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BAKERY

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA


July 13, 1992

BAKERY, CONFECTIONERY AND TOBACCO WORKERS' INTERNATIONAL UNION, LOCAL 6
v.
NATIONAL LABOR RELATIONS BOARD, JAMES M. STEPHENS, CHAIRMAN, MARY MILLER CRACRAFT, MEMBER, CLIFFORD R. OVIATT, MEMBER and NATIONIAL LABOR RELATIONS BOARD, REGION 4, PETER HIRSCH, REGIONAL DIRECTOR and STROEHMANN BAKERIES, INC.

The opinion of the court was delivered by: THOMAS N. O'NEILL, JR.

Memorandum

 O'Neill, J.

 I. Introduction

 This is an action arising under the National Labor Relations Act ("Act"), 29 U.S.C.A. § 151 et seq. (1973). Defendant National Labor Relations Board ("Board") conducted a representation election on January 28, 1990 in which plaintiff Bakery, Confectionery and Tobacco Workers' International Union, Local 6 ("Union") lost by one vote. *fn1" The Union brought this action to compel the Board both to reverse its decision not to sustain the Union's challenge of a disputed ballot and to order the employer to recognize the Union as the bargaining representative. In addition, the Union alleges that the employer, Stroehmann Bakeries, Inc., breached the Stipulated Election Agreement entered into prior to the representation election. Both the Board and the employer moved to dismiss for lack of subject matter jurisdiction. I referred both motions to Magistrate Judge M. Faith Angell for Report and Recommendation which she has submitted. The Union has filed objections to the Report which both defendants have answered. I have reviewed the Magistrate's Report and Recommendation and the parties' submissions. For the reasons set forth below, I will approve the Report as supplemented by this Memorandum and adopt the Recommendations.

 II. Background

 Although the facts are set forth in detail in the Report, I will briefly summarize the factual background of the case. Plaintiff Union alleges that the list provided to it by the employer of employees eligible to vote in the January 1990 representation election contained the typed notation "Quit as of 12/23/89" next to the listing of "S. Gallagher." The Union alleges that, according to the list, Mr. Gallagher was ineligible to vote because he was not an employee at the time of the election. The Union therefore alleges that Mr. Gallagher should not have been permitted to vote. The Union alleges in the alternative that the employer provided it with faulty information because the employer listed Mr. Gallagher as "Quit as of 12/23/89" but "failed thereafter to advise the Union that the said employee may in fact be eligible to vote." Amended Complaint at P 11. The Union therefore alleges that even if Mr. Gallagher had been eligible to vote, he should not have been permitted to vote.

 Mr. Gallagher voted in the election and the Union challenged his ballot. The Regional Director of the Board found that Mr. Gallagher was an eligible employee and recommended that his vote be opened and counted. The Board affirmed. Mr. Gallagher voted against the Union. The addition of Mr. Gallagher's vote resulted in a tie vote between those voting for and against Union representation. Consequently, the Union lost the election.

 III. Discussion

 Plaintiff Union concedes that district courts normally lack subject matter jurisdiction over challenges to Board representation proceedings. Plaintiff's Objections to the Report and Recommendation filed by the Honorable M. Faith Angell, U.S. Magistrate, at 3. The Magistrate's Report determines that the District Court lacks subject matter jurisdiction in this case because none of the exceptions to the normal rule apply here. Plaintiff objects to the Report's conclusion and argues that this Court has jurisdiction under the exception created by the Supreme Court in Leedom v. Kyne, 358 U.S. 184, 3 L. Ed. 2d 210, 79 S. Ct. 180 (1958), or under the exception created by the Court of Appeals for the Second Circuit in Fay v. Douds, 172 F.2d 720 (2d Cir. 1949). *fn2" In addition, plaintiff objects to the Report's determination that the District Court lacks subject matter jurisdiction over the contract claim against the employer.

