Montgomery Mailers' Union No. 127 v. Advertiser Co.

Decision Date15 September 1987
Docket NumberNo. 86-7503,86-7503
Citation827 F.2d 709
Parties126 L.R.R.M. (BNA) 2456, 107 Lab.Cas. P 10,180 MONTGOMERY MAILERS' UNION NO. 127, Plaintiff-Appellee, v. The ADVERTISER COMPANY, Defendant-Appellant.
CourtU.S. Court of Appeals — Eleventh Circuit

John M. Capron, Fisher & Phillips, Atlanta, Ga., M. Roland Nachman, Balch & Bingham, Montgomery, Ala., defendant-appellant.

Robert H. Stropp, Stropp & Nakamura, Birmingham, Ala., for plaintiff-appellee.

Appeal from the United States District Court for the Middle District of Alabama.

Before HILL and JOHNSON, Circuit Judges, and HENLEY, * Senior Circuit Judge.

HENLEY, Senior Circuit Judge:

Appellee Montgomery Mailers' Union No. 127 (Union) commenced this action under Sec. 301 of the Labor Management Relations Act, 29 U.S.C. Sec. 185, to compel appellant The Advertiser Company (Company) to arbitrate three grievances brought by the Union pursuant to the parties' collective bargaining agreement. On cross-motions for summary judgment the district court enjoined the Company from refusing to arbitrate. This appeal followed. We affirm in part, reverse in part and remand for further proceedings.

I

The term of the parties' collective bargaining agreement was from January 1, 1983 to December 31, 1985. The agreement also contained provisions for automatic renewal, renegotiation of the agreement and extension of the agreement during renegotiation. 1 By a letter dated October 25, 1985 the Union submitted a proposal for a new agreement. Accordingly, neither party contends that the year-to-year renewal provision of the old agreement applies. The Company asked for and received an extension of time in which to submit its counter-proposal. On November 22, 1985 the Company notified the Union in a letter that it had tentatively decided to subcontract the work performed by the employees under the collective bargaining agreement. Therefore, the Company "propose[d] simply to maintain the status quo until such time as the work is subcontracted and the bargaining unit eliminated."

On December 4, 1985 and January 13, 1986 representatives of the Union and the Company met in bargaining sessions. At both meetings the Company reiterated its decision to subcontract and the sessions revolved around that proposition. The parties again met on January 31, 1986 at which time the Union's attorney was present. The Company again indicated its intention to subcontract because it would realize substantial financial savings by doing so.

The following week the Union wrote to "accept[ ] The Advertiser Company's counter-proposal offering the existing contract. See paragraph [2, supra footnote 1 of this opinion] of the parties' current collective bargaining agreement...." The Union's position was that the Company's November 22 letter was not a "counter-proposal" and that under the terms of the agreement the Company is construed to have offered the existing contract as its counter-proposal. The Company, however, acknowledged that Union's acceptance as acquiescing in the Company's decision to subcontract.

The parties met at further bargaining sessions on February 26 and 27, 1986. At these sessions the parties further discussed the financial impact of the Company's decision to subcontract. On April 23, 1986 the parties had a final meeting. The Union argued that the Company had failed to submit a counter-proposal and the existing collective bargaining agreement was therefore proposed. The Company disagreed and continued to offer to negotiate on its decision to subcontract. The Union declined to continue bargaining. The following day the Company notified the Union of its intention to proceed with subcontracting.

The parties' collective bargaining agreement contained provisions for arbitration of disputes. The proceedings here are laid and battle joined under Section 15 of the agreement. 2 On April 25, 1986 the Union invoked the arbitration clause to determine whether the Company's November 22 letter was a "counter-proposal." 3 The Company expressed its willingness to resume negotiations, but it refused to arbitrate. On May 1, 1986 the Company advised the Union that it was going ahead with its decision to subcontract and would be discharging five bargaining unit employees. On May 7, 1986 the Union submitted its third grievance demanding that the company maintain the status quo until after arbitration. On May 9, 1986 the Company began subcontracting. The five employees were discharged and one was immediately reemployed in another position.

The Union then commenced this action to compel arbitration. 29 U.S.C. Sec. 185. On cross-motions for summary judgment the district court ordered the parties to proceed to arbitration. This appeal followed. During the pendency of this appeal arbitration was had and the arbitrator resolved all material issues in favor of the Union.

