Jacobs, Bigelow and Wm. J. Brennan, Jr. The opinion of the court was delivered by William J. Brennan, Jr., J.A.D. Jacobs, S.j.a.d., concurring. Bigelow, J.A.D., dissenting.
On September 28, 1948, a meeting of approximately 700 members of Local No. 1, Industrial Union of Marine and Shipbuilding Workers of America, an unincorporated association, voted, with eight dissenting, to terminate the local's affiliation with the defendant national union. This suit, brought in the Chancery Division of the Superior Court, resulted.
The individual plaintiffs are local members who allege that the attempted secession was not legally effective and that the local remains a national union affiliate. The principal defendants, who are appellants here, are the individuals composing the local's official board in office at the time of the secession, and who continued thereafter to administer its affairs and property. The other defendants are the national union, New York Shipbuilding Corporation, employer of the local's members at its Camden yard, and the several depositaries of the local's funds and the holders of its properties.
The national union is a cross-appellant. Its answer joined in plaintiff's prayers for relief and added a counterclaim, dismissed by the trial court, alleging that if the secession was effective the national union is entitled to the local's property.
Temporary injunctive relief was denied. Harker et al. v. McKissock et al. , 1 N.J. Super. 510 (Ch. Div. 1948). Plaintiffs prevailed at the trial and obtained the judgment under appeal restraining the official board's continued administration of the local's affairs and directing them to account for its assets, and granting incidental injunctive relief against the national union and the other defendants; and, as mentioned, dismissing the national union's counterclaim.
The trial court had no doubt of the local's power under the agreement to terminate the affiliation with the national union, but held that in the absence of a contract provision authorizing such action by majority vote, the power could be exercised only by unanimous vote.
The local was formed in 1933 to represent the shipbuilding employees at the Camden yard and its chief activity since that
time has been and continues to be the improvement through collective bargaining of the wages, hours and working conditions of the members of the local employed by New York Shipbuilding Corporation. The local had functioned for more than a year as an unaffiliated labor union when in September, 1934, it sponsored, and with two other shipyard workers unions from Chester, Pennsylvania, and Wilmington, Delaware (with which it had collaborated from the outset while all three were getting established), formed the national union for the purpose of spreading organization of industrial (as opposed to craft) unions throughout the shipbuilding industry. This is expressed in the preamble to the national union constitution:
"Recognizing that craft unionism, as practiced in the past, has been proved during the course of history to be both ineffective and dangerous to the interests of the workers, the Industrial Union of Marine & Shipbuilding Workers of America advocates and practices the program and tactics of militant industrial unionism based on the principle of One Industry -- One Union."
It seems quite clear that the purpose of the affiliation was separate from, and not paramount, but subordinate, to the objects which gave birth to the local, although also in aid of those objects. A reading of the national union's constitution and the local's by-laws and the proofs that the local over the years and to the time of withdrawal largely handled all relations with the employer manifest that the local did not surrender its autonomy or independence to administer its own affairs and manage its assets to accomplish its original and chief purpose of advancing the welfare of its members as employees of New York Shipbuilding Corporation. The plaintiffs and the national union point to provisions of the local's amended by-laws mentioning the national union, but we find in them nothing to support the notion that the local surrendered its autonomy and became, as plaintiffs and the national union contend, a mere creature and dependent of the national union. On the contrary, we read the references as only such as might be expected to give effect to the alliance
while it exists, and not as impairing or restricting in any real sense the local's freedom of action to run its own affairs as it had before the affiliation and to retain its assets to further its members' interests in their relation with the employer, as the proofs show was in fact done by the local.
The members did not become members of the national union. They remained members of the local. The property of the local did not become the property of the national union. This property was and is the product of dues and initiation fees paid by the members to the local and is of very substantial value. The local's only financial obligation to the national union is the payment of a per capita tax assessed against and paid by the local and not by its members.
In our view the national union is simply a federation of autonomous locals. The relationship lacks the features which spell out a single integrated structure of which the locals are mere constituent parts, as in Federation of Insurance Employees, et al. v. United Office and Professional Workers of America, C.I.O. , R.I. , 74 A.2d 446 (Sup. Ct. of R.I. 1950); and Brown v. Hook , 79 Cal. App. 2d 781, 180 P. 2d 982 (Cal. App. 1947).
The facts surrounding the alliance and its origin have a striking resemblance to those considered in State Council of Jr. O.U.A.M. of New Jersey v. National Council of Jr. O.U.A.M. of North America, et al. , 71 N.J. Eq. 433 (Ch. 1906); appeal dismissed, 79 N.J. Eq. 193 (E. & A. 1911). There the state council of a beneficial association was incorporated in New Jersey prior to the organization and incorporation of a national council, and the state council had played a part in the organization of the national council. The state council disaffiliated from the national council following a disagreement on policy. The national council attempted to set up a new state council and was restrained at the suit of the state council which was held to be fully autonomous and free to withdraw from the alliance and to continue possessed of its property as the only state council authorized to function in New Jersey. The national council unsuccessfully contended
that the state council was an integral part of the national council and inextricably intertwined and combined with it because of the references to the national council in the state council's constitution and the recognition of the national council's existence and authority, and of the facts that the state council had uniformly, by its delegates, taken part in the deliberations and proceedings of the national council and had paid to the national council the tax imposed by that body. The plaintiffs and the national union make substantially the same argument in this case, and we think it is equally ill-founded.
The alliance and its incidents are said to be a matter of contract. Thus it is held that whether a local union has power to withdraw is to be discovered in the contract formed by the constitution of the national union and the by-laws of the local union, considering also the surroundings under which the contract was made and the objectives which the parties sought to attain. International Union of United Brewery, Flour, Cereal, Soft Drinks and Distillery Workers of America, C.I.O., et al. v. Becherer et al. , 142 N.J. Eq. 561; affirmed, 4 N.J. Super. 456 (App. Div. 1949); cert. den., 3 N.J. 374 (1949); Cameron v. International Alliance of Theatrical Stage Employees, etc. , 119 N.J. Eq. 577 (E. & A. 1935). See, however, suggested alternative theories in a Note, " The Legal Consequences of Labor Union Schisms ," 63 Harvard Law Review 1413 (June, 1950).
We may concede that a local union may lawfully contract to become a mere constituent of a national union or, also, no doubt, by its conduct in relation to the national union, be estopped to deny the contrary. The important determinant is not necessarily whether the local or the national union was organized first; their agreement and the history of their relations under it, with emphasis perhaps on the time at or near the schism, are also relevant. If the proofs showed that the ...