Kirkpatrick, James W., Jr.

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Federal Jurisdiction -- A Restriction on the Application of Section 301(a) of the Taft-Hartley Act

University of North Carolina School of Law

NORTH CAROLINA LAW REVIEWVolume 37 | Number 4 Article 96-1-1959Federal Jurisdiction -- A Restriction on theApplication of Section 301(a) of the Taft-HartleyActJames W. Kirkpatrick Jr.Follow this and additional works at: http://scholarship.law.unc.edu/nclrPart of the Law CommonsThis Note is brought to you for free and open access by Carolina Law Scholarship Repository. It has been accepted for inclusion in North Carolina LawReview by an authorized editor of Carolina Law Scholarship Repository. For more information, please contact law_repository@unc.edu.Recommended CitationJames W. Kirkpatrick Jr., Federal Jurisdiction -- A Restriction on the Application of Section 301(a) of the Taft-Hartley Act, 37 N.C. L. Rev.500 (1959).Available at: http://scholarship.law.unc.edu/nclr/vol37/iss4/9NORTH CAROLINA LAW REVIEWFederal Jurisdiction-A Restriction on the Application ofSection 301(a) of the Taft-Hartley ActWhen does section 301(a) of the Taft-Hartley Act confer juris-diction on the federal courts?' The act on its face confers jurisdictionover all suits between labor unions and employers, for breaches of col-lective bargaining contracts, whether the benefits of the suit inure pri-marily to the employer, the union or the individual employee. However,a study of the cases shows that the interpretation of section 301(a) ofTaft-Hartley has not proved this simple.A restrictive interpretation of section 301(a) was first approvedby the Supreme Court in the case of Association of WestinghouseSalaried Employees v. Westinghouse Elec. Corp.2  In that case therewas a dispute over the payment of 4,000 employees who were absenton a particular day. The employer refused to pay the employees thisday's wages. The union contended that by the terms of the collectivebargaining agreement, unless the absences were "furlough" or "leave ofabsence," the company must pay the wages for that day. The unionrequested a declaration of rights under the agreement. It was heldthat the union was suing for the wages of the employees which was a"uniquely personal" right of the employees and not one of primary, con-cern to the union. Section 301 (a) was held to confer federal jurisdic-tion only when the rights sought to be vindicated were of primary in-terest to the union. Mr. Justice Frankfurter, writing for the court, dis-cussed at length the constitutional problems of section 301 (a),8 andI Section 301(a) of the Taft-Hartley Act reads in part, "suits for violationof contracts between an employer and a labor organization representing employeesin an industry affecting commerce as defined in this chapter . .. may be broughtin any district court of the United States having jurisdiction of the parties . .. ."Labor Management Relations Act (Taft-Hartley) § 301(a), 61 Stat. 156 (1947),29 U.S.C. § 185(a) (1952).9348 U.S. 437 (1955).'The primary constitutional problem raised was whether there was a case"arising under" the Constitution, laws, and treaties of the United States whenthe Taft-Hartley Act gave the federal courts "bare" jurisdiction, without de-claring any substantive law. The case of Textile Workers Union v. Lincoln Mills,353 U.S. 448 (1957), dispelled the constitutional problem by directing the lowerfederal courts to "fashion a body of federal law" in this area. 353 U.S. at 451.In view of the fact that the restrictive interpretation of 301(a) originated as abriefly considered escape from constitutional issues, which have now been settled,the future of the Westinghouse limitation is questionable.The constitutional problems of the Westinghouse and Lincoln Mills cases arediscussed in Note, 36 N.C.L. REV. 215 (1958).Added doubt is cast upon the force of the Westinghouse decision by the sharpsplit of the opinions. Justices Burton and Minton joined Justice Frankfurterin the constitutional entanglement. In the two concurring decisions, the ChiefJustice and Justices Clark and Reed were not troubled by the constitutionalproblems of section 301(a). Rather they would put the decision squarely on therestrictive interpretation of the statute. Justices Douglas and Black dissented onthe ground that no such restrictive interpretation could be placed on this sectionof Taft-Hartley.