Petition — Milwaukee Typographical Union No. 23 v. Newspapers, Inc.

Office-Supreme Court, U.S.

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NO. MMRANDER —

IN THE oT

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1981.

MILWAUKEE TYPOGRAPHICAL UNION

NO. 23,

Petitioner,

vs.

NEWSPAPERS, INC.,

Respondent,

On Writ of Certiorari to the United

States Court of Appeals For the

Seventh Circuit.

PETITION FOR WRIT OF CERTIORARI.

GILBERT A. CORNFIELD, ESQ.

CORNFIELD AND FELDMAN

10 South LaSalle Street

Suite 452

Chicago, Illinois 60603

(312) 726-2922

Attorneys for Petitioner.

NO,

IN THE

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1981.

MILWAUKEE TYPOGRAPHICAL UNION

NO. 23,

Petitioner,

vs.

NEWSPAPERS, INC.,

Respondent.

On Writ of Certiorari to the United

States Court of Appeals for the

Seventh Circuit.

PETITION FOR WRIT OF CERTIORARI.

QUESTIONS PRESENTED FOR REVIEW.

1. Does an arbitrator's interim award

directing the parties to negotiate over the

impact of technological changes on the "job

elements" within the bargaining unit draw its

"essence" from the provisions of a collective

bargaining agreement? :

2. Does an arbitrator lose his author-

ity to resolve the merits of a dispute over

the interpretation and application of terms

of a collective bargaining agreement as the

result of a court's determination that an in-

terim award by the arbitrator was not drawn

from the "essence" of the agreement?

TABLE OF CONTENTS AND AUTHORITIES.

QUESTIONS PRESENTED FOR REVIEW.........-l

OPINIONS DELIVERED BELOW......eeyeeeeee000

l. The Arbitrator's Opinion and

OE, Chad ss 6 CR be. Os oe REbe cee eh evenee

2. The Decisions and Orders of the

United States District Court for

e Eastern District of Wisconsin..6

3. The opinion and Decisions of the

nite tates Court of Appeals

For the Seven

reu OREN pag TR Ry J

-2-«

JURISDICTIONAL GROUNDS oe ccccccccccccccccce cd

RELEVANT STATUTORY PROVISIONS ...cccccccccce ef

STATEMENT OF THE CARB ce cestecveccesboceocecha

The Contract Dispute Which Led to

Es Ae ng RE Whe éON EDO SOOO ROCbC ha

The Arbitrator's Interim Findings

et aan 6 wba te bs 6 Gnade see heeehkoeead

Proceedings Before the District Court..19

The Decision of the Court of Appeals...22

REASONS FOR GRANTING THE WRIT....++++0+++26

* * *

Table of Cases

Boise Cascade Corp. v. United Steel-

workers, 598 F.2d 127 (C.A.5,1979),

cert. den'd 444 U.S. 830 (1979) oeecccese3l

City Electric, Inc. v. Local Union

77, IBEW, 517 F.2d 616 (C.A.9,

1975), cert. den'd 423 U.S. OOM. ccwcdt

Coca-Cola Bottling Co. v. Teamsters,

- im YA ’ OSG bee ekvevocoeneas

F.W. Woolworth Co. v. Miscellaneous

Warehousemen'’s Union, F.

C.A. - ee eth Sos Be he Ss ob 0 eae

Hart v. Overseas National Airways,

541 F.2d Came , Deere ie ok a alle

o 3.=

International Brotherhood of Elec-

trical Workers Vv. Olin Corp., 471

F.2a 468 (C.A.6, 1 Ty ean re a as

Johnson Bronze Co. v. United Auto

Workers, 621 F.2d 81 (C.A.3, 1980).....34

Machinists District No. 145 v. Modern

Air Transport, inc., 5 Civ. 1974, 495

F.2d 1241, 1244, cert. denied, 419

U.S. 1050, 95 S.Ct. 626, 42 L.Ed.2d

BER oe CP ee Pera. §o

Mistletoe Express Service v. Motor

ressmen’s Union, 566 F.2d 692

C.A. aipes 2G SRR Oe

Steelworkers v. W.C. Bradley Co.,

R5il F.2a 72 (C.A. , De Aina hie we 6 ee OO

Torrington Co. v. Metal Products

Workers, 362 F.2d 677 (C.A.2, 1966)....32

United Steelworkers v. American

Manufacturing Co., 363 U.S. 564 (1960).27

United Steelworkers v. Enterprise 27,28,

Wheel & Car Corp., 363 os 653 ; 29,31,

ih alist a Bs DAs 6 aC SED U OAs 000s ede den ee

United Steelworkers v. Warrior & Gulf

Navigation Co., 363 U.S. 574 (1960)....27

Warehousemen v. Standard Brands, Inc.,

- 2 (C.A.5, SFE) Gad ks cvivedoods

Miscellaneous

Professor Lewis B. Kaden, Judges and

Arbitrators: Observations on the

Scope of Judicial Review, (Vol. 80,

taba Law Review, p. 267 (1980) ......31, 36

St. Antoine, Judicial Review of Labor

Arbitration Awards: A Second Look at

Eoterprise Wheel and its Progeny, 75

gan Law Rev. etdeeccccesse

Raymond L. Hogler, Industrial Due Pro-

cess and Judicial Review of Arbitration

Awards, or Law Journal p. 57

Dae eh eee aie e eB we OSS OO Deve seee

APPENDIX

Arbitration Award of Arbitrator

Carl A. Warns, Bie waders oo hee eeebeee4 odth

Dissent of Company members of Board

of I SNE SE eae ed eee edee comae

Decision and Order of U.S. District

Court, dated January 31, 1980...........A33

Decision and Order of U.S. District

Court,’ dated March 31, 1980....-e0e+ee+++A44

Decision of U.S. Court of Appeals,

Decided January 23, DL. ok whee Seed oéee eee

Order Denying Petition For Rehearing,

dated March 3h; th ase ae heb ek bb. ne e's oe Cee

OPINIONS DELIVERED BELOW.

l. The Arbitrator's Opinion and Award.

The subject litigation is founded on part

of an interim opinion and award of Carl A.

Warns, Jr., as impartial chairman of an arbi-

tration board, issued on March 29, 1979.

(Al) A partially concurring and dis-

senting opinion was filed by the Employer mem-

bers of the arbitration board. (A28)

2. ‘The Decisions and Orders of the United

tates District Court For the Eastern

strict o sconsin.

On January 31, 1980, the District Court up-

held the Petition of the Milwaukee Typographi-

cal Union (the Petitioner herein) to enforce

Paragraph 3 of the aforesaid arbitration award.

(A42-43) Paragraph 3 of said interim

arbitration award provided for the contract

dispute to be returned to impartial arbitra-

tion if the parties were unable to reach

-6-

agreement through good faith negotiations with-

in 60 days of the interimaward. (A26-27)

On March 31, 1980, the District Court

denied Newspapers, Inc.'s (the Respondent here-

in) motion to stay the court's order directing

the parties to return their contract dispute

to impartial arbitration. (A44)

3. inion and Decisions of the United

The Op

ates Court of Appeals For the Seventh

reuit.

On January 23, 1981, a panel of the Court

of Appeals reversed the decision of the Dis-

trict Court, holding unenforceable both the

interim arbitration award directing negotia-

tions between the parties, and the arbitra-

tor's directive that failing agreement between

the parties, the contract dispute was to be

returned to impartial arbitration for final

decision. (Decision of the Court of Appeals,

p. 14, A66)

On March 31, 1981, the Court of Appeals

denied a Petition For Rehearing, noting that

Chief Judge Fairchild and Judges Swygart and

Cudahy would have granted the en banc rehear-

ing request. (A68) The panel of

the Seventh Circuit, denying rehearing, con-

sisted of Judges Pell and Wood, and Senior

Judge Byron G. Skelton of the United States

Court of Claims sitting by designation.

JURISDICTIONAL GROUNDS.

Original jurisdiction in the United States

District Court was founded on Section 301,

Labor-Management Relations Act, 29 U.S.C. §185

and the United States Arbitration Act, 9 U.S.

C. §1-14. This Petition For Writ of Certio-

rari is brought pursuant to 28 U.S.C.§1254(1)

to review the aforesaid decision of the Court

of Appeals, entered on January 23, 1981 and

the denial of rehearing on March 31, 1981.

= 8 «

RELEVANT STATUTORY PROVISIONS.

29 U.S.C. Section 185(a):

"Suits for violation of contracts

between an employer and a labor or-

ganization representing employees

in an industry affecting commerce

as defined in this chapter, or be-

tween any such labor organizations,

may be brought in any district court

of the United States having jurisdic-

tion of the parties, without respect

to the amount in controversy or with-

out regard to the citizenship of the

parties."

9 U.S.C. Section 9, in relevant part reads:

"If the parties in their agree-

ment have agreed that a judgment of

the court shall be entered upon the

award made pursuant to the arbitra-

tion, and shall specify the court,

then at any time within one year

after the award is made any party

to the arbitration may apply to the

court so specified for an order con-

firming the award, and thereupon the

court must grant such an order unless

the award is vacated, modified, or

corrected as prescribed in sections

10 and 11 of this title. If no court

is specified in the agreement of the

parties, then such application may be

made to the United States court in

and for the district within which such

award was made. ..."

- 9 =

7

9 U.S.C. Section 10(d) and (e):

"In either of the following

cases the United States court in

and for the district wherein the

award was made may make an order

vacating the award upon the ap-

plication of any party to the ar-

» bitration—

kak

(ad) Where the arbitrators ex-

ceeded their powers, or so imper-

fectly executed them that a mutual,

final, and definite award upon the

subject matter submitted was not

made.

(e) Where an award is vacated

and the time within which the agree-

ment required the award to be made

has not expired the court may, in its

discretion, direct a rehearing by the

arbitrators."

9 U.S.C. Section ll(c):

“In either of the following cases

the United States court in and for the

district wherein the award was made may

make an order modifying or correcting

the award upon the application of any

party to the arbitration—

kak

(c)” Where the award is imperfect

- 10 -

in matter of form not affecting the

merits of the controversy.

The order may modify and correct

the award, so as to effect the intent

thereof and promote justice between

the parties."

- ll -

STATEMENT OF THE CASE.

The issue in this case is the propriety of

the Court of Appeals' review of the scope of

an arbitrator's authority to interpret and

apply provisions of a collective bargaining

agreement, as provided by Section. 301 of the

Labor-Management Relations Act, supra.

The undisputed facts must be drawn from

the opinion and interim award of Arbitrator

Warns.

The Contract Dispute Which Led to

Arbitration.

The Petitioner labor organization is the

exclusive bargaining representative for all

of the Respondent Employer's composing room

employees engaged in the production of the

Respondent's daily newspapers. The subject

bargaining agreement was effective from

March 4, 1975 for a five year term.

From February through June, 1976, the

= 12 =

parties were unable to resolve a dispute

whether the Employer's unilateral introduc-

tion of a new, computerized video display

system (referred to as the "Hendrix System")

was a substitute process for preexisting com-

posing room functions, as specifically set

forth in the "Jurisdiction" section of the

bargaining agreement. (A4-6) Abiding by

the grievance resolution provisions of their

agreement, the parties jointly submitted

their dispute to impartial arbitration.

The issues between the parties were sum-

marized by Arbitrator Warns in his opinion:

"The Union provides the frame-

work for analysis as follows: 'The

dispute between the parties is not

whether the Hendrix system should

be introduced, but the question of

the right of the Union to negotiate

over its impact and/or the scope of

the jurisdictional language of the

collective bargaining agreement’

(from the Union's Brief, pp. 2-3)."

(A3-4)

"The Company poses this issue:

‘Whether the Company's introduc-

tion and use of the electronic

text editing system ('VDT System’)

violates the contract?'" (A-13)

The Petitioner relied upon the "Recog-

nition" and "Jurisdiction" provisions of the

bargaining agreement, Sections 3 and 4 res-

pectively. The Recognition clause provides

that the Petitioner is "the exclusive bargain-

ing representative" for employees engaged in

",...all Composing Room work...” and was speci-

fically referenced by the Petitioner to the

Respondent prior to submission of their dis-

pute to arbitration. (A4-5)

The Recognition clause of the agreement

is followed by the Jurisdiction section. Sec-

tion 4 is lengthy and describes in some de-

tail the type of functions and equipment em-

ployed in composing room work. The key pro-

visions are found in the final four para-

graphs of the section set forth by the

- 14 =-

Arbitrator on pages 5-6 of his opinion. (A6

to Al0) In summary, these provisions re-

quire:

1. That the Union's recognition and the

scope of the bargaining unit covers "...any

process, machinery or equipment which func-

tions as a substitute for or evolution of,

the typesetting and typecasting processes

-+--" (emphasis added), including "...the

preparation.of all input and handling of out-

put, operation of the computer and all input

and output devices..." "when a computer is

used for composing room work...."

