of all interested persons would be essential. This would be in cases where the right to be enforced was joint, common or derivative." Pentland held that the action there, which was brought under 29 U.S.C.A. 216(b), was a spurious class action because a judgment for or against the plaintiff in that case could not work an estoppel against a nonjoining other employee of the same employer. No basis for a class action, genuine or spurious, by the individual plaintiffs is disclosed in the complaint because the collective bargaining agreement constitutes Local as the representative of all of the employees of the class to which the individual plaintiffs belong. No conflict of interest exists within the Local, as was the situation in Giordano v. Radio Corporation of America, 3 Cir., 1950, 183 F.2d 558. , 29 U.S.C.A. 157 reaffirms the right of employees to organize, to join labor organizations, and 'to bargain collectively through representatives of their own choosing.' This right has been exercised by defendant's Newark employees, resulting in the contract upon which the present action is based. By the terms of that contract the employer recognized the Local as the sole and exclusive bargaining agent for all employees engaged in production, maintenance and shipping with respect to rates of pay, wages, hours of employment and other conditions of employment. Plaintiff employees, by relying upon the contract, have adopted Local as their representative. 29 U.S.C.A. 152(4). This action may not be maintained by any of the individual plaintiffs in a representative capacity. 29 U.S.C.A. 159(a).
The respective rights of individual employees on the one hand and of the Local on the other, under a collective bargaining agreement such as that which underlies the present action, have been considered and defined in Association of Westinghouse Salaried Employees v. Westinghouse Electric Corp., 3 Cir., 1954, 210 F.2d 623, affirmed 1955, 348 U.S. 437, 75 S. Ct. 489, 99 L. Ed. 510. At page 627 of 210 F.2d of the Court of Appeals opinion in that case, Judge Staley says: 'The collective contract plus the National Labor Relations Act binds the employer to include in the contract of hire which he may conclude with each individual employee in the bargaining unit the precise terms and conditions that have been set up by it. * * * The bargaining representative is made the sole agent for the unit and represents not only its members but all employees in that unit whether members of the union or not. The terms of the collective contract thus become part of the individual contract of employment, not because of the consensual acts of the employer and employee, but because the law says so no matter how those parties may feel about the matter. (Citing J. I. Case Co. v. N.L.R.B., 1944, 321 U.S. 332, 336, 64 S. Ct. 576, 88 L. Ed. 762) * * *. But not until an individual entered into a contract of hire with defendant did the latter become bound to pay that individual under such circumstances, and, if defendant failed to so pay, it breached, not its collective contract with the union, but its contract of hire with that individual employee. * * * Consequently, we think that, if there was a violation of contract here, it was a violation of the individual employment contract and, thus, there is no federal jurisdiction since Section 301(a) cannot be invoked.' Nevertheless, as stated in Westinghouse and in J. I. Case, supra, the individual employees are third party beneficiaries of the collective bargaining contract, some of the provisions of which may enure to the benefit of the union, as distinguished from some or all of its individual members. Westinghouse was, in effect, an action to compel the employer to pay wages to certain of its employees for a day upon which the employees did not work. In affirming the Court of Appeals, the Supreme Court refused to adopt the reasoning of the Court of Appeals in reaching its conclusion that the District Court, 107 F.Supp. 692, was without jurisdiction of the cause of action asserted in the case. In the language of Mr. Justice Frankfurter, 348 U.S. at pages 459-460, 75 S. Ct. at page 500, of the Supreme Court's opinion, we find the reason for that Court's refusal to recognize jurisdiction: 'Considering the nature of a collective bargaining contract, which involves the correlative rights of employer, employee and union, we might be disposed to read 301 as allowing the union to sue in this case. With due regard to the constitutional difficulties which would be raised, and in view of the fact that such an interpretation would bring to the federal courts an extensive range of litigation heretofore entertained by the States, we conclude that Congress did not will this result. * * * The employees have always been able to enforce their individual rights in the state courts. They have not been hampered by the rules governing unincorporated associations. To this extent the collective bargaining contract has always been 'enforceable." Textile Workers Union, etc. v. Lincoln Mills, etc., 1957, 353 U.S. 448, 77 S. Ct. 912, 1 L. Ed. 2d 972 was an action by a union of employees to compel their employer to arbitrate grievances relating to work loads and work assignments in accordance with the provisions of a collective bargaining agreement in effect between the union and the employer. The District Court recognized jurisdiction under section 301 of the Labor Management Relations Act of 1947. The Court of Appeals for the Fifth Circuit reversed. The Supreme Court, in turn, reversed the Court of Appeals, holding that the congressional policy in favor of the enforcement of agreements between employers and representatives of employees to arbitrate grievance disputes was clear. After the date of the decision of the Court of Appeals in that case, the employer had terminated its operations and contracted to sell its manufacturing properties, thus rendering moot the grievances arising out of the apportionment of work loads and the assignment of jobs. To the extent, however, that the union sought a monetary award, a continuing controversy was recognized by the Court as existing. To similar effect see General Electric Co. v. Local 205, etc., 1957, 353 U.S. 547, 77 S. Ct. 921, 1 L. Ed. 2d 1028, and Goodall-Sanford Inc. v. Union of Textile Workers, etc., 1957, 353 U.S. 550, 77 S. Ct. 920, 1 L. Ed. 2d 1031.