 (A) Leedom v. Kyne

 Plaintiff Union objects to the Magistrate's finding that this Court lacks subject matter jurisdiction over Board representation proceedings. Plaintiff's Objections at 1. Plaintiff relies on Leedom v. Kyne, 358 U.S. 184, 3 L. Ed. 2d 210, 79 S. Ct. 180, in which the Supreme Court carved out an exception to the normal jurisdictional rule that district courts lack subject matter jurisdiction over Board representation proceedings. Id. at 187-88. In Leedom v. Kyne, the Court held that district courts could properly exercise jurisdiction over Board conduct that is "in excess of its delegated powers and contrary to a specific prohibition in the Act." Id. at 188. The Court subsequently has held that the Leedom v. Kyne exception:

 is a narrow one, not to be extended to permit plenary district court review of Board orders in certification proceedings whenever it can be said that an erroneous assessment of the particular facts before the Board has led it to a conclusion which does not comport with the law.

 Boire v. Greyhound Corp., 376 U.S. 473, 481, 11 L. Ed. 2d 849, 84 S. Ct. 894 (1964).

 Plaintiff contends that the Report inappropriately characterized the Board's conduct as "an erroneous assessment of the particular facts." Plaintiff's Objections at 1 (quoting Boire, 376 U.S. at 481); Report at 10. Plaintiff argues that the Leedom v. Kyne exception applies here because the Board's conduct was "in excess of its delegated powers and contrary to a specific prohibition in the Act." Plaintiff's Objections at 3 (quoting Leedom v. Kyne, 358 U.S. at 188).

 First, plaintiff claims that the Board failed to address the Union's objection to the employer's allegedly faulty compliance with its obligation under the Board's decision in Excelsior Underwear, Inc., 156 N.L.R.B. 1236 (1966), to provide the Union with a list of employees eligible to vote in the representation election ("Excelsior list"). On the contrary, a review of the written Board decisions reveals that the Board considered the employer's compliance with the Excelsior requirement both in the Board Decision dated July 5, 1990 and in its Order Denying the Union's motion for reconsideration of that decision. See Motion of the National Labor Relations Board Defendants to Dismiss Amended Complaint for Lack of Subject Matter Jurisdiction or Alternatively Motion for Summary Judgment, Exhibits 3 & 4.

 Plaintiff also contends that the Board failed to determine whether the alleged mistake in the Excelsior list of eligible employees reflected bad faith conduct by the employer. As the Board determined that the employer had substantially complied with the Excelsior requirement and therefore had not violated Excelsior, id. at Exhibit 3, the Board did not need to reach the question of whether the employer's actions were taken in good faith.

 Third, plaintiff argues that the Board acted "in excess of its delegated powers and contrary to a specific prohibition in the Act," Plaintiff's Objections at 3 (quoting Leedom v. Kyne, 358 U.S. at 188), by failing to ensure employer compliance with the Excelsior list, by failing to ensure that the employer continually supplemented the list and by failing to ensure that the employer prepared the list of eligible employees in good faith. Plaintiff's Objections at 2. Plaintiff does not cite any authority for its view that the Leedom v. Kyne exception to the normal jurisdictional rule should apply to alleged violations of obligations imposed by the Board's Excelsior precedent in addition to statutory obligations imposed by specific language in the National Labor Relations Act.

 In my view, the narrow Leedom v. Kyne exception to the general rule that district courts lack jurisdiction over challenges to representation proceedings cannot properly be invoked in this case. The Leedom v Kyne exception applies only to "specific prohibitions" of the Act. 358 U.S. at 188. In decisions construing the scope of the Leedom v. Kyne exception, courts have examined whether the Board's actions contradicted specific language in the Act. The Court of Appeals for the Third Circuit has ruled that district court jurisdiction under Leedom v. Kyne exists where the Board "attempted [to] exercise [a] power that had been specifically withheld" from it in the statutory grant of power. Firestone Tire & Rubber Co. v. Samoff, 365 F.2d 625, 627 (3d Cir. 1966) (quoting Leedom v. Kyne, 358 U.S. at 189); see NLRB v. Interstate Dress Carriers, Inc., 610 F.2d 99, 106 (3d Cir. 1979) (holding that under Leedom v. Kyne jurisdiction exists over challenges "addressed to the very existence of Board power, as opposed to its exercise of that power"). *fn3"

