Leon Handbag Co. v. Local 213 of Leather, Luggage & Handbag Workers

appeals from the judgment entered upon an order sustaining a general demurrer to its complaint.

In its complaint filed on April 9, 1968, Leon alleged that it had an existing collective bargaining agreement with Local 213 of the Leather, Luggage and Handbag Workers, an AFL-CIO affiliated labor association, which included a no-strike, no-lockout provision and a sub-contracting provision which reads: '‘Outside contracting shall be permitted in extreme emergencies and after consultation with the Union. Except in extreme emergencies, no contracting shall be permitted until full overtime is worked according to shop practice and then outside contracting shall be done in Union shops if available and in all such cases, the Union shall be advised where the work is to be done. Embroidering, perforating and fancy trimmings may be given out provided such work cannot be done in the shop. ” (Section 18.)

The agreement also contained a broad grievance and arbitration procedure (Section 13) : “Any grievance, difference or dispute which arises concerning working conditions or interpretations or application of this agreement shall be presented to the shop committee and the Employer jointly. If no adjustment is made within forty-eight (48) hours after the matter is so presented, the complaining party may present the matter in writing to the other party and a meeting between the Union representative, the Employer and the shop committee shall be held within forty-eight (48) hours period, and then either party may immediately thereafter demand arbitration; said arbitration to be by an arbitrator agreed upon by both parties within twenty-four (24) hours, so if no arbitrator is so selected, then by an arbitrator selected by the California Conciliation Service. The arbitrator’s decision shall be final and binding upon both parties. In event of a dispute involving a discharge, the arbitrator may order reinstatement with or without back pay as he deems just. ”

As a result of changes in the shoe and handbag industry, Leon decided “to cease manufacturing handbags and to engage in the jobbing of handbags which plaintiff would import from other countries and offer to sell at wholesale as well as to develop certain specialty lines of handbags which it

[242]

would not manufacture but would procure through, having the same manufactured by contractors who would be entirely independent from and separate and apart from plaintiff.” Leon notified the union by letter on March 25, 1968, of its intentions to cease manufacturing handbags on April 1, 1968. The union notified Leon that, under the collective bargaining agreement, Leon could not cease manufacturing or acquire handbags for sale through a contracting operation. Leon then filed its complaint and seeks therein to have the court declare that it has the right to change its business to jobbing and to cease manufacturing and may as part of its jobbing business have handbags made for it by independent contractors. Union demurred generally to the complaint. The court sustained the demurrer and noted: