Standard Grocer Co. v. Local No. 406 of the American Federation of Labor

32 N.W.2d 519, 321 Mich. 276

• Court: Michigan Supreme Court
• Decided: May 18, 1948
• Docket: Docket No. 16, Calendar No. 43,652.
• Status: Published

Opinions

Bushnell, C. J.

Plaintiff Standard Grocer Company is a wholesaler, engaged in selling its merchandise throughout western Michigan. Its principal place of business is at Holland and its branches are at Grand Rapids and Muskegon.

Defendant Local No. 406 is a part of the International Brotherhood of Teamsters, Chauffeurs, Warehousemen & Helpers of America, affiliated with the American Federation of Labor, and is commonly known as the teamsters union. Defendant Thomas E. Burke is the representative of the Michigan State Conference of Teamsters, defendant Pat Maekev is the secretary of the union, and defendant Jack Walsh, when the bill of complaint was filed in this cause, had been directing a picket line at Standard’s warehouse at Holland.

Defendants have appealed from a decree enjoining them from “picketing the plants and places of business of the plaintiff, from threatening or ordering boycotts against suppliers to the plaintiff of merchandise or services, and from instructing or directing their representatives, agents or members to refrain or from causing any person, firm or corporation to refrain from supplying or to cease to supply plaintiff with articles of merchandise for its stock in trade, or refrain from handling merchandise be longing to or intended for delivery to plaintiff, or to refrain from driving trucks containing any other materials or supplies necessary to the conduct of plaintiff’s business, whether for making deliveries thereof or for any other proper purpose.”

The appellants contend that a lawful labor dispute exists between themselves and plaintiff and between themselves and plaintiff’s employees, “which would authorize picketing and boycotting of plaintiff by the teamsters union,” and that the injunction issued violates their rights under the Thirteenth and Fourteenth Amendments to the Constitution of the United States.

Appellee contends that the action of the union is unlawful in that its picketing and boycotting is to compel Standard to become an organizing agent of the union, although their employees are opposed to becoming members. Plaintiff also maintains that such unlawful action by the union in this instance was to compel plaintiff to enter into a closed-shop agreement without information as to the terms and conditions of such agreement.

Appellee directs attention to the fact that the decree of the trial court, entered May 8,1946, cannot become a final decree, because of defendants’ appeal, until final decision here; that subsequent to the entry of the decree below the labor management relations act of 1947 (Taft-Hartley law) became effective August 22, 1947, and that decision here is controlled by this Federal act.

The rather unusual features of this case and the important constitutional questions involved require a complete understanding of the factual situation and a full explanation thereof.

At its Holland warehouse plaintiff employs 13 men, and at its Grand Rapids and Muskegon branches it employs 4, and 2, warehousemen, respectively. It receives the merchandise which it sells and distributes by both rail and common-carrier truck service from points within and outside the State of Michigan. In the territory in which Standard operates it competes with wholesalers in Muskegon, Grand Rapids and Kalamazoo. It also acts as a servicing agent in procuring merchandise for the Independent Grocers’ Alliance, a chain of grocery stores operating in this same area. The latter service constitutes a large portion of plaintiff’s business. Probably the majority of the companies with whom the plaintiff competes have contracts with the defendant union. Plaintiff also competes with common carriers operating in its area, making deliveries from their warehouse to retail customers and picking up merchandise for delivery to its warehouse. The employees of the common carriers, with whom the plaintiff thus competes in this respect, are generally members of the defendant union.

Standard has no written collective bargaining agreement with its employees covering wages, hours or Avorking conditions, nor does it have any Avritten agreement Avith any collective bargaining agency, such as the defendant union, nor has defendant “labor organization” been “certified as the representative” of plaintiff’s employees under the provisions of section 9 of the Taft-Hartley act. It must be conceded that many of the benefits provided by the union’s contract Avith the Standard’s competitors are not enjoyed by the plaintiff’s employees, and that some of the benefits Avhich Standard’s employees do enjoy, such as a bonus, are not guaranteed to them, but rather depend solely upon the discretion of the plaintiff company.

Defendant union had, from time to time, over a period of six years, made unsuccessful efforts to induce Standard’s employees to join the union, and to induce plaintiff company to sign a written collective bargaining agreement.

In April of 1945, defendant Burke approached some officials of plaintiff company with respect to the advisability of the company attempting to induce their employees to join the union. These officials indicated that they had no desire to influence their employees’ decision in this respect.

