Botany Mills, Inc. v. Textile Workers Union of America, AFL-CIO, AFL-CIO

• Decision Date: 28 April 1958
• Docket Number: AFL-CIO,No. A--614,AFL-CI,D,A--614
• Citation: 141 A.2d 107,50 N.J.Super. 18
• Parties: BOTANY MILLS, Inc., Plaintiff-Respondent, v. TEXTILE WORKERS UNION OF AMERICA,, and Frank Cuccio, Manager of Passalc Joint Board of Textile Workers Union of America,, Defendants-Appellants. . Appellate Division
• Court: New Jersey Superior Court — Appellate Division

Page 18

50 N.J.Super. 18

141 A.2d 107

BOTANY MILLS, Inc., Plaintiff-Respondent, v. TEXTILE WORKERS UNION OF AMERICA, AFL-CIO, and Frank Cuccio Manager of Passalc Joint Board of Textile Workers Union of America, AFL-CIO, Defendants-Appellants.

No. A--614.

Superior Court of New Jersey Appellate Division.

Argued Jan. 20, 1958.

Decided April 28, 1958.

Sidney Reitman, Newark, argued the cause for defendants-appellants (Kapelsohn, Lerner, leuchter & Reitman, Newark, attorneys).

Joseph Brandschain, Philadelphia, Pa. (of the Pennsylvania bar, admitted to argue the cause pro hac vice), argued the cause for plaintiff-respondent (Bilder, Bilder & Freeman, Newark, and Wolf, Block, Schorr & Solis-Cohen, Philadelphia, Pa., attorneys).

Before Judges GOLDMANN, FREUND and CONFORD.

The opinion of the court was delivered by

CONFORD, J.A.D.

The defendant-union appeals from an order of the Chancery Division permanently restraining enforcement of an arbitration award and denying defendant's counterclaim for enforcement of the award. The plaintiff-company had sought this restraint after the arbitrator had entered an interim award favorable to the union's position that certain employees were entitled to vacation pay benefits under their collective bargaining agreement.

Botany Mills, the plaintiff, and the Textile Workers Union, the defendant, entered into a two-year collective bargaining agreement on April 14, 1954. The agreement, by Article XIX, was to continue in 'full force and effect' until March 15, 1956 and for 'successive one year periods' thereafter unless terminated by written notice given 60 days prior to the termination date.

At one time Botany employed over 6,000 employees, but by December 1955, because of intermittent layoffs due to technological changes and various work curtailments, this number had dwindled to about 1,000. Botany finally decided to discontinue operations and, on December 20, posted the following notice:

'Notice to Employees.

'The Dyeing and Finishing Operation of Botany Mills, Inc. will discontinue permanently as an active operation on December 31, 1955.

'Since this operation is being discontinued, all salaried and hourly paid employees of the Dyeing and Finishing Division of Botany Mills, Inc. are hereby notified that they are laid off at the close of operations of their scheduled shifts on December 29th and December 30th, 1955.'

On December 31 all manufacturing operations were discontinued.

The relevant contract provision concerning vacation pay, Article VI, entitled 'Vacation and Vacation Pay,' provides:

'Each employee in the employ of the Employer on each April 15th hereafter during the life of this agreement who has been in its employ at least one (1) year prior thereto but less than three (3) years, shall hereafter receive a vacation of one (1) week with pay as hereinafter set forth at a time to be set by the Employer; each employee in the employ of the Employer on each April 15th hereafter during the life of this agreement who has been in its employ at least three (3) years prior thereto but less than five (5) years, shall hereafter receive a vacation of one (1) week with pay as hereinafter set forth at a time to be set by the Employer; and each employee in the employ of the Employer on each April 15th hereafter who has been in its employ for five (5) years or more prior thereto, shall receive a vacation of two (2) weeks with pay as hereinafter set forth.'

The succeeding paragraphs of Article VI provide that in calculating the amount of vacation pay, for both hourly and piecework employees, the four-week period immediately preceding April 1 of the vacation year should be used as a base. Vacations were to be scheduled between April 15 and September 15. It was further provided that:

'Any employee who is qualified for a vacation or vacation pay under the foregoing but who had been laid-off for a continuous period of six (6) months or more prior to April 15th * * * shall not be entitled to a vacation or vacation pay.

'Any employee whose employment has been terminated prior to April 15th, as provided in Article XI-K shall not be entitled to a vacation or vacation pay.'

Article XI-K lists several reasons for which 'seniority and continuous employment records' of employees would be lost, including layoffs for two years or more.

