclusion Mt AI 17 APPENDIX: Connell v. Local 483 Oral Decision of Polow, J.S.C. occ la Eat SE, RR 29a Mundy v. Local 373 Oral Decision of Furman, J.S.C. 0.000... 32a ERTS SEERA cee ee 42a Esposito v. Local 11 Letter Opinion of Dwyer, J.S.C. .....nne. 45a Judgment 78a ii TABLE OF CONTENTS PAGE Serafin v. Local 480 Oral Opinion of Ackerman, J.S.C. .0000002000....... 80a Judgment .. GEORGE CONNELL, et al., Plaintiff's, LOCAL UNION NO. 483, INTERNATIONAL ASSOCI- ATION OF BRIDGE, STRUCTURAL AND ORNA- MENTAL LRONWORKERS, AFL-CIO, et al., Defendants. S a Before: Honoras_e Berrram Po iow, J.S8.C. Appearances: Messrs, Craner, BRENNAN & NELSON By: Mr. Joun A, Craner Attorneys for the Plaintiffs [la] 2a Oral Decision of Polow, J.S.C., October 27, 1976 Messrs, Nouan, Lynes, Bern & Moore By: Mr, Jerome Lynes, Usa. and Mn. Jonn J, Munyvinrnn Attorneys for the Defendant, Local No, 488 Messrs. Parsonnet, Parsonner & Duacan By: Mr. Tomas L, Pansonnet, Msq, Attorneys for the Defendant, International Association of Bridge, Structural and Ornamental Lronworkers Pamir Fisuman, C.S.R, Official Court Reporter The Court: L have, of course, listened carefully to all the evidence, I have examined the documents. I have listened to counsel. I obviously have a responsibility and to some extent, of course, the role of the Court has been explained by our Supreme Court in Moore. The ease is on remand from our Supreme Court in the matter orig- inally entitled Moore vy, those two defendants, the Local 483 of the International Association of Bridge, Structural and Ornamental Lronworkers, the AFL-CLO and the other defendant again is the International Union. On February 14, in fact, 1975 the matter was remanded to the trial court with directions that an order be entered requiring the local union to reconsider the applications of the plaintiffs in that case for transfer into the local union in accordance with the view expressed in the opinion of Judge Collester and further the Supreme Court ordered 3a Oral Decision of Polow, J.S.C., October 27, 1976 that in the event of rejection of any such application for transfer, the reasons must be stated for the rejection to provide a basis for a fair and impartial review by the International General Executive Board in accordance with the constitution of the International. Now, another suit was started in the interim since the decision in Moore and all the plaintiffs in both suits ap- pear now before this Court. The suits were consolidated by consent and for some reason, which I am not quite familiar with and it has nothing to do with the deter- mination in this case, a different name appears first, Connell instead of Moore, and so that the titles are some- what different. There are now 29 plaintiffs, I understand, who are in the same or similar positions, although their status is somewhat different based upon what efforts were made, what reasons were given for rejections and whether or not any formal appeal was made from the rejection to the International. It is clear that none of these 29 plaintiffs was approved for transfer into Local 483, The Moore trial took place in this courtroom, I believe, in or about December 1973, The trial judge found that the practice of Local 483 in rejecting all applications for transfer constituted an abuse of discretion. However, the trial judge also ruled that the Chancery Division of the New Jersey Superior Court lacks jurisdiction to intervene in the internal affairs of the union and, therefore, no ulti- mate relief could be granted. He relied on Mayer v. Journeyman Stonecutters Asso- ciation, which is reported at 47 N. J. Equity 519 and was apparently decided in 1890, Accordingly the trial judge entered a judgment in favor of the defendants and on 4a Oral Decision of Polow, J.S.C., October 27, 1976 appeal the Supreme Court determined that Mayer was not applicable and furthermore indicated that conditions have substantially changed since the Mayer decision in 1890, According to the Supreme Court in Moore, although our courts have traditionally refrained from interfering with the internal affairs of unions, they nonetheless will and have the obligation to intervene when the provisions of a union constitution are repugnant to public policy or exceed the limits on equal opportunity to work guaran- teed by the State and Federal Constitution or where they are interpreted in such a way as to in fact be repugnant to public policy or deprived parties or persons of the equal opportunities guaranteed by the State or Federal Constitution. Thus the Court concluded that the exclusion of qualified persons for membership in an organization where such membership is a matter of economic necessity is to be dealt with as stated in Falcon; that is, Falcon vy. Middle- sex County Medical Society reported at 34 N. J. 582 in 1961, and there it was held that a county medical society cannot arbitrarily exclude a duly licensed and qualified physician from membership. Following that in 1963 in Greisman v. Newcomb Hospi- tal at 40 N. J. 389 (1963) the Court noted that the hos- pital’s power to pass on staff membership is a fiduciary power and an applicant is entitled to be evaluated on his individual merits without regard to certain restrictive by-law requirements. The Court found a similarity in Moore between the union and the county medical society or hospital based upon the fact that they each effect the economic welfare of the individual applicant and all have public importance. 5a Oral Decision of Polow, J.S.C., October 27, 1976 Defendants here would make some distinction because they argue that there is no economic advantage to local membership. They deny any relative advantage in mem- bership in the union itself because all the applicants for membership in this case or at least theoretically to all the economic advantages as non-members which are available to those who are in fact members of the local, argue that they all work and are assigned work out of the same hir- ing hall and the same list. Be that as it may, however, as I see it, our Supreme Court has already resolved that issue in Moore, our Su- preme Court having stated specifically that there is an economic advantage in membership in the local and, I think, that this Court is bound by that determination and even regardless of that determination, this Court cannot help but conclude that the advantages are greater than merely the relief from the paying of the two-and-a-half- dollar weekly travel service fee. The fact that it is obvi- ous that all ironworkers aspire to membership in the local union in the community in which they live or work obvi- ously permeated the entire proceedings in this courtroom. The 29 plaintiffs in this case feel very strongly that they would have an advantage or surely would not have gone to the time and trouble involved, expense of pursuing this litigation. Beyond that it is clear that over the years members of the locals—at least in this area—have seen fit to attempt to restrict their membership for reasons which may to them be significant. Surely they cannot deny that there is a desirability in holding membership. I previously referred to the decision in California in Director’s Guild of America, Inc. v. Superior Court, 409 Pacific 2d 934 where the Court declares at 941 that mem- bership in the union means more than mere personal or 6a Oral Decision of Polow, J.S.C., October 27, 1976 social accommodation. Membership affords the employee not only the opportunity to participate in the negotiations of contracts but also the chance to engage in the institu- tional life of the union. In the case, of course, which involves interstate commerce the union must legally give fair representation to all the appropriate employees, whether or not they are members of the union, the union official, in the nature of political realities, will in all likeli- hood more diligently represent union members, who can vote him out of office, than employees whom he must serve only as a matter of abstract law, and the Court referred to an article in the Columbia Law Review in 1947: The right to join a union (1947) 47 Columbia Law Review Page 33. “Participation in the union’s affairs by the workman compares to the participation of the citizen in the affairs of his community. The union, as a kind of publie service institution, affords to its members the op- portunity to record themselves upon all matters affecting their relationships with the employer. It serves likewise as a vehicle for the expression of the membership’s posi- tion on political and community issues. The shadowy right to ‘fair representation’ by the union is by no means the same as the hard concrete ability to vote and to par- ticipate in the affairs of the union.” Obviously that explains some of the motivations behind both the desire, the strong urge on the part of these applicants to transfer into the local and, on the other hand, the antipathy these unions have shown and in fact one of the witnesses testified, although with regard to another local, for allowing transfers into the respective locals. Surely there are advantages and our Supreme Court was right in concluding that there are economic advan- Ta Oral Decision of Polow, J.S.C., October 27, 1976 tages in union membership. On the other hand, of course, this Court does not conclude that based upon that logic automatically all journeymen applicants must be admitted to the local union. That would also raise difficult social and economic questions and any such sweeping ruling could have adverse effects on the union by way of an influx of people who could distort the function of the union local itself and, of course, it could have important possible consequences on the primary subject of the testimony in this ease, specifically, the civil rights issue and the desir- ability of obtaining a better racial balance, so that there can be no sweeping ruling requiring acceptance of all applicants for transfer who might happen to be members, journeymen members, of the international, that not only might upset the racial balance further but might at the outset interfere with the attempt on the part of the U.S. Government to work out some method of obtaining better minority group representation. In any event, this Court is limited to act within the scope of the ruling in Moore by our Supreme Court. Our authority is surely cireumseribed and within those limits this Court must determine whether the reasons for rejec- tion is at this time, provided by the local, reviewed in accordance with the outlines of the Moore decision by the General Executive Board of the international and in ac- cordance with the provisions of the International Consti- tution, whether the reasons given should be reviewed by this Court for arbitrariness or reasonableness and perhaps also whether the mandate of our Supreme Court requir- ing, as I read it, that proper standards or guidelines or criteria be established has been in fact followed and ulti- mately whether the International Executive Board has reasonably exercised its discretion. 8a Oral Decision of Polow, J.S.C., October 27, 1976 It has been conceded that as a matter of record that at least 22 of the 29 plaintiffs did make application for transfer into the local and that they were rejected. Now, with regard to the rejection, 15 of them were apparently rejected solely on the basis of the Federal Court ruling and the interpretation of counscl that ae- ceptance of any of these applicants would be violative of either the spirit or purpose or the letter of those rulings. An additional seven were rejected for additional reasons as outlined by Mr. Lynes, having to do with untruthful statements, I believe, and those rejected applicants did file appeals with the International General Executive Board which declined to reverse the action of the local executive council. There were other plaintiffs who either failed to file any applications on the grounds that they would be futile or failed to seek their Appellate review for the same reason on the grounds that it would be futile and that the local and international had made it clear that they would not approve no application for transfer. Now, the local at first gave four reasons for its actions. I understand, as I have just indicated, that only two of those reasons are pressed by the local. As far as the international is concerned, it presses only one, that deal- ing with the civil rights issue. It’s stated as follows: Admission of each plaintiff would cause a further im- balance in the minority makeup of defendant local and would therefore adversely effect the continuing Title 7 decree entered in the case of U. S8. v. Plumbers, such orders or decrees having heen predicated upon assurance of defendant Local 483 that the minority makeup of all 9a Oral Decision of Polow, J.S.C., October 27, 1976 northern district ironworker locals will reach 20 per cent during the period between 1972 and 1977. ‘Therefore, to preserve this ratio no white members can be admitted into Local 483. During the course of the trial this statement was some- what modified to suggest that the intent was at this time as stated. However, the reason seems to be permanent and irrevocable. Now, that is only important in my at- tempt to interpret the motivation and justification for the stated reason. Now, do I have the power to determine first whether that reason is arbitrary or reasonable? We surely have some support in this State without relying solely on Moore. With regard to Moore, the Court discussed the impor- tance of the local setting forth reasons for review by the international for arbitrariness or reasonableness. The Court seemed to assume that that would be sufficient and the problem would thereby be solved. It did not take the next step and suggest that this Court has the power to review the action of the international for arbitrariness or unreasonableness. However, I cannot conceive of the Supreme Court having suggested that the matter be re- viewed and that this Court has the power to set aside an arbitrary act if in fact it did not conceive that this Court would exercise that power if necessary in this particular situation. ; In 1967 there was a decision in Ferger v. Local 483 and the Appellate Division affirmed the trial court’s ruling which would surely support the conclusion that this Court may review the actions ultimately barring transfers as sought in this case. 10a Oral Decision of Polow, J.S.C., October 27, 1976 Back as far as 1948 in Carroll vy. Local No. 269 decided in 133 N. J. Equity 144, the Court enunciated common law principles including the recognition that courts do not exercise general powers over voluntary associations. Ilow- ever, that a complete prohibition against review by