Opposition Brief — Houghton v. Pike

Office-Supreme Court, U.S.

FALEeD

JUL 23.1965

JOHN F. DAVIS, guene

SUT T/CO CRT, UW. Bh

‘No. 176

ae es IN THE

| soupceme Court of the Anited States,

ieesiens vain 1965

Jenkins Bros., Petitioner

V.

Locat 5623, Unrrep STEELWORKERS OF AMERICA |

ON PETITION FOR A WRIT OF CERTIORARI TO

THE

UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT

BRIEF FOR RESPONDENT IN OPPOSITION

BERNARD KLEIMAN

>. 318 West. Randolph Street

Chicago, Illinois

E.uiot BrEDHOFF

‘MicHaEL H. GoTTESMAN

100t Connecticut Avenue, N. W.

Washington; D. C. 20036

DANIEL BAKER |

. 482 Summer Street

, Stamford, Connecticut

’. Attorneys for Respondent

ig THE

supreme Court of the ‘Gnited States

: OcToBER TERM, 1965.

No. 176

ay

~~

_Jenxins Bos. - Petitioner ?

& V. :

Pi «

Loca 5623, UNirEp STEELWORKERS OF AMERICA

ON PETITION FOR A. WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT

BRIEF FOR i IN OPPOSITION

STATEMENT ..

The Company (petitioner) and the Union (respondent)

are parties to a collective bargaining agreement which pro- .

vides that the Company may discharge employees only for

just cause, and that the Union may arbitrate claims that

the Company has violated the agreement. ©

The Company discharged an employee, Edward Saladak,

on the stated ground that he had gambled on Company

premises: The Union invoked arbitration of the question:

“Was the discharge of Edward Saladak- for just cause; if

not, what shall the remedy be?” The Company instituted

the’ present action in state court to restrain the Union. and

2

The Connecticut State Board of Mediation and Arbitration

(the arbitrator designated in the agreement) from arbitrat-

ing the dispute. The complaint acknowledged that the dis-

pute was arbitrable under the agreement (R. 3a),’ but as-

serted that the agreernent was “unenforceable” -(R. 6a) be-

cause : :

“An arbitration award directing the reinstatement

of an employee discharged by an employer for violation

‘on Company premises of the state gambling statutes is. .

yoid: and unenforceable as against the publit policy. of

the State of Connecticut.” (R. 5a). i

The Union removed the action to federal district court

on the ground that the complaint was one arising under

- Section 301. of the Labor-Management -Relations Act, 29

U. S. C. § 185 (R. 1a). The Union thereafter moved to

dismiss the complaint for failure to state a claim (R. 13a).

_ The district court’ dismissed the complaint. It held that

the dispute was arbitrable under the agreement, and that,

“assuming without holding”. that an award reinstatir g an

employee for gambling on Company premises would violate

Connecticut’s public policy, “such state public policy is not

controlling over, but must yield to, the substantive principles

of national labor law” requiring arbitration of grievance

disputes where the parties have agreed thereto (R. 17a-18a).

The Court of-Appeals for the Second Circuit affirmed,

in a per curiam opinion, on the authority of its decision in

Local 453, Imternational Union of Electrical Workers v.

Otis Elevator Company, 314 F. 2d 25 (1963).

The Court of Appeals’. judgment was entered on Feb-

ruary 26, 1965. The Company did not move to stay the

. . mandate, and the mandate issued on March 23, 1965.

1 Record references are to the Appendix to Appellant's brief in the

court below, which constituted the record in the court below.

9’

- 9

The State Board of Arbitration scheduled the arbitration

to be heard’ on April 9, 1965. The Company’s attorney ap-

"peared at the outset of the hearing to urge that the case —

not be heard, because “an arbitration hearing would make.

its case moot before the Supreme Court” (Appendix, p. aye, Crs

The State Board decided to proceed, and the Company at-

torney refused to participate and left. The Board conducted

the hearing in the absence of the Company attorney because,

as the Company recognized in its complaint, “If one of the

parties to a dispute fails to appear before said Board, after

due notice; the Board may execute its duties ex —.

