Petition for a Writ of Certiorari — Local Union No. 229, International Brotherhood of Teamsters, Chauffeurs, Warehousemen & Helpers v. Affiliated Food Distributors, Inc.

CAD SRP IER IE GORGE LE LIN INL RDA IGE GUS IIE AN EE es CLEA IPLORY

ay, ee FILED

Was 7 3- TG

* C68 NOV 12 1973

MICHAEL ROZAX, JR CLE

IN THE

Supreme Court of the United States

OCTOBER TERM, 1973

LOCAL UNION NO. 229, AFFILIATED WITH

THE INTERNATIONAL BROTHERHOOD OF

TEAMSTERS, CHAUFFEURS, WAREHOUSEMEN

AND HELPERS OF AMERICA,

Petitioner,

versus

AFFILIATED FOOD DISTRIBUTORS, INC.,

Respondent.

Petition for a Writ of Certiorari to the United

States Court of Appeals for the Third Circuit

John J. Dunn, Sr.

234 Scranton Life Building

Scranton, Pennsylvania 18503

Attorney for Petitioner

INDEX

Page

ED vi cecescevkadvckves ees enes i 2

EAR aera shad aR ry, amr ane eg mere > 2

PPPS PITT CLOTS TEE CTE ES 2

a ea weve Gale bee wes NW oe eee 2

ES SS ES Ee eee ee 3

Reasons for Granting the Writ... .............005. 5

ee Ue ay ag a as dee ee ek eae 8

rtp ey rere eer ane er eee a 9

EE PR aR ere ey Serre ars ar re 19

CITATIONS

Cases:

Atkinson v. Sinclair Refining Co., 370 U.S.

SE re ROP PE ar ye 7

Boeing Co. v. International Union, 370 F.2d

I, BOD « bcc weed decccecesaes 5

Drake Bakeries v. Bakery Workers, 370

te EE. ns ch ailln ace setnsee x's 6&7

Firestone Tire and Rubber Co. v. Rubber

Workers, 476 F2d 603 (Sth Cir. 1973).... 5

G. T. Schjeldahl Co. v. Local Lodge 1680,

393 F.2d 502 (Ist Cir. 1968) ............ 5

Gateway Coal Co. v. United Mine Workers,

466 F.2d 1157 (3rd Cir. 1972), cert.

granted, _.__. U.S. —____, 93 Sup. Ct.

i a a a ae ella ere 8

Illinois Bell Telephone Co. v. Local Union

No. 399, 330 F. Supp. 303 (S. D. Ill.

BE i ok oa ee keww ees Pa ee 5

United Steel Workers v. Warrior and Gulf

Navigation Co., 363 U.S. 574 (1960) ...4,5,6,7,& 8

Wiley v. Livingston, 376 U.S. 543 (1964) ...

Statute:

I oa we sles te eee

Section 301(a), Labor Management Rela-

Gone Act, 79 U.S.C. S1GSla) ... 0. ceccces

ty

IN THE

Supreme Court of the United States

| OCTOBER TERM, 1973

No.

LOCAL UNION NO. 229, AFFILIATED WITH

THE INTERNATIONAL BROTHERHOOD OF

TEAMSTERS, CHAUFFEURS, WAREHOUSEMEN

AND HELPERS OF AMERICA,

Petitioner,

versus

AFFILIATED FOOD DISTRIBUTORS, INC.,

| Respondent.

Petition for a Writ of Certiorari to the United

States Court of Appeals for the Third Circuit

Petitioner, Local Union No. 229, affiliated with the

International Brotherhood of Teamsters, Chauffeurs, Ware-

| housemen and Helpers of America, respectfully petitions

for a Writ of Certiorari to review the judgment of the United

States Court of Appeals for the Third Circuit vacating the

| stay order pending arbitration entered by the United States

District Court for the Middle District of Pennsylvania upon

the motion filed by Petitioner, Local Union No. 229.

2

OPINIONS BELOW

The Opinion of the Court of Appeals is reported at 483

F. 2d 418 and appears at Appendix A, infra, pp. 9-18. The

Memorandum and Order of the United States District Court

for the Middle District of Pennsylvania is unreported and

appears at Appendix B, infra, pp. 19-25.

JURISDICTION

The Opinion of the Court of Appeals was filed on August

14, 1973. Petitioner invokes the jurisdiction of this Court

pursuant to 28 U.S.C.§1254(1). Federal jurisdiction of the

underlying cause of action is based upon 29 U.S.C.§ 18S.

QUESTION PRESENTED

Do the strong federal policy favoring arbitration of collective

bargaining agreement disputes and this Court’s acknowledge-

ment that a collective bargaining agreement is not an ordinary

contract require the courts to eschew traditional principles

of contract interpretation in favor of more liberal rules for

interpreting collective bargaining agreements in determining

whether an employer is bound to submit to arbitration its

claim for damages arising from a union’s alleged breach of a

contractual no-strike provision?

STATUTE INVOLVED

This case involves Section 301(a) of the Labor Management

Relations Act, 29 U.S.C.§ 185(a), which provides as follows:

Sec. 301. (a) Suits for violation of contracts between an

employer and a labor organization representing em-

ployees in an industry affecting commerce as defined

in this Act, 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

citizenship of the parties.

