International Ass'n of MacHinists v. State Ex Rel. Watson

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] The Attorney General of the State of Florida instituted quo warranto proceedings against Tampa Shipbuilding Company, Incorporated, a Florida corporation, to prevent the corporation from continuing the operation of its business in Hillsborough County under an existing collective bargaining agreement theretofore entered into with certain labor unions.

The substance of the information filed by the Attorney General is that Tampa Shipbuilding Company was incorporated and qualified as a Florida corporation on November 7, 1940. The shipbuilding plant and shops of the corporation furnish substantially all of the available employment for boilermakers, iron shipbuilders, welders, ship carpenters, blacksmiths and drop forgers; and the major part of the available employment for electrical workers, machinists, operating engineers, plumbers and steam fitters, sheet metal workers, technical engineers, architects, draftsmen and pattern makers for shipbuilding, within Hillsborough County. By its acceptance of articles of incorporation from the State of Florida Tampa Shipbuilding Company consented and agreed with the State, and with the people thereof, to refrain from entering into any contract or undertaking that was in violation of the Constitution or laws of the State of Florida, or that was ultra vires or contrary to the public policy of the State. Notwithstanding this agreement, the corporation, on July 16, 1941, entered into an unlawful contract with certain labor unions in Hillsborough County to employ only union labor in its shipbuilding operations, thereby illegally conspiring with said unions to prevent qualified persons from obtaining employment in the shipbuilding industry in Hillsborough County, unless as a condition of employment such persons were, or became and remained, members in good standing of the particular unions which represented the crafts in which they were skilled. As a result of this agreement numerous citizens and residents of Hillsborough County, and the territory adjacent thereto, who are duly qualified by experience and training, have been refused employment in the plants and shops of the Tampa Shipbuilding Company because they were not members of a union; or, if employed, have been laid off because they did not become or remain members of a union.

The charge is that such a contract creates an unlawful combination with the unions and monopoly in restraint of the equal right to work; that it is beyond the authority of the corporation to enter into such contract because the same is contrary to public policy, and is in violation of the laws and Constitution of the State of Florida.

The prayer is that Tampa Shipbuilding Company show cause by what warrant of authority it claims the right to make said contract and do business thereunder; that it be declared that the corporation is unlawfully usurping its corporate privileges by continuing said contract; and that the corporation be ousted from the continuation thereof.

In its answer Tampa Shipbuilding Company alleges that it is engaged in the construction of ships and vessels for the Navy Department of the United States Government. It admits that the major portion of the shipbuilding business in Hillsborough County is carried on in its plants and shops, although other plants are being operated in the county for the construction of ships. It admits that it entered into the collective bargaining contract with the unions as alleged and that it is operating thereunder. It admits that the effect of the contract is to favor employees who are union members, but that said contract was entered into only after there had been a conference held in New Orleans, Louisiana (known as the Gulf Zone Stabilization Conference) at which representatives of the shipbuilding industry in the zone affected, representatives of labor unions and representatives of the War Production Board, the United States Navy and the United States Maritime Commission had argeed upon certain basic standards for wages and employment in the Gulf Zone, which standards were thereafter approved by the Secretary of Navy for application to shipyards holding Navy construction contracts.

Respondent alleges that its contract entered into with the unions embodies only the standards established by the Gulf Zone Stabilization Conference; and that if compliance with its contract with the unions has affected the citizens and residents of Hillsborough County in the manner alleged, it has been without design or intention on the part of the respondent that such results should flow from its participation in the contract so approved by the Navy Department of the United States Government.

By stipulation of the parties the unions who were parties to the labor agreement with Tampa Shipbuilding Company were allowed to intervene as respondents. In due course they filed their answer alleging, among other things, the results of the "Gulf Zone Stabilization Conference," alluded to in the answer of the shipbuilding company and that its contract with the Shipbuilding Company is in conformance with basic standards for wages and employment there agreed upon and subsequently approved by the Federal Government.