 The district courts within the Third Circuit have interpreted Leedom v. Kyne to mean that, in order for a district court to have jurisdiction, the Board must violate a statutory provision that is "clear and mandatory." National Maritime Union v. NLRB, 375 F. Supp. 421, 432 (E.D.Pa. 1974), aff'd, 506 F.2d 1052 (3d Cir. 1974), cert. denied 421 U.S. 963, 44 L. Ed. 2d 449, 95 S. Ct. 1950 (1975). In National Maritime, the Court held that:

 [Leedom v.] Kyne and [Boire v.] Greyhound [376 U.S. 473, 11 L. Ed. 2d 849, 84 S. Ct. 894] teach us that disagreement with the Board on a matter of policy or statutory interpretation is not a sufficient basis for assertion of jurisdiction . . . Our jurisdiction is properly limited to intervention in those cases . . . in which the Board has violated a 'clear and mandatory' command of the Act.

 National Maritime, 375 F. Supp. at 434 (citation omitted); see U.S. Metal Co. Employees' Ass'n v. NLRB, 478 F. Supp. 861, 863 (W.D.Pa. 1979) (following National Maritime's construction of Leedom v. Kyne); see also Nissin Foods (USA) Co. v. NLRB, 515 F. Supp. 1154, 1158 (E.D.Pa. 1981) (holding in part that the Leedom v. Kyne exception applies only when the "Board violated a clear statutory mandate"). *fn4"

 Plaintiff does not allege that the Board violated a specific statutory provision. Plaintiff makes the general allegation that the Board exceeded its authority under § 9(c)(1) of the Act by failing to ensure employer compliance with the Excelsior requirement that the Union be provided with a list of employees eligible to vote in the representation election. Section 9(c)(1) states that under certain circumstances the Board "shall direct an election by secret ballot and certify the results thereof." 29 U.S.C.A. 159(c)(1). The Court of Appeals for the District of Columbia Circuit has held that § 9(c)(1) does not specifically require compliance with Excelsior and that therefore the Leedom v. Kyne exception to the normal jurisdictional rule does not apply when a Union alleges Board noncompliance with Excelsior. See UFCW Local 400 v. NLRB, 694 F.2d 276, 278 (D.C.Cir. 1982). In language which applies to this case as well, the Court held that:

 The Excelsior requirement does not specifically appear in the National Labor Relations Act. The rule was announced by the Board nearly two decades after enactment of the Act. Essential a tool as the rule may be to fair elections, it cannot reasonably be viewed as a statutory mandate violated by the Board's actions in this case.

 Id. at 278-79.

 Rather than "disregarding a specific and unambiguous statutory directive," UFCW Local 400, 694 F.2d at 278, the Board in fact was exercising a power specifically granted to it under § 9(c)(1) of the Act. 29 U.S.C.A. § 159(c)(1). Indeed, both the Supreme Court and the Court of Appeals for the Third Circuit have interpreted this statutory provision to vest the Board with "wide discretion" over representation proceedings. Wells Fargo Guard Services v. NLRB, 659 F.2d 363, 370 (3d Cir. 1981), relying on NLRB v. A.J. Tower Co., 329 U.S. 324, 330, 91 L. Ed. 322, 67 S. Ct. 324 (1946) (holding in part that "Congress has entrusted the Board with a wide degree of discretion in establishing the procedure and safeguards necessary to insure the fair and free choice of bargaining representatives by employees"). Although the Act allowed the Board to decide in Excelsior that the employer must provide the Union with a list of employees eligible to vote in a representation election, the Board created the requirement pursuant to its discretion under § 9(c)(1).

