Petition for Writ of Certiorari — Mogge v. District No. 8, International Ass'n of Machinists

Ee Office-Supteme Court, U.S,

CIBRARY — 2 , FILED |

«

!PREME COURT. U. & ‘ | APR 22\ 1968

, aah ate _] JOHN F. BAVIS, CLERK

In Ta

Spe Court of the United States

- Octoser TERM, 1967

uw tS 5 ]

ROSEMARY OC. MOGGE and OFFICE EMPLOYEES’

INTERNATIONAL UNION, LOCAL 28, AFL-CIO,

Petitioners,

Vs.

DISTRICT NO. 8, INTERNATIONAL ASSOCIATION OF

| MACHINISTS, AFL-CIO,

‘Respondent.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT.

-

Barnasas F’. Szars,

James N. Kosmonp, ©

33 N. LaSalle Street,

Chicago, Illinois 60602,

Attorneys for Petitioners.

MIDWEST LAW PRINTING CO., 326 NM. MICHIGAN, GHIGAGO 60601, FINANCIAL 6-3068

reece: Mosinee AAPL ONT Ig PLY OWN R™ | LTE RN BONE GHG ITE OR GO Sak ee Pr AES

NTE TNE LMR ALIS

%

.

.

“

a

-

.

*

INDEX |

PAGE

Opinions Below .. ates pies: ot a

Jurisdiction . ae aaa ee

Questions: Presented , bins 2

Statutes Involved ; ons ; §-

Statement. : _ euse 4

1, Factual Background ............... 4

2. The Collective Serguining Agreement of Jan-

uary 1, 1964 ... 5

3. Rosemary Mogge’s Discharge : .

4. District No. .8’s Repudiation of the. Agreement 10

5. The Complaint Filed .-- olathe : 11

6. Motion to-Dismiss or Stay Proceedings ........ 12

7. Subsequent Proceedings ........ # 16.

Reasons For Granting The Writ .... nl mn a

Conclusion . ane | : - 99

Appendices : ,

A—(Opinion of the District Court) ................ la-2a

B—(Opinion of the Court of Appeals) ..:......... 3a-7a

C—(Judgment of the Court of Appeals) ane 8a’

D—(Order Denying Petition for Rehearing) .. 9a

E-—(Statutes Involved) soascrilcnine " 100-128

’

ot

List Or Aurnorrries Crrep -

Cases: :

Anderson Vv. M. —_ & Sons, 170 Minn. 53; 212

NW. 9, 11-(1927) -20..0.......: ‘

Berry y. Carter, 19 Kan. 135, 139 (1877)_................

Bertero v. Superior Court, 30. Cal: Rptr. 719: 216

Cal. App. 2d 213, 218 (1968) .....22.-.:.............. |

Calhoun Deeny & Ewing v. Pederson, 85 Wash.

630; 149 P. 25, 26 (1915)

~ Cash v. Concordia Fire Ins. Co., 111 Minn. 162,

126 N.W. 524, 525 (1910) ‘

Drake Bakeries, Inc: v. Local 50, 287 F: 2d 155

(2nd Cir. 1961); 294 F. 2d 399 (2nd Cir. 1961);

Cert. granted 370 U.S. 24, 8 L. Ed. 2d 474

21

G

(1962) hae 16, 18, 25, 27

El Paso Bldg. & Const. v, El Paso Chap. Assoc.

_ Gen. Con., 376 F. 2d 797, 799 (1967) )

General Electric Company v. Local 205, etce., 233

F. 2d 85, 98 (1st Cir. 1956) Cert. granted 353 |

U.S. 547, 1 L. Ed. 2d 1028

Kulukundis Shipping Co. v. Amtorg Trading Corp.,

126 F. 2d 978 at 989 (2nd Cir. 1942)

Lane, Ltd. v. Larus & Brother Co., 243 F. 2d

364, 367 (2nd Cir. 1957) .. .

‘Lincoln Mills of Alabama v. Textile Workers Union,

230 F. 2d 81, 86 (5th Cir. 1956) Cert. granted

yA

90 -

a

' 28

21

353 U.S. 448, 1 L. Ed. 2d 972 (1957) ............ 26-27, 28.

Local No. 149 v. General Electric Company, 250 .

F, 2d 922, 927 (1st Cir. 1957); cert. denied 356

U.S. 938; 2 L. Ed. 2d 813

27

iii

Mapes v. Metcalf, 10 N.D. 601, 88 N.W. 713, 717

| na a

Nachman v. Nachman: 17 N.Y. S. 2d 323, 324, 12

- Mise. 2d 551 .(1958). ........

Packinghouse Workers v: Needham Packing Co.,: i

- 376 U.S. 247, 251 ; 11. L. Ed. 2d 680, 683 (1964) -

. 16,

Pellicano v. Hartford Fire Ins. Co., 211 Minn. 314,

1 N.W.. 2d 354, 365 (1941) nun... eeccccee Pucccceceeee

Pietro Scalzitti v. Int’l. Union of Operating: En-

gineers, 351 F. 2d 576, 579-580 (7th Cir’ 1965) ..

United Steelworkers v. American Menufacturing

Co., 363 U.S. 564, 566-568; 4 L. Ed. 2d 1408 ....

* United Steelworkers v. Warrior & Gulf Navigation

Co., 363 U.S. 574, 581-584; 4 L. Ed. 2d 1409 .

Vaca, v. Sipes, 386 U.S. 171, 185; 17 Ti. Bd: 2d 849,

RR IRPURT Sais tas cerns We eed Soca ie

Willett v. Smith, 214 Mass: 494; 101 NE. _

1059 (1913) sec : plant Wasi

_ Others:

National Labor Relations Act, eh |

6A Corbin, sence ieadl Section 1443 ( 1962) at pages

434-435 eta ” 18-19

9 U.S.C. 41 ......... ei : lla

9 U.S.C. §3 ) 128

28 U.S.C. 2201 et seq. vee 20

29 U.S.C. §185 ..... : . 24, 10a

64 ALR 2d 1336, 1343-1348 ..... a ae

ne an

ad .

