On appeal from the Appellate Division of the Superior Court, whose opinion is reported in 10 N.J. Super. 26.
For modification -- Chief Justice Vanderbilt, and Justices Heher, Wachenfeld and Ackerson. For affirmance -- Justices Case, Oliphant and Burling. The opinion of the court was delivered by Heher, J
The questions posed here are (1) whether there was a valid secession of the plaintiff Local Union No. 1 from the defendant Industrial Union of Marine and Shipbuilding Workers of America, and (2) whether a self-executing provision of the national union's constitution for the transfer, upon disaffiliation, of the local affiliate's property to the national union is valid and enforceable.
The Appellate Division of the Superior Court unanimously resolved the first issue in the affirmative, and the second in the negative, with Judge Bigelow dissenting. The case is here under Article VI, section V, paragraph 1(b) of the Constitution of 1947 and Rule 1:2-1(b) of this court.
The national union comprises Local No. 1, composed of employees of the New York Shipbuilding Corporation at its shipyard in Camden, New Jersey, Local No. 2, consisting of employees of the Sun Shipbuilding and Dry Dock Company at its shipyard in Chester, Pennsylvania, and Local No. 3, made up of employees of the Pusey and Jones Corporation at its plant in Wilmington, Delaware, devoted to shipbuilding and the manufacture of paper-making machines. The national and local units are all unincorporated associations. The contention is that National was organized to secure united action by all the employees of a given industry irrespective of trade or craft, industrial unionism as distinguished from draft unionism. "One Industry -- One Union," and thus the better to serve the interests of all workmen in
the industry; and that to this end the national and local unions came into being as an integrated whole by the common effort of all. It is said that "membership from the very outset was in the national organization," and that the central council of that body "initially set up a constitution under which all three locals could and did govern themselves," and "the local union had no existence apart from and before the formation of the national union." In a word, the insistence is that the local unions derive their being from the national union's constitution, whence comes also the essential rights of membership, and they are in substance and effect but subordinate units for local administration. The Local is deemed "a mere constituent part" of "a single integrated national structure."
But this is not a realistic conception of the relations between the local affiliates and their members and the central body. The locals are separate and distinct units primarily designed to secure and maintain an equality of bargaining power between the employer and their employee-members in the economic struggle for the fruits of the joint productive effort of labor and capital; and the association of the locals into the national union was in furtherance of the same end. These associations are consensual entities capable of entering into such legal relations with their members. The essential purpose was the affiliation of the local unions into a common enterprise to increase by collective action the common bargaining power in respect of the terms and conditions of labor. Yet the locals remained the basic units of the association, free to serve their own and the common interest of all subject to the restraints imposed by the constitution and laws of the association, and free also to renounce the affiliation for mutual welfare upon the terms laid down in the agreement which brought it into existence.
The right of disaffiliation was inherent in the compact. The association is essentially conventional in character. It derives from the common consent of the parties, and is limited accordingly. The inquiry concerns the nature and
scope of the common undertaking; and, in the quest for the common intention, the situation of the parties and the accompanying circumstances are to be considered. Regard must be had to the relation of the parties and the surroundings when the agreement was made and the objects which they were striving to attain. Like other contractual relationships, trade union membership is purely voluntary; and the parties are bound only to the extent set by the agreement. The rights and liabilities of the parties are measured by the contract; and it is the judicial function to enforce the contract in all its terms, save as it may transcend public policy or the law of the land. Cameron v. International Alliance of Theatrical Stage Employees and Moving Picture Operators, 118 N.J. Eq. 11 (E. & A. 1935); Ibid. 119 N.J. Eq. 577 (E. & A. 1936).
Judicial intervention in the internal affairs of trade unions is generally exerted for the protection of a "property right" or for the enforcement of what is deemed a contract expressed in the union's constitution and laws. Fleming v. Moving Picture Machine Operators, 124 N.J. Eq. 269 (E. & A. 1938); Otto v. Journeymen Tailors' Protective & Benevolent Union, 75 Cal. 308, 17 Pac. 217 (1888); Spayd v. Ringing Rock Lodge, 270 Pa. 67, 113 A. 70 (1921); Snay v. Lovely, 276 Mass. 159, 176 N.E. 791 (1931); Polin v. Kaplan, 257 N.Y. 277, 177 N.E. 833 (1931); Alexion v. Hollingsworth, 289 N.Y. 91, 43 N.E. (2 d) 825 (1942). The property and contract theories have been criticized as pure legal fictions. One writer suggests as a rational alternative concept the recognition of the union member as "essentially a citizen within an industrial government," and the function of the courts as the prescription of "the minimum standards for the protection of individuals within that government." 64 Harvard Law Review ...