 For the reasons above, I hold that the Board's actions were not an attempt to exercise a power that had been "specifically withheld" by the statute, see Firestone Tire, 365 F.2d at 627, nor were the Board's actions a violation of a "clear and mandatory" provision of the Act. See e.g. National Maritime, 375 F. Supp. at 434. Plaintiff's challenge is "addressed to the . . . exercise of [Board] power" rather than the "very existence of [that] power." Interstate Dress Carriers, 610 F.2d at 106. Consequently, plaintiff's challenge to the Board's application of Excelsior does not meet the requirements of Leedom v. Kyne and thus does not justify departure from the normal jurisdictional rule prohibiting district court jurisdiction over Board representation proceedings.

 (B) Fay v. Douds

 Plaintiff also objects to the Report's refusal to consider the Fay v. Douds, 172 F.2d 720 (2d Cir. 1949), exception to the general rule prohibiting district court jurisdiction over challenges to Board representation proceedings. In Fay, the Court of Appeals for the Second Circuit held that a district court could properly exercise jurisdiction over a party's claim that the Board violated the party's constitutional rights. Id. Plaintiff correctly notes that the Report does not reach the merits of plaintiff's constitutional claim. The Report declines to follow Fay because the exception to the normal jurisdictional rule adopted by the Second Circuit in Fay has not been adopted by the Supreme Court or followed by the Court of Appeals for the Third Circuit. In addition, as the Report fully explains, the Court of Appeals for the Third Circuit and district courts within the Third Circuit have questioned the continuing validity of the Fay exception. Report at 13 (citing Interstate Dress Carriers, 610 F.2d at 107; National Maritime, 375 F. Supp. at 435; Nissin Foods, 515 F. Supp. at 1158); see also E. I. DuPont de Nemours and Co. v. Federal Trade Comm'n, 488 F. Supp. 747, 753 (D.Del. 1980) and cases cited therein (stating "the Second Circuit itself has questioned [Fay's] continued validity, and every other Court of Appeals that has directly considered it has either rejected it entirely or limited its application"). *fn5"

 Plaintiff relies on a single case, McCormick v. Hirsch, 460 F. Supp. 1337 (M.D.Pa. 1978), in support of its argument that this Court should follow Fay. Plaintiff's reliance is misplaced. McCormick was decided prior to the Court of Appeals for the Third Circuit decision in Interstate Dress Carriers, in which the Court strongly criticized Fay as showing "little growth potential, either in the Second Circuit . . . or elsewhere." 610 F.2d at 107. I therefore agree with the Report that I need not reach the merits of plaintiff's claim under the Fay doctrine because there is no reason to conclude that this exception is or will be recognized within the Third Circuit.

 (C) Contract Claim

 Plaintiff objects to the Report's conclusion that this Court lacks jurisdiction over plaintiff's contract claim *fn6" in which plaintiff alleges that the employer breached the Stipulated Election Agreement. I am not persuaded by plaintiff's objection. First, plaintiff argues that the Board failed to exercise jurisdiction because it never considered plaintiff's contract claim. Plaintiff's Objections at 5. On the contrary, a review of written Board and Regional Director decisions reveals that the Board did exercise jurisdiction over the contract claim. The Board decision dated July 5, 1990 reviews the record and adopts the Regional Director's Report and Recommendation. Motion of the Board Defendants to Dismiss Amended Complaint, Exhibit 3. The Regional Director's Report and Recommendation specifically considers compliance with the Stipulated Election Agreement. Plaintiff's Amended Complaint, Exhibit D.