3

STATEMENT OF THE CASE

Petitioner Local Union No. 229, affiliated with the Inter-

national Brotherhood of Teamsters, Chauffeurs, Warehouse-

men and Helpers of America, and Respondent Affiliated Food

Distributors, Inc. were parties to a Collective Bargaining Agree-

ment which was in effect from May 3, 1969 to May 3, 1972.

Said Collective Bargaining Agreement contained the following

provision which is the subject matter of this case:

“ARTICLE XXIII-ARBITRATION

“Any difference, grievance, or dispute between the

Company and the Union arising out of, or relating to

this Agreement, or its interpretation or application, or

the enforcement thereof, except as otherwise specifically

provided herein, shall be subject to the following pro-

cedures:

*“A. Any grievance which arises may be taken up

by the Union Steward(s) with a representative of the

department involved, or with an official of the Company.

Grievance must be presented in writing.

“B. In the event that the grievance shall not have been

resolved within three (3) working days, the Business

Representative of the Union shall take the subject matter

up with the Employer. If the Business Representative

of the Union and the Employer cannot reach a satisfac-

tory agreement within three (3) working days, the subject

matter shall be referred to arbitration immediately. The

arbitrator may be selected by mutual agreement between

the Company and the Union. If no agreement is reached

on the selection of the arbitrator within five (5) days,

the arbitrator shall be selected from a panel of the

American Arbitration Association.

“It is to be clearly understood that the arbitrator shall

not have the power to alter any of the terms of the

Agreement. Decisions of the Arbitration Board shall be

final and binding on both parties. Pending the decision

of the Arbitration Board, the Union will not permit any

strikes or interference with the regular routine of business.

4

The cost of the Arbitrator shall be borne equally by the

parties to this Agreement.”

From November | through November 3, 1971, certain

members of Petitioner, employed by Respondent and covered

by the above-mentioned Collective Bargaining Agreement,

engaged in a stoppage of work. On November 18, 1971,

Respondent filed in the United States District Court for the

Middle District of Pennsylvania an action for damages, alleging

that the work stoppage constituted a breach of the no-strike

provision contained in the above-quoted contract provision.

The action against Petitioner was filed pursuant to Section

301 of the Labor Management Relations Act of 1947, as

amended, 29 U.S.C.§185(a). On July 10, 1972, the district

court granted Petitioner Union's motion to stay the damage

action pending arbitration of the substantive issues of the

damage action, i.c., whether the Union violated the no-strike

provision and, if so, the compensable damages resulting there-

from, pursuant to the above-quoted arbitration provision.

In so ruling, the court resolved any doubt or uncertainty as

to the scope of the arbitration provision in favor of arbitra-

bility, pursuant to this Court's broad directive in United Steel-

workers of America v. Warrior and Gulf Navigation Company,

363 U.S. 574 (1960).

Pursuant to Respondent's appeal from the interlocutory

order, on August 14, 1973, a divided court of appeals vacated

the stay and remanded the case for further proceedings in the

district court. The majority opinion relied upon “traditional

principles of contract interpretation” in concluding that the

parties did not intend the arbitration clause to cover disputes

of this kind. The dissenting opinion correctly noted that in

the absence of explicit language either including or excluding

a particular dispute from arbitration, the admonition of

Warrior and Gulf required the courts to eschew the “rules

of contract construction applicable in a normal commercial

context . . . in the interpretation of the arbitration clause

of a collective bargaining agreement” so that where an ambi-

guity exists, as in this case, the provision must be interpreted

in favor of arbitration.

ee ar) eA a ed —

5

REASONS FOR GRANTING THE WRIT

This case presents the issue of a developing trend by lower

courts repudiating the admonitions and guidelines of Warrior

and Gulf in their reliance on traditional principles of contract

interpretation in determining the arbitrability of an employer's

claim on a union's alleged breach of a contractual no-strike

provision. ! This developing trend ignores the fundamental,

substantial distinctions and differences between “ordinary

contracts” and collective bargaining agreements, as well as

the necessarily different rules of construction that must be

applied. This Court clearly recognized in Warrior and Gulf

that a collective bargaining agreement “is more than a con-

tract; it is a generalized code to govern a myriad of cases which

the draftsmen cannot wholly anticipate.” 363 U.S. at 578.

This view that “a collective bargaining agreement is not an

ordinary contract’’ was reaffirmed in Wiley v. Livingston,

376 U.S. 543, 550 (1964).

Acknowledging the different character of collective ba

ing agreements and in furthering the strong federal policy in

favor of arbitration, this Court explicated the following —

liberal rules of construction to be applied in determining

whether a dispute should be submitted to arbitration under

a collective bargaining agreement:

An order to arbitrate the particular grievance should

not be denied unless it may be said with positive as-

surance that the arbitration clause is not susceptible to

an interpretation that covers the asserted dispute. Doubts

should be resolved in favor of coverage .... We think

only the most forceful evidence of a purpose to exclude

the claim from arbitration can prevail .... [Emphasis

added.] Warrior and Gulf, supra, 363 U.S. at 582-585.