Thereafter, testimony was taken on the issues presented by the information and answers thereto. At final hearing the trial court entered its judgment finding that the "closed shop" feature of the contract ". . . has become ultra vires andinvalid by virtue of present war conditions . . ."; and that the respondent, Tampa Shipbuilding Company, and the intervening unions, shall "forthwith cancel the clause in said contract complained of . . . and desist from further executing and performing the same." (Italics supplied by us).

We think that the primary question involved in this appeal is whether, at the instance of the Attorney General of Florida, the shipbuilding company, which is engaged in building vessels exclusively for the Navy Department in times of war and under Government contract, may be required to desist from adhering to a "closed shop" contract, the conditions of which have been formulated by the Federal Government; neither the Federal Government, the shipbuilding company nor the unions involved being here complaining.

We are dealing in this case with two parties sui juris who have entered into a contract under the conditions above set forth, which both parties were competent to make and execute, and which the circuit judge has properly adjudged to have been lawful and valid at the time it was made; but a clause and condition of which he has held to be unenforceable because our country is now at war.

Neither the shipbuilding company nor the unions, who are the parties to the labor agreement, nor the Government, is complaining that such agreement is invalid or that the contracts for building ships are not being prosecuted and completed on schedule. The Attorney General of the State is the sole moving party, presumably on the hypothesis that an appreciable portion of the citizenry of the State is affected by the provisions for the employment of union labor exclusively — a situation not supported by the record because the complaints of fewer than a score of workmen were recounted. Has the Attorney General authority to prosecute this action? If so, has he made such showing on the record as will authorize the entry of a final judgment or order striking down the contract?

If the Attorney General may prosecute this action, it must be on the ground that by the operation of the contract between the parties the public policy of the State is being violated. The question of public policy has been ably discussed by this Court in A. C. L. RR. Co. v. Beazley, 54 Fla. 311, 45 So. 761. See also City of Leesburg v. Ware, et al., 113 Fla. 760,153 So. 87. The question of whether the court should interfere with controversies of this character as a matter of public policy was referred to in Jetton-Dekle Lumber Company v. Mather, et al., 53 Fla. 969, 43 So. 590, where we said:

". . . moreover, may it not be judicial to add that as the questions trench so close upon the political, they may finally be solved only by the political departments of the government?"

Whether or not the provisions of a contract involving the manufacture of materials to be used exclusively in the prosecution of the war are helpful or harmful to the prosecution of that effort, is a subject over which neither State officials nor State courts have any inherent jurisdiction; and, as there exists no statute, either State or Federal, vesting such jurisdiction there, the power to determine such matters must lie where Congress, acting under the Federal Constitution, has placed it — in the Federal Government. The Constitution of the United States vests in the President and in the Congress full power to declare and wage war. This vesture of power carries with it all those implied powers necessary to fully effectuate this express enumerated power. McCulloch v. Maryland, 4 W. 316. The Federal power to wage war being absolute, it must necessarily be exclusive. See Ex parte Milligan, 4 Wall. 2.

This express grant of power, says the Supreme Court of the United States, in Gordon Kiyoshi Hirabayashi v. The United Statee of America, (October Term, 1942, dated June 21, 1943):

"— extends to every matter and activity so related to war as substantially to affect the conduct and progress. The power is not restricted to the winning of victories in the field and the repulse of enemy forces. It embraces every phase of the national defense, including the protection from injury and from the dangers which attend the risk, prosecution and progress of war. 11 Wall 268, 303-314; Stewart v. Kahn, 1 Wall. 493, 506-7; Selective Draft Law Cases, 245 U.S. 366; McKinley v. United States, 249 U.S. 397; United States v. McIntosh, 283 U.S. 605, 622-623."

The National War Labor Board was created by executive order January 12, 1942, for the purpose of procuring an uninterrupted prosecution of the war on the part of labor and industry. This Board was given the duty of disposing of all labor disputes which might affect the war effort. In consideration of labor agreeing to a policy of no strikes for the duration of the war, labor was given the right of collective bargaining, and the National War Labor Board was set up to settle all disputes peacefully. Now if the Executive Department of each of the several States, through its Attoney General, is allowed to question in the courts of the several states whether as a matter of public policy the war effort is being properly prosecuted, then a clash is inevitable among state tribunals and between them and Federal agencies expressly created for that purpose.