the Court would be obsolete as applied to unions. That may be considered as dictum because in that case there was no relief when there was an agreement that the plaintiffs be allowed to apply for membership and work unmolested. However, the language is surely significant and perhaps even more significant now than when it was stated by the Court, and I quote: “If the characterization of a labor union as a voluntary association becomes in time a mere anachronism, the mere word ‘voluntary’ will not likely preserve the present state of the law. “It is wise to foresee that a change in surrounding cir- cumstances such as the economic strengths of competing groups, may make the existing law disjointed and an in- strument of oppression if strictly adhered to, “It is the peculiar genus and strength of the common law that no decision is stare decisis when it has lost its usefulness in our social evolution; it is distinguished, and if times have sufficiently changed, overruled Judicial opin- ions do not always preserve the social staties of another generation.” Our Supreme Court surely recognized the obligation of the courts of this State to act and protect what it desie- nated as the property rights of journeymen, members of the international union, who are economically dependent upon collective bargaining contracts, which in this case, of lla Oral Decision of Polow, J.S.C., October 27, 1976 course, would be negotiated by Local 483, in that their applications for transfers be fairly and properly con- sidered. A rejection of an application for transfer must have a reasonable basis. Transfer should not be barred because of a decision to restrict membership to those who have participated in an apprenticeship program. I have not decided that on my own. I have taken that from the ruling of the Supreme Court. I am not sure that the union 2.; yet understands it so I will repeat it. Transfer of membership should not be barred because of a decision of the union to restrict membership to those who have participated in an apprenticeship program. So the ques- tion then remaining is whether these rejections based pri- marily on the allegation that the stipulation and consent decree in the Title 7 action in the federal courts bar all transfers of white members into 483 and that, in any event, transfers of white members would be a violation of the spirit, if not the letter, of the intention of the Court. Is that interpretation supported by the proofs? If not, is it a fair and reasonable basis for rejection, whether or not required by the language of the decree, stipulation and amended decree? The local argues that Title 7 decree was predicated on an agreement between counsel for the local and the inter- national or, I suppose, counsel for the Northern New Jersey District, the international and government counsel. Now, that agreement was based upon a desire of the Federal Government to obtain better racial balance, that certain assurances were given to the government in that the union has an obligation to live up to its promises. I think Mr. Duff referred to a moral obligation on his part to keep his word. If it is the local’s position that it 12a Oral Decision of Polow, J.S.C., October 27, 1976 is a moral, if not a legal, requirement on their part, the international joins the argument of the local but also adds to it the fact that it cannot be held liable for anything in the absence of fraud or malice because in performing its duties under the union constitution it is acting as an appellate tribunal deciding an appeal from an administra- tive agency and, therefore, it cannot be held for damages even if they are wrong. They rely on United Mine Work- ers vy. Gibbs reported in 383 U.S. 715 to establish that the liability of the international for actions by the local must be established on the basis of clear proof of actual participation or actual authorization of such acts by the union. Of course, in this case there is no question about knowl- edge. The question is whether there was in effect a con- spiracy. A conspiracy obviously may he proved by cir- cumstances without having to show specifically an oral or written agreement. Defendant also relies on Gavin, which is, as I under- stand it, an unpublished opinion which has been supplied to the Court and which has been referred to by counsel in which it was determined that the decision of the local to hold up transfer applications or hold them in abeyance was supported by the Court. I indicated before that it did appear during the course of the trial or at least during sumuations, that there was a suggestion that the rejec- tions were intended to be at this time not final and irre- vocable. The language of Gavin is interesting. The Court stated that a consent decree was entered on June 26, 1973 by order of the United States District Court, Northern Illi- nois. Among other things, the decree imposes upon the 13a Oral Decision of Polow, J.S.C., October 27, 1976 local an obligation to exercise good faith efforts to achieve over the next several years numerical goals of active black journeymen and apprentice members. Though the local is not prohibited from admitting into membership members of other ironworker locals under the provisions of the in- ternational constitution and upon such conditions as Local No. 1 may require, the decree specifically provides that the admission of new white members will not relieve the local of its obligations to meet the goals set forth. The Court, of course, emphasized the discretion vested in local unions by the international constitution. It upheld that discretion in that case, although it was clear that the consent decree in that case did not purport to prohibit transfer of members. However, I cannot say that that decision applies to the facts as I find them in this case. In this case it seems to me that we have clear proof. As a matter of fact, we have a ruling by the Supreme Court upon which I cannot conclude anything but that traditionally there has been a deliberate, definite policy of excluding transferees except as I noted previously in the case of relatives of existing members. That policy was condemned by our Supreme Court as arbitrary and unreasonable and I cannot say that in this case the defendants did anything but use the consent decree and stipulation as a deliberate means of continuing the very policy which has been condemned by our Supreme Court, and I will be more specific. The erucial document upon which defendants rely is, I believe, the stipulation. I think it is clear and not much need be said about the fact that the original order would have permitted all transferees without limitation. The original order would have also permitted or required, l4a Oral Decision of Polow, J.S.C., October 27, 1976 mandated, admission to all who had completed only six months of training. Now, I am perfectly satisfied that neither of those re- sults was contemplated by either party and, therefore, some amendment was obviously necessary. The parties agreed on the manner of amendment and the stipulation and consent decree provides that Paragraph 33A_ be stricken and this be substituted. Paragraph 383A originally provided full journeymen membership to anyone who completed six months experi- ence. The amendment limited the effect of that provision to any black or Spanish-surnamed American. Now, pursuant to the discussions, there was an order requiring admission of no fewer than 75 minority appli- cants every year for a period of no less than five years and no less than 25 minorities in the apprenticeship pro- gram. Now, there has been testimony allowed concerning the discussions which led up to the final requirement for 75 minority applicants per year for five years and this was over the objection of the plaintiffs and that testimony was introduced to support the contention of defendants that the basis of the number 75 was the ultimate desire to reach a ratio of 80 whites to 20 minorities within the designated five-year period. I have in my colloquy with counsel indicated that my recollection of the testimony is that they rounded out the numbers to the extent that they began with a figure of approximately 1400 members as of the time of the dis- cussions in the five locals making up the Northern New Jersey District and that they considered that with the 15a Oral Decision of Polow, J.S.C., October 27, 1976 expected growth and making allowance for attrition, as we have indicated, by way of retirement on pension, by way of transfers out by way of termination and by way of death; that a certain number of new members would be admitted each year but that at least 75 of each of those years be members of these designated minority groups to thr end that at the end of the five years there would be at least 20 per cent minority membership. Now, just by simple mathematics, of course, if 375 is 20 per cent and then the total anticipated membership would have been approximately 1900, I think that five times 375 is 1875. So that there was at least an antici- pated total growth of 500 members over the five-year period and making allowances for the obvious attrition rate and, as I have said, I do not recall any specific testi- mony as to what that rate is. Nevertheless, it is clear that it was anticipated that there be at least as many new white members as those contemplated among minority groups. Now, defendants insist that the purpose of the amended decree and stipulation was to bar all white transfers at least until the desired goal had been reached or T suppose that the alternative in that their argument is that in any event allowing white transfers would frustrate the attempt to achieve that stated goal. In fact, of course, the local has not come close to meeting the requirements of the order, The district has not come close to meeting the requirements of the order. At no time has there been 75 minority members admitted. Even immediately follow- ing the entry of the order and the stipulation and the consent decree in the first year, according to the evidence, 73 whites and 33 minority members were admitted as l6a Oral Decision of Polow, J.S.C., October 27, 1976 apprentices and 29 minority trainees started in July 1973. Somehow or other 18 months elapsed. There were no other new members admitted into any program until January 1975, the only other class admitted since the order, and that class consisted of 42 white members and 23 minority members in the apprentice category; 20 minority trainees. At this time the testimony is to the effect that Local 483 has seven journeymen blacks, seven apprentice blacks among its 143 active working members. Appar- ently, according to the testimony, the membership also — pensioners, although their status is not entirely clear. . Obviously, both the district and the local have failed to live up to the consent deeree, according to the testimony at least partly because of economic conditions, although even at the very outset, as T have indicated, the very first class selected in October 1972 failed to comply and surely the selection in October 1972 presumably purstiant to the Title 7 order of 1973, the number of white apprentices against a lesser number of minority people contradicts counsel’s suggestion that no new white members were to be contemplated at all. All the white new members of the union since the Moore decision came through aecept- ance by the union local itself. None were transferees, There Was no apparent equivalent policy adopted by the union to hold down white new membership equivalent to its poliey as stated here to allow no transfers of white members until the racial balance is achieved. There is no basis that I can see that has been presented to this Court for this kind of discrimination absolute prohibition against white transfers, no policy at all re- stricting white new members based upon this raci 1 bal ance problem. oe 17a Oral Decision of Polow, J.S.C., October 27, 1976 Our court in Moore has already held that the union constitution clearly contemplates that journeymen mem- bers of the international union should be permitted to transfer to another local union. It further held that mem- bership in the local is a matter which critically affects the person’s ability to earn a living and that a competent journeymen who is a member of the international should not arbitrarily be precluded from transfer of membership. Mr. Craner has referred to the Local 638 decision re- ported in 582 Federal 2d 821 (1976) and it seems to me that it does have some relevance here and I intend to quote two paragraphs on Page 828. The first is a quote from the Bridgeport Guardians case as follows: “The imposition of quotas will obviously discriminate against those whites who have embarked upon a_ police career with the expectation of advancement only to be now thwarted because of their color alone. The impact of the quota upon these men would be harsh and can only exacer- bate rather than diminish racial attitudes.” The other quote is the following: “The smaller group participating in a civil service ex- amination, the more pointed the problem of reverse dis- crimination becomes. We can no longer speak in general terms of statistics and class groupings. We must address ourselves to individual rights.” Now, this, of course, supports his argument concerning the difference in dealing with an unidentifiable group such as prospective new members who are not yet applicants and a very specific small identifiable class, those who are already members of the international and made applica- tion for transfer. 