1. Firestone Tire and Rubber Co., v. Rubber Workers, 476 F. 2d

603 (Sth Cir. 1973); G. T. Schjeldahl Co. v. Local Lodge 1680,

393 F. 2d $02, 505 (Ist Cir. 1968); Boeing Co. v. International

Union, 370 F. 2d 969 (3rd Cir. 1967); Illinois Bell Telephone

Co. v. Local Union No, 399, 330 F. Supp. 303 (S.D. Ill. 1971).

a EES POLAR ANTES NN BRE RN TROON EEO steueees

The Court strikingly demonstrated that different, more liberal

rules of interpretation applied in cases involving arbitration

provisions of collective bargaining contracts in binding to a

contract an unconsenting successor while conceding that the

principles of law governing ordinary contracts would not re-

quire such a result. Wiley, supra, 376 U.S. 543, 550. “When a

contract is scrutinized for evidence of an intention to arbitrate

a particular kind of dispute, national labor policy requires,

within reason, that ‘an interpretation that covers the asserted

dispute,” Warrior and Gulf, supra, pp. 582-583, be favored.”

Wiley, at 550, n. 4.

It is that national labor policy that the court of appeals in

the instant case ignored and frustrated in applying its standard

of “‘traditional principles of contract interpretation”: 2

The principle that doubt should be resolved in favor of

arbitration does not relieve a court of the responsibility

of applying traditional principles of contract interpreta-

tion in an effort to ascertain the intention of the contract-

ing parties. When a contract, fairly read with these

principles in mind, is susceptible of a construction that

dictates arbitration, the congressional policy favoring that

form of dispute resolution may require the denial of

judicial relief despite the possibility of fairly reading the

contract to evidence a contrary intent. But there is no

occasion to resort to this congressional policy in a case

where the contract, fairly read as a whole, is not sus-

ceptible of a construction that the parties bound them-

selves to arbitrate the dispute before the court. We

conclude that this is such a case. [Emphasis added.]

(Appendix A, pp. 12-13)

2. The court’s selection of the phrase may require the denial of

judicial relief despite the possibility of fairly reading the contract

to evidence a contrary intent” reflects the “hostility” of courts

to arbitration that was referred to by this Court in Warrior and

Gulf, 363 U.S. at 578. Furthermore, as to the reference to

“denial of judicial relief,” the district court in the instant case

correctly noted that Drake Bakeries v. Bakery Workers, 370 US.

254 (1962), does not require a dismissal of the Section 301 damage

suit but only a stay pending arbitration. (Appendix B, p. 23, n. 3)

ail anaiaaieltataae ar Rae cena eee es CE

7

- - en2 “+e . - +

This standard clearly falls far short of the broad rules of

interpretation favoring arbitration mandated by Warrior and

Gulf. Furthermore, as reflected above, the majority opinion

specifically disavowed consideration of the congressional policy

favoring arbitration in its interpretation of the arbitration

provision in the instant case, which disavowal directly conflicts

with the basic underlying rationale of Warrior and Gulf.

The court of appeals in the instant case, as well as other

lower courts,3 have departed from the teachings of Warrior

and Gulf by placing undue emphasis upon this Court’s state-

ment in Atkinson v. Sinclair Refining Co., 370 U.S. 238, 241

(1962), that “arbitration is a matter of contract and a party

cannot be required to submit to arbitration any dispute which

he has not agreed so to submit” to the exclusion of the pre-

sumption in favor of arbitrability set forth in Warrior and Gulf.

The misplaced emphasis on this language overlooks the fact

that this admonition was lifted from the majority opinion

in Warrior and Gulf. 363 U.S. at 582. In misreading

Atkinson, these courts have failed to consider that Atkinson

presented a “clear” situation of a specific exclusion from

arbitration, which obviated the necessity for this Court to

rely upon the liberal rules of construction or presumption

of arbitrability. Atkinson, supra, 370 U.S. at 241. Similarly,

this Court found that the broad inclusive language of the

arbitration provision in Drake “‘easily”’ covered the employer's

claim of the union’s violation of the no-strike clause, again

without the necessity of the Court invoking or relying upon

liberal rules of construction or a presumption in favor of

arbitrability. Drake Bakeries, supra, 370 U.S. at 258. Such

rules and presumptions obviously come into play only in the

more difficult cases where the arbitration provisions lack the

exclusion or inclusion type of language found in Atkinson

and Drake, respectively. This is precisely the type of case

for which this Court established liberal rules of construction

where “doubts should be resolved in favor of coverage.’’ War-

rior and Gulf, supra, 363 at 583. However, the lower courts

3. See footnote 1.

4. Ibid.

appear. reluctant. te apply those-rules ‘in deterniining the

arbitrability of an employer’s claim of a union’s breach of

a no-strike provision.

CONCLUSION

The granting of this Writ is necessary for this Court to

reaffirm the continuing validity of the instructions of Warrior

and Gulf and to confirm the application of those instructions

to the issue of the arbitrability of an employer’s claim that a

union violated the contractual no-strike provision. A resolu-

tion of these issues is necessary to the proper development of

the “federal common law” under Section 301, which con-

sideration presumably prompted the Court to grant certiorari

in another case from the Third Circuit involving arbitrability

under Section 301 of the Labor Management Relations Act.

Gateway Coal Co. v. United Mine Workers, 466 F.2d 1157

(3rd Cir. 1972), cert. granted, US. , 93 Sup. Ct.

1157 (1973).

For the foregoing reasons, this petition for a Writ of Cer-

tiorari should be granted.

Respectfully submitted,

John J. Dunn, Sr.

Attorney for Petitioner

November 12, 1973

9

° .- sf at il al a APPENDIX A Site

UNITED STATES COURT OF APPEALS

For tue Turep Circuit

No. 72-1855

AFFILIATED FOOD DISTRIBUTORS, INC.,

Appellant,

v.

