Court Opinion

ID: 9444077
Source: CourtListenerOpinion
Date Created: 2023-08-03 19:40:35.075058+00
Date Added: 2024-06-11T17:29:42.180095
License: Public Domain

HASTIE, Circuit Judge
(dissenting).
The complaint in this case was dismissed in the district court on the defendant’s motion which advanced three contentions; (1) that the matter in controversy was not within federal jurisdiction, (2) that the complaining labor union was not the proper party to maintain the suit, and (3) that the claim on its face was without merit. The district court thought that the third objection, and only that one, was meritorious. This court now decides that the first objection was well taken and accordingly vacates the judgment and orders the cause dismissed for lack of federal jurisdiction. However, I think the district court ruled correctly on all three points raised by the motion and that its judgment should be affirmed.
The first question is whether Section 301(a) of the Labor-Management-Relations Act, 29 U.S.C.A. § 185(a), which confers upon federal district courts jurisdiction of “suits for violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce * * is applicable to this controversy. This action is ex contractu. The adequate involvement of commerce is unquestioned, but the rights asserted as the basis of relief are beneficially the alleged several rights of a great number of defendant’s employees to receive a day’s pay for a day on which they did not work. The company argues that its refusal to pay these employees, if actionable at all, must be attacked as a breach of the individual contracts of hire, a matter beyond federal cognizance. Cf. Christiansen v. Local 680, 1940, 126 N.J.Eq. 508, 10 A.2d 168. This court now accepts that reasoning, treating as decisive the undeniable fact that the obligation to pay any particular workman in accordance with the union contract depends upon his individual hiring as well as the collective bargain. I believe the court does not regard the time sequence of these contracts as consequential. I agree that this dual con*631tracting shows that the individual workman can found a common law action for pay upon the terms of his employment without even attempting to make the matter one of federal cognizance under Section 301(a). But in the present circumstances I think the existence of this individual common law right does not prevent the refusal to pay from also being a violation of the collective bargaining agreement and, as such, within federal jurisdiction as extended by Section 301(a).
The union’s complaint asserts that its collective bargaining contract with the defendant, as properly construed and mutually understood, obligates the employer to compensate its employees for the period of absence in suit. It is the union’s position that, although the employment status of each individual arises out of his hiring, certain of his rights as an employee, including the right in suit, are the legal consequences of undertakings embodied in the collective bargaining contract as enforceable promises of the employer made to the union for the benefit of all who may be employees while the collective bargain remains in force. This reasoning reflects the analysis made by Mr. Justice Jackson in J. I. Case Co. v. National Labor Relations Board, 1944, 321 U.S. 332, 335-336, 64 S.Ct. 576, 579: “After the collective trade agreement is made, the individuals who shall benefit by it are identified by individual hirings. * * * But the terms of the employment already have been traded out. There is little left to individual agreement except the act of hiring. * * * The individual hiring contract is subsidiary to the terms of the trade agreement * * I think such analysis is realistic. In terms of the matter presented in this complaint, individual hiring is “subsidiary” to the collective agreement in which the parties addressed themselves to and "“traded out” that term of employment which controls pay status on non-working days. Accordingly, it seems proper to say that the asserted right to relief is so predicated upon a violation of the contract between employer and union that the controversy comes within federal jurisdiction as conferred by Section 301(a) of the Labor-Management-Relations Act. American Federation of Labor v. Western Union Telegraph Co., 6 Cir., 1950, 179 F.2d 535; Bakery & Confectionery Workers Union, Local No. 492 v. National Biscuit Co., 3 Cir., 1949, 177 F.2d 684; Mercury Oil Refining Co. v. Oil Workers International Union, 10 Cir., 1951, 187 F.2d 980.
My view of the first point makes it necessary that I consider the distinct, though related, question whether the union, without joining individual employees, is a proper party to assert and litigate the present claim. Section 301 (a) gives the district court jurisdiction over violations of collective bargaining contracts but does not indicate who may sue on the various claims which may arise out of such contracts. The answer to that question must be found elsewhere.
