JAVIER BAUTISTA et al., Respondents, v. PAUL JONES et al., Appellants, 25 Cal. 2d 746

GIBSON, C. J. Plaintiffs brought this action to enjoin defendants from coercing or preventing milk companies from supplying plaintiffs with milk or milk products. By stipulation the ease was submitted on the pleadings and affidavits filed by the parties. Defendants have appealed from an order of the trial court awarding a permanent injunction] Plaintiffs, Bautista and Macias, residents of California, were jointly engaged in the business of distributing milk and milk products to retail dealers in Los Angeles County for the past seven or eight years.

They purchased their milk and milk products from brokers or wholesalers and distributed it in automobile trucks which they owned and operated themselves. They employed no other persons and had no need for employees. They invested considerable sums of money for equipment and built up a business and a good will, realizing substantial yearly profits. The defendant Milk Drivers and Dairy Employees Union, Local 93, is an unincorporated labor organization.

It admits to membership “milk-wagon drivers, helpers and workers generally who are citizens of the United States.” Defendant Paul Jones is the business agent and secretary-treasurer of Local No. 93. The union has “union shop” contracts -with about ninety-five per cent of the milk brokers in Los Angeles County, and, according to the affidavit of the secretary-treasurer of the union, the companies signing the agreement have agreed that they will employ only union members in good standing. Thus, in practically the entire locality no one but union members may work as employees.

The agreement also provides that the employers will not sell dairy products to any distributor unless he observes the same conditions of employment required of the employers. The defendant union, having so organized the milk industry, proposed to plaintiffs that they employ members of Local No. 93 to drive their trucks. Plaintiffs declined to do so, but thereupon filed applications for admission to union membership. The applications were rejected by the union “on the ground that plaintiffs were independent peddler distributors.” No other ground of rejection was mentioned.

Thereafter the union sent to each of the milk brokers with whom it had contracts the following communication: “Dear Sir: For some time Local Union #93 has been confronted with the problem of the independent peddler distributors who have been from time to time taking business from the legitimate wage earners who are members of Local #93. At a regular meeting of Local #93 on October 23rd, there were a number of applications for membership filed by the independent peddler distributors which were discussed at some length by the members present at that meeting, after which they were rejected.

The officers of Local #93 were instructed to see that the employers who held agreements with Local #93 comply with Paragraph 22 of our agreement on or before November 30, 1941. As these men are not members of the Union and the membership does not see fit to admit them to Union membership, it seems there is only one way left, and that is to discontinue selling to these independent peddler distributors. Hoping you will cooperate in cleaning up this matter, Very truly yours, Paul D.

Jones, Sec ’y Treas. ’ ’ The trial court found that by the above notice and by oral statements the union demanded that the brokers cease delivering milk or milk products to plaintiffs, among other independent distributors, and that the brokers understood the notice to mean that if they continued to supply plaintiffs, the union would "apply economic pressure to enforce such request and demand by means of strike, picketing and boycott. ’ ’ The court further found: "That the purpose of said Local No. 93 and its agents was to prevent the plaintiffs from obtaining any milk or milk products with which to carry on their independent business of milk distributing to their retail customers, and thereby to compel plaintiffs to employ as drivers of their trucks members of said Local No. 93, and to discontinue driving their own trucks and doing their own work of conducting their business with their own hands.” (Italics added.) The brokers complied with the demands of the union, and plaintiffs, thus prevented from obtaining any milk or milk products, were compelled to discontinue their business.

They brought this action for injunctive relief. The trial court, concluding that the purpose of the union was unlawful and not reasonably related to legitimate activities of labor organizations, permanently enjoined the union and its agents and members from preventing plaintiffs from obtaining milk or milk products and from coercing brokers to refrain from selling such to plaintiffs. Defendants Local No. 93 and Paul Jones have appealed from the judgment, contending that the activities of the union, as found by the trial court, were not unlawful. The case of James v.

Marinship Gorp., ante, page 721, [155 P.2d 329], furnishes the starting point for the consideration of the special problems presented herein. We held in that, case that a union cannot maintain an arbitrarily closed union and a closed shop, and that therefore it cannot use economic pressure to compel the discharge of workers for lack of union membership when it arbitrarily excludes them from membership.

But we also reaffirmed the well-established rule that 'if the object of a union is reasonably related to the legitimate interests of labor, and the means employed are proper, the union cannot be enjoined from using concerted action to enforce its demands. The right to work, either in employment or independent business, is fundamental and, no doubt, enjoys the protection of the personal liberty guarantee of the Fourteenth Amendment to the federal Constitution, as well as the more specific.provisions of our state Constitution. (Cal. Const., art. I, §§ 1, 13; see Suckow v.