[Vol. 37NOTES AND COMMENTSclearly indicated that the case was decided upon the restrictive interpre-tation of this section to avoid a constitutional decision.It should be noted that the sole reason that Justice Frankfurtergave for the distinction made in the Westinghouse case was that "no-where in the legislative history did Congress discuss or show any recog-nition of the type of suit involved here.. . ."4 In substance this is anassertion that there is no legislative intention shown. In the absence oflegislative history to the contrary it would seem only reasonable tofollow the plain meaning of the act.5 Section 301 (a) provides that anaction may be brought in the federal court by "a labor organizationrepresenting employees," when there is an industry affecting interstatecommerce. There is no indication that such a representative suit may bebrought only when the union is primarily interested in the results.An article by Professor Bunn, an eminent authority on federal juris-diction, suggests additional reasons why the Wistinghouse distinctionis incorrect." His argument is primarily based on the fact that a West-inghouse limitation of section 301(a) is contrary to Rule 17(a) of theFederal Rules of Civil Procedure. This rule provides that the realparty in interest must bring the suit. It additionally provides that (1)when a party has made a contract for the benefit of a third party or (2)when a statute so authorizes, a party "may sue in his own name with-out joining with him the party for whose benefit the action isbrought . . ."7 (1) The suit by a union for a right that is "primarilyfor the benefit of the individual employee" fits the third party beneficiarysituation. The Supreme Court has held that "an employee becomesentitled by virtue of the Labor Relations Act somewhat as a third partybeneficiary to all benefits of the collective trade agreement. . . ." (2)Section 301(b) of the Taft-Hartley Act gives the union the right to suefor the benefit of the employee.9The Westinghouse limitation of section 301 (a) to suits wherein theunion is primarily interested has been repeatedly applied by the lowerfederal courts. Several cases have held that suits to enforce agreementsto maintain union shops and check-off of union dues are primarily aunion concern, and federal jurisdiction is allowed. 10 However, federal'348 U.S. at 461.'Osaka Shosen Kaisha Line v. United States, 300 U.S. 98 (1937).'Bunn, Lincoln Mills and the Jurisdiction to Enforce Collective BargainingAgreenments, 43 VA. L. Rxv. 1247 (1957).7FFD. R. Civ. P. 17(a).8 J. I. Case Co. v. NLRB, 321 U.S. 332, 336 (1944).' This section says, "Any such labor organization may sue or be sued as anentity and in behalf of the employees whom it represents in the courts of theUnited States." Labor Management Relations Act (Taft-Hartley) § 301(b), 61Stat. 156 (1947), 29 U.S.C. § 185(b) (1952).'o United Steelworkers v. Knoxville Iron Co., 162 F. Supp. 366 (E.D. Tenn.1958); Burlesque Artists Ass'n v. I. Hirst Enterprises, Inc., 134 F. Supp. 20319591NORTH CAROLINA LAW REVIEWjurisdiction has been denied because of the "uniquely personal" rights ofthe employee where the dispute involved extra work hours,1 dischargeof an employee who invoked the fifth amendment,12 and reduction of anemployee's pension allowance by the amount recovered under work-men's compensation.' 3None of the above cases were ones where there had been an agree-ment between the union and the employer to arbitrate labor disputes.It is now necessary to discuss how the presence of such an agreementaffects the restrictive Westinghouse interpretation of section 301(a).Prior to 1957, it had been settled in the lower federal courts that whenthere was an agreement to arbitrate, the union had standing to sue inthe federal courts to force a recalcitrant employer to submit the disputeto arbitration.1 4  The union was held to be asserting its right to per-formance of an agreement that governed the relation between the em-ployer and the union, even if the dispute arose about a benefit "uniquelypersonal" to the employee.In 1957, the Supreme Court, in the case of Textile Workers Unionv. Lincoln MillsU and its two companion cases,'( confirmed the holdingsof the lower federal courts that the union had standing to bring anaction for specific performance of an agreement to arbitrate. Section301(a) of the Taft-Hartley Act was held to afford federal jurisdictionwhen the employer had refused to submit to arbitration, per the col-lective bargaining agreement, a dispute about workloads and workassignments.The Lincoln Mills case did not overrule the Westinghouse dis-tinction between "uniquely personal" and "union" causes of action. TheCourt merely fitted the arbitration situation into the framework of thedistinction.17(E.D. Pa. 1955); Durkin v. John Hancock Mutual Life Ins. Co., 11 F.R.D. 147(S.D.N.Y. 1950); United Steel Workers v. Shakespeare Co., 84 F. Supp. 267(W.D. Mich. 1949)."Burlesque Artists Ass'n v. I. Hirst Enterprises, Inc., supra note 10."2 United Elec., Radio and Mach. Workers, Local 506 v. General Elec. Co., 231F.2d 259 (D.C. Cir.), cert. denied 352 U.S. 872 (1956)."United Steelworkers v. Pullman-Standard Car Mfg. Co., 241 F.2d 547 (3dCir. 1957)." Local 19, Warehouse Workers Union v. Buckeye Cotton Oil Co., 236 F.2d776 (6th Cir. 1956) (arbitration of disputes over hours of work, wages and work-ing conditions) ; Independent Petroleum Workers v. Esso Standard Oil Co., 235F.2d 401 (3d Cir. 1956) (arbitration of new salary rates when there has beena new job classification); Textile Workers Union v. American Thread Co., 113F. Supp. 137 (D. Mass. 1953) (arbitration of a dispute over separation pay)."353 U.S. 448 (1957).10 Goodall-Sanford, Inc. v. United Textile Workers, Local 1802, 353 U.S. 550(1957) ; General Elec. Co. v. Local 205, United Elec., Radio and Mach. Workers,353 U.S. 547 (1957)."7 United Steelworkers v. Pullman-Standard Mfg. Co. 241 F.2d 547, 549, 550(3d Cir. 1957) ; Textile Workers Union v. Cone Mills Corp. 116 F. Supp. 654, 659(M.D.N.C. 1958).