LOCAL UNION No. 229, AFFILIATED WITH THE

INTERNATIONAL BROTHERHOOD OF TEAM-

STERS, CHAUFFEURS, WAREHOUSEMEN AND

HELPERS OF AMERICA,

Appellee.

(D.C. Civil Action No. 71-513)

AppgeaL From THE Unirep Srates District Court FoR THE

Mippue District or PENNSYLVANIA

Submitted May 24, 1973

Before: Aupisert and Apams, Circuit Judges; and

Srapieton, District Judge.

Melvin S. Katzman, Esquire,

Jackson, Lewis, Schnitzler & Krupman,

11 West 42nd Street,

New York, New York 10036

Attorney for Appellant.

John J. Dunn, Sr., Esquire,

234 Scranton Life Building,

Scranton, Pennsylvania 18503

Attorney for Appellee.

10

os «= oe es —— | . . “<-+e eo +-@# s-@ -

OPINION OF THE COURT

(Filed August 14, 1973)

Srapteton, District Judge.

The sole question on this appeal is whether the appel-

lant-employer is bound to arbitrate its damage claim

against the appellee-union for breach of a no-strike clause.

Appellant, Affiliated Food Distributors, Inc. (‘‘ Affiliated’’)

brought this action pursuant to Section 301 of the Labor

Management Relations Act, 29 U.S.C.A. §185 (1965). On

motion of the appellee, Local Union No. 229, the district

court ordered a stay of the action pending arbitration.

Affiliated appealed from this interlocutory order,’ and

urges that the collective bargaining agreement between the

parties does not require arbitration of its damage claim.

We agree and reverse.

There is a clear congressional policy favoring private,

extra-judicial resolution of labor-management disputes.”

In furtherance of this policy, the Supreme Court of the

United States issued the following mandate in United Steel

Workers of America v. Warrior and Gulf Nav. Co., 363

US. 574, 582 (1960) :

An order to arbitrate the particular grievance

should not be denied unless it may be said with positive

assurance that the arbitration clause is not susceptible

of an interpretation that covers the asserted dispute.

Doubts should be resolved in favor of coverage.

However, even in the presence of this clear congres-

sional policy, it remains the rule that parties are bound to

arbitrate only those disputes which, under a fair construc-

tion of their collective bargaining agreement, they have

bound themselves to arbitrate. As the Supreme Court noted

1. 28 U.S.C.A. § 1292(a).

2. 29 U.S.C.A. §171 (1965).

e- e @2e «4 oe < = ~@e@e - 7 bid or;

in Atkinson v. Sinclair Refining Co., 370 U.S. 238, 241

(1962) :

Under our decisions whether or not the Company

was bound to arbitrate, as well as what issues it must

arbitrate, is a matter to be determined by the Court

on the basis of the contract entered into by the parties.

. . . ‘[A]rbitration is a matter of contract and a party

cannot be required to submit to arbitration any dispute

which he has not agreed so to submit.’

At the heart of this matter, therefore, is the intention

of the parties when they negotiated and signed their col-

lective bargaining agreement. The parties chose the fol-

lowing words to evidence their agreement regarding arbi-

tration:

Article XXIIIJ—Arbitration

Any difference, grievance, or dispute between the

Company and the Union arising out of, or relating to

this Agreement, or its interpretation or application, or

the enforcement thereof, except as otherwise specifi-

cally provided herein, shall be subject to the following

procedure:

A. Any grievance which arises may be taken up by

the Union Steward(s) with a representative of the

department involved, or with an official of the Com-

pany. Grievances must be presented in writing.

B. In the event that the grievance should not have

been resolved within three (3) working days, the Busi-

ness Representative of the Union shall take the subject

matter up with the Employer. If the Business Repre-

sentative of the Union and the Employer cannot reach

a satisfactory agreement within three (3) working

days, the subject matter shalt be referred to arbitration

immediately. The arbitrator may be selected by mutual

12

agreement between the Company and the Union. If

no agreement is reached on the selection of the arbi-

trator within five (5) days, the arbitrator shall be

selected from a panel of the Ameyican Arbitration

Association.

It is to be clearly understood that the Arbitrator

shall not have the power to alter any of the terms of

the Agreement. Decisions of the Arbitration Board

shall be final and binding on both parties. Pending

the decision of the Arbitration Board, the Union will

not permit any strikes or interferences with the regular

routine of business. The cost of the arbitrator shall be

borne equally by the parties to this Agreement.

The court below observed that ‘‘the preamble clause in

and of itself is broad enough to cover the issue of whether

there was a violation of the no-strike clause.’’ It then noted

Affiliated’s contention that ‘‘the procedure through which

‘any difference, grievance or dispute’ must pass provides

only for the initiation of Union grievances.’’ The district

court concluded, however, that the contract provisions re-

lating to procedure did not ‘‘supply the ‘positive assurance’

requisite to deny the defendant’s motion to stay.’’ It held:

After careful study of the arbitration clause pre-

sented here as well as the cases which have attempted

to interpret similar clauses, we are unable to ascertain

the true intent of the parties and therefore hold that

since it is not certain that the company’s claim for

damages resulting from a violation of the no-strike

clause is not subject to arbitration, the Union’s motion

to stay must be granted.