It is next contended that the challenged clause of the contract is abhorrent because it effectuates a monopoly of labor in restraint of the free right to work. Perhaps that is the indirect effect of such contract, in limited degree. But assuming that to be true and that such was its purpose, it does not follow that such contract is illegal or violative of public policy. Such monopoly is not illegal per se, nor is it contrary to any applicable statute. Public policy is not thereby violated, because Congress, by at least three statutory enactments, has affirmed the right of laborers to combine and act in the interest of the group. By the Norris-LaGuardia Act, 29 U.S.C.A. No. 101-105, Congress prohibited the use of injunction to interfere with the orderly combination and action of labor unions; by the Anti-Trust Act, of 1914, Congress deliberately exempted labor unions from application of its provisions; and by the National Labor Relations Act, 29 U.S.C.A. Sec. 151, it definitely established the right of labor organizations to combine and bargain collectively for the performance of labor. This established the legality in this regard of contracts such as we are now considering here.

With the wisdom of these statutes, or with the wisdom of the public policy which they establish, we cannot be concerned. The cold fact is that Congress has ordained that except where applicable statute prohibits, labor unions may indulge in practices which may produce monopolistic results, and also may combine and through one and the same representative, bargain and contract together and collectively for the performance and execution of all the labor required by any employer to be performed and in regard to which such employer is willing to enter into such contract.

But, aside from the question of the authority in the Attorney General to maintain this action, the decree is erroneous, on at least one other ground. We find no proof in the record that compliance with the contract has resulted in a retardation of the war effort. For this alone, the decree would have to be set aside; for it was upon this ground, and this ground only, that the trial court struck down the "closed shop" clause of the contract. There is some evidence in the record that some persons have been discharged who would not have been except for the challenged provisions of the contract. It is contended that virtually all of the labor turn-over was occasioned by failure of workmen to maintain union membership. But the facts do not support the contention.

It appears that the Tampa Shipbuilding Company maintains a payroll of approximately 12,000 employees. The testimony is that the company is obliged to hire approximately 600 new workmen a month in order to maintain this employee level. The inference attempted to be drawn from this turn-over is that this situation has been brought about, directly or indirectly, as the result of the closed shop agreement. However, such inference cannot be substantiated by the facts of the case. It is a matter of common knowledge — the industrial circles at least — that labor turn-over is inevitable, and is to be expected at all times in more or less degree. Many factors are responsible for this situation. A "quit," which is defined by the United States Bureau of Labor Statistics as a termination of employment by the worker because of his desire to leave, may result from dissatisfaction with wages, hours or conditions of labor. Sickness, disability, old age, death, or expected call to military service, may likewise be influencing factors. A "discharge" is a termination of employment at the will of the employer, with prejudice, because of some fault on the part of the worker. Insubordination, tardiness, incompetence, slothfulness, and dishonesty are some of the more common causes of discharge. A "lay-off" is a termination of employment at the will of the employer, without prejudice to the worker. Lay-offs may be due to lack of orders, technical changes, or the failure of flow of parts or materials to the job, as needed. Whatever the causes, quits, discharges and lay-offs are classified as "Labor separations." See United States Bureau of Labor Statistics, Handbook of Labor Statistics, 1936, pp. 803-804.

Apparently, labor separations (quits, discharges, lay-offs) at the Tampa Shipbuilding Company plants and shops are approximately 5 per centum per month. Is this so much higher than the average of labor separations in the industry, generally, as to raise an inference that other than ordinary normal causes are responsible for the labor condition there?

