Mengel Company v. Nashville Paper Prod. & Spec. Wkrs. Union

Decision Date16 April 1955
Docket NumberNo. 12260.,12260.
Citation221 F.2d 644
PartiesThe MENGEL COMPANY, Appellant, v. NASHVILLE PAPER PRODUCTS AND SPECIALTY WORKERS UNION, NO. 513, an unincorporated Labor Organization, and John Nelson Cook, Appellees.
CourtU.S. Court of Appeals — Sixth Circuit

James U. Smith, Jr., Louisville, Ky. (K. Harlan Dodson, Jr., Nashville, Tenn., on the brief), for appellant.

Herbert S. Thatcher, Washington, D. C., (John S. McLellan, Hugh E. Reams, Kingsport, Tenn., on the brief; Minter, McLellan, Tipton, Kingsport, Tenn., of counsel), for appellees.

Before McALLISTER, MILLER and STEWART, Circuit Judges.

MILLER, Circuit Judge.

Appellant filed this declaratory judgment action under the provisions of Sec. 2201, Title 28 U.S.Code, asking that an arbitration award, claimed by appellees to have been made pursuant to the provisions of a collective bargaining contract, be declared invalid. The District Judge sustained appellees' motion to dismiss.

Appellant, The Mengel Company, hereinafter referred to as Mengel, operates a corrugated box manufacturing plant in Nashville, Tennessee. Appellee, John N. Cook, was an employee at that plant. Appellee, Nashville Paper Products and Specialty Workers Union No. 513, hereinafter referred to as the Union, has been for a number of years the collective bargaining agent of the production and maintenance employees at this plant.

Mengel and the Union entered into a collective bargaining contract covering the period of September 14, 1952 to September 14, 1953. On June 8, 1953, Mengel discharged Cook from its employ. The Union demanded that Mengel reinstate Cook, claiming that he had been discharged without cause. Mengel refused to reinstate Cook for the reasons — (1) that Cook's employment was an employment at the will of either party and nothing in the collective bargaining contract limited or impaired Mengel's right to terminate the employment relationship at any time with or without cause, and (2) that, in any event, Mengel had ample cause to discharge Cook.

With respect to the first of these contentions there appears to be only three provisions in the collective bargaining contract that refer to the discharge of an employee.

Article IX provides: "No employee shall be discharged or discriminated against because of his lawful Union activities, not inconsistent with this Agreement." No contention is made by appellees that this provision was violated.

Article XII deals with vacations. The various sections thereof state the rules governing eligibility therefor, provide for the length of vacations based on length of service, and deal with the time, and priority among employees when vacations should be taken. Section 8 of Article XII provides: "When an employee who is eligible for vacation is laid off for an indefinite period, or quits, or is discharged, the vacation allowance accrued, if any, will be paid at the time of such termination or lay-off." Section 11 of Article XII provides — "An employee who has or does quit, or who has been discharged for cause, or who takes an unauthorized leave of absence, shall lose all rights to previous service, and continuous service will only be calculated from the date of reemployment." Appellant argues that neither Section 8 nor Section 11 of Article XII limits or restricts in any way the right of management to hire and fire at will as it existed prior to the execution of the contract.

Appellees contend that a proper construction of the contract as a whole, with particular consideration to Section 11, Article XII, limits the right of management to discharge an employee except for cause, and since there is disagreement between the parties about the proper construction of the contract, it was a matter which could be referred to arbitration under the arbitration provisions contained in the contract.

The Union sought arbitration over the question of Cook's discharge, relying upon the following provisions of the Collective Bargaining Agreement. Article XIII provides: "In the event of a difference arising between the Company and its employees as to the meaning and application of the provision of this Agreement, all work shall continue without interruption pending proceedings looking to conciliation or arbitration. * * *" Article XIV provides: "Should any difference arise between the parties to this Agreement, such difference shall first be taken up between the aggrieved employee and the foreman of the department involved," and in the event it is not so settled it shall be referred in writing to the Joint Standing Committee, to which Committee "shall be referred all questions which may arise as to the construction to be placed upon any of the clauses of this Agreement or any alleged violation thereof, which cannot be settled otherwise." It also provides that if a "question or difference" referred to the Committee is not determined by the Committee after a certain period of time, "the matter in dispute" shall be referred to an Arbitration Board upon the demand of either party to the Agreement.

