Chabot v. Prudential Insurance Co. of America

75 A.2d 317, 77 R.I. 396, 1950 R.I. LEXIS 97, 26 L.R.R.M. (BNA) 2496

• Court: Supreme Court of Rhode Island
• Decided: August 4, 1950
• Docket: Eq. No. 1911
• Status: Published

Opinions

Baker, J.

This is a bill in equity brought by four individual complainants, on behalf of themselves and thirty-five other individuals with a common interest all being formerly members of a labor union, in order to have their employer enjoined from continuing to deduct dues and assessments from their wages and paying them over to the union under a collective bargaining agreement, and for incidental relief. The cause was heard in the superior court on bill, answers and proof and a final decree was entered denying and dismissing the bill. Thereafter an appeal was duly prosecuted to this court by the complainants.

It appears from the record that before the suit was heard in the superior court the United Office and Professional Workers of America, an unincorporated association and a national union, hereinafter referred to as the union, and its secretary-treasurer were by order of that court permitted to intervene as parties respondent. The other respondent is The Prudential Insurance Company of America, hereinafter called the company, which is engaged in interstate commerce and does an insurance business in this state and in other parts of the United States. The complainants were all industrial insurance agents employed by the company and were previously members of the Industrial Insurance Agents Union, Local 36, an unincorporated subordinate association hereinafter termed the local, which was affiliated with said national union.

It is undisputed that prior to and at the time of the happening of the events which were the cause of the bringing of the present bill the union was, under the provisions of the National Labor Relations Act, the duly authorized and recognized collective bargaining agency for the complainants and others in their dealings with the company. On June 24, 1946 the union and the company had entered into a collective bargaining agreement which by its terms was to continue in force until October 1, 1948 and was automatically to be extended for a period of one year, after which time it was to continue from year to year unless either party should notify the other in writing at least sixty days before October 1, 1948, or before the end of any such yearly period, of its election that it should not be so extended.

The agreement also provided that the company should check off and deduct from the wages of members of the union, after proper authorization by them, monthly union dues to be remitted to the secretary-treasurer of the union provided, however, that any such deduction could be' terminated by the union member by giving the company written notice thereof, the termination, however, to become effective at the end of the period in which such notice was given. The above agreement, which was substantially national in scope and covered a large number of union members in thirty-one states, contained a provision to the effect that employment would not be conditioned on membership in the union.

The evidence shows that under date of April 21, 1947 the local was notified by letter from the president of the union that it was suspended pursuant to a specific provision of the constitution of the union because of its failure to pay certain assessments, and an administrator was appointed to conduct its affairs. On May 9, 1947 a special meeting of the local was held at which it was voted to sever relations with and disaffiliate from the union. Furthermore the by-laws of the local were thereupon amended to bring about that result and the name of the local was changed. Under dates of May 24 and June 10, 1947, the company was sent thirty-nine slips signed by the respective complainants, revoking prior authorizations to deduct union dues from their wages and pay such dues to the union. On May 31, 1947 the secretary-treasurer of the union wrote a letter to the local enclosing certain findings and the decision of the executive board in relation to the charges previously made against the local. As a result of such findings and decision the charter of the local was revoked by the union. On June 3, 1947 the company notified the complainants’ solicitor that, in spite of the revocations above referred to, it would continue to deduct and check off dues from the complainants’ wages.

The instant bill was filed June 12, 1947. It is alleged therein that the deductions which the company threatened to make from the wages of the complainants were unlawful and illegal as being contrary to the provisions of the aforesaid collective bargaining agreement and also contrary to the statutes of this state relating to the weekly payment of wages. The pertinent statute thus relied on is public laws 1941, chapter 1069, as amended by P. L. 1942, chap. 1237, hereinafter called the weekly wage payment law. In referring to the payment of weekly wages, sec. 2 of the chapter last mentioned contains the following language: “Every such employer shall pay such wages in full in lawful money of the United States, or checks on banks, convertible into cash on demand at full face value thereof.” Section 5 of chapter 1069 provides among other things that the provisions of the law may not be waived or set aside by a private agreement between employer and employee.

The complainants further argue that as members of a voluntary association for an indefinite period they had the right to withdraw at any time without being obliged to continue to pay dues thereto, and that it is inequitable and improper that they should have to pay such dues by way of checkoff when they are no longer members of the union which itself first suspended and thereafter revoked the charter of the local to which they belonged.

The respondents, however, maintain in substance that employees, especially a minority in one state for whom a collective bargaining agreement was duly made, may not at will repudiate and cancel it during its term; that the statute of this state regulating the weekly payment of wages does not make illegal the deduction of union dues under an agreement between an employer and an accepted collective bargaining agent; and if a statute of this state prevents check-off provisions in such agreements it cannot properly apply to the facts herein because of its conflict with the National Labor Relations Act and cannot restrain the right to bargain collectively for the checkoff of union dues.

