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Blum v. International Association of Machinists

Decided: June 1, 1964.


For affirmance -- Chief Justice Weintraub, and Justices Jacobs, Proctor and Hall. For reversal -- Justices Francis, Schettino and Haneman. The opinion of the court was delivered by Jacobs, J. Francis, J. (dissenting). Justices Schettino and Haneman join in this dissent.


The Appellate Division directed that summary judgment against the plaintiff be entered on the ground that jurisdiction had been preempted by the National Labor Relations Act and the Labor Management Relations Act as amended. 80 N.J. Super. 37 (1963). We granted certification on the plaintiff's application. 41 N.J. 196 (1963).

The plaintiff was plant manager and an executive officer of Oxwall Products Company which was engaged in interstate commerce and conducted assembly and shipping operations at its premises in Oxford, New Jersey. In November 1960 the respondent union began a campaign to organize Oxwall's workers and its efforts met with active resistance from the employer acting through its plant manager. There were accusations and cross-accusations which were followed by the issuance on May 26, 1961 of an unfair labor practice complaint against the employer and the filing on July 6, 1961 of a common law libel action against the union. Hearings on the unfair labor practice complaint were held before a trial examiner of the National Labor Relations Board. Testimony was taken with respect to the union's organizational activities,

including its distribution of weekly or semi-weekly leaflets at Oxwall's plant gate, and with respect to the activities of the employer which were aimed towards avoiding the unionization of its employees.

The trial examiner found that the employer had interfered with, restrained or coerced employees in the exercise of the rights guaranteed by § 7 of the National Labor Relations Act, and had thereby violated § 8(a)(1) by interrogating employees concerning their union activities and by threatening employees with reprisals because of union activities. The examiner found further that the employer had discriminatorily discharged certain named employees and had thereby engaged in unfair labor practices within the meaning of §§ 8(a)(1) and (3), and he recommended the form of relief including a cease and desist order and the payment of wages lost by the employees who suffered the discriminatory discharges. The Board agreed with its examiner's findings and recommendations and entered an appropriate order (Ox-Wall Products Mfg. Co., 135 N.L.R.B. 840 (1962)); a petition to set aside the order was denied and enforcement was directed in Oxwall Tool Co. v. National Labor Relations Board, 310 F.2d 878 (2 Cir. 1962).

The plaintiff's libel action seeks compensatory and punitive damages because of statements made by the union representatives during the organizational campaign. These statements were contained in sheets or leaflets which were known as "Union News" and were distributed periodically to the employees. A January 1, 1961 issue of the Union News allegedly contained the following: "Why the concentration camp pressure by 'Joe' and his pet stooges" . . . "Could it be that 'Joe' fears the facts that Oxwall workers are about to free themselves of the company Gestapo tactics" . . . "As 'Joe' rides again and again through the shop spreading fear * * *." An April 4, 1961 issue allegedly stated that "Joe is using the 'Big lie' tactics of Hitler and the fear and threats like Russian pressures to dictate your future"; a June 8, 1961 issue allegedly contained the following: "Joe Blum and other

Company officials have discriminated, intimidated, bribed and coerced Oxwall workers in order to prevent a free choice of Secret Ballot Vote for a Union of their choosing"; and a March 2, 1962 issue allegedly charged that "Joe Blum & Company have used bribery, threats and favoritism to influence you." In its answer the union set up the defenses of truth, privileged communication and fair comment. See Prosser, Torts § 95 (2 d ed. 1955). In an amendment of the answer the defendant set forth the following:

"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, preempted to the proper federal jurisdiction and authority. Such preemption is exclusive and therefore this Court has no jurisdiction in this cause at all."

Thereafter the plaintiff moved to strike the defense of preemption. His motion was granted by the trial court and, with leave, the union appealed to the Appellate Division. There the trial court's action was reversed in an opinion by Judge Goldmann which, after discussing the pertinent federal cases dealing with preemption in the labor relations field, expressed the firm view that the plaintiff's libel action was "arguably subject to § 7 or § 8 of the federal act" and was therefore preempted under the principles expressed in San Diego Bldg. Trades Council v. Garmon, 359 U.S. 236, 79 S. Ct. 773, 3 L. Ed. 2 d 775 (1959); the opinion stressed the freedom of expression provision in § 8(c) and determined that statements, such as those allegedly made here by the union during an organizational campaign having in ultimate view an election under § 9(c) could not, consistently with the policies underlying the federal legislation, be the proper subject of a state court libel action seeking compensatory and punitive damages. Such reported cases as are at all comparable have reached a similar result. See Hill v. Moe, 367 P. 2 d 739

(Alaska 1961), cert. denied 370 U.S. 916, 82 S. Ct. 1554, 8 L. Ed. 2 d 498 (1962); Schnell Tool & Die Corp. v. United Steelworkers, 200 N.E. 2 d 727 (Ohio Com. Pl. 1964); cf. Kominski v. Western Express Co., 37 Misc. 2 d 992, 234 N.Y.S. 2 d 976 (Sup. Ct. 1962), aff'd 19 A.D. 2 d 862, 245 N.Y.S. 2 d 372 (1963).