Ze A joint committee of an equal num-

ber of union and employer representatives is

to attempt to resolve "all questions con-

cerned with": (a) the method of operation;

(b) the complement of men; and (c) the re-

training of affected employees. The joint

committee is to function after the Union has

- 15 -

been notified by the employer "...in advance

of any changes" in the abovementioned pro-

cesses, machinery or equipment.

36 If the joint committee is unable to

resolve the questions, delineated above, then

the final resolution of the questions is to

be submitted to final arbitration. In this

regard, Section 4 incorporates the provisions

of Section 7 of the agreement, describing a

formal grievance procedure terminating in

joint submission to binding arbitration.

(See A7-9)

From the outset, the parties held to a

fundamental difference of views concerning

the relationship of the new Hendrix system

to contract rights. The Employer had con-

sistently maintained that the system was not

a “substitute process" or incorporated "input

devices" for computerized phototypesetting

within the meaning of Section 4 of the

- 16 -

bargaining agreement. Contrary, the Union

argued that Hendrix was such a new process

and the Employer was obligated to first no-

tify the Union and negotiate over the impact

of the system upon the employees and opera-

tions of the composing room as provided by

Sections 3 and 4 of the agreement. fFurther-

more, the Union contended, failing agreement

of the parties, if Hendrix is a "substitute

>rocess", then the parties were bound to sub-

mit their unresolved differences relating to

the "method of operation", "the complement

of men",and "the retraining of affected em-

ployees" to binding impartial arbitration.

(A3-4)

The Arbitrator's Interim Findings and Award.

Following three days of hearing, a trans-

cript of proceedings, and post-hearing briefs,

Arbitrator Warns rendered an interim decision

remanding the dispute to the parties for 60

ie ae

days of negotiations. The interim ruling was

accepted by the union members and dissented

to by the employer members of the arbitration

board. Arbitrator Warns held that the Hendrix

system is subject to the resolution of ques-

tions which impact upon the bargaining unit,

as set forth in Section 4 of the agreement.

(A23)

Then, having decided that Section 4 of

the agreement was applicable, Arbitrator Warns

directed the parties to attempt to settle

questions arising from the Hendrix system

and the work of the bargaining unit for a

period of 60 days; and failing agreement,

",..-the matter shall be returned to a mutually

selected Arbitrator, or if none can be agreed

upon, to this Arbitrator for a specific rul-

ing." (A27)

In directing the parties to attempt to

negotiate their differences before returning

an 3B

to the arbitration forum, Arbitrator Warns

noted that his interim directive was con-

sistent with decisions of the National Labor

Relations Board and the federal courts con-

cerning the duty to bargain over job changes

affecting composing room operations occurring

during a contract term. The Arbitrator then

utilized the Board's “good faith" bargaining

standard as a guideline for the parties' 60

day period of negotiations. (A23, A27)

Proceedings Before the District Court.

Following the Arbitrator's interim deci-

sion, the parties unsuccessfully attempted

to negotiate their differences, although the

Employer reserved its position that the Arbi-

trator had exceeded his authority and also

any further arbitration proceedings over the

merits of the dispute are not arbitrable.

On June 1, 1979, the Union sought to

- 19 -

remand the controversy to arbitration, as

provided by Paragraph 3 of Arbitrator Warns'

interim award. (A26 -27) The Employer re-

fused to resubmit the dispute to arbitra-

tion. On August 17, 1979, the Union filed a

petition for enforcement of the award. The

petition stated, in part, that the parties

had exhausted at least 60 days of unsuccess-

ful negotiations; and, therefore, the Union

requested "...that the court order the Res-

pondent to comply with the subject arbitra-

tion award and submit their dispute to Arbi-

trator Warns for a ‘specific ruling.'"

The District Court's opinion and order

refers to the Respondent Employer's position

throughout the post-arbitration proceedings.

The Employer has contended that Arbitrator

Warns was without contract authority to

fashion an interim award directing negotia-

tions between the parties. Following this

- 20 =

stated premise, the Employer then concludes

that, as a matter of law, further arbitration

proceedings, following the unsuccessful ne-

gotiations, resolving the merits of the dis-

pute which was originally submitted to arbi-

tration are foreclosed. The District Court

alluded to, but, rejected the Employer's po-

sition, both as to the authority of the Arbi-

trator to fashion an interim award and the

continuing jurisdiction of the arbitration

forum over the merits of the dispute:

"The respondent concedes that the ©

contract requires negotiation or

arbitration over the method of

operation, the complement of men

required, or the retraining of

affected employees arising from

new Composing Room technology.

What constitutes ‘new composing

rom technology’ is a matter of

contract interpretation for the

arbitrator and not for this court

to decide. Once having decided

that technological change in the

Editorial Department was included

within the spirit of that phrase,

Arbitrator Warns was entitled to

impose the remedy provided for in

o 21 «

the contract when such change

occurred." (A39~40)

The District Court's conclusion was reiter-

ated in a subsequent decision denying the Em-

ployer's request for a stay. (A52)

The Decision of the Court of Appeals.

A panel of the Seventh Circuit accepted

the Employer's reasoning. The Court first

recognized that the bargaining agreement

specifically required the Employer to notify

and negotiate with the Union over the "...

method of operation, the complement of men

required or the retraining of affected em-

ployees” upon the introduction of new com-

posing room processes. (Decision of Court

of Appeals, A64) The Court of Appeals stated

that an impartial arbitrator had the authority

to interpret and apply the relevant provisions

of Section 4 of the agreement and, if the par-

ties were unable to negotiate their differences

- 22 «-

",..that the dispute shall be submitted to

arbitration. (F.n. 7, Decision of Court of

Appeals, A64, referring also to F.n. 3, Deci-

sion of Court of Appeals, A56)

However, the Court of Appeals disagreed

with the District Court that the interim

award directing the parties to first attempt

to negotiate their differences over the "im-

pact” of the new processes on composing room

operations was consistent with the detailed

scope of negotiations set forth in the "new

process" clause of the contract. The key part

of the Court of Appeals' decision states:

"Negotiating over the impact of

the VDT system on composing room

employees would include bargain-

ing over a broad range of items

including, but not limited to,

issues such as involuntary lay-

off, termination, bonuses and

loss of overtime. A directive

to bargain over this broad range

of issues injects items into

negotiation which were not con-

templated by the 'new process'

clause of the collective bargaining

= 23-

contract. Even the most general

of the three categories, method

of operation, clearly refers to

how the system will be run and

Is not a catchall term which im-

poses a duty to bargain about any-

thing conceivably affected by the

new technology. Consequently, be-

cause Part 2 of the arbitration

award does not draw its essence

from the contract, it cannot be

enforced. See, e.g., City Elec-

tric, Inc. v. Local Union

Int't Brotherhood of Electrical

orKkers ° ’

Sth Cir.., cert. denied, 423

U.S. 894 (1975) (court refused

enforcement of arbitration award

directing the parties to negotiate

the rate of a travel allowance be-

because the award was not authorized

by 6 collective bargaining agree-

ment.

The district court acknowledged

the Employer's contention that ‘in

making his award, Arbitrator Warns

relied in part on certain policies

of the Labor-Management Relations

Act and on'‘the decisions of other

arbitrators in similar actions,

rather than basing his award solely

on the language of the contract at

issue." The court responded by

quoting Enterprise Wheel, SUP TAY

for the proposition that an -

guous opinion accompanying an arbi-

tration award will not prohibit en-

forcement of the award. Enterprise

Wheel, supra, 363 U.S. at 598-99.

While we adhere to the Supreme

Court's admonition in Enterprise

Wheel in appropriate cases, Amoco

O., SUPER, 548 F.2d at 1294-95,

S is not such a case. We do not

regard it as necessary to discuss

the arbitrator's reasoning because

we find that the award itself demon-°

strates an infidelity to the plain

restrictive terms of the contract."

(A64-65)

After deciding that the interim award re-

quiring “impact” negotiations went beyond the

negotiating requirements set forth in the

contract, the Court of Appeals held that the

totality of Part 3 of the award, including

the continuing jurisdiction of arbitration

proceedings over the merits of the dispute,

was unenforceable. (Decision of Court of Ap-

peals, A66) The Court of Appeals made no

reference to Section 3 of the agreement, re-

cognizing the Union as the exclusive bargain-

ing representative.

In the Petition For Rehearing before the

= 28 -

Court of Appeals, the Union focused on the

fact that the Petition before the District

Court sought only a return to arbitration,

the negotiating process having been exhausted.

In denying rehearing, the original panel of

the Court of Appeals restated that all of

Part 3 of the Warns' award was "invalidated",

leaving ambiguous whether the Petitioner was

now compelled or could start the entire grie-

vance process all over again on a contract

issue initiated in February, 1976.

REASONS FOR GRANTING THE WRIT.

We have detailed the sequence of events

and decisions in this collective bargaining

dispute not to suggest that the Supreme Court

consider a different contract interpretation

than that advanced by the panel of the Court

of Appeals. Rather, we desire to persuade

the Supreme Court that it is now necessary

to further delineate the scope of judicial

- 26 -

review of labor contract disputes which are

subject to binding arbitration. This case

makes evident that the Court's admonition to

defer to arbitration when the arbitrator's

decision and remedy draw its "essence" from

the agreement, does not have a general under-

standing among the federal judiciary. As

long as there continues to be a lack of a

common framework for judicial review, the

intent for arbitration to be an expeditious,

relatively inexpensive and binding process

for the peaceful resolution of labor dis-

putes is thwarted. United Steelworkers v.

American Manufacturing Co., 363 U.S. 564

(1960); United Steelworkers v. Warrior & Gulf

Navigation Co., 363 U.S. 574 (1960); and ©

United Steelworkers v. Enterprise Wheel & Car

Corp., 363 U.S. 593 (1960).

The existing conflict among the judiciary

as to the scope of their review authority is

= 27 «

mirrored in the subject litigation. Ap-

parently all of the judges recognized that

the union has raised an issue subject to

binding resolution through arbitration. The

District Court concluded, pursuant to Enter-

prise Wheel, supra, if the arbitrator's in-

terim award was ambiguous, that is not a suf-

ficient reason to halt the arbitration pro-

cess to effect a final resolution of the

merits of the union's grievance. (A40) The

District Court was satisfied that the arbi-

trator's use of the term "impact", in describ-

ing the range of negotiations to be pursued

between the parties, must be understood in

light of the contract's specific require-

ments to negotiate in Section 4 of the agree-

ment, as reflected in the arbitrator's entire

opinion.

A panel of the Court of Appeals, also

relying on Enterprise Wheel, chose to

- 28 -

interpret the arbitrator's use of the term

“impact” encompassed elements of negotiations

beyond the requirements of Section 4 of the

agreement and then concluded that the arbitra-

tor did not draw his conclusions "essence"

from the agreement. Apparently, three other

Judges of the Seventh Circuit question whether

the Supreme Court's decision in Enterprise

Wheel contemplated that the scope of judicial

review should include the court's independent

interpretation of an award and relevant con-

tract provisions. (Decision of Court of Ap-

peals, A65, and noted positions of Chief

.Judges Swygert and Cudahy, Denial of Petition

for Rehearing, F.n. 1, A68 .)

We submit that the decision of the Court

of Appeals is something more than a "judg-

ment call” by a single panel of judges re-

viewing an arbitrator's award. The decision

requires the broadest concept of judicial

- 29 =

authority in implementing the Supreme Court ‘és

standard in the "Steelworker Trilogy" of cases

that judicial review was limited to a deter-

mination of whether an arbitrator's decision

reasonably is drawn from "the essence” of the

agreement and within the arbitrator's exer-

cise of equitable remedial authority. In

this case, the Court of Appeals has assumed

that its authority, in implementing the stan-

dards of judicial review set forth in the

"Trilogy" include its own construction of

contract language, the intent of language

employed by the arbitrator ard the appro-

priate remedy.

