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Adams v. Budd Co.

decided: July 26, 1965.

JAMES E. ADAMS, ET AL., APPELLANTS
v.
BUDD COMPANY, ET AL., APPELLEES



Kalodner, Hastie, and Freedman, Circuit Judges.

Author: Kalodner

KALODNER, C. J.:

Asserting existence of federal jurisdiction under Section 301(a) of the Labor Management Relations Act of 1947,*fn1 the plaintiffs, employees of The Budd Company ("Budd") and members of United Automobile Workers of America, Local No. 813 ("Union"), brought this action alleging that Budd and Union, "collusively" and "in bad faith", conspired to deprive them of a "super-seniority" status which they had acquired under their "original contract of hire" and earlier labor contracts, in negotiating a new collective bargaining agreement.

The critical issue presented is whether federal jurisdiction exists in such an action under Section 301(a).*fn2 The District Court dismissed the action for failure to state a claim upon which relief may be granted.*fn3

The plaintiffs make these allegations, inter alia, in their Complaint:

At the times they were employed,*fn4 Budd had a declared "policy" of granting "a preferred status of super-seniority" to seriously injured employees and this policy was incorporated into collective bargaining agreements entered into by Budd and Union in 1948 and 1955; plaintiffs were seriously injured in the course of their employment between 1947 and 1952 and were officially accorded "super-seniority" status; following expiration of the 1955 labor contract in December, 1958, a new collective bargaining agreement provided that preferential seniority would be granted only to employees having more than a 17 percent disability and, as a consequence, the plaintiffs, who had less than a 17 percent disability, were not eligible for super-seniority status; that the earlier-enjoyed "super-seniority" of the plaintiffs was a "vested right" and "status" which " does not involve 'the meaning and application of any of the provisions' of the [collective bargaining] agreement . . . [which] could not be divested by any arbitrary, capricious, and/or malicious acts of the defendants herein acting in concert, conspiracy and collusion to defraud the plaintiffs and others similarly situated of their vested rights in contravention of law and public policy."

The record discloses that the collective bargaining agreement in effect*fn5 when the instant action was instituted on January 2, 1964, also provided that super-seniority status was accorded only to employees who had more than a 17 percent disability.

It is the plaintiffs' contention here that their super-seniority rights "are based not upon the collective bargaining agreements but upon the original contract of hire"; they "did not have the spark of their creation in the collective bargaining agreements themselves . . . therefore, these rights survive and are not nullified when the agreements, nor portions of them are terminated"; and, Union "breached a duty of fair representation as to the plaintiffs" when it and Budd conspired "to collusively deny the plaintiffs . . . of their super-seniority status" in new collective bargaining agreements.

In reply, Union contends that Section 301 (a) accords jurisdiction to the federal courts over actions for breach of a labor contract and the plaintiffs' complaint fails to allege such a breach; further, plaintiffs' "claim is not based upon a violation of a contract between an employer and labor organization" but "solely upon the adverse effect upon plaintiffs of the negotiation of such an agreement."

Union's contention is well-taken.

The distilled essence of the plaintiffs' position is that they can enforce, under Section 301(a), their "contract of hire" super-seniority rights, accorded under Budd's pre-labor contract policy, even though subsequently negotiated collective bargaining agreements bargained away such rights.

The plaintiffs seem to be oblivious of the fact that Section 301(a)*fn6 only creates federal jurisdiction, in the absence of diversity of citizenship, with respect to " suits for violation of contracts between an employer and a labor organization . . . or between such labor organizations."

Here the plaintiffs do not seek redress for violation of a collective bargaining agreement; what they seek is redress for an alleged violation by a labor contract of rights which they assert were independently, and pre-agreement, vested in them by their "contract of hire."

We are of the opinion that Section 301(a) did not confer jurisdiction upon the District Court to entertain this action and that it should have dismissed it for that reason. As we earlier stated, it is ...


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