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SHAW ELECTRIC COMPANY v. INTERNATIONAL BROTHERHOOD ELECTRICAL WORKERS LOCAL UNION NO. 98 (03/22/65)

decided: March 22, 1965.

SHAW ELECTRIC COMPANY, INC.
v.
INTERNATIONAL BROTHERHOOD ELECTRICAL WORKERS LOCAL UNION NO. 98, APPELLANT



Appeal from order of Court of Common Pleas No. 3 of Philadelphia County, Dec. T., 1962, No. 4637, in case of Shaw Electric Company, Inc. v. International Brotherhood Electrical Workers Local Union No. 98.

COUNSEL

Bernard N. Katz, with him Meranze, Katz, Spear & Bielitsky, for appellant.

Pace Reich, with him Modell, Pincus, Hahn & Reich, for appellee.

Bell, C. J., Musmanno, Jones, Cohen, Eagen, O'Brien and Roberts, JJ. Opinion by Mr. Justice Roberts. Mr. Justice Musmanno and Mr. Justice Eagen dissent. Dissenting Opinion by Mr. Justice Cohen.

Author: Roberts

[ 418 Pa. Page 2]

Shaw Electric Co., appellee, filed a complaint seeking injunctive relief restraining appellant-union from picketing its job sites and place of business and an order requiring appellant to conform to its collective bargaining contract. It also sought compensation for damages which have accrued, and will continue to accrue, by means of the alleged illegal contract termination and alleged illegal acts thereafter. Appellant filed preliminary objections contesting the jurisdiction of the court below. The objections were dismissed and this appeal questions the correctness of that dismissal.

I

Appellant, relying upon San Diego Bldg. Trades Council v. Garmon, 359 U.S. 236, 79 S. Ct. 773 (1959),

[ 418 Pa. Page 3]

    contends that the case is within the exclusive jurisdiction of the National Labor Relations Board. There are, however, well recognized exceptions to the general rule established in Garmon, a rule which requires state courts to defer to the jurisdiction of the Board whenever the activity involved is arguably subject to Sections 7*fn1 or 8*fn2 of the National Labor Relations Act, as amended. One significant exception was upheld in Local 174, Teamsters Union v. Lucas Flour Co., 369 U.S. 95, 82 S. Ct. 571 (1962), which sustained state court jurisdiction in a suit for violation of a collective bargaining contract on the ground that the preemptive doctrine expressed in Garmon is irrelevant in such a case.*fn3

Appellant acknowledges this exception but contends that the present case is not a suit for breach of a contract. Our reading of the record, however, leads us to agree with the court below which concluded that the complaint alleges that appellant has unjustifiably refused to abide by its contract.

The facts alleged in the complaint may be summarized as follows. Appellee is an electrical contractor and appellant is a union whose members are electrical workers. At all relevant times, there existed a contract between the parties which is attached to the complaint.*fn4 Various allegations of the complaint indicate that the contract continues to exist and that plaintiff

[ 418 Pa. Page 4]

    suffered, and continues to suffer, damages as a result of appellant's continuing breach. Appellant-union is obliged by the contract to supply the contractor with unionized electrical workers. On August 9, 1961, as a consequence of the re-employment in 1957 of a returning veteran, appellant terminated its agreement with the appellee.*fn5 The contract provides: "This Agreement shall . . . continue in effect from year to year . . . from September 1, to September 1 of each year, unless changed or terminated in the way later provided herein. . . . Either party desiring to change or terminate this Agreement must notify the other in writing at least sixty (60) days prior to September 1st of any year. Whenever notice is given for changes, the nature of the changes desired must be specified in the notice, and until a satisfactory conclusion is reached, in the matter of such changes, the original provision shall remain in full force and effect." Furthermore, the contract states that "in the event that any part or parts of this Agreement are found by proper authority to be in conflict with any mandatory State or Federal law or regulation, then such part or parts of the Agreement shall be modified to the extent of compliance with the applicable State or Federal law or regulation." The contract also sets up machinery

[ 418 Pa. Page 5]

    by which a "Labor-Management Committee" is to decide "all disagreements, or claims, of violation of this Agreement . . . which cannot be adjusted between the duly authorized representatives of the Union and the Employer . . . . Where possible there shall be no lockout, or removal of men by the Union prior to a decision by the Committee." The contract further provides for reference of cases where the committee is unable to render a decision by majority vote to the Council on Industrial Relations for the Electrical Construction Industry of the United States and Canada, whose decision shall be final and binding on all parties.

The complaint further alleges that subsequent to the unlawful termination of the contract by appellant on August 9, 1961, appellant caused its members to picket jobs which appellee had undertaken so as to cause appellee to lose work in which it was engaged. Appellee's efforts to be "reinstated" with appellant proved futile. As a result of appellant's conduct, appellee has been unable to bid for or obtain work requiring unionized help and has suffered irreparable harm and great damage. From August 9, 1961, to the date of the complaint, financial damages in excess of $100,000 have been incurred and future damages will continue to be incurred by reason of appellant's actions.*fn6

We hold that the allegations constitute a suit for violation of a collective bargaining contract, a suit to

[ 418 Pa. Page 6]

    which the preemptive doctrine expressed in Garmon does not apply. The circumstances of the ex parte termination of the contract and the other acts of appellant, when viewed in the light of contractual provisions such as those requiring arbitration, a notice period for termination, and compliance with state and federal laws or regulations, raise issues of contractual violations. Because the case is before us merely on appeal after preliminary objections, we, of course, express no opinion as to whether appellee could make out a case warranting either injunctive relief or damages. The question whether appellant has violated contractual obligations justifying such relief would, in the first instance, be the subject of factual and legal determinations by the court below after evidence is received and argument heard.

II

Appellant argues that even if the preemptive doctrine of Garmon is irrelevant in the present case, the court below lacks jurisdiction to entertain a complaint in equity seeking the type of injunctive relief requested by appellee. It is clear that state court jurisdiction lies to order a breaching party to follow procedures contained in a collective bargaining agreement, see Carey v. Westinghouse Elec. Corp., 375 U.S. 261, 84 S. Ct. 401 (1964), and that state courts may award resultant damages flowing from breach of contract. E.g., Local 174, Teamsters Union v. Lucas Flour Co., supra. We are thus faced with the precise issue of whether, in addition to ordering arbitration and granting damages, a state court may grant injunctive relief which enjoins activities precluded by the collective bargaining agreement.*fn7

[ 418 Pa. Page 7]

It is now clear that substantive principles of federal labor law*fn8 are applicable in both federal and state courts suits brought under § 301*fn9 of the Labor Management Relations Act of 1947. Local 174, Teamsters Union v. Lucas Flour Co., supra. Appellant contends that since Sinclair Ref. Co. v. Atkinson, 370 U.S. 195, 82 S. Ct. 1328 (1962), holds that the anti-injunction provisions of the Norris-LaGuardia Act*fn10 apply to federal courts in § 301 suits, that such provisions must be held applicable under the Lucas principle to suits brought in state courts as well. However, we are persuaded that the rationale underlying the holding in Sinclair is inconsistent with appellant's view.

In Sinclair, an employer sought, in a United States district court, to enjoin a union from violating a nostrike agreement. After examining the language and history of § 301, the Supreme Court of the United States concluded that Congress did not intend to partially repeal the Norris-LaGuardia Act and held that the district court was correct in dismissing that count of the ...


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