18a Oral Decision of Polow, JS.C., October 27, 1976 With regard to the Title 7 proceedings, I am unable to find in any of the documents submitted in evidence, either the original opinion, stipulation, the amended decree, or any of the agreements which were testified to, any inten- tion to absolutely bar white transferees. Surely, the rationale behind the Federal Court orders is most desir- able and will in all respects be supported by this Court to the extent that this Court has the power or authority to do anything about it. Surely, racial balance should he achieved, However, other than some references in the testimony here, the economic conditions and the dropout rates, there really has been no satisfactory explanation for the failure to come closer to achieving that goal nor has there been any explanation whatever as to why new white membership should be permitted in the face of this desire to achieve racial balance, but all transfers of jour- neymen members should be barred or prohibited. It seems to me that any restrictions on new white mem- berships should apply more stringently to those who have not yet been trained or appenticed or if not more strin- gently at least equally to new and old union membership alike, to apprenticeship and transfer membership alike. : Our Court has also held and directly stated in Moore that transfer of otherwise competent journeymen mem- bers should not be barred because of a decision to restrict membership to those who have participated in an appren- ticeship program. It is not the proper role of this Court, as counsel have stated and as TI think I have repeated, to evaluate the propriety or the effectiveness of the various Federal Court orders nor may this Court concern itself with the decreo of compliance or lack of compliance by the union local or 19a Oral Decision of Polow, J.S.C., October 27, 1976 international or district council to the mandates, whether they be explicit or inexplicit in those orders or decrees. However, this Court does have a mandate imposed by our own Supreme Court to determine whether the provi- sions of the constitution of the international had been complied with with respect to transfer applications. Our Court indicated that there should be guidelines and cri- teria for exercise of discretion and acceptance or rejec- tion of transfer application. I have heard no evidence that the international has complied with that mandate. I had no testimony that any such policy including standards, guidelines have been adopted. I have indicated and I find as a fact, that there has been traditionally a policy of absolute prohibition against transfers into the Local 483. This has become an absolute prohibition, apparently, since 1968, A reading of the decision in Moore indicates that prior to that there were some transfers permitted except that they were limited to relatives of then existing local members. I find that this practice has continued since the Moore deci- sion without any kind of modification, although, I suppose, some effort has been made to show pro forma compliance. I refer to the fact that rather than having rejected these applications out of hand without giving any reason what- ever, that the local apparently did arrange to have inter- views and sent out letters containing reasons. In my opinion that is no more than pro forma compliance, I cannot conclude anything but a continued intention to continue the tradition of barring and prohibiting transfers while adopting a color of compliance, pro forma compli- ance. Of course, there has been no evidence of even one approval of a transfer. As a matter of fact, there has 20a Oral Decision of Polow, J.S.C., October 27, 1976 been an admission that there is no intention to approve any transfer. I have already interpreted all of the Federal Court rul- ings as not intended to absolutely bar transfers of white journeymen members nor to discriminate between new apprenticeships and transfers of journeymen as among white persons in the effort to achieve racial balance. Therefore, I find that both the local and the international have arbitrarily rejected all transfer applications and have failed to exercise reasonable discretion. Now, with regard to the defense by the international that it acted as an appellate review board and has not been shown to have been guilty of fraud, bad faith or malice. There has been testimony in this case that not only Local 483 but in fact other locals, at least one in particu- lar, had a firm policy of prohibiting all transfers in favor of graduates of their own apprentice programs. I cannot conclude otherwise and I find as a fact that it is a reason- able inference that the international knew of this policy. Surely the international is charged with knowledge of the ruling of our Supreme Court that amy such policy is arbi- trary and unreasonable. The international also had com- plaints by some of the applicants alleging specifically that a policy existed limiting transfers to relatives of existine members of the local. The international saw fit to ignore all of this and sent a form letter using the Title 7 court action as its justification. I am satisfied and T find as a fact that the actions of the international in doing so was in knowing conspiracy with the known and stated policy of the local to bar al} 2la Oral Decision of Polow, J.S.C., October 27, 1976 transfers, which policy was held by our courts to be arbi- trary and unreasonable. Counsel argued that since the International Executive Board knew none of the applicants individually or per- sonally it could not have been based upon prejudice against any of them—its determination could not have been based upon bias or prejudice against any of them individually. However, I find that bias and prejudice did exist at least to the extent that there was clear bias and prejudice in favor of the improper policy of Local 483 which the international encouraged and approved. The international has, of course, also failed to comply, as I have indicated, with the mandate of our Supreme - Court to establish criteria standards for the exercise of discretion having failed to take steps to modify the pre- existing policy which has been condemned by our Supreme Court, having in fact encouraged and approved the con- tinuation of that policy in the face of a firm declaration by our Supreme Court that it was arbitrary and discrim- inatory. I am satisfied that both defendants have acted in an arbitrary and unreasonable manner. Now having so held the question is what is the next step within the authority and power of this Court. May this Court establish for the defendants proper standards and guidelines and criteria? I feel not. Too many cases have been cited with regard to the reluctance of the Court to interfere in the internal operations of a union organiza- tion. However, despite that reluctance, there must be something that the Court has power to do to compel com- pliance. There surely must be a policy adopted when mandated by the Court. Such a policy must in this case include a recognition that our Supreme Court has ruled 22a Oral Decision of Polow, J.S.C., October 27, 1976 that there may not be an absolute prohibition of all trans- fers of journeymen, members of the union, and the policy should combine, it seems to me, an intelligent reasonable approach to achieving some racial balance by controlling both new membership among apprentices as well as train- ees and I understand that the trainees are limited to minority groups only and transferees, Surely, as I have already indicated, there may not be a more stringent bar against white transferees than the bar against new white trainees for apprentices. 1 find that the reasons stated for rejection of the seven appli- eants, in addition to the racial balance reasons as set forth by the local, have been or in fact would have been overruled by the international had it been reviewed and, therefore, those reasons are academic and need not be eon- sidered by the Court. So what remedy is appropriate under these circuni- stances? I am going to order that the defendant inter- national adopt a policy containing standards and criteria as originally mandated by the Supreme Court in Moore within 30 days. I am going to order that within 90 days all of the 29 plaintiffs be considered or reconsidered by the local executive council as under the terms of the international constitution in a reasonable manner. Hear- ings may be held if desired by the local provided each of the plaintiffs receives adequate and reasonable notice: that each plaintiff is to be dealt with individually, receive notice in writing, that the hearing be conducted in a rea- sonable and fair manner and that thereafter findings in writing together with the reasons therefore with reference to the policy to be adopted by the international. be pro- vided to each of the plaintiffs applying to each plaintiff individually. 23a Oral Decision of Polow, J.S.C., October 27, 1976 Now, each of these steps must be completed within the 90-day period. Failure to comply in full within the time- table I have set forth will be considered an acceptance of the transfer application without further proceedings pro- vided, of course, that the plaintiffs make themselves avail- able as reasonably required and cooperate with any rea- sonable appropriate demands. In cases where such applications are rejected in writing within the 90-day period pursuant to the newly adopted policy as contemplated herein and upon written notice of appeal, the defendant international must act within 30 days after receiving such notice and again should the de- fendant international fail to act, that will be considered a determination in favor of the applicant without further proceeding. With regard to the claim for damages, counsel has sought to have me hear further argument and perhaps provide further testimony. There will be no consideration of compensatory damages since this Court will not usurp the proper function of the defendants in adopting policies and properly evaluating each applicant with a view to reasonable acceptance or rejection based upon proper standards and criteria including the problem of achieving racial balance and the goals as stated during the testimony in this case as may be appropriate, although may not, as I have already stated, absolutely bar reasonable transfer applications. No compensatory damages will be considered since I cannot make any finding with regard to any particular applicant and I will not, therefore, consider any proofs in that connection. 24a Oral Decision of Polow, J.S.C., October 27, 1976 I should state in passing, of course, that the proofs in this case indicate that all applicants have been given work opportunities through the local hiring hall although, of course, defendants still insist that they suffer economic disadvantages without local membership. In any event, compensatory damages will not be considered in this ease for the reasons I have stated. However, there is also a demand for punitive damages. In the case of DiGiovanni that is reported in 55 N. J. 188 in 1970, our Supreme Court indicated that ordinarily damages are intended to compensate rather than to pun- ish. In exceptional cases, however, punitive damages are awarded as a punishment of the defendant and as a deter- rent to others from following his example. Further it says: “Something more than the mere commission of a tort is always required for punitive damages. There must. be such a conscious and deliberate disregard of the interests of others that his conduct may be called willfull or wanton. “Our cases indicate that the requirement may be satis- fied upon a showing that there has been a deliberate act or omission with knowledge of a high degree of probability of harm and reckless indifference to consequences.” In this case I have found that the defendants have de- liberately, knowingly and with the intent to deprive the applicants of property rights which have heen enunciated by our Supreme Court and that they intentionally con- spired to continue this condemned local traditional ‘policy to absolutely prohibit transfers except for relatives of members. 25a Oral Decision of Polow, J.S.C., October 27, 1976 I am satisfied, therefore, that there is a reasonable basis for punitive damages. I am going to award the sum of $500 for punitive damages for each of the plaintiffs who made application to the local union against the local union in this case for having arbitrarily rejected those applications. I am going to award damages against the international in those cases where appeals were taken to the international and the international upheld the deci- sion of the local. There is also an application before me for counsel fees. Counsel have relied on the decision—Mr. Craner has cited a decision which I do not have before me. Mr. Craner: Red Devil Tool v. Tip Top Brush Co, The Court: All right. That decision, I recall, was a 1965 decision prior to the enactment of the present rules. According to Judge Pressler, the latest modification of that rule in 4:42-9 was to clarify the previous con- fusion and eliminate the abuses, and I quote here, “of the pre-1948 chancery practice by limiting an aware of counsel fees to a few specified situations.” I see that Red Devil Tools was cited in 1967 in 50 N.J. 563, The new rule was adopted subsequently and I am _ perfectly satisfied to eliminate the awarding of fees in situations of that kind. I surely agree with Judge Pressler’s com- ment. However, there is an area where the Court has the right to act. The plaintiffs in this case are all members of the inter- national union. As members they act not only in their own individual behalf and obviously they have an indi- vidual interest, but they act on the behalf of anyone else who is in the same situation. 26a Oral Decision of Polow, J.S.C., October 27, 1976 Judge Pressler discusses that problem as well and refers to Sunset Beach Amusement Corp. decided in 33 N.J. 162. “Fund in court’ is not to happy a term,” says our Supreme Court. “It is a shorthand expression intended to embrace certain situations in which equitable allow- ances should be made and can be made consistently with the policy of the rule that each litigant shall bear his own costs. The difficulty with the term is that literally it may connote a fund within the precincts of the court in a physical or geographic sense whereas ‘in court’ refers to the jurisdictional authority of the court to deal with the subject matter.” Citing cases. “And for that matter, the existence of power in the court to control the subject matter is not itself enough to demonstrate the existence of a ‘fund in court’ within the purpose of the rule. “In general, allowances are payable from a ‘fund’ when it would be unfair to saddle the full cost upon the litigant for the reason that the litigant is doing more than merely advancing his own interests, Thus, for example, when there are classes of claimants to the fund and the services redound to the benefit of others as well, it is fair that all contribute to the cost by a charge against the subject matter, ‘Typical is a controversy among. stockholders with respect to dividend rights in the surplus of a cor- poration.” Now, I cite this because I don’t believe that Mr. Par- sonnet has had an opportunity to respond to that. I am going to order or I am going to permit, I should say, Mr. Craner to submit an affidavit of services. 