(R. 4a).

On June 7, 1965 the Company applied to the Court of

Appeals “for recall of mandate and stay of its reissuance,”

stating that the State Board’s award might be forthcoming

at any time-.unless the mandate were’ recalled. On June

16, 1965 the Court of sia denied the siti it oil S ap-

plication.

On June 30, 1965, the State Board issued its tdetailie )

award, reinstating Saladak, but without back pay for the

_ 21 months during which he was denied employment. The —

award is set out in an appendix to this brief. ,The Board

recited Saladak’s testimony that he had -had an excellent

work record with the Company for 11 years; that “he had

‘not taken ‘play’ in the plant but had carried _— into the

plant representing ‘play’ taken at other times”; and that

“he had not been inyolved in any kind of ‘action’ in the

plant” (Appendix, p. 4).-The Board found that to be ar-

_rested on, Gompany property while in possession of policy

slips, without having gambled on Company property, was -

not just cause’for discharge, but warranted the imposition

of the lesser discipline of. denial of back pay.

- 2 “Appendix” refers to the appendix to this brief, consisting of the

_ State Board’s decision. . ~

; P

ARGUMENT

The petition for certiorari should: be denied for several

reasons:

(1) This action is now moot;

(2) The Company’s “Question Presented” is not

presented by the facts of this case; and _ :

“"() "Tae Company’s “Question Presenica” is not

worthy of this Court’ Ss attention. |

I. This action is now moot. It was brought to restrain.

the Union from “proceeding to arbitrate its dispute regard-

ing the discharge of Edward Saladak” (R. 8a-9a). But

_ the dispute has now been arbitrated, and the arbitration °,

award rendered. - There is nothing. left to litigate.

2. The “Question Presented” is not presented by the facts

of this case. According to the petition the “announced pub-

lic policy” of the State of Connecticut precludes enforce-

‘ment of an arbitration award reinstating an employee who

_ has gambled on Company premises’ (Petition for Certiorari,

pp. 6, 8, 9, 11-12). The “Question Presented” (Petition, p.

2) is whether, in light of that “public policy,” a federal

court may order arbitration of the justness of discharge of

-an employee who gambled “in the plant.” But this begs one

of the questions which the Union wished to arbitrate: did

Saladak gamble in the plant? Indeed, Saladak testified in

~ the arbitration hearing that he did not, and the State Board

of Arbitration concladed that “on the basis of the evidence

presented in the hearing . . . there was not = cause for

3 The “announced public policy” on which the Company so > heavily

relies is an unappealed décision of a lower court. Avco Corp. v.

Preteska, 22 Conn. Supp. 475,.174 A. 2d 684 (Super. Ct.‘ Fairfield

Co. 1961). The judge refused to enforce an award in which the ar-

bitrator found that the employee had gambled on Company property

but nonetheless ordered him reinstated. The language of the judge’s

opinion makes clear that the invoked “public policy” is applicable

only if the arbitrator finds mad the employee has gambled on Company

property.

-

§

discharge” (Appendix, p. 5). An arbitration award rein-

stating Saladak because he did not gamble on Company

__premises does not conflict with any announced public policy

- of the State of Connecticut," The decision of the court be-

low, therefore, does ‘not raise petitioner’s “Question,” for

it does not “overrule the announced. public Policy of [the]

state” (Petition, p. 2).

*3. We have shown that petitioner’s “Question” is not

_ raised by the facts of this case. Even if it were, however,

the “Question” would not be worthy of this Court’s attention.

There is only one reported decision in which the “Ques-

tion” has been considered, Local 453, International Union

of Electrical Workers v. Otis Elevator Coz; 314 F. ‘2d 25 (2d

Cir. 1963), cert. denied 373 U. S. 949 (1963). There, the

- arbitrator found that the employee had gambled on Com-

pany property but reduced the penalty from discharge to

a seven-month suspension, reasoning “that Calise had al-

ready been punished once for his offense by ‘the public.