The need for direction from the Supreme

Court as to the conditions in which a review-

ing court can determine that an arbitrator's

decision is or is not drawn from the essence

of the contract is of current, vital impor-

tance. This need has been forcibly and

= 30 <-

cogently advanced by Professor Lewis B. Kaden,

Judges and Arbitrators: Observations on the

Scope of Judicial Review (Vol. 80, Columbia

Law Review, p. 267 (1980). Note also, St.

Antoine, Judicial Review of Labor Arbitration

Awards: A Second Look at Enterprise Wheel

and Its Progeny, 75 Michigan Law Rev. 1137

(1977).

We submit that the scope of review em-

ployed by the Court of Appeals in the subject

case is in conflict with a much more limited

' reading and implementation of Enterprise

Wheel by other judges of the United States

Courts of Appeal. In Boise Cascade Corp. v.

United Steelworkers, 588 F.2d 127 (C.A.5,

1979), cert. den'd 444 U.S. 830 (1979), the

Fifth Circuit upheld the arbitrator's inter-

pretation of ambiguous contract language in

a wage dispute during the term of the agree-

ment. Citing Enterprise Wheel, Judge Wisdom

= 3] «-

opinioned that the judicial review conceived

by the Supreme Court was limited to "...call-

ing for vacation of an arbitrator's award only

when it is ‘without foundation in reason or

fact.' Machinists District No. 145 v. Modern

Air Transport, Inc., 5 Civ. 1974, 495 F.2d

1241, 1244, cert. denied, 419 U.S. 1050, 95

S.Ct. 626, 42 L.Ed.2d 644." (588 F.2d 129)

(Cf: Torrington Co. v. Metal Products Work-

ers, 362 F.2d 677 (C.A.2, 1966) for a con-

trary result. In City Electric, Inc. v.

Local Union 77, IBEW, 517 F.2d 616 (C.A.9,

1975), cert. den'd 423 U.S. 894, the bargain-

ing agreement contained no reference to an

employee benefit which the arbitrator held

was subject to negotiations, unlike the spe-

cific procedures for dispute resolution in

Section 4 of the subject contract. See also,

Raymond L. Hogler, Industrial Due Process and

Judicial Review of Arbitration Awards, 3l

= 32 -

Labor Law Journal p. 570 (1980), comparing

the conflicting application of the Enter-

prise Wheel, supra, standards of judicial

review between the Tenth and Eighth Circuit

Courts of Appeal in Mistletoe Express Service

v. Motor Expressmen's Union, 566 F.2d 692

(C.A. 10, 1977); and Coca-Cola Bottling Co.

v. Teamsters, 613 F.2d 716 (C.A.8, 1980).

The conflicting view of the scope of ju-

dicial review is highlighted by another de-

cision from the Seventh Circuit, with Judges

Cudahy and Swygert in the majority, upholding

an arbitrator's award reinstating to employ-

ment discharged employees, although the arbi-

trator had initially found a technical viola-

tion of work rules by the employees. F.W.

Woolworth Co. v. Miscellaneous Warehousemen's

Union, 629 F.2d 1204 (C.A.7, 1980). Citing

Enterprise Wheel, Judge Cudahy noted that it

was not up to the court to pass upon the

«330

"propriety" of the arbitracor's reasoning,

but only to determine if the arbitrator's

interpretation and application of the agree-

ment proceeds “in some rational manner...de-

rived from the agreement." (629 F.2d 1215)

The Court of Appeals for the Third Circuit

has utilized the standard of whether the arbi-

trator has engaged in "manifest disregard of

the agreement" in implementing the principles

of judicial review set forth in Enterprise

Wheel. Johnson Bronze Co. v. United Auto

Workers, 621 F.2d 81 (C.A.3, 1980).

By holding that Arbitrator Warns' deci-

.sion was not even ambiguous, the Court of

Appeals also avoided the approach taken by

other Courts of Appeal to remand to the arbi-

trator for clarification or further proceed-

ings rather than imposing the court's own con-

struction.

The result of the Court of Appeals’ action

- 34 -

in this case is to render five years of time

consuming grievance processing, arbitration

and post-arbitration litigation an expensive

nullity for the Union and its membership.

(Cf: for a contrary result, Enterprise Wheel,

supra; Warehousemen v. Standard Brands, Inc.,

579 F.2d 1282 (C.A.5, 1978); Steelworkers v.

W.C. Bradley Co., 551 F.2d 72 (C.A.5, 1977);

Hart v. Overseas National Airways, 541 F.2d

586 (C.A.3, 1976); and International Brother-

hood of Electrical Workers v. Olin Corp.,

471 F.2d 468 (C.A.6, 1972).

This case is most appropriate for a grant

of a Writ of Certiorari. This Petition not

only presents an opportunity to correct er-

ror, but to advance significant guidelines

for the courts' role in reviewing or inter-

preting an arbitrator's construction of an

agreement, the terminology of his award, the

scope of the arbitrator's remedial authority

- 35 -

in attempting to resolve a significant con-

tract dispute.

We quote from Professor Kaden's recent

article when he urged the Supreme Court to

return to the subject matter of the "Steel-

worker Trilogy” by selective grants of

certiorari in order to "...further elaborate

a theory of national labor policy applicable

to collective bargaining agreements....":

"Occasional confusion and aber-

rational decisions by the lower

federal courts concerning review

of arbitration awards are not in

themselves intolerable. Recently,

however, changes elsewhere in the

law affecting the labor contract,

the bargaining relationship, and

the arbitrator's role have combined

to heighten the frequency of con-

flict between courts and arbitra-

tors. This mounting judicial in-

tervention proceeds in contexts

where judges still lack the moor-

ings of ‘reasons that in their

generality and their neutrality

- 3% =

transcend any immediate result.”

80 Col.L. Rev. 277.

Respectfully submitted,

Gilbert A. Cornfield, Esq.

Cornfield and Feldman

10 South LaSalle Street

Suite 452

Chicago, Illinois 60603

(312) 726-2922

Attorneys for Petitioner.

ARBITRATION AWARD

In the Matter of:

NEWSPAPERS, INC.,

and

MILWAUKEE TYPOGRAPHICAL UNION NO. 23

FOR THE COMPANY:

FOR THE UNION:

BOARD OF ARBITRATION:

David W. Croysdale,

At torney

George D. Cunningham,

Attorney

Gilbert A. Cornfield,

Attorney

Frank Guskey, Jr.,

President

Albert J. Van Boxel,

Secretary~-Tresurer

Robert A. Kahlor,

Company Member

Eugene J. Cuske,

Company Member

Albert J. Van Boxel,

Union Member

Frank Guskey, Jr.,

Union Member

Carl A. Warns, Jr.

Louisville, Kentucky

Impartial Chariman

Al

By the terms of the contract between

Newspapers, Inc., hereinafter called “the

Company," and the Milwaukee Typographical

Union No. 23, hereinafter called “the Union,"

there is provided a grievance procedure in-

Cluding arbitration. Accordingly, the parties

mutually selected Carl A. Warns, Jr.,

Louisville, Kentucky, as Impartial Chairman

of the Board of Arbitration. Hearings were

held in Milwaukee, Wisconsin, on December 14,

1977, February 3, 1978 and May ll, 1978.

Equal opportunity was given the parties for

the preparation and presentation of evidence,

examination and cross-examination of wit-

nesses and oral argument. A transcript was

made of the evidence and post-hearing

briefs were filed.

A2

OPINION OF THE CHAIRMAN

I will not burden this Opinion with

defining the various terms used--whether they

relate to equipment or process. They have

been adequately explained to the Chairman at

the hearings, by observation, in the exhibits

and in the briefs. All parties to whom this

Opinion and Award are addressed are obviously

knowledgeable of the subject matter involved.

The discussion and analysis will accordingly

be confined to the relationship between those

items of equipment and process as they relate

to the mutual expectations from the negotiated

contract. The precedent effect of the Solomon

Award will be examined.

The Union provides the framework of

analysis as follows: "The dispute between the

parties is not whether the Hendrix system

should be introduced, but the question of the

A3

right of the Union to negotiate over its im-

pact and/or the scope of the jurisdictional

language of the collective bargaining agree-

ment" (from the Union's Brief, pp. 2-3).

The Company poses this issue:

"Whether the Company's introduction and use

of the electronic text editing system (‘VDT

System') violates the contract?"

The following exchange of corres-

pondence between the parties eventually led

to the present arbitration:

"February 27, 1976

"Mr. E.J. Cuske, Vice-President

Journal Company

333 West State Street

Milwaukee, Wisconsin 53203

"RE: Video Display Terminals

"Dear Gene:

"It has come to my attention that

Newspapers, Inc., has either in

the plant or on order a number of

Video Display Terminals. Because

these machines can be used for

composing room work and provide

A4

“input to the computer, the union

desires to envoke Section 3 of the

current Working Agreement.

"Union members on the Joint Standing

Committee will be Tim Maciolek and

Rodger Maerder. At your earliest

convenience, please advise me of a

date to meet.

"Sincerely,

signed/Robert McGarry

President"

(Joint Exhibit #2)

"March 8, 1976

"Mr. Robert McGarry, President

Milwaukee Typographical Union No.23

1012 N. Third Street

Milwaukee, Wisconsin

"Re: Video Display Terminals

"Dear Bob:

"This is in response to your letter

of February 27, 1976, and our more

recent telephone conversation re-

garding the subject.

“While the company denies any

alleged violation of the current

collective bargaining agreement

in this matter, I feel it would

be mutually beneficial for the

A5

“parties to meet in order to re-

view the anticipated installation

of the electronic text editing

system. ..."

(Joint Exhibit #3)

"June 16, 1976

"Mr. E.J. Cuske, Vice-President

Journal Company

333 W. State Street

Milwaukee, Wiconsin 53203

"Dear Mr. Cuske:

“After careful consideration the

union charges Newspapers, Inc.

with contract violation with the

introduction and use of the

CRT-VDT system.

"Specifically, we charge you with

violation of Sections 4 and 37...

(Joint Exhibit #4)

The following contract provisions are in

issue:

RECOGNITION

"Section 3. The Publisher hereby

recognizes the Union as the ex-

Clusive bargaining representative

of all employes covered by this

agreement. The words ‘employe'

A6

*

“and ‘employes' when used in this

contract apply to journeymen and

apprentices."

JURISDICTION

". . . Jurisdiction of the Union and

the appropriate unit for collective

bargaining is defined as including

all Composing Room work including

classifications such as hand com-

positors, typesetting machine

operators, copy cutters, makeup men,

bank men, mark-up men, paste make-

up men, proof press operators,

proofreaders, full time copyholders,

machinists for typesetting machines,

operators and machinists on all de-

vices which case or compose type or

slugs, or film, operators of a tape

perforating machines and recutter

units and monitors for linecasting

machines operating from tape, for

use in composing or producing type,

and operators of all photo-

typesetting machines (such as

. otosetter, Photon, Linofilm,

Monophoto, Coxhead Liner, Filmo-

type, Typro and Hadego). The

advent of the photo composition

process has created additional

paste makeup and has brought it

within the scope of Composing Room

work. Journeymen and apprentices

are doing paste makeup on the pro-

duct of photo composing machines.

As the use of paste makeup expands

and as proficiency is gained by

A7

“Composing Room personnel, the

volume of paste-up work, including

proofing, waxing and paste makeup

with reproduction proofs, and the

processing of the product of photo

composing machines (including proofs

of type, hand lettered, illustrative

border, and decorative material) and

the ruling, photo-proofing, correc-

tion, alteration and pasting into

position of copy material (in-

Cluding photostats, prints and

positive proofs of illustrations)

will increase in the Composing

Room. The Publisher agrees not

to grant jurisdiction covering

the work above mentioned to any

other Union."

". . . In the event of the intro-

duction into Composing Room work

of any process, machinery or

equipment which functions as a sub-

stitute for, or evolution of, the

typesetting and typecasting pro-

cesses that were in use at the date

this contract became effective, all

questions concerned with the

method of operation, the complement

of men required or the retrainin

of affected employes shall be de-

termined by the Joint Standing

Committee, which shall give due

consideration to priority with re-

gard to any question of retraining

presented to it.”

"The Publisher agrees to notify the

Union in advance of any such changes,

A8

"and to process any dispute

promptly if the Union objects

to the method of operation.

"The Joint Standing Committee and

Arbitration Board provided for in

Section 7 shall be bound by the

agreement of the parties hereto

that all work on any such process,

machinery or equipment shall be per-

maa a by journeymen or appren-

tices.

