Lewis v. Seanor Coal Co.
Lewis v. Seanor Coal Co.
Opinion of the Court
OPINION OF THE COURT
The trustees of The United Mine Workers of America Welfare and Retirement Fund of 1950 brought this action against Seanor Coal Company, the appellant, for royalty payments of forty cents per ton as fixed by the National Bituminous Coal Wage Agreement as amended in 1964, on coal produced by the company between February 1 and June 30, 1965. They claimed also the balance on a promissory note which they alleged was accelerated because of the default in the payment of royalties. The company counterclaimed for payment it had made earlier into the welfare and retirement fund under the forty cents royalty provision of the agreement.
I.
In support of its contention that the provision for the payment of royalties under the agreement is illegal under the hot cargo prohibition of § 8(e) of the National Labor Relations Act, the company relies upon two decisions of the National Labor Relations Board. Raymond O. Lewis, 144 N.L.R.B. 228 (1963), held invalid under § 8(e) the subcontracting provision ,of the 1958 National Bituminous Coal Wage Agreement which required that the terms and conditions of employment for subcontracting operations be at least as favorable as those fixed for employees of signatories of the agreement. Later, the board dealt with the subsequent 1964 agreement, which discontinued this requirement but added a new provision which in addition to increasing from thirty to forty cents the royalty payments to the fund for every ton of coal produced by the operator for use or for resale, also required for the first time an eighty cent royalty on coal which an operator acquired from a non-signatory.
It is clear, therefore, that the Board has not decided or even cast any doubt on the validity of the basic royalty provision of forty cents per ton but instead has limited its inquiry to the effect under § 8(e) of the exaction from the coal operators of the doubled royalty where they purchased coal from outside, nonsignatory operators. The basic provision of forty cents royalty per ton for coal produced by the employer is radically different from the special provision requiring an eighty cents royalty on coal acquired from outside nonsignatory operators and standing alone is beyond the range of § 8(e). The essence of a proscribed “hot cargo” agreement is that it applies pressure on an employer, directly or indirectly, to require him to cease doing business with a third party in order to persuade the third party to accede to the union’s objectives.
In these circumstances, any finding by the Board that the 1964 agreement is invalid under § 8(e) would not affect the severable basic royalty provision.
II.
The company’s claim that the agreement violates the Sherman Antitrust Act is not a defense to the trustees’ action. It is now well established that the remedy for violation of the antitrust law is not avoidance of payments due under a contract, but rather the redress which the antitrust statute establishes, — a private treble damage action. Kelly v. Kosuga, 358 U.S. 516, 79 S.Ct. 429, 3 L.Ed.2d 475 (1959); Bruce’s Juices, Inc. v. American Can Co., 330 U.S. 743, 67 S.Ct. 1015, 91 L.Ed. 1219 (1947). See also Hanover Shoe, Inc. v. United Shoe Machinery Corp., 377 F.2d 776, 791 (3 Cir. 1967). To permit avoidance of payments required under the contract would go beyond the remedy prescribed by the antitrust statute and, as the Supreme Court has pointed out in Bruce’s Juices, Inc. v. American Can Co., supra, 330 U.S. at 756-757, 67 S.Ct. 1015, would have the incongruous effect of affording an injured party simple compensatory damages where he is a defendant while allowing him to treble the identical damages where he is a plaintiff. Moreover, the general rule is especially applicable here, where as we have already pointed out the payments required by the contract have the characteristics of compensation to the employees for services they have already rendered.
III.
The company’s final defense is the alleged oral modification of the 1964 agreement. It asserts that shortly after it had terminated operation of its mine in February 1965 because of heavy losses, it reopened the mine in reliance upon the statement of the president of the local union that if it did so “the productivity per employee would increase sufficiently to enable the Defendant to meet its obligations under the labor contract.” The company alleges that this statement was intended to induce it to reopen the mine and to incur new and additional obligations including the royalties, and that in reliance on the representation it reopened the mine but that “the increase in productivity per employee promised and represented * * * has in fact not occurred.”
In its pleading the company presented these claims as establishing an estoppel against the plaintiffs from claiming that any royalties were due. In the court below and here, however, it has apparently abandoned this contention and instead relies upon the circumstances as creating an oral modification of the agreement to pay royalties.
We come then to the question whether there was a valid oral modification of the agreement which absolves the company of the requirement to pay the forty cents per ton royalty.
At the outset it may be observed that the alleged agreement might well be declared ineffective because it lacks definiteness and is vague and uncertain.