. . . . -

. ‘

a ¢ cs

“g P « ° rd . °

< i

+. f

.

.

.

-

° * : . i

.

4 - i

. .

a ,

.

é

os ‘

,

. = ’

; .. ae ;

-

.

-

-

a, 7

te .

. , . °

.

.

-

,

-

.

od . e

.

e -

e e - e

. . .

. e .

. ite

a . : »

ad . =? c

, *. «

.

-

. ” e

by ; «

° .

‘

at ‘ .

.

. ° .

.

° .

os

.

¢ a ‘

- > »

ov

°

-? ad . °

:

.

‘ °

° °°

-.

. °

. .

A .

.

: o's °*~

. - »

. ° ‘

. to =

. x .

. ba .

. i ;

:

«

. ®

* a 4 - |

r . ie °

*

In THE

a

‘Supreme Count nf the. Vuited ) Sites

Ocrossn Term, 1967

aa

_ ROSEMARY OC. MOGGE and OFFICE EMPLOYEES’

INTERNATIONAL UNION, LCCAL 28, AFL-CIO,

Petitioners,

vs.

_ DISTRICT NO. 8, INTERNATIONAL ASSOCIATION OF

MAC TS, AFL-CIO,

Respondent.

PETITION FOR A WRIT OF CERTIORARI TO THE —

|‘ UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT.

Petitioners. pray that a.Writ of Certiorari issue to

review the judgment of the United States Court of—

Appeals for the Seventh Circuit entered on December

26, 1967: The Court of Appeals affirmed the District

Court’s granting of Respondent’s alternative. motion to

stay, pending arbitration, Petitioners’ suit for damages

under Section 301(a). of the National Labor Relations

“Act, as amended.

OPINIONS BELOW. .~ ~

“The opinion of the Distriet Court for the Northern

District of Illinois, Eastern Division, filed on. April

21, 1967, was not reported. It is set forth in Appendix

A, infra pp. la-2a. The opinion of the Court of Appeals

for the Seventh Circuit, filed on’ December 26, 1967, is —

set forth in Appendix B, infra pp. 3a-Ta, and fo

at 387 F. 2d 880. |;

-

_ JURISDICTION.

- @

4

The judgment of the Court of Appeals was entered

on December 26, 1967 (Appendix C, infra p. 8a). On

January 23, 1968 the Court of Appeals denied peti-

tioners’ Petition for Rehearing (Appendix D, infra p.

9a). The jurisdiction of this“Court is inveled under

28 U.S.C.°§ 1254(1).

QUESTIONS PRESENTED. —

re » mene 3 j

1. May a party to a collective bargaining agreement,

after having acknowledged the agreement, when asked

to arbitrate thereunder disclaim the agreement and re-

+ pudiate its arbitration provisions, in violation of the

national labor policy, thereafter stay for arbitration a

suit for damages filed in reliance upon the repudiation,

under Section 301(a) of the National Labor Relations

‘Act? ys ,

one = ,

2. Whether the Supreme Court shou’4 exercise its

supervisory powers to review a decision of the’ Court

of Appeals based. upon findings wholly maanppeotes by

_any evidence?

3. Whether tite United States Arbitration Act ap-

\ Plies to cases arising under Section 301(a) of the Na-

‘ tional Labor Relations. Act? If so,. is the respondent. in

default within the meanings of its terms? If not, what |

- are the applicable standards under the substantive law

of Section 301(a)’ for seeking arbitration after having

previously refused saine, and may the respondent herein

stay for arbitration petitioners’ suit for breach of dam-

ages? ’

- STATUTES INVOLVED.

| named

Section 301 of the Labor Management Relations Act,

29 U.S.C. §185, and Sections 1 and ‘3 of the United States

Arbitration Act, 9 U.S.C..§1 and §3 are involved herein.

They are set out in full in Appendix E, infra PP. 10a-12a.

pee ee

‘STATEMENT.

A : a

————— - .

1. Factual Background

. August, 1950, petitioner-plaintiff Mogge was em-

ployed by the respondent-defendant as a stenographer-

secretary for two days-a week. In early 1951, she com-'

menced working three days a week. In the spring of 1952

she started working five days a week (A. 29-30). Upon

the retirement of Lois Brooks in October, 1959, Mrs.

Mogge was promoted to the job classification of Admin-

istrative Secretary, formerly held by Mrs. Brooks. Her

_. Salary was increased to that’ which the former Adminis-

trative Secretary had been receiving (A. 30, 50-51).

On February 1, +1963, Mrs. Mogge began a six-month

maternity leave of absence. Prior to this time, Doris

Farley was hired as a stenographer-typist. On August 1,

'- 1963, Mrs. Mogge returned to work three days a week

at an adjusted salary. She worked every Monday, Wed-

nesday and Thursday. Doris Farley worked every Tues-

day, Thursday and Friday (A. 17, 31, 54).

Mr. James G. McDonald had been the executive head

of, District No. 8 since’ July, 1945 (A. 153). In his ca- .

pacity as Directing Business Representative Mr. Me- °

Donald handled the administrative operation of the de-

fendant union (A. 33). In such position, he entered

into‘ various agreements and contracts. on behalf of

the District. These included the execution of leases, cen-

tracts for purchase of. furniture and fixtures, and vari-

ous other matters arising in the administration of the

_District.. He had the authority to hire and fire union

—5— . : :

organizers: (A. 33). The present Directing Business Rep-

resentative described the job as “running the affairs of

_ District No. 8” (A. 155).

‘Plaintiff Mogge attended the meetings of the ‘District

Council of defendant union as the reporter. Although

wage increases and expenditures would be mentioned at

District Council meetings Mrs. Mogge had no knowledge

.of any requirement that the council had to formally ap-

prove them. Rather, such matters were brought out in-

formally by Mr. McDonald (A. 33, 56). ~

The petitioner-plaintiff union, Office Employees’ Inter-

national Union, Local 28, AFL-CIO, had been represent-

ing the office employees of the defendant since’ at. least

1944, when Sarah E. Keenan was elected the Business

Representative (A. 36-37, 74-75). From some time prior

to 1944, until January 1, 1964, an oral collective bargain- .

ing agreement had existed between plaintiff - union and

defendant (A. 36-37). 0D

“Mr. McDonald conducted all negotiations on behalf of

the defendant with the plaintiff union. from 1945 to Feb-

ruary, 1965 (A. 37). He had made various agreements:

and commitments on behalf of defendant, with plaintiff

union, concerning terms and conditions of employment

of the employees in the unit (A. 37): Any such agreement

made with him, or commitment from him, was fulfilled

(A. 32).

