Before LUMBARD, Chief Judge, WATERMAN and MOORE, Circuit Judges.
LUMBARD, Ch. J.: The appellant, manager and trainer of a troupe of chimpanzees with which he performs professionally under the name of the "Marquis Family" in theaters, night clubs, circuses, on television, and in motion pictures, instituted this proceeding under § 102 of the Labor-Management Reporting and Disclosure Act of 1959, 29 U.S.C. § 412, demanding injunctive relief and damages for an alleged violation of the procedural rights granted union members by § 101(a)(5) of the Act, 29 U.S.C. § 411(a)(5).*fn1 Upon a motion for summary judgment, the district court dismissed the complaint on the ground that under § 101 (a)(4) the plaintiff could bring no court action against a labor union without first exhausting the internal remedies provided by the union, and that in this case the defendant union had established reasonable procedures by its constitution whereby claims against it by members could be heard within the four-month period permitted by the law.
The controversy between the appellant and the American Guild of Variety Artists, a labor union representing variety entertainers in the United States and Canada, arose out of a breach-of-contract claim made against the appellant by a resort hotel in Las Vegas, Nevada. After failing to settle the dispute by negotiation, the AGVA requested the parties to submit it to arbitration, which they did. A panel of three, one selected by each of the parties to the dispute and the third chosen by the two so designated, met in Los Angeles County, California, on January 12, 1960, and decided in favor of the hotel. The union then advised the appellant that if he did not abide by the award, it would place him on the "National Unfair List" appearing in its monthly periodical "AGVA News." The appellant replied that he intended to move to vacate the arbitration award in the California courts, but never began any such proceedings. When the three months provided by California law for vacating arbitration awards had elapsed, the union proceeded to publish the appellant's name in the August 1960 issue of the periodical under a heading which read as follows:
The rules require that you may not work for any employer, agent, booker or third party who is marked 'Unfair' by AGVA. Violation of these rules subjects you to disciplinary action.
The appellant then began this proceeding in the Southern District of New York, claiming that the listing amounted to disciplinary action within the meaning of § 101 (a)(5) of the Labor-Management Reporting and Disclosure Act of 1959, 29 U.S.C. § 411(a)(5), and that he was, therefore, entitled to specific written charges, a reasonable time to defend, and a full and fair hearing before having his name placed on the list.
The appellant did not, however, seek to utilize the procedure made available by Article XX of the Constitution of the AGVA. This article, entitled "Claims of Members," establishes procedures whereby claims asserted against the union are heard and determined by its Board or Executive Committee. Thus, the first issue before us now is whether the provisio in § 101(a)(4), which protects the right of a union member to sue his union, "provided, that any such member may be required to exhaust reasonable hearing procedures (but not to exceed a foru-month lapse of time) within such organization, before instituting legal or administrative proceedings against such organizations or any officer thereof," required of the appellant in this case that he first have recourse to the internal procedures established by the union's constitution. The exhaustion proviso of § 101(a)(4) does not appear in § 102, which grants members who claim that their rights under § 101 have been infringed a federal forum in which to litigate their disputes with the union.It might also appear from the rejection by the House of Representatives of H.R. 8342, the bill originally reported out of the Committee on Education and Labor, which explicitly provided for exhaustion of internal remedies in § 102, that Congress did not mean to have the exhaustion doctrine apply to the rights granted by § 101, except where, as in the case of the right to sue, it was expressly provided. However, the broad language of the proviso in § 101 (a)(4) includes suits instituted against labor unions in any court on any claim. Absent a clear directive by Congress, the policy formulated over a course of time by courts reluctant to interfere in the internal affairs of private organizations should not be superseded. We hold, therefore, that the provision in § 101(a)(4) applies, as well, to suits brought in the federal courts for violations of the rights secured by § 101.