Defendant Mackey testified that, because of the adverse effect upon other union members of the failure of the plaintiff company to become organized, it was decided that it would be necessary to picket Standard, and that in October of 1945 a picket line was set up at the Grand Eapids branch. It is conceded that this picketing incident, and all subsequent picketing, was both peaceful and orderly, unaccompanied by any violence.

At the instance of the conciliation division of the United States department of labor and the Michigan mediation board, this Grand Eapids incident was settled and picketing ceased when it was agreed that Standard would advise its employees of a meeting at which the union would explain the advantages of organization. Prior to this agreed-upon meeting, officials of the company “had a discussion” with its employees, during which they stated that Standard was not going to force its employees either to join or refuse to join the union. They stated in this discussion :

“It is our desire that our family relationship should be continued as it is. It is your privilege to do as you desire to do. If you vote so that the majority of you want to join the union, we shall have to recognize it and we shall recognize it.”

Subsequently the union representatives met with the employees of Standard at various times to discuss the question of organization. After some dif ficulty in trying to explain the advantages which would accrue to them if they joined the union, and after it had been stated that their failure to join the union would harm the employees of the company’s competitors, application blanks were passed out with the request that Standard’s employees sign them if they desired to join. The men were also informed that a picket line would be formed in the event they failed to join the union. At this time some of the men indicated that they had “religious objections” to joining this union and others had personal feelings against joining unions.

None of the men signed application blanks and the union representatives made no further effort to contact the officers of the company. On November 12, 1945, picketing' began at the warehouse at Holland. There pickets carried signs indicating that the company was “unfair to organized labor” and to “Truck Drivers Union, Local 406.” The employees of the company countered with a sign setting forth their feelings in the matter, which read “Union Unfair. We voted 100% against the AFL. Employees of the Standard G-rocer Company.”

As a result of this picketing two common carriers, in accordance with their union contract, refused to direct their drivers to make deliveries to Standard. Some deliveries, however, were made without regard to the picketing. After a brief period, rail deliveries were normal.

The instant case is unique in one important respect. Plaintiff company, although obviously not desirous of having its employees organized, nevertheless allowed the union to have meetings with its employees in an attempt to organize them. Standard agreed to abide by whatever decision their employees should make. The employees, after being presented with all the facts, decided unanimously that they did not want to join the union. Thus, in actuality, it is the employees of the plaintiff company who, if any, are “unfair” to organized labor, and not the company itself.

Two major issues are thus presented. First, whether there was an existing labor dispute, and second, whether the picketing was a means to accomplish a lawful labor objective. In this respect the trial court held:

“Under the testimony it is clear that the result sought to be accomplished by picketing plaintiff’s place of business was to compel plaintiff to put its employees in defendant union, regardless of whether or not such employees wished to join. Our Supreme Court has declared such objective to be unlawful. # # *

“In this case Mr. Burke offered to waive the initiation fees, but it is the unlawful ‘objective’ and not necessarily the means that determines whether such picketing is lawful.”

The facts in the instant case closely parallel those of Silkworth v. Local No. 575 of the American Federation of Labor, 309 Mich. 746. In that case the union representatives approached the employer and made overtures concerning organizing the employees, coupled with a demand that the employer pay the initiation fees of the workers. This Court, in that case, affirmed the decision of the lower court enjoining the union from participating in picketing activities. In that case, although there are certain dissimilarities from the facts in this case, the general over-all picture is so much the same that much of what was said in the Silkworth Case, is applicable here. The citations and quotations covering the background material are particularly pertinent. Mr. Justice Starr, in the Silkworth Case, cogently pointed out some of the meat of the problem, saying :

“There was no showing that plaintiffs had interfered with defendants’ efforts to unionize their driv ers; and no satisfactory showing that plaintiffs’ drivers were willing to join the union even under a check-off system, whereby plaintiffs would pay their initiation fees and deduct the same from their wages. There was no strike and no showing of any argument or dispute between plaintiffs and their drivers over wages, hours of work, collective bargaining or terms and conditions of employment. * * *

“We recognize that peaceful picketing has been upheld as an exercise of the right of free speech, and that a union may, by the process of peaceful picketing, make known the facts of a labor dispute. * # *

“However, a decision of the question as to whether or not a labor dispute existed between plaintiffs and their employee drivers would not alone determine the question of defendants’ right to maintain a picket line. In recent decisions it has been held that although there was no controversy between an employer and his own employees, if the economic interests of other employees engaged in the same industry were affected, they could, through their labor union, publicize their grievance by the means of peaceful picketing.”