2. The Collective Bargaining Agreement |

of J anuary 1, 1964

the the fall of 1963, the four office employees in the

unit ‘agreed to seek a written contract embodying their

present terms and conditions of employment (A. 31-32,

~

37-38, 69-70). Mrs. Mogge and another of employees met

on several occasions with Local 28’s Business Represen-

_ tative, Sarah Keenan, regarding this matter (A. 32, 37).

This culminated in a meeting later in December, 1963,

between Miss Keenan, Mrs. Mogge and James G. Me-

Donald. Mr. McDonald agreed to the employees’ request

to have the oral collective bargaining agreement reduced

to writing. Shortly thereafter, Mrs. Mogge typed the con- _

tract (A. 32, 37-38, 70). The agreement was then exam-

ined and approved by all employees in the unit includ-

ing Mrs. Farley (A. 32). The written contract merely

codified the oral agreements between plaintiff union and

defendant employer. There were no additional economic

benefits, nor were there any changes in terms and con-

ditions of employment (A. 32, 37, 82-83). The contract

(A. 8-17) was signed in the office of Local 28 « on Janu-

ary 2,.1964 (A. 32, 38, 69, %).

The agreement provided in Article III, Section 1, that

the defendant accepted the job classifications set out in

Schedule C attached to the agreement (A. 8). Schedule C

provided for four job classifications: Administrative

Secretary, Steno-Secretary, Steno-Typist and Switch-

board-Typist (A. 17). |

It farther provided in Article ITI, Section 2: “Whenever

@ new job is created, or the contents of any job changes,

the employer agrees to meet with: the Union ‘Committee

to discuss the new classification or changes in the existing

job.”’ (A. 9). :

In Article VI, Section 7, the Seienek solid, “Eim-

_ ployees employed by the Employer at the execution date

_ of this Agreement, and employees hired to fill ‘a perma

> - —

nent position covered by this Agreement, may not be

dismissed, suspended or demoted without just and suffi-

cient cause, except as provided in Section 2 above.”’

(A, 11). : |

Attached to and made a part of the Agreement (A. 17)

was a “Letter of Understanding’’ dated January 1, 1964,

which in part provided: “It is understood and agreed

between District No. 8, International ‘Association of Ma-

chinists, known as’ the Employer, and the Office Em-

Ployees’ International Union, Local 28, known as the

Union, that the’ Administrative Secretary, Rosemary

Mogge, shall work three days per week * * * at the

salaries stipulated in Schedule “B” of this Agreement.

In the event Rosemary Mogge shall return to her orig-

inal five-day week, her salary shall be reinstated to

$185.00. per week.’? ree eo

. The Agreement also contained “Grievance & Arbitra-

tion Machinery” in Article XTIT as follows (A. 14):

“* * * When an-emplovee has a grievance, he or she |

shall first make an effort ‘to arrive at a satisfactory’

settlement through the Union Steward. In the event

the grievance ‘is not settled in this manner, the Execu-

tive Officer of the Employer will be consulted by the

Union Business Representative, or her agent. If the

' grievance still exists, within ten ( 10) calendar days

the matter may be submitted to arbitration.”

| Rosemary Mogge’s Discharge

In February of 1965 Mr. McDonald resigned because

of ill health (A. 33). On or about February 1, 1965, at

_ the request of the district delegates of District No. 8, the

Grand Lodge of the International Association of Machin-

ists assumed supervision of the District.’ Mr. Eugene

‘

Glover, a Grand Lodge Representative, was appointed

by the International President to agsume control of Dis-:

trict No. 8. His title was Deputy Sujervisor (A. 199-204).

.On April 5, 1965,-Rosemary Mogge was told by Mr.

Glover that he had decided to eliminate her job. classifica-

tion of Administrative Secretary and that she had been

reclassified as a stenographer. She was further told to .

réport for work five days a week commencing with the

week of April 12, 1965. Mrs. Mogge told him he could

not take this action without negotiating with the \plain-

tiff union and that she would discuss the matter with

Miss Keenan (A. 34, - 62-66, 217-218).

In the deposition of Eugene D. Glover, sie _—

‘14, 1966, he testified that he told plaintiff Mogge on April

5, 1965: “We will make some kind of arrangement, what-

ever. you can, and you report in next month. You do not

- have to report in right away, but next month you report |

in.on a five-day week.’’ (A. 217-218). However, he later

said in his deposition that he did require her to work

five days a week starting April 12, 1965 (A. 227, see

~~ also his letter of April 13, 1965, A. 19).

After her conversation with Mr. Glover, Mrs. Mogge

then called Sarah Keenan to report this action. Miss

Keenan attempted to call Mr. Glover, and was informed

._ that he had left town and would not be back until aeatiade

April 12, 1965 (A. 38). | ;

Thereafter, on April 7, 1965, Miss Keenan sent a letter

by certified mail to Mr. Glover at the office of District

No. 8 requesting a meeting “on Monday, April 12, or as

goon thereafter as possible.’”? Miss Keenan further stated

in the letter: “This meeting is requested as there has been

—9

a threatened violation of our agreement. (The agreement

' is’ dated January .2, 1964.)” The letter also requested that

‘the working conditions of the union members in: the em-

ploy of defendant remain. in status quo until after a

meeting is held and the results evaluated (A. 38-41).

On April 12, 1965-4 meeting was arranged. Miss Keenan

_and Mrs. Mogge met with Mr. Glover ‘and Mr. Gray for

_ almost four hours. During the meeting, Mr. Glover stated

that he would not negotiate with the union on the change —

in. Mrs. Mogge’s job classification from Administrative

Secretary to stenographer, nor would he negotiate. the

requirement that she work five days a week instead of

three. Miss Keenan and Mrs. Mogge were advised by Mr.