The principle that doubt should be resolved in favor of

arbitration does not relieve a court of the responsibility

of applying traditional principles of contract interpretation

in an effort to ascertain the intention of the contracting

13

parties.* When a contract, fairly read with these principles

in mind, is susceptible of a construction that dictates arbi-

tration, the congressional policy favoring that form of dis-

pute resolution may require the denial of judicial relief

despite the possibility of fairly reading the contract to

evidence a contrary intent.*. But, there is no occasion to

resort to this congressional policy in a case where the con-

tract, fairly read as a whole, is not susceptible of a con-

struction that the parties bound themselves to arbitrate the

dispute before the court. We conclude that this is such

a case.

It is, of course, well established that contract language

must be read in context and that ‘‘a subsequent specifica-

tion impliedly limits the meaning of a preceding generali-

zation.”’> <A careful reading of this agreement and an

application of these principles to it, lead us to the firm con-

viction that the parties bound themselves to arbitrate only

employee grievances. Article XXIII does not state that

‘‘any difference, grievance or dispute . . . arising out of,

or relating to this agreement, or its interpretation or ap-

plication or the enforcement thereof’’ shall be the subject

of arbitration. Rather it provides that any such difference,

grievance or dispute ‘‘shall be subject to the following pro-

eedure.’’ The procedure that follows, as articulated in

paragraphs A and B ean fairly be read only as applying to

employee grievances.

These paragraphs specify three successive steps in

an arbitration process. ‘‘The grievance’’ referred to in

the first sentence of paragraph B must be the written griev-

3. G. T. Schjeldahl Co. v. Local Lodge 1680, 393 F.2d 502, 505 (1st Cir.

1968); Boeing Co. v. International Union, 370 F.2d 969 (3rd Cir. 1967);

Illinois Bell Telephone Co. v. Local Union No. 399, 330 F. Supp. 303 (S.D.

Ill. 1971).

4. We are not here presented with the question of whether and under what

circumstances a district court should consider tendered evidence other than

the contract itself in attempting to determine whether there is “positive assur-

ance” that arbitration was not contemplated by them. _See Strauss v. Silvercup

Bakers, Inc., 353 F.2d 555 (2nd Cir. 1965).

5. G. T. Schjeldahl Co. v. Local Lodge 1680, 393 F.2d 502, 505 (1st Cir.

iB

14

. @7*-+ -@ se 7 = - . 7 . esse e@ « -

ance presented pursuant to paragraph A and the third

party-arbitrator provisions of the second sentence of para-

graph B, read in context, must refer to grievances unre-

solved after the two preceding steps.

Initially, any grievance ‘‘may be taken up by the Union

Steward(s) with a representative of the department in-

volved, or with an official of the Company.’’ At the second

stage, ‘‘the Business Representative of the Union shall

take the subject matter up with the Employer.’’ Thus, at

both stages the initiative is with the union. It would be a

strained construction at best which would attribute to the

parties the thought that a company official would refer an

employer’s grievance to a union steward who would, in

turn, refer the grievance to ‘‘a representative of the de-

partment involved”’ or to ‘‘an official of the company’”’.

In short, we think it may be said with positive assur-

ance, as in Atkinson, that the arbitration clause of this

collective bargaining agreement is not susceptible of a fair

construction that the parties bound themselves to arbitrate

employer grievances of the kind here involved.®

. The order of the district court granting appellee’s mo-

tion to stay will be vacated and this case will be remanded

for further proceeding consistent with the views we have

here expressed.

Apams, Circuit Judge, dissenting:

A different understanding of the mandate of United

Steelworkers of America v. Warrior & Gulf Nav. Co.' and

the application of that mandate to the present case compels

this dissent.

The district court, confronted with the employer’s suit

seeking damages from the union for violation of a no-strike

6. Cf. Boeing Co. v. International Union, 370 F.2d 969 (3rd Cir. 1967) ;

G. T. Schjeldahl Co. v. Local Lodge 1680, 393 F.2d 502, 505 (1st Cir. 1968).

1. 363 U.S. 574 (1960).

15

clause, stayed that action pending arbitration.2? The ma-

jority, holding that the terms of the collective bargaining

agreement did not require the employer to submit its claim

to arbitration, reversed the district court. I believe that

the collective bargaining agreement, read with the admoni-

tions of Warrior ¢ Gulf firmly in mind, requires that this

dispute be submitted to arbitration. Therefore, I would

affirm the district court.

As the majority points out, the arbitration clause of

the collective bargaining agreement controls the determina-

tion whether or not a particular type of dispute is to be

arbitrated.* Explicit language in the agreement commit-

ting a question to arbitration or withholding it from arbi-

tration is determinative.t It is in the absence of such

specificity that problems arise. Such is the situation here.

Warrior & Gulf states the Supreme Court’s basic un-

derstanding of Congress’ philosophy in favor of resolution

of disputes through the machinery of arbitration.®

To achieve the Congressionally required end, the Su-

preme Court has promulgated strict rules for the inter-

pretation of the collective bargaining agreement.

‘*Apart from matters that the parties specifically

exclude, all of the questions on which the parties dis-

agree must therefore come within the scope of the

grievance and arbitration provisions of the collective

agreement.’’ ®

2. The damages claimed by the employer are for injury suffered from a

strike occurring between November 1, 1971 and November 3, 1971.

3. See Atkinson v. Sinclair Refining Co., 370 U.S. 238 (1962) quoted by

the majority.

