Greenwald v. Chiarella

Eder, J. Defendant appeals from a judgment for plaintiff entered after trial. The organization suing herein is a barbers’ union; the defendant is the proprietor of a barbershop. On December 10, 1941, he entered into a written agreement with — 763 — the union and agreed to employ and to continue to employ members of the union in good standing; in turn the union agreed to furnish him, upon request, with journeyman barbers, if able to do so. The contract in subdivision (d) of article 5 thereof provides that if the union is unable to supply said help the proprietor may thereupon engage outside aid and that such outside journeyman barber shall immediately apply for union membership; in the event his application is disapproved the proprietor is then required to terminate his services. Subdivision (d) of article 6 contains the following provision which forms the basis óf this action: “ The Proprietor agrees to deduct, on or before the first day of each and every month during the term of this agreement, from the salary due each barber employee, whether or not such employee is a member of the Union, the monthly dues, the amount of which the Proprietor admits having knowledge of, and such other amounts which the Union shall, by written notice, certify to the Proprietor as due from such employee, and immediately transmit said amount to the authorized Union representative for remission to the Union.” The complaint avers the making of the contract; it sets forth this provision, verbatim; it also alleges that between April and July, 1944, the defendant had in his regular employ two journeymen barbers; that defendant failed to deduct the sum of $18 dues for said period and initiation fees in the sum of $50, and neglected to transmit the same to plaintiff. Exhibit 2 is a statement sent to defendant and contains these items: two nonunion men; dues for three months, $18; initiation fees $25 each; total $68. The defendant interposed various defenses; one of them challenged the validity of said provision; the cause was tried before a jury; both sides moved for a directed verdict upon which decision was reserved; the court later rendered judgment for plaintiff. I am of the opinion that this was error and that the complaint should have been dismissed on the merits. The above-quoted provision is known in labor circles as a “ check off ”; the term appears to have been first referred to in Borderland Coal Corp. v. International U. M. Workers (275 F. 871) there defined as a retention by the employer of a sum from the wages of the employee and the paying over of said amount to the employee’s union. It is a device conceived and adopted by labor unions to assure payment of dues and other sums due to it from the members.' “ Check off” is accomplished by the act of the employer deducting, with the consent — 764 — of the employee, a certain sum monthly and as respects the employer, insofar as his obligation to make deduction and transmittal is concerned, it is said to rest purely on contract (Pacific Mills v. Textile Wkrs.’ Union of Amer., 197 S. C. 330; Local 60, &c., America v. Welin Davit & Boat Corp., 133 N. J. Eq. 551). “ Check off ” has been termed a contractual expedient (Local 60, &c., America case, supra); such an arrangement, then, is a matter of contract between the union on the one hand and the employer on the other; the union members while not individually named as parties to the contract, or actually participating therein, are nonetheless regarded in law as parties thereto since the contract is of a collective nature and is deemed the joint and several contract of the members of the union made for them by their agents (Local 60, &c., America case, supra). The provision in the agreement to apply the checkoff system is a valid covenant supported by a sufficient consideration in the assent of the parties to such an arrangement, it being a cause or reason for inducing the parties to enter into the contract ; in a proper setting this arrangement has been recognized as valid (Pacific Mills, case, supra; Local 60, &c., America case supra). It is to lie observed that the employer, though a contracting principal, also becomes the agent of the union and of the union employees for the purpose of making such deductions and transmittals. Of course, only the contracting parties are bound. Failure or refusal on the part of the employer to comply with this provision would involve a breach of contract giving rise to a suit by the union for a recovery of the sums which should have been deducted and remitted to it. A different situation is presented and another question arises where the contract requires the employer to make such deductions and remittances in the case of a nonunion employee who has not consented thereto. It is to be noted that subdivision (d) of article 6 nevertheless requires deductions from the wages of employees who are not union members of initiation fees and dues to the same extent as if they were members of the union although enjoying none of the union privileges or any of its advantages; indeed, for such deduction payments the • nonunion employee is in no manner- whatever compensated by the union. To the agreement in suit the nonunion employee is not a party, yet it subjects him, without his consent, to these deductions and requires the employer to make them and