Glover that he was not going to have the office workers

_ telling him how to run the office: Mr. Glover insisted that _

‘Mrs. Mogge report for work on April 13, 1965, a day .

she would normally be off from work, or she would be

subject to disciplinary action: Thereafter, when Mrs.

Mogge did not report for work on April 13th,.she re-

ceived a telegram from Mr. Glover (A. 18) advising that

she had been “terminated for insubordination. ” A. 34-35,

39, 66-68, 85-89). ,

On the same day, April 13th, plaintiff union by tele-

gram to the defendant employer submitted the grievance

of Rosemary Mogge to arbitration under Article XIII

of the Agreement (A. 231-232).

Thereafter plaintiffs received a letter from defendant

over the signature of Mr. Glover, dated April 13, 1965.

It was directed to plaintiff union with a copy to plaintiff

employee (A, 19-20). It acknowledged that a hearing had

been held on a grievance filed by Mrs. Mogge. It then

went on to state:

EL AIT ITIL TOT

_

“Mrs. Mogge contended that District No. 8, Inter-

national Association of Machinists was violating the

Contract between the parties by assigning her to

work five days per week and relieving her of her

duties as ‘Administrative Secretary’.

“Qn Monday, April 5, 1965, Mrs. Mogge was in-

structed by Grand Lodge Representatiye Glover that

she would no longer be required to perform the duties .

of ‘Administrative Secretary’; and further, that she

-would be required to report for work five days per

week commencing Monday, April 12, 1965.-

“District No. 8, I. A. of M. contends that the Con-

tract alldws the employer to assign or relieve em-

ployees of duties as well as require employees -to

work a regular five-day week. a

The letter conéladed by asserting that there : was no viola-

_ tion of the agreement, and snonmngy s Genied the griev-

ance (A, 19-20). o-

4. District No. 8’s aadeithiitas of the Agreement

On April 15, 1965 another letter was sent by the de-

fendant over the signature of Mr. Glover to plaintiff

union. It stated (A. 21): .

| “This will acknowledge receipt of your telegram

dated April 13, 1965, advising me that 0.E.I.U. Local

No. 28 is submitting a Grievance to arbitration under

Article XIII of an alleged Agreement between

O.E.1.U. Local 28 and District No. 8,. ieepetionss

Association of Machinists.

“Be advised that since our discussion concerning

the legality and enforceability of the alleged contract

on April 12, 1965, we have sought advice of counsel

|

. and have been advised that there is no valid contract

in existence between O.E.I.U. Local No. 28 and Dis-

_ trict No. 8, International Association of Machinists

and that the purported Agreement on which you rely

is not binding on District No. 8, International Asso-

ciation of Machinists. 2

“In view of the above, be further advised that since

there is no Agreement to arbitrate in effect between:

the parties, we cannot agree to submission of the

Grievance in question to-arbitration.”’

On: April 21, 1965, the plaintiff union again formally

requested arbitration by correspondence to the defendant

(A. 23). On April 22, 1965, a ten-minute meeting was held -

between Miss Keenan, Mrs. Mogge, Mr. Glover and a

Mr. Gray at defendant’s office. Mr.. Glover advised that

the defendant had refused plaintiff union’s further request

for ‘arbitration dated April 21, 1965, and reiterated de-

fendant’s position that the written Collective Bargaining

Agreement was invalid (A. 35-36, 39-40,-89-91).

, 5. The Complaint Filed |

On October 15, 1965, plaintiffs filed the Complaint be-

low. It alleged that contrary to the terms and conditions

of the said Agreement, on April 5, 1965, the action of the

defendant, in eliminating the job classification of Admin- °

istrative Secretary, reclassifying plaintiff employee as a

stenographer, and ordering her, to report for work five

days a week commencing April 12, 1965, was a unilateral

change of an existing job classification in violation of

Article ITI, Sections 1 and 2. It also alleged that such con-

duct violated Article VI, Section 7, in that the plaintiff

employee was demoted without just and sufficient cause,

eae

and further violated the “Letter of Understanding” made

a part of the Agreement (A. 45).

The Complaint further alleged ‘that the defendant other-

wise breached the Collective Bargaining Agreement by

refusing to enter into arbitration under Article XIII of

the Agreement pursuant to plaintiff union’s requests of

April 13, 1965 and April 21, 1965 (A. 5-6). It also alleged

that the defendant persisted in its refusal to submit to.

arbitration, by reason of the alleged invalidity of the

contract, up to the time of the filing of the Complaint

(A. 6). It further alleged that by reason of defendant’s

breach of the -Agreement and wrongful discharge of

Plaintiff Mogge, monetary oan have heen suffered

(A. baka 7 :

6. Motion to Dismiss or Stay ——

On December 20, 1965, the defendant filed a motion to

dismiss or stay proceedings. (A. 23-27).. Attached to this.

motion were the affidavits of Russell Oddo, the present -

- Directing Business Representative of defendant union,

and Doris Farley. The alleged invalidity of the contract -

- appeared to he based upon two grounds.

The first was that “The governing board of District

No. 8 is the District Council, and it must approve all

contracts and expenditures of the District”—that since

‘ the Collective Bargaining Agreement between plaintiff

union and defendant was not approved by the District

Council, the Directing Business Representative did not

_ have the authority to execute the Agreement, and there-

fore it was not binding on the defendant. While the mo-

tion itself infers that this approval was required by the

By-laws of the District, it is not specific as to the nature

os

‘

3.

of the requirement. under which the Agréement should

have been approved by the District Council (A. 23-24).

+The support’ for this position was primarily based upon

the affidavit of Russell Oddo, the present Directing Busi- -

ness Representative of defendant union. Mr. Oddo averred

_ that in his capacity as Directing Business Representative

of the defendant union, he has custody of its records and

full knowledge of its affairs. Mr. Oddo stated that the

By-laws of District No. 8, as welt as the Constitution of

the International Association of Machinists, require that

all contracts be submitted to the District Council of de-

fendant union for approval. He further averred that he

had attended all’ meetings of the District Council .and

examined the official minutes of such meetings, and that’.

they fail to disclose that the contract was ever submitted

to the council for approval (A. 26-27). Leas

No: copies of either the By-laws oh defendant union,

the Constitution of the International Association of Ma-

chinists, or minutes of the District Council were attached

as exhibits to the Motion to Dismiss. Nor was there men-

tioned what policy or customary practice, if any, required

the submission of Agreement to the District Council for

approval.

