South Louisiana Chapter, Inc. v. Local Union No. 130 of the International Brotherhood of Electrical Workers

177 F. Supp. 432, 44 L.R.R.M. (BNA) 2996, 1959 U.S. Dist. LEXIS 2668
CourtDistrict Court, E.D. Louisiana
DecidedSeptember 25, 1959
DocketCiv. A. No. 9193
StatusPublished
Cited by4 cases

This text of 177 F. Supp. 432 (South Louisiana Chapter, Inc. v. Local Union No. 130 of the International Brotherhood of Electrical Workers) is published on Counsel Stack Legal Research, covering District Court, E.D. Louisiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
South Louisiana Chapter, Inc. v. Local Union No. 130 of the International Brotherhood of Electrical Workers, 177 F. Supp. 432, 44 L.R.R.M. (BNA) 2996, 1959 U.S. Dist. LEXIS 2668 (E.D. La. 1959).

Opinion

J. SHELLY WRIGHT, District Judge.

This suit by an employers’ association asks that a certain trust agreement between it and a labor union be declared null and void, and that the labor union and the trustees of the fund provided for in the agreement be enjoined from receiving or disbursing any moneys under the trust agreement. It asks further that the trustees be required to give an accounting of the money in the fund, to the end that all contributors thereto be reimbursed their pro rata share.

Jurisdiction is based upon the authority of the district courts to adjudicate “any civil action or proceeding arising under any Act of Congress regulating commerce.” 28 U.S.C. § 1337. The Union and the employers’ group are engaged in an industry affecting interstate commerce; hence jurisdiction is also supported by 29 U.S.C.A. § 185(b), permitting any labor organization which represents employees in an industry affecting commerce to sue or be sued in the courts of the United States.

Plaintiff predicates its action on Section 302 of the Labor-Management Relations Act of 1947, 29 U.S.C.A. § 186. That section makes illegal, and criminal, the giving by an employer anything of value to any representative1 of his efnployees. Plaintiff contends that the trust agreement between the employers’ association and the local union violates this section of the Act.

The trust agreement was originally entered into January 14, 1957. It provided that there be established a fund for the training of apprentices in the electrical industry and the improvement of the skills of journeymen. The fund was to be entirely supported by contributions of iy2 cents per man hour worked for all employer-members of the South Louisiana Chapter, Inc., of the National Electrical Contractors Association, and any other employer who signed the trust agreement. Although other employers contributed to the fund, only plaintiff Association has signed the trust agreement.

Originally the fund was to be administered by a board of eight trustees, four selected by the Association and designated “employer trustees” and four chosen by the Union, to be designated “union trustees.” Each trustee was to-serve for one year. The Board would choose its own chairman. Decisions were to be made by a majority of the-members. In case of deadlock, a neutral; person acceptable to both groups of trustees was to be consulted. If none was found acceptable, the senior judge of the-[434]*434federal district court was to appoint an umpire. Trustees received no compensation but were reimbursed reasonable expenses. Six trustees constituted a quorum, the decisions of which were determined by majority vote.

In November 1957, the Court of Appeals for the Ninth Circuit, in Sheet Metal Contractors Ass’n of San Francisco v. Sheet Metal Workers International Association, 9 Cir., 248 F.2d 307, declared that a trust fund administered by a joint labor-management board and which, among other purposes, financed an apprenticeship program, was in violation of 29 U.S.C.A. § 186. The decision evoked some apprehension about the legality of the trust agreement between Local 130 and the plaintiff Association, and early in 1958 there occurred an exchange of letters among spokesmen for the Union, the Association, and the U. S. Department of Labor, the consequence of which was a hope and eventually the conviction that designation of a bank as trustee of the apprenticeship training funds would make the program less suspect. Eventually, on June 17, 1959, the Union and the Association, through their respective trustees of the New Orleans Electrical Joint Apprenticeship Committee and Training Fund, named the National Bank of Commerce as trustee for the receipt and disbursement of all funds connected with the apprenticeship training program. Two of the employer trustees were named chairman and treasurer of the Committee and Training Fund, and a member of the Union was named secretary-coordinator. The bank could only disburse money from the training fund upon written request of two of the above three officials.

Meanwhile, the collective bargaining agreement regulating working conditions for Union employees of the plaintiff Association members approached its expiration date, June 30, 1959. It was not renewed because the Association refused to accede to the Union’s new demands. A strike ensued.

This suit was filed July 14, 1959, ostensibly to test the validity of the trust agreement. It is apparent, however, that while the validity of the agreement may have excited some anguish on the part of the Association, its use as a possible weapon with which to break the strike did not escape the attention of either Association officials or their counsel.2 The testimony of Elgutter and [435]*435Weisfeld, both members of the plaintiff Association, makes it quite clear that the motive for filing this suit was not' so much concern for the validity of the trust agreement, since only a month earlier the Association and the Union had gone to great pains to correct what they thought might be vulnerable conditions in the pact, but was rather a strategic maneuver in a labor dispute. Regardless of the motive, however, the legality vel non of the trust agreement must still be determined.

At the outset, it would appear that a number of contractors, not members of plaintiff Association, who contributed to the fund to train apprentices and improve the skills of journeymen, should be made parties. On closer analysis, however, since the legality of the trust agreement is the issue in suit, and since the plaintiff and defendants here are the only signatories to that agreement, this issue may be resolved without prejudice to the contractors who merely contributed to the fund. Haby v. Stanolind Oil and Gas Company, 5 Cir., 228 F.2d 298; Mackintosh v. Marks’ Estate, 5 Cir., 225 F.2d 211. A further issue in.the case, the question of the disposition of the fund in the event the agreement is held illegal, may require additional parties. However, as will appear, this second issue is not reached.

Defendants raise the issues of laches and the doctrine of “unclean hands,” claiming that the Association’s conscious assent to an allegedly illegal agreement estops it from complaining about its illegality. They contend that the Association’s bad faith is also amply demonstrated by its use of a lawsuit as a labor weapon. Plaintiff takes the position that even though parties to an illegal contract are in pari delicto, courts will grant affirmative relief to one or the other when public policy requires. Here, according to plaintiff, the public has such an interest that a court is justified in granting relief, including reimbursement to the contributors to the fund their pro rata share.

The demand that a court of equity distribute the alleged illegal fund to those who have knowingly contributed to it is indeed a strange one. Under Section 302' of the Act,3 if the fund is illegal, the contributors have committed a crime [436]*436punishable by fine and imprisonment.

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177 F. Supp. 432, 44 L.R.R.M. (BNA) 2996, 1959 U.S. Dist. LEXIS 2668, Counsel Stack Legal Research, https://law.counselstack.com/opinion/south-louisiana-chapter-inc-v-local-union-no-130-of-the-international-laed-1959.