[Vol. 371959] NOTES AND COMMENTS 503But the broad sweep of the opinions may indicate that the Courtwas not entirely satisfied with the limitation on 301 (a).18 Moreover, thefact that the decision was written by justice Douglas seems significant.He was one of the dissenters in the Westinghouse case.19The lower courts have not found the application of the Lincoln Millsholding easy. In Textile Workers Union v. Bates Mfg. Co., 20 the unionsued for a wage increase purportedly authorized by the escalator clausein its contract with the employer. Pursuant to the collective bargainingagreement, the employer submitted to arbitration and there was anaward in his favor. He refused to pay because he had won the award.The court held that since the arbitration agreement had been com-pletely submitted to and refusal to pay was in compliance with theaward, there was nothing more asserted by the union than a suit forwages, which was a "uniquely personal" right of the employees. Ac-cordingly the court refused federal jurisdiction.21In Textile Workers Union v. Cone Mills Corp.,2 2 a district courtsitting in North Carolina heard a case where there had been an arbitra-tion award which decreed that the company must denominate a workstoppage a "shut down," not a holiday or vacation. This decree re-sulted in an award of unemployment benefits to the individual employeesinvolved. The employer, in violation of the collective bargaining agree-ment, refused to abide by the decree and award of the arbitrator. Theunion, in the federal court, sought to force the employer to comply withthe award. The court refused jurisdiction. A distinction was drawn be-tween an action to specifically enforce an agreement to submit to arbi-tration, and enforcement of the terms of the award after the dispute"8 The broadness of the dictum was recognized by the court in the Cone Millscase. 166 F. Supp. 654, 658. One commentator on the case has said, "The reason-ing applies as fully to the simple suit for money as to the more complex one forarbitration." Bunn, Lincoln Mills and the Jurisdiction to Enforce Collective Bar-gaining Agreements, 43 VA. L. REv. 1247, 1257 (1957)." The only reference to the Westinghouse case is in the form of a non-committal footnote by way of distinction. 353 U.S. 448, 456, n. 6. In the lightof Justice Douglas' former disapproval of the Westinghouse limitation on theapplication of section 301 (a), it would seem that the footnote was added withdisapproval. All but three of the members of the court joined in this opinion.The two concurring Justices, Burton and Harlan, seem more decidedly in favorof the Westinghouse limitation. They said, "The District Court had jurisdictionover the action since it involved an obligation running to a union-a union contro-versy-and not uniquely personal rights of employees sought to be enforced bya union." 353 U.S. 448, 460.20 158 F. Supp. 410 (S.D. Me. 1958). Another case where there was a refusalto arbitrate a dispute over the discharge of an employee followed Lincoln Millsand allowed federal jurisdiction. Item Co. v. New Orleans Newspaper Guild, 256F.2d 855 (5th Cir.), cert. denied 79 Sup. Ct 98 (1958)."An alternative ground for dismissal of the union's action could have beenthat the parties were hound to abide by the arbitrator's award. Such an awardis binding so long as the arbitrator has not exceeded 'his jurisdiction. MotorHaulage Co. v. International Brotherhood of Teamsters, Local 807, 272 App. Div.382, 71 N.Y.S. 2d 352 (1st Dept. 1947)." 