In Garner v. Teamsters, C. & H. Union, 346 U.S. 485, 74 S. Ct. 161, 98 L. Ed. 228 (1953), preemption in the labor field emerged in full bloom. The teamsters union had been able to recruit only a handful of employees though the employer had not objected to unionization. Nevertheless the union began picketing and the employer obtained a lower state court injunction based on the fact that the picketing violated Pennsylvania's Labor Relations Act. The injunction was set aside by the Pennsylvania Supreme Court on the ground that the federal remedy was exclusive and its judgment was sustained by the United States Supreme Court. In the course of his opinion for the Court, Justice Jackson declined to consider whether the picketing violated the federal legislation, noting that the power and duty of primary decision rested with the National Labor Relations Board. He pointed out that Congress had not only laid down the substantive rules of law but had provided for centralized administration and that a "multiplicity of tribunals and a diversity of procedures are quite as apt to produce incompatible or conflicting adjudications as are different rules of substantive law." 346 U.S., at p. 491, 74 S. Ct., at p. 166, 98 L. Ed., at p. 241. He rejected the employer's contention that the federal legislation was designed to enforce only a public right whereas the state court's power was invoked to protect only a private right and then said:

"Further, even if we were to assume, with petitioners, that distinctly private rights were enforced by the state authorities, it does not follow that the state and federal authorities may supplement each other in cases of this type. The conflict lies in remedies, not rights. The same picketing may injure both public and private rights. But

when two separate remedies are brought to bear on the same activity, a conflict is imminent." 346 U.S., at pp. 498-499, 74 S. Ct., at p. 170, 98 L. Ed., at pp. 243-244

The Court's opinion in Garner recognized that there may be certain exceptions to its broad rule of preemption; it cited Allen-Bradley Local, etc. v. Wisconsin E. Rel. Bd., 315 U.S. 740, 62 S. Ct. 820, 86 L. Ed. 1154 (1945), which involved mass picketing and threats of physical violence, and International Union UAW v. Wisconsin Empl. Rel. Bd., 336 U.S. 245, 69 S. Ct. 516, 93 L. Ed. 651 (1949), which involved intermittent and unannounced work stoppages. In United Constr. W., etc. v. Laburnum Constr. Corp., 347 U.S. 656, 74 S. Ct. 833, 98 L. Ed. 1025 (1954), the union threatened a contracting company with violence to such a degree that it was obliged to abandon its work. The company sued in a state court for compensatory and punitive damages and obtained a judgment. The union contended that the National Labor Relations Act had deprived the state court of jurisdiction but its position was rejected by the Supreme Court in an opinion by Justice Burton which stressed the fact that the Board had no power to grant relief comparable to that available in the state court action. In their dissent, Justices Douglas and Black noted that the union's conduct amounted to an unfair labor practice and they took the position that the Board's jurisdiction should be deemed exclusive; they expressed the thought that if the parties to the labor controversy have, not only the remedy provided by Congress, but also a common law action for damages, then the controversy is not settled by what the federal agency does but "drags on and on in the courts, keeping old wounds open, and robbing the administrative remedy of the healing effects it was intended to have." 347 U.S., at p. 671, 74 S. Ct., at p. 841, 98 L. Ed., at p. 1035. See also International Union, U.A.A., & A.I.W. v. Russell, 356 U.S. 634, 647, 78 S. Ct. 932, 2 L. Ed. 2 d 1030, 1040 (1958) (dissent of Warren, C.J. and Douglas, J.). In Weber v. Anheuser-Busch, 348 U.S. 468, 75 S. Ct. 480, 99 L. Ed. 546 (1955), the Court declined to extend Laburnum to a nonviolence

case where a state court had issued an injunction restraining union conduct which violated the state's common and statutory law (criminal as well as civil) dealing with restraints of trade; the Supreme Court, through Justice ...

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