92 N.J. Eq. 131 | New York Court of Chancery | 1920
This bill is to restrain a conspiracy to prevent the performance of a building contract by means of a strike to compel a closed shop.
The Lehigh Structural Steel Company contracted to fabricate and deliver to' the Atlantic Smelting and Refining Works, f. o. b. Allentown, Pa., the structural steel for a building at Brills, Newark, and also to' erect it. The Lehigh company sublet the erection to Donnell-Zane Company. The steel had been delivered and paid for, and Donnell-Zane had nearly completed the work when its employes, erectors, struck by order of Timothy Tierney, the business agent of Local No. 11, International Brotherhood of Bridge and Iron Workers of America, of which local, of Newark, they were members. ■ Donnell-Zane then declared its intention of employing other available labor which, of course, was non-union, and was notified by William E. Lehman, the architect of the building, and the sole representative and major-domo of the Atlantic company, that it would not be permitted to finish the job with other than union workmen, his stated reason being that there would be a general strike of the allied trades on the works if it were done otherwise. That that
“To the Lehigh Struotwal Steel Company:
“Gentlemen—You are hereby notified to cease any further work under contract made between the undersigned and the Lehigh Structural Steel Company for the erection of all structural steel for the refining plant being built for the undersigned on Doremus avenue, Newark, New Jersey. This notice is given to you because you insist upon using nonunion labor to complete the said work. The contract herein referred to is the one referred to as ‘Our Contract No. 723’ in your letter of November 15th, 1919, addressed to the undersigned wherein you' agree to do said work for the sum of $2,970.
“ATLANTIC SMELTING AND REFINING WORKS, INC..
“By Morris Birenbaum, Treas.”
The complainants thereupon filed this bill reciting the foregoing facts, and further setting up that the strike was ordered to force them, against their will, to conduct their business on the closed shop plan, viz., to employ none but union men. Tierney and Local No. 11 admit and avow this to be their object, and plead in justification that the Building Trades Employers’ Association of the city of New York (an association of
The strike is purely sympathetic. Tierney and the men who obeyed his order had no grievance. He supplied them to Donnell-Zane, and wages, hours, and conditions, were satisfactory and according to the union regulations. Local No. 11 was not a party to the New York contract, nor a beneficiar}1’, except in the sense that all locals are benefited by the achievements of the various units of the federation. The men were not under contract, and individually had the right to quit work as it pleased them, and as members of the federation it ■was their privilege to use the strike in sympathy with the en
The principle of the closed shop'—i. e., the monopolization of the labor market, has found no judicial sponsor. In whatever form organized labor has asserted it, whether to- the injury of employer, or to labor, or to- labor unions outside of the fold, the judiciary, of the country has responded, uniformly, that it is inimical to the freedom of individual pursuit guaranteed by the fundamental law of the land, and contravenes public policy. On the other hand, public policy favors free competition, and the courts have been keen to recognize the right of organized labor to compete for work and wage and economic and social betterment, and to use its weapon—the strike—to- realize its lawful aspirations, but none has gone to the length of sanctioning a strike for a closed shop, which has for its object the exclusion from work of workmen who are not members of the organization. There is a wealth of literature and authority upon the subject in England and in this country. Walker v. Cronin, 107 Mass. 555;
