Lammonds v. Aleo Manufacturing Company

JOHNSON, J. Decision here turns on whether the plaintiff is the real party in interest, within the purview of G.S. 1-57, and as such has the right to maintain this action. The defendant insists that since the plaintiff is not a party to the collective labor contract or to the arbitration, she may not maintain the action. The defendant further contends that if any action of this type is appropriate, it must be brought by the labor union. On the other hand, the plaintiff insists that she as a third party beneficiary is entitled to sue into the contract for back pay and other benefits due her under the terms of the contract. These contentions were resolved in favor of the plaintiff by the court below, and our study of the complaint leaves the impression that the ruling is correct. The third party beneficiary doctrine is well established in our law. Stated in general terms, and leaving out of consideration certain limitations and exceptions (12 Am. Jur., Contracts, Sections 279 to 284), the rule is that a third person may sue to enforce a binding contract or promise made for his benefit, even though he is a stranger both to the contract and to the consideration. Trust Co. v. Processing Co., 242 N.C. 370, 371, 88 S.E. 2d 233; Canestrino v. Powell, 231 N.C. 190, 56 S.E. 2d 566, and cases cited. For valuable analysis of third party beneficiary decisions of this Court, see 13 N. C. Law Review, p. 94 et seq. See also 12 Am. Jur., Contracts, Section 277; 39 Am. Jur., Parties, Section 21; Annotation: 81 A.L.R. 1271, 1281. A comprehensive annotation on the subject of “Right of Individual Employee to Enforce Collective Bargaining Agreement against Employer,” appears in 18 A.L.R. 2d p. 352 et seq. This treatise, embracing collation of cases from various jurisdictions, discloses that by what appears to be the decided weight of authority it is generally held that an employee may maintain an action to enforce a collective labor contract made between the labor union and the employer, in respect to provisions inserted in the contract for the benefit of the employee. This is particularly so with respect to wage provisions. See Annotation 18 A.L.R. 2d 352, 365. See also Annotation 95 A.L.R. 10, 41; 31 Am. Jur., Labor, Section 119 (1955 Supp.); 56 C.J.S., Master and Servant, Section 28 (83) b., p. 270, and 1955 Supp. The rule is supported in *753 principle by what is said in these decisions of this Court: James v. Dry Cleaning Co., 208 N.C. 412, 181 S.E. 341; Coley v. A. C. L. R. R., 221 N.C. 66, 19 S.E. 2d 124. In James v. Dry Cleaning Co., supra, the plaintiff sued for back salary due under the President’s Re-employment Agreement, made pursuant to the National Industrial Recovery Act. Stacy, C. J., speaking for the Court, said: “That the plaintiff is entitled to sue upon the ‘President’s Re-employment Agreement,’ voluntarily signed by the defendant, either in equity, under the doctrine of subrogation, or at law, as upon a contract made for the benefit of a third person, is fully established and supported by the decisions in this jurisdiction.” In the case at hand the complaint alleges these crucial facts: (1) the existence of a collective labor contract between the defendant and the labor union, under which the plaintiff as an employee was entitled to contract benefits, and (2) that the plaintiff was required to work under an increased work load assignment, or stretch out, in violation of the contract, and for which violation the plaintiff is entitled to back pay under the terms of the contract. These allegations and others of a supporting nature, when taken as true, as is the rule on demurrer, are sufficient to support the inference that the defendant violated contractual provisions inserted in the contract for the benefit of the plaintiff, for the alleged breach of which she is entitled to recover. It necessarily follows that the demurrer was properly overruled. The plaintiff is entitled to an opportunity to offer her evidence and see if she can make good the allegations of her complaint. The fact that disputed provisions of the contract have been arbitrated under the procedure outlined in the contract does not make the question here presented one of arbitration and award under our Uniform Arbitration Act. G.S. 1-544 et seq. Nor does our statutory procedure for the voluntary arbitration of labor disputes as contained in Chapter 95, Article 4 (a), of the General Statutes (G.S. 95-36.1 et seq.), preclude maintenance of this action by the plaintiff. These statutory methods of arbitration provide cumulative and concurrent rather than exclusive procedural remedies. See Thomasville Chair Co. v. United Furniture Workers of America, 233 N.C. 46, 62 S.E. 2d 535; Skinner v. Gaither Corp., 234 N.C. 385, 67 S.E. 2d 267; Brown v. Moore, 229 N.C. 406, 50 S.E. 2d 5. Here the arbitration agreement is governed by the common law. The complaint alleges that the grievances of the workers in respect to the increased work load, or stretch out, have been arbitrated under the agreement; that the arbitrator’s decision determines that the defendant has violated the terms of the contract, and that by reason thereof the plaintiff is entitled to an adjustment of wages and back pay; that the *754 defendant has failed to comply with the arbitrator’s decision and has refused to make the adjustment due the plaintiff in accordance with the terms of the contract. These allegations in nowise preclude the plaintiff, a third party beneficiary, from recovering for an alleged breach of contract. On the contrary, when taken as true on demurrer, the allegations tend to make the plaintiff’s right to recover more definite and certain. The decisions cited and relied on by the defendant are either factually distinguishable or are not considered controlling with us. The judgment below is Affirmed. DeviN, J., took no part in the consideration or decision of this case.