Appendix — Mogge v. District No. 8, International Ass'n of Machinists

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_APPENDIX.A

eceenedanenememet

- District Court of the United States

, Northern District of Illinois’

Eastern Division

Rosemary’ C. Mocce and Orrice )

Emp.Loyess’ INTERNATIONAL UN-

ion, Locat 28,. AFL-CIO,

Plaintiffs, -

v. >. No. 65 C 1716

District No. 8, Internationay As-

SOCIATION OF Macuinists, AFL-

CIO,

: Defendant. 4

__ Memorandum and Order |

. The complaint in this matter charges a wrongful dis-

charge of an’ employee in violation of a collective bar-

gaining agreement. It is somewhat unusual in that the

employer charged with the violation is itself a labor -

union. The complaint charges that the defendant em-

ployer (hereinafter referred to as “employer”) ‘first

- Violated the agreement by effecting a unilateral change

in job classifications and in demoting plaintiff Mogge

' (hereinafter referred to as “employee”’).

A grievance hearing was held at which time the em-

ployer denied the grievance and refused to maintain the

status quo pending arbitration. The employee was then

discharged for insubordination.

Plaintiff-union twice requested arbitration under the

agreement, but the employer denied the validity of the

agreement and refused to submit to arbitration. The

position of the employer in denying the existence of a

contract.is that the directing business agent who signed

_ and executed the’ agreement had no authority to do so

and the contract was not entered into in accordance with

the policy and by-laws of the organization requiring all

aiaead

a “ae

contracts to be submitted to the governing board for

approval. The employer also contended that even if there

were a contract it appeared there was nothing to arbi-

trate as its rights were clear. Plaintiffs then filed this

~ suit.

- Defendant now moves to dismiss or stay these pro-

ceedings and refer the matter to arbitration.. It now.

admits that the contract, if one existed, requires the

matter be submitted to arbitration, and “by agreeing to

arbitrate all disputes, the parties have in fact surren-

dered the right to sue for damages.” ;

Plaintiffs argue that the defendant has repudiated and

waived its right to arbitration by refusing to arbitrate

initially. :

Much as I readily understand plaintiffs’ feelings in

the matter, I cannot agree with-their contention. “. . .

in determining whether one party has so repudiated his .

promise to arbitrate that the other party is excused.

the circumstances of the claimed repudiation are critically

important .. .”- Drake Bakeries v. Local 50, -370 U.S.

254, 262 (1962). . ' |

I find that there was a valid and enforceable contract.

between the parties. Defendant’s previous contesting of.

the yalidity thereof I further find was not unreasonable. —

Unlike. the defendant in E. T. Simonds Const..Co. v.

Local 1330 Hod Carriers, 7th Cir. 315 F. 2d 291, de-

fendant promptly moved for a stay of these proceedings

and asserted its right. to arbitration when this suit was

filed. Therefore, I find no waiver of a right to arbitra-

tion. ;

‘ Based on the rationale of Drake Bakeries v. Local 50,

370 U.S. 254 and Packinghouse Workers v. Needham

Packing Co., 376 U.S. 247, defendant’s motion to stay

these proceedings pending arbitration is granted, and

this cause is continued generally to be set upon ten .

days notice by either party upon the concluston of the

said arbitration. ;

/s/ Campbell

Dated: April 21, 1967 ” Chief Judge

candies

Ct a APPENDIX B

: pe ts

—- Gnited States Court of Appeals -

3 For the Seventh Circuit

SEPTEMBER TERM, 1967 SEPTEMBER Session, 1967

Rosemary -C. Mocce ‘and Orrice >

EmpLoyeEs’ INTERNATIONAL UN-

10N, Locat 28, AFL-CIO, .

| Plaintiffs-Appellants, | Appeal from the United

| ° States District Court for

No. 16304 | v. > the Northern District of

: re Illinois — Eastern Divi-

District No. 8, INTERNATIONAL :As- | sion.

_ SOCIATION OF MacHinists, AFL-

CIO, TS

Defendant-Appellee. }

DEceMBER 26, 1967

Before Castix, Swycert and Cummines, Circuit Judges.

Cummines, Circuit Judge. This action is brought under

Section 301(a) of the Labor-Management Relations Act

of 1947’ by Mrs. Mogge and her ‘union, Local 28,? to

recover damages for her discharge by another union, her

employer.* ‘

. * Section 301(a) provides (29 U.S.C. § 185(a)):

“Suits for violatiozr of contracts betwéen an employer and a labor

* organization representing employees in an industry affecting com-

merce as defined in this chapter, or between any such labor organi-

zations, may be brought in any district court of the United States

having jurisdiction of the parties, without respect to the amount

in controversy or without regard to the citizenship of the parties.’’

