Hoover Motor Exp. Co. v. TEAMSTERS, CHAUFFEURS, ETC.

• Citation: 217 F.2d 49
• Decision Date: 23 November 1954
• Docket Number: No. 12063.,12063.
• Parties: HOOVER MOTOR EXPRESS CO., Inc., Appellant, v. TEAMSTERS, CHAUFFEURS, HELPERS AND TAXICAB DRIVERS, LOCAL UNION NO. 327, and International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America (A. F. of L.), Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (6th Circuit)

217 F.2d 49 (1954)

HOOVER MOTOR EXPRESS CO., Inc., Appellant, v. TEAMSTERS, CHAUFFEURS, HELPERS AND TAXICAB DRIVERS, LOCAL UNION NO. 327, and International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America (A. F. of L.), Appellees.

No. 12063.

United States Court of Appeals Sixth Circuit.

November 23, 1954.

Judson Harwood, Nashville, Tenn., for appellant.

S. Del Fuston, Jr., Chattanooga, Tenn., H. G. B. King, Chattanooga, Tenn., Woll, Glenn & Thatcher, Washington, D. C., on brief, for appellee.

Before SIMONS, Chief Judge, and ALLEN and STEWART, Circuit Judges.

ALLEN, Circuit Judge.

This is an appeal from an order of the District Court granting defendants' motion for stay of trial pending arbitration between the parties.¹ The case arises out of a suit for damages for breach of contract filed by plaintiff, a corporation operating an extensive interstate motor express service in Tennessee and neighboring states, against defendants' labor unions representing plaintiff's employees in Nashville, Tennessee. The collective bargaining agreement between plaintiff and defendants recognized defendant Local Union No. 327 as collective bargaining representative of a unit of plaintiff's employees designated as "over the road drivers," and contained a no-strike provision, but contained no arbitration clause.

The complaint alleges that the defendant unions authorized, induced and encouraged a strike against plaintiff without first exhausting the means of settlement set out in the contract and claimed substantial damages due to the closing for approximately eight days of plaintiff's entire operation at Nashville, Tenn. The answer alleged that the work stoppages were unauthorized or wildcat strikes, for which defendants under the collective bargaining agreement were not liable, that they took all reasonable means to return the employees to their jobs and had violated no terms of the contract. Defendants then filed a motion under Section 3 of the United States Arbitration Act, 9 U.S.C., asking for an order staying trial of the action until arbitration had been had in accordance with the terms of the agreement. The instant appeal is prosecuted to the granting of this motion by the District Court.

Section 1 of Article VIII of the collective bargaining agreement reads as follows:

"Grievance, Machinery and Union Liability

"The Unions and the Employers agree that there shall be no strikes, lockout, tieup, or legal proceedings without first using all possible means of a settlement, as provided for in this Agreement, of any controversy which might arise. Disputes shall first be taken up between the Employer and the Local Union involved. Failing adjustment by these parties, the following procedure shall then apply:

"Section 1.

"(a) Where a Joint State Committee, by a majority vote, settles a dispute, no appeal may be taken to the Joint Area Committee. Such a decision will be final and binding on both parties.

"(b) Where a Joint State Committee is unable to agree or come to a decision on a case, it shall, at the request of the Union or the Employer involved, be appealed to the Joint Area Committee at the next regular session.

"(c) It is agreed that all matters pertaining to the interpretation of any provision of this contract may be referred, at the request of any party at any time, for final decision to the Joint Area Committee after first being heard by the Joint State Committee and, in event of referral, the Joint State Committee's decision shall not become effective.

"(d) Deadlocked cases may be submitted to umpire handling if a majority of the Joint Area Committee determine to submit such matter to an umpire for decision. Otherwise either party shall be permitted all legal or economic recourse.

"(e) Failure of any Joint Committee to meet without fault of the complaining side, refusal of either party to submit to or appear at the grievance procedure at any stage, or failure to comply with any final decision withdraws the benefits of Article VIII."

Section 2 of the agreement relates to non-liability of the union for unauthorized strikes and work stoppages. It contains no provision for arbitration and no such provision is presented in the record.

At the oral hearing in this court the appealability of the stay order was questioned. The defendants cited the opinion of this court in Dowling Bros. Distilling Co. v. United States, 6 Cir., 153 F.2d 353, which, relying upon Enelow v. New York Life Insurance Co., 293 U.S. 379, 55 S.Ct. 310, 311, 79 L.Ed. 440, held that an order denying a stay of proceedings growing out of a prosecution for violation of the Emergency Price Control Act was not appealable. The Enelow case distinguished between interlocutory orders or decrees which constitute an exercise of equitable jurisdiction in granting or refusing an injunction and "a mere stay of proceedings which a court of law, as well as a court of equity, may grant in a cause pending before it by virtue of its inherent power to control the progress of the cause so as to maintain the orderly processes of justice." However, in Shanferoke Coal & Supply Corp. v. Westchester Service Corp., 293 U.S. 449, 55 S.Ct. 313, 79 L.Ed. 583, decided on the same day as the Enelow case, supra, the Supreme Court held that denial by the District Court of an application for a stay of proceedings in an action on a contract until an arbitration shall be had in accordance with the terms of the contract is in effect an order denying an interlocutory injunction and is appealable. The court held, page 452 of 293 U.S. page 314 of 55 S.Ct., that the special defense setting up the arbitration agreement is an equitable defense or cross-bill within the meaning of the Federal statutes and that the motion for stay is an application for an interlocutory injunction based on the special defense. This case, so similar factually to the instant case, we think is clearly controlling. See also Gatliff Coal Co. v. Cox, 6 Cir., 142 F.2d 876, 879. Cf. Markel Electric Products, Inc., v. United Electrical, Radio & Machine Workers of America, 2 Cir., 202 F.2d 435, where the court disposed on the merits of an appeal from denial of a motion to stay proceedings pending arbitration. We conclude that the order is appealable.

Plaintiff contends that the United States Arbitration Act is inapplicable to this proceeding and that a suit for damages for breach of contract is not the type of controversy contemplated by Article VIII of the bargaining agreement above quoted. Section 3 of the United States Arbitration Act in its material portion reads as follows:

"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."

Section 1 of the same Act, after certain definitions, provides that "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."

Plaintiff urges that the contract involved is a contract of employment and that a stay order therefore cannot be issued under the Arbitration Act, citing Gatliff Coal Co. v. Cox, supra, as authority for its position. The suit there was for wages, brought by an individual member of the United Mine Workers of America. While the court held that the exclusion clause of Section 1 of the Arbitration Act is applicable to the whole Act, this case is not authority for the proposition that the instant controversy is "a contract of employment" within the meaning of and subject to the exception in 9 U.S.C. § 3. The contract here involved is not an agreement for wages but the general bargaining contract between the unions and the employer, including an express "no-strike" clause. The contract of employment specifically described in the United States Arbitration Act and excepted from the operation thereof is a contract for the hiring of individuals, seamen, railroad employees, or workers engaged in foreign or interstate commerce. The collective bargaining agreement between the employer and the union defines the terms which will govern hiring, work, vacations, union shop and all conditions of employment. It is a trade agreement rather than a contract of employment. J. I. Case Co. v. National Labor Relations Board, 321 U.S. 332, 334, 335, 64 S.Ct. 576, 88 L.Ed. 762. While the Gatliff case has been cited by other courts, cf. Amalgamated Association of Street, Electric Railway and Motor Coach Employees v. Pennsylvania Greyhound Lines, Inc., 3 Cir., 192 F.2d 310, and International Union United Furniture...