In reaching his conclusion, Mr. Justice Starr says:

“Therefore, in the present case we must determine whether or not defendants’ picketing of plaintiffs’ storage plant was for the purpose of obtaining a lawful labor objective. The motive for the picketing, that is, the result sought to be accomplished, was a question of fact. The testimony is* convincing that defendants’ real objective was to compel plaintiffs to put their drivers in defendant union by paying their initiation fees, regardless of whether or not the drivers wished to join. This was not a lawful labor objective. Defendants could not use the lawful means of peaceful picketing to accomplish such unlawful purpose.”

Apart from the effect of the Taft-Hartlev law, •which will be discussed later, the solution of the problem confronting us is simplified by the guide posts set up in the Silhivorth Case. As was recognized in the Silkworth Case, supra, as well as in Bakery & Pastry Drivers & Helpers Local 802 of the International Brotherhood of Teamsters v. Wohl, 315 U. S. 769 (62 Sup. Ct. 816, 86 L. Ed. 1178); American Federation of Labor v. Swing, 312 U. S. 321 (61 Sup. Ct. 568, 85 L. Ed. 855); Senn v. Tile Layers Protective Union, 301 U. S. 468 (57 Sup. Ct. 857, 81 L. Ed. 1229), and others, it is not necessary that there be a dispute between the employer and its own employees in order to give the union the right to picket the employer. In the Silkworth Case, supra, it was specifically decided that, “If the economic interests of other employees engaged in the same industry were affected, they could, through their labor union, publicize their grievance by the means of peaceful picketing.”

' But it must be remembered that this language was uttered in the light of the situation there existing, where the union and its members had a grievance with the employer of the nonunion workers. Here, we are asked to decide whether this same reasoning should apply with respect to picketing by a union and its members which actually have a grievance with the nonunion employees of their picketed employer. The language used in American Federation of Labor v. Swing, supra, is particularly applicable here. There it was said:

“That a State has ample power to regulate the local problems thrown up by modern industry and to preserve the peace is axiomatic. But not even these essential powers are unfettered by the requirements of the bill of rights. The scope of the Fourteenth Amendment is not confined by the notion of a particular State regarding the wise limits of an injunction in an industrial dispute, whether those limits be defined by statute or by the judicial organ of the State. A State cannot exclude workingmen from peacefully exercising the right of free communication by drawing the circle of economic competition between employers and workers so small as to contain only an employer and those directly employed by him. The interdependence of economic interest of all engaged in the same industry has become a commonplace. American Steel Foundries v. Tri-City Central Trades Council, 257 U. S. 184, 209 (42 Sup. Ct. 72, 66 L. Ed. 189, 27 A. L. R. 360). The right of free communication cannot therefore be mutilated by denying it to workers, in a dispute with an employer, even though they are not in his employ. Communication by such employees of the facts of a dispute, deemed by them to be relevant to their interests, can no more be barred because of concern for the economic interests against which they are seeking to enlist public opinion than could the utterance protected in Thornhill’s Case. ‘Members of a union might, without special statutory authorization by a State, make known the facts of a labor dispute, for freedom of speech is guaranteed by the Federal Constitution.’ Senn v. Tile Layers Protective Union, 301 U. S. 468, 478 (57 Sup. Ct. 857, 81 L. Ed. 1229).”

Such reasoning must apply with equal force to the present controversy. There is no more reason why the constitutional freedom of speech guaranteed to workers should permit them to air to the public a dispute which they have with an employer, whose employees are nonunion, than there is why this same constitutional freedom of speech should not guarantee to them the right to air to the public those grievances which they have with workers who are nonunion. Nor would it be a proper claim for the plaintiff here to say that his business and economic interests are being adversely affected by the union’s activities in a grievance with respect to his workers. Such, if true, seems to be an injury for which the law does not compensate. For these union men may not have their right of free speech abridged, merely because plaintiff’s economic interests are being damaged, without a showing of unlawful activity.

With respect to the first problem, therefore, it must be held that, although there is no labor dispute present here, the defendants’ right of free speech allows them to picket, even in a case where this dispute is with the employees of the plaintiff.