"It is agreed that when a computer

is used for composing room work,

the jurisdiction of the Union in-

cludes the preparation of all in-

put and handling of output,

Operation of the computer and all

input and output devices, pro-

gramming (except that programming

which is provided by the manu-

facturer or lessor as part of the

standard services for the purchase

or lease of the equipment) and

maintenance of all the foregoing

equipment and devices (except

maintenance which is provided by

the manufacturer or lessor as part

of the standard services for the

lease or purchase of the equip-

ment) ."

"Section 37. In the event the

regular news wire of the Associated

Press and/or United Press Inter-

national is received over the

regularly leased wires of the par-

ticular wire service in the form

A9

“of tape, such tape may be used.

It is agreed that all other tape

must be perforated by employes

covered by this agreement."

Arbitrator Solomon had before him

in his decision of June 21, 1974, the Company's

introduction and use of the scanner system. I

quote from his Opinion:

"It is indisputable that with the

introduction of the scanner system

into the composing room it is now

possible to achieve the perforation

of unjustified tape without the

utilization of the TTS operator.

The effect of the use of the

scanner system when so utilized

inevitably results in substantially

reducing the work opportunities

of the TTS operators. ..

(Op. 6)

Arbitrator Solomon found no violation of the

negotiated work jurisdiction provision,

“when a computer is used for composing room

work, the jurisdiction of the Union includes

the preparation of all input and handling of

output, operation of the computer and all

Al0

input and output devices. ..." The

Arbitrator saw no contractual significance in

the fact that with the introduction of the

scanner it was necessary, if that equipment

was to be used, that the Editorial Department

use a specifically equipped IBM Selectric

typewriter, special bond paper, and special

aqua blue pens to note corrections. Whereas

previously, with the exception of contractually

negotiated excepted tape, copy or hard copy

with typesetting instructions was sent to the

composing room where the unit Teletypesetter

Operating the TTS machine performed the

necessary keyboarding, producing the per-

forated unjustified tape, fed into a tape

reader, then to the production computer to

justified tape, then to another tape reader

and on to the linecasting machines or the

photo composition machines. Scanner ready

copy, using the special equipment by the

All

non-unit editorial department, eliminated the

need of having the copy perforated into unjus-

tified tape by the TTS operator.

The Arbitrator concluded that what

occurred here was simply a legitimate exercise

of Management's right to use any "type of

material, tools or other equipment within

its editorial or other departments, ergo the

utilization of the IBM Selectric, as equipped,

new pens, nad bond paper" and that absent

express limitations, and there were none here,

Management did not violate the contract. He

dismissed the Union's claim that the IBM Selec-

tric is an “input device” in the scanner

system is the Optical Reader, operated by unit

employees. He also rejected the Union's con-

tention that the-then Section 40 was violated.

The scanner is operated by unit employees,

and non-unit employees do not perforate tape.

Al2

One of the aspects of this arbi-

tration that is especially interesting is

that the Solomon Award, between these parties,

is at variance in part with, if not the letter,

at least the spirit, of all of the other arbi-

tration cases cited. The Company asserts that

"The Solomon Award is Final and Binding Pre-

cedent for this Proceeding," and "Solomon

resolved the issues in this proceeding." Com-

pany Counsel compared the significant points

in that Award and in this current proceeding:

* *&

“Editorial Department use of

specially designed selectric

typewriters, aqua pens, and bond

paper was challenged in the

scanner case; Editorial Depart-

ment use of video display ter-

minals and related computer

apparatus is challenged here.

Editorial Department keyboarding

on selectric typewriters was

Claimed to be ‘preparation of

input' before Solomon; Editorial

Department keyboarding on video

display terminals is now claimed

as ‘preparation of input’ here.

Al3

"Reduction of Composing Room

personnel due to the scanner

was argued as evidencing.

‘transfer of Composing Room

work' in the scanner case;

the impact of the VDT sys-

tem on Composing Room per-

sonnel is asserted for the

same purpose in this case.

Indeed, even the ‘tape clause'

is brought back for one more

turn on-the arbitral wheel of

fortune.

"Each of these Union positions

was forthrightly rejected by

Arbitrator Solomon in his

thoughtful and comprehensive

scanner decision. Precisely

the same conclusions apply

to the issues in this pro-

ceeding.”

xk tk

"The Editorial Departments’

freedom to prepare and edit

copy in whatever manner and

with whatever tools the Com-

pany determines is no more

contractually constrained

today than it was four years

ago when the Solomon decision

was issued. The VDT system

is no more and no less than

a technologically more advanced

tool for composing and editing

copy. The fact that copy pre-

pared and edited with VDT

Al4

System may be 'fed into and

understood by’ the CRIP

is in full accord with

the contract."

x kek

"Computers, video display ter-

minals, and typewriters are

common tools within the Com-

pany, and indeed, within the

business world at large.

'Keyboarding' of typewriters

occurs throughout the Company.

Video display terminals are

used in many departments in-

cluding the Business Office,

Composing Room, and Editorial

Departments. Obviously,

several distinct and indepen-

dent computer systems exist

within the Company. The mere

fact that Editorials Depart-

ment employees ‘keyboard’

operate video display ter-

minals, and utlize computer

technology is entirely irrele-

vant.

"What is relevant is the func-

tion and purpose for which these

tools are used. The conclusion

compelled by the record evidence

is that these tools are used by

Editorial Department employees

to prepare and edit copy and

to issue appropriate type-

setting instructions.

Al5

"Conversely, these tools are

not and cannot be used to

generate paper tape or, put

differently, these tools do

not substitute for the scanner

or the teletypesetter in pro-

ducing paper tape. Quite sim-

ply, by eliminating the need

for paper copy, the need for

converting paper copy to paper

tape is also eliminated.

"In the’ same way that reporters

and editors keyboarded copy on

typewriters, the same persons

keyboard copy on video display

terminals. In lieu of delivering

or transporting paper copy by

hand, or pneumatic tube, copy

may now be instantaneously

transmitted by electronic im-

pulse through the editorial

computer and its related

wiring. In essence, the VDT

system is a substitute for

previous Editorial Department

processes and in no way is a

substitute for any typesetting

or typecasting process."

As to the Solomon analysis of the

Section 37 claimed violation:

"5. The ‘ta clause' is in-

applicable to this proceeding.

nion misguidely invokes

Section 37 of the contract

which requires that all tape

Al16

"must be perforated by Com-

posing Room employees except

certain ta received from

wire services. Solomon re-

jected a similar argument

in the scanner case holding:

‘Section 40 [Section 37

in the present contract] does

not here apply, for it is the

scanner serving as a substitute

for the TTS machine which pro-

duces unjustified tape, and

since the scanner is operated

by unit employees, non-unit

employees do not perforate

tape and no contractual vio-

lation is established. '

(Employer Exh. 10, pg. 18)

"Exactly the same holding applies

in this case. The record evi-

dence is utterly void of any

showing that tape is perforated

anywhere except in the Composing

Room. Indeed, perforation of

paper tape is not even at

issue."

On the other hand, the Union in-

troduced decisions from other Arbitrators

who took a different approach. In the

Beacon Journal Publishing Co. case 13 LA 453,

Arbitrator Kates, with a similar question

Al7

of preparing scanner ready copy to the compo-

sing room by non-unit personnel, stated that

he reached a conclusion “partially different

from Arbitrator Solomon's and partially in

accord with that of Arbitrator Russell A.

Smith in the Detroit News and Detroit Typo-

graphical Union No. 18 (June 6, 1973)... ."

The Union refers also to a decision by

| William Zaston in the Times-Herald, Vallejo,

California, and Bay Area Typographical Union

No. 21, Aurora Beacon-News and Chicago Typo-

graphical Union No. 16, Peter Kelliher,

Chairman, Decatur Herald and Review, [nc.,

and Central Illinois Typographical Union,

Arthur Malinowski, Arbitrator, and the

implementing decision of Louis Crane in the

Detroit News and Detroit Typographical Union

No. 18 case.

All of the Arbitrators referenced

above are of outstanding reputations. It

Al8

must be admitted that there is still a little

of the "old school tie" attitude among

Academy arbitrators with long experience.

Yet the Company makes a strong point when they

urge this Board to consider the Solomon Award

as precedent. Preliminarily, it must be said

‘the "final and binding" mandate of the con-

tract concerns only the observance of the award

by the parties themselves; it does not mean

that it binds a different arbitrator with a

new case although the issue is the same. In

some umpireships we follow the "clear error

rule," that is, we do not reverse an earlier

decision unless it is shown the ruling is in

“clear error". Apparently, Arbitrator

Solomon was not the permanent umpire. Of

course, we pay respect to well-reasoned

opinions as well as to the practical point

that if there is to be stability in relation-

ship, earlier decisions cannot be ignored

Al9

merely because a subsequent arbitrator

feels the need to substitute his judgment

for that of the other arbitrator. There must

be some meaningful basis to reverse under

the same contract, on the same issue, between

the same parties.

In my Opinion, Arbitrator Solomon

resolved some but not all of the issues. I

note again the Union's realistic statement of

the issue: "The dispute between the parties

is not whether the Hendrix system should be

introduced, but the question of the right

of the Union to negotiate over its impact

and/or the scope of the jurisdictional

language of the collective bargaining

agreement."

The Union does have the right

to negotiate over the impact and the

"commingled" relationship between the Hendrix

system and the jurisdiction of the "Composing

| A20

Room.” I find nothing in the Solomon Opinion

or Award which forecloses this finding. I

also agree with the Union that the words

"Composing Room," historically understood,

do not necessarily imply that the defined

jurisdiction of the Composing Room and the

Joint Standing Committee regarding changes

are limited to a prescribed physical area.

"Function and purpose" emphasized by the Com-

pany, are utilitarian, to be viewed in the

context of the practical setting in which

they apply. Section 4 is more than a listing

of unit classifications--the words "in the

event of the introduction into Composing Room

work of any process, machinery or equipment

which functions as a 'substitute for, or

evolution of, the typesetting processes that

were in use . . ." delegates to the Joint

Standing Committee the responsibility of

accomodating Management's legitimate right

A21

and responsibility to keep abreast of new de-

velopments in order to survive in the market-

place with the right of the members of the

bargaining unit to maintain their productive

role in the enterprise and to support their

families.

To repeat, I do not interpret

the Solomon Award as informing Management

that they are under no duty to bargain

about the impact of technological change

which affects the bargaining unit. A careful

study of that Award, and I have given it

exhaustive review, reflects that Solomon was

confirming Management's right to introduce

new equipment into the Editorial Department

although that equipment had an incidental

cause and effect on the Composing Room. He

did not find that preparing scanner ready

| copy by the Editorial Department a basis for

giving the Composing Room “jurisdiction,"

A22

that is, preventing the Editorial Department

from using the new typewriters for the work

normally transacted. He did not consider the

use of the new Selectric with attendant equip-

ment computer "input"; he did not find that

"tape" in violation of Section 40 was prepared

by the non-unit personnel. Therefore, no

jurisdiction, no limitation on Management's

right to assign. But as I said earlier, I

interpret Section 4 as more than a definition

of current rights and duties in the legal

model, although it is that; it informs the

reader very clearly that both sides recognize

the complexity of the relationship with its

equally complex challenges in the tradition

of an ongoing relationship. And in this

general connection I cannot overlook the

statutory backdrop to the bargaining process

and the history of this industry regarding

the mandate of Section 8(a) (5) and its

A23

related Section 8(d). The case of National

Labor Relations Board v. Columbia Tribune

Publishing Co., 8th Circuit (1974), 73 CCH Lab.

Cas., Par. 14,480 involved this industry and

the duty to bargain over job changes affecting

the composing room. The Court referred to

Rochet d/b/a The Renton News Record, 136 NLRB

1294, a similar case. The Court reaffirmed

that “the effect of automation on the bar-

gaining unit was a mandatory subject of

collective bargaining." Although the facts

in Columbia concerned the change from hot

metal to the cold type process, the signifi-

cance of that precedent with its roots in

Fiberboard Corporation v. NLRB, 379 U.S. 203,

a contracting out case, is that impact as well

as work assignment is a term and condition of

employment. The impact here is real; the

Company concedes that the function of copy

cutter, scanner operator, teletypesetter

A24

Operator and proofreader are “rendered un-

necessary by reason of the VDT system"

(Company Brief, p. 26). Job elimination is

within the scope of mandatory bargaining.

