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Finnegan v. Pennsylvania Railroad Co.

Decided: July 27, 1962.

PATRICK J. FINNEGAN, WILLIAM P. WINAND, CARL O. MCHENRY, STEPHEN J. BURAWSKI, LOUIS N. FUGARO, RALPH A. FUGARO, JOHN SCHWERTFEGER, THOMAS KERN, JOHN C. EMMS AND THOMAS J. KLESO, PLAINTIFFS,
v.
PENNSYLVANIA RAILROAD CO., A PENNSYLVANIA CORPORATION, HARBORSIDE WAREHOUSE CO., INC., A NEW JERSEY CORPORATION, AND HARBORSIDE TERMINAL CO., INC., A NEW JERSEY CORPORATION, DEFENDANTS



On motion for summary judgment.

Labrecque, J.s.c.

Labrecque

In the present action, the defendants Harborside Warehouse Co., Inc., and Harborside Terminal Co., Inc., move for summary judgment in their favor, asserting that the controversy is one of law for resolution by the court.

Plaintiffs are ten former employees of Harborside Warehouse Co., Inc., a New Jersey corporation, which formerly owned and operated the Harborside Warehouse at Exchange Place, Jersey City, New Jersey. By their complaint they seek damages arising out of their asserted unlawful discharge

following the sale of the warehouse on January 1, 1959, to Harborside Terminal Co., Inc. Their claimed right to recovery is based upon the terms of a collective bargaining agreement entered into between Harborside Warehouse Co., Inc., and Special Police Guards Union, Local 23318, AFL-CIO. The union was not a party to the complaint nor has it sought leave to intervene or be joined as a party.

Briefly, it is asserted that prior to December 31, 1958, the plaintiffs had been employed by Harborside Warehouse Co., Inc., hereinafter designated as Warehouse, under a collective bargaining agreement covering the period from June 1, 1957 to May 31, 1962. On December 31, 1958, the entire operation was sold to Harborside Terminal Co., Inc., hereinafter designated as Terminal. The count against Warehouse asserts that the plaintiffs were unlawfully discharged as of the latter date and seeks both compensatory and punitive damages for their unlawful discharge.

As a cause of action against Terminal, it is asserted that prior to the transfer of ownership referred to above, Terminal had agreed to assume the obligations of Warehouse referable to the collective bargaining agreement and that, notwithstanding this, on March 1, 1959, Terminal, without just cause, terminated their employment in violation of the provisions of the agreement. Both compensatory and punitive damages are likewise sought against Terminal.

In defense, Warehouse alleges that sometime prior to December 31, 1958, it entered into bona fide negotiations with York Associates, Inc., a New York corporation, which culminated in an agreement dated November 11, 1958, for the sale of the warehouse for $4,750,000. The agreement of sale provided in ยง 13:

"To the extent warranted by business conditions as determined by Purchaser, Purchaser shall retain in its employment for not less than one year after settlement, all employees of Vendor who are regularly employed by Vendor on the property sold hereby at the

settlement date and are not represented by labor unions (but not including the President); provided that Purchaser may discharge any employee for good cause. Purchaser will take subject to existing labor contracts with unions representing employees of Vendor."

Subsequently, York Associates, Inc., assigned the agreement of sale to defendant Terminal, the assignment providing: "the assignee * * * assumes all the obligations of the Purchaser specified in the aforesaid contract of sale." Warehouse asserts that the sale was bona fide , that it thereby divested itself of the ownership and operation of the business and that as a matter of law it was not required to continue to employ the plaintiffs beyond the time when it ceased to engage in business.

Defendant Terminal denies that it assumed the obligations contained in the collective bargaining agreement. It asserts that the words "subject to" in the contract meant something less than the assumption of the labor contract and that, in any event, it was not required by the latter to continue to employ the plaintiffs. It additionally asserts that it continued to employ the plaintiffs and other members of the union until March 1, 1959, at which time, in the exercise of management prerogative, it adopted a policy of employing an independent contractor, rather than its own employees, to perform guard services at the warehouse. It thereupon entered into a contract with McRoberts Protective Agency, Inc., for the performance of the duties which had theretofore been performed by the plaintiffs. McRoberts then entered into a collective bargaining agreement with the same Local 23318 of the Special Police Guards Union, AFL-CIO and all but one of the plaintiffs continued to perform guard service as employees of McRoberts under the new agreement. Negotiations for the new agreement were carried on by a committee of three, which included two of the plaintiffs herein. On February 26, 1959, all of the plaintiffs had signed a written authorization for the negotiations.

The collective bargaining agreement contained a clause prohibiting strikes, stoppages or lockouts during the term of the agreement and a clause providing that:

"ARTICLE II -- DISPUTES OR INTERPRETATION OF AGREEMENT

Section 1. In case any dispute arises during the term of this agreement between the parties hereto in reference to its meaning, interpretation, construction or application, each party shall name one representative who shall determine the question or questions which have arisen and which determination shall be final and binding upon the parties hereto. In the event said two representatives are unable to agree, they shall select a third party who shall in no way be connected with the employer or the Union and the majority decision of the said three (3) individuals shall be final and binding upon the parties hereto."

The complaint, which was filed more than two years after the events referred to, contained no prayer for arbitration and up to the time of the making of the motion for summary judgment, a motion for arbitration was not made by the plaintiff. Subsequent to the return day of the motions for summary judgment, plaintiffs made a motion for arbitration which was denied. The collective bargaining agreement was to have expired on May 31, 1962. The union took no part in the motion. A previous motion for arbitration in the alternative was made October 20, 1961.

The present applications are made pursuant to R.R. 4:58-2 and 3 and are based upon the pleadings, answers to interrogatories, affidavits and exhibits filed and admissions of the parties. If the facts necessary to the determination of the controversy are not in dispute, the matter is clearly one calling for the court's determination. Devlin v. Surgent , 18 N.J. 148 (1955); Trustees of Columbia University v. Jacobsen , 53 N.J. Super. 574 (App. Div. 1959), appeal dismissed, 31 N.J. 221 (1959). But summary judgment may not be rendered unless the pleadings, the admissions and the affidavits show palpably that ...


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