269 F.2d 633 (5th Cir. 1959), 17646, United Steelworkers of America, AFL-CIO v. Warrior & Gulf Nav. Co.

Docket Nº:17646.
Citation:269 F.2d 633
Party Name:UNITED STEELWORKERS OF AMERICA, AFL-CIO, Appellant, v. WARRIOR & GULF NAVIGATION COMPANY, Appellee.
Case Date:July 30, 1959
Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit

Page 633

269 F.2d 633 (5th Cir. 1959)

UNITED STEELWORKERS OF AMERICA, AFL-CIO, Appellant,

v.

WARRIOR & GULF NAVIGATION COMPANY, Appellee.

No. 17646.

United States Court of Appeals, Fifth Circuit.

July 30, 1959

Page 634

Characterization of action of an employer in contracting out maintenance work as a "partial lockout" did not bring it within the language of the collective bargaining agreement between the parties making a lockout on the part of the employer a violation of the agreement, in view of fact such contracting out could not be deemed to be what is known in labor management relations as a "lockout."

Page 635

David E. Feller, Arthur J. Goldberg, Washington, D. C., Hugo L. Black, Jr., Cooper, Mitch, Black & Crawford, Birmingham, Ala., for appellant.

Samuel Lang, New Orleans, La., T. K. Jackson, Jr., Mobile, Ala., for appellee. Kullman & Lang, New Orleans, La., Armbrecht, Jackson, McConnell & DeMouy, Mobile, Ala., of counsel.

Before HUTCHESON, Chief Judge, and RIVES and TUTTLE, Circuit Judges.

TUTTLE, Circuit Judge.

This is an appeal from a denial by the trial court of an order granting specific performance of an agreement to arbitrate. The action was brought by the appellant, United Steelworkers of America, AFL-CIO, against the appellee, Warrior & Gulf Navigation Company, under Section 301 of the Labor Management Relations Act, 29 U.S.C.A. § 185. The sole question presented by the suit is whether, under the terms of the collective bargaining agreement between the parties, unilateral action by the employer in contracting out work that had previously been performed by members of the bargaining unit gave rise to a dispute which is subject to arbitration. The district court held that it did not, and, accordingly, dismissed the Union's complaint.

The employer is engaged in the transportation by barge of steel products and raw materials used in the manufacture of steel. It maintains a terminal at which it performs certain repair and maintenance work on its barges. During the term of the current collective bargaining agreement the company undertook to contract with others to perform some of this maintenance work. This resulted in the filing of a grievance by the union which averred as follows:

'Nature of Grievance. We are hereby protesting the Company's actions, of arbitrarily and unreasonably contracting out work to other concerns, that could and previously has been performed by Company employees.

'This practice becomes unreasonable, unjust and discriminatory in view of the fact that at present there are a number of employees that have been laid off for about 1 1/2 years or more for allegedly lack of work.

'Confronted with these facts we charge that the Company is in violation of the contract by inducing a partial lock-out, of a number of employees who would otherwise be working were it not for the unfair practice.'

The Company took the position, which it adhered to in the suit below, that the matters dealt with in the grievance were not subject to grievance procedures. These grievance procedures are provided for by Section 10 of the collective bargaining agreement, the first paragraph of which follows:

'Issues which conflict with any Federal statute in its application as established by Court procedure or matters which are strictly a function of management shall not be subject to arbitration under this section.'