The Board has said:

"The elimination of unit

jobs, albeit for economic

reasons, is a matter within

the statutory phrase ‘ot'er

terms and conditions of em-

ployment’ and is a mandatory

subject of collective bar-

gaining within the meaning

of Section 8(a) (5) of the

Act." Town and Country

Manufacturing Co. 136 NLRB

1022, enforced 316 F. 2d 846.

It is true that Joint la reflects a

supplement to the 1975 Agreement in providing

certain work guarantees to situation holders.

But there is no evidence that this agreement

is the quid pro quo for the impact on the

bargaining unit of the Hendrix system.

In summary, I find that the intro-

duction of the Hendrix system with its impact

A25

on the available and changed job elements in

the "Composing Room" establishes an appro-

priate basis for bargaining.

AWARD

i. I accept the Solomon Award for the pur-

pose of confirming Management's right

to keep abreast of technological advances

in the industry and to make appropriate

assignments.

2. I find, however, that the introduction

of the Hendrix system, a technological

change, has sufficient impact on the

job elements of the Composing Room as

to warrant the imposition of a duty to

bargain about such impact.

3. The parties are directed to bargain in

good faith according to the guidelines

of Sections 8(a) (5) and 9(b) (3) of the

National Labor Relations Act, As Amended.

A26

If the parties are unable to reach agreement

within 60 days of the receipt of this Award,

the matter shall be returned to a mutually

selected Arbitrator, or if none can be agreed

upon, to this Arbitrator for a specific ruling.

This ruling shall be made within 30 days of

the close of the hearing.

March 29, 1979

( ) concur

( ) concur

( ) concur

( ) concur

( ) didgsent

( ) dissent

( ) dissent

( ) dissent

A27

/s/Carl A. Warns, Jr.

Impartial Chairman

Robert A. Kahlor,

Company Member

Eugene J. Cuske,

Company Member

Albert J. Van Boxel,

Union Member

Frank Guskey, Jr.,

Union Member

Arbitration Matter Between

NEWSPAPERS, INC.

and

MILWAUKEE TYPOGRAPHICAL UNION NO. 23

Position and Opinion of Company Members

of the Board of Arbitration

Re Arbitration Award Issued by

Carl A. Warns, Jr., Impartial Chairman

Notice is given that Mr. Richard A.

Williams is substituted for Mr. Eugene J. Cuske

as one of the Company Members of the Board of

Arbitration by reason of Mr. Cuske's change in

employment. Accordingly, the position and

opinion stated below is provided by Company

Members Robert A. Kahlor and Richard A.

Williams.

The Company Members respectfully

concur and dissent as follows regarding the

award issued March 29, 1979 by the Impartial

Chairman.

l. The Company Members concur

with the first paragraph

of Mr. Warns’ award which

states as follows:

"I accept the Solomon Award

for the purpose of confirming

Management's right to keep

A28

“abreast of technological

advances in the industry

and to make appropriate

assignments.”

The Company Members dissent to

the second and third para-

graphs of Mr. Warns’ award

which state as follows:

"I find, however, that the

introduction of the Hendrix

system, a technological

change, has sufficient im-

pact on the job elements

of the Composing Room as to

warrant the imposition of a

duty to bargain about such

impact.

"The parties are directed

to bargain in good faith

according to the guide-

lines of Sections 8(a)

(5) and 9(b) (3) of the

National Labor Relations

Act, As Amended. If the

parties are unable to

reach agreement within

60 days of the receipt of

this Award, the matter

shall be returned to a

mutually selected Arbi-

trator, or if none can be

agreed upon, to this Ar-

bitrator for a specific

ruling. This ruling shall

be made within 30 days of

the close of the hearing."

, A29

In reaching their decision, the Com-

pany Members have very carefully and deliber-

ately considered Mr. Warns’ award and his

forthright and perceptive reasoning in support

of his award. The Company Members further

recognize the complexity and importance of the

issues submitted to Mr. Warns and very much

appreciate the thoughtful and concerned per-

spective he has brought to the arbitration

matter.

The Company Members are compelled,

however, to dissent to paragraphs two and

three for the reasons summarized below:

Ll. The contract does not con-

tain any clause or provision

requiring either party to

negotiate over the effects

of a technological change.

2. The first paragraph of the

Arbitrator's award, having

held no violation of the

work jurisdiction provisions

of the contract, must govern

and accordingly does not give

rise to a remedy.

3. Neither the contract nor law

governing the contract pro-

vides or permits an arbi-

tration board to invoke or

enforce provisions of the

National Labor Relations

Act ("NLRA").

4. Even under the NLRA, the

maximum legal duty imposed

A30

is the duty to bargain

with the clear statutory

provision that agreement

on any specific issue may

not be mandated. Accordingly,

neither the contract nor law

governing the contract em-

powers an arbitration board

to exceed the requirements

of NLRA and require that

agreement be reached and,

even more, that agreement

be reached within a pre-

scribed time period.

It is the position of the Company

Members that paragraphs two and three of Mr.

Warns' award exceed the authority of the ar-

bitration board and accordingly may not be

enforced. However creative and sensitive to

the perceived equities of the parties, the

directives of these paragraphs are made with-

out contractual or legally binding authority.

The Company Members, like the Im-

partial Chairman, are equally concerned about

preserving a good faith and constructive labor

realtionship. Issuance of this position does

not foreclose, in the opinion of the Company

Members, discussions between the Company and

the Union or, for that matter, even negotia-

tions between the Company and the Union over

the effects, if any, of the technological

change. Indeed, it is fully consistent with

the NLRA that parties may voluntarily and

mutually engage in negotiations even where

not required by law or contract.

Assuming a good faith and respon-

sible position by the Union, the Company

A31

Members are fully prepared to recommend that

such discussions or negotiations occur.

Respectfully submitted,

/s/ Robert A. Kahlor

/s/ Richard A. Williams

cc: Frank Guskey

Al Van Boxel

Gilbert Cornfield

David Croysdale

A32

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF WISCONSIN

MILWAUKEE TYPOGRAPHICAL

UNION NO. 23,

DECISION AND ORDER

Petitioner,

Civil Action

Vv. No. 79=-C-649

NEWSPAPERS, INC.,

Respondent.

This is an action brough pursuant to

§ 301 of the Labor Management Relations Act,

29 U.S.C. § 185, for enforcement of an arbi-

trator's award made pursuant to the provisions

of a collective bargaining agreement in effect

between the petitioner Milwaukee Typographical

Union No. 23 and the Respondent Newspapers,

Inc. The Respondent has moved the court to

dismiss the petition on the ground that the

arbitrator's award exceeded his authority

A33

and is unenforceable. For the following

reasons, the motion will be denied.

Paragraph five of Section 4 of the

collective bargaining agreement provides:

"In the event of the introduction in-

to Composing Room work of any process,

machinery or equipment which functions as

a substitute for, or evolution of, the

typesetting and typecasting processes

that were in use at the date this con-

tract became effective, all questions

concerned with the method of operation,

the complement of men required or the

retraining of affected employees shall

be ‘determined by the Joint Standing

Committee, which shall give due con-

sideration to priority with regard

to any question of retraining pre-

sented to it."

Section 7 of the agreement provides in part:

"* * * To this [Joint Standing]

committee shall be referred all ques-

tions that may arise regarding this

contract or any alleged violation

thereof, which cannot be settled

otherwise. * * * If the committee

does not reach an agreement within

fifteen (15) days of the date of

transmission of notice of difference,

the questions in dispute shall, on

request of either party to the agree-

ment, be submitted to arbitration * * *.

*x* *«

A34

The Petitioner represents employees

in Respondent's Composing Room; it does not

represent other of Respondent's employees.

Sometime in 1976, the Respondent introduced

certain technological changes into its

Editorial Department which had an undisputed

impact on the work performed in the Composing

Room. Petitioner filed a grievance relating

to the impact on the job elements in the

Composing Room caused by said change. On

March 29, 1979, Arbitrator Carl A. Warns, Jr.,

issued a decision upholding the Respondent's

right to make the technical changes, but

concluding:

"2. I find, however, that the intro-

duction of the Hendrix system, a techno-

logical change, has sufficient impact on

the job elements of the Composing Room

as to warrant the imposition of a duty

to bargain about such impact.

"3. The parties are directed to

bargain in good faith according to the

guidelines of Sections 8(a) (5) and

9(b) (3) of the National Labor Relations

A35

*

Act, As Amended. If the parties are un-

able to reach agreement within 60 days

of the receipt of this Award, the matter

shall be returned to a mutually selected

Arbitrator, or if none can be agreed upon,

to this Arbitrator for a specific ruling.

This ruling shall be made within 30 days

of the close of the hearing."

The respondent argues that having

found no contract violation, the arbitrator

was not free to impose a remedy for what he

perceived as an inequity in the existing con-

tract where the contract itself did not allow

for such remedy. See, e.g., City Electric,

Inc. v. Local Union 77, International Brother-

hood of Electrical Workers, 517 F.2d 616 (9th

Cir. 1975), cert. denied 423 U.S. 894, holding

that an arbitrator may deal only with what

exists in a contract and may not bring in

ad hoc modifications. The respondent also

argues that the third paragraph of the award

is an interest arbitration provision of the

type found to be impermissible in Milwaukee

A36

Newspaper & Graphic Communications Union Local

No. 23 vs. Newspapers, Inc., 586 F.2d 19 (7th

Cir. 1978), cert. denied 47 U.S.L.W. 3636

(March 26, 1979). Finally, the respondent

argues:

"The fatal flaw in Petitioner's

argument is the claim that the ‘new

process’ clause [paragraph five of

Section 4], which relates only to

new technology in the compos ng room

also applies to technologica change

introduced into other departments of

the Employer. Of equal Taeartance

is the fact that the ‘new process'

clause does not meoeee to = im-

pact on the c Sing room of tech-

nology used in Scheer departments.

Instead, this clause requires arbi-

tration with respect to only three

narrowly defined questions: ‘the

method of operation, the complement

of men required or the retraining

of affected employees' arising from

new composing room technology. There-

fore, t new process' clause cannot

be construed to require negotiation or

arbitration over the impact on the com-

sing room of technology in other de-

nts Of the Employer." (Emphasis

ms Original.) Respondent's reply brief

filed December 11, 1979, at p.3)

A37

United Steelworkers of America v.

Enterprise Wheel & Car Corp., 363 U.S. 593, 599

(1960), states:

"* * * the question of interpreta-

tion of the collective bargaining agree-

ment is a question for the arbitrator.

It is the arbitrator's construction which

was bargained for; and so far as the ar-

bitrator's decision concerns construction

of the contract, the courts have no

business overruling him because their

interpretation of the contract is

different from his."

Arbitrator Warns found that the contract be-

tween petitioner and respondent did not pre-

vent the respondent from introducing techno-

logical changes into its Editorial Department

even if those changes had an impact on the

Composing room. He also found, however,

that the correct interpretation of paragraph

five of Section 4 of the contract is not the

interpretation argued for by the respondent

and set forth above but rather:

“* * * T also agree with the Union

that the words ‘Composing Room,’ his-

A38

4

torically understood, do not neces-

sarily imply that the defined juris-

diction of the Composing Room and the

Joint Standing Committee regarding

changes are limited to a prescribed

physical area. ‘Function and pur-

pose’ emphasized by the Company, are

utilitarian, to be viewed in the

context of the practical setting

in which they apply. Section 4 is

more than a listing of unit classi-

fications--the words ‘in the event

of the introduction into Composing

Room work of any process, machinery

or equipment which functions as a sub-

stitute for, or evolution of, the

typesetting processes that were in

use . . .* delegates to the Joint

Standing Committee the responsibi-

lity of accommodating Management's

legitimate right and responsibility

to keep abreast of new developments

in order to survive in the market-

place with the right of the members

of the bargaining unit to maintain

their productive role in the enter-

prise and to support their families."

(Arbitrator Warns' decision at p. 12)

The respondent concedes at the contract re-

quires negotiation or arbitration over the

method of operation, the complement of men

required, or the retraining of affected

employees arising from new Composing Room

A39

technology. What constitutes “new composing

room technology” is a matter of contract inter-

pretation for the arbitrator and not for this

court to decide. Once having decided that

technological change in the Editorial Depart-

ment was included within the spirit of that

phrase, Arbitrator Warns was entitled to impose

the remedy provided for in the contract when

such change occurred.

