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Blum v. International Association of Machinists

Decided: July 3, 1963.


Goldmann, Freund and Foley. The opinion of the court was delivered by Goldmann, S.j.a.d.


Defendants, by leave of court granted, appeal from a Superior Court, Law Division, order denying their motion for summary judgment upon their fourth separate defense setting up federal pre-emption of the issues involved, and granting plaintiff's motion to strike that defense.

Plaintiff Blum, plant manager of Oxwall Products Company, Inc., instituted the present action to recover damages for alleged libelous material contained in certain leaflets published

and issued by defendants under the name "Union News." Toward the end of November 1960 defendant union and its representatives launched a campaign for the purpose of organizing Oxwall's production and maintenance employees and eventually winning an election to be conducted by the National Labor Relations Board (NLRB). The campaign was conducted with vigor and persistence, and it was in the course of that campaign that defendants issued the printed sheets in question.

Oxwall is a manufacturing company located in Oxford, N.J., and engaged in interstate commerce within the meaning of the National Labor Relations Act, 29 U.S.C.A. § 141 et seq. On May 26, 1961 NLRB issued a complaint against Oxwall and three associated companies upon charges filed by the union alleging violations of sections 8(a)(1) and (3) of the National Labor Relations Act, 29 U.S.C.A. § 158(a)(1) and (3), as amended. After a hearing and the coming in of the intermediate report and recommended order of the trial examiner, NLRB entered its decision and order on February 5, 1962 adopting his findings, conclusions and recommendations, except as modified by it. It found as a fact, as had the trial examiner, that Oxwall (mainly through plaintiff) had "interfered with, restrained, and coerced its employees in violation of Section 8(a)(1) of the Act, by engaging in unlawful interrogation and threats of economic reprisal against its employees if they joined or assisted the Union." It also found that the company had accelerated the transfer of its assembling and shipping operations from the State of New Jersey to New York City "because of the union activities of its employees and its manifest union animus." Oxwall had scheduled the transfer for April 30, 1961, but moved the date forward to March 31, 1961. NLRB stated that it was apparent that the impetus for this precipitant move arose, not from any economic need, but from the fact that on March 15, 1961 the union had advised the company that it represented a majority of its employees and requested recognition and bargaining, and the further fact that shortly thereafter NLRB's regional

office had advised the company that the union had petitioned for an election. Accordingly, the Board found that by accelerating the transfer to New York City and by discharging almost all of its shipping employees, Oxwall had engaged in unlawful discriminatory conduct in violation of section 8(a)(3) and (1) of the act.

Plaintiff instituted this action during the union's organizational and election campaign. He seeks both compensatory and punitive damages on each of the four counts of the complaint. It is not unreasonable to draw the inference that this step was taken as a possible deterring influence upon the union and its representatives, for plaintiff is acting treasurer of Oxwall and secretary of one of its associated companies.

Defendants answered the complaint, setting up the defenses of truth and privileged communication. To these there was later added the defense of fair comment. Defendants subsequently moved to amend their answer by adding a fourth separate defense alleging federal pre-emption of jurisdiction over the action, and a fifth separate defense stating that the cause was not justiciable because any judgment in plaintiff's favor would constitute a violation of the First Amendment as an illegal abridgement of free speech. We are concerned only with the fourth defense, which reads:

"The issues herein involved concern a labor dispute between a labor organization and an employer, in which the plaintiff is a managing executive and which employer is engaged in interstate commerce under the terms of the Federal Labor-Management Relations Act as amended. The acts complained of in the Complaint and its Amendments are part and parcel of that labor dispute and the entire action is, by reason of the aforesaid Act of Congress, pre-empted to the proper federal jurisdiction and authority. Such pre-emption is exclusive and therefore this Court has no jurisdiction in this cause at all."

The trial judge granted the motion, but gave plaintiff leave to move to strike.

Plaintiff thereupon moved to strike the fourth separate defense. Defendants concurrently moved for summary judgment

upon that defense. The trial judge having granted plaintiff's motion, and denied defendants', the latter then sought and were granted leave to appeal.

The single issue presented is the legal question of whether Congress, by the adoption of the National Labor Relations Act and the Taft-Hartley Law (the Labor Management Relations Act of 1947, as amended by the Landrum-Griffin Act of 1959), 29 U.S.C.A. § 141 et seq. , pre-empted jurisdiction of a defamation action stemming from a union's conduct of a campaign to organize and win an NLRB election.

We are, of course, not concerned here with an action involving a violation of a labor-management contract in an industry affecting interstate commerce. Whatever may have been said by the United States Supreme Court in San Diego Building Trades Council v. Garmon , 359 U.S. 236, 79 S. Ct. 773, 3 L. Ed. 2 d 775 (1959), (Garmon II), and cases preceding it, concerning federal pre-emption of jurisdiction in such a situation, the matter was laid to rest in Smith v. Evening News Ass'n , 371 U.S. 195, 83 S. Ct. 267, 9 L. Ed. 2 d 246 (1962). That case held that a common-law action for damages for breach of a collective bargaining contract between a labor organization and an employer in an industry affecting interstate commerce could be maintained against the employer in a state court by an employee who was a member of the labor group, and this even when the conduct complained of was concededly also an unfair labor practice within the jurisdiction of NLRB. The federal Supreme Court read section 301(a) of the Labor Management Relations Act, 29 U.S.C.A. § 185(a), as permitting state courts to have the concurrent jurisdiction with federal courts to grant damages in a breach of contract action of the type described, provided they enforced ...

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