In connection with the issues thus raised P. L. 1947, chap. 1944, which took effect June 3, 1947 and reads as follows, has been called to our attention: “Section 1. Chapter 292 of the general laws, entitled 'Assignment of wages,’ as amended, is hereby further amended by adding thereto the following section: 'Sec. 9. Deduction of Union or Craft Dues. None of the foregoing sections of this chapter shall be applicable to or control or prohibit the deduction of labor or trade union or craft dues or other obligations imposed by a collective bargaining contract, or subscriptions to a non-profit hospital service corporation established under chapter 719 of the public laws, 1939, from wages of an employee by an employer in accordance with a written request made by the individual employee.’ Sec. 2. This act shall take effect upon its passage and all acts and parts of acts inconsistent herewith are hereby repealed.”

In the case of Shine v. John Hancock Mutual Life Ins. Co., 76 R. I. 71, where the facts closely resemble those in the instant case, we recently had occasion to pass on and discuss fully many of the issues now before us. Strictly speaking in our judgment chapter 1944, which we have just quoted, has no application in the case at bar since the pertinent collective bargaining agreement was entered into June 24, 1946 and that statute, which is not retroactive, did not go into effect until June 3, 1947. However, in view of certain peculiar facts and extensive arguments appearing in the instant cause, we will assume for the present purposes that such chapter has a bearing herein.

Upon consideration we are of the opinion that in enacting chapter 1944 the general assembly intended to amend and to change only the assignment of wages act by providing in substance that such act should not control or prohibit the checkoff of union dues or other obligations imposed by a collective bargaining agreement or subscriptions to a nonprofit hospital service corporation by an employer from his employees’ wages in accordance with the latter’s written request to that effect. Morever, it is our judgment that chapter 1944 did not in any manner, either directly or by necessary implication, amend the weekly wage payment law of this state. An examination of chapter 1944 shows that by its express language it applies specifically only to the chapter of the general laws relating to assignment of wages, and that it also provides in particular that none of the foregoing sections of that chapter shall prevent the checkoff of union dues and the other matters referred to therein. To give chapter 1944 such a comprehensive and extended construction as would make it apply also to another chapter, namely, the weekly wage payment law, would in effect be writing into the act material provisions which the legislature itself did not see fit to include.

Further it may be noted that P. L. 1947, chap. 1945, which immediately followed chap. 1944 and which also went into effect June 3, 1947, was an amendment to the weekly wage payment law. Significantly, however, it did not contain any reference to checkoff and relates solely to a matter not pertinent herein. It is fair to assume that if the general assembly desired also to amend that law in the same particulars as the assignment of wages act, which was then being amended by chap. 1944, it knew how to do it and had ample opportunity to do so in the same way. Its express amendment to the assignment of wages statute to permit checkoff thereunder and its failure, while considering both statutes, to make a similar amendment to the weekly wage payment law clearly exhibits an intent not to change the latter statute in that respect.

Finally in the Shine case at page 382 of the opinion we stated that chap. 1944 “expressly exempted the check off of dues or other obligations imposed by a collective bargaining contract and subscriptions to a nonprofit hospital service corporation from the operation of the provisions as to assignments of wages. * * * Moreover, by that amendment the legislature significantly did not abrogate the required conditions as to all assignments, which if done might have implied an intent also to change the prohibition against waiving or setting aside the provisions concerning payment of wages in full under the weekly wage payment law; but it apparently confined the exemptions thereby authorized to assignments in the two specified categories.”

We find therefore from such express, positive and substantially contemporaneous legislative action that chapter 1944 was not intended to and did not amend or change the existing weekly wage payment law of this state. That being the case, although chapter 1944 did exempt the checkoff of union dues and other specified matters from the operation of the law dealing with the assignment of wages, the weekly wage payment law of this state, so far as checkoff is concerned, remains unamended and with the same force and effect as when the Shine case was decided. In accordance with our holding in that case the purported assignments herein do not conform to the requirements of that last-mentioned law and according to its express terms the company, the union, and the individual complainants could not lawfully by private agreement waive the provisions of such law. The fact that it did not expressly make illegal the deduction of union dues under an agreement between an employer and a collective bargaining agent does not aid the respondents. The comprehensive provisions of that law as now in effect clearly prevent such deductions under any private agreement between employer and employee. In the circumstances we find that the instant collective bargaining agreement, in so far as it concerned the mandatory checkoff of dues out of the wages of complainants and the payment thereof to the union, was invalid and of no force and effect under the existing weekly wage payment law of this state.