This language is immediately followed by a second introductory paragraph upon

Page 636

which the appellant places major reliance. It provides:

'Should differences arise between the Company and the Union or its members employed by the Company as to the meaning and application of the provisions of this Agreement, or should any local trouble of any kind arise, there shall be no suspension of work on account of such differences, but an earnest effort shall be made to settle such differences immediately in the following manner: * * *'

In bringing its suit for specific performance of an agreement to arbitrate the appellant must of course, show that the collective bargaining agreement places on appellee the duty to arbitrate. Local No. 149, of Am. Federation of Technical Engineers, (A.F.L.) v. General Electric Co., 1 Cir., 250 F.2d 922, 927. The initial determination whether such duty arises under the contract must be made by the court. Local No. 149 of Am. Federation of Technical Engineers (A.F.L.) v. General Electric Co., su pra; Engineers Association v. Sperry Gyroscope Co., 2 Cir., 251 F.2d 133, 137. Since an agreement relating to the processing of grievances, including compulsory arbitration, may appropriately be dealt with by the parties as they see fit, it is of course within the competence of the Union and the employer to limit the subject matter of such grievance procedures. Here the parties introduced the section dealing with grievances by an initial withdrawal from the provisions of the section of any matters 'which are strictly a function of management.' We have heretofore in Amalgamated Association of Street, Electric Railway and Motor Coach Employees of America, Division 1326 v. Greyhound Corporation, 5 Cir., 231 F.2d 585, 57 A.L.R.2d 1394, stated that whatever subjects are not covered by an employment contract are left to the parties to act upon as they see fit. The contract before us does not deal with the power of the employer to contract with others to perform services previously done by its employees. Since this is a matter as to which an employer may, except as limited by a specific collective bargaining agreement, act without violating either state or federal law, it remains, so far as relates to this agreement, strictly a matter of management. Even if this result did not follow from the fact that the contract does not restrict such action, it would nevertheless follow by reason of the construction of this collective bargaining agreement in the light of the conduct of the parties in negotiating it.

The trial court, upon ample evidence, made the following findings of fact:

'8. Throughout the successive labor agreements between these parties, including the present one, the plaintiff has demonstrated that it was and has been aware of the defendant's practice of contracting out such work, and it has unsuccessfully sought to negotiate changes in the labor contracts, and particularly during the negotiation of the present labor agreement, in the year 1956, which would have limited the right of the defendant to continue the practice of contracting out such work.

'9. None of the contracts between the parties affecting the employees involved here has ever contained any provision limiting or abridging in any manner the defendant's right to contract out work of any kind, nor has there been any complaint or grievance at any time prior to August 22, 1958, that any of the labor contracts between the parties in any way limited or abridged the right of the defendant to contract out maintenance or repair work.' 1958, 168 F.Supp. 702, 704-705.

Thus, what we have here is a collective bargaining agreement resulting from negotiations between the parties, one of which sought to include a provision prohibiting the company from contracting out some of its work. Having failed at the conference table to obtain the consent of the other party to the inclusion of such provision, it signed the

Page 637

contract that was finally worked out, presumably by a process of 'give and take' between the parties. It is not only consistent with basic principles governing the construction of a contract for the court, as it did, to hold that the final product should not be construed to give the Union the provision it had unsuccessfully sought to have incorporated, but it would be unconscionable for the court to hold to the contrary. Whatever may be meant ordinarily by the term 'inherent rights of management, ' (Cf. Amalgamated Association of Street, Electric Railway and Motor Coach Employees of America, Division 1326 v. Greyhound Corporation, supra) we clearly have here a matter which by the agreement of the parties, is 'strictly a matter of management.'

Having decided that the criticized action of the Company is action which by the agreement of the parties was not to be a subject of arbitration, we conclude that the trial court correctly decided that the action for specific performance must fail. See Local No. 149 of Am. Federation of Technical Engineers (A.F.L.) v. General Electric Co., 1 Cir., 250 F.2d 922; United Steel Workers of America v. American Manufacturing Co., 6 Cir., 264 F.2d 624.

The appellant attempts, by characterizing the simple facts of contracting out maintenance work as 'unreasonable, unjust and discriminatory, ' and by asserting such conduct by the Company amounts to 'inducing a partial lockout, ' to set the complaint within a frame of reference comprehended by the agreement to arbitrate. This, however, cannot change the fact that the criticized action, by whatever name called, remains exempted from the range of...

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