Chicago Typographical Union No. 16 v. Chicago Sun-Times, Inc., SUN-TIME

Decision Date31 October 1988
Docket NumberNo. 88-1392,INC,SUN-TIME,88-1392
Citation860 F.2d 1420
Parties129 L.R.R.M. (BNA) 2948, 57 USLW 2375, 110 Lab.Cas. P 10,819 CHICAGO TYPOGRAPHICAL UNION NO. 16, Plaintiff-Appellant, v. CHICAGO, Defendant-Appellee.
CourtU.S. Court of Appeals — Seventh Circuit

Gilbert A. Cornfield, Cornfield & Feldman, Chicago, Ill., for plaintiff-appellant.

Bernard D. Meltzer, Professor of Law, University of Chicago, Law School, Chicago, Ill., for defendant-appellee.

Before CUDAHY, POSNER and EASTERBROOK, Circuit Judges.

CUDAHY, Circuit Judge.

Plaintiff-appellant Chicago Typographical Union No. 16 (the "Union") commenced this action to compel the defendant-appellee, Chicago Sun-Times, Inc. (the "Sun-Times"), to arbitrate a dispute over the proper interpretation of a collective bargaining agreement. 1 The district court found that the parties were not in "controversy [or] ... disagreement as to interpretation or enforcement of the terms of th[e] Agreement" as required by the contract's arbitration clause. The court refused to order arbitration of what it considered a non-existent dispute. It therefore dismissed the Union's complaint with prejudice. This appeal followed. We affirm.

I.

The contract between the Union and the Sun-Times contains what is commonly known as a "most favored nation" clause. 2 Under this provision, the parties have agreed that if more advantageous terms or conditions of employment are "granted" by the Union to the Chicago Tribune (the "Tribune"), the Sun-Times will be allowed to implement the same terms and conditions or their equivalent.

The Union has been involved in continuing controversies with the Tribune over the last several years. The last collectively bargained agreement between the Union and the Tribune expired on January 14, 1983. After an impasse in bargaining had been reached, the Tribune posted its "final offer" of work terms and conditions on January 15, 1985. Negotiations continued, but to no avail; the Union declared a strike on July 18, 1985. On February 10, 1986, the Union submitted an unconditional offer to return to work. Since that time, various union members have returned to work in the Tribune's composing room. The Union takes the position that its members' return to work under the terms unilaterally imposed by the Tribune does not constitute a "grant" of wage concessions by the Union, as that term is used in the most favored nation clause of the Union's agreement with the Sun-Times.

On August 21, 1987, Jack Nettis, Director of Personnel and Labor Relations for the Sun-Times, sent a letter to Dave Donovan, President of the Union. The letter recited that

In recent weeks, we have learned that there may have been actions taken by the Chicago Typographical Union No. 16 in 1986 or 1987, regarding terms and conditions of employment at the Chicago Tribune, that affect certain rights of the Chicago Sun-Times, Inc., under the labor contract between Chicago Sun-Times, Inc. and Chicago Typographical Union No. 16. In order to properly administer our labor contract and to insure the protection of the Company's rights under the labor contract, we request the Union provide us with the following information.

The letter went on to request various "correspondence, proposals and agreements" between the Union and the Tribune, relating to the terms and conditions of employment of the Union's members in the Tribune's composing room.

Donovan responded on August 24. He stated that he "was not aware 'that there may have been actions taken by Chicago Typographical Union No. 16 in 1986 or 1987, regarding terms and conditions of employment at the Chicago Tribune.' " Donovan thanked Nettis for his "interest and concern," but otherwise provided no information concerning the terms and conditions under which members of the Union were working at the Tribune.

The correspondence assumed a somewhat less cordial character on August 31, when Nettis replied to Donovan's missive. Nettis reiterated the information request, noting that the information was required "in order to enable the Chicago Sun-Times, Inc., to administer the labor unit rate and protect its rights." Nettis also asserted that Donovan's "degree of awareness concerning the actions of Chicago Typographical Union No. 16 is not relevant to and does not relieve the Union of the Union's obligation to respond to the Company's legitimate information request." Nettis therefore requested that the Union promptly respond to the initial request for information.