? Office Employees’ International Union, Local 28, AFL-CIO.

* District No. 8, International Association of Machinists, AFL-CIO.

> ‘

a

— 4g

In August 1950, Mrs. Mogge was employed by District

No. 8 as a stenographer-secretary for two days a week.

In early 1951 she commenced working three days a week;

in the spring of 1952, she started working on a five-day

basis. In February 1963, Mrs. Mogge took a six-month

maternity leave of absence. Upon her August 1963 return,

she worked on a three-day basis.

Since July 1945, James G. McDonald was Directing

Business Representative of District No. 8. He resigned

in February 1965. At the request of the Council of District

' No. 8, the Grand Lodge of the International Association

of Machinists assumed supervision of the District and

_ Eugene Glover became its Deputy Supervisor. .

On April 5, 1965, Glover instructed Mrs. Mogge to

report to work five: days a week commencing with the.

week of’ April 12th. She insisted that she had the right

to work only three days a week under the terms of a

January 2, 1964, collective bargaining agreement between

Local 28-and District No. 8. At this juncture, Mrs. Mogge

reported the impasse to Sara Keenan, the business repre-

sentative of Local 28. Miss Keenan requested a meeting

with Mr. Glover. After an April 12 conference attended |

by Mrs. Mogge, Miss Keenan, Mr. Glover and. George —

Gray of District No. 8, Glover advised. Miss Keenan

that Mrs. Mogge’s grievance was denied, on the ground

that there had been no violation of the collective bargain-

ing contract. ;

Mrs. Mogge’s refusal to work five days a week resulted “-

in her diseharge on April. 13. On that day, Local 28

requested District No. 8 to arbitrate the discharge under.

‘Article XIII of the collective bargaining agreement. Dis-

trict No. 8 refused, asserting that no binding collective

bargaining agreement was in existence. This suit followed.

About two months after the complaint was filed, Dis- .

trict No. 8 filed a motion to dismiss the complaint on the

ground that the collective bargaining agreeme not

been submitted to its Council and therefore wa nor

binding. In the alternative, District No. 8 requested that

the proceedings. be stayed pending arbitration. Thé *plain-

tiffs filed a cross-motion for summary judgment, seeking

to establish the validity of the collective bargaining fAgree-

ment between the two ynions. |

aillaiin

The District Court granted District No. 8’s motion to

_ stay the proceedings pending arbitration and held that

‘ the collective bargaining agreement was valid. The court

reasoned that because District No. 8’s denial of the va-

lidity of the agreement was not unreasonable, it had not

repudiated its promise to arbitrate. District No. 8 has not

cross-appealed from the decision upholding the agreement.

As noted, District No. 8 refused arbitration. on the

ground that the collective bargaining agreement was in-

valid for want of approval by its Council.‘ Before arbi-

tration could be ordered pursuant to the agreement, it

was imperative for the District Court to determine its

validity. John Wiley & Sons v. Livingston, 376 U.S. 543,

547. The District Court’s determination that the contract

is valid is unchallenged. However, plaintiffs refuse to

honor Article XIII, the arbitration clause, contending that

District No. 8 waived its arbitration rights by its earlier

_ Tefusal to arbitrate.

As seen, the District Court concluded that District No.

8’s contest of -the validity of the collective bargaining

agreement ‘‘was not unreasonable.’’ We agree. District

No. 8 demonstrated that the agreement was never ap-

proved by the District Council and that.Mrs. Mogge knew

of the District’s procedures requiring Council approval

of matters of importance. This was sufficient to raise a.

good faith doubt. as to the validity of the agreement.

Hamdton Foundry € Machine Co. v. international Molders

& Foundry Workers, 193 F.2d 209, 214-215 (6th Cir.

1951), certiorari denied, 343 U.S. 966. District No. 8 had.

the right to a judicial determination of the threshold

question of validity before being required to proceed

with arbitration. Since District No. 8 had a plausible

-- ground for challenging the validity ‘of the collective bar-

gaining agreement, its refusal to arbitrate until. that

question could be determined did not constitute a waiver

of arbitration. See Drake Bakeries v. Bakery Workers,

370 U.S, 254, 262-263. As contra, plaintiffs rely on 6A Cor-

bin on Contracts § 1443, but the aathor was referring to

waiver of arbitration caused by wrongful. repudiation

of a contract. Idem at p. 434; see also note 7, infra. If

* District No. 8 also contested the execution date of the contract.

7

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District: No. 8’s grounds were patently untenable or clearly

wrong, as in the cases relied on by plaintiffs, its refusal

to arbitrate would of course have waived the arbitration

provisions of the contract.