According to the official statistics published by the United States Bureau of Labor, average total separations (quits, discharges and lay-offs) in the entire shipbuilding industry in the United States for the month of January, 1941, was 7.91%; for July, 1941, 5.63%; for September, 1941 6.15%. Even before the declaration of war, therefore, the average separation rate for the industry generally was higher than it now is at the Tampa Shipbuilding Company in times of war. At the rates revealed, and assuming a payroll of 12,000 employees, the normal labor separations in the entire industry for the month of January, 1941, would have been approximately 950; and yet, for the Tampa Shipbuilding Company, it is only 600. In July, 1941, there would have been on the average, nationally, approximately 675 separations for every 12,000 employees; and in September, 1941, there would have been 738 — figures much higher than those shown for the respondent company. See Labor Turnover in Manufacturing Industries, United States Department of Labor, Bureau of Labor Statistics.

Complete statistics are not available for the shipbuilding industry for months subsequent to the entry of the United States of America into World War II; but from such figures as are available, it appears that the national average in the industry of quits alone for January, 1943, was 6.98%; for February, 1943, 5.9%; for March, 1943, 7.11%; and for April, 1943, 6.3%. Total separations for male workers in the industry for August, 1943, were 10.84%; and for female workers were13.98%.

These are but a few of the statistics taken at random from the official compilations of the United States Bureau of Labor. But they serve to illustrate, we think, that there is nothing peculiarly significant about the labor turnover at the Tampa Shipbuilding Company's plants and shops, for, manifestly, the separation rate there is much lower than the separation rate was and is for the industry in the nation, before and during war times.

There is evidence that some people have not been employed who might have been employed, had it not been for the challenged provisions of the contract. But there is no evidence that the thousands of efficient and reliable employees who were employed under this contract would have been available for the carrying on of the work, without the benefit of such contract. In this consideration, the contract and operations under it, must be viewed as a whole and when considered in its entirety, there is no proof that the performance of the contract has in anywise created a condition more adverse to the prosecution of the war effort than that which would have obtained had the parties not entered into the contract. Nor is there any proof that such contract has in fact retarded the war effort.

We admit that every man and woman not lawfully incarcerated or otherwise incapacitated, has the right to work and earn a livelihood. But it does not follow that all have the right to require any particular person, firm or corporation to give them employment as a matter of right of contract between the employer and employee. The right of contract has been lawfully exercised in the present case.

No purpose will be served by discussing in detail the merits or demerits of the Union closed-shop policy. 'Sufficient to say, that the Courts have uniformly declined to hold the Union closed-shop clause against public policy, where no controlling statute exists; but have sanctioned such contracts when freely entered into without malicious design to others. Jacobs v. Cohen, et al., 183 N.Y. 207, 76 N.E. 5; Williams, et al., v. Quill, et al., 277 N.Y. 1, 12 N.E.2d 547. See also Section 157, National Labor Relations Act, guaranteeing to labor the right to organize and bargain collectively. Therefore, the parties may negotiate any contracts not contrary to law or good morals. Management is free to hire only union men if it chooses. Likewise, labor is free to work only with Union men, if it chooses. The fact that a few laborers may be denied work in the particular plant or shop, unless they join the Union, will not, of itself, vitiate such contract.

In the present case it is shown that the Tampa Shipbuilding Company does not use all labor in the area. At least one other shipyard is being operated in the county — and that upon an "open shop" basis. No claim can be made, therefore, that work at the shops and plants of the Company is the only avenue open for employment.

It must be recognized that this is a case of first impression and that it was instituted by the Attorney General in good faith and as a zealous effort to pursue what he conceived to be his duty in behalf of the citizenry of Florida. But our conclusion is that the remedy for the evil — if it be an evil — is one that must be reached elsewhere than in the State forum. We have found no authority vested in courts to write new contracts for parties sui juris, contracting in regard to a lawful subject matter. That is exactly what we should do here if we should strike down any of the material conditions of the contract agreed upon between the parties. One consideration on the part of the Unions for the contract was the promise not to strike during the progress of the war. If the agreement is interfered with by the court the result would be to release them from that promise. Thus, would be given back to them a pressure weapon well recognized, which, if resorted to, would obviously retard the war effort.

The judgment must be reversed with directions that the information be quashed.

So ordered.

BUFORD, C. J., CHAPMAN, THOMAS, ADAMS and SEBRING, JJ., concur.

TERRELL and BROWN, JJ., dissent.