The requirement that “the detailed basis on which such payments are to be made is specified in a written agreement with the employer * * * ” (§ 302(c) (5) (B), 29 U.S.C. § 186(e) (5) (B)) is not free from ambiguity. The same phrase, “such payments”, appears in the proviso in § 302(c) (5) (A), 29 U.S.C. § 186(c) (5) (A), where it clearly refers to payments made by the employer. In § 302(c) (5) (B), 29 U.S. C. § 186(c) (5) (B), however, the language seems to look to payments to be made out of the fund by the trustees to the employees. We may not, however, determine the meaning of the provision by a microscopic study of its language in order to decide whether “such payments” refers only to those made by the employer to the trust fund or only to those made by the trustees to the employees. We have recently been reminded of the particular emphasis which must be given to the legislative history of labor legislation,
We hold therefore that an oral modification which would have suspended the payment of the forty cents per ton royalty into the fund by the employer was ineffective because it violated § 302(c) (5) (B).
The judgment of the district court will be affirmed.
. The counterclaim was in the amount of $88,322.20, representing payments made at forty cents per ton.
. The new addition, somewhat circumstantially phrased, reads: “On all bituminous coal procured or acquired by any signatory Operator for use or for sale there shall, during the life of this Agreement, be paid into such Fund by each such Operator signatory hereto or by any subsidiary or affiliate of such Operator signatory hereto the sum of eighty cents (800) per ton of two thousand (2,000) pounds on each ton of such bituminous coal so produced or acquired on which the aforesaid sum of forty cents (400) per ton has not been paid into said fund prior to such procurement or acquisition.”
. See 350 F.2d at 802, n. 12.
. Compare San Diego Bldg. Trades Council, etc. v. Garmon, 359 U.S. 236, 79 S. Ct. 773, 3 L.Ed.2d 775 (1959) with Vaca v. Sipes, 386 U.S. 171, 87 S.Ct. 903, 17 L.Ed.2d 842 (1967) ; Linn v. United Plant Guard Workers of America, Local 114, 383 U.S. 53, 86 S.Ct. 657, 15 L.Ed. 2d 582 (1966) ; Comment, 113 U.Pa. L.Rev. 1104 (1965).
. National Woodwork Manufacturers Association v. NLRB, 386 U.S. 612 (1967) ; A. Duie Pyle, Inc. v. NLRB, 383 F.2d 772 (3 Cir. 1967).
. See NLRB v. Rockaway News Supply Co., Inc., 345 U.S. 71, 73 S.Ct. 519, 97 L. Ed. 832 (1953).
. § 8(e), 29 Ü.S.C. § 158(e).
. Lewis v. Benedict Coal Corp., 361 U.S. 459, 469, 80 S.Ct. 489, 4 L.Ed.2d 442 (1960).
. Lewis v. Benedict Coal Corp., supra, n. 8.
. Kelly v. Kosuga, supra, 358 U.S. at 520, 79 S.Ct. at 432.
. Zukoski v. Baltimore & Ohio Railroad Co., 315 F.2d 622, 625 (3 Cir. 1963), cert. denied, 375 U.S. 856, 84 S.Ct. 118, 11 L.Ed.2d 83 (1963).
. 93 Cong.Rec. 4746, reprinted in 2 Legis. Hist, of the Labor-Management Relations Act, 1947, pp. 1310-11. See also S.Rep. No. 105, 80th Cong., 1st Sess. 52 (Supplemental Views), reprinted in 1 Legis. Hist. 458; 93 Cong.Rec. 3565-66, 3569, 1 Legis.Hist. 754-57; 93 Cong.Rec. A1910, 1 Legis.Hist. 869 (remarks of Rep. Meade) ; 93 Cong.Rec. 4678, 2 Legis. Hist. 1305 (remarks of Sen. Byrd) ; 93 Cong.Rec. 5015, 2 Legis.Hist. 1498 (remarks of Sen. Ball).
. See Arroyo v. United States, 359 U.S. 419, 79 S.Ct. 864, 3 L.Ed.2d 915 (1959) ; United States v. Ryan, 350 U.S. 299, 76 S.Ct. 400, 100 L.Ed. 335 (1956).
. § 302(c) (5) (A), 29 U.S.C. § 186(c) (5) (A).
. § 302(e) (5) (B), 29 U.S.C. § 186(c) (5) (B).
. § 302(c) (5) (C), 29 U.S.C. § 186(c) (5) (C).
. National Woodwork Manufacturers Association v. NLRB, 386 U.S. 612, 87 S. Ct. 1250, 18 L.Ed.2d 357 (1967) ; NLRB v. Allis-Chalmers Mfg. Co., 388 U.S. 175, 87 S.Ct. 2001, 18 L.Ed.2d 1123 (1967).