In Folsom v. Lewis, 208 Mass. 336, an injunction was granted restraining a strike called to force the signing of a closed shop agreement. The court said: "The master was, undoubtedly, right in finding that the purpose of the defendants and the real object of the strike were not so much to obtain certain slight advantages referred to in the proposed agreement, as to compel the employers, by inflicting this injury upon them, to submit to an attempt to obtain for the union a complete monopoly of the labor market in this kind of business, by forcing- all laborers who wished to work to join the union, and by forcing all employers to agree not to employ laborers, except upon such terms' as they could make with the combination tligt should control all labor in this business. This has been held to go- beyond the limit of justifiable competition. Conduct directly affecting an employer to his detriment, by interference with his business, is not justifiable in law, unless it is of a kind and for a purpose that has a direct relation to benefits that the laborers are trying to obtain. Strengthening the forces of a labor union, to put it in a better condition to enforce its claims in controversies that may after-wards arise with employers, is not enough to justify an attack upon the business of an employer by inducing his employes to strike.” In Connors v. Connolly, 86 Conn. 641, the hat manufacturers of Danbury, in settlement of a strike, entered into an agreement with the unions to employ union men only. The plaintiff lost his membership in the union and was discharged by his employer as a result of a threat by the union leaders to call a strike if this were not done, according to the terms of the agreement. In a suit for damages against the union leaders, the contract.was relied upon in justification. In dealing with this feature of the defence, Chief-Justice Prentice said that all the authorities were, as far as he had observed, in complete accord in holding “that, where the agreement is one which takes in an
In Curran v. Galen, 152 N. Y. 33, the local organization of the Knights of Labor had a contract with the brewers of Rochester that no employe should work longer than four weeks without joining the union, and if he failed in this, he was to be discharged. The plaintiff, an employe of one of the brewers, refused to join, and his discharge followed the demand made by the defendants (union leaders) of the employer to comply with the agreement. The contract was set up, in justification and was overruled. The court, in a per curiam opinion, said:
In Berry v. Donovan, 188 Mass. 353, it was claimed by the unions that the closed shop- was justifiable in law, on the theory of competition between organized labor and so-called capital for as large a share as possible of the income from their combined efforts in the industrial field. In disposing of this contention, Chief-Justice Knowlton said: “The gain which a labor union may expect to derive from inducing others to join it, is not an improvement to be obtained directly in the conditions under which the men are working, but only added strength for such contests with employers as may arise in the future. An object of this kind is too remote to be considered a -benefit in business, such as to justify the infliction of intentional injury upon a third person for the purpose of obtaining it. If such an object was treated as legitimate, and allowed to be pursued to its complete accomplishment, every employe would be forced into membership in a union, and the unions, by a combination of those in different trades and occupations, would have complete and absolute control of all the industries, of the country. Employers would be forced to yield to all their demands or give up business. The attainment of such an object in the struggle with employers would not be competition but monopoly. A monopoly, controlling anything which the world must have, is fatal to prosperity and progress. In matters of this kind the law does not tolerate monopolies. The attempt to force all laborers- to com
Vice-Chancellor Foster, recently, in Baldwin Lumber Co. v. Local Number 560, International Brotherhood of Teamsters, &c., 91 N. J. Eq. 240, held that coercion, by means of a strike, to compel a closed shop' in the employment of teamsters in the lumber trade, in a territory as large as Hudson county, was unlawful, as against public policy. The soundness of his conclusions is evidently convincing to organized labor, for it has denied itself an appeal.
Curran v. Galen stands as the law of New York on the question of the closed shop to obtain a monopoly of the labor market, although its wide sweep was criticised in the later ease of National Protective Association v. Cummings, 170 N. Y. 315. See Jacobs v. Cohen, 183 N. Y. 207; McCord v. Thompson-Starrett Co., 113 N. Y. Supp. 385; Auburn Draying Co. v. Wardell, 165 N. Y. Supp. 469; affirmed, 227 N. Y. 1.
In the cases relied upon by the defence, the policy of the law towards the principle of the closed shop, announced by the foregoing authorities, is not in the last qualified. Upon an examination of these cases it will be found that the unions convinced the court that their motives were intrinsically self-protective, in a lawful way, and not monopolistic of purpose.