On September 3, Donovan sent letters to Nettis and to Robert Page, the President and Publisher of the Sun-Times. The letter to Nettis stated that

Your letter of August 21, 1987, followed by your letter of August 31, 1987, and your recent actions in unilaterally cutting wages of the Mailers' bargaining unit portends the same action by the Chicago Sun-Times for its composing room employees under your interpretation of the "Uniformity of Agreement" of our contract (Section 7). The Union disputes your position that our contract grants authority to the Chicago Sun-Times to lower wages to ... wage rates which the Chicago Tribune may be paying strike-breakers or others hired since July 18, 1985....

The Union will not tolerate action by the Chicago Sun-Times in unilaterally cutting our negotiated wages under the guise of a fabricated interpretation of the Uniformity of Agreement provisions of our contract. Therefore, the Union insists that we immediately arbitrate the issue whether the Union has "granted to the Chicago Tribune ... better or different ... operating costs in the Composing Room" (which have the effect of reducing operating costs) within the meaning of Sections 7(a) and 7(b) of the bargaining agreement.

(second emphasis original). Donovan's letter to Page enclosed copies of his correspondence with Nettis, and observed that "[m]y letter of response to Mr. Nettis raises an issue over the interpretations [sic] and enforcement of provisions of our bargaining agreement," therefore creating an arbitrable dispute under the terms of the collective agreement.

Nettis responded to Donovan's letter on September 14. He stated that the Union's "grievance and request for arbitration is somewhat premature. We have made no decision, as yet, regarding whether the Chicago Sun-Times has the right to invoke the provisions of section 7(a) of our Labor Contract."

Despite the Sun-Times' avowal that it had not yet taken any position regarding the proper interpretation of section 7(a), the Union filed its complaint in the district court on September 15, 1987. The complaint states that the Union has "reason to believe" that the Sun-Times interprets the terms "grant" in the most favored nation clause as comprehending the terms under which Union members are working at the Tribune. Complaint, p 12. Based on this apparent dispute, the Union seeks an order compelling the Sun-Times to submit to arbitration.

The Sun-Times moved to dismiss the action for failure to state a claim under Fed.R.Civ.P. 12(b)(6), arguing that there was no current dispute between the parties requiring arbitration. On February 2, 1988, the district court granted the Sun-Times' motion. The court observed that the contract only provided for arbitration of "disagreements" or "controversies" between the parties. Examining the correspondence between Donovan and Nettis, the court concluded that no arbitrable grievance existed.

The union insists that it has "reason to believe" that the Sun-Times has taken a position regarding Section 7(a) with which it disagrees, thus giving rise to an arbitrable "dispute." However, because of the union's refusal to date to disclose the information requested by the Sun-Times, the Sun-Times presently does not know what terms and conditions exist in the Tribune's Composing Room, or how those conditions came about. Thus, the Sun-Times is not even at this time in a position to take a position one way or another on whether it will invoke the provision of Section 7(a).

... That the union has a belief that the Sun-Times will adopt a position contrary to its own when it becomes aware of the facts is an insufficient basis on which to compel the Sun-Times to arbitrate, since the Agreement itself requires a "disagreement" or a "dispute." There is simply no contractual basis for arbitration in this case.

Mem. op. at 4-7 (emphasis original).

The court also noted, as "yet another basis for refusing to compel arbitration," that the Union's refusal to provide the requested information was the subject of a pending unfair labor practice proceeding before the National Labor Relations Board. Since, according to the district court, "when an activity is even arguably subject to Section 8 of the [National Labor Relations] Act, federal courts must defer to the exclusive competence of the NRLB [sic]," the court considered its refusal to order arbitration particularly appropriate.

II.

The Supreme Court has recently reaffirmed the general principles which must guide a court in an action seeking to compel arbitration of a labor dispute. Quoting liberally from its twenty-five-year-old decisions in the Steelworkers Trilogy, 3 the Court enumerated four basic principles which are relevant to a suit to compel arbitration.

The first principle gleaned from the Trilogy is 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." ...

The second rule, which follows inexorably from the first, is that the question of arbitrability--whether a collective-bargaining agreement creates a duty for the parties to arbitrate the particular grievance--is undeniably an issue for judicial determination....

* * *

The third principle derived from our prior cases is that, in deciding whether the parties have agreed to submit a particular grievance to arbitration, a court is not to rule on the potential merits of the underlying...

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