Alderson, 182 Cal. 247 [187 P. 965] ; Angelopulos v. Bottorff, 76 Cal.App. 621 [245 P. 447].) But this right, like others equally fundamental, is not absolute. It is safeguarded from legislative action which discriminates against a person or class of persons in respect of opportunities to obtain work or enter into business (Yick Wo v. Hopkins, 118 U.S. 356 [6 S.Ct. 1064, 30 L.Ed. 220]; Abe v. Fish & Game Commission, 9 Cal.App.2d 300 [49 P.2d 608]) ; and it is also protected in some degree against arbitrary action by private organizations, including employers and labor unions. (James v.

Marinship Corp., supra.) But it is subject to many legislative restrictions familiar to all, such as statutory limitations on working hours, minimum wages, age limits for employment, licensing acts, safety regulations, and a host of others. It is equally subject to peaceful, economic pressure by labor organizations seeking legitimate ends, such as conditions of work, collective rather than individual bargaining, seniority privileges and other methods of advancement, and the union or closed shop. (See McKay v. Retail Auto. S. L. Union No. 1067, 16 Cal.2d 311 [106 P.2d 373] ; C. S. Smith Met. Market Co. v.

Lyons, 16 Cal.2d 389 [106 P.2d 414] ; Shafer v. Registered Pharmacists Union, 16 Cal.2d 379 [106 P.2d 403] ; American Federation of Labor v. Swing, 312 U.S. 321 [61 S.Ct. 568, 85 L.Ed. 855].) The businessman-worker operating in an industry or field in which he competes with organized workmen may like-wise be subjected to the same means of persuasion as any other workman to join the union and conform to the conditions regulating union labor. Directly in point is the decision of Cafeteria Employees Union v. Angelos (1943), 320 U.S. 293 [64 S.Ct. 126, 88 L.Ed. 58].

In that case plaintiffs owned operated a cafeteria as partners, without aid of any employees. The defendant labor union picketed the cafeteria "in an attempt to organize it." A New York court granted an injunction on the ground that there was no "labor dispute" within the meaning of the New York Antiinjunc-tion act.

The United States Supreme Court reversed the judgment, stating (p. 126 [64 S.Ct.]): "But as we have heretofore decided, a state cannot exclude working men in a particular industry from putting their case to the public in a peaceful way 'by drawing the circle of economic competition so small as to contain only an employer and those directly employed by him.' American Federation of Labor v. Swing, 312 U.S. at 326...." (Cf. Bakery & P. Drivers Local v.

Wohl, 315 U.S. 769 [62 S.Ct. 816 [86 L.Ed. 1178].) Some employers have sought to evade the obligations imposed by social security and similar legislation, enacted for the benefit and protection of employees, by inducing employees to sever their employment relationship and become independent distributors. The “peddler distributor system” and its asserted evils are described in Bakery & P. Drivers Local v. Wohl, 315 U.S. 769 [62 S.Ct. 816 [86 L.Ed. 1178], wherein the peddlers refused to join the union or to conform to its rules, such as a six-day week.

It was held that the union’s peaceful picketing could not be enjoined. In Emde v. San Joaquin County etc. Council, 23 Cal.2d 146 [143 P.2d 20, 150 A.L.R 916] , the union published an

article calling attention to the asserted violation of an agreement by the dairy owners through the hiring of nonunion drivers, some of whom had been union members and were persuaded to become independent contractors. It was held, that, the union had a right to publish the facts concerning the existence of a bona fide labor controversy, and a judgment for damages for libel was reversed.

And although the court was divided on the result all members were in agreement that the decisions of the United States Supreme Court establish the general proposition that the peddler distributor system, if deliberately introduced for the purpose of injuring the legitimate interests of organized labor, or if it operates with this effect, may be met with appropriate concerted action by the unions.

The instant case, however, is entirely distinguishable from those eases, in two vital respects: First, it is not a case of attempted introduction of the peddler system by employers as a means of lowering the union’s conditions of work, since both plaintiffs entered the business on their own initiative many years ago. Second, it is not a case of the peddler distributor attempting to compete with union workers on unequal terms, either for his own interests or those of the employer.

The two plaintiffs sought to join the union, but were refused admission on the sole ground that they were “peddlers.” The threat to picket, boycott, and strike was then made to prevent plaintiffs from continuing as businessmen-workers. Thus the question before us does not relate to the right of the union to take measures reasonably necessary to protect its members from unequal or unfair competition, but, instead, to the asserted right to make the possible evils of a system the basis for complete deprivation of the opportunity of particular individuals to work.

In dealing with a question of such gravity we must take notice of- the far-reaching effect of any such decision as the union urges upon us. Milk is only one commodity distributed by retail delivery, and not all businesmen-workers are engaged in the retail distribution of commodities. The union’s position would have an identical effect on the laundry and dry-cleaning driver, the barber and the plumber, the watchmaker and the groceryman, the service station operator, and the farmer.

In a word, all businessmen-workers operating without the aid of employees will be affected by the result of this case, and a decision which dooms them to extinction at the hands of powerfully organized labor unions cannot be lightly made. Ironically, one of the goals toward which workingmen strive, namely, the greater security and opportunity of an independent business, is the subject of attack by the very group which may, in many instances, profit by it. Nor can the elimination of the small independent farmer from our economic life be contemplated without the most serious misgivings.