The employer says the union alone cannot maintain this action because the rights asserted, even if they derive from the collective bargaining agreement, are beneficially the individual rights of the employees who were denied compensation. Cf. Milk Wagon Drivers Union, Local No. 753 v. Associated Milk Dealers, D.C.N.D.Ill. 1941, 42 F.Supp. 584. The union counters with the contention that Rule 17(a) of the Federal Rules of Civil Procedure and Section 301(b) of the Labor-Management-Relations Act enable it to sue alone to realize the benefits it has won for all the employees.
It seems to me that Rule 17(a) is relevant. That Rule explicitly states that “Every action shall be prosecuted in the name of the real party in interest; but * * * a party with whom or in whose name a contract has been made for the benefit of another, * * * may sue in his own name without joining with him the party for whose benefit the action is brought; * * * ”
*632In a variety of situations this Federal Rule and its state prototypes1 have served to enable the maker of a contract for the benefit of another to sue in his own name to vindicate the beneficiary’s rights. See Valentine v. Powers, D.Neb. 1948, 85 F.Supp. 732; Linnemann v. Kirchner, 1920, 189 Iowa 336, 178 N.W. 899; Shellberg v. McMahon, 1916, 98 Kan. 46, 157 P. 268; Millers Nat. Ins. Co. v. Bunds, 1944, 158 Kan. 662, 149 P.2d 350, 153 A.L.R. 176. A union’s effort to enforce.the rights it has obtained for the shifting membership of a class it represents through a contract that it made in their interest seems a very appropriate occasion for such procedure. Local 793 UAW-CIO v. Auto Specialties Mfg. Co., D.C.Mich.1951, 15 F.R.D. 261; Local 937 UAW v. Royal Typewriter Co., Inc., D.C.D.Conn.1949, 88 F.Supp. 669; Cf. Amalgamated Meat Cutters and Butchers, Local 634 v. Safeway Stores, Inc., Denver Colo.Dist.Ct. 1949, 16 CCH Lab.Cas.Par. 65,044.
The opinion of the court quite properly points out that present professional views of the jural relationships which grow out of collective bargaining contracts are various and unsettled, and that in the circumstances an eclectic approach to the possibilities of the situation is warranted. But going at the problem this way it seems to me that the employer as promisor in the collective contract is in no position to complain that his promise is enforced by the one to whom it was given. And it seems entirely fair to the individual employee that Rule 17(a) be employed according to its tenor to permit his exclusive representative for the making of a contract for his benefit without his personal participation,2 to proceed similarly on its own initiative to obtain for his benefit a judicial determination of the rights the contract gives him. In this type of statutory relationship and representative status the courts have taken care to protect the individual employees by imposing upon the union, quite apart from Rule 17(a), a strict and high fiduciary obligation of diligence and fairness in advancing the interests of all those it represents. Brotherhood of Railroad Trainmen v. Howard, 1952, 343 U.S. 768, 72 S.Ct. 1022, 96 L.Ed. 1283; see Ford Motor Co. v. Huffman, 1953, 345 U.S. 330, 337, 338, 73 S.Ct. 681, 97 L.Ed. 1048.
If in this process the union should succeed in winning, as it sought here, a judicial determination establishing the alleged right of all employees under the collective bargaining contract to be paid for days of voluntary absence, the question would remain whether any monéy judgment could properly be rendered without joinder or intervention of individual beneficiaries. Some of the above cited cases go that far, treating the plaintiff maker of a third party beneficiary contract as a fiduciary who may obtain a money award for distribution among the beneficiaries. It is not necessary to pass upon that issue here because the district court rightly concluded that the contract in suit did not create such an obligation as the union asserts in this suit. And *633since the majority does not reach this point at all, I express no opinion on the matter of necessary parties beyond saying that the union suing alone can obtain an effective declaration of the rights and obligations created by the collective bargaining contract, including any created for the benefit of the workmen as individuals.