1 am also, however, going to give Mr. Parsonnet an Op- portunity to respond to the comment which T have just 27a Oral Decision of Polow, J.S.C., October 27, 1976 made concerning whether or not this Court has the power to or should under the circumstances award counsel fees to these plaintiffs as members of the international. I suggest that both of those things be done within the next ten days. . I would like counsel then to submit a form of judgment ordingly. » oer aes: Your Honor, may I ask the Court one question that has come to mind and I think it should be clarified immediately. There are other individuals who have applied for trans- fer into Local 483 who have been rejected for identically the same reasons as the plaintiffs herein. What is the status of those persons with respect to the criteria and review? The Court: Mr. Craner, you are a very competent member of the New Jersey Bar. I have dealt with the cases before me, You will give legal advice to anyone who seeks it properly from you. Mr, Craner: Very well, your Honor. Thank you. Mr. Parsonnet: Your Honor has allowed 30 days with- in which action must be taken by the international. The Court: Extending a policy. Mr. Parsonnet: Yes. The Court: You have a couple of years, Mr. Par- sonnet, The Court says specifically that you are to adopt standards and guidelines and criteria, Have you done “es. Parsonnet: No, sir. My only question is may I have 30 days from the date of receipt of the transcript. The Court: From date of the receipt of the transcript? That could be three months from now. Mr. Parsonnet: I don’t know how else I can call your Honor’s ruling to the attention of my client. 28a Oral Decision of Polow, J.S.C., October 27, 1976 The Court: You see, what you can do, and if this transcript is held up for an unreasonable length of time you can make an appropriate application. Mr. Parsonnet: Thank you. The Court: [ am going to ask the Court Reporter—] take it that you are immediately going to order a tran- seript. Mr. Parsonnet: Yes, of course. The Court: | am going to ask the Court Reporter to make it his business to make that available as quickly as possible. - Mr. Parsonnet: Thank you, sir. The Court: We will stand in recess for lunch. * * * | hereby certify the foregoing. Puiu Fisoman, CSR Official Court Reporter md 29a Judgment (Filed—Mareh 17, 1977) Superior Court or New JERSEY CHancery Diviston—Sussex County Crvm AcTION L.. — ConnELL, et al., Plaintiffs, Vs. Loca, Union No. 483, InrernationaL ASSOCIATION OF Brince, SrrucruraL & OnrnamentaL [RoNWORKERS, AFL.- CLO, et al., Defendants, Docker No. C-4434-74 and Hespevt, et al., Plaintiffs, ULE Loca, Union No. 483, InrernationaL ASssoOcIATION OF Brivcr, Srrucruna, & OrnaMentTAL [RONWORKERS, AFL.- CLO, et al., Defendants. Docker No. C-2157-75 An — 30a Judgment This action having come on for trial before the Court sitting without a jury on October 20, 21, 25, 26, 1976 ond the Court having also heard motions for reconsideration of judgment thereafter, and having directed defendant Local 483 to reconsider the applications of plaintiffs in accordance with the oral decision of this Court dated October 27, 1976, and the matter having been submitted to the Court for final disposition on January 24, 1977, and the Court having heard the evidence and the argument of the attorneys for the respective parties and having announced its decision in open Court on October 27, 1976 and on January 24, 1977, and being of the opinion that Judgment should be entered in favor of certain plaintiffs for the relief demanded in the Complaint; | It is on this day of February, 1977, Orperep that Judginent be entered as follows: (a) Defendants shall be directed to immediately accept the transfer applications and admit into membership at Local 483 the following plaintiffs: Elio Rossi, Patrick Turi, Antonius Winkens, Roland Donaldson, Andrew Mil- mark, George Connell, Joe Lee Moore, John Shouldis Alexander McClellan, James O’Keefe, Joseph Lanzalotto, Ronaid Jehlen, Raymond G. Jehlen, Rudy DiGiorgio, Wil, liam Wharrie, Joseph Foley, Michael Cheselka, Robert Farro, Gregg, Eck, and William O'Neill. Defendants shall be required to process the plaintiffs above named forthwith and to comply with the Constitu- tion of the International Union insofar as the proper pro- cedure for transfer is concerned and to forthwith submit a plaintiff indicia of membership in defendant, Local 3la Judgment (b) The following plaintiffs are hereby awarded dam- ages in the amount of $500.00 each as against defendant, Local 483, as and for compensatory and punitive dam- ages: George Connell, Joe Lee Moore, William O’Neill, An- thony Cueci, Roland Donaldson, John Shouldis, Antonius Winkens, Joseph Mahon, Ben Geshensky, David Gregory, Jack Hespelt, Mitel Hespelt, Michael Cheselka, Alexander McClellan, Raymond G. Jehlen, Patrick Turi, Andrew Milmark, Ronald P. Jehlen, James O’Keefe, Joseph Lanza- lotto, Elio Rossi, Donald Seaburg, George Janesek, Gregg W. Eck, Rudy DiGiorgio, Richard A, Ruby and Robert A. Farro. (c) The following plaintiffs shall be entitled to receive the sum of $500.00 from defendant, International Asso- ciation of Bridge, Structural & Ornamental Ironworkers, AFL-CIO, as and for punitive damages: George Connell, Joe Lee Moore, William O'Neill, An- thony Cueei, Roland Donaldson, John Shouldis, Antonius Winkens, Joseph Mahon, Ben Geshensky, David Gregory, Jack Hespelt, Kitel Hespelt, Michael Cheselka, Alexander McClellan, Raymond G, Jehlen, Patrick Turi, Andrew Mil- mark, Ronald P. Jehlen, James O’Keefe, Joseph Lanza- lotto, Elio Rossi, Donald Seaburg, George Janesek, Gregg Eek, Rudy DiGiorgio, Richard A. Ruby, and Robert A. Farro. Plaintiffs William Wharrie and Joseph Foley shall not be entitled to $500.00 damages from the Inter- national Union having not appealed to said body. (d) Plaintiff's applications for counsel fees are hereby denied on the ground that this Court lacks the power to grant such an application in accordance with the rules of Court. (e) Costs of suit to be taxed. Berrram Potow, J.S.C. 32a Oral Decision of Furman, J.S.C., November 9, 1976 Superior Court or New Jersey Cuancery Diviston—Muppiesex County Docker No, C-2156-75 = a PHitie W, Munpy, et al., Plaintiffs, Loca Union No. 373, et al., Defendants. »™ —_— New Brunswick, New Jersey November 9, 1976 Before: Honorasite Davin D. Furman, J.S.C. Appearances : Craner, Brennan & Nelson, Esqs., By: John A. Craner, Esq., Attorneys for the Plaintiffs Nolan, Lynes, Bell & Moore, Esqs., By: Jerome M. Lynes, Esq., and John J. Mulvihill, Esq., Attorneys for the Local 33a Oral Decision of Furman, J.S.C., November 9, 1976 Parsonnet, Parsonnet & Duggan, Esqs., By: Thomas L. Parsonnet, Ksq., and Harold Stern, N.Y. Bar, Attorneys for the International. STANLEY GrRaBon, C.S.R. The Court: This is an action to compel Local 373 of the Iron Workers to admit twenty-seven plaintiffs to membership in the Loeal. It is also for incidental dam- ages and for punitive damages. All twenty-seven, applying in 1975 after the Moore decision of the New Jersey Supreme Court, were rejected by the Local. A number of them appealed. I haven’t totaled it up, but I believe around twenty or twenty-two appealed to the International. All were rejected by the International. The grounds of rejection by the International were con- fined to the effect of the consent decree of the Federal District Court. The grounds of rejection by the Local were twofold. One is that the testimony before the Executive Board in- dicated no fromal training in the various phases of iron working, and that the applicants had never been tested as to his capabilities; in addition, he would not qualify as an all around journeyman iron worker; plus the effect of the Federal District Court consent decree as supplemented. The Moore case necessarily concludes that there is a financial benefit in membership in the union. There is a 34a Oral Decision of Furman, J.S.C., November 9, 1976 reference to the same line of authorities as the Falcone case, that for a county medical society to arbitrarily, with- out reason and without good cause, deny membership to a doctor would interfere with his right to earn his liveli- hood and to practice his profession. T would also conclude on the basis of the testimony dur- ing this trial that there is a financial advantage to member- ship in the Loeal. If nothing else, there is relief from the $2.50 per day travel expense fee. Mr. Lynes has conceded, and T believe that he would necessarily do so, and he is entirely candid about this, that there is no requirement for a transferee that he be an all around iron worker. The word journeyman does not ex- clude specialists. As I heard the testimony of Mr. MeCloud, there was no recognized citerion that the applicant for a transfer be an all around iron worker. An applicant might have a specialty such as a rod man. Nor am I able to find in the criteria, P-53 in evidence, that there is any standard or eriterion that the applicant be an all around iron worker. With respect to the ground of denial of application for transfer that there was no formal training or no test, T have to conclude that this is by itself insufficient as a mat- ter of law in view of the factual testimony that these men had experience; Mr. Doninich T believe back to the 1940s and several to the 1950s. There was experience in all cases of at least six or seven years as iron workers prior to their rejection. It is not a reasonable basis for rejection of experienced iron workers who individually had never been refused for referral to a job or removal from a job because of lack 35a Oral Decision of Furman, J.S.C., November 9, 1976 of qualifications, it is not a reasonable basis for rejecting the transfers of such applicants that they had not taken any formal training or test. As T have alluded to in the course of interrogation of counsel, I would consider that the refinements of the Fal- cone ease as applied to doctors should also hold here, and that before there was a rejection for cause of a transfer on the grounds of lack of qualifications when the man had experience and had developed skills and had performed in the trade, that there should be a specification of what is said to be wrong or lacking in his qualifications.. There should be a confrontation with witnesses or a right to con- front witnesses, and there should be a right of cross-exam- ination. These hearings were not hearings in the evidential sense. They were interviews. There was no substantive evidence in these naked interviews themselves to support the con- clusions that these men were not qualified by experience and skill to be journeymen iron workers. Many of them were not all around iron workers but they were iron workers with a specialty. T aiso conclude, and I believe that Mr. Lynes again candidly has virtually conceded this, that the case, never- theless, must rest or stand or fall on the ground for rejec- tion on the appeal by the International Executive Board. I’m not sure that I have given the right term for the body that rejected it. The general executive board. All right. As I said in granting the motion of Mr. Stern, there is in the background of this case something of a conflict be- tween the State Court in the Moore case and the Federal District Court in the consent decree. 36a Oral Decision of Furman, J.S.C., November 9, 1976 Unquestionably the results or the approach by the Local and the International appears to fly in the face of the Moore decision. It would virtually bar any transferees, at least during the course of the four years. Mr. Duff, a man of vast background as a labor lawyer, testified to his understanding that the objective was to reach a twenty pereent ratio of minority members of the Loeal within a period of five years. He has testified to his understanding that there was a har against what is called an inundation of transferees, Nevertheless, there is nothing on the face of the consent decree or of the amendment imposing an eighty-twenty per- cent ratio or balance. There has been reliance upon the amendatory language in P-61 in evidence, Paragraph 33B. That language per- mits transfers, provided that the determination allowing the transfer is made without having the effect of diserim- inating against or exeluding any such applicant on the basis of his race or color. These present plaintiffs T would have to conelude have been barred because they are White and that they do not have Spanish-speaking surnames. There seems to be no dispute or question that if these were iron workers with books from other locals who were Black or with Spanish-speaking surnames they would have been admitted, assuming other qualifications, and would not have been barred under the federal consent decree. So the necessary effect of at least that language is a reverse discriminatory effect contrary to what is now a developing doctrine of law prohibiting reverse discrimina- tion. 37a Oral Decision of Furman, J.S.C., November 9, 1976 The other clause referred to is that there may be a trans- fer unless the transfer has the effect of perpetrating the effects of any past exclusion. Now, it is argued, and apparently seriously and I may say ingeniously by counsel for the Local and the Interna- tional that that phrase is intended to protect the eighty- twenty ratio as to safeguard or assure that the eighty- twenty ratio would be reached at the end of five years. There is no limitation on the total number of members of the Local. It must have been in the background or within the contemplation of Judge Garth as well as the parties to the consent decree that because of expansion of the economy, for instance, opportunities, there might be an expansion in the total number of members. It must also have been contemplated that there might be an attrition as a result of deaths, retirements, and so forth. It appears to me that this eighty-twenty did not have the sanctity of a formula embedded into the consent decree or the amendment. It was an objective which was discussed in the course of negotiations which happened to fit within the numerical proportions at the time of the consent de- cee, that is, there was the objective of a total of three hun- dred seventy-five in the course of five years. I believe that’s seventy-five per year. If there are five locals, it is fifteen per local per year members of minorities taken in as apprentices or trainees. The consent decree has nothing within it except as to admissions of apprentices and trainees. It has nothing specifically in it with relation to transferees, except the language which I have alluded to in the amendment in P-61. 