Textile Workers Union v. American Thread Co.

• Decision Date: 05 June 1953
• Docket Number: Civ. A. No. 52-503.
• Citation: 113 F. Supp. 137
• Parties: TEXTILE WORKERS UNION OF AMERICA (CIO) v. AMERICAN THREAD CO.
• Court: U.S. District Court — District of Massachusetts

113 F. Supp. 137

TEXTILE WORKERS UNION OF AMERICA (CIO) v. AMERICAN THREAD CO.

Civ. A. No. 52-503.

United States District Court D. Massachusetts.

June 5, 1953.

Jacob Minkin, New Bedford, Mass., for plaintiff.

Francis J. Vaas, A. Lane McGovern and Ropes, Gray, Best, Coolidge & Rugg, Boston, Mass., for defendant.

WYZANSKI, District Judge.

This is a suit under § 301 of the Labor Management Relations Act of 1947, commonly called the Taft-Hartley Act, 61 Stat. 156, 29 U.S.C.A. § 185, to order defendant to submit to arbitration the question whether under certain provisions of a collective bargaining contract with plaintiff it is liable for separation pay.

Section 301(a) provides that "Suits for violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce * * * may be brought in any district court of the United States having jurisdiction of the parties * * *."

Since 1948 defendant, an employer, has had contracts with plaintiff, "a labor organization representing employees in an industry affecting commerce." The 1948 contract provided in Article VII that "any * * * controversy of any nature * * * between the Union and the Company, which has not been satisfactorily adjusted within fifteen (15) working days after the initiation of conferences between representatives of the Union and the Company shall be promptly referred to arbitration * * *. Questions involving changes in the * * * provisions of this Agreement shall not be subject to * * * arbitration." March 29, 1951 the parties, in two separate but substantially identical memoranda covering defendant's Hampton Yarn Division and Merrick Mills, modified and extended the 1948 contract. In each memorandum it was agreed that there shall be retirement separation pay which "shall become effective upon approval by the appropriate governmental authority and shall not be retroactive"; the parties "shall select by mutual agreement a new permanent arbitrator" (presumably in lieu of the person named in Article VII of the 1948 contract); and, as modified, the 1948 contract shall "continue in full force and effect * * * until March 15, 1953."

Defendant separated from employment ten persons whose cases are still in controversy. Plaintiff claims they are entitled to separation pay. Defendant rejects the claim on the ground that, in its view, the employees were separated before the 1951 memoranda received approval by the appropriate governmental agency. Plaintiff demanded that the controversy be submitted to arbitration; but defendant refused to comply.

Plaintiff, thereupon, brought this suit for specific performance of what it claims is defendant's obligation to submit its claim to arbitration. Defendant contends that there is no arbitrable issue and that, if there were, this Court has no power to direct specific performance of an agreement to arbitrate. Each party moved for summary judgment.

Defendant's first point can readily be answered. As was evident in the discussion at bar, the controversy between the parties turns partly on the question as to when these ten persons were in fact separated from employment. Such factual issues are plainly arbitrable under the contract. Furthermore, issues as to the meaning of the terms in the contract are also arbitrable for the parties have excluded from arbitration only "changes in the terms and provisions" of the contract.

More troublesome is defendant's second point that this Court lacks the power specifically to enforce an arbitration provision in a collective bargaining contract.

Defendant's argument is that the federal courts cannot grant specific performance of arbitration contracts in the absence of statutory authority, Red Cross Line v. Atlantic Fruit Co., 264 U.S. 109, 44 S.Ct. 274, 68 L. Ed. 582; United States Asphalt Refining Co. v. Trinidad Lake Petroleum Co., D.C. S.D.N.Y., 222 F. 1006, and that the Federal Arbitration Act, 61 Stat. 669, 9 U.S.C. § 1 et seq., which excludes "contracts of employment of * * * any * * * class of workers engaged in foreign or interstate commerce" has been held not to give authority for specific performance of arbitration provisions in collective bargaining contracts. Amalgamated Ass'n of Street, Electric Ry. & Motor Coach Employees of America v. Pennsylvania Greyhound Lines, Inc., 3 Cir., 192 F.2d 310; International Union United Furniture Workers of America v. Colonial Hardwood Flooring Co., Inc., 4 Cir., 168 F.2d 33; Gatliff Coal Co. v. Cox, 6 Cir., 142 F.2d 876; Boston & Maine Transp. Co. v. Amalgamated Ass'n of Street & Electric Ry. & Motor Coach Employees of America, Division No. 718, D.C.D.Mass., 106 F.Supp. 334. Contra: Lewittes & Sons v. United Furniture Workers of America, D.C.S.D. N.Y., 95 F.Supp. 851. Compare: Sturges & Murphy, Some Confusing Matters Relating to Arbitration Under The United States Arbitration Act., 17 Law & Contemp. Prob. 580, 605-619; Recent Case, 65 Harv. L.Rev. 1239. This Court expressly declines to consider the correctness of the foregoing argument, since § 301 of the Taft-Hartley Act makes it unnecessary to state what authority this Court would have in the absence of statute, or what is the correct construction of the Federal Arbitration Act.