. Lewis v. Benedict Coal Corp., 361 U.S. 459, 470, 80 S.Ct. 489, 4 L.Ed.2d 442 (1960).
. See § 8(d), 29 U.S.C. § 158(d) ; H. J. Heinz Co. v. NLRB, 311 U.S. 514, 61 S.Ct. 320, 85 L.Ed. 309 (1941).
. See Lewis v. Lowry, 295 F.2d 197, 200 (4 Cir. 1961), Sobeloff, Ch. J., dissenting, cert. denied, 368 U.S. 977, 82 S.Ct. 478, 7 L.Ed.2d 438 (1962). See also Lewis v. Mears, 297 F.2d 101, 105 (3 Cir. 1961), Biggs, Ch. J. dissenting from denial of rehearing en banc, cert. denied, 369 U.S. 873, 82 S.Ct. 1142, 8 L.Ed.2d 276 (1962).
Dissenting Opinion
(dissenting).
The appeal here is from the granting of a motion for summary judgment by the District Court. The significant facts are simple and admitted. The union involved, through its president whose authority is conceded, agreed with appellant mine owner that if the latter would reopen its mines (which it had permanently closed) the employee productivity would increase sufficiently to enable the mines owner to meet all its obligations under an existing collective bargaining contract. Relying on that agreement, which clearly modified the underlying agreement requiring appellant to pay royalties to the union’s welfare fund, appellant opened its mines. The employees did not increase their productivity and so enable appellant to pay royalties to the welfare fund. As a result appellant had to shut down its mines. Notwithstanding that situation, the trustees of the welfare fund brought this suit for said royalties and in the face of the above facts, the District Court granted the trustees’ motion for summary judgment.
Both equitable estoppel and oral modification of the 1964 labor contract were urged by appellant in the District Court as defeating the present action. The trial judge held that such oral modification was against public policy on the strength of Lewis v. Harcliff Coal Co., 237 F.Supp. 6, 8 (W.D.Pa. 1965). The oral agreement there was prior to the written contract. The decision is no authority to uphold the brazen repudiation of the subsequent oral agreement in this appeal. This Court in Burlesque Artists Assn. v. I. Hirst Enterprises, Inc., 267 F.2d 414 (3 Cir. 1959) affirmed a judgment where the jury had found that there had been a valid subsequent oral addition to the original written labor agreement. This recognition of subsequent oral modification of collective bargaining contracts is viewed as sound in labor arbitration practice. Gertman Co., Inc., 45 LA 30 (Thomas Kennedy Arbitration 1965). Metropolitan Transit Authority, 39 LA 849 (W. Fallon Arbitration, 1965).
The District Court considered that the modification to the original agreement under 29 U.S.C.A. § 186(c) (5) (B) had to be in writing. The majority opinion does not agree with that. It cautiously considers that the statute “is not free from ambiguity”. However, it never does construe it and simply goes on to fashion new law to support this judgment. I think it very clear that Section 302(c) (5) (B) of the L.M.R. Act does not touch the validity of the oral modification before us. In our Bey v. Muldoon, 354 F.2d 1005 (3 Cir. 1966) we affirmed the District Court, 223 F.Supp. 489, in holding regarding § 302(c) (5) (B) that “Reference to the legislative history shows that the Act was intended to prohibit any receipt of money by unions from employers unless the precise use to which the money shall be put is delineated.” Absent a statutory provision that the oral modification involved is required by statute to be in writing that subsequent agreement is itself a valid contract. United Shoe Workers, etc. v. Le Danne Footwear, Inc., 83 F.Supp. 714 (D.Mass. 1949).
The District Court not only disposed of the above most substantial controverted issue by summary judgment but also so disposed of appellant’s affirmative defenses of illegality. It is impossible to conjure away the vital fact questions raised. Appellant contended that the Welfare and Retirement Fund clause of the National Bituminous Coal Wage Agreement was illegal under either or both the National Labor Relations Act and The Sherman Anti-trust Act. The District Court opinion concedes that the 1964 Amendment to the Welfare and Retirement Clause of the said Agreement with respect to its 80 cents per ton payment into the Fund by the signatory operator was held to be violative of Section
Reference
- Full Case Name
- John L. LEWIS, Henry G. Schmidt and Josephine Roche, as Trustees of the United Mine Workers of America Welfare and Retirement Fund of 1950 v. SEANOR COAL COMPANY, a Corporation
- Cited By
- 55 cases
- Status
- Published