Finch, J.
The facts in this case have been fairly and well stated in the dissenting opinion by Chief Judge Lehman.
The question is clear. It is our opinion that the decision found by the Labor Board puts a premium upon industrial unrest. The question presented for decision is whether employees, who have selected a labor union as their representative by joining and retaining membership therein, and who have allowed such selected representatives to make an agreement which is binding upon the employer, are in spite of this contract still entitled to a certificate from the Labor Board to the effect that they have selected another union as their bargaining representative in order to void the contract which they have previously made. In short, the question is whether employees who have made a valid contract with their employer may, while the contract is in force, choose another union as their representative to repudiate the contract which is already in force.
The validity and the fairness of the contract entered into by the Triboro Coach Corporation and Amalgamated Association of Street, Electric Railway and Motor Coach Employees of America, Local Division 1104, in 1936 is not questioned in this proceeding. Thus the Board by its own
act of reversing its order for an election upon the first application by the Transport Workers Union has recognized the validity of that contract for the three-year period of its existence. It is this 1936 agreement which the Board has found Amalgamated elected to terminate at the expiration of the then current term. Both the Special Term and the Appellate Division have held that that finding is not supported by any substantial evidence. Only by reading into the letter sent by Amalgamated to Triboro on July 17,1939, an intention which is admittedly not expressed in that letter, and by withdrawing isolated statements of the witnesses from the context of the entire testimony of such witnesses, can evidence be found which supports this finding .by the Board. Thus it cannot be said upon this record that Amalgamated ever expressed its intention to terminate the contract of 1936. It follows that the 1936 contract was automatically renewed under its terms by the inaction of the parties when the first three-year period expired on October 20, 1936.
Since this 1936 contract provided for a closed shop and under its terms every employee of Triboro was a member of Local 1104 (Amalgamated), it follows that at the time of the making of the November 14, 1939, agreement, the officers of Amalgamated were the
“
representatives designated or selected for the purposes of collective bargaining by the majority of the employees in a unit appropriate, for such purposes * * (Labor Law, § 705.) Since the contract of November 14, 1939, was a contract made by the employer with a labor organization which is “ the representative of employees as provided in section seven hundred five ” (§ 704), it follows that this contract, which was ratified in a properly noticed meeting held by Amalgamated, by the vote of 128 employees (which constituted a majority of the 240 Triboro employees who were affected thereby) is a valid and binding contract. Since the enactment of the State Labor Relations Act (Labor Law, art. 20; Cons. Laws, ch. 31), the right of the employer to contract with the representative selected by the employees is not in doubt (§ 705, subd. 5). In order for such contracts to be of any effect to carry out the policy of the act to establish
industrial peace (§ 700), such contracts must be binding on both parties.
In any event, if the 1939 agreement was not valid, the 1936 agreement would still continue in effect, since no notice of an intention to repudiate that contract was sent by either party to the other ninety days before the termination of the contract as provided therein.
It is urged that, since the Board had determined that a controversy existed among the employees as to the appropriate representative to bargain with the employer and had issued an order for an election to determine such controversy prior to the time of the making of the 1939 agreement, Triboro’s knowledge of such action by the Board suspends the right of the employer to enter into a contract with the selected representatives of a majority of the employees. The act does not so provide, and the only argument that is advanced to sustain this contention is that to hold to the contrary deprives the employees of their right under the statute to choose their own representatives. If the right of the employees to choose their own representatives was actually barred by this action by the employer, then a serious question would arise as to whether or not the action of the employer in the case at bar was not illegal and contrary to the Act. However, such is not the situation in the case at bar.
It will be noticed that in this case the Transport Workers Union did not petition for an election to determine an appropriate agent until July 20, 1939. This was the same day that the period expired during which Triboro could have notified Amalgamated that it elected to terminate the 1936 agreement. Thus after the expiration of the period during which notice to terminate the 1936 contract might be given, Triboro was bound by the closed shop provisions of that contract and was bound to negotiate with Amalgamated exclusively as to all conditions of employment which were covered by it. By waiting until the expiration of the period during which such notice might be given, the employees have in effect made a choice that Amalgamated
is to be their representative for the next three years or until another representative is chosen, since they have not notified their employer or the Labor Board of a contrary intention.
Thus it is claimed that Transport which, if designated the appropriate bargaining agent before the 1936 contract was renewed, might have repudiated that contract by delaying its petition for a representation proceeding until after the expiration of the period in which notice might have been given, has now placed Triboro in a position where it cannot deal validly with any labor union, since to deal with Amalgamated violates the designation of the Board and to deal with Transport violates the 1936 contract with Amalgamated. It is submitted that Triboro has been placed in no such distorted position.
