PIANO & MUSICAL INST. WKRS. U., LOCAL 2549 v. WW Kimball Co.

• Citation: 333 F.2d 761
• Decision Date: 30 June 1964
• Docket Number: No. 14446.,14446.
• Parties: The PIANO AND MUSICAL INSTRUMENT WORKERS UNION, LOCAL NO. 2549 OF the UNITED BROTHERHOOD OF CARPENTERS AND JOINERS OF AMERICA, AFL-CIO, Plaintiff-Appellee, v. W. W. KIMBALL COMPANY, a Delaware corporation, Defendant-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

333 F.2d 761 (1964)

The PIANO AND MUSICAL INSTRUMENT WORKERS UNION, LOCAL NO. 2549 OF the UNITED BROTHERHOOD OF CARPENTERS AND JOINERS OF AMERICA, AFL-CIO, Plaintiff-Appellee, v. W. W. KIMBALL COMPANY, a Delaware corporation, Defendant-Appellant.

No. 14446.

United States Court of Appeals Seventh Circuit.

June 30, 1964.

Thomas R. Mulroy, Chicago, Ill., Fred P. Bamberger, Evansville, Ind., Ralph E. Davis, Luther A. Harthun, Chicago, Ill., Hopkins, Sutter, Owen, Mulroy & Wentz, Chicago, Ill., of counsel, for appellant.

Bernard M. Mamet, Chicago, Ill., for appellee.

Before DUFFY, SCHNACKENBERG and KNOCH, Circuit Judges.

SCHNACKENBERG, Circuit Judge.

W. W. Kimball Company, a Delaware corporation, defendant, has appealed from an order of the district court granting summary judgment on count I of a complaint of The Piano and Musical Instrument Workers Union, Local No. 2549 of the United Brotherhood of Carpenters and Joiners of America, AFL-CIO, plaintiff, under 29 U.S.C.A. § 185, being § 301 of the Labor Management Relations Act.

Relevant pleadings and exhibits affirmatively show the following facts.

Defendant was engaged in the business of manufacturing pianos and organs at its plant at Melrose Park, Illinois.¹ On October 1, 1960 it entered into a collective bargaining agreement with plaintiff, which by its terms expired October 1, 1961. On August 15, 1961, defendant notified plaintiff by letter that it had decided because of economic necessity to "discontinue operations in Melrose Park immediately" and that it would "begin immediately to lay off the employees". Production operations at Melrose Park ceased on August 17, 1961.

Defendant transferred its manufacturing operations to a plant at French Lick, Indiana. On October 9, 1961, it began hiring employees for the French Lick plant. No operations were carried on in that plant prior to that date.

The 1960 agreement provided for seniority rights for a period of two years following lay-off for those employees who had one or more years' service with the defendant. In the case of lay-off, provision was made for re-employment in the order of seniority, in which case defendant was to give written notice by mail to each employee to report back to work within three days after mailing of the notice, failing which the next employee in seniority might be re-employed. An employee who failed to show good cause for failure to report within three days would lose his seniority standing.

These are the principal seniority provisions upon which plaintiff relies as a contractual basis for its position with respect to the re-employment rights of the employees. The 1960 agreement also provided, in Article VIII, section 1:

"Any difference arising from the interpretation or application of this agreement between the parties hereto, which cannot be settled directly by the parties concerned, will be referred to a board of arbitration * * *."

While defendant's motion for summary judgment was denied, plaintiff's motion for summary judgment as to count I was granted.² It prayed for arbitration of the disputed issues as to the rights of laid-off employees to be "recalled" to work at the French Lick plant also their right to collect damages for lost wages and other benefits, together with costs and attorneys' fees.