A question may be raised in this respect that, conceding what has been said above, nevertheless the sign carried by the pickets said, “This company unfair to organized labor,” when, in actuality, it was the employees and not the plaintiff company who were in conflict with the defendants. This argument cannot justify the issuance of an injunction in such broad language as is used in the present case, for thus far no reason is found why the defendants should not be permitted to picket the plaintiff’s employees. It might, however, be said, that the sign carried in the instant case was clear enough, under the circumstances, to apprise the public of the fact that some sort of a dispute was going on, and should not, therefore, subject these defendants to an injunction merely because the word “company” was used, rather than the words “company’s employees.” Further, were the latter words used, the effect upon the plaintiff’s business would be the same, and, therefore, this is an inconsequential argument.

We, therefore, must next proceed to the question of whether there was a lawful objective to be achieved by this picketing. In the Silkworth Case, supra, it was held that the forcing of an employer to pay his employees initiation fees and thus force him to put his employees in the union, was not a lawful labor objective. But it was there further said:

“Wo confine our holding in the present case to the point that defendants could not use the lawful means of peaceful picketing to accomplish their unlawful objective. However, our decision should not be construed as in any way limiting or restraining peaceful picketing in the accomplishment of a lawful labor objective.”

We are therefore forced to determine just what the objects were which the union and its members were attempting to accomplish by this picketing.

It must be stated, at the outset, that if the object of this picketing was to coerce the plaintiff into forcing the men into joining the union, that would not be a lawful labor objective. But it fairly appears that the basic objective of the picketing in the instant case was actually to bring the working standards, so far as wages, hours, working conditions, bonuses, and vacations of the workers in the plaintiff’s employ up to those of the union members. This was an essential accomplishment to the furtherance of the union’s objectives as well as the objectives of their members. As long as the plaintiff’s employees were receiving compensation or working conditions which were in any way inferior to those of the workers of plaintiff’s competitors, the union would be greatly handicapped in any attempts to better their members’ condition. This is, under the Federal authorities cited, supra, a clearly recognized economic fact. Therefore, in order to achieve the purposes of union organization, increasing the lot of the union members, it was necessary to increase those conditions and wages of the nonmember workers in the industry so as to satisfy the members’ employers that they were not competing with companies -who had a lower labor cost.

Obviously the ultimate goal sought by this picketing was the unionization of the plaintiff’s employees, for if this were accomplished, it would bo easier to control the wages and working conditions of these workers. But, as pointed out above, if the objective was to coerce this employer to in turn coerce his men into becoming unionized, or to coerce the employees directly into becoming unionized, or, as later discussed herein, if otherwise declared to be unfair labor practice, it would not be a lawful objective.

It clearly appears from the record before us that, if the wages and working conditions of the plaintiff’s employees were increased to those enjoyed by the union membership, these defendants would have been satisfied, for then the immediate barrier to increased benefits to the union membership would have been removed. This objective, vis., the bettering of the working conditions and wages of nonunion members in the industry, so as to remove the barrier to increased benefits to union members, we must deem to be a lawful labor objective, if not otherwise prohibited by law.

That this was the objective of the instant picketing is amply supported by the record. As testified by Mackey, one of the union officers:

“There was a dispute in working conditions, trying to equalize wage conditions, and as far as Standard Grocer only giving one week’s vacation when we were asking two, and in Armour and other contracts we get three weeks. How can we get grocery people three weeks if we can’t get two weeks at Standard Grocer? * * #

“That to get out there and organize the Standard Grocer Company, and they were hurting our conditions and therefore we couldn’t go farther ahead unless there was something done about it. I knew what the conditions were at Standard Grocer Company. I knew some of the conditions.”

It also appears that there was another lawful objective in connection with this picketing. In this respect Mackey testified:

“You understand, as I explained before, in our union meetings union people don’t like to work with nonunion people and therefore they start to quarrel, and if the nonunion people can receive the same as the union people, why the nonunion person will say to the union person, ‘You pay two bucks for nothing,’ and so therefore they start to quarrel among themselves as members of our organization, and it is our duty to try to straighten out these quarrels.”

In the light of this testimony, it would be a lawful objective of this picketing to attempt to induce the nonunion employees of the plaintiff to join the union so as to keep the union members satisfied, for, as stated by Mackey, one should not get the benefits of unionization without being a member. This basically is an attempt to preserve the organization and is a lawful labor objective, except as hereinafter stated.