4. See Independent Oil Workers at Paulsboro, N.J. v. Mobil Oil Corp.,

441 F.2d 651 (3d Cir. 1971). In that case, this Court stated that the presence

of a clause which provided that “‘nothing in this agreement shall prevent’

application to a court of competent jurisdiction” operates as “an ‘escape’ clause

which nullifies the mandatory terms of the earlier language and makes arbi-

tration optional.” Jd. at 653-4. .

5. United Steelworkers of America v. Warrior & Gulf Nav. Co., 363 U.S.

$74, 582 (1960).

6. Id. at 581. (Emphasis added.)

16

eee a Oo. + -@ « -“* . . eo@e-+e

‘*An order to arbitrate the particular grievance should

not be denied unless it may be said with positive as-

surance that the arbitration clause is not susceptible

of an interpretation that covers the asserted dispute.

Doubts should be resolved in favor of coverage."

‘In the absence of any express provision excluding a

particular grievance from arbitration, we think only

the most forceful evidence of a purpose to exclude the

claim from arbitration can prevail, particularly where,

as here, the exclusion clause is vague and the arbitra-

tion clause quite broad.’’®

Rules of contract construction applicable in a normal

commercial context are to be eschewed in the interpretation

of the arbitration clause of a collective bargaining agrce-

ment.°

It is against these dictates of Warrior & Gulf that the

arbitration clause of the collective bargaining agreement

in issue must be measured. First, Article XXIII is titled

‘‘Arbitration,’’ not ‘‘Grievance Procedure.’’’® Second,

the preamble of Article XXIII, by its terms, includes ‘‘ Any

difference, grievance, or dispute between the Company and

the Union. . . .’’ However, as the majority points out,

the procedures outlined in paragraphs A and B of Article

XXIII appear to be directed towards the resolution of em-

ployee grievances. Applying ‘‘traditional principles of

contract interpretation,’’ the majority concludes that the

presence of the detailed procedure gives ‘‘positive assur-

7. Id. at 582-3, (Emphasis added.)

8. Id. at 584-5. (Emphasis added.)

9. The Supreme Court in Warrior & Gulf stated:

“In the commercial case, arbitration is the substitute for litigation. Here

arbitration is the substitute for industrial strife. Since arbitration of Jabor

disputes has quite different functions from arbitration under an ordinary

commercial agreement, the hostility evinced by courts toward arbitration

of commercial agreements has no place here.” Jd. at 578.

10. Compare G. T. Schjeldahl Co. v. Local Lodge 1680, International

Association of Machinists, 393 F.2d 502 (1st Cir. 1968),

17

- - ec: - “tT ee ee Oe ° 7

ance’’ that the arbitration clause ‘‘is not susceptible to a

fair construction that the parties bound themselves to ar-

bitrate employer grievances of the kind here involved.’’ I

do not believe that Warrior d Gulf states that such a con-

struction is dispositive. Rather, it appears to command

that the arbitration clause be *‘not susceptible of an in-

terpretation that covers the asserted dispute.’’ (Emphasis

added). ‘The clause in question here, I believe, is sus-

ceptible to an interpretation that would cover the matter

in dispute.”

Under the majority’s interpretation of the arbitration

clause of the collective bargaining agreement, only em-

ployee grievances would be included within the arbitration

process. This would exclude all differences, grievances and

disputes raised by the employer. Yet, these items are

explicitly included in the arbitration Article. Such a cab-

ined construction would appear to be a limitation on the

arbitration article arguably not warranted by the language

of the Article. Indeed, the thrust of the preamble, as well

as its specific language, indicates a more spacious role for

arbitration. While the majority’s interpretation might be

the better one were ordinary rules of contractual construc-

tion applicable, the teachings of Warrior € Gulf require

that if an ambiguity exists, and I believe that there is such

an ambiguity, the clause must be interpreted to remit the

parties to arbitration.

Analysis of cases dealing with the question of the

sweep of an arbitration clause reveals that there are avail-

able to drafters of collective bargaining agreements an

11. To the extent that the majority relied on language in this Court's

opinion in Boeing Co, v. International Union, 370 F.2d 969 (3d Cir. 1967),

for the proposition that a “fair construction” of the provision is the standard,

I believe such reliance to be misplaced. First, the Supreme Court in Atkinson

v. Sinclair Refining, supra, found that, regarding the arbitration clause in

question there, “We think it unquestionably clear that the contract here involved

is not susceptible to a construction that the company was bound to arbitrate.”

370 U.S. at 241. (Emphasis added.) ps

Moreover, this Court, in Boeing, held that “the arbitration clause is not

susceptible of a construction that the plaintiff was bound to arbitrate.” 370

F.2d at 971. (Emphasis added.)

18

*-* e-f ener © @ 2 @ + @& _* . . ‘ere or * -

apparently limitless variety of combinations of headings,

inclusions, exclusions and procedures. Detailed discussion

of these cases is not fruitful in connection with our prob-

lem, Similarities to the present case and differences from

the present case can be found-in opinions holding that ques-

tions are within the arbitration clause and those holding

that a question is without." The conclusion that may

properly be drawn is that each arbitration clause must be

examined independently, with the mandates of Warrior &

Gulf firmly in mind. Having done this, 1 believe that the

issue raised in the distriet court is within the seope of the

arbitration article of collective bargaining agreement

present here,

Accordingly, | respectfully dissent,

12. See Atkinson & Sinclair Refining Co., 370 ULS. 238 (1962); Drake

Rakerivs Inc. vy. Loval $0, American Bakery & Confectionery Workers Inter-

national, 370 U.S. 254 (1902); Independent Oil Workers at) Paulsboro, NJ.

v. Mobil Oil Co, 441 F.2d oS) (dd Cir, 1971); Boeing Co. v. International

Union, 370 Fld 99 (3d Cir, 1907); G. T. Sehjeldahl Co. v. Local Lodge

1o8d, 393 F.2d $02 (ist Cir. 1968).