However, in Mr. Oddo’ s deposition, taken March 1,

1966, he testified that the provision of the By-laws that

he referred to in his affidavit was Article IT, §3 (A. 183-

186). That provided as follows: :

« “Section 3: Secketary and Duties: A Buslaces Agent

shall act as Secretary and shall keep a correct record

‘of the reports submitted by the Chairman. He shall.

also submit the records of each meeting to the Dis-

__ trict Lodge at its succeeding meeting.”’ (A. 185)

Mr. Oddo also identified the section of ‘the Constitution

of the International Association ‘of Machinists that he

had reference to in his affidavit as Article 24, Section 11

(A. 183-184, 186-187). That provision was as follows:

“Management, Investment and Disbursement of Dis-

trict Lodge Funds or Property:

Section 11. The funds, property or assets of Dis-

trict Lodges shall not be loaned or appropriated for

any other than the legitimate purposes of the I. A. M.

“Expenditures or contemplated expenditures i in vio-

lation of this Sec, shall be cause for any action

deemed necessary by a Grand Lodge officer to fully

protect such funds, property or assets of the District

Lodge.” (A. 186-187).

In his deposition Mr. Oddo said that he also had refer-

ence in his affidavit to the fact that/@astomary practice

would require the Agreement to be approved by the Dis-

trict Council (A. 183, 185). Mr. Oddo explained this prac-

-tice to be that, “any wage increases for. business agents,

office employees, has (sic.) always : been brought. before

the District Council to be approved.” (A. 190-191) Mr.

Oddo knew that there was-a verbal agreement or under-

standing. between. plaintiff union and defendant prior to -

the written agreement (A. 173). Regarding the authority

of business. agents to execute contracts or collective bar- :

gaining agreements he said, “. . . any business agent that

signs a contract—it becomes a i document. It binds

both parties” (A. 173). : ).

Mr. Glov er further said that ueach of the authority of

Directing Business Representatives arises from customary

practice, as opposed to specified authority (A. 247). He

was not familiar with the customary practice of District

No. 8 prior to February 1, 1965 (A. 248)*

tee

==

_ _ The second apparent ground in the Motion for claiming

the Agreement to be invalid was the assertion that it was

not signed on January 2, 1964, as appeared on the face

of the agreement, but rather some time in January, 1965.

The support for this, ground is stated to be the affidavit

of Doris Farley (A. {20 Doris Farley, an employee in

the unit, avers that ‘she was present when the original

of the said agreement was typed in the office of District _.

No. 8 on or’ about January 21; 1965. She recalled Rose-

mary Mogge and Helen Spillane leaving the office of

District No. 8 with the typed agreement to go to the

office éf sss union on or about January 21, 1965

(A. 27)%.

ier: of Doris Farley was taken on January

27, 1966 (A. 97-148). Her testimony regarding the aver-

ments of the affidavit was conflicting and confused (see

A. 112-135): In it she stated that she never saw the

‘agreement being typed (A. 134). She also testified that.

she saw the “completed” agreement in early January,

1965, either the first or second Thursday in the month |

(A. 115-118). When asked if she was sure that it was

January 21, 1965 that Rosemary Mogge and Helen Spil-

lane took the agreement to the office of plaintiff union,

as stated in her affidavit, she said “I could be wrong

” '(A.- 134).

The second part of defendant’s Motion alleged that if

the Agreement was valid, either the complaint should be

dismissed or the matter stayed. pending arbitration as A.

— : \

g

—16—

7. Subsequent Proceedings |

On May 27, 1966 plaintiffs filed their Crose-Motion for

Summary Judgment seeking to establish the validity of

the Agreement. It was supported by the affidavits of

Rosemary Mogge and Sarah E.: Keenan (A, 28-42).

The Motion and affidavits set out that the written col-

lective bargaining agreement was a codification of the

existing verbal agreements between the parties. That it.

contained the same terms and cénditions of employment

and economic benefits as had existed prior thereto. Fur-

ther, that the Directing Business Representatives : had

the authority to execute same on behalf of the deféndant

employer. That there was no genuine issue as to a ma-—

terial fact regarding the validity of the Agreement (A.

28, 32-33, 36-38).

On April 21, 1967, the District Court rendered a Memo-

randum and Order (A. 42-44, Appendix A infra pp.

la-1b). In it -the following’ finding was made:

“T find that there was valid and enforceable ¢ con-

tract between the parties. Defendant’s previous con-

testing of the validity thereof I further find was not

reasonable.” (A. 43)

The Court then went on to find that there was “no

waiver of a right ‘to arbitration’, by the defendant (A.

43). Based upon the rationale of Drake Bakeries ‘v.

Local 50, 370 U.S. 254 and Packinghouse Workers v.

Needham Packing Co., 376 U.S. .247, the Court granted

defendant’s motion to stay the ne pending arbi-

tration.

. Plaintiffs appealed from that a of the decision

granting District No. 8’s motion to stay the proceedings

—1i-

pending arbitration. District No. 8 did not cross appeal

from the decision finding the collective bargaining agree-

ment valid. On December 26, 1967, the Court. of Appeals

affirmed the District Court’s granting of the stay order.

(Appendix B infra pp. 3a-7a).

It agreed that District No. 8’s_ prior contesting of ' the

validity of the agreement “was not unreasonable.” The

opinion added that District No. 8 had.& “plausible ground

for challenging the validity” of the agreement its prior

refusal to arbitrate did not constitute. a waiver of ‘that

“Tight.

The Court held that the United States Arbitration Act

is applicable to Section 301(a) cases. However, it found

_ that District No. 8’s prior refusal to. arbitrate did not con-

stitute “default” within the meaning of the Act. Petition

for Rehearing was denied on J anuary 23, 1968 (Ap-

— D infra p. Ba).