-authorities, that he had undergone a seven-month layoff

without pay or unemployment compensation, that he had

24 years of unbroken seriiority dnd satisfactory service at the

Company, that he had ‘heavy family obligations involving

four young innocent children and a wife,’ that as a result

of discharge he would lose considerable pension rights “built

up aftér decades of ‘service,’ and that the company had not

disciplined the four other men who ‘were guilty also of

violating the same rule against gambling in the plant.’”

- 314 F. 2d at 27.

The district court in Otis refused to enforce the award,

on the ground that reinstatement of the employee ,would

‘violate the “public policy” of the State of New York. 206 F.

-. Supp. 853 (S. D. N. Y. 1962). The court of appeals re-

* Moreover, arbitrators normally hold that gambling outside’ Com-

pany property does not constitute just cause for discharge. ‘Radio Cor-

, poration of America, 39 L. A. 621 (1962); General Electric Co., 41

L.A. 823 cree

~

6 ‘

versed. At the outset, it noted that thé parties had ained

to have an arbitrator, not’a court, decide whethef the em-

ployee should be reinsated. 314 F. 2d at 28. Acknowledging

that there might conceivably be some circumstances in

which “public policy” would preclude enforcement of an ar-

bitration,award, it emphasized that this would be a federal

“public policy,” drawn from “the substantive principles of

federal labor law which federal courts, under the mandate _

_ of Textile Workers Union of America v. Lincoln Mills, 353

U. S. 448 (1956), are empowered, to fashion.” 314 F. 2d at

29. It determined that there is no federal policy precluding

enforcement of an award reinstating an employee convicted |

of gambling on his employer’s premises.

“Of course there is a public policy which condemns

gambling by an employee on the premises of his em-

ployer; it is a‘ policy expressed by the section of the

New York Penal Law which Calise was convicted of

violating. But that policy has been vindicated in the. .

present case in the very manner that the State of New

York contemplated, by a criminal conviction and a

judicial imposition of a penalty. . . . There is no federal

policy that requires. greater vindication of the public

condemnation of gambling than this. The law is not

that Draconian. To enforce the arbitrator’s award in

these circumstances cannot fairly be, looked upon as

judicial condonation of. Calise’s offense.” (314 F. 2d,

at 29; emphasis supplied.) .

The Company in Otis had argued—as did the Company —

here—that it would be subjected to criminal liability if

forced to reinstate the employee, because state law forbids

an owner of premises from “knowingly”. permitting gam-

bling on the premises. The court dismissed the contention ~

out of hand:

“Tt is hard to imagine that an Sectied who had

specifically indicated his disapproval of gambling on

i)

On

: A

‘the premises, had penalized:the employee found guilty,

and had. warned against any such conduct in the future

could be found guilty of valeiicas the statute.” 314 F..

2d at 29.. | :

The Company petitioned for Cnaiaetdd feces the Sec- |

ond Circuit’ s decision. Certiorari_ was denied. 373 U. S.

949 (1963). |

’ The dima in Otis clearly is correct, ae ieliuw fed-

eral labor policy. There have been no subsequent decisions

by any court, state or federal, on the question decided in

Otis. The question was not worthy of review in 1963, as

this Court concluded i in Otis, and it is no worthier of review

“today. ,.

4. The decision below (or, more precisely, the decision of

the court’ below in Otis, which the Company treats as if it

were the decision below) does not conflict, even “in prin-

‘ciple”, with the cases relied upon in the petition (pp. 7-8).

None of. those cases arose under Section 301 of the LMRA,

and thus none involved the enforceability of arbitration |

awards under the “federal common law” of Lincoln Mills

and subsequent decisions. Moreover, none of those cases in- |

volved employees whose vice was gambling. The court be-

“low recognized, in Otis, that there might be some awards

which would be. unenforceable because in conflict with

federally fashioned “public policy” 314 F..2d at 29. It

held only that there is no such policy precluding enforce-

ment of an award reinstating an employee guilty of in-plant

gambling. The Company’s cases dealt with entirely different

types of employee misconduct® and thus are totally i oo

site.