 Plaintiff also contends that "there exists a federal basis for recovery when a party breaches [a Stipulated Election Agreement] entered into for purposes of furthering [the] federal policy" of supporting free and fair representation elections. Plaintiff's Objections at 5. As the Report explains, a union and an employer may enter into a Stipulated Election Agreement as part of the representation election process. Report at 14. Because the Stipulated Election Agreement is part of the election process, disputes regarding the Agreement implicate representational issues and therefore fall within the exclusive jurisdiction of the Board. Report at 13-14; see NLRB v. Paper Manufacturers Co., 786 F.2d 163, 167 (3d Cir. 1986) (holding that "representation issues are matters relegated to the Board. . . . Representation issues may not be decided by contract, and thus may not be decided by an arbitrator.").

 Plaintiff cites no authority for the proposition that an allegation of a breach of a Stipulated Election Agreement justifies departure from the normal rule prohibiting district court jurisdiction over Board representation proceedings. In the three cases that plaintiff relies on, NLRB v. Frederick Cowan & Co., 522 F.2d 26 (2d Cir. 1975); NLRB v. Carlton Wood Products Co., 201 F.2d 863 (9th Cir. 1953); NLRB v. Standard Transformer Co., 202 F.2d 846 (6th Cir. 1953), the Courts exercised jurisdiction pursuant to normal jurisdictional rules rather than pursuant to an exception to the rule prohibiting district court jurisdiction over Board representation proceedings. In Frederick Cowan, the District Court properly exercised jurisdiction under § 11(2) of the Act, which grants district court jurisdiction to enforce a Board subpoena under certain conditions. 29 U.S.C.A. § 161(2). In Carlton Wood Products and Standard Transformer, the Courts of Appeals exercised original jurisdiction pursuant to § 10(e) of the Act. 29 U.S.C.A. § 160(e). Therefore, because the existence of the Courts' jurisdiction in these cases was not based on the allegation of a breach of a Stipulated Election Agreement, these decisions offer no support to plaintiff's claim. As discussed above, plaintiff concedes that the normal jurisdictional rule prohibits district court jurisdiction over Board representation proceedings. Plaintiff's Objections at 3. Plaintiff also acknowledges that three exceptions exist, only two of which are relevant here, Leedom v. Kyne and Fay v. Douds. Plaintiff's Memorandum of Law at 6. I have already declined to consider the applicability of Fay. Plaintiff does not argue that Leedom v. Kyne would apply to its contract claim. Nor does plaintiff point to any additional exceptions which might apply here. I will therefore adopt the Recommendation that plaintiff's contract claim be dismissed for lack of subject matter jurisdiction.

 EDITOR'S NOTE: The following court-provided text does not appear at this cite in 799 F. Supp. 507.

 ORDER - July 13, 1992, Filed

 AND NOW, this day of July, 1992, upon consideration of the Report and Recommendation of Magistrate Judge M. Faith Angell, the objections thereto, the supporting and opposing memoranda and the parties' submissions, it is hereby ORDERED that:

 1) the Report, as supplemented by the attached Memorandum opinion, is APPROVED and the Recommendations are ADOPTED;

 2) the Motion of the National Labor Relations Board Defendants To Dismiss Amended Complaint For Lack Of Subject Matter Jurisdiction Or Alternatively Motion For Summary Judgment is GRANTED;

 3) the Motion of Defendant Stroehmann Bakeries, Inc. To Dismiss Amended Complaint For Lack Of Subject Matter Jurisdiction is GRANTED;

 4) the Motion of the National Labor Relations Board Defendants To Dismiss Complaint For Lack Of Subject Matter Jurisdiction and the Stroehmann Bakeries' Application For Permission To File Reply Memorandum Of Law In Support Of Motion To Dismiss are DENIED AS MOOT;

 5) the above-captioned amended complaint is DISMISSED FOR LACK OF SUBJECT MATTER JURISDICTION;

 6) the Motion of Defendant Stroehmann Bakeries, Inc. To Assess Rule 11 Sanctions is DENIED.

 THOMAS N. O'NEILL, JR., J.


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