~

=_—

REASONS FOR GRANTING THE WRIT.

1. The decision of the Court of Appeals affirming .

the District Court is in derogation of the common law

and represents an improper extension of the rationale

of Drake Bakeries v. Local: 50, 370 U.S. 254 and other

decisions of this Court, which if permitted to stand,

will frustrate the national labor policy favoring arbi-

tration of labor disputes. Furthermore the determina-

tion of the issues herein involve important questions of

substantive law under Section 301(a) of the National

Labor Relations Act regarding repudiations involving

other than alleged breaches of no-strike provisions of

collective. bargaining agreements which should be de-

termined by this .Court. :

It. has been well established that repudiation of arbi-

‘ tration provisions of a contract by disclaiming the. valid-

-ity of the contract or denying the obligation thereof,

cannot be retracted after a suit for damages has been |

filed: in reliance thereof by the other party. The rule

is set out in 6A Corbin, Contracts, Section: 1443 (1962) @)

at pages 434-435:

“Next, consider the effect of a repudiation or other

breach by’ one party, its effect on the right of the

other party and its effect on the right of the repudi- °

ater himself. Although one party cannot by himeelf

@) This Court has recently commented on the applicability ‘of this

section to situations similar to that at bar, in Vaca v. Sipes,.386

- US. 171, 185; 17 L. Ed. 2d 842, 855 (1967).

‘rescind’ a contract, he can wrongfully ‘repudiate’ it.

- What is the effect of his repudiation? To answer this,

we must first interpret his expressions and determine

- the coverage of the repudiation. Suppose first that he

repudiates the agreement to arbitrate itself. By such

a repudiation he does not deprive the other party of

his right to arbitration; and if the repudiator brings

- an action in breach of his valid arbitration agreement

the defendant can defend on the ground that arbitra-

tion is a condition precedent, or under a statute can

obtain a stay or an order to arbitrate, or can counter-

claim for damages. But such a repudiator has himself

no right to arbitration. The other party can now

bring his action in reliance on the repudiation, or

otherwise change his position in reliance. Thereafter,

the repudiator has no power of retraction and can-

not «insist on the remedy by arbitration. If the al-

leged repudiator denies the existence or the scope of

his alleged ‘repudiation,’ in the suit brought against

him, and asks for a stay of the action and an order

to arbitrate, the issue so raised would be for the

courts to determine.” (Emphasis supplied).

_ However, the Court of Appeals held that the rule in.

Corbin is only applicable where the repudiation is wrong- -

ful. It equated “wrongful repudiations’” as those which -

are based upon grounds that are “patently untenable” or

“clearly. wrong’’ as ‘it says existed “in the cases relied

upon by plaintiffs’, in support of the rule in Corbin

(Appendix B, infra p. 5a). This tortured interpretation

of repudiation as used by Professor Corbin is unsup-

ported by either logic or the cases cited therein.

It is submitted the Seventh Circuit has confused wrong-

ful refusals to arbitrate or nonperformance with repudia-

tions of ‘an entire agreement containing the arbitration

provisions. Where the repudiation is of the entire agree-

ee

an =i.

ment the repudiator’s right to arbitration is lost once

the’ other~ party -has changed its’ position. in Teliance ¢ on

. the repudiation. (2)

_ Bertero v. Superior Cour? 30 Cal. Rptr. 719; 216 Cal.

App. 2d 213, 218 (1963) cited by Professor Corbin, pre-

sented a factual situation almost identical to that at bar.

It involved an employment contract which contained an

_ arbitration clause. The employer, prior to the filing of

suit, had written to the,employee stating that the- con-

tract between them was invalid. Thereafter, the employee

brought an action at law for damages for breach of

contract. The defendant moved to stay the action pend-

\ ing arbitration. The court held that the defendant's let-

~ter, which declared the contract invalid, unenforceable

and terminated, constituted such repudiation as to be a

waiver of the defendant’s right to demand arbitration.

In Berry v. Carter, 19 Kan. 135, 139 (1877), the defend-

ant told the plaintiff prior to the institution of a suit for

damages, that he would not recognize the contract be-

tween the parties. In commenting as to whether the

plaintiff should have appointed arbitrators as spelled

out by the contract, the court said at page 139:

“The defendant, by refusing to recognize the con-

tract, waived his right to an arbitration, and at once

gave authority to the plaintiff to sue him in.any court

having the requisite jurisdiction for the damages

_ which plaintiff had sustained.” (Emphasis supplied).

(2) However, the repudiator could have challenged the validity of

the agreement by way of declaratory judgment, 28 U.S.C. 2201

et seq. See El Paso Bldg. & Const. v. El Paso Chap. Asqoc. Gen.

Con., one F’. 2d 797, 799 (1967).

wala.

In Mapes v. Metcalf, 10 N:D. 601, 88 NW. 713, 717

(1901), the defendants disclaimed liability under a con-

tract on the ground that it was a restraint against trade

and void as against public policy. The court held that

even though the defendants did not specifically refuse

arbitration, since they denied all liability under. the con-

tract, they waived any right whieh they may have had

to arbitration. —

In Pellicano v. Hartford Fire Ins. Co., 211 Minn. 314,

1 N.W. 2d 354, 355 (1941), the defendant insurance com-

pany had declared a policy void. Thereupon, the policy-

holder sued. To the defendant’s assertion that the mat-

ter be arbitrated as provided in the policy, the Court

said:

_-* * * The defendant, by repudiating the policy as

void and thus denying any liability under it, lost any

right it may have had to require arbitration ay eae

(1 N.W. 2d 354, 355)...

The rule that a defendant cannot seek arbitration af-

ter a suit in reliance on the repudiation is filed is also

found in Willett v. Smith, 214 Mass. 494; 101 N.E. 1058,

1059 . (1913) ; Calhoun Denny & Ewing v. Pederson, 85

Wash. 630; 149 P. 25, 26 (1915); Cash v. Concordia Fire

Ins. Co., 111 Minn. 162, 126 N.W. 524, 525 (1910) ; Ander-

son v. M. Burg & Sons, 170 Minn. 53; 212 N.W. 9, 11

_ (1927); and Nachman v. Nachman, 177 N.Y.S. 2d 323,

' 324, 12 Mise. 2d 551 (1958). ‘See also Lane; Ltd. v. Larus

&. Brother Co., 243 F. 2d 364, 367 (2nd Cir. 1957).