Section 301 is drafted in terms which appear to be exclusively jurisdictional. The statute does not expressly state what law shall be applied to determine the rights of the parties or their remedies.

A substantial majority of the courts that have considered this section have concluded that it is a direction to develop a federal common law in connection with the rights of the parties (and presumably a fortiori in connection with their remedies). See International Union of Operating Engineers v. Dahlem Construction Co., 6 Cir., 193 F.2d 470, 475; Shirley Herman Co. v. International Hod Carriers, 2 Cir., 182 F.2d 806, 809, 17 A.L.R. 2d 609; Schatte v. International Alliance of Theatrical Stage Employees and Moving Picture Machine Operators, 9 Cir., 182 F.2d 158, 164. Note 57 Yale L.J. 630. But see Mercury Oil Refining Co. v. Oil Workers International Union, 10 Cir., 187 F.2d 980, 983; Paterson Parchment Paper Co. v. International Brotherhood of Paper Makers, 3 Cir., 191 F.2d 252, 253, certiorari denied, 342 U.S. 933, 72 S.Ct. 376, 96 L.Ed. 694. This construction presents no constitutional difficulties. Under Article I § 8, cl. 3 of the Constitution Congress has the power to give to the federal judiciary authority to construct a corpus of common law to regulate commerce. Compare Clearfield Trust Co. v. United States, 318 U.S. 363, 63 S.Ct. 573, 87 L.Ed. 838; D'Oench, Duhme & Co. v. Federal Deposit Ins. Corp., 315 U.S. 447, 62 S.Ct. 676, 86 L.Ed. 956. And such an exercise of Congressional power is a law of the United States, so that cases arising thereunder may be heard by a duly authorized United States Court established under Article III of the United States Constitution. See Wilson & Co., Inc., v. United Packinghouse Workers of America, D. C.S.D.N.Y., 83 F.Supp. 162, 165; Colonial Hardwood Flooring Co., Inc., v. International Union United Furniture Workers of America, D.C.D.Md., 76 F.Supp. 493, 496, affirmed on other grounds, 4 Cir., 168 F.2d 33. But though this construction of § 301 is permissible and constitutional, it is not plainly right. There is no satisfactory legislative declaration or history supporting this construction. It vastly extends the reach of federal law. It may curtail the effect of state law even in state courts; for if this construction of § 301 is correct it may be that state courts would be required by Article VI of the United States Constitution to treat federal law as supreme where there was in issue a labor contract in an industry affecting commerce. And if the state court is not required to apply federal law, then with respect to the same contract two conflicting rules are possible, depending upon the choice of forum.

Another possible construction of § 301 is that it is a Congressional direction to the federal courts to take jurisdiction of suits for violation of labor contracts and to apply to those cases federal law with respect to procedural questions, local law with respect to substantive questions, and federal or possibly state law with respect to remedial measures. Cf. Cox, Some Aspects of the Labor Management Relations Act, 1947 (II), 61 Harv.L.Rev. 274, 305. There is no doubt that under Article I, § 8, cl. 3 of the Constitution Congress can direct that controversies affecting commerce shall be governed by state law. Cf. Kentucky Whip & Collar Co. v. Illinois Central R. R. Co., 299 U.S. 334, 57 S.Ct. 277, 81 L.Ed. 270 (Ashurst-Sumners Act¹); Williams v. Austrian, 331 U.S. 642, 67 S.Ct. 1443, 91 L.Ed. 1718, and Schumacher v. Beeler, 293 U.S. 367, 55 S.Ct. 230, 79 L.Ed. 433 (Bankruptcy Act²); Williams v. United States, 327 U. S. 711, 66 S.Ct. 778, 90 L.Ed. 962 (Assimilative Crimes Act³); Just v. Chambers, 312 U.S. 383, 61 S.Ct. 687, 85 L.Ed. 903, rehearing denied, 312 U.S. 668, 61 S.Ct. 687, 85 L.Ed. 903 (admiralty⁴). And that if Congress did enact such a law, controversies arising thereunder could be heard by a duly authorized court established under Article III of the Constitution. Mater v. Holley, 5 Cir., 200 F.2d 123. Cf. Osborn v. Bank of United States, 9 Wheat. 738, 6 L.Ed. 204; Kentucky Whip & Collar Co. v. Illinois Central R. R. Co.; Williams v. Austrian; Schumacher v. Beeler; Williams v. United States, all supra. See Mishkin, The Federal "Question" in the District Courts, 53 Col.L.Rev. 157, 184 et seq. This construction of § 301 may find some support in the legislative history. See Sen.Rep.No. 105, 80th Cong., 1st Sess. 15, 17; H.R.Rep.No. 245, 80th Cong., 1st Sess. 46; remarks of Senator Taft, 93 Cong.Rec. 3955. Compare the remarks of Senator Murray, 93 Cong.Rec. 4153, and Sen. Minority Rep.No. 105, Part 2, 80th Cong., 1st Sess. 13, with the remarks of Senator Ball, 93 Cong.Rec. 5146. But this construction...