Judge Dimock in this case read § 101(a) (4) as imposing upon the union member an absolute duty to exhaust union remedies before applying to the federal courts. The legislative history of the section indicates, however, that Congress had no intention of establishing such a rule.*fn2
The statute provides that any member of a labor organization "may be required" to exhaust the internal union remedies, not that he "must" or "is required to" exhaust them. When read in light of the statements made on the floor of Congress by the authors of the statute, it appears clear that the proviso was incorporated in order to preserve the exhaustion doctrine as it had developed and would continue to develop in the courts, lest it otherwise appear to be Congress' intention to have the right to sue secured by § 101 abrogate the requirement of prior resort to internal procedures. In addition, the proviso dictated an outside limit beyond which the judiciary cannot extend the requirement of exhaustion - no remedy which would require proceedings exceeding four months in duration may be demanded. We therefore construe the statute to mean that a member of a labor union who attempts to institute proceedings before a court or an administrative agency may be required by that court or agency to exhaust internal remedies of less than four months' duration before invoking outside assistance.
Section 102, under which the appellant instituted his proceeding, provides for enforcement by federal courts of rights secured by federal law. We are not in this case, therefore, bound by the doctrine of exhaustion as developed in the New York, Nevada, or California courts with respect to suits against unions brought in the courts of those states by union members. In enforcing rights guaranteed by the new statute, whether or not similar rights would be enforced under state law by state courts, the federal courts may develop their own principles regarding the time when a union's action taken in violation of § 101 is ripe for judicial intervention. Cf. Holmberg v. Armbrecht, 327 U.S. 392 (1946); Sola Electric Co. v. Jefferson Electric Co ., 317 U.S. 173, 176-77 (1942). The rules formulated by various state courts may suggest helpful avenues of approach, cf. Textile Workers Union v. Lincoln Mills, 353 U.S. 448, 457 (1957), but the authority granted to the federal courts by Congress to secure the rights enumerated in § 101 of the 1959 Act is accompanied by the duty to formulate federal law regarding a union member's obligation to exhaust the internal union remedies before seeking judicial vindication of those rights.
If we look to the substantial body of state law on the subject, we find that the general rule requiring exhaustion before resort to a court has been almost entirely swallowed up by exceptions phrased in broad terms. See Annot., 168 A.L.R. 1462 (1947); Summers, Legal Limitations on Union Discipline, 64 Harv. L. Rev. 1049, 1086-92 (1951). Rather than decide whether exhaustion is proper by determining whether the union's action can be characterized as "void" (e.g., Tesoriero v. Miller, 274 App. Div. 670, 88 N.Y.S. 2d 87 (1949)) or as "affecting property rights" (e.g., Local No. 65 of Amalgamated Sheet Metal Workers v. Nalty, 7 F.2d 100 (6th Cir. 1925)), we believe it preferable to consider each case on its own facts.
The Congressionally approved policy of first permitting unions to correct their own wrongs is rooted in the desire to stimulate labor organizations to take the initiative and independently to establish honest and democratic procedures. See Cox, The Role of Law in Preserving Union Democracy, 72 Harv. L. Rev. 609, 615 (1959). Other policies, as well, underlie the exhaustion rule. The possibility that corrective action within the union will render a member's complaint moot suggests that, in the interest of conserving judicial resources, no court step in before the union is given its opportunity. Moreover, courts may find valuable the assistance provided by prior consideration of the issues by appellate union tribunals. See Summers, The Law of Union Discipline: What the Courts Do in Fact, 70 Yale L. J. 175, 207 (1960). Congress has provided a safeguard against abuse by a union of the freedom thus granted it by not requiring exhaustion of union remedies if the procedures will exceed four months in duration. But in any case, if the state of facts is such that immediate judicial relief is warranted, Congress' acceptance of the exhaustion doctrine as applied to the generality of cases should not bar an appropriate remedy in proper circumstances.
The affidavits and exhibits submitted in the district court on the motion for summary judgment establish that the only hearing given the appellant before his name was placed on the National Unfair List was that of the arbitration proceeding. The union was not a party to the arbitration, and the issue decided by the arbitrators was not whether the appellant should be disciplined by the union but whether he owed an obligation to an employer with whom he had contracted. It is undisputed that no hearing was held in which the appellant could respond to the union's intention of taking disciplinary action. Quite clearly, a hearing in which some liability between a union member and a third party is determined is not the type of hearing demanded by § 101(a)(5). At no time was the appellant given the opportunity of arguing before the union's hearing board that placing him on the Unfair List exceeded the powers granted to the union by its constitution, nor could he raise other mitigating circumstances in response to an expressed intention to place his name on such a list. The facts on their face, therefore, reveal a violation of the rights guaranteed union members by § 101(a)(5). If the ...