The first representation hearing in 1937, brought by Transport, which was dismissed without prejudice to Transport to renew its petition within any reasonable period prior to the expiration of the 1936 contract, would not compel Triboro to give notice to Amalgamated that it elected to terminate such contract, since its employees had taken no further action in accordance with the permission granted by the Board. There could be no duty on Triboro to anticipate that such further action would in fact be taken.
As was pointed out in the opinion at Special Term, there were several courses of action open to the employees of Triboro to prevent the renewal of the 1936 contract and the subsequent execution of the 1939 contract. Thus the employees, as members of Amalgamated, might by resolution have directed the officers of Amalgamated to give notice of termination of the 1936 agreement before July 20, 1939, or the employees might have given such notice directly (§ 705, subd. 1).
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Finch, J.
The facts in this case have been fairly and well stated in the dissenting opinion by Chief Judge Lehman.
The question is clear. It is our opinion that the decision found by the Labor Board puts a premium upon industrial unrest. The question presented for decision is whether employees, who have selected a labor union as their representative by joining and retaining membership therein, and who have allowed such selected representatives to make an agreement which is binding upon the employer, are in spite of this contract still entitled to a certificate from the Labor Board to the effect that they have selected another union as their bargaining representative in order to void the contract which they have previously made. In short, the question is whether employees who have made a valid contract with their employer may, while the contract is in force, choose another union as their representative to repudiate the contract which is already in force.
The validity and the fairness of the contract entered into by the Triboro Coach Corporation and Amalgamated Association of Street, Electric Railway and Motor Coach Employees of America, Local Division 1104, in 1936 is not questioned in this proceeding. Thus the Board by its own
act of reversing its order for an election upon the first application by the Transport Workers Union has recognized the validity of that contract for the three-year period of its existence. It is this 1936 agreement which the Board has found Amalgamated elected to terminate at the expiration of the then current term. Both the Special Term and the Appellate Division have held that that finding is not supported by any substantial evidence. Only by reading into the letter sent by Amalgamated to Triboro on July 17,1939, an intention which is admittedly not expressed in that letter, and by withdrawing isolated statements of the witnesses from the context of the entire testimony of such witnesses, can evidence be found which supports this finding .by the Board. Thus it cannot be said upon this record that Amalgamated ever expressed its intention to terminate the contract of 1936. It follows that the 1936 contract was automatically renewed under its terms by the inaction of the parties when the first three-year period expired on October 20, 1936.
Since this 1936 contract provided for a closed shop and under its terms every employee of Triboro was a member of Local 1104 (Amalgamated), it follows that at the time of the making of the November 14, 1939, agreement, the officers of Amalgamated were the
“
representatives designated or selected for the purposes of collective bargaining by the majority of the employees in a unit appropriate, for such purposes * * (Labor Law, § 705.) Since the contract of November 14, 1939, was a contract made by the employer with a labor organization which is “ the representative of employees as provided in section seven hundred five ” (§ 704), it follows that this contract, which was ratified in a properly noticed meeting held by Amalgamated, by the vote of 128 employees (which constituted a majority of the 240 Triboro employees who were affected thereby) is a valid and binding contract. Since the enactment of the State Labor Relations Act (Labor Law, art. 20; Cons. Laws, ch. 31), the right of the employer to contract with the representative selected by the employees is not in doubt (§ 705, subd. 5). In order for such contracts to be of any effect to carry out the policy of the act to establish
industrial peace (§ 700), such contracts must be binding on both parties.
In any event, if the 1939 agreement was not valid, the 1936 agreement would still continue in effect, since no notice of an intention to repudiate that contract was sent by either party to the other ninety days before the termination of the contract as provided therein.
It is urged that, since the Board had determined that a controversy existed among the employees as to the appropriate representative to bargain with the employer and had issued an order for an election to determine such controversy prior to the time of the making of the 1939 agreement, Triboro’s knowledge of such action by the Board suspends the right of the employer to enter into a contract with the selected representatives of a majority of the employees. The act does not so provide, and the only argument that is advanced to sustain this contention is that to hold to the contrary deprives the employees of their right under the statute to choose their own representatives. If the right of the employees to choose their own representatives was actually barred by this action by the employer, then a serious question would arise as to whether or not the action of the employer in the case at bar was not illegal and contrary to the Act. However, such is not the situation in the case at bar.
It will be noticed that in this case the Transport Workers Union did not petition for an election to determine an appropriate agent until July 20, 1939. This was the same day that the period expired during which Triboro could have notified Amalgamated that it elected to terminate the 1936 agreement. Thus after the expiration of the period during which notice to terminate the 1936 contract might be given, Triboro was bound by the closed shop provisions of that contract and was bound to negotiate with Amalgamated exclusively as to all conditions of employment which were covered by it. By waiting until the expiration of the period during which such notice might be given, the employees have in effect made a choice that Amalgamated
is to be their representative for the next three years or until another representative is chosen, since they have not notified their employer or the Labor Board of a contrary intention.