II

The only issue to be resolved in this appeal is whether the district court properly compelled arbitration. In analyzing that decision we are not to concern ourselves with weighing the merits of the underlying grievance. Steelworkers v. American Manufacturing Co., 363 U.S. 564, 568, 80 S.Ct. 1343, 1346, 4 L.Ed.2d 1403 (1960). The Steelworkers Trilogy 4 establishes 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.' " AT & T Technologies, Inc., 106 S.Ct. at 1418 (quoting Warrior & Gulf, 363 U.S. at 582, 80 S.Ct. at 1353). The second Steelworkers Trilogy principle follows from the first--arbitrability is for judicial determination unless the parties unequivocably provide otherwise. AT & T Technologies, Inc., 106 S.Ct. at 1418. Finally, in determining arbitrability there is a presumption in favor of arbitration. Id. at 1419.

The Company contends that it should not have been compelled to arbitrate because the Union's request for arbitration was made after the termination of the collective bargaining agreement. 5 Expiration of the collective bargaining agreement does not automatically end the parties' contract rights including that of arbitration. "[T]he parties' obligations under their arbitration clause survive contract termination when the dispute [is] over an obligation arguably created by the expired contract." Nolde Brothers, Inc. v. Local No. 358, Bakery &amp Confectionery Workers Union, 430 U.S. 243, 252, 97 S.Ct. 1067, 1072, 51 L.Ed.2d 300 (1977). When the manner of contract termination or renewal is dictated by a provision in the collective bargaining agreement, and the agreement contains a broad arbitration clause, the appellate courts have compelled arbitration. Sheet Metal Workers Local 57 Welfare Fund v. Tampa Sheet Metal Co., 786 F.2d 1459, 1461 (11th Cir.1986); International Brotherhood of Electrical Workers, Local 1228 v. Freedom WLNE-TV, Inc., 760 F.2d 8, 11 (1st Cir.1985); Rochdale Village, Inc. v. Public Service Employees Union, Local No. 80, 605 F.2d 1290, 1295-96 (2d Cir.1979); Local Union No. 4, International Brotherhood of Electrical Workers v. Radio Thirteen-Eighty, Inc., 469 F.2d 610, 614 (8th Cir.1972). See contra Office & Professional Employees International Union Local 42 v. United Automobile, Aerospace & Agricultural Implement Workers of America, Westside Local No. 174, 524 F.2d 1316, 1317 (6th Cir.1975) (per curiam).

Accordingly, in determining whether the district court erred in compelling arbitration under the broad arbitration clause in the parties' collective bargaining agreement, we must confine our inquiry to "ascertaining whether the party seeking arbitration is making a claim which on its face is governed by the contract." American Manufacturing Co., 363 U.S. at 568, 80 S.Ct. at 1346. We therefore turn to the individual issues raised in the Union's grievances to determine whether they are arbitrable.

III

The Union's first grievance (Exhibit B attached to its complaint) seeks arbitration of the question whether the Company's November 22, 1985 letter is a counter-proposal. Assuming that the letter is not a counter-proposal, the Union further requests determination of the term of the existing contract the Company is deemed to have submitted as a counter-proposal. This mechanism of proposal followed by counter-proposal is established by the collective bargaining agreement and the district court properly ordered arbitration of the issues presented in the Union's first grievance. See Rochdale Village, Inc., 605 F.2d at 1296 (whether an employer had complied with the contract termination provision of a collective bargaining agreement is arbitrable).

IV

The Union's second grievance is more complex. This grievance is divided into two parts. The first portion contends that the Company's decision to subcontract is contrary to the parties' "current collective bargaining agreement." The Union concedes that this portion of the second grievance is dependent on a favorable resolution of the first grievance. Thus, the Union contends that the proposal/counter-proposal mechanism in the old contract has resulted in the formation of a new collective bargaining agreement. The new agreement would be a renewal of the old agreement, assuming a favorable result in the Union's first grievance, because the Company is deemed to have offered the existing agreement which, the argument continues, the Union accepted.

The Union's reference in its brief to acceptance is terse. "There is no dispute that the Union accepted the offer by its February 7, 1986 letter of acceptance." (Emphasis by the Union.) The Union's position on the first part of the second grievance assumes that its letter of February 7 is undisputedly acceptance of the offer the Company is deemed to have made (the subject of the first grievance). We must disagree. Certainly the Union attempted to accept an offer; however, an offer may be withdrawn prior to acceptance. "An offeree's power of acceptance is terminated when the offeree receives from the offeror a...

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