5 Mutiny aboard ship (Southern. Steamship); seizure of the em- -

ployer’s plant (Fansteel); membership and participation in the Com- |

munist Party ( Cutter Laboratory); refusal to transmhit telegraph mes-

sages (Western Union ‘ Z

>

é 8 ‘ 3 ‘ .

CONCLUSION =|.

__ This case is moot. The “Question Presented” is not pre-

sented by the facts of this case. If it were, it would not be

worthy of this Court’s attention. Accordingly, t the petition _

for certiorari: should be denied.

Respectfully submitted, -

BERNARD KLEIMAN |

'. 318 West Randolph Street

_ Chicago, Illinois .

Exuiot BREDHOFF

MicHaEL H. GorTresMAN - |

1001 Connecticut. Avenue, N. W.

Washington, D. C. 20036 —

Danret BAKER

ee 482 Summer Street

Stamford, Connecticut

Attorneys for Respondent

Appendix | i.

STATE OF CONNECTICUT

~ LABOR DEPARTMENT

4

‘STATE BOARD OF MEDIATION AND ARBITRATION _

Jenkins BROTHERS © yes. |

— nd — « Arbitration Award .

Bocar 5623 me Case No. -6364-A55

- Unrrep STEELWorKERS | - Dated: June 30, 1965

OF AMERICA _ | }

- An arbitration hearing was held on this matter in Bridge-

port, Connecticut, on April 9, 1965. Representing the Com-

- pany was Clifford R. Oviatt, Ji., Attorney, -and appearing —

for the Union was Warren Pyle, Attorney. _

SPECIAL BACKGROUND _

A grievance was processed in August 1964 protesting the

discharge of Edward Saladak and it came to the arbitration

step. Arbitration was requested by the Union. At that point

it was decided that arbitration would ‘be held up until the

Company processed its claim in court that this matter was _

" not a proper subject of arbitration. _,

In December 1964 the United States District Court -dis-

missed the Company action to enjoin.the Board from arbi-

trating the grievance in dispute. The Company then ap-

pealed to the United States Court.of Appeals. On February :

26, 1965, the Court, dismissed. the Company action.

In March, 1965 the Board received the. following com- }

munication: ~~

a otha nae

_ 200 Folly Brook Boulevard

Appendix

. “Board of Mediation and Arbitration

State Labor Department

Wethersfield, Connecticut \

“Attention: Robert A. Cronin

' Board Secretary

Re: Jenkins Bros. and Local 5623, United

‘Steelworkers.of America ~~

: "Board Case No. beta A-55

“Gentlemen:

) _ “In your letter oz March 22, 1965, you asked our r ad-

vice-as to whether the Board should assign the arbitra-

tion hearing in view of:the decision in the. above case

_of the United States Court of Appeals for the Second —

” Circuit, Docket No. 29027, Genin, the employer’s

* appeal.

~ “Tt is our opinion hint. the Board should now assign

_ the matter for arbitration hearing as requested by. the

‘Union. Furthermore, we feel that the same procedures _ —

shculd be followed in the companion case—Jenkins

Brothers’ and. ‘Local 123, ie ae Board ‘Case No.

- 6364-A47.

“The ruling does i in our opinion also govern the case"

involving Local 123, OELU.

“Very truly yours,

Harold M. ‘Mulvey © 7

_ Attorney General

‘By ‘Raymond J. Cannon (Signed)

Raymond_ J. Cannon

*RJC:D __- Assistant’ Attorney General

cg: Robert L. Stutz

Appendix © ; ie

_ The Board, then set an-arbitration hearing for April 9, .

: + 1965, at Bridgeport, Connecticut. The Company and Union

ae - . presented themselves. The Company declined to participate

in an arbitration hearing, claiming that it was planning an

‘appeal to the United States Supreme Court. and asked that

arbitration not go forward until the Company’s legal rem- |

edies were exhausted. The Company stated that an_arbi-

{ ie tration hearing would make its case moot. before the Su-

preme Court. The Company also stated that the Attorney

| General of Connecticut had agreed that arbitration wid

not take place until litigation was completed.