District: No. 8 did not seek to havé the merits of the

dispute resolved by the District Court. At the time of its

first pleading, District No. 8 challenged the validity of

the contract and, alternatively, sought arbitration. Under

Drake Bakeries v. Bakery Workers, 370 U.S. 254, 266-267,

the request for arbitration did not come too late. Nor can

it be concluded that the request for arbitration fails be-

cause it was pleaded as an alternative to the motion

‘to dismiss. In Genesco, Inc. v. Shoe. Workers, 341 F.2d

482 (2d Cir. \1965), an employer sued a union for breach

of a no-strike clause in a collective bargaining contract. —

The union filed a_motion to dismiss on the ground that

under the agreement the dispute should be arbitrated, but

it. also attempted to reserve its right. to challenge the

’ validity of the contract. The court held (at p. 484): |

‘¢‘Since the contract pleaded by the employer had an

‘arbitration clause, the union was entitled to raise

the question whether an action was not barred by its

~ very terms, while reserving the right to deny the

- existence of the contract if the court decided ad-

_versely, * * *.”

The same result should apply where, as here, a ‘defendant

first’ seeks a ruling on validity and requests arbitration

in the alternative. :

Finally, plaintiffs assert that arbitration is improper

because District No. 8 is in default within the meaning

of § 3 of the United States Arbitration Act.’ District

_ 5 Seetion 3 provides (9 U.S.C.§ 3): .

‘Tf any suit or proceeding be brought in any of the courts of the

United States upon any issue referable to arbitration under an

_ agreement in writing for such arbitration, the court in which such

suit is pending, upon being satisfied that the issue involved in such

suit or proceeding is referable to arbitration under such an agree-

ment, shall on application of one of the parties stay the trial of

the action until such arbitration has been had in accordance with

the.terms of ‘the agreement, providing the applicant for the stay

is not in default in proceeding with such arbitration. * * *.”’

—

a (a

No. 8’s argument that the United States Arbitration Act

is inapplicable is foteclosed in this Cirenit by Pietro -

Scalzitti v. International Union of Operating Engineers,

351 F.2d 576, 579-580 (7th Cir. 1965). Section 3 of the

Act was construed in Kulukundis Shipping Co. v. Amtorg

Trading Corp., 126. F.2d 978 (2d Cir. 1942).* There the

court approved defendant’s alternative pleading denying

the existence of the contract but otherwise praying for

arbitration. Since the District Court’s finding that Dis-

trict No. 8’s challenge of the contract’s validity was ‘‘not

unreasonable” has support in the record, we hold there

‘was no default in proceeding with arbitration within: the

meaning of § 3 of the United States Arbitration Act.’

If plaintiff’s view were adopted that District No. 8 should

- have proceeded with arbitration forthwith, it might have

lost the right to challenge the validity of the agreement.

Lewis v. Kerns, 175 F.Supp. 115 (S.D. Ind. 1959). Yet

the Kulukundis opinion itself recognizes that a defendant

should not be foreclosed from denying the validity of a

collective bargaining agreement before arbitration.

The judgment. is affirmed.

A ‘true Copy:

Teste:

Clerk of the United States.Court of

Appeals for the Seventh Circuit.

_ * Kufukundis was cited with approval in Drake Bakeries v. Bakery

Workers, 370 U.S. 254, 262, note 9. wd

7 In Kulukundis, Judge Frank does state that the default provision

of § 3 of the United States Arbitration Act applies to ‘‘a party who,

when requested, has refused to go to arbitration’ (126 F.2d at p.

_ 989), but an earlier passage from the opinion, citing 6 Williston on

Contracts (Rev. Ed. 1938, § 1921), shows that the reference was to

wrongful refusals to arbitrate (idem at p. 988). 3

; . —8a—

| APPENDIX ©

oe ee).

. Hnited States Court of Appeals .

| es For the Seventh Cirenit - =

"Chicago, Illingis 60604

'_' Tuesday, December 26, 1967

. “Before

Hon. Latruam Castie, Circuit Judge

Hon. Lurner M. Swycert, Circuit Judge

_ Hon. Waurer J. Cummines, Circuit Judge

Rosemary .C: Mocce and Orrice }

Empwioyees’ INTERNATIONAL Un- |

ton, Loca 28, AFL-CIO, hares

Plaintiffs-Appellants, | Appeal from the United -

States District Court for .

No. 16304 Vv. . the Northern District of

| Illinois — Eastern’ Divi-

- Disrrict No. 8, INTERNATIONAL As- | sion,

’ goctation oF Macuinists, AF'L-

CIO, ; . -|-

Cam Defendant-Appellee. )

This cause came on to be heard on the transcript of

the record from the United States District Court for the

Northern District of Illinois, Eastern Division, and was

argued by counsel. | |

On consideration whereof, it is ordered and adjudged

by this court that the judgment of the said District Court.

in this cause appealed from be, and: the same is hereby,

ArFirMED, with costs, in accordance with the opinion of

this Court _ this shy. | :

“

+

In the pee

Gnited States Court of Appeals

| For the Seventh Crmt.