We think the true answer to this question will be found in the realization that the businessmen-workers constitute a minority group, whose activities are not fundamentally inimical to the public interest or to the special interest of organized labor, and who therefore are entitled to the same treatment as any other minority group.

The elimination of such persons from our economic life is no more a legitimate object of union activity than would be the elimination of Negroes ; and any union which exerts economic pressure to obtain the discharge of the businessman-worker as such, and at the same time excludes him from union membership on that ground alone, transcends the bounds of legitimate union activity. (See James v. Marinship Corp., ante, p. 721, supra.). The case of Senn v. Tile Layers Protective Union, 301 U.S. 468 [57 S.Ct. 857, 81 L.Ed. 1229], is not inconsistent with this view.

In that case the defendants sought to unionize plaintiff’s employees, and to persuade plaintiff Senn to sign an agreement that all work should be done by union tile layers, which would have prevented Senn from doing any further work as a tile layer.

The Wisconsin court denied Senn an injunction against peaceful picketing, and the United States Supreme Court, in affirming that judgment, held that it was a matter for the state to determine whether to permit unions to endeavor to induce an employer to agree to refrain from using his hands, and that “Whether it was wise for the state to permit the unions to do so is a question of its public policy-not our concern.

The Fourteenth Amendment does npt prohibit it.” Thus the Senn case merely determines that there is no absolute federal constitutional right of an individual to work with his hands, and it declares that the legitimacy of the objects of union concerted action is a matter of state policy. It is, of course, improper in this proceeding to consider what means the union may adopt to eliminate the alleged evils of the peddler distributor system.

The record shows that nothing of this sort was attempted but, instead, the union flatly refused to accept plaintiffs into membership, and offered no terms upon which they would be permitted to work. This position of the union may be contrasted with numerous instances which our economic history discloses of businessmen-workers, including distributors of retail commodities and service drivers, who are members of labor unions and have worked in harmony with union employees.

In the very opinions relied upon by defendants as establishing their right to concerted action against peddler distributors, it appears that efforts were made by the union to induce the peddlers to join or to comply with working hours or. other conditions applicable to union members. (See Bakery & P. Drivers Local v. Wohl, 315 U.S. 769, supra; Cafeteria Employees Union v. Angelos, 320 U.S. 293 [64 S.Ct. 126, 88 L.Ed. 58] supra; Emde v. San Joaquin County etc.

Council, 23 Cal.2d 146, supra.) Defendants assert that the' inapplicability of social security and workmen’s compensation laws gives to the peddler a special bargaining advantage with the employer by permitting him to work for a lower return. This may be true, but the problem thus presented must be solved without entirely eliminating businessmen-workers from the ranks of labor add industry.

Insofar as unemployment insurance is concerned, plaintiffs would not come within the provisions of the law even if they were to hire one or two workmen, since the statutes apply only to employers who hire a greater number of employees. (Unemployment Insurance Act [Stats. 1935, p. 1226 as amended], Deering’s Gen.

Laws, Act 8780d, §9; U.S.C.A., Title 26, Internal Revenue Code, §1607.) If the applicability of unemployment insurance laws were the criterion, then labor would have the right to use its weapons to force the small merchant, the small barber and the corner grocer out of business because, since their trade does not warrant it, they cannot afford to hire enough employees to come within the terms of the statute.

If it seems desirable to bring peddlers and others similarly situated within the purview of the laws relating to unemployment insurance and workmen’s compensation, proposals to accomplish that end must be addressed to the Legislature or the voters. The union may, of course, impose reasonable requirements for membership, and if the regulations adopted are proper the peddler must comply therewith or relinquish his favored position in order to avoid union pressure. If the .peddler meets the conditions imposed, the union must accept him! for membership or give up its demand for a closed shop.

The interests of the peddler member may not be identical with the other union men, but the resultant conflicts and inequalities must be overcome if the legitimate objectives of organized labor are to be achieved and the means of attaining them preserved without arbitrarily depriving the small businessman who operates without the aid of employees of the right to work with his hands. The rights involved are too fundamental to be ignored by either group; they cannot be flouted but must be reconciled, regardless of the difficulties which may confront those faced with the task.

Defendants contend that the terms of the injunction-are too broad, in that it restrained them.from “preventing” plaintiffs from obtaining milk “in any manner or by any means.” This language was, of course, directed to conditions existing at the time of the decree. If the relationship of the parties is altered in such a manner as to justify a modification or vacation of the decree, application may he made therefor. (See Milk Wagon Drivers Union v. Meadowmoor Dairies, 312 U.S. 287, 298-299 [61 S.Ct. 552, 85 L.Ed. 836, 132 A.L.R. 1200].) The judgment is affirmed. Shenk, J., and Curtis, J., concurred.