Jurisdiction must be recognized in this case because the action is brought by a labor organization against an employer for a declaration of rights created by the terms of a collective bargaining agreement between the labor organization and the employer for the benefit of employees represented by the labor organization. Local 33 Int. Hod Carriers, etc. v. Mason Tenders, etc., 2 Cir., 1961, 291 F.2d 496. A justiciable controversy exists between the parties because the employer contends that it is at liberty, during the life of the collective bargaining agreement, to discontinue or curtail its operations at one location and to transfer the same or pursue other operations at another location without recognition of the seniority rights created by the terms of the agreement between the parties. The Local, on the other hand, contends that those seniority rights persist, at least during the life of the agreement, and that the employer is obligated to offer each of the employees represented by the Local continuing employment at the new location.
Does the complaint set forth a claim upon which relief can be granted to Local as representative of defendant's Newark employees? The action is brought to preserve and enforce the seniority rights created by the collective bargaining agreement in favor of defendant's employees represented by plaintiff Local. The complaint alleges that those rights are threatened by the employer's curtailment of operations in Newark, New Jersey, and by the sale of employer's inventory and equipment to a Pennsylvania corporation in process of organization, to be used by the purchaser in conducting, at Erie, Pennsylvania, some or all of the manufacturing operations theretofore carried on by the defendant at Newark. The collective bargaining agreement is presently and will continue in effect until January 31, 1962.
The complaint in this action sets forth a claim upon which relief can be granted by reason of the existence of a justiciable controversy; the power of this Court to enter a declaratory judgment; and its jurisdiction as between Local and defendant. 29 U.S.C.A. 185(a).
Plaintiffs rely upon Zdanok v. Glidden Company, 2 Cir., 1961, 288 F.2d 99, from which an appeal is presently pending in the Supreme Court of the United States. In that case, after the expiration of a collective bargaining agreement between Local and employer, certain former employees of the latter sought damages for breach of seniority provisions of the agreement which, by its terms, contemplated the arbitration of disputes. As the expiration date of the agreement approached, the employer gave notice to the Local that the agreement would be terminated on the date therein prescribed for its expiration. The employer commenced reduction of production at its plant in New York, and the removal of its machinery and equipment to a newly established plant in Pennsylvania where it continued production of similar products. The employer terminated the employment of the plaintiff employees prior to the expiration of the agreement. It offered to consider applications for employment at its Pennsylvania plant from former employees at the New York plant, if they would come to Pennsylvania and make application there upon the same basis as if they were new applicants seeking employment. The plaintiffs contended that, as beneficiaries of the collective bargaining agreement, and of the seniority provisions thereof, they were entitled to employment at the Pennsylvania plant. The Court of Appeals held that the plaintiffs had acquired vested seniority rights which could not be unilaterally annulled, and that if the employer had continued to operate the New York plant without a renewal of the union contract, or had reopened the New York plant after it had been closed for a time, the plaintiffs would have been entitled to reemployment with seniority. In construing the language of the contract, the Court of Appeals held that the terms thereof were not applicable only to the New York plant of the employer, but that a rational construction of the language would extend their application to any other location to which the employer might transfer its operations and continue work which the plaintiffs were eligible to perform. The refusal of the employer to recognize the existence of such rights to reemployment was a breach of the union contract for which the plaintiffs were entitled to recover damages.
In the action before this Court no answer has as yet been filed. The affidavits and depositions submitted upon the return of the order to show cause for a preliminary injunction present critical issues of fact which cannot be resolved without a plenary trial. If it should then be disclosed that the proposed or pending removal and change of the defendant's operations is a subterfuge for the purpose of enabling the employer to evade its obligations under the union contract respecting the seniority of its employees, final injunctive relief may appear to be in order. On the other hand, if the employer, in good faith, is exercising its right to terminate or change its business operation, and to sell its equipment and physical assets, at arm's length, to another corporation, the sole remedy, if any, to which the former employees may be entitled is that of damages under the union contract. Upon a motion for preliminary injunction I am not called upon to anticipate the ultimate determination of the issues of fact or questions of law which may develop upon a plenary trial of this case. If the grant of a preliminary injunction would give to the Local or the complaining employees the seniority advantages to which the employees might become entitled as a result of a favorable adjudication of the controversy, a preliminary injunction should be denied. No preliminary injunction may be granted without a showing that a denial thereof would cause irreparable injury to the plaintiff or plaintiffs; but such preliminary relief must be denied where the rights of the plaintiffs are doubtful. Murray Hill Restaurant, Inc. v. Thirteen Twenty One Locust, Inc., 3 Cir., 1938, 98 F.2d 578. Upon these principles it is obvious that unless and until there has been a determination that the defendant's contemplated or pending actions which the plaintiffs seek to restrain, are violative of enforceable vested rights created by the terms of the union contract, no injunctive relief should be granted. Warner Bros. Pictures, Inc. v. Gittone, 3 Cir., 1940, 110 F.2d 292. Accordingly, the order to show cause in this action, made on September 29, 1961 is discharged and this Court's restraining order of October 6, 1961 is vacated.
The foregoing opinion embodies the findings of fact and conclusions of law required by F.R.Civ.P. rule 52(a), 28 U.S.C.A.
Present order accordingly.
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