On August 15, 1961, vice-president Habig of defendant, notified business agent Kearney of plaintiff, of its decision to discontinue the Melrose Park operation. On September 7, 1961, Habig and A. C. Sermersheim, one of defendant's officers, met with Kearney to discuss what should be done about the employees laid off as a result of the transfer to French Lick. Plaintiff demanded that laid-off employees be re-employed in the new location. As early as September 7, defendant was considering job applicants for French Lick. Kearney said that he had a list of 39 Melrose Park employees who wished to obtain employment at the French Lick plant. Sermersheim requested a copy of this list and Kearney said that he could give him a copy. This Kearney did not do.

On September 15, 1961, Sermersheim and James Loftus, defendant's purchasing agent, met with Kearney and Bennett, general organizer of the United Brotherhood of Carpenters and Joiners of America, AFL-CIO. It does not appear that anything was then said or done about the copy of the list which Kearney said on September 7 he would give to Sermersheim.

No hiring was undertaken by defendant at French Lick until October 9, 1961.

On November 1, 1961, plaintiff again demanded re-employment for laid-off employees and requested back pay until reemployment. On November 14, 1961, defendant's plant manager Domark of the Melrose Park plant and Sermersheim met with Bennett and Kearney. Bennett stated that defendant could be required to offer employment to the Melrose Park employees at French Lick. When Sermersheim asked for a list of employees who desired such employment, Kearney declined to furnish it.

On December 14, 1961, defendant asked for a list of employees who desired employment at French Lick, offering to furnish plaintiff with application blanks for those employees seeking employment there. This offer was rejected by Bennett who insisted that re-employment under Article III of the contract be offered to all Melrose Park employees and that defendant contact them for such purpose in accordance with the contract.

Such a list was never given to defendant, although in a letter dated January 15, 1962, defendant offered severance and termination pay to Melrose Park employees. Kearney refused this offer in a letter dated January 20, 1962.

No recall having taken place, plaintiff on July 30, 1962 offered to submit the "disputed issues" to arbitration, which was refused by defendant on September 1, 1962. This suit followed on September 14, 1962.

Defendant insists that the decisive factor, under the arbitration clause, is the time at which the dispute arose. It relies on Procter & Gamble Independent Union of Port Ivory, N. Y. v. Procter & Gamble Mfg. Co., 2 Cir., 312 F.2d 181 (1962), cert. denied 374 U.S. 830, 83 S.Ct. 1872, 10 L.Ed.2d 1053. It likewise relies upon Local Union No. 998 etc. v. B. & T. Metals Co., 6 Cir., 315 F.2d 432 (1963), holding that arbitration could not be compelled because a dispute over seniority arose after termination of the collective bargaining agreement.

Thus, argues defendant, an application of the Procter & Gamble and B. & T. Metals test to the facts here, requires a holding that the "difference" urged by plaintiff is not arbitrable because it arose after termination of the contract.

1. In John Wiley & Sons, Inc., v. Livingston, President of District 65, Retail, Wholesale and Department Store Union, A.F.L.-C.I.O., 376 U.S. 543, 84 S.Ct. 909, 11 L.Ed.2d 898 (1964), it appears that Interscience Publishers, Inc. had a collective bargaining agreement with the union and that, while the agreement was in effect, Interscience merged with Wiley and ceased to do business as a separate entity, for genuine business reasons. A major question presented in Wiley was whether a corporate employer was required to arbitrate with a union under a bargaining agreement made between the union and Interscience, a corporation which later had merged with the employer.

Because of the extensive reliance by plaintiff in the case at bar upon Wiley (which it cites on eight pages of its brief), we shall now discuss it.

The employees involved were employed by Interscience prior to the merger with Wiley. The union sought to arbitrate with Wiley the question, inter alia, whether or not the seniority rights built up by the Interscience employees had to be accorded to such employees by Wiley not only during the term of the Interscience agreement but after its expiration. Wiley contended that it had no agreement with the union and that it was not obligated to recognize the rights of the prior Interscience employees — which rights the union contended had "vested". Wiley not only contended that it was not a party to the agreement and,...