Local Number 358, Bakery & Confectionery Workers Union, Afl-Cio v. Nolde Brothers, Incorporated

WIDENER, Circuit Judge

(concurring and dissenting):

While I agree that this case calls for referral to arbitration, I do not agree that Piano & Musical Instrument Workers v. W. W. Kimball, 379 U.S. 357 , 85 S.Ct. 441 , 13 L.Ed.2d 541 (1964), forecloses an objection to arbitration being lodged before the arbitrator. I, therefore, respectfully dissent from that portion of the majority’s opinion.

In Piano Workers, the defendant Kim-ball had entered into a collective bargaining agreement with Piano & Musical Workers Local 2549. The contract period ran from October 1, 1960 to October 1, 1961. In August 1961, the defendant decided to discontinue operations at its Melrose Park Plant in Illinois and began the process of discharging all employees at that location. On October 9 of that year, eight days after the expiration of the collective bargaining agreement, Kimball opened a new plant at French Lick, Indiana.

Despite the fact the union contract had been terminated, the union claimed its members had a right to priority in employment at the new plant. It based its claim on Article II, Section 2, Paragraph 6 of the contract, which stated:

“When reemployment occurs employees will be called back to work in order of their seniority.”

When the company refused to follow the rehiring procedure desired by the union or submit the dispute to arbitration, the union brought suit in the United States District Court for the Northern District of Illinois.

*555 The district court in that action determined that the question of whether the issues raised by the complaint were arbi-trable following termination of the contract was a subject for arbitration. As the court pointed out, it was “the arbitrator’s construction of that [arbitration] clause and not the Court’s that was bargained for.” 221 F.Supp. 463 . The court did not, therefore, in that holding, go so far as to hold that the union-employer dispute over rehiring was, in fact, arbitrable.

On appeal, the Seventh Circuit held that the lower court’s determination that the question of arbitrability was for the arbitrator was in error. But it went on to conclude that arbitration could not be ordered under the circumstances since the record failed to show that Kimball, during the term of the agreement, had in any way violated the contract rights of any of its employees. 333 F.2d 761 .

The Supreme Court subsequently granted certiorari and summarily reversed the Seventh Circuit. The question presented to the Supreme Court, however, did not include the issue of whether the court or the arbitrator was to determine the threshold question of arbitrability under these circumstances. Rather, the issue before the Court in that case was the propriety of the Circuit Court’s dismissal of the appellant’s claim based upon the merits of the dispute. 1

I am of the opinion, therefore, that Piano Workers does not require that the substantive dispute in the present case be deemed arbitrable. Nor do I believe that the conclusion is mandated by the Supreme Court’s opinions in United Steelworkers v. American Mfg. Co. or John Wiley & Sons v. Livingston. 2 The question before us is a very narrow one: Is the arbitration clause susceptible of an interpretation that necessarily covers the asserted dispute? While doubts should be resolved in favor of coverage, United Steelworkers v. Warrior & Gulf Co., 363 U.S. 564, 582-83 , 80 S.Ct. 1343 , 4 L.Ed.2d 1403 (1960); A. S. Abell Co. v. Baltimore Typographical Union No. 12, 338 F.2d 190, 193 (4th Cir. 1964), the court should ever be mindful of Mr. Justice Douglas admonishment in United Steelworkers v. American Mfg. Co., 363 U.S. 564 , 80 S.Ct. 1343 , 4 L.Ed.2d 1403 (1960):

“The courts . . . have no business weighing the merits of the grievance, considering whether there is equity in a particular claim, or determining whether there is particular language in the written instrument which will support the claim.” 363 U.S. 564, 568 , 80 S.Ct. 1343, 1346 , 4 L.Ed.2d 1403 .

Thus, where the determination of the arbitrability of a dispute would necessarily require consideration of the merits of the underlying disagreement, both issues should be submitted to the arbitrator. A. S. Abell Co. v. Baltimore Typographical Union No. 12, 338 F.2d 190 (4th Cir. 1964).