38a Oral Decision of Furman, J.S.C., November 9, 1976 The grounds of rejection are suspect on the basis of uni- formity and also as heing too pat. Even taking the words at their face value, there is nothing to suggest a harmful discriminatory effect amounting to a perpetuation of past exclusion if the total number of iron workers expands to two thousand instead of fourteen hundred and the number of minority members remains at three hundred seventy- five. At least that is not so clear or so patent that T ean find that that language gives sanctity to and embodies within and imbeds within the consent decree as modified the so called eighty-twenty formula. [ believe that the reasons advanced, the conclusions ad- vanced by myself a few minutes ago in dismissing the punitive damage action against the International must also apply to the Loeal. With respeet to the Loeal, T eonelude that the Local acted arbitrarily, without a reasonable basis, without « substan- tial basis in denying the applications for transfer on the grounds of lack of qualifications or on the grounds of the federal consent decree. The defendants did not seck a clarification of the consent decree in the light of the Moore case at any time. Tt may be that at the conclusion of this trial the defendant, Local, and it may even be the International, will seek some elari- fication of the federal consent decree, Nevertheless, as I read the federal consent decree, nei- ther on its face nor by any necessary implication nor by any understanding or commitment which is binding upon the parties or upon this Court is there a basis for rejecting transferees who are qualified. So the order of this Court or the judgment of this Court will be that the plaintiffs are entitled to a judgment to 39a Oral Decision of Furman, J.S.C., November 9, 1976 compel the defendant, Local 373, to admit them to mem- bership. Now, with respect to the damage claim, the only damage claim that I have heard which seems to have a factual basis would be with respect to a reimbursement for the $2.50 per day travel expense. I should say that there was some question with respect to Mr. Machemull, as to his present residence, and that the judgment would apply to admission of those now re- siding in the area, that is, within the geographical juris- diction of Local 373. Are you pressing, Mr. Craner, for a compensatory dam- age judgment with respect to reimbursement of the differ- ential between the $2.50 expense and anything that the Union members may pay or the Local members? Mr. Craner: May I explain my damage claim? We are seeking compensatory damages based upon the denial of the right to vote and to attend meetings plus the $2.50. The Court: You have no supporting proof of that, though. Mr. Craner: There’s nothing to prove. It follows, and the Constitution says that you must be a member of the local union in order to do those things. Now, you can’t vote if you are not a member of the local union, your Honor. The Court: Don’t we have an apparent offset of the union dues and any loss because of the expense? Mr. Craner: No, my clients must pay dues to their local unions just as members of Local 373 pay to their union. My clients in addition pay Local 373 $2.50 for every day that they work. A local man does not have to pay that when he works within the jurisdiction of the district council. 40a Oral Decision of Furman, J.S.C., November 9, 1976 So that my clients, if they work in northern New Jersey, they pay the $2.50, The local men don’t pay it. Every- body pays the same working assessment, however. So that we are out the $2.50, plus if your Honor eon- siders my other damage claim, we have lost the right to vote and to attend meetings, et cetera. The Court: It would be sheer speculation what the value of that would be. Isn’t that so? Mr. Craner: Your Honor, may IT then advance this argu- ment? I’m seeking punitive damages as well. T agree with vour Honor that that is hard to fix a dollar amount on. llowever, at the very least, aside from the $2.50, it is worth at least nominal damages, and I am certainly en- titled, if the Court decides to award it, to a punitive dam- age award based upon nominal damages. I am also seeking counsel fees in this matter for the reasons that I have outlined in my brief. If the Court will note that Judge Polow awarded fees based on a trust fund theory, Mr, Lynes: Judge Polow didn’t award counsel fees as far as I know. I think that he directed at the end of the case that Mr. Craner submit an affidavit and he would consider whether or not he could award counsel fees against the International. He awarded no counsel fees against the Local, and there’s been no award of counsel fees made whatsoever as far as I know. Mr. Craner: That’s correct, your Honor. T would then ask the same thing, though, but that the award of counsel fees be against the local union. I have briefed the point, your Honor, The Court: The only judgment as to damages will be a reimbursement of the $2.50 per day, and that of course would involve an accounting as to what those figures were, 4la Oral Decision of Furman, J.S.C., November 9, 1976 Mr. Craner: That would be from the date of transfer on? Is that correct? It is from the date of application for transfer up to the present time or would it be for- ever or what? The Court: I think that it would be limited to the date of rejection by the Local. Mr, Craner: Very well, your Honor. The Court: Auugst 13, 1975 in most cases. You may apply for an attorney’s fee and you should submit an affidavit of services and it would be on the trust fund theory. Mr. Lynes: May we submit briefs in opposition to, that point? The Court: Yes, you may. CERTIFICATE I, Sranuey Grason, a Certified Shorthand Reporter of the State of New Jersey, do hereby certify that the fore- going is a true and accurate transcript. StanLey Grason, CSR Official Court Reporter 42a Judgment (Filed—January 19, 1977) Superior Court or New Jersey CuHancery Division—Muipp.esex Country Docket No. C-2156-75 Crviz. Action = er Parr W. Munpy, Vincent Hi. MacHemvutyt, Josern Doutnicu, Donan McManon, THomas McC oskey, Joun J. Krusis, Epwarp Fartey, Pavt Boncarp, Jr., CHARLES C. Borroy, Wiu1Mm B. Crawrorp, Pxinip CoNNELL, Wittum J. Surma, Louis DiCapva, Henry ARMINAS, Joun McFappen, Josepn Tom, James Fox, Arruur Smirn, Puiu Suapy, Frank P. Casreiano, Jr., Ron- ALD Benrretp, Jerrrey R. Corermor, Frank O'NEILL, Grorce Morcan, Ler Zpunex, Leon Apuer, and CHarves THom, Plaintiffs, Vs. Loca. Union No, 373, InrernationaL ASSociATION oF Brivce, Srructura, & Ornamentat Ironworkers, AFL- CIO and IyxrernationaL Association or Brivcr, Struc- TURAL & ORNAMENTAL TRoNWorKERS, AFL-CIO, Defendants. ? 43a Judgment This matter having come on for trial before the Court sitting without a jury, on November 8 and 9, 1967, John A. Craner, Esq. (Craner, Brennan & Nelson) attorney for plaintiffs, Jerome M. Lynes and John J. Mulvihill, Esqs. (Nolan, Lynes, Bell & Moore) attorneys for defend- ant, Local 373, and Thomas Parsonnet, Esq. (Parsonnet, arsonnet & Duggan) and Harold Stern, Esq., attorneys for defendant, International Association of Bridge, Struc- tural & Ornamental Ironworkers, AFL-CIO, and the Court having taken testimony in open court and having heard the arguments of counsel, the Court having announced its opinion in open court, and the International having rep- resented in open Court that it would not take action to interfere with the transfer of membership ordered by the Court, and It is on this 19 day of January, 1977, Ordered that Judgment be entered in favor of plaintiffs and against defendant, Local Union No. 373, International Association of Bridge, Structural & Ornamental Ironworkers, AF'L- CI@, directing said defendant to immediately take into its membership each and every plaintiff, in accordance with the constitution of the International and to issue the necessary indicia that each plaintiff has so been trans- ferred into defendant, Local 373. With respect to Vin- cent H. Machemull, transfer is conditioned upon his re- siding within the territorial jurisdiction of defendant, Local 373. It is further Ordered that Judgment be entered in favor of each plaintiff directing defendant Local 373 to refund to him all travel service dues paid to Local 373 from the date each plaintiff was rejected for transfer by Local 373 until the date of the actual transfer of each plaintiff. 44a Judgment It is further Ordered that Judgment be entered in favor of plaintiffs and against defendant Local 373 award- ing to the attorneys for plaintiffs the sum of $500.00 as and for their counsel fees. Counsel for plaintiffs may make further application for counsel fees after the issue of counsel fees in other visinages where similar actions are pending has been resolved and may also offer spe- cifie proofs as to the dollar amounts involved for services rendered in this particular case. It is further Orperen that the motion of plaintiffs to add dward Kutchman and Walter Clark as party plain- tiffs is denied. It is further Ordered th» Judgment be entered in favor of defendant, International Association of Bridge, Structural & Ornamental Ironworkers, AFL-CIO and against plaintiffs dismissing the complaint as to it. Davy D. Furman, J.S.C. 45a Letter Opinion of Dwyer, J.S.C., March 21, 1977 Superior Court or New JERSEY CHAMBERS OF Arrnur C. Dwyer J UDGE Chancery Division Essex Country Courts Bupa. NEWARK, John J. Bracken, Esq. Bracken & Craig, Esqs. 11 Commerce Street Newark, New Jersey 07102 Ronald J. Nelson, Esq. Craner, Brennan & Nelson, Esqs. 1143 East Jersey Street Elizabeth, New Jersey 07201 Joseph M. Nolan, Esq. Nolan, Lynes, Bell & Moore, Esqs. 60 Park Place Newark, New Jersey 07102 Thomas L, Parsonnet, Esq. Parsonnet, Parsonnet & Duggan, Esqs. 10 Commerce Court Newark, New Jersey 07102 Re: Esposito, et als v. Local 11, Ironworkers, et als Docket No. C-2155-75 N. J. 07102 March 21, 1977 46a Letter Opinion of Dwyer, J.S.C., March 21, 1977 Gentlemen: In the Complaint filed herein, ten individuals who hold “books” issued by a local union affiliated with defendant International Association of Bridge, Structural & Orna- mental Ironworkers, AFL-CIO (“International”) other than defendant Local Union No. 11 (“Local 11”) sought in this action to recover compensatory damages for Local 11 wrongfully refusing to transfer their respective mem- berships from the other locals to Local 11 as well as an order of this court directing said transfer of membership together with counsel fees. At the Pretrial, they also claimed punitive damages. Thereafter, three other individuals who were similarly situated and who had previously brought such an action (McFadden, et al v. Local 11, et al, Docket No. C-4230-75) which resulted in a judgment directing reconsideration of the prior applications moved to and were permitted to join this action, They seek relief similar to the original plaintiffs. The prior decision was the result of the deci- sion of the New Jersey Supreme Court in Moore v. Local 483, 66 N.J. 527 (1975) and Philipchuk, et al v. Inter- national Association, AFL-CIO, 66 N.J. 539 (1975). The judgment permitted “* * * questions as to qualifications but not to include tests * * *”, . Plaintiffs herein means all thirteen individuals. The Answer of the International admitted that the ten original plaintiffs were members in good standing in the International and the locals other than Local 11. In other respects it asserted the autonomy of Local 11 to make decisions concerning transfers, it lacked knowledge con- cerning activities of Local 11, Complaint made no allega- tions of misconduct on its part, and any plaintiff who 47a Letter Opinion of Dwyer, J.S.C., March 21, 1977 had not appealed Local 11’s decision had failed to exhaust internal remedies. The Answer of Local 11 denied that the ten original plaintiffs or the three added plaintiffs were members in good standing of the International or the other local. It admitted the rejection of the transfers. It asserted any Plaintiff who did not take an appeal failed to exhaust internal remedies. It asserted a separate defense that the court lacked jurisdiction because the United States Dis- trict Court had entered a Consent Decree in United States of America v. Plumbers Local 24, et al., on July 28, 1976 as amended and supplemented which controlled all hiring practices and therefore preempted the matter. It asserted that Local 11 properly exercised its discretion under the International Constitution and was sustained by the Inter- national. It asserted that Plaintiffs obtained their mem- berships in other locals by fraud and hence are barred from seeking equitable relief. Both International and Local 11 deny Plaintiffs have any right to counsel fees. A review of such recent cases as Ferger v. Local 48%, 94 N.J. Super. 554 (Ch. 1967) aff'd 97 N.J. Super. 505 (App. Div. 1967) and Moore v. Local 483, swpra, as well as the related cases in the United States District Court for New Jersey and the Court of Appeals for the Third Circuit, show that there is a history of conflicting inter- ests among those engaged in the work done by the Tron- workers and those involved in the union movement active in that jurisdiction which undoubtedly has become more aggravated by several recent Federal laws and particu- larly those laws found in Title VIT of the Civil Rights Act of 1964, 42 USCA 2000e, et seq., coupled with the decline in construction and resultant loss of construction work, 48a Letter Opinion of Dwyer, J.S.C., March 21, 1977 the issues in the minds of many have to be “bread and butter” if not survival issues. This is also evident from the testimony. It is not the function of this court to har- monize and resolve all those problems. It is the function of this court to decide the issues posed by the parties in this action. The ten original plain- tiffs have withdrawn as much of their claim for compen- satory damages as relates to wage loss based on discrim- inatory hiring practice because of a pending hearing be- fore the NLRB, Tenore one of the three added plaintiffs has similarly withdrawn his claim for compensatory dam- ages. The court earlier ruled on offers of proof that Plain- tiffs would show from records of the pension fund asso- ciated with Local 11 that members of Local 11 with al- legedly similar experience had earned more than Plain- tiffs that the court was preempted from going into that area based on the cases set forth in the record. The court further ruled that payment of travel dues of $2.50 for each week or part thereof worked by a Plaintiff remained in the case. See concurring opinion of Justice Fuld in Phalen vy. Theatrical Protective U. No. 1, 22 N.Y. 2d 34, 290 N.Y.S. 2d 881 (1968) cert. den. 393 U.S. 1000 and NLRB y. Allis Chalmers Mfg. Co., 8388 U.S. 175, 184, 186, 87 8.Ct. 2001, 18 L.Ed. 2d 1123, International Association of Machinists v. Gonzales, 356 U.S. 617, 78 S.Ct. 923, 2 L.Ed. 2d 1018. The separate defense based on total preemption because of the Consent Decree was not seriously pressed. Indeed, it could not be. The decree as amended by order of Sep- tember 1973 expressly permits transfers. 