Jou-Jou Designs, Inc. v. International Ladies' Garment Workers' Union, Local 23-25

94 A.D.2d 395, 465 N.Y.S.2d 163, 115 L.R.R.M. (BNA) 3676, 1983 N.Y. App. Div. LEXIS 18000
CourtAppellate Division of the Supreme Court of the State of New York
DecidedJune 30, 1983
StatusPublished
Cited by9 cases

This text of 94 A.D.2d 395 (Jou-Jou Designs, Inc. v. International Ladies' Garment Workers' Union, Local 23-25) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Jou-Jou Designs, Inc. v. International Ladies' Garment Workers' Union, Local 23-25, 94 A.D.2d 395, 465 N.Y.S.2d 163, 115 L.R.R.M. (BNA) 3676, 1983 N.Y. App. Div. LEXIS 18000 (N.Y. Ct. App. 1983).

Opinions

OPINION OF THE COURT

Alexander, J.

Local 23-25 of the International Ladies’ Garment Workers’ Union (hereinafter Local 23-25) appeals from an order of Special Term (Henry R. Williams, J.), which denied its motion to dismiss the within complaint for lack of subject matter jurisdiction by reason of Federal pre-emption of this “labor dispute” and failure to state a “labor dispute” cause of action cognizable under section 807 of the New York State Labor Law.

[396]*396We reverse the order below and direct that the complaint be dismissed.

This action arises out of a dispute between the plaintiff Jou-Jou Designs, Inc. (Jou-Jou) and the defendant Local 23-25 regarding the union’s entitlement to a “Hazantown Agreement”. Jou-Jou is a New York corporation, engaged in the apparel and clothing industry and as is the common practice in that industry, Jou-Jou does not, itself, manufacture the garments it sells. Rather, it designs sample garment patterns which are furnished, along with material and manufacturing specifications to outside subcontractors who fabricate the garments in accordance with the specifications. The finished garments are then returned to Jou-Jou which markets them through retailers. Thus the actual manufacture of the garments is accomplished by workers employed by Jou-Jou’s contractors working in the contractor’s “outside” shop. Only a very few workers were required in Jou-Jou’s “inside” shop, since essentially the only work required therein would be sample or pattern making and shipping and receiving chores.1 A manufacturer who operates in this manner is known in the industry as a “jobber”.

It appears that this method of operation was designed and widely employed by garment manufacturers in the New York area to avoid the impact of unionization on wages and other production costs, and for the over-all well-being of the garment workers. Most, if not all of these “outside” shops were nonunion and provided substandard working conditions for the employees. Moreover, the need for workers who normally would be members of the garment workers’ union was diminished if not wholly eliminated. (Indeed, it appears that in 1979, Jou-Jou had only six inside employees, none of whom belonged to any union [Jou-Jou Designs v International Ladies Garment Workers Union, AFL-CIO, 643 F2d 905, 907].) Finally, by “farming out” the work to an “outside shop”, the manufacturer divested himself of contact with or responsibility for the [397]*397worker, no longer being responsible for wages, working conditions, etc.2

In response to this new relationship and to extend the coverage of the collective bargaining agreement with the jobber to the employees of the contractors and to some extent, protect the interests of the “inside” employees of the jobber, the International Ladies’ Garment Workers’ Union (ILGWU) engaged in extensive picketing and negotiating to obtain what came to be known as a “Hazantown Agreement”. Such an agreement, which takes its name from the “jobber” involved in Danielson v Joint Bd. of Coat, Suit & Allied Garment Workers’ Union, I.L.G.W.L. (494 F2d 1230), executed between the jobber and the union, in many ways made the jobber responsible for the workers’ benefits and working conditions' in the contractor’s “outside” shop, and committed the jobber to “farm out” its production only to contractors whose shops were approved by or represented by the union.

From May, 1978 to July, 1979, the employees of the subcontractors to whom Jou-Jou farmed out the actual manufacture of its garments were represented by Local 155 of the International Ladies’ Garment Workers’ Union (Local 155) pursuant to a “Hazantown Agreement” between Jou-Jou and Local 155. That agreement was not renewed upon its expiration and Local 155 picketed Jou-Jou for a time, but discontinued its picketing upon learning that Jou-Jou had entered into a “Hazantown Agreement” with Local 5A of the General Trades Employees Union (Local 5A), an affiliate of the United Brick and Clay Workers’ Union of America, AFL-CIO. (Local 5A had received National Labor Relations Board [NLRB] certification as bargaining agent for the “outside” shops).

In March of 1980, believing that one of Jou-Jou’s subcontractors (Tomlino) had been pressured by Jou-Jou and Local 5A into repudiating its contract with it and entering into labor relations with Local 5A and that the “Hazantown Agreement” with Local 5A was merely a sham designed to permit Jou-Jou to use “sweatshop” nonunion [398]*398contractors and shield Jou-Jou from being compelled to agree to a bona fide Hazantown Agreement with a “real”3 union, Local 23-25 began picketing Jou-Jou’s premises on Seventh Avenue in Manhattan. Local 155 again demanded that its “Hazantown Agreement” be renewed and commenced picketing Jou-Jou again. Local 23-25 embraced the demands of 155 and continued picketing.

Jou-Jou commenced this action against Local 23-25 alleging that the picketing was violent and unlawful and was designed solely to damage the plaintiff’s conduct of its business by interfering with its contract with Local 5A. Jou-Jou’s complaint sought both monetary damages and injunctive relief. Jou-Jou simultaneously sought a temporary injunction against the alleged continued violent picketing.

Contending that the complaint and application for injunctive relief were primarily directed to the allegedly unlawful object of its picketing, and therefore that the suit properly belonged in Federal court, the union, prior to answering the complaint, noticed the case for removal to the Federal court for determination under the standards of pre-emptive Federal labor law. Jou-Jou opposed removal and sought remand to the State court, arguing that there was no “labor dispute” between the parties, rather, there was merely an effort by it to prevent tortious interference with the conduct of its business and obtain injunctive relief against violent picketing. At an expedited hearing, Judge Milton Pollack found that Jou-Jou had established, prima facie that there was violent picketing which was properly subject to State injunctive action and that the union had failed to establish that the action involved a “labor dispute” arising under Federal law. He therefore returned the matter to State court.

Special Term thereafter granted the temporary injunction, notwithstanding that Local 23-25 had neither answered the complaint nor offered any evidence in rebuttal to the charges of violent picketing. Special Term also did not hold a hearing to inquire into the applicability of [399]*399section 807 of the Labor Law, but determined on the papers submitted that no “labor dispute” within the contemplation of section 807 was involved. On appeal, we, without opinion, affirmed Special Term’s determination (see 76 AD2d 1044).

This State action thereafter lay dormant while the parties engaged in substantial litigation both before the NLRB and in the Federal courts. Jou-Jou brought action in the Southern District seeking a declaration that the efforts of Locals 23-25 and 155 to secure a “Hazantown Agreement”, and the initiation by them of interunion arbitration against Local 5A violated Federal antitrust laws. They sought treble damages and injunctive relief against the arbitration proceeding.

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Bluebook (online)
94 A.D.2d 395, 465 N.Y.S.2d 163, 115 L.R.R.M. (BNA) 3676, 1983 N.Y. App. Div. LEXIS 18000, Counsel Stack Legal Research, https://law.counselstack.com/opinion/jou-jou-designs-inc-v-international-ladies-garment-workers-union-nyappdiv-1983.