Our decision in Winston-Salem Printing Pressmen & Assistants’ Union No. 318 v. Piedmont Publishing Co., 393 F.2d 221 (4th Cir. 1968), 3 is precisely in point *556 here on facts which are indistinguishable for. all practical purposes. The majority, however, fails to follow that case. There, we scrupulously avoided any expression as to how the question of arbi-trability should be resolved where the application of the arbitration clause itself was subject to dispute. In that case, an employer sought to avoid arbitration on the grounds that the duty to arbitrate ceased With the expiration of the contract when the request to arbitrate came subsequent thereto. The district court concluded that the contract in question did not state that notice to arbitrate had to be given prior to expiration of the agreement, but that should settlement of contract disputes prove impossible, the differences would be arbitrated. On appeal, we held that where the issue of arbitrability involved interpretation of the contract, the entire matter, including the question of arbitrability should be submitted -to the arbitrator.

This conclusion is consistent with our earlier holding in A. S. Abell Co. v. Baltimore Typographical Union No. 12, 388 F.2d 190 (4th Cir. 1964), where we stated that where it is not “clear beyond rational debate” that the litigants intended the dispute to be submitted to arbitration, the entire matter, including the question of arbitrability, should be referred to the arbitrator. To conclude otherwise would be to foreclose any opportunity to establish, by way of bargaining history, the intent of the parties to exclude certain matters from arbitration, for it is firmly established in this circuit that bargaining history is of no legitimate use in determining whether to order the submission of a grievance to arbitration. Id. at 194 . See also Local No. 1434 IBEW v. E. I. duPont deNemours & Co., 350 F.Supp. 462, 466-67 (E.D.Va.1972).

In the instant case, it is by no means “clear beyond rational debate” that the dispute over severance pay after contract termination constitutes a “grievance” within the meaning of the contract. The contract itself merely provides:

“In the event any grievance cannot be satisfactorily adjusted ... either of the parties hereto may demand arbitration. . . . ”

Nowhere within the agreement have the parties attempted to define “any grievance.” Since the phrase “any grievance” is left undefined, whether the parties intended that disputes arising after the termination of the contract be subject to arbitration may well call for a detailed examination of the bargaining history leading up to the contract, a task uniquely suited to the arbitrator. I am of opinion either party should be allowed to offer bargaining history to explain the undefined phrase, which, being unde *557 fined, and subject to bargaining history, is not “clear beyond rational debate.”

The majority, without the benefit of any evidence as to the parties’ intent, has chosen to foreclose further inquiry into the question of arbitrability. In essence, it holds that the courts must conclusively decide the question of arbitra-bility, even where it is not “clear beyond rational debate” what the intent of the parties might have been. In so doing, the majority opinion extends an open invitation, indeed a command, to the courts to entangle themselves in the construction of both procedural and substantive provisions of labor agreements. This I consider to be improvident, clearly contrary to the law which has prevailed in this circuit, and not in keeping with the rule as stated in Warrior and Gulf, 363 U.S. at p. 585 , 80 S.Ct. 1347 .

Moreover, whether the parties in the instant case intended for the dispute over severance pay to be subject to arbitration after the termination of the contract seems to me to be inextricably intertwined with the substantive problem of whether or not it was the intent of the parties that severance pay provided for in the contract survive its termination. Certainly, no dispute can arise under the terms of the expired contract unless some substantive right survives its expiration.

Even assuming that there be doubt that the dispute is arbitrable, given the standard to be applied, it is clear that this matter must be submitted to arbitration at least for threshold consideration. To go further, however, and hold that the controversy is so clearly arbitra-ble under the contract as to foreclose the introduction of any evidence before the arbitrator as to the intent of the parties is, in my opinion, to substitute the views of this court for that of the arbitrator as to the merits of the dispute. This would create a “curious rule which required that intertwined issues . . . growing out of a single dispute and raising the same question on the same facts had to be carved up between two different forums, one deciding after the other. Neither logic nor considerations of policy compel such a result.” 4

I would accordingly remand with instructions that:

(1) The whole dispute should be referred to arbitration.

(2) At the arbitration, the company may make the objection that the dispute over severance pay under the facts presented was not intended by the parties to be subject to arbitration.

(3) If the arbitrator should decide the dispute is subject to arbitration, then he should go on and decide, under the facts presented, the substantive question of whether or not “the parties intended . . . [severance pay] rights to be enjoyable, even after contract expiration.” Opinion, p. 552.

Since the Supreme Court in Piano Workers did not decide the question of whether the question of arbitrability of the dispute was subject to arbitration, the majority here has obviously chosen to follow the Seventh Circuit in Piano Workers rather than our own cases. Not only do I prefer the logic of Cardwell Mfg. Co. and our cases of A. S. Abell Co. and Winston-Salem Printing Pressmen, for they give a more liberal reading to arbitration provisions, which I think consistent with national labor policy, I submit we are bound by our own decisions absent an en banc court.