Chicago, Illinois 60604

Tuesday, January 23, 1968

z Before

Hon. Latuam Castiz, Circuit Judge

Hon. Lutuer M. Swycert, Circuit Judge

Hon. Watrer J. Cummines, Circuit Judge ’

Rosemary C. Mocce and QrFice ),

EMPLOYEES’ INTERNATIONAL Un-

ion, Locan 28, AFL-CIO, _

Sea te A from the United

Plaintiffs-A ppellants, 5 woah rar oh for

No. 16304 = * ; the Northern District of

ae47 Illinois — Eastern Divi- :

District No. 8, Inrernationan As- | sion. |

SOCIATION OF Macniyists, AF'L- '

CIO,

Defendant-Appellee. j

It Is Orperep by the Court that the petition for

ring filed in the’ ahove entitled causé be and the

same is hereby denied. .

i | — o.

APPENDIX E

Title 29 United States Code §185

Suits by and against labor organizations—Venue,

amount, and citizenship !

(a) Suits for violation of contracts between an em-

ployer and a labor organization representing employees

in an industry affecting commerce as defined in this

ee chapter, or between any such labor organizations, may

/ be brought in any district court of the United States

\ having jurisdiction of the parties, without respect to

the amount in controversy or without regard to the citi-

zenshipof the parties. — Besar

Responsibility for acts of agent; entity for

purposes of suit; enforcement of money judgments

(b) Any labor organization which represents em-

ployees in an industry affecting commerce as defined in

- this chapter and any employer whose activities affect

commerce as defined in this chapter shall be bound by

the acts of its agents. Any such ‘labor organization may

sue or be sued as gn entity and in behalf of the em-

ployees whom it represents in the courts of the United -

States, Any money judgment against a labor organiza-

tion in a district court of the United States shall be en-

forceable only against the organization as an* entity and

against its assets, and shall not be enforceable against

any individual member or his assets.

Jurisdiction

(c) For the purposes of actions and proceedings by or

against labor organizations in the district courts of the

United: States, district courts ‘shall be deemed to have

o °jurisdiction of a labor organization (1) in the district

' $n which such organization maintains its principal office,

—lla—

or (2) in-any district in which its duly authorized officers °

or agents are engaged in representing or acting for em-

ployee members. sa tas

Service of process

(d) The service of ‘summons, subpena, or other legal

process of any court of the United States upon an officer

or agent of a labor organization, in his capacity as such,

shall constitute service upon the labor organization. .

Determination of question of agency

(e) For the purposes of this section, in determining

whether any person is acting as an “agent” of another

person so as to make such other person responsible for

_ his acts, the question of whether the specific acts per-

formed were actually authorized or subsequently ratified

shall not be controlling. June 23, 1947, ec. 120, Title ITI,

§ 301, 61 Stat. 156.

Title 9 United States Code gi

“Maritime transactions” and “commerce” defined;

‘exceptions to operation of title .

“Maritime transactions”, as herein defined means char-

ter parties, bills of lading of water carriers, agreements

relating to wharfage, supplies furnished vessels or re-

pairs to vessels, collisions, or any other ‘matters in foreign

commerce which, if the subject of controversy, would be

embraced within admiralty jurisdiction; “ecommerce”, as

herein defined, means commerce among the several States

or with foreign nations, or in any Territory of the United

States or in the. District of Columbia, or between any

such Territory: and another, ‘or between any such Terri-

tory and any State or foreign nation, or between the

District of Columbia and any State or Territory or

foreign nation, but nothing herein contained shall apply

to contracts of employment of seamen, railroad employees,

or any other class of workers engaged in foreign or

interstate commerce. July 30, 1947, c. 392, .§ 1, 61 Stat.

669.

—l2a—

Title 9 United Statés Code §3

Stay of proceedings where issue therein referable

to arbitration |

If any suit or proceeding be brought in any of the

courts of the United States upon any issue referable to

_ arbitration under an agreement in writing for such

arbitration, the court in which such suit is pending, upon

being satisfied that the issue involved in such suit or:

proceeding is. referable to arbitration under such an —

agreement, shall on application of one of the parties

stay the trial of the action until such arbitration has

been had in accordance with the terms of the agreement, |

providing the applicant for the stay is not in default

in proceeding with such arbitration. July 30, 1947, ec. 392,

§ 1, 61 Stat. 669. |