2, The findings of the Court of Appeals upon which

its decision is based are wholly unsupported by any evi-

dence. Although acknowledging that District No. 8 had

refused to arbitrate on the ground that the collective

—22—

_ bargaining agreement was allegedly invalid, the Court

found this not to be a repudiation of arbitration be-

cause the reasons for contesting the validity of the

agreement were “not unreasonable.” In so finding the

Court relied upon the fact that the District Council did

not approve the contract and that “Mrs. Mogge knew of

the District’s procedures requiring Council approval of

matters of importance.” This the Court held “was suf-

ficient to raise a good faith doubt .as to the validity

of the agreement” (Appendix B, infra p. 5a).

It is submitted that whatever knowledge Mrs. Mogge

had, or did not have, is irrelevant to the question of

whether the By-Laws or Constitution of tHe defendant

required the agreement to be approved by the Council.

Furthermore, even if Mrs. Mogge had testified herein |

that she had this knowledge, her depositién was taken on

December 9, 1965.) It is inconceivabe how her testi-

mony can support a finding that District . No. 8’s* denial

of the’ validity of the agreement on April 15, 1965 was

in good faith (A. 48). |

Assuming arguendo that the defendant’s prior refusal]

to arbitrate would not be a “wrongful repudiation” of

arbitration if the grounds therefore were “not unrea-

sonable”, “patently untenable” or “clearly wrong’’, the -

evidence’ herein can lead to no other. conclusion but a

‘finding that the repudiation was wrongful. The primary

ground for denying the validity of the contract was

based upon a claim that the District Council had to ap- -

(3) Mrs. Mogge’ s only testimony regarding this was that wage’ in-

creases and - bows were mentioned at District Council ©

meetings (A. 33, 56)..

—23—

prove the Agreement, and lacking such approval the

Directing Business Representative did not have the au-

thority to execute same (A. 23-27).

The affidavit of Mr. Russell Oddo stated that the By-

laws of defendant union and Constitution of the Interna-

tional Union required such District Council approval. It

was discovered that the By-law provision relied on was

Article 2, Section 3, defining the duties of a Secretary at

meetings (A. 185). There is no relationship between a

requirement that a business agent shall act as a Secre-

tary and keep accurate records, with a requirement that

collective bargaining agreements must be approved by .

the District Council. |

Equally without merit is. Article 24, Section 11 of the °

International Union’s Constitution which Oddo relied, on’

as requiring District Council approval of the agreement .

(A. 183-184, 186-187).: Again, it is inconceivable how any

‘ interpretation of a provision stating that illegitimate -

loaning or appropriating of funds, property or assets of

a. district lodge will subject the guilty party to disciplin-

ary action, in any way can be strained into a requirement

that contracts must be approved by the District Council

before they become valid instruments.

“As ‘Mr. Oddo. said in his deposition when asked again

if ‘these were the only provisions he was referring to in

his affidavit: “Yes. This is one of these hurry-up deals. I

‘ was called in and referred to certain things in the spur

of the moment on the way out.” (A. 188).

It appeared that Directing Business Reproeehtatives:

~ secure their authority not from By-laws or the Constitu-

tion but rather from prior practice (A. 247 ): For some

—24—

- twenty years, the Directing Business Representatives who

executed the agreement herein, had been the chief execu-

tive officer of the District and had executed all nature

of documents arising in the scope of his authority (A. —

32-33, 36-37, 56, 155). See also 28.U.S.C. 185(b) and 185-

(e) (Appendix E, infra pp. 10a-11 ;

The only evidence presented regarding “customary prac-

tice” of securing District Council approval was. with re-

gard to’ wage increases (A. 190-191). However, there

were no wage increases or other increased economic

benefits in the agreement (A. 32, 37, 82-83).

The affidavit of Doris Farley regarding the time of the

execution of the agreement, apparently inferring fraud on

plaintiffs’ part, was also urged in the Motion to Dismiss

(A. 24). The District Court did not feel that it was even

worthy of mentioning in its decision ( Appendix A, infra

pp. la-2a). The Court of Appeals only mentioned it in

a brief feotnote (Appendix B,.p. 5a).

- Moreover, District No. 8 prior to it alleging the in-

validity of the contract had accept the contract and

‘operated thereunder. At the meeting of April 12, 1965

_-its representatives were well aware of the collective

_ bargaining agreement. between the parties and the rights

set out therein. Mr.-Glover stated at the time that it

was District No. 8’s position’ that the agreement be-

tween the parties permitted him to take the action he

had taken (A. 34-35, 39, 66-68, 85-89). No-better con-

firmation of District No. 8’s acceptance of the contract .

validity can be found than’in Glover’s correspondence —

_of April 13, 1965 acknowledging that. the meeting of

April 12th was in fact a grievance hearing within the

“ae , —5—

. fF ~ .

terms of the contract. At this: point, District No. 8 had

no difficulty in accepting the agreement between the

parties (A. 19.20). ‘a ,

It was only after receipt of the request for arbitra-

tion that the defendant sent the letter of April 15, 1965

denying the validity of the agreement based upon “ad-

vise of counsel”. (A. 21). Obviously, its counsel was fa-

miliar with the Supreme Court mandate requiring ar-

bitration: unless specifically exeluded by the contract. -

United Steelworkers v. American Manufacturing Co., 363

U.S. 564, 566-568: 4 L. Ed. 2d 1403 and United Steel-

workers v. Warrior .& Gulf Navigation Co., 363 U.S.

574, 581-584; 4 L. Ed. 2d 1409. Thus, the defendant had

to reverse its field and deny the contract to avoid ar-.

bitration. SS

‘In two recent cases, this Court has had occasion

to consider alleged repudiations of collective bargaining

agreements. Both involved repudiations hased upon elaim-

ed breaches of the no-strike provisions. In both this -

Court held that the arbitration provisions were still

operative. Drake Bakeries v. Local 50, 370 U.S. 254, 261 ;

8 L. Ed. 2d 474, 479 (1962) and Packinghouse Workers.

-v. Needham Packing Co., 376 U.S. 247, 251: 11 L. Ed.