Article XV provides for the creation of a Board of Arbitration within thirty days "after a question or difference between the parties to this Agreement shall have come to the point where it is ready for consideration by the Board of Arbitration." Article XV also provides that the parties recognize "that it is imperatively obligatory upon both parties whenever any difference of opinion as to the rights of either party under the Agreement shall arise or whenever any dispute as to the construction of the Agreement, or any of its provisions take place, at once to appeal to the duly constituted authorities under this Agreement, viz: — the Joint Standing Committee, and in case of disagreement, to the Board of Arbitration, * * *"

A Board of Arbitrators was convened. The Company moved that the Board dismiss the case on the ground that the Board was without jurisdiction in that there was no arbitrable issue to submit to them, since the Company's right to discharge an employee was unimpaired by the contract. The Chairman of the Board took the motion under advisement and directed that the parties proceed with the question of whether good cause existed for Cook's discharge. Testimony was heard on this question. Thereafter, the Board ruled that it had jurisdiction in the matter, that Cook was discharged without just cause and that the Company make whole as to lost wages.

Mengel filed the present action in the District Court asking for a declaration of rights under the collective bargaining contract, to the effect that the discharge of the appellee Cook was not an arbitrable question and that the Board of Arbitrators had no authority to hold the hearing and make the purported award. It also asked that the appellees be enjoined from taking any action to enforce the purported award. Jurisdiction in the District Court was claimed under Sec. 301, Labor Management Relations Act of 1947, Sec. 185, Title 29 U.S. C.A. The appellees moved to dismiss the complaint (1) for lack of jurisdiction and (2) for failure to state a cause of action. The appellant moved for summary judgment and filed the affidavit of its general manager in support of the motion. The District Judge, in a brief order without explanatory statement or opinion, denied appellant's motion for summary judgment and sustained appellees' motion to dismiss the complaint. This appeal followed.

The appeal presents two questions: (1) Whether the District Court had jurisdiction to entertain the suit and (2) if jurisdiction existed in the District Court, did the Arbitration Board have authority under the provisions of the collective bargaining contract to hear the dispute and make an award. The Atlanten, 252 U.S. 313, 40 S.Ct. 332, 64 L.Ed. 586; Republic of Colombia v. Cauca Co., 190 U.S. 524, 529-530, 23 S.Ct. 704, 47 L. Ed. 1159. The District Judge did not indicate whether he decided the case on the jurisdictional ground or on the merits.

Appellant conceded in the District Court and in its original brief filed in this Court that diversity of citizenship did not exist and that jurisdiction of the District Court depended solely upon Sec. 301 of the Labor Management Relations Act. This section provides — "Suits for violation of contracts between an employer and a labor organization representing employees 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." Sec. 185, Title 29 U.S.C.A. American Federation of Labor v. Western Union Telegraph Co., 6 Cir., 179 F.2d 535 and Milk and Ice Cream Drivers and Dairy Emp. Union, Local No. 98 v. Gillespie Milk Products Corp., 203 F.2d 650, decided by this Court, are relied upon in support of the jurisdictional contention.

We do not think this case presents the same jurisdictional question that was involved in those cases. In each of those cases there was an express provision in the collective bargaining agreement which the Union brought suit to enforce. No question was raised about the existence of the contract provision. The cases involved possible defenses to the enforcement of such a provision. The present suit, instead of seeking to enforce a contract provision attacks the validity of an arbitration award on the ground that there was no contract authorizing the arbitration and the award. Appellant's alleged cause of action is not based on the contract but on the following well established principles of law, which existed prior to the execution of the collective bargaining agreement and are independent of it.

There is no common law right of arbitration. Hamilton v. Home Ins. Co., 137 U.S....

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