B & G Manufacturing Company, Plaintiff-Appellant v. Sheet Metal Workers International Association et al., Defendants-Respondents. (1972)

Plaintiff B & G Manufacturing Company (B & G) appeals from a summary judgment entered pursuant to Code of Civil Procedure section 437c, dismissing its second amended complaint by which it sought damages totaling $295,000 from two employer organizations:

(1) Sheet Metal and Air Conditioning Contractors' National Association, Inc. (National Contractors' Association); and

(2) Sheet Metal, Air Conditioning and Heating Contractors Association of Long Beach-Orange County (Orange County Contractors Association)

and two labor organizations:

(1) Sheet Metal Workers' International Association, AFL-CIO (International Union); and

(2) Sheet Metal Workers International Local Union No. 420 (Local 420).

Proceedings Below

Defendants' demurrers to the original and first amended complaint were sustained with leave to amend. The second amended complaint alleged four causes of action, all obviously framed under California law. They may be roughly characterized as alleging interference with contract relations, conspiracy to interfere with contract relations, conspiracy to restrain trade in violation of the Cartwright Act and breach of contract. The pleading was unverified, did not spell out the true nature of the controversy, and did not suggest interstate commerce and collective bargaining rights might be involved.

The answers filed by the various defendants denied the allegations of the second amended complaint, then set up numerous affirmative defenses, including: failure to state a cause of action, lack of jurisdiction over the subject matter, exclusive jurisdiction in the National Labor Relations Board (NLRB), failure to exhaust remedies under the employer-union agreements, and exemption from the Cartwright Act by Business and Professions Code sections 16700 et seq.

The defendants then served interrogatories and requests for admissions upon the plaintiff and, when these were answered, moved for summary judgment under Code of Civil Procedure section 437c. The motions were based upon the interrogatories and requests for admissions, plaintiff's answers thereto, and four detailed supporting affidavits. These documents spelled out the nature of the controversy between the parties, set out the details of Local 420's labor grievances and the arbitration proceedings which had dealt with it, and established the defendants were directly involved in interstate commerce and that plaintiff was indirectly involved also. In response to all this plaintiff filed a single, brief declaration which showed only that it was not involved directly in interstate commerce. After argument on the motions, plaintiff filed supplemental points and authorities, contending for the first time the court had jurisdiction under sections 301 and 303 of the National Labor Relations Act.

The court entered summary judgment for defendants, ruling it lacked jurisdiction over the subject matter and there was no triable issue of fact presented. It dismissed the second amended complaint with prejudice.

Facts

The affidavits, declarations and other documents filed in support of and in opposition to the motion for summary judgment reveal: During the years of 1967 and 1968, plaintiff B & G manufactured rectangular sheet metal ducts in Los Angeles and sold them to air conditioning and heating contractors. Two of its customers were located in the Long Beach-Orange County area: Service Engineering Air Conditioning Company (Service) and Southland Heating Company (Southland).

Defendant Local 420, an affiliate of defendant International Union, signed collective bargaining agreements with both Service and Southland. In each instance the agreement consisted of: (1) a Standard Form Union Agreement (SFUA) which had been drafted jointly by the International Union and the National Contractor's Association, and (2) an Addenda which had been negotiated by Local 420 with the Orange County Contractors Association. Included in the agreement were various work preservation clauses (e. g., SFUA, Art. II; Addenda clauses 16 and 35) and elaborate provisions for settling grievances that developed between union members and employers arising out of the collective bargaining agreements by arbitration through Boards and Panels made up of representatives of both the union and contractor-members of the Association.

When Service and Southland continued to purchase prefabricated ducts from B & G, Local .420 protested they were violating the work preservation clauses of the collective bargaining agreements, maintaining such work was traditionally performed in the employer's shop and was not subject to subcontracting. To settle the dispute, Local 420 invoked the grievance and arbitration procedures outlined in Article X of the SFUA. The Local Joint Adjustment Board decided Southland's purchases of prefabricated ducts from B & G violated clause 35 of the Addenda, and instructed Southland to fabricate the ducts in its own shop using Local 420 members. In the dispute with Service, the Local Board was deadlocked (the issue involved the capability of the employer's shop to produce the ducts), so the matter was submitted to a two-man arbitration Panel, which decided Service was in violation of clause 16 of the Addenda. When Service failed to activate its own shop to produce the ducts, Local 420 appealed to the National Joint Adjustment Board, which ruled clause 16 was a valid work preservation clause applicable to the dispute in arbitration and authorized Local 420 to cancel the collective bargaining agreement if Service failed to comply with the decisions.

As the result of arbitration, both Southland and Service ceased buying prefabricated ducts from B & G.

