Court Opinion

ID: 9469044
Source: CourtListenerOpinion
Date Created: 2023-08-05 02:30:35.066133+00
Date Added: 2024-06-11T17:41:11.200865
License: Public Domain

WEICK, Senior Circuit Judge,
dissenting:
I respectfully dissent. In my opinion, neither the Labor Management Act, 29 U.S.C. § 185 or the National Labor Relations Act, 29 U.S.C. § 151 et seq., or any other federal law to my knowledge, gives to the labor union a license to intentionally injure the employer by circulating defamatory or insulting material about him known to be false. Linn v. Plant Guard Workers, 383 U.S. 53, 86 S.Ct. 657, 15 L.Ed.2d 582 (1966). The district court had pendant jurisdiction under United Mine Workers v. Gibbs, 383 U.S. 715, 725, 86 S.Ct. 1130, 1138, 16 L.Ed.2d 218 (1966), to apply Tennessee tort law on defamation.
The controversy in this case did not arise out of campaign oratory of union employees and the employer in a Labor Board conducted election. It arose out of deliberate intentional acts of a local labor union designed to injure the employer by false defamatory material.
The district court adopted findings of fact and conclusions of law which are plain and understandable, although some of them were mixed.
The district court found:
The union, however, refused to settle the grievance. The union claimed that the employees were entitled to double overtime based on the following spurious theory: if an employee works four 10-hour *566days and one 8-hour day, for a total of 48 hours, he should be paid daily overtime for all hours in excess of 8, or 8 hours for the week and, the union claimed, the employee should receive in addition, 8 hours overtime for the 8-hour day, for a total of 16 hours overtime for the week. The union’s claim was made in spite of the clear prohibition against the pyramiding of overtime in the collective bargaining agreement, (emphasis added).
2. The posting of the bulletin of August 2. 1978, which accused the plaintiff of cheating its employees out of thousands of dollars, constituted a breach of Article X, § 4 of the collective bargaining agreement which forbids the publication or circulation by the union of any false or misleading remarks about the employer or any of its officers.
3. At all times relevant to this suit Willie Rudd was acting president of the local, and as the local’s agent acting within the course of his employment the union is responsible for his acts. See 29 U.S.C. § 185(b)(e).
4. The accusation that The Davis Company “cheated” employees was false and misleading and was also defamatory in that it falsely accused the company of dishonesty. Furthermore, there was clearly no basis for the interpretation asserted by Mr. Rudd of the overtime provision of the contract, Article VI, Section 1. The falsity contained in the notice posted on the bulletin board by Rudd was deliberate, and therefore actionable. Letter Carriers v. Austin, 418 U.S. 264, 283, 94 5. Ct. 2770, 2780-81, 41 L.Ed.2d 745 (1974). Because Mr. Rudd was acting as the president of the local, the local is liable for his defamatory statements, and both Mr. Rudd and the local are jointly liable on the defamation cause of action.
5. False, misleading, and defamatory remarks are not protected under the First Amendment or the National Labor Relations Act. Timpte, Inc. v. NLRB, 590 F.2d 871 (10th Cir. 1979); Bettcher Manufacturing Corporation, 76 NLRB 526 (1948); Maryland Drydock Company v. NLRB, 183 F.2d 538 (4th Cir. 1950).
6. The walkout by the employees and the resulting loss of production by the plaintiff was proximately caused by Mr. Rudd’s false, misleading and defamatory statements posted on the bulletin board.
7. When a company suffers a loss of production as a result of a breach of contract or other wrongful acts, the company is entitled to damages measured by the loss of fixed costs of operation which are not offset by income otherwise derived or attributable to productive labor. Sheet Metal Workers International Association v. Atlas Sheet Metal Company, 384 F.2d 101, 109 (9th Cir. 1967). Based on the testimony of the company’s certified public accountant and the custodian of the production records, that amount in damages equals $6,713.82. The plaintiff is also entitled to the costs of obtaining private security service in the amount of $703.13 for total compensatory damages in the amount of $7,416.95.
The Union at no time either in the district court or here disputed the accuracy of the computation of the damage award.
The Collective Bargaining Agreement did not provide for arbitration so that the employer had no remedy except an action for damages.
In Black’s Law Dictionary, Fifth Edition, the author defines the verb cheat:
To deceive and defraud. It necessarily implies a fraudulent intent. The words “cheat and defraud” usually mean to induce a person to part with the possession of property by reason of intentionally false representations relied and acted upon by such person to his harm. They include not only the crime of false pretenses, but also all civil frauds, and include all tricks, devices, artifices, or deceptions used to deprive another of property or other right. See Fraud.
Without question, the Union accused the company of criminal activity.
It is submitted that the district judge in trying this case without a jury had the *567right to and did make credibility assessments. He certainly did not believe the testimony of the Union President Rudd, whose theory as to double payment of overtime he found was “spurious”. Rudd accused the company of dishonesty when he actually knew that the company did not intentionally withhold any money knowing it to be owing to its employes. If this does not involve malice, what is it?
In making his findings, the district judge could take into account inferences from proven facts logically deductible therefrom. He found that the walkout and damage sustained by the employer resulted proximately from the libelous statements asserted by the union on the bulletin board, which also violated the Collective Bargaining Agreement.
One other matter is noteworthy. The Collective Bargaining Agreement provided in Article III Section 4(d):
If no such settlement is arrived at within five (5) days after [the last meeting under the grievance procedure], then the Union may strike and the Employer may lock out the employees. App. p. 145.
The purpose of the five day period after the last meeting was to provide for a cooling off time before the Union can strike. The Union in its brief erroneously calls the walkout a strike, which it was not. The last meeting was on June 2, and the employees met at night after the meeting. No strike was authorized at the meeting. The walkout occurred on the following day, June 3. If it was a strike which the Union claims it was, then it was an unlawful strike in violation of the Collective Bargaining Agreement, for which it was liable in damages.
In my opinion, the libelous statements were not authorized by the First Amendment to the Constitution, nor did they constitute “protected activity” under § 7 of the Act.
In my opinion, the findings of fact and conclusions of law adopted by the District Judge McRae were supported by substantial evidence and are not clearly erroneous. The majority takes the position that there was no evidence to support them, but this in my opinion is incorrect. This is a clear case of liability from which the Union and its President have no exemption.
I would affirm the judgment of the district court.