Association of Industrial Scientists v. Shell Develop. Co.

• Decision Date: 29 June 1965
• Docket Number: No. 19425.,19425.
• Citation: 348 F.2d 385
• Parties: ASSOCIATION OF INDUSTRIAL SCIENTISTS, Appellant, v. SHELL DEVELOPMENT COMPANY, a division of Shell Oil Company, a corporation, Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

348 F.2d 385 (1965)

ASSOCIATION OF INDUSTRIAL SCIENTISTS, Appellant, v. SHELL DEVELOPMENT COMPANY, a division of Shell Oil Company, a corporation, Appellee.

No. 19425.

United States Court of Appeals Ninth Circuit.

June 29, 1965.

COPYRIGHT MATERIAL OMITTED

Ernest H. Norback, Adrian G. Schoorl, Norback & Law, San Mateo, Cal., for appellant.

William W. Schwarzer, McCutchen, Doyle, Brown, Trautman & Enersen, San Francisco, Cal., J. Carter Perkins, B. G. Warren, Los Angeles, Cal., for appellee.

Before HAMLEY and KOELSCH, Circuit Judges, and MADDEN, Judge of the Court of Claims.

KOELSCH, Circuit Judge.

The Association of Industrial Scientists commenced this suit to compel Shell Development Company, a division of Shell Oil Company, to submit to arbitration a labor dispute pursuant to the collective bargaining agreement between the parties.¹ The dispute arose when Shell decided to close its Fuels and Lubricants Department at Emeryville, California and transfer ten of the research scientists employed there to other laboratories in Illinois. Shell advised them that a refusal to go would result in their discharge. All ten are members of the Association which is their collective bargaining representative.

The District Court, concluding (1) from an "examination of the agreement in its entirety" that the dispute was not one within the arbitration provision of the agreement and (2) that, in any event, the grievance procedure provided by the agreement could be invoked only by the individual employees and was not available to the Association, granted Shell's motion for summary judgment. This appeal followed.

"The duty to arbitrate being of contractual origin, a compulsory submission to arbitration cannot precede judicial determination that the collective bargaining agreement does in fact create such a duty." John Wiley & Sons v. Livingston, 376 U.S. 543, 547, 84 S.Ct. 909, 913, 11 L.Ed.2d 898 (1964). It is true that the bargaining agreement before the court made no mention of geographical transfers (or for that matter the nature or type of any particular complaint) as a subject for discussion and arbitration. But that silence clearly did not justify the entry of summary judgment. Manifestly, the parties entered into the agreement to forestall industrial strife by providing a method to preclude by peaceful means disruptive labor disputes; in the agreement they expressly declared that "there shall be no cessation of work due to strikes or lockouts during the period of this Agreement"; and to that end they not only agreed that employees could present for discussion complaints "on any subject" but they also provided grievance procedures with arbitration proceedings as the final stage.

The District Court thus should have viewed the agreement as "more than a contract" United Steelworkers of America v. Warrior & Gulf Co., 363 U.S. 574, 578, 80 S.Ct. 1347, 4 L.Ed.2d 1409 (1960), and proceeded on the assumption that it reflected a bi-partite effort to erect "a system of industrial self-government," Id., at 580, 80 S.Ct. at 1352 with the arbitration machinery "at the very heart." Id. at 581, 80 S.Ct. at 1351. In determining the scope of the agreement, the court should have commenced with the premise that "apart from matters that the parties specifically exclude, all of the questions on which the parties disagreed must therefore come within the scope of the grievance and arbitration provisions of the collective agreement." Id. But this was not the court's approach. The "findings of fact" which the court made, preliminary to entry of summary judgment, show that the court held the view that such agreements must be narrowly construed. This was incorrect.² "An order to arbitrate the particular grievance should not be denied unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute. Doubts should be resolved in favor of coverage." United Steelworkers v. Warrior & Gulf Co., supra, 363 U.S. at 582, 583, 80 S.Ct. at 1353. And no fact or combination of facts appearing in the materials submitted to the court on the motion was sufficient to settle the issue.³

The second ground of decision was one not available to the district court, and accordingly does not afford valid support for the entry of the judgment against the Association.

The parties' agreement provided two other procedures to be respectively exhausted before resort could be made to arbitration. "Step 1," required the employee to "verbally" present his complaint to his immediate supervisor. If the matter still remained unsettled "Step 2" provided for a meeting between Shell's manager and the Association's adjustment committee. The meeting would be held upon the Association's written request, signed by the employee, and setting out a full statement of his complaint. If this meeting failed to satisfactorily settle the complaint, then the Association was entitled to demand arbitration as provided by "Step 3."

The District Court reasoned that the Association, as the employees' collective bargaining representative, had no standing to initiate the adjustment proceedings because "the adjustment procedure set forth in Article IV (of the bargaining agreement) is not susceptible of an interpretation that would cover the complaint presented by the petitioners where the employees to which it relates have not become parties to the complaint by signing the written statement thereof."⁴ But in making this determination, the District Court usurped a function which the Supreme Court in John Wiley & Sons v. Livingston, supra, 376 U.S. 543, 84 S.Ct. 909 (1964) has squarely held is to be exercised exclusively by the arbitrator.

Wiley tells us that procedural questions are for the arbitrator without regard to factual variations from case to case.⁵ First, because as the Supreme Court said, ordinarily a court cannot avoid involvement with the merits of a dispute were it to resolve the issue of procedural arbitrability. John Wiley & Sons v. Livingston, supra, 376 U.S. at 557, 84 S.Ct. 909. (True, the Court went on to acknowledge that this would not always be a consideration and, it might be added, the case before us might well, as a matter of speculation, be among those "rare" cases). And second and separately because, as the Court rationalized, "procedural disagreements" should be viewed "not as separate disputes but as aspects of the dispute which called the grievance procedures into play." Id. at 559, 84 S.Ct. at 919. For to leave the determination of procedural arbitrability to a court "would produce the delay attendant upon judicial proceedings preliminary to arbitration," Id. at 558, 84 S.Ct. at 919 and would "entail the fractionating of disputes about subjects which the parties do wish to have submitted" contrary to "the usual purposes of an...