The arbitrators who served on the Local Board were named by Local 420 and the Orange County Contractors Association; those on the Panel and on the National Board were selected by the International Union and the National Contractors' Association.

The affidavits filed in support of the motion for summary judgment established the contractor-members of the Orange County Contractors Association collectively sold over $50,000 worth of goods to customers outside the State of California annually and purchased goods and supplies valued in excess of $50,000 from suppliers outside the State of California. They also established B & G itself, during the year 1968, sold in excess of $95,000 worth of goods to Scott Company of California which in turn purchased in excess of $50,000 worth of goods from suppliers outside the state.

Discussion

Although stated in four separate causes of action, the essence of B & G's complaint is the defendants, individually and in collaboration, enforced the work preservation clauses in Local 420's collective bargaining agreements with Service and Southland, causing the contractors to discontinue purchasing B & G's prefabricated ducts.

Section 7 of the National Labor Relations Act (29 U. S. C. § 157) establishes the right of employees, through a labor organization of their choice, to enter into collective bargaining agreements with employers concerning wages, hours and conditions of employment. Section 8 of the Act (29 U. S. C. § 158) defines unfair labor practices. Provisions in collective bargaining agreements regulating the ‘contracting out’ of work traditionally performed by members of the bargaining unit are related to the conditions of employment, are commonly found in such agreements, and are frequently the basis of grievances which proceed to arbitration. (Fibreboard Paper Products Corp. v. NLRB, [50 LC ¶19,384] 379 U. S. 203, 209-212 [85 S. Ct. 398, 402-403].) When the objective of such provisions is the preservation of work traditionally performed by job site workers, the provisions do not constitute an unfair labor practice. (National Woodwork Mfrs. Ass'n. v. NLRB, [55 LC ¶11,842] 386 U. S. 612, 642-643 [87 S. Ct. 1250, 1267].) Where the activity which is the subject matter of the litigation is arguably subject to the protection of section 7 or the prohibitions of section 8 of the National Labor Relations Act, state courts are deprived of jurisdiction and must defer to the exclusive competence of the NLRB. (San Diego Building Trades Council, etc. v. Garmon, [37 LC ¶65,367] 359 U. S. 236, 244-245 [79 S. Ct. 773, 779-780]; Musicians Union, Local No. 6 v. Superior Court, 69 Cal. 2d 695, 706; International Brotherhood of Teamsters, Local No. 42 v. Superior Court, [66 LC ¶12,134] 20 Cal. App 3d 517, 518-519), and state laws cannot be applied to prevent or penalize the parties from carrying out their collective bargaining agreement. (Local 24, Internat'l. Teamsters, etc. v. Oliver, [36 LC ¶65,161] 358 U. S. 283, 295-296 [79 S. Ct. 297, 304-305].)

This is precisely the context in which the case appeared before the superior court on the motion for summary judgment. We need not set out again the facts contained in the documents filed in support of the motion. It is sufficient to state they brought the subject matter of the dispute within the reach of section 7 of the National Labor Relations Act. They demonstrated the controversy which was the basis for B & G's complaint arose out of the provisions of the collective bargaining agreements between Local 420 and Service and Southland, and resolution of the controversy was effected through the arbitration provisions contained in those agreements. B & G filed nothing in response to the defendants' documents particularizing and detailing the dispute. Nothing contained in the documents filed by the defendants indicated any of them had engaged in an unfair labor practice, and B & G's bald assertion they had was not supported by a single factual allegation. All of the facts presented to the trial court on the motion for summary judgment indicated the dispute in question arose out of the legitimate exercise of collective bargaining rights and its resolution lies within the NLRB's exclusive jurisdiction.

Sections 301 and 303 of the National Labor Relations Act (29 U. S. C. §§ 185 & 187) give jurisdiction to state and federal courts to redress grievances arising out of labor disputes in certain limited situations. There are many reasons why B & G's belated claim these sections confer jurisdiction on the superior court should be rejected.¹ The claim was asserted by supplemental points and authorities filed after the motion for summary judgment was submitted and was not supported by any declaration of fact. All of the causes of action in the second amended complaint purported to seek redress under state law. Neither the pleading, nor any properly filed declaration of fact, gave any indication B & G intended to or could plead a cause of action for relief under sections 301 and 303 of the National Labor Relations Act.

The judgment is affirmed.

FOOTNOTES

1.  For example: Section 301 confers jurisdiction on federal district courts in suits between an employer and a labor union for violations of collective bargaining agreements. B & G had no contractural relation with any of the defendants. Section 303 confers jurisdiction on state and federal courts for certain limited suits against labor unions and could not be invoked against the contractors' association defendants.

AULT, J.