2d 680, 683 (1964).

. However, in Drake Bakeries the first knowledge that

the union had of the dispute was tHe receipt of the

complaint filed by the employer, and it promptly as-

serted its arbitration rights. In Needham Packing Co.

the union seeking to compel arbitration had previously

sought arbitration and the employer had resisted. Al-

though two months expired between the occurrence and

—26—

the submission of the two grievances to arbitration there

was no change in position by the employer.

To permit the defendant to stay this action for dam-

ages would be an anomalous: ruling repugnant to the

~-eommon ‘law and an improper extension of the rationale”

of Drake Bakeries and Needham Packing Co. Moreover,

it- is submitted that the national labor policy of en-

eouraging arbitration of lahor disputes would be defeated

‘by permitting a party to a labor contract, when called

upon to live up to its bargain, disclaim the contract and

repudiate its arbitration provisions. The aggrieved party |

is thus foreed to bear the expense of litigation, with the

only reprimand for capricious and arbitrary refusal he-

ing submission to arbitration, which it had wrongfully

elected to’ disregard. Indeed. this national policy would

be frustrated by permitting a party to flaunt its arhitra-

tion agreement and escape without penalty.

3 To resolve the conflict and confusion between the |

“Circuits as to whether or not the United States Arbi- ©

tration Act applies to suits arising under Section 301(a) -

of the National Labor Relations Act. If so, to deter-

mine whether the respondent is: in default in- seeking

arbitration within the.meaning of Section 3.of the Act.

If not, to determine the’ applicable standards under Sec-

“tion 301 (a) substantive law for seeking arbitration after.

having previously refused same, and whether the Te-

spondent herein may do so.

- There is a conflict as to whether or not the term

‘“eontracts of employment” in Section 1 of the Arbitra-

tion Act applies to collective bargaining agreements be-

tween a union and an employer, which has not been re,

solved by this Court. The Fifth Circuit, in Lincoln Mills

—_4

or

of tlebone v. Fextile Workers Union, 230 F. 2d 81, 86

(5th Cir. 1956) Certiorari granted 353 U.S. -448, 1 L.

Ed. 2d 972 (1957) held that a’ collective bargaining agree-

ment was a “contract of employment”’ within the mean-

ing of Section 1 of the Arbitration Act and as such ex-

eluded from the application of the Act. In reversing the

Fifth Circuit and ordering arbitration, this point was not

discussed. . . *

A companion case to Minot Mills, decided on the

same day, is General Electric Company v. Local 205,

etc., 233 F. 2d 85, 98 (1st Cir. 1956) Certiorari granted

353 U.S. 047, 1 L. Ed. 2d 1028. That arose from the

First Circuit, which had decided that the collective bar- .

gaining agreement was not a “contract of employment”

within the exclusionary provision of Section, 1. In af-

firming the First Circuit’s reversal of the District Court,

. and ordering arbitration this Court indicated that it was

p sabe: “in part a different path than the Court of

ppeals”, though reaching the same result. The con-

fusion which resulted in the First Circuit as to. wheth-

er or not this language meant that the Arbitration Act

was inapplicable to Section 301(a) cases is shown by"

its subsequent opinion in Local No. 149 v. General Elec-

tric Company, 250 F. 2d 922, 927 (1st Cir. 1957) ; cert.

denied 356 U.S. 938; 2 L. Ed. 2d 813.

Drake Bakeries, Inc. v. Local 50, 287 F. 2d 155 (2nd

Cir. 1961); 294 F. 2d 399 (2nd Cir. (1961); Certiorari

granted 370 U.S. 254, 8 L.Ed. 2d 474 (1962) arose

under Section 3 of the ‘Arbitration Act. In affirming the

District Court’s granting of the” motion to stay the

proceedings this Court failed to comment ‘on the ap-

plicability of the Arbitration Act. However, there was |

@ specific finding that the Union in Drake Bakeries was

’ ~-

iy

not in default in seeking arbitration (370 U.S. 254 at

266). | -

The Seventh Circuit-from which this case rises holds

that the Arbitration Act is applicable to 301(a) cases

Pietro Scalzitti v. Int’l. Union of Operating Engineers,

351 F. 2d 576, 579-580 (7th Cir. 1965). The Court be-

low applied the Act herein (Appendix B, infra p. 7a)..

It held howéver, that the defendant is not in default

within the meaning of Section 3 of the Act. It concluded

that the definition ‘of default set out in Kulukundis

._ Shipping Co. v. Amtorg Trading Corp., 126 F. 2d 978 .

at 989 (2nd Cir. 1942) applied only to prior wrongful

refusals to arbitrate, although the moving party. in Kulw-

kundis had never previously been requested to arbitrate.

The mandate of Textile Workers Union v. Lincoln

Mills, 353 U.S. 448, 456 (1957) is that federal substan-

tive law is to be applied in, cases arising under Section

301(a). That body of law is being created and applied

with ever increasing frequency. This Court is cognizant

of the. multitude of cases involving a determination of

arbitration issues being filed under Section 301(a). The

question of whether the United States Arbitration Act

is applicable should be settled.

Further, assuming the Act to be ae a working

definition of default should be enunciated to assist the

lower courts in determining the issue as in the case at

‘bar., Even if the Act is found not to apply to ‘cases:

arising under Section 301(a) guideposts should be set

up for the substantive law being fashioned daily through-

‘ out the courts of this land.

(4) See also the cases collected’in 64 ALR 2d 1336, 1343 to 1348.

—29—

- CONCLUSION.

For the important reasons assigned, it is respectfully

submitted that this petition for writ of certiorari ‘Should

‘be granted. )

_ Respectfully submitted,

BarnaBas F. Szars,

JaMEs N. Kosmonp, |

' 33. N. LaSalle Street,

Chicago, Illinois 60602,

Attorneys for Petitioners.