National Protective Association v. Cummings, supra, was a struggle between rival unions. The majority of the court were of the opinion that the motive of the defendant union was the securing of work for its own members, and though the means resorted to were calculated to intimidate the employers of the plaintiffs, they were justified on the ground of lawful competition, and that-tire injury to the plaintiffs in thus preventing them from working, or getting work, was incidental; whereas the minority opinion held to the view that the defendant’s purpose was, through coercing the employer of the plaintiffs by threats of a strike, to drive the plaintiffs’ union out of business and altogether eliminate them as competitors.—a purpose which was as obvious as it was unlawful. The court simply split on the question of fact as to what the true motive was. Apparently, there was no division of minds as to the law upon either hypoth
Jacobs v. Cohen, supra, was a suit on a note given as security . and to be applied as liquidated damages for breach of a contract which required the defendant to employ in his shop workmen affiliated with a union composed of his employes only—a shop organization. A demurrer to an answer setting up that the contract was in restraint of trade and void on the ground of public policy was sustained. Judge Gray, who wrote the opinion in Curran v. Galen, 'distinguishes the two cases thus: “It would seem as though an employer should be, unquestionably, free to enter into such a contract with his workmen for the conduct of the business without it being deemed obnoxious upon any ground of public policy. If it might, operate to prevent some persons from being employed by the firm, or, possibly, from remaining in the firm’s employment, that is but an incidental feature. Its restrictions were not of an oppressive nature, operating- generally in the community to prevent such craftsmen from obtaining employment and from earning their livelihood. * * Their (workmen) combination is lawful, when it does not extend so far as to inflict injury upon others, or to oppress and crush them by excluding them from all employment, unless gained through joining labor organizations or trade unions. This we have decided, and this the law of the state sanctions.” Citing Curran v. Galen.
In National Fireproofing Co. v. Mason Builders’ Association, 169 Fed. Rep. 259, the mason builders’ association and the bricklayers’ unions of New York City entered into a working agreement providing, 'inter alia, that the builders must include in
In White Mountain Freezer Co. v. Murphy, 101 Atl. Rep. 357, the moulders’ union struck for a closed sirope and the bill sought a restraint. The supreme court was asked to rule on certain questions, as matters of law, in advance of the trial. The court refused to rule that a strike for a closed shop constituted a conspiracy, as a matter of law, but held that it established a prima facie case of unlawful interference, which may be justified, and that justification was a question of fact, to be determined as a question of law, only, if upon the evidence reasonable men could come to but one conclusion. It also found itself unable to rule that competition was a justification (citing Pickett v. Walsh, 192 Mass. 572), since there was no evidence of competition before the court to sustain the claim.
National Fireproofing Association v. Mason, it is argued, is dispositive of the complainants’ right to relief, if it is true, as is claimed, that they are not parties to the New York agreement. The difference between the two cases is obvious. In the cited case the plaintiff suffered injury in consequence of a lawful contract entered into between the unions and the builders to secure to the unions certain work in competition with the plaintiff, while here the complainants are victims of a strike, because they refuse to be parties to, or comply with the terms of, an unlawful contract which excludes the employment of non-union men, for which there has not been shown' legal cause oi* excuse. White
The conclusion upon the case as presented is, that the New York contract violates public policy, and that the sympathetic strike is without just cause or excuse and is unlawful.
Lehman and the Atlantic company say they were not parties to the sympathetic strike, and, consequently, not parties to the conspiracy of the unions. _ That they were, it seems to me, admits of no doubt. They were, and are, fixed in mind not to allow the work to be done by non-unionists, and to this end brought suit to restrain the complainants, and when they failed, ordered the complainants off the job for no other reason than that they were going to complete it with the labor of the unanointed. Their excuse is that they feared the wrath of organized labor and were acting in self-defence. In other words, they breached their contract to avert a general strike of the trades unions on the work. That that is not a legal excuse for breaching the contract needs no argument. And that it furnishes a legal excuse for joining the oppressors of the complainants is even less defensible. Their protection lies in the law, not in the graces of those who transgress the law. Their further contention that they were moved to their course by causes wholly independent of the motives of the unions, that they were prompted solely by a desire to escape a labor squabble, and to have their building completed expeditiously, is irreconcilable with their activities and the means they used to accomplish the unlawful aim of the unions, in common with the unions, to make the sympathetic strike effective, viz., by preventing the complainants from employing non-union men. Their motive may not have been co-extensive with that of the unions; they may have been wholly indifferent as to the success of the ultimate object of the sympathetic strike, but a common ground upon which they met the unions, a common motive that actuated them, and made them co-conspirators, was the enforcement of the closed shop at Brills.