On January 9, 1956 the company gave notice pursuant to the aforementioned Article XIX of the contract that the collective agreement would be terminated effective March 15, 1956.

The union demanded vacation pay for all employees whose layoffs occurred after October 15, 1955. That date was specified by the union because of the contract provision concerning vacations quoted above, which excepts from disqualification from vacation benefits on account of layoff those employees who had been laid off less than six months prior to April 15 of the vacation year, and because the company had awarded vacation pay in 1954 and 1955 to any employee who had been laid off not earlier than the preceding October 15. The union had made these demands known to the company representatives as early as October 1955 at a meeting, engendered by rumors of the impending shutdown, between the union and Botany's general manager. The demands were formally renewed on February 2, 1956, before the expiration date of the contract. The company's answer to the counterclaim of the union in this cause admits it denied liability for the claims during the month of February 1956.

On April 4, 1956 the arbitration machinery of the contract was invoked by the union and the dispute was formally placed before the arbitrator.

The arbitration clause of the agreement states that:

'Any differences or dispute between the parties whether or not a grievance, which is not satisfactorily adjusted under the preceding applicable provisions of this agreement, shall be promptly referred to arbitration, at the request of either party hereto. The arbitrator shall hear the matter expeditiously and render his decision which shall be final and conclusively binding upon the parties hereto.

'The arbitrator shall have no jurisdiction or authority to add to, subtract from, modify or alter any of the terms of this agreement; nor shall the arbitrator have jurisdiction or authority to affect, rule upon, or grant any extension or renewal of this agreement.'

The company challenged the jurisdiction of the arbitrator but participated in the proceedings with the understanding that it was not waiving its jurisdictional objection. The arbitrator, David L. Cole, heard the matter on June 14, 1956, and made an 'Interim Award,' holding that (1) he had jurisdiction to hear the cause, and (2) the employees laid off by the company on or about December 31, 1955 and subsequently were employees of the employer on April 15, 1956 and therefore entitled to vacations, and directing a further hearing of the dispute to determine the amount of vacation pay owed to individual employees.

One week later the company obtained an order to show cause from the Chancery Division seeking to enjoin the arbitration proceedings. On the return of the order, the court ruled that the arbitration proceedings should continue but that enforcement of any award be restrained until further order of the court.

On July 18, 1956 the arbitrator filed his final award and opinion, conforming to his interim award in all respects except that vacation pay was awarded to all employees laid off after October 15, 1955, and awarding specific amounts to the respective employees.

After rendition of the award the union filed a counterclaim in the Chancery action seeking judicial enforcement of the award as rendered. The cause came on for hearing, and the trial court first granted an interlocutory injunction restraining enforcement of the award (opinion reported 42 N.J.Super. 327, 126 A.2d 389 (Ch.Div.1956)) and then entered final judgment for plaintiff vacating the award (opinion reported 44 N.J.Super. 504, 130 A.2d 900 (Ch.Div.1957)). Both decisions were based upon the court's determination that no arbitrable dispute was presented. On the present appeal the union maintains that the company's refusal to pay vacation pay to employees laid off after October 15, 1955 presented an arbitrable dispute under the collective bargaining agreement.

The issue before this court, then, is only the arbitrability of the dispute, and consequently, meritorious aspects of the union's claim to vacation pay are to be considered only with a view to resolution of that inquiry. Standard Oil, etc. Union v. Esso Research, etc., Co., 38 N.J.Super. 106, 118 A.2d 70 (App.Div.1955); Goodall-Sanford, Inc. v. United Textile Workers, 233 F.2d 104, 107--108 (1 Cir, 1956), affirmed on other grounds, 353 U.S. 550, 77 S.Ct. 920, 1 L.Ed.2d 1031 (1957). The company asserts, in defense of the determination below, that (1) the arbitrator lacked power to act because the employees, in any case, would not have been 'legally entitled' to vacation pay until April 15, 1956, which was subsequent to the termination date of the collective bargaining agreement, and (2) there was no Bona fide dispute as to the right to vacation pay, within the rule of the Standard Oil case, supra. If either contention of the company is maintainable, the trial court was correct in restraining enforcement of the award.

I.

The first point of the company's argument is that since, under the contract, vacation pay for the year 1956 was not payable (or determinable) until April 15 of that year, a date subsequent to the actual termination of this contract, vacation rights, even if they existed, could not have 'accrued' before such termination. The company contends this circumstance defeats the arbitrator's jurisdiction, as his adjudicatory power can only extend to rights which accrue during the life of the agreement.

Prefatory to discussing this point we note that the trial court apparently did not rest its decision thereon. In its initial...