A True Copy:

Teste:

Clerk of the United States Court of Appeals

for the Third Cireust

(A.0.—U, S. Courts, International Printing Co. Phila. Pa.)

19

APPENDIX B

- =~ eo ow . .e -

UNITED STATES DISTRICT COURT

For tHe Mippie District or PENNSYLVANIA

Civit No. 71-513

AFFILIATED Foop Distrisutors, INc.,

Plaintiff,

Vv.

Loca Union No, 229, Arrruuater With Tuer INTERNATIONAL

Brotuernoop or Teamsters, CHAUFFEURS, WARKHOUSE-

MEN AND HeLPEers OF AMERICA,

Defendant,

Memorandum and Order

This is an action by an employer pursuant to § 301 of

the Labor Management Relations Act of 1947 (29 U.S.C.

§ 185 (1965)) for damages sustained as a result of an

allegedly illegal work stoppage occurring on November 1,

1971 at Affiliated Food Distributors’ place of business in

Scranton, Pennsylvania, The work stoppage is alleged to

have been in violation of a no-strike provision contained

in the collective bargaining agreement by and between

Affiliated Food Distributors and Local 229, International

Brotherhood of Teamsters, Chauffeurs, Warehousemen and

Helpers of America, collective bargaining representative

of the employees of Affiliated Food Distributors.

The Union has filed a motion to dismiss or, in the alter-

native, to stay this proceeding pending arbitration of the

substantive issues. The court must, therefore, look to the -

20

agreement itself to ascertain whether it requires mandatory

arbitration of the claimed violation of the no-strike provi-

sion by the Union since it is apparent that the parties

cannot agree upon their intention in that regard.

The controversy is by no means unique. It has arisen

quite frequently in suits of this nature and although the

decision in each case, to varying degrees, has been de-

1 The relevant contractual language provides:

“ARTICLE XXII[I—ARBITRATION

“Any difference, grievance, or dispute between the Company

and the Union arising out of, or relating to this Agreement,

or its interpretation or application, or the enforcement thereof,

except as otherwise specifically provided herein, shall be sub-

ject to the following procedures:

“A. Any grievance which arises may be taken up by the

Union Steward(s) with a representative of the department

involved, or with an official of the Company. Grievance must

be presented in writing.

“B. In the event that the grievance shall not have been

resolved within three (3) working days, the Business Repre-

sentative of the Union shall take the subject matter up with

the Employer. If the Business Representative of the Union

and the Employer cannot reach a satisfactory agreement within

(3) working days, the subject matter shall be referred to

arbitration immediately. The arbitrator may be selected by

mutual agreement between the Company and the Union. If

no agreement is reached on the selection of the arbitrator

within five (5) days, the arbitrator shall be selected from a

panel of the American Arbitration Association.

“It is to be clearly understood that the arbitrator shall not

have the power to alter any of the terms of the Agreement.

Decisions of the Arbitration Board shall be final and binding

on both parties. Pending the decision of the Arbitration

Board, the Union will not permit any strikes or interference

with the regular routine of business. The cost of the Arbi-

trator shall be borne equally by the parties to this Agree-

ment.”

PPR BI SEI MARIBEL TES ABBE OTB 9 EAE IEEE OER TL ELISE emp nese ememeramccismce st gL

21

pendent upon the wording of the arbitration clause con-

tained in the particular contract involved therein,’ it has

been universally agreed that the following liberal rule of

construction promulgated by the Supreme Court must

control our decision. “An order to arbitrate the particular

grievance should not be denied unless it may be said with

positive assurance that the arbitration clause is not sus-

ceptible of an interpretation that covers the asserted

dispute. Doubts should be resolved in favor of coverage.”

United Steelworkers of America v. Warrior & Gulf Naviga-

tion Co., 363 U.S. 574, 582-83 (1960). “In the absence of

any express provision excluding a particular grievance

from arbitration ... only the most forceful evidence of a

purpose to exclude the claim from arbitration can prevail.”

Id. at 584-85. (Emphasis supplied)

In light of the above, we turn to the arbitration clause

of the instant contract which provides:

“ARTICLE X XITI—ArBiITraTION

“Any difference, grievance, or dispute between the

Company and the Union arising out of, or relating

to this Agreement, or its interpretation or application,

or the enforcement thereof, except as otherwise spe-

cifically provided herein, shall be subject to the follow-

ing procedures.”

The procedures subsequently outlined provide means

whereby the Union Steward may initiate the grievance

2 Compare G. T. Schjeldahl Co. Packaging Mach. Div. v. Local

Lodge 1680, Etc., 393 F.2d 502 (1st Cir. 1968); Boeing Co. v.

Int’l Union, U.A.A. & A. Implement Wkrs., 370 F.2d 969 (3d

Cir. 1967), with Drake Bakeries v. Bakery Wkrs., 370 U.S. 254

(1962) [and] ITT World Communications, Inc. v. Communications

Wkrs., 422 F.2d 77 (2d Cir. 1970); Yale & Towne Mfg. Co. v.