Thus it is claimed that Transport which, if designated the appropriate bargaining agent before the 1936 contract was renewed, might have repudiated that contract by delaying its petition for a representation proceeding until after the expiration of the period in which notice might have been given, has now placed Triboro in a position where it cannot deal validly with any labor union, since to deal with Amalgamated violates the designation of the Board and to deal with Transport violates the 1936 contract with Amalgamated. It is submitted that Triboro has been placed in no such distorted position.
The first representation hearing in 1937, brought by Transport, which was dismissed without prejudice to Transport to renew its petition within any reasonable period prior to the expiration of the 1936 contract, would not compel Triboro to give notice to Amalgamated that it elected to terminate such contract, since its employees had taken no further action in accordance with the permission granted by the Board. There could be no duty on Triboro to anticipate that such further action would in fact be taken.
As was pointed out in the opinion at Special Term, there were several courses of action open to the employees of Triboro to prevent the renewal of the 1936 contract and the subsequent execution of the 1939 contract. Thus the employees, as members of Amalgamated, might by resolution have directed the officers of Amalgamated to give notice of termination of the 1936 agreement before July 20, 1939, or the employees might have given such notice directly (§ 705, subd. 1). Or the same result might have been accomplished by instituting a representation proceeding before the expiration of the period ninety days before the end of the contract. However, by failing to take any of these courses of action, the employees have made their
choice that Amalgamated is to be their representative for the next three- years or until the contract expires and other representatives are chosen.
On the other hand, Triboro which, according to the provisions of its franchise, would lose its franchise to operate buses if it did not have a collective bargaining agreement with a
bona fide
labor organization at all times, having had no further indication from its employees, had no alternative but to allow its contract with Amalgamated to be automatically renewed.
It is also urged that these employees were not offered the choice of accepting the new contract made with Amalgamated or of insisting upon their right to choose a different union as their representative in the vote on the 1939 agreement. That choice had already been made by the employees when they failed to take any action to terminate the 1936 contract. Instead of rejecting such new contract, which they had the power to do, the majority of the employees of Triboro voted to approve such new contract, thus adopting and approving of the actions of their adopted representatives.
The decision of the courts below does not deprive the Transport Workers Union, or any other union, of the right to organize the employees' of Triboro.
(Stillwell Theatre, Inc.,
v.
Kaplan,
259 N. Y. 405.) Such organization may be attempted at any time, and the Board may certify the new union as the appropriate bargaining unit for the purpose of entering into further contracts with the employer upon the expiration of the existing contract. However, there is nothing in this right of union members to select a new bargaining representative which would impair the sanctity of the obligations of the existing contract while that contract was still in force.
It will be noticed that the refusal of this court to grant to the Board the power which it claims to set aside contracts where it finds that the employees have chosen a new bargaining unit, would tend to compel the new union to resort to a strike to enforce its demands. Chief Judge Lehman
in his opinion approves of the method of avoiding industrial strife chosen by the Board. However, the effect upon the employer between these two methods of settling such a dispute should be considered. Under the first method, according to the settled practice of the Board, the contract is subject to be revised once each year. The employer has no recourse but to enter into new negotiations with the newly-designated representative. However, if the union resorts to a strike, the employer will be free to discharge those workers who are unwilling to be bound by the contracts which they have made through their selected representatives.
The practical implication of the decision of the Board upon the closed shop unions was clearly pointed out by the testimony of George Meany, president of the New York State Federation of Labor and now the General Secretary of the American Federation of Labor. Mr. Meany testified that the Board’s decision that it will hold an. election upon request when it finds that the workers desire a change of bargaining agent, will upset the entire democratic process whereby closed shop unions are controlled, since that decision will allow workers to set up their own rival unions instead of seeking control by the normal process of joining the union in power and electing representatives favorable to their views. In this way, the Board, instead of furthering industrial peace, makes itself an instrument to destroy a collective bargaining organization and to weaken the effectiveness of collective bargaining.
The decisions of the Special Term and the Appellate Division are in keeping with the policy of the act as set forth in section 700. Thus where the bargaining power between employers and employees has been equalized through the powers of the Board, the recognition of the sanctity of contracts made between the parties would seem more likely to remove sources of industrial strife and unrest. Industrial peace is promoted by collective agreements obtained for employees through the medium of their
bona fide
labor organizations or other proper representatives. When such an agreement has been obtained, and a stable relationship established thereby, the very purpose of the act may be defeated if the machinery of the Board be employed to upset such contractual relationship.
It follows that the order appealed from should be affirmed, with costs.