The respondent points out that in

making his award, Arbitrator Warns relied in

part on certain policies of the Labor Manage-

ment Relations Act and on the decisions of

other arbitrators in similar actions, rather

than basing his award solely on the language

of the contract at issue. Again, as stated

in United Steelworkers of America v. Enterprise

Wheel & Car Corp., supra, however at 597-598:

"* * * an arbitrator is confied to

interpretation and application of the

collective bargaining agreement; he does

A40

*

not sit to dispense his own brand of

industrial justice. He may of course

look for guidance from many sources,

yet his award is legitimate only so

long as it draws its essence from the

collective bargaining agreement. When

the arbitrator's words menifest an in-

fidelity to this obligation, courts

have no choice but to refuse enforce-

ment of the award.

"The opinion of the arbitrator

in this case * * * is ambiguous. It

may be read as based solely upon the

arbitrator's view of the requirements

of enacted legislation, which would

mean that he exceeded the scope of

the submission. Or it may be read

as embodying a construction of the

agreement itself, perhaps with the

arbitrator looking to ‘the law' for

help in determining the sense of the

agreement. A mere ambiguity in the

opinion accompanying an award, which

permits the inference that the arbi-

trator may have exceeded his authority,

is not a reason for refusing to en-

force the award. Arbitrators have

no obligation to the court to give

their reasons for an award. To re-

quire opinions free of ambiguity

may lead arbitrators to play it safe

by writing no supporting opinions.

This would be undesirable for a well-

reasoned opinion tends to engender

confidence in the integrity of the pro-

cess and aids in clarifying the under-

lying agreement. Moreover, we see no

reason to assume that this arbitrator

A4l

has abused the trust the parties con-

fided in him and has not stayed within

the areas marked out for his considera~-

tion. * # #*

Finally, the case of Milwaukee

Newspaper & Graphic Communications Union

Local No. 23 v. Newspapers, Inc., supra,

is not on point. In that case the Court held

only that a union cannot insist to impasse

during bargaining on the inclusion of an

interest arbitration clause in a new contract.

It did not hold that when such a clause is in-

cluded in an existing contract, a party may

be excused from complying with it.

For the foregoing reasons,

IT IS ORDERED that the motion of

the respondent Newspapers, Inc., to dismiss

the petition for enforcement of an arbitration

award is denied.

IT IS FURTHER ORDERED that the

petition for enforcement is granted, and that

A42

the respondent Newspapers, Inc., is to com-

ply forthwith with paragraph 3 of the arbi-

tration award of Arbitrator Carl A. Warns, Jr.,

issued March 29, 1979.

Dated at Milwaukee, Wisconsin, this

3lst day of January, 1980.

/s/ John W. Reynolds _

John W. Reynolds,

Chief Judge

A43

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF WISCONSIN

MILWAUKEE TYPOGRAPHICAL )

UNION NO. 23, )

)

Petitioner, )

)

Vv. ) DECISION AND

) ~~ ORDER”

NEWSPAPERS, INC., )

Respondent. )

This is an action brought pursuant to

§ 301 of the Labor Management Relations Act,

29 U.S.C. §185, for enforcement of an arbitra-

tor's award made pursuant to the provisions of

a collective bargaining agreement in effect

between the petitioner Milwaukee Typographical

Union No. 23 and the respondent Newspapers, Inc.

Paragraph 3 of the award provided:

"3. The parties are directed to

bargain in good faith according to

the guidelines of Sections 8 (a) (5)

and 9(b) (3) of the National Labor

Relations Act, As Amended. If the

parties are unable to reach agreement

A44

within 60 days of the receipt of

this Award, the matter shall be

returned to a mutually selected

Arbitrator, or if none can be

agreed upon, to this Arbitrator

for a specific ruling. This

ruling shall be made within 30

days of the close of the hearing."

On January 31, 1980, the Court entered an order

denying the respondent's motion to dismiss the

petition for enforcement of the award and order-

ing the respondent to comply forthwith with

paragraph 3 of the award. That order has been

appealed to the United States Court of Appeals

for the Seventh Circuit.

Presently pending before this Court is

respondent's motion for a stay of the order

pending appeal. The respondent argues that the

Court .converted its Rule 12(b) (6) motion to

dismiss into a motion for summary judgment under

Rule 56 of the Federal Rules of Civil Procedure

without giving the respondent an opportunity to

file evidentiary material, see Rull 56(c); that

had respondent been advised of the Court's

A45

~~

intention it would have filed affidavits

disputing the Court's statement on page 2 of

its decision that “the respondent introduced

certain technological changes into its Editorial

Department which had an undisputed impact on

the work performed in the Composing Room" and

disputing that sixty days of bargaining had

occurred under paragraph 3 of the arbitration

award; and finally, that the respondent will

suffer irreparable injury if a stay is denied

because of the burden and expense of proceeding

with arbitration, whereas petitioner will not

be harmed if the stay is granted because the

status quo will be maintained.

Rule 81(a) (3) of the Federal Rules of

Civil Procedure provides that in proceedings

under Title 9 of the United States Code relating

to arbitration “these rules apply only to the

extent that matters of procedure are not pro-

vided for in those statutes." In general, in

A46

deciding a petition for arbitration, the Court's

inquiry ends with determining whether the issues

presented are on their face referable to arbi-

tration under the parties' contract, and if so,

whether the arbitrator's award draws its essence

from the contract. Galt v. Libbey-Owens-Ford

Glass Company, 376 F.2d 711, 714 (7th Cir. 1967);

Butler Products Company v. Unistrut Corporation,

367 F.2d 733, 735 (7th Cir. 1966); Hamilton

Life Insurance Company of New York v. Republic

National Life Insurance Company, 408 F.2d 606

(2d Cir. 1969); Drake Bakeries Incorporated

v. Local 50, American Bakery & Confectionery

Workers International AFL-CIO, 370 U.S. 254,

256 (1962). Therefore with reference to the

respondent's first argument that it would have

filed affidavits stating that the technological

changes in the editorial department had no impact

on the work performed in the composing room,

that issue was within the scope of the matters

A47

for the arbitrator and not for this Court to

decide. The Court's use of the word “undisputed"

was perhaps unfortunate, but in any case the

impact issue was one within the arbitrator's

and not the Court's jurisdiction, was decided

by the arbitrator adversely to the respondent,

and is not subject to revision by the Court.

As stated in International Union of Operating

Engineers, Local Union No. 139 v. Carl A. Morse,

Inc., 529 F.2d 574, 581 (7th Cir. 1976):

"The employer has complained that

the proceedings below partook of the

nature of a motion for summary judg-

ment, but deprived it of the opportun-

ity to present affidavits in support

of its defenses in opposition to ar-

bitration. We have assumed, for pur-

poses of this decision, that the em-

ployer's positions can be adequately

backed up by evidence sufficient to

create genuine issues of fact. But

those issues are to be resolved by

the arbitrator, not by the court.

Whether under summary judgment pro-

cedures or upon a petition to compel

arbitration under the United States

Arbitration Act, 9 U.S.C. §4 (1925),

the issues open for judicial considera-

tion are limited and rarely factual.

A48

Here they raise only questions of

law, and were properly ruled upon

by the District Court. [Citations

omitted.]”"

The respondent's second claim, that it

would have submitted affidavits disputing peti-

tioner's contention that sixty days of bargaining

had taken place pursuant to paragraph 3 of the

arbitration award, has more merit in that had

the Court's attention been drawn to that claim,

it might then have issued a more narrowly drawn

order of compliance than it did. As stated in

the January 31, 1980 decision and order, however,

the Court is satisfied that the relief set forth

in paragraph 3 of the award was within the arbi-

trator's power. The question raised by the

respondent's second claim therefore is whether

compliance with the award broke down prior to

the completion of the sixty days of bargaining,

or whether it broke down after the bargaining

at the point where the matter should have been

returned to an arbitrator for a specific ruling.

A49

Respondent complains that the Court

accepted petitioner's assertion that the sixty

days of bargaining had been completed. The

Court's order, however, merely required the

parties to comply forthwith with paragraph 3

of the award and did not make a finding as to

the degree of compliance which had already been

achieved. Thus the order did not by its terms

accept the petitioner's claim. Had respondent

chosen to, it could have moved the Court for a

clarification of the order and filed its affi-

davits with respect to the bargaining issue.

That it did not is unfortunate because of the

resulting ambiguity in the order, assuming the

parties cannot now agree on the extent of the

compliance which has been achieved to date, but

that ambiguity alone, which is still subject to

Clarification by this Court upon request of a

party, see Rule 62(c) of the Federal Rules of

A50

Civil Seocedute,* does not require that the

order be stayed.

Finally, for the reasons set forth

above and in its January 31, 1980 decision and

order, the Court is not persuaded that respond-

ent will prevail on the merits of its appeal,

nor is it persuaded that the respondent will

suffer irreparable injury if the stay is denied.

The Court's January 31, 1980 order does no more

than require the respondent to perform the

bargain it mad when it entered into a collective

bargaining agreement with the petitioner provid-

ing for the resolution of disputes by arbitration.

Furthermore, federal policy favors arbitration

in cases where the parties have contracted for

it because of its relative economy and swiftness,

* Title 9 U.S.C. does not specify the

procedure on appeal of an order granting

a petition to compel arbitration and

therefore Rule 62 of the Federal Rules

of Civil Procedure applies. See Rule 81(a) (3).

AS51l

and the Court is unpersuaded that the burden

and expense of complying with the arbitrator's

award will be, as respondent claims, excessive.

IT IS THEREFORE ORDERED that the

motion of the respondent Newspapers, Inc. for

a stay pending appeal is denied.

Dated at Milwaukee, Wisconsin, this

3lst day of March, 1980.

/s/ John W. Reynolds

John W. Reynolds,

Chief Judge

A52

in the

Huited States Court uf Appeals

For the Seventh Cirrutt

No. 80-1272

MILWAUKEE TYPOGRAPHICAL UNION No. 23,

Plaintiff-Appellec,

Vv,

NEWSPAPERS, INC.,

. Defendant-A ppellant.

Appeal from the United States Distriet Court for the

Eastern District of Wisconsin.

No. 79-C-649—John W. Reynolds, ./udge.

ARGUED SEPTEMBER 26, 1980—DEcIDED JANUARY 23, 1981

Before PELL, Circuit Judge, SKELTON, Senior Judge,*

and Woop, Circuit Judge.

PELL, Cireutt Judge. This action arose from a labor

dispute between Newspapers, Inc. (Employer), a news-

paper publisher in Milwaukee, Wisconsin, and its labor

organization representing the Employer's composing

room employees, Milwaukee Typographical Union No.

23 (Union). In 1976, the Employer installed a video dis-

play terminal (VDT) system in its editorial departments

which introduced electronic preparation, editing, and

transmission of newspaper copy. The Union sought

arbitration claiming that. the introduction of the VDT

system fell within the collective bargaining agreement's

* Senior Judge Ryron (. Skelton of the United States Court

of Claims is sitting by designation.

A53

2 No. 80-1272

jurisdictional language, thereby compelling the

‘mployer to bargain about the system's impact. The

dispute was submitted to arbitration. On March 29,

1979, Arbitrator Warns decided that while the

Employer was entitled to install the VDT system, it was

obligated to negotiate with the Union regarding the

system's “impact” upon composing room work. The

arbitrator directed the parties to bargain and to return

to arbitration after 60 days if they could not reach an

agreement.

On August 17, 1979, the Union petitioned the district

court for enforcement of the award A tome to the

Labor-Management Relations Act, 29 U.S.C. § 185. and

the United States Arbitration Act. 9 U.S.C. §§ 1-14. In

lieu of an answer, the Employer filed a motion to

dismiss in accordance with Federal Rule of Civil Pro-

cedure 12(bX6). The Union filed a reply to the Em-

ployer’s motion and the Employer, in turn, filed a

reply brief. No motion for summary judgment ever was

iled.

In the district court’s January 31, 1980, Decision and

Order, the court denied the Employer's motion to

dismiss and granted enforcement of the arbitration

award. The Employer argues on appeal that the district

court's judgment violated due process because the court

converted the Employer's motion to dismiss into a

motion for summary judgment without prior notice to

the parties, and without affording the Employer an

opportunity to file evidentiary material in accordance

with Fed. R. Civ. P. 56.' Alternatively, the Employer

contends that the arbitration award is unenforceable

because the arbitrator exceeded his authority.