Coming finally to the merits, I agree with the District Court that the facts alleged do not entitle the plaintiff or the employees it represents to relief. The complaint asserts that an obligation to compensate employees for the day in controversy when they were absent from work is imposed on defendant by the collective bargaining contract which it made with the union November 1, 1950. At the same time the complaint does not state why the employees were absent except that they were not “furloughed” or on “leave of absence”, these being two situations of extended absence in which the contract makes it clear that an employee is not entitled to pay. Thus, it necessarily is the theory of the complaint that the contract requires that an employee, not on furlough or leave of absence, must be paid for every day when he voluntarily stays away from work, for whatever reason, just as if he were on the job.
But this claim is based on misconstruction of the contract. That instrument formally establishes a standard basic forty hour, five day work week upon which rates of pay are determined. It also contains a comprehensive enumeration of the absences, both normal and unusual, which the employer must credit toward the forty hour work week just as if the employee were working. Specifically, for employees who have worked more than one year the contract provides annual vacation of two or three weeks without loss of pay. Certain holidays are similarly to be credited as work time. Absences for jury duty and for certain union activities are authorized without loss of pay. Sick leave is covered by a separate written contract. Thus I think it clear that what the parties intended and accomplished was to cover by specific agreement each type of absence which should be compensable. Accordingly, there is no provision whatever stipulating any particular circumstance in which absence for a single day or any other short period is not compensable. None need be stated since all compensable absences are enumerated. The references to extended absence without pay in the nature of temporary reduction of force, called “furlough”, and to extended absence without pay at the employee’s own request called “leave of absence”, are made in connection with an important statement of the agreed seniority status of employees thus temporarily removed from the payroll. There was need to mention this type of absence not because of uncertainty as to pay status but to clarify seniority rights.
I think, as did the District Court, that the contract is clear in its intendment that the absent employees are entitled to pay for the days in suit only if they allege and prove that the situation is within one of the enumerated categories — vacation, holiday, sick leave, jury duty, or negotiating time.
Only brief comment will be made on one other theory of liability urged by the union. It is said that the 1950 contract incorporated certain alleged earlier understandings concerning compensation for periods of voluntary absence. The answer is two-fold. As already shown, the formal agreement is detailed and comprehensive in its enumeration of the circumstances in which there is to be pay for voluntary absence. Moreover, it contains this provision:
“This Agreement expresses the understanding of the parties in respect to matters deemed by them to be Company-wide and * * * it will not be changed, modified or varied except by a written instrument signed by duly authorized agents of the parties hereto, * * ”
This suit attempts to “change, modify or vary” the terms of the formal agreement. And the only provision of the contract *634which defendant points out as containing any possible sanction for the modifying incorporation of any past understanding in the 1950 agreement is in fact, as the District Court pointed out, a prospective reference in subsection H of section VI to interpretations which may be agreed upon in the future. There is nothing in the 1950 contract which makes it either necessary or appropriate to read into it any alleged prior understanding about paying for periods of voluntary absence.
It is my view that the judgment should be affirmed.
I am authorized to state that BIGGS, Chief Judge, and KALODNER, Circuit Judge, join in this dissent.

. Some states have provisions like the Federal Rule. Others approximate this language:
“Every action shall be prosecuted in the name of the real party in interest, but * * * a trustee of an express trust, * * * may sue without joining with him the person for whose benefit the action is prosecuted. A person with whom or in whose name a contract is made for the benefit of another is a trustee of an express trust within the meaning of this section.” See 3 Moore, Federal Practice, 2d ed., 1371-72.
Whether expressed in the one form or the other, the result is the same: a person wbo enforces a contract made in his name for the benefit of another enforces rights belonging to another and, where allowed a money judgment, holds any proceeds recovered in a fiduciary capacity.

. While neither party argues the point, the pleadings indicate to us that the union as the chosen bargaining representative of the employees concerned here is the exclusive statutory representative of the class for bargaining “in respect to rates of pay, wages, hours of employment,' or. other conditions of employment * * as provided in Section 9(a) of the National Labor Relations Act, as amended, 61 Stat. 143, 29 U.S.C.A. § 159(a).