However, the respondents urge here, as did the respondents in the Shine case, that the National Labor Relations Act and the amendment thereof in 1947, 61 Stat. 136, 143, chap. 120, sec. 101, superseded state statutes which are inconsistent with them. Speaking generally the soundness of such view may be conceded in the proper circumstances. In the case at bar the respondents argue in support of their position that a state law barring check-off provisions in a union agreement could not constitutionally apply to interstate commerce by reason of a conflict with the National Labor Relations Act. In this connection they maintain in substance that sec. 9(a) of the National Labor Relations Act, 49 Stat. 453, chap. 372, provides that the duly selected ' representative for collective bargaining shall be the exclusive representative of the employees “for the purposes of collective bargaining in respect to rates of pay, wages, hours of employment, or other conditions of employment * * They contend that the phrase last quoted, other conditions of employment, should be broadly construed so as to include within its scope the checkoff of union dues thus making that subject mandatory in collective bargaining between employer and employee under the National Labor Relations Act.

We are unable to agree with that contention. Giving the language used its ordinary meaning, checkoff is not a condition of the employment. In our judgment if it was intended that checkoff be a mandatory subject of collective bargaining it would have been expressly included in the act as were rates of pay, wages, and hours of employment. These are clearly conditions of employment but they were specified and not left to interpretation. Checkoff is a matter between the individual and the union and is not reasonably a condition of employment between the individual and the employer.

The respondents have cited no cases and none have come to our attention which support their contention that checkoff is a subject which is mandatory under the National Labor Relations Act and therefore that the refusal or failure of an employer to negotiate and agree on that issue becomes an unfair labor practice. On the other hand the above questions raised by the respondents were carefully considered and fully discussed by us in the Shine case to which reference may be had for our holdings. In that case we cited authorities which in our opinion supported our decision and distinguished cases relied on by the respondents there and by respondents here. It is unnecessary to review them now.

In deciding the Shine case, at page 386 of the opinion we used the following language: “The issue in the instant case involves the question whether the employer must, as a mandate from the essential terms and requirements of the National Labor Relations Act, bargain collectively for a check off of dues and include such a provision in the bargaining contract or become guilty of an unfair labor practice, notwithstanding that such provision is contrary to the express terms of the statutes of this state. In the circumstances of the instant case we find that the National Labor Relations Act by its terms makes mandatory as an essential subject matter for collective bargaining the rates of pay, wages, hours or other conditions of employment, and certain grievances as therein set forth; that a check off of dues out of the wages of the employees is not included thereunder as mandatory * * These conclusions are supported by direct holdings in Hughes Tool Co. v. National Labor Relations Board, 147 F.2d 69, 74. In passing we note that respondents admit that no opinion of the United States supreme court or any federal circuit court of appeals dealing directly with mandatory checkoff as inherently essential in the National Labor Relations Act has held contra to the Hughes case.

In the present circumstances we are of the opinion that checkoff of union dues, while a proper subject for voluntary collective bargaining between employer and employee, is not mandatory under the provisions of the National Labor Relations Act and its amendment of 1947, so that a refusal to include it would constitute an unfair labor practice; and therefore that such act and amendment did not supersede the provisions of a state statute in full force and effect, such as our weekly wage payment law, which does not permit the checkoff of union dues by an employer even under an agreement of the parties. In our judgment since the congress has not made the checkoff mandatory in collective bargaining, it follows that this state through its weekly wage payment law is not unlawfully attempting to enter a field fully and properly appropriated by the congress; that no question of interference with interstate commerce is involved herein; and that no constitutional problem is raised.

The respondents have also argued that the complainants as employees on whose behalf a collective bargaining agreement was made may not at will repudiate such agreement during its term. This point was considered to some extent in the Shine case and we cited therein the case of Braddom v. Three Point Coal Corp., 288 Ky. 734, involving an agreement for an indefinite term as being in effect contrary to the position taken by respondents. However, in our opinion a conclusive answer to the respondents’ argument in this connection is that we have hereinbefore determined that the collective bargaining agreement under consideration in respect to the matter of checkoff of union dues is invalid and of no effect by reason of being contrary to the provisions of the existing weekly wage payment law of this state. For that reason the collective bargaining agreement between the complainants and the company, which is voluntary and not for a definite term, is not binding-on the parties and the complainants clearly had the right to withdraw from it if they so desired. They evidenced their wish and intent so to do in the present case by giving to the company notices revoking their previously given authorizations that a checkoff might be made from their wages and payment thereof be made to the union. We perceive nothing improper or illegal in the complainants’ conduct in this respect.

Viewing the instant case as a whole it is our conclusion that the basic questions raised are governed largely by our decision in the Shine case which we hereby affirm. Accordingly for the reasons hereinbefore set out we hold that the provisions in the present collective bargaining-agreement purporting to authorize a checkoff from complainants’ wages and payment thereof to the union for dues and assessments are not in that respect valid and binding upon the complainants and the company. The moneys which have been deducted from complainants’ wages by the respondent company and held by it subject to the order of the court should now be paid over to the complainants respectively in the amount to which each is entitled.

The complainants’ appeal is sustained, the decree appealed from is reversed, and the parties may present to this court' for approval a form of decree, in accordance with this opinion, to be entered in the superior court.