_—~"The Board then caucused and. decided that it would pro-

“.: ceed immediately with an arbitration hearing: The Com-

' "pany declined to participate. As the Company left the hear-

ing room, it instructed two police officers subpoenaed by it

to stay at the hearing. Mase eC

The Board.then proceeded with an ex parte hearing and

~ the Union requested that there be a decision in favor of the

Union on the basis of a default by the Company:

The Board stated that the Union should put on its entire

argument and the hearing continued.

Issue : | |

The. Board has set down the following issue for arbitra-

tion: UN :

Was the discharge of Edward Saladak for just cause?

_:. If not, what should the remedy be?

_ It is based upon the Union grievance as presented to the .

csr | D Company. : |

YS Se ee CONTRACT PROVISIONS .

fi | vide Sees Article Il, Management alas

A. Subject to the conditions of this agreement, the ©

Union recognizes the retention by the Company of the

usual management rights, including the management »

Facts

4 + Appendix ee

of the work.and the direction of the work force, the

right to hire, suspend or discharge for just cause or to

transfer; the right to relievé employees, because of lack

-of work or for other legitimate reasons, and the right

to determine the extent to which the plant shall be op-

_ ‘erated, including the determination of shift hours and

eee

equipment. ,

» -

On October 7, 1963, under sections a the Connecticut

General Statutes, a number of policemen arrested Mr. Ed-

ward Saladak in the vem The Company discharged Mr.

. Saladak.

On October 17, 1963, Mr. Saladak appeared with coun-

sel before the Second Circuit Court (Bridgeport, Connecti-

cut) and pleaded guilty to a charge of violation of Section

53-298 of the General Statutes entitled Policy Playing and

Section 53-295 entitled Pool Selling. The record before the —

Court was, introduced in evidence by the’ Union. It was tes-

tified that this was a first offense. The Court accepted the . |

plea and fined Mr. Saladak $50.00 for policy ms 5 and

$100.00 for pool selling.

Argument

Mr. Saladak appeared as a Union witness and testified —

that he had worked for the Company for twelve years. His

work record was eXcellent, he reported, with one warning

’ in 1953 for taking an unauthorized day off.

_ In answer to a question from the Board, Mr. Saladak tes-

tified that he had not taken “play” in the plant but had

carried slips into the plant representing “play” taken at

other times. He stated further that he had not been involved

in any kind of “action” in the plant.

The Union argued that Mr. Saladak has been punished

by the Court and that the Company’s ~— action was

unjustified under all the circumstances.

| Appendix | 5

_ ° The Union contended that the Avco case (Avco Corpora-

tion vs. Preteska, 174 Atlantic 2nd 684, 1961) did not ap-

ply since that case was involved with gambling activity on

the Company - premises during working hours. The Union

pointed out that the Avco case had been rejected by the

two Federal courts that heard the Saladak case.

Discussion cee ae

‘The Board noted the position of the Company with re-~

spect to its intended appeal to the Supreme Court and de-

_ cided to go forward on the basis of the statement of the At-

torney General (supra). A: i

The Board noted the Union’s position that there had been

_a default by the Company but decided that the Union must

_ go forward and put on its total case for a decision by the

Board. —

_ The Board asked the two witnesses subpoenaed by the

Company if they had statements to make. They did not

offer a statement. onere MB ee

The initial question to be answered is as follows:

Was there just cause for discharge in the arrest on -

~ the Company premises for violation of the law against

policy playing and pool selling? |

On the basis of the evidence presented in the hearing, the

Board finds that there was not just cause for discharge. -

This answer leads to the following question:

It being determined that there was not just cause .

for discharge of Mr. Saladak, should there be a total —

remedy in favor of Mr. Saladak on the basis of an ar-

rest on Company premises for policy playing and pool -

_ selling? i wee ie } ae

The arrest on Company premisés for an illegal act on the

Company premises compels the Board not to provide a total

remedy to Mr. Saladak. : 3 : az

6 Appendix

} AWARD.