! While the Employer did not petition Judge Reynolds to set

aside his order pursuant to Fed. R. Civ. P. 60, the eon 9

did raise this due process argument at the district court level

in its brief in support of its motion for a stay pending appeal.

The court denied that motion.

A54

No. 80-1272 3

I.

The parties vigorously disagree on the applicability of

the United States Arbitration Act to the facts of this

case.2 The Union argues that the Act applies and seems

to theorize that Fed. R. Civ. P. 81(aX3) preempts

normal procedure under Rules 12(b) and 56. Rule 81(a)

(3) stipulates that the Federal Rules of Civil Procedure

apply to proceedings under the Arbitration Act only to

the extent that matters of procedure are not provided

for in that Act.

The Applicability of the Arbitration Act

As this court recently noted in Teamsters Local 135 ».

Jefferson .Trucking Co., 628 F.2d 1023, 1026 (7th Cir.

1980), the circuits are divided over whether the Arbitra-

tion Act applies to collective bargaining agreements

because § 1 of the Act explicitly excludes “contracts of

employment of . . . workers engaged in foreign or inter-

state commerce” from the Act’s coverage. District courts

in this circuit, however, have applied 9 U.S.C. §9 in

proceedings to confirm arbitration awards made pur-

2 In its complaint the Union sought application of both the

Arbitration Act_and Ei of the Labor-Management Rela-

tions Act, 29 U.S.C. ; 85. In its brief in support of its motion

to dismiss, the Employer predicated jurisdiction solely upon

the Labor-Management Relations Act, noting that “{sJince it is

uncontroverted that this Court has jurisdiction by reason of

§ 301, Petitioner's allegations respecting the United States

Arbitration Act . . . are redundant and need not be con-

sidered.” Contrary to the Em raer, allegations on appeal,

however, the Union's reply in the district court reiterated that

it sought application of both Acts, thereby implicitly rejecting

the Employer's narrowed interpretation.

The district court based its jurisdiction in its January 31,

1980, enforcement order explicitly upon § 301 without men-

tioning the Arbitration Act. Subsequently, in its order

denying a stay pending appeal, in response to the Employer's

coniention that it was denied due process, the court again

precioaten jurisdiction on § 301. Although the court alluded to

ule 8l(a) (3), its analysis suggested that the enforcement

award was appropriate because no issue of material fact

existed, not because Rule 81(a) (3) and Title 9 preempted

Rules 12(b) (6) or 56.

AS55

4 No. 80-1272

suant to collective bargaining contracts. DBotica »,

Floyd Steel Erectors, Inc., 485 eng 334 (N.D. Tl.

1980); Teamsters Local 364 v. Ruan Transport Corp.

A473 aad 298 (N.D. Ind. 1979). This court has held

that the Act’s exclusion relates gniy te workers in

transportation industries. Pietro Sealzitti Co. v. Intl

Union of Operating Engineers, Local 150, 351 F.2d

576, 579-80 (7th Cir. 1965).

Even assuming that § 1 poses no bar in this case, the

Employer nonetheless points out that §9 of the Act

allows enforcement of an arbitration order only “{i]f the

parties in their agreement have agreed that a judgment

of the court shall be entered upon the award made

pursuant to the arbitration. . . .” In this case the labor

agreement contains no express statement authorizing

the entry of judgment.

The agreement contemplated oy § 9, however, need

not be explicit. In Commonwealth Edison Co. v. Gulf Oil

Corp., 541 F.2d 1263, 1273 (7th Cir. 1976), for example,

this court held that the parties were “decmed to have

consented to entry of judgment ... as required by 9

U.S.C. §9” because their agreement stipulated that

arbitration proceedings would be conducted in accord-

ance with the American. Arbitration Association's (AAA)

rules which did provide such consent.

While the contract in the present case does not adopt

AAA rules, it does provide that any decision of the

arbitration board “shall be final and binding upon both

parties.”’ Several courts have found such language suf-

4 Section 7 of the collective bargaining contract provides, in

part, that a

standing committee of two representatives of the Pub-

lisher . . . and a committee of two representing the Union

shall be selected. . . . To this committee shall be referred

all questions that may arise regarding this contract or any

alleged violation thereof, which cannot be settled other-

wise. .. . If the committee does not reach an a ment

.. . the questions in dispute shall .. . be submitted to arbi-

tration. . . . The arbitration board shall consist of two

representatives of the Publisher and two representatives

of the Union, the four to select a fifth member who shall

(Footnote continucd on following page)

AS6

No, 80-1272 5

ficient to imply consent to the entry of judgment on an

arbitration award under § 9. Kallen v, District 1199,

Nat'l Union of gree Care Employees, 574 F.2d 723, 724-

26 (2d Cir. 1978); J/S Stravborq ». Natl Metal

Converters, Inc., 500 F.2d 424, 426-27 (2d Cir. 1974);

Audi NSU Auto Union Aktiengesellschaft v. Overseas

Motors, Inc., 418 F Supp. 982. 984-85 (.D. Mich. 1976).

The court in Kallen, supra, 574 F.2d at 726, faced wit

a situation analogous to that of the present case,

reasoned that

while it is true that the Employer has resisted en-

forcement of the award, it nevertheless participated

fully in the arbitration process before the American

Arbitration Association. In such circumstances, the

Employer can hardly avow that an award will be

“final, conclusive and binding” upon it without

implicitly agreeing that federal court intervention

may be sought to compel compliance.

In Kallen, the court invoked both the Arbitration Act

and the Labor-Management Relations Act to confirm an

arbitration award rendered pursuant to a collective

bargaining contract. Accord, Marine Transit Corp. v.

Dreyfus, 284 U.S. 263, 276 (1932) (In upholding the

district court’s confirmation of an arbitration award

under § 8, Title 9's admiralty provision, the Court found

that the be poe he stipulation that an arbitration

award be “final and binding” was sufficient to refute the

titioner’s argument that §9 precluded the judgment

ause the contract contained no language explicitly

authorizing the entry of judgment).

The Due Process Claim

Although we find § 9 of the Arbitration Act applicable

in this case, we cannot accept the argument that Fed. R.

3 continued

act as chairman of the board. Said fifth member may be

selected in any manner agreed upon by the four members,

but if... the four members are unable to agree upon a

fifth member, he shall be selected . . . in accordance with

rules of the American Arbitration Association. . . . The

decision of this bourd shall be final and binding upon both

parties. . . . (Emphasis added.)

A57

6 No. 80-1272

Civ. P. 81(aX3) automatically preempts procedures

which otherwise would obtain under Rules 12(b) and 56.

Sry in §9 precludes application of these rules,

Courts have applied various sections of the Rules of Civil

Procedure in actions under the Arbitration Act. See,

e.g:, Compania Espanola de Petroleos, S.A. ». Nereus

Shippin . S.A,, 527 F.2d 966 (2d Cir. 1975), cert. denied,

426 US 936 (1976) (Rule 42(a) consolidation); Jn re

Hidrocarburos y Derivados, C.A. and Lemos, 458

F.Supp. 160 md 1977) (Rule 4(dX7) service of

com men Robinson v, Warner, 370 F.Supp. 828 (D.R.1.

1974) (Rule 42(a) ); /n re Intl Union of Electrical, Radio

achine Workers, AFL-CIO and Westinghouse

Electric Corp., 48 F.R.D. 298 (S.D.N.Y. 1969) (dis-

covery); Jn re Lodge 506, Intl Assoc. of Machinists

and General Electric Co,, 211 F.Supp. 654 (N.D.N.Y.

1959) (motion to dismiss).

The Union submits no compelling reason why normal

procedures should be subverted where, as here, the

isto roceeded in traditional adversary fashion. The

nion, for example, filed its petition for enforcement by

a summons calling for an answer within twenty days as

opposed to'the typical commencement of a proceedin

under the Arbitration Act by application and notice o

the motion to confirm the award. 9 U.S.C. § 9. The

Union's petition was captioned as a regular adversary

proceeding rather than “Jn re .. .”. The Union stipulated

to an extension of time for the Employer to anawer or

otherwise plead. The Employer explicitly responded

under Rule 12(b) (6). The Union expressly answered this

motion to dismiss with a “Reply To Respondent's Motion

To Dismiss.” We therefore conclude that Rule 12(b) was

applicable in this case.

Because the district court granted enforcement of the

award, it necessarily treated the Employer's 12(b)(6)

motion as a motion for summary judgment. Although

this conversion is appropriate when the court deter-

mines that no triable issues of material fact exist,

Chicago-Midwest Meat Assoc. v. City of Evanston, 589

F.2d 278, 281-82 (7th Cir. 1978). cert. denied, 442 US.

946 (1979), Rule 12 outlines the applicable procedure for

conversion which was not entirely followed here.

AS58

No. 80-1272 7

Initially, Rule 12 requires that conversion occur only

when “matters outside the pleadings are presented to

and not excluded by the court.” The Employer asserts ©

that no matters outside the pleadings ever were

presented to the court in this case. It is true that

memoranda of points and authorities = wey ooh are held

not to constitute matters outside the oe apie Macklin

v, Butler, 563 F.2d 525, 528 (7th Cir. 1977) (per curiam);

Sardo v, MeGrath, 196 F.2d 20, 23 (D.C, Cir. 1952). In

this case, however, the parties have submitted numerous

exhibits which include the collective bargaining contract

at issue, the Warns’ arbitration award and the arbitra-

tion panel's company members’ dissent thereto, the prior

Solomon award which related to a similar dispute

between the parties, and various letters relevant to the

arbitration procrse. These exhibits constitute

matters outside the pleadings sufficient to convert a

12(b\6) motion into a motion for summary judgment.'

‘ The defendant argues that dicta in Macklin v. Butler, supra,

653 F.2d at 528 n.1, preclude a court from ever treating ex-

hibits attached to a memorandum as matters outside the

leadings. We disagree. Mucklin did not use such broad

anguage, but merely stated that the memorandum and accom-

panying documents submitted in that case did not meet the

requirements of Rule 56(e). The Macklin court was primarily

dissatisfied with the unsworn nature of the memorandum in

support of the motion to dismiss. The nature of the exhibits in

Macklin was not set out in that opinion.

In the present case, the documents submitted as exhibits

constituted the basic evidence upon which the court was

bound to resolve the merits of this case. It is well settled that

courts are strictly limited in reviewing arbitration awards to

determine (1) whether the award draws its essence from the

contract and (2) whether “the arbitrator's words manifest an

infidelity to this obligation.” /.W, Woolworth Co. », Miscel-

laneous Warehousemen's Union, Local 781, 629 F.2d 1204,

1215 (7th Cir. 1980); Amoco Oil Co. v, Oil, Chemical & Atomic

Workers Intl Union, Local 7-1, Inc., 548 F.2d 1288, 1293-94

(7th Cir.), cert. denied, 431 U.S. 905 (1977). Moreover, the

determination of whether or not the Board exceeded its

authority in making the Award must be made by reference to

the four corners of the instrument constituting the agreement

between the parties.” Gibbons v. United Transp. Union, 462

F.Supp. 838, 844 (Nal 1978). It is difficult to imagine

documents more reliable and relevant to the determination of

the controversy than those exhibits attached to the complaint

and brief in support of the motion to dismiss in this case.

A59

8 No. 80-1272

Affidavits “as such . . . are not indispensably required

where exhibits annexed to a... complaint . . . demon-

strate that the contention of the party is something dif-

ferent from the barebones formal allegations.” Bradford

», School District No, 20, 364 F.2d 185, 187 (4th Cir.

1966), quoting Smoot vr, State Farm Mut. Auto. Ins. Co.,

299 bd 525. 528 (5th Cir. 1962). See, ¢.9.. General

Guar. Ins. Co. v. Parkerson, 369 F.2d 821, 823 (5th Cir.

1966) (exhibits): Pintozzi v. Scott, 436 F.2d 375, 378 n.2

7th Cir. 1970) (exhibits); Smith ». United States, 362

.2d 366, 367-68 (9th Cir. 1966) (exhibit): Oahu Gas

Serv., Ine. v. Pacific Resources, Inc., 460 F Supp. 1359,

1364 (D. Hawaii 1978) (exhibits and tables).

The Employer next contends that even if the exhibits

did satisfy Rules 12(b) and 56, the district court erred

by failing to give the parties notice that it intended to

treat the 12(b\6) motion as one for summary judgment.