As was said in Harper v. Brennan, 311 Mich. 489, 505, a case in which it was held that there was no lawful labor objective:

“No complaint is made that the employment of such employees by plaintiffs is not in full accord with union standards. As stated above the primary purpose of the picketing in this case is not to establish a closed shop or to protect or improve the interests of labor, but only to compel plaintiffs to pay monthly union dues.”

This language clearly implies, although not the fact in that case, that if such an objective, i, e., “that the employment of such employees by plaintiffs is not in full accord with union standards,” or “to establish a closed shop,” or “to protect or improve the interests of labor,” is the one to be sought, then it was at the time a lawful objective of the picketing. In the present case the two objectives of the picketing are “that the employment of such employees by plaintiff is not in full accord with union standards” and “to protect or improve the interests of labor.”

Appellee, however, urges application here of the provisions of the labor management act of 1947 (Taft-Hartley law), citing American Steel Foundries v. Tri-City Central Trades Council, 257 U. S. 184 (42 Sup. Ct. 72, 66 L. Ed. 189, 27 A. L. R. 360). That question was not presented to the trial court, nor could it have been presented as that Federal statute was not yet then enacted.

We determined that at the time the picketing was lawful. Injunctions, however, operate in futuro, (Duplex Printing Press Co. v. Deering, 254 U. S. 443 [41 Sup. Ct. 172, 65 L. Ed. 349, 16 A. L. R. 196]); Pennsylvania v. Wheeling & Belmont Bridge Co., 18 How. (59 U. S.) 421 (15 L. Ed. 435), and no vested right exists therein, as they may be modified or dissolved later.

The Taft-Hartley law defines what shall be deemed unfair labor practice in section 8 (b) as follows:

“Sec. 8 (b). It shall be an unfair labor practice for a labor organization or its agents:

“(1) To restrain or coerce (a) employees in the exercise of rights guaranteed in section 7: Provided, That this paragraph shall not impair the right of a labor organization to prescribe its own rules with respect to the acquisition or retention of membership therein; or (b) an employer in the selection of his representatives for the purpose of collective bargaining or the adjustment of grievances;

“(2) To cause or attempt to cause an employer to discriminate against an employee in violation of subsection (a) (3) or to discriminate against an em ployee with respect to whom membership in such organization has been denied or terminated on some ground other than his failure to tender the periodic dues and the initiation fees uniformly required as a condition of acquiring or retaining membership; * * *

“(4) To engage in, or to induce or encourage the employees of any employer to engage in, a strike or a concerted refusal in the course of their employment to use, manufacture, process, transport, or otherwise handle or work on any goods, articles, materials, or commodities or to perform any service, where an object thereof is: (a) Forcing or requiring any employer or self-employed person to join any labor or employer organization or any employer or other person to cease using, selling, handling, transporting, or otherwise dealing in the products of any other producer, processor, or manufacturer, or to cease doing business with any other person; (b) forcing or requiring any other employer to recognize or bargain with a particular labor organization as the representative of his employees unless such labor organization has been certified as the representative of such employees under the provision of section 9.”

Section 7 thereof, above referred to, reads:

“Sec. 7. .Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection, and shall also have the right to refrain from any and all of such activities except to the extent that such right may be affected by an agreement requiring membership in a labor organization as a condition of employment as authorized in section 8 (a) (3).”

The act in question provides (section 8[c]):

“The expressing of any views, arguments or opinion, or the dissemination thereof, whether in written, printed, graphic or visual form, shall not constitute or be evidence of an unfair labor practice under any of the provisions of this act, if such expression contains no threat of reprisal or force or promise of benefit.”

This section applies both to the employer under section 8 (a) and a union under section 8 (b), and probably cuts across both the doctrine of “totality of conduct,” see Fred Wolferman, Inc., v. Root, 356 Mo. 976 (204 S. W. [2d] 733), and that of the so-called “captive audience,” see New Labor Law, Labor-Management Relations Act of 1947, with explanation. C. C. H. June, 1947, pp. 41, 42.

We are controlled by decision in Senn v. Tile Layers Protective Union, supra, and American Federation of Labor v. Swing, supra. See, also, Silkworth v. Local No. 575, of the American Federation of Labor, supra.

The labor management act of 1947 did not and cannot abrogate the constitutional right of free speech as illustrated by the Senn and Swing Cases, supra.

The decree below is modified by deletion of that portion which abrogates defendants’ right of free speech. In other respects it is affirmed. A modified decree may be entered here, but without costs, neither party having prevailed on appeal.