33 (B) “During the effective period of this De- cree, to the extent that the defendant locals accept 49a Letter Opinion of Dwyer, J.S.C., March 21, 1977 into membership individuals holding journeyman membership in non-defendant locals of the Interna- tional they shall accept or deny the membership applications of such individuals according to the rules and regulations of the defendant locals and the International governing such transfers, pro- vided that such determinations shall be made with- out having the effect of discriminating against or excluding any such applicant on the basis of his race or color, or of perpetuating the effects of any such past exclusion, and provided further, that all such transferees must meet the minimum qualifica- tions under Paragraph 33(A) herein.” The relevant portion of Paragraph 33 (A) setting forth the minimum standard is: “Bach defendant local shall offer full journeyman membership to any black or Spanish surnamed American, who either: (1) has six months experience in the ironwork- ing trade (including but not limited to shop work and construction laborer work); or * * *”. This is the minimum standard. The courts of the various states have jurisdiction to protect the rights of members of unions afforded them under the constitution or charters of the union organiza- tion. International Association of Machinists v. Gonzales, swpra, see authorities in f.n. 7 in Ferger v. Local 483, supra, at p. 569. The following facts are undisputed. Each of the Plain- tiffs obtained a membership book in a local other than 50a Letter Opinion of Dwyer, J.S.C., March 21, 1977 Local 11. Each of the Plaintiffs is a resident of the north- ern New Jersey area and was at the time he obtained a membership book in the other local. Each has paid dues to the other local regularly. Each has obtained a clearance card from the other local for transfer to Local 11. Each has filed the clearance card with Local 11. Each has ap- plied for transfer to Local 11 and been rejected. Loeal 11 has sent to each of the Plaintiffs a letter setting forth the reasons for rejection. In respect of the three added Plaintiffs the Executive Committee of Local 11 conducted an interview on April 10, 1975, The letters of rejection sent by Local 11 were substantially identical. The reasons stated for rejecting the transfer were: 1. In applying for membership the individual had mis- stated his work experience. The local did not give a test. He had not completed an apprenticeship program. Local 11 referred to See. 6 of Art. II of the International Constitution which provides that “Any membership gained by false pretenses or misrepresentation shall be revoked,” 2. Local 11 could not make any determination as to transferee’s qualifications to be a journeyman iron- worker because transferees refused to answer ques- tions about same. 3. The last reason was that under the consent decree “* * * requiring us to admit to membership a group of minority workers equal to 20% of our total membership. We must be very careful in 5la Letter Opinion of Dwyer, J.S.C., March 21, 1977 this respect to comply with the Order and we do not want to increase the number of minority workers by an unreasonable number especially at a time when we are now applying for relief from that Order.” Likewise the letters to the other ten Plaintiffs were identical to each other except for the names. A copy of one of said letters is attached as Appendix A, rather than copy it. In essence the Executive Board found these transferees “had no formal training in the various phases of iron- working” and had never been tested. It further found that these transferees had not acquired the necessary training and experience to qualify as “an all around jour- neyman ironworker.” The Executive Board referred to the consent decree that required it to have 20% minority journeymen and apprentices by 1977 and concluded: “Counsel has, therefore, advised the Executive Board that the acceptance of white transfers at this time would place Local 11 in jeopardy of vio- lating its commitments and obligations to the Gov- ernment.” The International sent identical letters to all the Plain- tiffs. This appears to be consistent with the practice of the General Executive Board in issuing guidepost deci- sions where facts are similar. Mr. Lyons on deposition testified that an investigation had been made; that he met with the Business Agents for the locals of the District Council for Northern New Jersey, and explored the con- sent decree, 52a Letter Opinion of Dwyer, J.S.C., March 21, 1977 _He further explained that the International had a spe- cial department that monitored consent decrees and kept copies of all such documents at Headquarters, In respect to Northern New Jersey he said: “* * * the consent decree stipulated specifie per- centages of ironworkers and if you are going to have specifie percentages or ironworkers each year growing, you are going to have to have an employ- ment capability of having ironworkers employed. The employment situation in Northern New Jersey we have been working with and are aware of for some period of time. * * *” a ; “* * * the conclusion I should say that the employ- ment opportunities for ironworkers in Northern New Jersey is very, very bleak * * *” See pp, 22- 23. At p. 29-30 Mr. Lyons said that he was aware as were the other members of the General Executive Board the Consent Decree contained no specific percentages. The Board had a copy of it. He further stated the knowledge about percentages was based on what the Business Agents told them, “* * * what they had agreed to that would ulti- mately be put in the final version and we coucluded that they were telling us the truth based upon the fact that what they were saying to us is the same thing that we have seen time and time again in consent decrees across the country, these three ele- ments: A number, a time and the end result.” * * * “Now, on the point of the end result the Govern- ment was asking for a percentage of the numbers, this is what the Local told us. * * *” (p. 31) 53a Letter Opinion of Dwyer, J.S.C., March 21, 1977 The reason for the percentage at the end of the decree was that minorities then would have a political voice in the Local Union. (See p. 32) The letters from the International were all identical ex- cept for dates and names. The General Executive Board stated it would only comment on the Civil Rights reason. It stated: “With respect to the Civil Rights reason, the Gen- eral Executive Board noted that every local union affiliated with this International Association has rights of local autonomy and in accordance with this principle has the discretionary right to protect the interests of its members, provided the use of such discretion is not capricious. In this connection there is presently outstanding a United States Court de- eree which requires and directs five local unions affiliated with this international Association—all lo- cated in northern New Jersey, including Local Union No. 11—to admit into membership black journeymen on a quota basis and sets a goal to be reached by 1977. This decree was issued by the United States District Court on the basis of a formula that estab- lished an end result which included both the number of admissions of black journeymen and a percentage of black to white membership. If Local Union No. 11 were to transfer you and others who have applied at this time, the addition of such transfers could cause an imbalance which might prevent the local union from achieving its commitment to the Federal Court because of circumstances over which it has no control. “The General Executive Board recognizes, of course, that there are no limitations on the number 54a Letter Opinion of Dwyer, J.S.C., March 21, 1977 of individuals who may be admitted to Local Union No. 11. However, as you must be aware, a serious unemployment problem exists in the construction in- dustry at the present time and in the foreseeable future in northern New Jersey which seriously af- fects the employment of iron workers.” Harold Stern, Esq., General Counsel for the Interna- tional stipulated that if the court ruled adversely on the Civil Rights defense, the International would not then de- cide on the other grounds. Loeal 11’s time for appeal with- in the Constitution of the International has expired. For completeness the issues for decision are: 1. Is Loeal 11’s expressed desire not to disturb the projected number of minority members in rela- tion to the 1972 membership of 5 affiliated locals a reasonable basis for rejecting the transfers? 2. If it is not, are the other reasons advanced reasonable grounds for rejecting the transfers with- in the guidelines of Moore v. Local 483, supra? 3. If 1 and 2 are answered negatively, is Local 11’s and the International’s action based on reasons so invalid that such action must be regarded as arbi- trary or capricious? Before taking up the issues in the order stated, the court notes that the attorney for all the locals prepared a set criteria to be used for judging requests for transfers. Local 11 adopted it in March 1975. It was never distributed. The explanation was that no one had asked for it. The attor- neys, during the litigation didn’t even seek it by interroga- tory. It was produced during the evidence presented by 55a Letter Opinion of Dwyer, J.S.C., March 21, 1977 Local 11. The reasons set forth for rejection bear some relation to said criteria. 1. The Consent Degree was agreed to by all parties, which ineluded Local 11 and the other locals in the Northern New Jersey District Council, in February 1972 except as to membership requirements. Footnote 5 to Judge Garth’s decision dated December 22, 1972. The issue of member- ship in the locals for the ironworkers was litigated. Judge Garth set forth in finding 13 that from 1963 to 1972 there were three methods of gaining admission to the locals, including Local 11: (i) successful completion of the apprenticeship pro- gram; (ii) with respect to defendant Locals 11 and 483, sons and other relatives of incumbent members, all white, have been admitted directly to journeyman membership in the defendant locals without the necessity of having served in the Ironworker JAC program. * * * (iii) with respect to defendant Locals 45, 373 and 483, sons and other relatives of incumbent members, all white, have been transferred into journeyman membership in the defendant ironworker locals after having obtained ironworker journeyman membership in ironworker locals located outside the Northern New Jersey area. Judge Garth then decreed the following as the language for paragraphs 33.(A) and (B): 56a Letter Opinion of Dwyer, J.S.C., March 21, 1977 *33.(A) Each defendant local shall offer full jour- neyman membership to any applicant who either: (1) has six months experience in the ironwork- ing trade (including but not limited to shop work and construction laborer work) ; or (2) has suecessfully completed an ‘approved’ ex- amination or test. (a) An ‘approved’ examination or test is any valid, written examination or test capable of ob- jective evaluation or grading, which test reason- ably measures and is demonstrably related to the individual’s ability to perform the normal day-to-day work required of an average jour- neyman ironworker, (b) The validity of any such test shall be de- termined according to Guidelines on Employee Selection Procedures, 29 C.F.R. §§1607 et seq. (1972), and the use of such test shall be ap- proved in writing by the plaintiff prior to its use by the defendants, “33.(B) All applicants for full journeyman mem- bership, including applicants who have already at- tained journeyman membership in a local not a party to this action or in the International, must satisfy the requirements as set forth in paragraph 33.(A) above.” The local unions, including Local 11, then appealed Judge Garth’s decision. There is testimony that the reason for the appeal was that the language in Paragraph 33.(A) (1) would destroy the apprenticeship program. But see Para- graph 38(e) of the Consent Decree. 57a Letter Opinion of Dwyer, J.S.C., March 21, 1977 An affidavit of Wallace, Business Agent for Local 11, filed in support of a stay pending appeal stated in part: “oe, There are presently pending 19 requests from White members of other locals in the International for transfer into the defendant Locals, pursuant to the Order: notwithstanding the fact that these indi- viduals are not minority group members nor have they been discriminated against in employment re- ferral. Deponent respectfully submits that unless a stay is entered, the defendant Locals will be in- undated with transfers from White members of other locals. At present, there are approximately 1900 members of other locals working within the terri- torial jurisdiction of the defendant Locals. With- out a stay, such men would be eligible for transfer regardless of their color or other Union affiliation pursuant to the Order subject to the appeal herein. In July 1973 the Government and the other parties en- tered into a further stipulation that set forth Paragraph 33A and 33B set forth above. It also changed Paragraph 38(e) to read as follows: “Any apprentice or trainee who resigns or whose apprenticeship or trainee program 1s terminated for any reason except by reason of illness, injury, or military service shall forfeit all referral rights for a period of one year, and no work experience ob- tained as an apprentice or trainee shall be applied to work experience necessary for union membership pursuant to paragraph (33) (A) ( 1) herein. Such persons shall, however, have the right to reenroll in any subsequent year in the apprenticeship or trainee programs without forfeiture of any completed year of training.” 