1. The discharge of Edward Saladak was not for just

cause. The Board, therefore, orders the, Company to rein-—

‘state Edward Saladak to his job on the askew following

receipt of this award. :

‘THE Conmnontut SraTe Boarp oF MEDIATION

em AND ARBITRATION _

| George Bennett (Signed )

George F. McDonough (Signed ) (Dissenting).

Vincent J. Sirabella (Signed ) i yee

2. There will be no back pay awarded to Edward Saladak

- for the period from October 7, 1963 to the Monday follow-

ing receipt by the Company of this award.

George Bennett (Signed)

George F. McDonough (Signed) _

Vincent ‘J. ne (Signed ) (Dissenting Opinion)

Appendix 7

_ STATE OF CONNECTICUT —~—

LABOR DEPARTMENT

STATE BOARD OF MEDIATION AND ARBITRATION

ee.

JENKINS BROTHERS :

— and — Dissenting Opinion.

Loca 5623 _ > Case No. 6364-A55

= UniTeD STEELWORKERS Dated: June 30, 1965

OF AMERICA © |

J

I disagree with the Board’s majority opinion, failing to

award Edward Saladak back pay, for the following reasons:

1. The issue as framed was “Was the discharge of

Edward Saladak for just cause?” Yet, in the discussion, .

’ this is translated into the following issue, “Was. there ©

just cause for discharge in the arrest on the Company ~

" premises for violation of the law against policy playing

and pool selling?” I submit that this distorts the issue

presented completely. It ignores entirely the fact that

he was discharged for violation of the Company rule “

against: wagering on the Company .premises and that

whether this rule was violated is the issue, not whether

a state law or any other rule was violated. The facts

failed to show any such violation.’ He was actually dis-

charged. on the basis of the arrest and not on the‘convic- _

tion. ate %, paar eee 7

.2. The next issue as determined by the Board is

“What shall the remedy be?” But again in the discus- _

sion it is translated to read “Should there be a total

remedy in favor of Saladak on the basis of an arrest

on Company premises for policy playing and pool sell-

ing?” . .

Appendix aa

Since at the time of the discharge Saladak was only

arrested for the violation of two statutes—and not for

the specific crimes of policy playing or pool selling—

the Company acted prematurely in rushing the dis-

charge: It had not evidence, of its own to indicate any- ~

thing more than “possession” at that time. It had no

eviderice that there had been wagering by the employee

on the ‘Company: premises. There was, therefore, no _

basis whatsoever for imposing any penalty then. It

failed to offer any case here, and it, therefore, should —

be required to reinstate the employee with full rights

of employment less any monies earned from employ-

ment since his discharge. |

3. In this case, the matter was not heard for some

18 months after the discharge. The entire delay was

due solely to the employer's efforts in the Coyrts to pre-

vent arbitration. The union made every effort to get

a hearing, but the Board did-not proceed 1 until advised

to do so by the Attorney General. The result of this

delay—the employee lost an average of $130 per week

or about $10,000, without regard to the Company in- |

‘surance and pension plans ag overtime. Hence, Sala-

dak is being penalized to’an extent that he is paying ©

_ the legal costs involved in preventing arbitration. More-

~ over, while the Court’s penalty for violation of the Gen-

eral Statutes was $150, the Board’s denial of back pay

in effect “fines” Saladak.a sum many times greater than

the Court did. 3

4. The Board’s concern with the question of what |

~-an employer ought to do about an employee violating ae

a state law on his premises was, in my opinion, an-

_ “swered by the Second Circuit Court in Otis Elevator

' . ys. Local 453,. TUE, where the Court pointed out that

the individual has paid his debt to the community by

way of a fine and that further punishment for such

crime should not be imposed“by the employer. “The

-

Appendix eke |

answer is that this i is society’ s opligaiion, not the indi-

- vidual employer’s, and that once society has acted, the

employer cannot superimpose an additional penalty

for the violation of the law itself. This is particularly

true here where the Company never had any evidence

_ of “wagering on the Company premises.” :

Vincent J. Sirabella (Signed)

2