Local Lodge No. 1717, Etc., 299 F.2d 882 (3d Cir. 1962).

ae ALLERGIES a 7

22

procedure by presenting a written grievance to “a repre-

sentative of the department involved or with an official of

the Company.” If the grievance cannot be resolved within

3 days thereafter, the Union Business Manager is to dis-

cuss the grievance with the employer. The clause then

provides, “[iJf the Business Representative of the Union

and the Employer cannot reach a satisfactory agreement

within three (3) working days, the subject matter shall be

referred to arbitration immediately.”

It is clear that the preamble of the clause in and of itself

is broad enough to cover the issue of whether there was a

violation of the no-strike clause. However, Affiliated Food

Distributors contends that the procedure through which

“any difference, grievance or dispute” must pass provides

only for the initiation of Union grievances and that arbi-

tration is to be invoked only if the grievance procedure

cannot resolve the controversy.

A similar argument was made in this district before our

colleague Judge Muir in the case of Supermarket Service

Corp. v. General Drivers € Helpers Local Union 229 Etc.

(M.D.Pa. C.A. No. 72-44). Judge Muir there rejected the

argument as failing to “supply that ‘positive assurance’

requisite to deny the defendant’s motion to stay these pro-

ceedings.” We agree. At best the company’s interpreta-

tion creates an ambiguity which, as the Supreme Court has

consistently suggested, should be resolved in favor of arbi-

tration. United Steelworkers of America v. Warrior ¢ Gulf

Navigation Co., supra.

Article XXIII of the collective bargaining agreement is

on its face vague and uncertin. Whether this uncertainty

is intentional or simply the result of poor draftsmanship

need not concern us. However, when faced with the task

of interpreting such a clause, we are of the opinion that

— ee Se

23

the court should simply resolve all doubts in favor of arbi-

tration rather than strain to construe its language to con-

clude that it can ascertain the true intent of the parties.

After careful study of the arbitration clause presented

here as well as the cases which have attempted to interpret

similar clauses, we are unable to ascertain the true intent

of the parties and therefore hold that since it is not certain

that the company’s claim for damages resulting from a

violation of the no-strike clause is not subject to arbitra-

tion, the Union’s motion to stay must be granted.*

The company also contends that the Union has waived

its right to demand arbitration by failing to petition the

court to stay this action before the parties participated in

the arbitration concerning the underlying grievance pre-

cipitating the work stoppage thereby unnecessarily subject-

ing the corporation to a second arbitration proceeding.‘

3 Drake Bakeries v. Bakery Wkrs., 370 U.S. 254 (1962) requires

only that the action for damages be stayed pending arbitration ;

it does not require dismissal of the suit.

‘The United States Arbitration Act, in §3 of Title 9 (1965)

provides :

“Stay of proceedings where issue therein referable to arbi-

tration

“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 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, pro-

viding the applicant for the stay is not in default in proceed-

ing with such arbitration.”

The act has been held to be part of the federal law which may be

resorted to in implementing federal policy in labor relations.

Inter-Continental Engine Service, Inc. v. Int’l Assoc. of Machinists,

Etc., 305 F.Supp. 577 (S.D.Tex. 1969).

|

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24

The corporation’s damage suit was initiated on November

18, 1971. On December 14, 1971 the Union filed its answer

and the motion to dismiss which is now before the court.

The corporation, however, was not served with these plead-

ings until December 22, 1971. On December 27, 1971 the

parties arbitrated the underlying grievance. The corpora-

tion was, therefore, aware of the Union’s desire to arbi-

trate the issue of whether it had violated the no-strike

clause five days before the scheduled arbitration, and the

corporation could have taken appropriate steps to submit

that issue to the arbitrator if it so desired.

Surely it cannot be contended that the Union was under

an affirmative duty to request arbitration before the time

when it was required to file its pleadings in response to

the corporation’s complaint. Notwithstanding the 8-day

delay in serving the corporation with the answer and mo-

tion to dismiss, the Union’s action cannot be held to consti-

tute a default inasmuch as the corporation was notified of

the Union’s desire to arbitrate before the December 27th

arbitration and was therefore not: prejudiced by the delay.

See, ITT World Communications, Inc. v. Communications

Wkrs., 422 F.2d 77 (2d Cir. 1970). The corporation has

vehemently opposed arbitration of the substantive issues

involved in this suit, and we fail to see how the controversy

could have been resolved by an adverse proceeding in time

to submit the matters to the December 27th arbitration

even if the Union had requested a stay immediately upon

service of the corporation’s complaint.

Moreover, assuming arguendo that five days notice was

not sufficient time for the company to prepare the no-

strike clause violation issue for the December 27th arbi-

tration, had it desired to do so, and that the company is

now being subjected to a second proceeding, we do not

saebiiciiateameeatinaianiaialaiaddminaiediatia: EN TORRES SLO ORI ELON

25

feel that the resulting prejudice to the company warrants

a finding of waiver on the part of the Union.

An order granting the defendant’s motion to stay pend-

ing arbitration will be entered.

R. Drxon HERMAN

R. Dixon Herman

United States District Judge

Middle District of Pennsylvania

Dated: July 10th, 1972.

—————— es SES 2 ? ENR T