58a Letter Opinion of Dwyer, J.S.C., March 21, 1977 The language quoted immediately above made it clear that no apprentice dropout would gain membership under Par. 33(A) (1). The language in Par. 33(B) sets up four criteria: “1. transfers shall be accepted on the basis of the rules and regulations of the International and local Con- stitutions governing transfers; 2. such transfers shall be determined without the * * * ; etre callers : effect of discriminating against or excluding any such applicant on the basis of his race or color * * * 3. *e8 transfers shall not assist in ‘* * * perpetuating the effects of any such past exclusion * * *’: and 4, all such transferees must meet the minimum qualifi- cation under Par. 33(A) herein.” The basis for any discussion of a percentage factor is found in Par. 38(¢) which states: “The JAC shall select and indenture each year no fewer than 75 minority applicants that qualify if available, in the Tronworker ISmployer Training Program and in the Apprenticeship Training Pro- gram under the selection procedures listed above for a period of no less than five (5) years. The good faith goal shall be to indenture an equal number of applicants in cach program, but in any event to in- denture no less than 25 minorities in the apprentice- ship program.” (Emphasis added). | This language is part of the original bargained for por- tion of the Consent Decree. Plaintiffs urged that under the parol evidence rule no testimony should be allowed about 59a Letter Opinion of Dwyer, J.S.C., March 21, 1977 negotiations between the Government attorneys and attor- neys for the local to show that a 20% membership goal was to be attained at the end of 1977 so that minorities would have a political voice in the locals. Local 11 urged that there was some ambiguity. The court allowed the testimony. Those who testified for Local 11 were Wallace, the Business Agent, attorneys Kennedy, a specialist in Title VII matters, and Duff the regular attor- ney for Local 11. The thrust of their testimony was that 375 was based on adding that number to the number 1400 which was the membership for all five locals which then made 375 20% of the projected 1977 membership. Arithmetically the cal- culation is wrong for 375 is 20% of 1875. However, there are more substantial problems with the testimony. The numbers relate to applicants not journey- men at the end of a three year program, The Consent Decree itself recognizes that there will be attrition. In fact the testimony establishes the greatest attrition is with minorities. Careful review of Kennedy’s testimony shows that the Government never talked in terms of a “quota” but good faith goals. The only definite number mentioned after “rood faith goal” is 25 per year for five years or a total of apprentices of 125. If this were attained the impact politically on the locals would be far less than 20%. The court accepts the Plaintiffs contention that the proper standard for construing a consent decree in respect to purpose is set forth in United States of America v. Armour & Co., 402 U.S. 673, 29 L.Ed. 2d 256, 91 S.Ct. 1752 (1971) 60a Letter Opinion of Dwyer, J.S.C., March 21, 1977 “* * * the scope of a consent decree must be discerned within its four corners, and not by reference to what might satisfy the purposes of the parties to it * * *” [402 U.S. 681]. The cases collected in the footnotes to Justice Pashman’s dissent in Lige v. Town of Montclair, 72 N.J. 5 (1976) at p. 27 et seq. demonstrate that the United States of America knows how to spell out a quota program when it desires one. Significantly no witness from the Department of Justice or EEOC was called. No brief amicus curiae was re- quested. The court concludes on the testimony of the witnesses of the defendants that no quota system was ever agreed to. The court concludes that construing the Consent Decree within its four corners none can be spelled out. The training commitment is that of JAC an independent legal entity from the locals. The court will consider the fourth criteria in the Consent Decree in reverse order. The undisputed evidence is that each of the Plaintiffs has worked for five years or more in one or more of the eight branches of ironworking referred to in Paragraph 6 of the Consent Decree. Each of said Plaintiffs has been re- ferred out for work by the hiring hall of Local 11. Each of the July 22, 1975 letters of rejection in essence implies the rejected transferee will be continued to be referred out on a non discriminatory basis. This is sufficient to satisfy the fourth criteria and the court so finds. 6la Letter Opinion of Dwyer, J.S.C., March 21, 1977 The effects of such past exclusion were threefold. They excluded minorities. They gave preferences to sons and relatives of members of certain locals. Local 11 is not picked out as one of such locals by Judge Garth. Except possibly in the ease of Surrinski, the court does not recal+ that any of the Plaintiffs are sons or relatives of members of Local 11. In the ease of Surrinski, the court recalls that his father assisted him in getting a book in the Seran- ton local and worked with him. If his father is a member of Local 11 or any of the others are sons or relatives, then that matter should be separately explored with EEOC which is now in charge of enforcement. The admission of these Plaintiffs will neither further discrimination nor re- duce job opportunities for they are already in the active job market with other members of Local 11. The July 22, 1975 letters state: “Counsel has, therefore, advised the Executive Board that the acceptance of white transfers at this time would place Local 11 in jeopardy of violating its commitments and obligations to the Govern- ment.” That reason violates the second criteria of the Consent De- eree, It also amounts to the reverse discrimination re- ferred to in Lige v. Town of Montclair, supra. See discus. sion at p. 19. The court in this action is not dealing with a class of 1900 members referred to in the Wallace affidavit. It is dealing with thirteen identifiable persons and Local 11 and the International. This leaves the first criteria of the Consent Decree. This in essence is the same standard as mandated by 62a Letter Opinion of Dwyer, J.S.C., March 21, 1977 Moore v. Local 483, supra. Except for the 1968 amend- ment to the International’s Constitution which change the criteria from automatic transfer, Ferger v. Local 483, 94 N.J. Super. 554 (Ch. 1967) aff'd 97 N.J. Super. (App. Div. 1967). Accordingly, the court will consider this under point 2. The court concludes that the reasons given by Local 11 and the International based upon the consent decree are not well founded. If the Consent Decree is construed as contended by defendants the effect is to exclude all whites over age 30 from admission and reduce the means for admission for whites to an apprenticeship program. The New Jersey Supreme Court has already ruled that the type of ad- mission for individuals such as Plaintiffs must be by means other than apprenticeship. Moore v. Local 527, supra. “The transfer of such journeymen members should not be barred because of a decision to restrict mem- bership to those who have participated in an ap- prenticeship program.” (66 N.J. at 537). 2. In Ferger v. Local 483, supra, the court did not have to construe and apply the provisions of Article XXI, Sec. 30 and 31 of the International Constitution as amended in 1964 which required that transfers be approved by a majority vote of the membership of the local into which an individual sought to transfer membership. It noted that the Executive Committee had the power to inquire into “the character and qualification” of the individual seeking transfer. 63a Letter Opinion of Dwyer, J.S.C., March 21, 1977 “While the International constitution has been amended to grant the above-mentioned discretion- ary right to local unions in accepting transfers, nothing was done to the constitution by way of supplement or amendment so as to effect a change in the requirements or qualifications for membership in the International Union. Those requirements, as set forth in article II, sections 1 through 6, have remained unchanged. There is nothing in the record of the federal proceedings, or in the pro- ceedings in this action, which even remotely indi- cates that there is some change in the status of any plaintiff with respect to his membership in the International Union. I cannot accept any suggestion that the discretion given to local unions under the constitutional provisions quoted above is one of unbridled nature. It is not difficult to conceive of situations in which the exercise of the ‘discre- tion’ granted to local unions might become arbi- trary or unreasonable. Obvious examples would be the refusal to accept a member by transfer solely because of race, creed or ethnic origin. * * *” (94 N.J. Super. at 573). Earlier the court had noted that after the Federal liti- gation referred to, the local had urged in the Ferger case the transferors had obtained membership by fraud and without complying with professional standards. But it ruled that the prior Federal litigation disposed of those defenses. In 1968 the International Convention changed Sections 30 and 31 to read: “See, 30. A member of the International Asso- ciation who desires a clearance card for the pur- b4a Letter Opinion of Dwyer, J.S.C., March 21, 1977 pose of transferring his membership to another local union must be a member of the International Association for at least two (2) years. Any mem- ber who has been a member of the International Association for at least two (2) years, desiring a clearance card for the purpose of transferring his membership to another Local Union shall apply to the Financial Secretary of his Local Union, and if such member is in good standing in his Local Union, and no charges are pending against him, the Financial Secretary shall grant a clearance card upon the payment by the member of unpaid dues, or other obligations, plus One Dollar ($1.00) for the clearance card, The Financial Secretary of the said Local Union, upon issuing said clearance card, shall report the same to the next meeting of the Local Union, and report same on a regular monthly report submitted to International Head- quarters. “See. 31. Thereafter a member obtaining a clear- ance card inust present the same to the Local Union into which he desires to transfer, for acceptance by it, and the matter shall be referred to the Execu- tive Committee of the local union which shall ac- cept or reject such clearance card within the dis- cretion of the Exeeutive Committee. The decision the Executive Committee of either acceptance or rejection of the clearance card shall be subject to review by the General Executive Board. As stated earlier, there is no dispute that each of the Plaintiffs procedurally complied with all steps required under 80 and 31 of Article XXI. 65a Letter Opinion of Dwyer, J.S.C., March 21, 1977 In Moore v. Local 483, supra, the New Jersey Supreme Court recognized that the Executive Committee should consider a prospective transferor’s “qualifications” and that the local in the first instance should establish criteria by which transfers would be judged. 66 N.J. at 537. Local 11 did adopt criteria, Ex, DL-10, in March 1975 to judge transfers. Local 11 introduced them, The con- tention is that the transfers were judged by these criteria. The court has the benefit of a transcript of the inter- views held for the original ten Plaintiffs. The testimony establishes the interviews for the added three were sub. stantially similar. The criteria are: “1, Criteria relating to origin of applicant’s contract right of transfer.” Under this heading four questions are taken from the membership application which are: No. 6 How long have you been following the trade? No. 7 Are you able to command the average wage in this locality? No. 8 Are you in sound health? No. 9 Are you willing to take an obligation that will in no wise conflict with your religious beliefs on your duty as a citizen? 2. Criteria respecting qualifications? 3. Criteria relating to required residency? 4. Criteria relating to health? 5. Criteria relating to union obligation? 66a Letter Opinion of Dwyer, J.S.C., March 21, 1977 In Query No. 6 criteria it is stated that long period of training is desirable and the requisite period of the ap- prenticeship is about what time it takes to acquire skills of “Journeyman Ironworker”, as distinguished from specialized branches. The latter are recognized in the referral system spelled out in the Consent Decree, On page 5 it then states 5 to 15 years experience is the time needed to acquire the skills without an apprenticeship. In Moore v. Local 483, supra, apprenticeship was ruled out for the type of transferor involved here. By reason of the bargaining over the very issue of transfer membership in Par. 33(a) of the Consent Decree, Local 11 agreed six months was reasonable for member- ship. Although there is a two year period before transfer is possible Art. XXI §30, if six months experience is adequate for direct membership as a construction laborer how can five years as an ironworker be inadequate? The evidence shows that each of the Plaintiffs has five years and some more than 15 years. In Query No. 7, the criteria suggest the reference is competence to perform work adequate to receive the wage rates in the area of the District Council and that resi- dence should be in that area. The Criteria on page 7 refers to the fact that the ap- plication blank requires a certification that the answers are true, particularly those as to qualification, and that if false the individual may be debarred. The findings of Judge Garth as to what Local 11 did in its own admissions prior to 1972 raise substantial ques- tions as to whether or not at the time Plaintiffs filled out their applications that under prevailing practices there was any deception. 67a Letter Opinion of Dwyer, J.S.C., March 21, 1977 But more to the point, each of the Plaintiffs has demon- strated qualification for over five years. The question is transfer not original application. Aside from the fact that the International suggested their reasons could only be inquired into at a hearing where presumably the officers of the other locals would be available and the scope of everyone’s knowledge ex- plored, there are substantial factors of waiver and estop- pel. The Criteria is replete with random references to ele- ments of contract law such as fraud. However, no where is reference made to materiality, laches, waiver, acquies- cence, or estoppel if not ratification. There is reference to the “all around ironworker”, the specialist ironworker, and the shopman which is deemed irrelevant. It is not necessary for this court to comment on the statements that in bargaining the business agents repre- sent only “all around ironworkers”. There is no testi- mony by defendants that any exist except by sugggestion that the apprenticeship graduates may. It is not a term foun] in the International Constitution. The suggestion that transferors must be “all around ironworkers” is un- related to the facts in the record or the referral for work testified to. The tests suggested have none of the safeguards of ob- jectivity suggested by Judge Garth and were not admin- istered as a matter of fact. In respect to residency the evidence establishes most if not all of the Plaintiffs own their homes in the District Council area at the time of requesting transfer. 