While we agree that the conversion of a 12(b\6) motion

into a summary judgment motion should be accom-

panied by prior notice and “a reasonable opportunity to

establish the existence of material controverted facts.”

the failure to afford such procedure does not necessarily

mandate reversal. Chicago-Midwest Meat Assoc. v. City

of Evanston, supra, 589 F.2d at 282. Where the record

iscloses the existence of unresolved material fact issues,

or where the parties represent that they would have sub-

mitted specific controverted material factual issues to

the trial court if they had been given the opportunity,

we would have to find that summary judgment was in-

spore. Choudhry v. Jenkins, 559 F.2d 1085, 1090

(7th Cir.), cert. denied, 434 U.S. 997 (1977): Macklin rv.

Butler, supra, 558 F.2d at 528. But where no potential

disputed material issue of fact exists, a summary

‘judgment will not be disturbed even though the district

court disregarded the procedure which should have

been followed. Chicago-Midwest Meat Assoc. v. City of

Evanston, supra, 589 F.2d at 282. Consequently, the

resolution of the Employer's due process claim depends

upon whether any material disputed factual issue

existed which was either evident from the record itself,

or which the Employer could have submitted if given

the opportunity.

A60

No. 80-1272 9

The Employer has not alleged any specific. disputed

factual issues sufficient to preclude summary judgment

in its brief on appeal. Nor, even though explicitly asked,

did the Employer reveal the existence of any such issues

in oral argument. The only apparent allegations of

disputed factual issues which the Employer might have

resented to the trial court if given the opportunity were

in fact submitted to that court in the Employer's brief in

support of its motion to stay the judgment pending

appeal. There the Employer asserted that “had the

Court given some indication of its intent to make a final

disposition of this case. respondent would have supplied

affidavits directly controverting (1) the contention that

there was acverse ‘impact’ on com cmp | room em-

loyees caused by the introduction of the VDT system

termed ‘undisputed’ by the district court] and (2) the

allegation of . . . the Petition that sixty days of negoti-

ations took place pursuant to part 3 of the Warns

award.” (Footnote omitted.)

The district court responded to the first contention by

stating that the court's “use of the word ‘undisputed’ was

perhaps unfortunate, but in any case the impact issue

was one within the arbitrator's and not the Court’s juris-

diction. was decided by the arbitrator adversely to the

respondent, and is not subject to revision by the Court.”

Secondly, the court reasoned that its order “merel

required the parties to comply forthwith wit

paragraph 3 of the award and did not make a finding as

to the degree of compliance which had already been

achieved. Thus the order did not by its terms accept the

petitioner’s claim.” The court invited the Employer to

move the court for a clarification of its order.

Remanding this case to allow the Employer to assert

these allegations would be futile. It is irrelevant whether

or not the district court’s characterization of the VDT

system's adverse impact on composing room employees

as “undisputed” could be rebutted. The issue before the

district court, as discussed in detail separately herein-

after, was whether or not the arbitrator exceeded the

scope of his authority when he determined that the

Employer had a contractual duty to bargain over the

VDT system's “impact.” To the extent that the degree of

A61

10 No. 80-1272

impact is at all relevant in this case, it would be a ques-

tion to be resolved by the arbitrator, assuming arquendo

that he had authority to im a duty to bargain over

impact. Judicial review of an arbitration award is

limited to determining (1) whether the award draws its

essence from the contract and (2) whether “the

arbitrator's words manifest an infidelity to this

obligation.” F.W. Woolworth Co. v. Miscellaneous

Warehousemen's Union, Local 781, 629 F.2d 1204,

1215 (7th Cir. 1980); Amoco Oil Co. v. Oil, Chemical &

Atomic Workers Intl Union, Local 7-1, Inc., 548 F.2d

1288, 1293-94 (7th Cir.), cert. denied, 431 U.S. 905

(1977). Consequently, in Int? Union of Operating

Engineers, Local Union 139 v. Carl A. Morse, Ine.,

- MP vn 574, 581 (7th Cir. 1976), this court reasoned

at the

employer has complained that the proceedings

below partook of the nature of a motion for sum-

mary judgment, but deprived it of the opportunity

to present affidavits in support of its defenses in op-

position to arbitration. We have assumed, for the .

purposes of this decision, that the employer's

positions can be adequately backed up by evidence

sufficient to create genuine issues of fact. But those

issues are to be resolved by the arbitrator, not by

the court. Whether under summary judgment

procedures or upon a petition to compel arbitration

under the United States Arbitration Act, .. . the

issues open for judicial consideration are limited

et rarely factual. Here they raise only questions of

| Aa

The second allegation which the Employer would

have raised, that sixty days of negotiations had not in

5 Even if the degree of impact had been an issue within the

purview of the district court, it is well settled that even gen-

uine disputed issues of fact will not preclude summary judg-

ment unless they are material to the legal issues in the case.

Terket v. Lund, 623 F.2d 29, 31 (7th Cir. 1980). The degree of

impact caused by the imposition of the VDT system is not

material to whether or not a contractual provision existed in

the contract from which the arbitrator could have imposed a

duty to bargain over impact.

A62

: a

No. 80-1272 7 1

fact taken place, would likewise have no significance on

the court’s order enforcing the award. The court mereiy

ordered the parties to ny with Paragraph 3 of the

arbitrator’s award which directed the parties to nego-

tiate for sixty days and then return to arbitration if the

parties were unable to reach an agreement. The court

did not find that the parties had already complied with

the sixty days bargaining directive.

Because we find the Employer's due process claim to

be without merit, we reach the issue of whether or not

‘the district court ruled yc Api d by finding that the

)

arbitrator did not exceed his authority and by ordering

enforcement of the award.

Il.

In Part 2 of his award, Arbitrator Warns found that

“the introduction of the Hendrix [VDT] system, a

technological change, has sufficient impact on the job

elements of the Composing Room as to warrant the im-

position of a duty to bargain about such impact.”* A

determination of whether or not the arbitrator exceeded

his authority must be made by reference to the contract

because, as the Supreme Court has ruled,

an arbitrator is confined to interpretation and

application of the collective bargaining agreement;

he does not sit to dispense his own brand of

industrial justice. He may of course look for guid-

ance from many sources, yet his award is legitimate

only so long as it draws its essence from the

collective bargaining agreement. When the

arbitrator’s words manifest an infidelity to this

obligation, courts have no choice but to refuse

enforcement of the award.

United Steelworkers of America v. Enterprise Wheel &

Car Corp., 363 U.S. 598, 597 (1960).

& The propricty of Part 1 of the award, which confirmed the

Employer's right to introduce the VDT system and to “make

appropriate work assignments,” is not at issue. The Union

contends that the entire award was within Arbitrator Warns’

authority. The Employer agrees that Part 1 of the award was

appropriate, but contests the validity of Parts 2 and 3.

A63

12 No. 80-1272

The arbitrator's authority to enter Part 2 of his

award, if any. derives from the “new process” clause of

§4 of the collective bargaining agreement which

provides, in relevant part, that

In the event of the introduction into Composing

Room work of any process, machinery or equipment

which functions as a substitute for, or evolution of,

the typesetting and typecasting processes that were

in use at the date this contract became effective, all

uestions concerned with the method of operation,

the complement of men required or the retraining of

affected employes shall be determined by the Joint

Standing Committee, ... .7

(Emphasis added.) The “new process” clause explicitly

limits questions which may be submitted to arbitration

in the event of the introduction of a substitute process to

(1) method of operation, (2) complement of men and (3)

‘retraining. The district court acknowledged these

limitations, bul. assumed, without examination, that a

directive to bargain over “impact” fitted within these

categories."

Negotiating over the impact of the VDT system on

composing room employees would include bargainin

over a broad range of items including, but not limite

7 Tf the Joint Standing Committee is unable to reach. an

agreement, § 7 of the contract provides that the dispute shall

be submitted to arbitration. See supra, note 3.

Section 5 establishes that the “parties agree that. . . the

complete obligation of cach to the other is expressed herein.”

*® The court concluded that

The respondent concedes that the contract requires negoti-

ation or arbitration over the method of operation, the

pon Yo of men required, or the retraining of affected

employees arising from new Composing Rooin technology.

What constitutes “new composing room technology” is a

matter of contract interpretation for the arbitrator and

not for this court to decide. Once having decided that tech-

nological change in the Editorial Department was

included within the spirit of that phrase, Arbitrator

Warns was entitled to impose the remedy provided for in

the contract when such change occurred.

A64

No. 80-1272 13

to, issues such as involuntary layoff, termination,

henuses and loss of overtime. A directive to bargain over

this broad range of issues injects items into negotiation

which were not contemplated by the “new process”

clause of the collective bargaining contract. Mven the

most general of the three categories, method of

operation, clearly refers to how the system will be run

and is not a catchall term which imposes a duty to bar-

gain about anything conceivably affected by the new

technology. Consequently, because Part 2 of the arbitra-

tion award does not draw its essence from the contract,

it cannot be enforced. See. e.g... City Electric, Ine. v.

Local Union 77, Intl Brotherhood of Electrical Workers,

517 F.2d 616, 619-20 (9th Cir), cert. denied, 423 ULS. 894

(1975) (court refused enforcement of arbitration award

directing the parties to negotiate the rate of a travel °

allowance because the award was not authorized by the

collective bargaining agreement,

The district court acknowledged the Employer's con

tention that “in making his award, Arbitrator Warns

relied in part on certain policies of the Labor-Manage- .

ment Relations Act and on the decisions of other arbi-

trators in similar actions, rather than basing his award

solely on the language of the contract at issue.” The

court responded by quoting Enterprise Wheel, supra, for

the proposition that an ambiguous opinion accom-

pinyving an arbitration award will not prohibit enforce-

ment om the award. Enterprise Wheel, supra, 363 U.S. al

HOR-99.

While we adhere to the Supreme Court's admonition

in Mnterprise Wheel in appropriate cases, Amoro Oil Co.,

supra, 648 F.2d at 1294-95, this is not such a case. We

do not regard it as necessary to discuss the arbitrator's

reasoning because we find that the award itself demon-

strates an infidelity to the plain restrictive terms of the

contract.

The Employer contended, in oral argument, that Part

3 of the award, ordering bargaining, also exceeded the

arbitrator's authority. We do not need to determine this

issue inasmuch as the direction to bargain related only

to the “impact” matter.

A65

14 No. 80-1272

For the reasons stated herein, the judgment granting

Z enforcement of Parts 2 and 3 of the arbitration award: is

reversed. Costs against the plaintiff-appellee.

REVERSED.

A true Copy:

Teste:

Clerk of the United States Court of

Appeals for the Seventh Circuit

USCA 4969—Midwest Law Printing Co., Inc., Chicago—1-23-81—350

‘@ 66

UNITED STATES COURT OF APPEALS

For the Seventh Circuit

Chicago, Illinois 60604

March 31, 1981

Before

Hon. WILBUR F. PELL, JR., Circuit Judge

Hon. BYRON G. SKELTON, Judge*

Hon. HARLINGTON WOOD, JR., Circuit Judge

MILWAUKEE TYPOGRAPHICAL UNION ) Appeal from

NO. 23, ) the United

Plaintiff-Appellee, ) States Dis-

) trict Court

NO. 80-1272 vs. ) for the

) Eastern Dis-

* NEWSPAPERS, INC., ) trict of

Defendant-Appellant.) Wisconsin.

)

)No. 79-C-649

)John W. Reynolds,

) Judge

In its rehearing petition, the Union

expressed uncertainty regarding the effect of

the Court's decision in this case, particularly

*Senior Judge Byron G. Skelton of the United

sha Court of Claims is sitting by desig-

nation.

A67

whether the decision permits further arbi-

tration pursuant to the Warns' award, or

whether any future arbitration regarding the

VDT system must begin anew. This Court

Clearly invalidated both Parts 2 and 3 of

the Warns’ award. Thus, the Warns' award

contains no valid bargaining directive which

would require bargaining or further arbitration

pursuant to that particular award.

On consideration of the petition for

rehearing and suggestion for rehearing en banc

filed in the above-entitled cause by Milwaukee

Typographical Union No. 23, plaintiff-appellee,

a majorityl/ of judges have voted to deny re-

hearing en banc, and all of the judges on the

original panel have voted to deny a rehearing.

Accordingly,

IT IS ORDERED that the aforesaid

petition for rehearing be, and the same here-

by, DENIED.

1/ Chief Judge Fairchild and Judges

Swygert and Cudahy would have granted

the en banc rehearing request.

A68