pay them over to the union for its sole benefit. If the union had brought suit directly against these nonunion employees to recover said amounts on the theory that by — 765 — accepting employment with the defendant they thereby assented to the terms of the said provision and thereby authorized the defendant as their employer to make such deductions and transmittals there could be no recovery against them because it is an arrangement clearly lacking in consideration and mutuality. If, instead, the union had exacted from the nonunion employees an assignment to it of these sums, to be deducted by their employer from their wages and transmitted to it as a condition for permitting their employment with the defendant the instrument would be unenforcible for like reason. If on the other hand the employer had made such an exaction in order to meet the union’s demand and made such deductions and remittances to it I think it is equally clear that it would be invalid and that such sums so deducted could be recovered by such nonunion employee. The Labor Law (§§ 196-198) and the Penal Law (§ 1272) inhibit any arrangement or practice which will deprive an employee of wages rightfully earned and to which he is justly entitled; and while these statutes are directed against the employer, in my opinion they nonetheless indicate a policy on the part of the State disapproving of any device or method which will or tends to accomplish such a result and a transaction savoring of that nature should be held to be invalid and unenforcible; it is an unconscionable imposition in such circumstances and offensive to public sentiment, said to be another name for public policy (Veazey v. Allen, 173 N. Y. 359, 368). By this provision the union is in effect endeavoring to accomplish by indirection that which it could not legally attain directly, utilizing the employer of nonunion help as a conduit to siphon for it these sums which it could not itself legally acquire from them. The Trial Judge appreciated the difficulty and sought to justify a recovery by plaintiff on the following theory: ‘ * It is assumed that these new employees knew or were informed by the defendant that he was operating a closed shop, and it might be argued that, in accepting employment in a closed shop they consented to the requirements of the closed shop agreement.” (Italics added.) There is not the slightest basis for this assumption and assumed consent; the logical assumption is to the converse, that they did not consent to be bound thereby from the very fact that they were nonunion barbers. It has been intimated that there is legal sanction for this provision as applied to nonunion employees because they were — 766 — entitled, although not members of the union, to the benefits of the collective bargaining agreement; I am unable to see that this furnishes a consideration; the law appears to confer the benefits of collective bargaining equally upon union members and nonunion employees, making no discrimination; collective bargaining* is for the benefit of all employees (National Labor. Relations Act, § 9, subd. [a]; U. S. Code, tit. 29, § 159, subd. [a]) and a collective bargaining representative is required to act on behalf of both union and nonunion employees (see Steele v. L. & N. R. Co., 323 U. S. 192); the union therefore gave up nothing as a basis or as a consideration in return for the deduction requirement thus imposed on the employer as applied to nonunion employees. As I view the case, irrespective of any other feature, and assuming the mentioned provision to be valid, in no event has there been a breach of contract shown. An initiation fee and dues are obligations arising from membership; “initiation fee ” is a sum paid on joining an organization for the privilege of membership (Derby v. United States, 17 F. 2d 119, 120); “ dues ” refers to obligations into which a member of an organization enters to pay a sum, usually fixed by the by-laws, at recurring intervals, for the maintenance of the organization, for-its general upkeep (Thompson v. Wyandanch Club, 70 Misc. 299). It is only when membership has been acquired that the payment of such fee and dues becomes an obligation of the member and until then the organization may not properly demand such sums. Subdivision (d) of article 5 of the contract imposes no obligation on the employer to compel the nonunion employee to join the union; what it does impose is a requirement on the part of such employee to do. so, viz., “ said Journeyman Barber shall immediatély make application for membership in the Union ’ ’. Inasmuch as the said employees did not become members of the union no initiation fees or dues became due from them and the defendant as their employer was without legal sanction to make such deductions. The union therefore never acquired any legal right to these sums. Upon the facts shown the failure or refusal of the defendant to make such deductions and pay them over to the union was not a breach of contract. The union clearly has no cause of action and the complaint should have been dismissed.' In view of the position here taken I regard it as unnecessary to consider other points made in the briefs. It was error to award plaintiff a recovery. — 767 — The judgment appealed from should be reversed, with $30 costs, and the complaint dismissed upon the merits, with costs.