“Whether contracting out [arbitration] in the present case violated the agreement is the question. It is a question for the arbiter, not the courts.” 363 U.S. at 585, 80 S.Ct. at 1354. This final conclusion of'the Supreme Court in Warrior and Gulf is equally applicable here and no more than a following of the statute, 29 U.S.C. § 173 (d), as it declares that settlement of labor disputes by arbitration is the “desirable method” for set *558 tling “grievance disputes” arising not only from the “interpretation” of collective bargaining agreements, but also their “application.” Typical of the majority opinion is its placing of italics on interpretation in its quotation of the statute, opinion p. 550, while not acknowledging anywhere in the opinion the equal emphasis Congress placed on application. That is its fundamental error.

Thus, the majority has fallen into the same trap for which it chides the district court at p. 551 of the opinion. It “preempted the arbitrator rather than overruling him.” It “may do neither under the labor law.” This court has no more authority to pre-empt the arbitrator than has the district court.

. The second opinion of the district court which establishes what the Supreme Court decided in its own case was not considered by the majority here. It is reported in 239 F.Supp. 523 (1965).

. The Steelworkers Trilogy and John Wiley and Sons were specifically discussed and construed in our opinion in Winston-Salem Printing Pressmen & Assistants’ Union No. 318 v. Piedmont Publishing Co., 393 F.2d 221 (4th Cir. 1968), which case is later discussed.

. An examination of the contract in that case shows that the phrase construed was “any dispute” over wages, hours, working conditions, and shop practices. 393 F.2d 221, n. 1 . I submit the difference between “any dispute” in Winston-Salem Printing Pressmen, and “any grievance” in question here', is more theoretical than real. It is true that in the Winston-Salem Printing Pressmen case the contract provided for arbitration of “the construction to be placed upon any clause of . [the] agreement,” but that is what a grievance is, a dispute between employee and employer over the meaning of the collective bargaining agreement. A case directly in point and consistent with my viewpoint is U. A. W. et al v. Cardwell Mfg. Co., 304 F.2d 801 (10th Cir. 1962), where the matter to be submitted to arbitration was a “grievance” which was defined in the contract as “any dispute between the Company and the Union.” Here, the fact that *556 “any grievance” is undefined by contract is all the more reason to submit to arbitration the applicability of the phrase to the dispute at hand.

It is generally held that the term “grievance” is not a term of art, and has no connotation different from its meaning in ordinary use. Forrest Industries, Inc. v. Local No. 3-436 Int. Woodworkers, 266 F.Supp. 265 (D.Or.1966), aff'd 381 F.2d 144 (9th Cir. 1967); Butte Miners’ Union No. 1, etc. v. Anaconda Co., 159 F.Supp. 431, 435 (D.Mont.1958); Petition of Labor Mediation Board, 365 Mich. 645 , 114 N.W.2d 183, 187 (1962); Timken Roller Bearing Co. v. NLRB, 161 F.2d 949, 955 (6th Cir. 1947). And the teaching of the Supreme Court in its decision in Warrior & Gulf is to the effect that a liberal and broad construction should be given the term in the interest of encouraging the use of machinery which the parties themselves have set up for the peaceful settlement of disputes. Forrest Industries, Inc. v. Local No. 3 —436, Int. Woodworkers, 381 F.2d 144, 146 (9th Cir. 1967).

Warrior & Gulf states the rule we should follow now, as we have in the past:

“Since any attempt by a court to infer such a purpose necessarily comprehends the merits, the court should view with suspicion an attempt to persuade it to become entangled in the construction of the substantive provisions of a labor agreement, even through the back door of interpreting the arbitration clause, when the alternative is to utilize the services of an arbitrator.” * * * * * *

“The judiciary sits in these cases to bring into operation an arbitral process which substitutes a regime of peaceful settlement for the older regime of industrial conflict. Whether contracting out in the present case violated the agreement is the question. It is a question for the arbiter, not for the courts.” 363 U.S. at 585, 80 S.Ct. at 1354.

. John Wiley & Sons v. Livingston, 376 U.S. 543, 547 , 84 S.Ct. 909 , 11 L.Ed.2d 898 (1964). While the Court was dealing with a question of procedural arbitrability, the logic employed there appears equally applicable to the facts of this case for the majority here has taken “intertwined issues . . . growing out of a single dispute” and carved them up between two different forums.