Lehman and the Atlantic company ask upon what theory they can be deemed co-conspirators, inasmuch as the proofs show the
The Atlantic company next tabes the stand that the remedy of the complainant Lehigh company is at law for damages, citing McGann v. LeBrecque, 91 N. J. Eq. 307.
The general rule is that compensation in damages is the relief for breach of a contract, and that the remedy is at law and that the measure of damages is the immediate loss, tlié incidental losses., which are often the heavier, being regarded as, too remote to bring into the calculation. Where, however, as here, the complainants are not suing for a breach-, but to prevent a, breach of a contract by unlawful means, and to serve unlawful ends, to the
Mr. Justice Swayze, in the McGann Case, did not intend to question the jurisdiction of equity where the remedy at law is inadequate, but to instruct that in the class of cases he was dealing with the jury and not the chancellor held the yard-stick of the measure of damages, and that the remedy was at law though the injury be irreparable in money.
The Atlantic company further contends that this suit is for the specific performance of a building contract, and that as equity would not entertain jurisdiction to compel the Lehigh company to perform its contract (Atlantic & S. Ry. Co. v. Board of
Technical objection is raised to complainants’ right to maintain this suit because they are foreign corporations, and did not obtain certificates from the secretary of state authorizing them to do business in this state before the bill was filed as provided by section 97 of our Corporation act. Comp. Stat. p. 1657. The Lehigh company is a corporation of Delaware, and Donnell-Zane is a corporation of the State of New York, and neither obtained the required certificate until after.the suit was brought. But that omission does not bar them from suing in this state, if the suit be on a contract, unless the contract was made in this state. Section 98 provides the penalty. It reads that
“until such corporation so transacting business in this state shall have obtained said certificate of the secretary of state, it shall not maintain any action in this state upon any contract made in this state."
It has been repeatedly held that the statute does not reach contracts made outside the state. Faxon Co. v. Lovett Co., 60 N. J. Law 128; D. & II. Canal Co. v. Mahlenbrock, 63 N. J. Law 281; Owen & Co. v. Storms & Co., 78 N. J. Law 154; Slaytor-Jennings Co. v. Specialty Box Co., 69 N. J. Law 214; McMillan Co. v. Stewart, 69 N. J. Law 212; Falaenau v. Reliance Steel Co., 74 N. J. Eq. 325.
The contract in this.case was made at Allentown, Pennsylvania, the principal office of the Lehigh company. Before it was finally reduced to writing and executed there was letter communication of proposals and acceptances for the material and work between the Lehigh companjg at Allentown, and Lehman, the architect, at Newark; and there were also personal negotia
It is not to be inferred from what has been said that the present suit would not have been entertained if the contract had in fact been made in this state, for it is questionable whether this suit is an “action” upon a contract. Falaenau v. Reliance Steel Co., supra. And whether “maintain,” as used in the statute means commence, and that an action upon a contract-would be defeated unless a foreign corporation had its eei*tificate before suit is begun, is also open to debate. There are authorities holding that the certificate is timely if taken out pending the action. Thomp. Corp. § 6720. The points have been argued in the briefs but they are not ripe for decision.
The reciprocity provision of section 101 of the Corporation act, imposing upon foreign corporations taking out certificates to do business in this state, “the same taxes, fines, penalties, licenses, fees, obligations and requirements of whatever kind” as are imposed by the laws of the state of the foreign corporations upon corporations of this state, if they are greater than those of this state, adds nothing, in the present instance, to the penalty imposed by section 98. The Delaware statute prohibits foreign corporations from doing business in the state “through or by branch offices, agents or representatives located in this state” until certified under penalty of a misdemeanor, &c. Rev. Code
There -will be an injunction restraining the strike and the breach of the contract. The form of the injunction will be settled on notice.