68a Letter Opinion of Dwyer, J.S.C., March 21, 1977 In respect to health there is no showing any applicant was not in good health or incapable of work. If health is a question, a medical examination would be appropri- ate. See comment below on Durante. In respect to taking an oath, the nature, form and con- tent of the oath are not set forth except as to the appli- cation blank. If one is desired as many organizations do it can be taken when the transferors are sworn in. There is no showing or suggestion that any Plaintiff has been disloyal to the union movement generally, the Interna- tional, the Local to which he belongs, « ¢ Local 11. Good moral character is a relevant factor. There is no showing that any Plaintiff lacks good moral character. The court will now consider the specific reasons set forth in the letters dated July 22, 1975. The Constitution of the International sets forth the re- quirements for membership: Articie LI. Membership “See. 1. This organization shall consist of an un- limited number of bridge, structural, ornamental, reinforced concrete iron workers’, machinery movers’, stone derrickmen’s, shopmen’s and navy yard riggers’ local unions, and the various members thereof, and it shall not dissolve so long as any two local unions oppose such dissolution. “Membership Requirements “Sec. 2. To be admitted to membership in any local union of the International Association one 69a Letter Opinion of Dwyer, J.S.C., March 21, 1977 must be a practical workman versed in the duties of some branch of the trade as set forth in See- tion 1 of this Article, of good moral character and competent to demand standard wages.” Sec. 3-6 are prohibitions against persons who be- long to organizations that in substance would sub- vert the United States of America and/or the union movement, the International or any local thereof. Each local is given authority to adopt its own by-laws (Art. XXI §4) provided the same do not conflict with Article XXVI “Constitution Governing all Local Unions.” There is no provision therein dealing with membership. Article TV sets forth the claimed jurisdiction. A local might very well specify an area or degree of competence for membership. Local 11 has introduced no evidence that it has any such requirement. Except to the statements in the Criteria about “an all around ironworker”, there is no evidence to support a finding that said criteria was ever employed in practice. By reason of Local 11 agreeing to the referral system in the operation of its hiring hall by branches in the Con- sent Decree and by reason of the fact that the hall has been so run for at least four years and one of said years regarded as excellent for construction work and iron- workers, the court finds that this reason is not only not supported by the evidence, but is contradicted by the evi- dence including the evidence produced by Local 11. Pre- sumably the all around ironworker could do every task for each branch of work on the referral questionnaire. The reference in the letters to “no forma! training” if construed to mean apprenticeship the Supreme Court has already ruled invalid. 70a Letter Opinion of Dwyer, J.S.C., March 21, 1977 The letters also indicated no evaluation of the facts. DeMaio testified that after he had his book “* * * I went to Local 11’s apprenticeship school. * * * When T first came into the business I went through welding and I learned everything else with Hank. * * * We went two terms with them. * * * I would say ’68, 69. * * *” In response to the question “* * * what kind of work have you done?” “A. A little bit of everything. (). Can you make it more clear? A. I have done finishing, I have done roads, | have done a little rigging, I did a little bit of—l did some sheeting. I did miscellaneous iron.” (See p. 31 DL-11). Ife received the same form letter as everyone else. The court will not comment on each interview. In gen- eral, DL-11 shows that the ten had varying experience, had been referred out by Local 11, were never fired for incompetence but one was fired for being 20 minutes late from lunch when he encountered a problem in cashing a check, apparently cooperated with Local 11, felt Local 11 members were favored in job assignments, and wanted to participate in Local 11 in seleeting those who represented them. In respect to the additional three, the reasons set forth in their letters are that their memberships were obtained by fraud and hence the Local did not want members who could be expelled, that they had refused to answer ques- tions about qualifications, and Local 11 did not want to violate the Consent Decree. Tla Letter Opinion of Dwyer, J.S.C., March 21, 1977 Each of these refused to answer certain questions on the advice of counsel that no tests were to be adminis- tered. The persons conducting the interviews included one who gave out work assignments. DL-11 p. 97. No witness for Local 11 testified as to what competence was needed, From the testimony of Wallace the court con- cluded that the applicable collective bargaining set the wage scale for ironworkers, with a differential for ap- prentices and trainees but that otherwise as to the branches specified in the referral form there was no dif- ference. The court finds that there was and is no sepa- rate category of “general all around ironworker”. The court finds it significant that in the July 22, 1975 letters that Local 11 did not find the difficulty with ob- taining membership worthy of mentioning as a ground for refusing transfer even though it stated it had inquired into it. Based on the record in this action, the court finds that any problem surrounding the original application for membership not a valid reason for denying transfer. 3. Defendant correctly states that an action at law in lieu of mandamus may be brought to enforce rights of mem- bership. Zeliff v. Knights of Pythias, 53 N.J.L. 536 (S.Ct. 1891). But they are wrong in asserting that the presence of a “discretionary power” in Local 11 ends all right of Plaintiffs to any judicial review where that discretionary power has been exercised. The question here is whether there was good faith exer- cise of that power or was it arbitrary and/or capricious. 72a . 73a Letter Opinion of Dwyer, J.S.C., March 21, 1977 Letter Opinion of Dwyer, J.S.C., March 21, 1977 Then Vice Chancellor Jayne stated the test for judicial Div. 1965), certif. den. 49 N.J. igh ely goye review of action by a labor union in expelling a member v. Board of Education, 78 ee ‘Srna Mill / in Dragwa vy. Federal Labor Union No. 23070, 136 N.J. (App. Div. 1962); Tullo v. Towns ‘p of lburn, Nq. 172 (Ch. 1945) as: | 54 N.J. Super. 483, 498 (App. Div. 1959). We con- “* * * It is to be realized that Chancery does not furnish a retrial of the case to determine anew the guilt or innocence of the union member (citations omitted—ed.). The inquiry when undertaken by this court is usually concentrated on the good or bad faith inspiring the action of the union and on whether the expulsion of the member and the un- derlying causes are capricious or contrary to pub- lie policy and natural justice.” (136 N.J. Eq. at 174). sider the same standard of review appropriate with respect to decisions of governing boards of hospi- tals, such as the determination here being examined. See Duffield v. Memorial Hospital Association of Charleston, 361 F.Supp. 398, 404 (S.D.W.Va. 1973) ; Davidson v. Youngstown Hospital Association, 19 Ohio App. 2d 246, 250 N.E. 2d 892, 896 (1969) ; Benell y. City of Virginia, 258 Minn. 559, 104 N.W. 9d 633, 636 (1960); Grodjesk v. Jersey City Medi- cal Center, 135 N.J. Super. 398, 410 (Ch.Div. 1975). Such a standard defers to the expertise of hospi- tal authorities concerning the operations of the hos- The standard for review of denial of a surgeon to surgi- cal privileges at a hospital was set forth recently by the New Jersey Supreme Court in Guerrero v. Burlington County Mem. Hosp., 70 N.J. 344 (1976) as follows: “ee 8° © pital, while at the same time affording full oppor- tunity for judicial intervention when there is no ra- tional basis for the decision being reviewed, or it appears to be wnreasonable, arbitrary or caprict- a reviewing court should confine its effort ous.” (70 N.J. at 356, emphasis added). to determining whether the decision made by the hospital is supported by substantial credible evi- dence and is neither arbitrary nor capricious. When a decision fulfills these requirements, a reviewing court should refrain from substituting its own judg- ment for that of the hospital authorities. In respect to the problem of new doctors coming into the area the New Jersey Supreme Court in Guerrero said: “Nothing we have said should be in any way con- strued as suggesting that hospitals may routinely deny staff privileges to doctors moving into an area. “It is well settled that this is the proper stand- ard of review by which to measure the propriety of determinations of administrative agencies. See, e.g., Close v. Kordulek Brothers, 44 N.J. 589-99 (1965); Flanagan v. Department of Civil Service, 29 N.J. 1, 12 (1959); First Savings & Loan Asso- ciation Vv. Howell, 87 N.J. Super. 318, 321-22 (App. Any denial of such privileges, if motivated by a de- sire to exclude newcomers in order to maintain the status quo of the staff, woald not be judicially tol- erated. Implicit in our opinion in Falcone v. Middle- sex County Medical Society, 34 N.J. 582, 597 (1961) is the belief that the power to exclude must be rea- sonably and lawfully exercised in furtherance of the 74a Letter Opinion of Dwyer, J.S.C., March 21, 1977 interests of both the public and the medical pro- fession. A denial predicated upon exclusionary pol- icies fostering only the well-being of those staff members who are already admitted would clearly be in derogation of the spirit of Falcone. * * *” [70 N.J. at 358]. In Greisman v. Newcoml Hospital, 40 N.J. 389 ( 1963) the New Jersey Supreme Court characterized the “disere- tionary power” to admit new staff as a fiduciary power. After referring to the trial court decision in Falcone v. Middlesex County Medical Society, supra, the court said: “On appeal, its judgment was sustained in an opin- ion which, after pointing out that the Society had virtually monopolistic power to preclude Dr. Faleone from successfully continuing his practice and to re- strict his patients in their freedom of choice of phy- sicians, held that public policy dictated that this power was not to remain unbridled but was to ‘be viewed judicially as a fiduciary power to be exer- cised in reasonable and lawful manner for the ad- vancement of the interests of the medical profession and the public generally.’ 34 N.J., at p. 597. Sup- porting reference was made to various decisions including Wilson v. Newspaper, etc., Union, 123 N.J. Eq. 347, 351 (Ch. 1938), where Vice Chancellor Bige- low had appropriately suggested that where a labor union has a virtual monopoly it is under a fiduciarv duty not to exercise its membership power in arbi- trary fashion. * * *” [40 N.J. at 400]. In Wilson, the union had signed a closed shop agreement with the Newark News, denied plaintiff admission, and then 75a Letter Opinion of Dwyer, J.S.C., March 21, 1977 sought his discharge on the ground that he was not a mem- ber of the union. Plaintiff did not seek admission to the union but an injunction against union interfering with his job which was granted. Art. I, par. 2, of the 1947 New Jersey Constitution pro- vides: “Persons in private employment shall have the right to organize and bargain collectively * * *” The Landrum-Griffin Act, 29 U.S.C. §401 encourages the view that individuals who are affected by the collective bar- gaining agreements negotiated by a union should have rights of election in those unions. These are the goals sought by the Plaintiffs. They are consistent with the public policy of this State. Against this criteria of exercise of fiduciary power, based on credible evidence to show a rational and reasonable reason for rejection of the transfers, this court concludes that the record establishes beyond a fair preponderance of the credible evidence that defendant Local 11 Executive Committee did not base its decision on credible evidence or rational reason. In respect to the Consent Degree reason, the court at most ean find that it is a mitigating factor in respect to punitive damages in that there may have been some sub- jective feeling that admissions of white transfers in light of the little progress in attaining minority trainees and/or apprentices might have created problems. The court repeats the finding that there is no basis 0% eredible evidence based on defendant Local 11’s testimony that any quota existed. 76a Letter Opinion of Dwycr, J.S.C., March 21, 1977 The court also finds in respect to punitive damages that defendant Local 11 harbored no ill will or malice towards the Plaintiffs but were seeking to protect jobs for the members who elected them. The court has already commented on the other reasons given under the criteria. The court finds that the reasons based on the original ap- plication are not rationally related to the transfer where there is no showing of disloyalty to the International, their original Local, or Local 11, for periods ranging from 5 to 15 years. If it is appropriate to take an oath, Local 11 certainly should give one to all persons who come in. The court repeats as an express finding that there is no requirement existing for “general all around ironworker”, either in the International Constitution, Local 11 By-Laws, or the practices of the referral system at the hiring hall run by Loeal 11. Loeal 11 is required by the Consent Deerce to keep ree- ords of referral and file reports. The records of Local 11 presumably show who worked, when they worked, and what they did. They would also show who did not answer a eall for work. It may well be that a reasonable provision in a Local By-Law for continued good standing is a requirement that unless ill or otherwise excused, a failure to register for work or respond to a eall on a certain number of occasions within a time span is ground for expulsion. But in the absence of Local 11 showing that any of the Plaintiffs posed that problem it is not a reason for denying transfer. Local 11 did not ground the refusal to honor Durante’s transfer on a health problem. The problem is not job 77a Letter Opinion of Dwyer, J.S.C., March 21, 1977 related, it is a pinched nerve. It has caused him to have to leave work. Durante should submit a statement of his treating physician that he is capable of working without difficulty. If Local 11 questions it, it may request a phys- ical examination and report by their own independent phy- sician. The court concludes that Plaintiffs have met their burden of proof. The court concludes that Local 11 did not base its rejection on an exercise of reasonable fiduciary discre- tion. The court concludes that the rejections were on grounds that were not relevant and may be illegal. Under the cireumstances of this case the court directs that In [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385005_2135%3A1. Public record. Not legal advice.