APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY (D.C. Civil No. 76-698)
Before: ALDISERT and WEIS, Circuit Judges, and HUYETT, District Judge*fn*
The question for decision is whether a complaint filed by 15 local unions of the Amalgamated Transit Union [ATU] stated a claim upon which relief could be granted. The complaint charged that New Jersey officials impermissibly interfered in the collective bargaining process between the local unions and various transit companies by threatening to withdraw state subsidies from any transit company which provided in its collective bargaining agreement for an uncapped cost of living clause or for a wage increase for union employees higher than that given to state employees. The unions sought declaratory and injunctive relief against state interference in the negotiations. Pursuant to Fed. R. Civ. P. 12(b)(6), the district court dismissed the complaint for failure to state a claim. We reverse.
On a Rule 12(b)(6) motion, the factual allegations of a complaint should be accepted by the court as true, see Estelle v. Gamble, 45 U.S.L.W. 4023 (U.S. Nov. 30, 1976); Radovich v. Nat'l Football League, 352 U.S. 445, 448 (1957), and the complaint should be dismissed only if it appears to a certainty that no relief could be granted under any set of facts which could be proved in support of its claims. Conley v. Gibson, 355 U.S. 41, 45-46 (1957). These oft-stated precepts are consistent with the simplified pleading requirements of the Federal Rules of Civil Procedure, whose purpose is "to facilitate a proper decision on the merits." Conley, supra, 355 U.S. at 48.
The present complaint alleged that for at least 25 years, plaintiff-appellant local unions engaged in collective bargaining with various privately owned transit companies in New Jersey, and that on January 9, 1976, during the parties' negotiations over new labor contracts to succeed those soon to expire, Alan Sagner, New Jersey's Commissioner of Transportation, called a meeting of union officials involved in the negotiations to announce that "the State would not continue its policy of subsidizing troubled private transit companies if the unions insisted on retaining the 'uncapped cost of living' clause in their contracts...." Further, it alleged that on February 6, 1976, Sagner and Lewis Kaden, Counsel to New Jersey Governor Brendan Byrne, met with union officials in Washington; that at this meeting, Kaden informed the union representatives that New Jersey "objected to the cost of living principle as it existed in current contracts and was going to 'destroy' it"; and that both Kaden and Sagner reiterated that any transit company agreeing to such cost of living clauses in the present negotiations would not receive state subsidies.
The local unions also averred that in March, 1976, transit company negotiators informed union negotiators that state officials had instructed their companies to abandon the cost of living clauses and to hold any wage increases at the level of that granted state employees, lest the state withdraw subsidy assistance from the company; that the unions objected to these positions, and negotiations reached an impasse, as a result of which strikes occurred at four transit companies; that during the strikes, Governor Byrne stated publicly that New Jersey would not subsidize any transit company which retained a cost of living clause in its labor agreements; and that Alan Sagner distributed to the negotiating parties a statement indicating that the state would not subsidize any company which granted salary and benefit increases beyond those granted state employees. Finally, it was averred that at a bargaining session occurring during the strikes, a representative of Governor Byrne stated to negotiators that "a new contract could not contain the uncapped cost of living clause as it existed in the current contract."*fn1
These proceedings emphasize the tension between the state's legitimate concern for conserving limited finances used to underwrite New Jersey transit companies and the keystone of our national labor policy, embodied in the original National Labor Relations Act of 1935 [NLRA], 29 U.S.C. § 151:
It is declared to be the policy of the United States to eliminate the causes of certain substantial obstructions to the free flow of commerce and to mitigate and eliminate these obstructions when they have occurred by encouraging the practice and procedure of collective bargaining and by protecting the exercise by workers of full freedom of association, selforganization, and designation of representatives of their own choosing, for the purpose of negotiating the terms and conditions of their employment or other mutual aid or protection.
July 5, 1935, c.372, § 1, 49 Stat. 449; June 23, 1947, c.120, Title I, § 101, 61 Stat. 136.
As originally passed and as amended in 1947, the NLRA reflects a careful balancing of the differing powers and viewpoints of labor and management. See Local 1976, Carpenters v. NLRB, 357 U.S. 93, 99-100 (1958). Concerned that the inequality of bargaining power between employers and employees threatened the national economy and industrial peace, Congress encouraged "practices fundamental to the friendly adjustment of ...