166 F. Supp. 654 (M.D.N.C. 1958).NORTH CAROLINA LAW REVIEWhas been submitted to arbitration and resolved. The former was heldto be a right of primary interest to the union and there is jurisdiction.28But in the latter situation, federal jurisdiction was refused because theindividual employee in whose favor the award was given was the partyprimarily interested.24The Bates case had said that when there was complete compliancewith the agreement to submit to arbitration and the award of thearbitrator the union no longer had a right to sue in the federal courts.The Cone Mills case went a step further, and refused jurisdiction whenthe employer had submitted to arbitration, but refused to abide by theaward.The Sixth Circuit Court of Appeals, in A. L. Kornman Co. v.Antalgamated Clothing Workers,25 reached a contrary conclusion in acase practically on "all fours" with Cone Mills. The employer hadrefused to abide by the arbitration award which granted certain em-ployees the disputed vacation pay. Holding that section 301 (a) of Taft-Hartley conferred jurisdiction over the union's suit to enforce the award,the court recognized the distinction enunciated in the Westinghousecase, but held that the decision of the Supreme Court in Lincoh Millscontrolled this case. The court stated that it made no difference whetherthe union sought the aid of the federal courts before or after submissionto arbitrate; if there had not been complete compliance with the collectivebargaining agreement section 301 (a) afforded jurisdiction. The Courtsaid,If the United States District Courts have jurisdiction and mayorder compliance with the grievance arbitration provisions of acollective bargaining agreement, they must necessarily have juris-diction to enforce the resulting awards. To hold otherwise wouldrender the entire arbitration machinery merely time-consumingand useless. Authority to compel arbitration carries with itauthority to enforce the resulting award.26This case held that jurisdiction would be allowed until there was ascomplete compliance with the arbitration agreement as there was in theBates case. Mere submission to the award and refusal to abide therebywas not sufficient to prevent federal jurisdiction, as held in the ConeMills case.CONCLUSIONIt is respectfully submitted that the distinction between "uniquelypersonal" rights of the employee and those of the union is a questionable" Textile Workers Union v. Lincoln Mills, 353 U.S. 448 (1957)."'Textile Workers Union v. Bates Mfg. Co., 158 F. Supp. 410 (S.D. Me.1958).2264 F.2d 733 (6th Cir. 1959).20 Id. at 737.[Vol. 37NOTES AND COMMENTSrestriction on the extent to which section 301(a) of the Taft-HartleyAct confers federal jurisdiction. Legislative history does not indicatethat such a distinction was intended. Further, this distinction was theresult of the Courts wanting to avoid constitutional issues which havenow been resolved. Be this as it may, when this distinction is appliedto the arbitration situation, the courts should find that there is a "unique-ly personal" right of the employee only after there has been submissionto arbitration and compliance with the award of the arbitrator. Theresult of the Kornman case seems preferable to that of the Cone Millscase.JAMES W. KIRKPATRICK, JR.Labor Law-FLSA-Extending "In Commerce" CoverageIn Mitchell v. Lublin, McGaghy & Associates,' the respondent wasan architectural and consulting engineering firm engaged in the prepara-tion of plans and specifications for repair and construction of various in-terstate facilities, including air bases, roads, turnpikes, bus terminals,and radio and television installations. Also, it was engaged in the prep-aration of plans for the construction of homes, shopping centers, andcommercial buildings. These plans and specifications consist of draw-ings and information needed for the estimation of cost and guidance tocontractors in their bidding and in actual construction. The informationis gathered by fieldmen at the sites of the projects and transmitted tothe offices of the respondent. From this information draftsmen preparethe plans under the supervision of professional engineers. In additionto the draftsmen, clerks and stenographers also participate in the me-chanical process of preparing the plans.The U.S. Court of Appeals for the Fourth Circuit2 held that thedraftsmen, fieldmen, clerks, and stenographers, as a group, were neither"engaged in the production of goods for commerce" nor, because of thelocal nature of the business, "engaged in commerce" so as to come withinthe provisions of the Fair Labor Standards Act.3 Under an almostidentical set of facts the Eighth Circuit in Mitchell v. Brown4 had heldthat the employer's draftsmen, fieldmen, clerks, and stenographers, as agroup, were "engaged in commerce" and thus covered by the act. It was1358 U.S. 207 (1959).'250 F.2d 253 (4th Cir. 1957).'Fair Labor Standards Act § 6(a), 52 STAr. 1060 (1938), as amended, 29U.S.C. § 206(a) (1958):"Every employer shall pay to each of his employees who is engaged in com-merce or in the production of goods for commerce wages at the followingrate. . ."'244 F.2d 359 (8th Cir. 1955), cert. denied, 350 U.S. 875 (1955). Apparentlythe only factual difference in the two cases was that in the Brown case an agentof the defendant inspected the work of the contractor.1959]

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Federal Jurisdiction -- A Restriction on the Application of Section 301(a) of the Taft-Hartley Act

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