Fur Dressers Union Local 2F v. DeGeorge

• Decision Date: 22 December 1978
• Docket Number: Civ. A. No. 76-770.
• Parties: FUR DRESSERS UNION LOCAL 2F, Fur Floor Workers Union Local 3F, and Fur Dressers Labor Lyceum, Inc., Plaintiffs, v. Stephen Vincent DeGEORGE and Stephen DeGeorge, and Stroudsburg Fur Dressing Corporation, Defendants.
• Court: U.S. District Court — Middle District of Pennsylvania

462 F. Supp. 890

FUR DRESSERS UNION LOCAL 2F, Fur Floor Workers Union Local 3F, and Fur Dressers Labor Lyceum, Inc., Plaintiffs, v. Stephen Vincent DeGEORGE and Stephen DeGeorge, and Stroudsburg Fur Dressing Corporation, Defendants.

Civ. A. No. 76-770.

United States District Court, M. D. Pennsylvania.

December 22, 1978.

Handler, Gerber & Weinstock, by Ira H. Weinstock, Elliot A. Strokoff, Harrisburg, Pa., for plaintiffs.

Robert H. Nothstein, Lee, Fritz & Nothstein, Stroudsburg, Pa., Thomas Beckley, James P. Cullen, Beckley & Madden, Harrisburg, Pa., for defendants.

MEMORANDUM

HERMAN, District Judge.

Plaintiffs, labor organizations, filed this action on June 17, 1976 seeking damages for an alleged breach of an agreement between Plaintiffs and Defendants under section 301 of the Labor Management Relations Act, 29 U.S.C. § 185. On October 13, 1977 Defendants filed an answer denying liability and also brought a three-count counterclaim against the Plaintiffs. Count I of the counterclaim alleges the labor organizations breached their agreement with Defendant Stroudsburg Fur Dressing Corporation and seeks damages. Count II of the counterclaim alleges a cause of action under section 303 of the Act, 29 U.S.C. § 187, based upon unlawful secondary activity engaged in by the Plaintiff labor organizations. Count III alleges a claim under Pennsylvania law for tortious interference with business relationships. Plaintiffs on November 23, 1977 filed a motion to dismiss the counterclaims and by our memorandum and order of June 29, 1978 the motion to dismiss was denied as to Count II and granted as to Count III. We then elected to treat the motion as to Count I of the counterclaim as a motion for summary judgment and deferred a ruling on the motion until additional materials were submitted. Plaintiffs have now submitted the additional materials and have also filed a motion to reconsider our prior memorandum and order. Defendants have filed responsive briefs and the matter is now ready for a determination of the motions.

Count I of the counterclaim will be dismissed as the claim raised therein of breach of contract is arbitrable and should be first submitted to arbitration in accordance with the collective bargaining agreements entered into between the parties. Count II of the counterclaim will not be stayed pending arbitration of Count I as this claim states a separate and distinct cause of action that will not be affected by the outcome of the arbitration. Therefore, the case will proceed to trial on the counts raised in the complaint and Count II of the Defendants' counterclaim.

The first issue that must be addressed is whether Count I of the counterclaim is barred by the doctrine of res judicata. In our prior order of June 29, 1978 we postponed a decision on the question of whether the allegations of Count I had been previously submitted to arbitration. We now have reviewed the materials submitted on this issue, including the transcript of the arbitration hearing, the arbitration award, and the framing of the issues in the submission. It is now clear that res judicata should not bar Count I of the counterclaim as a result of the arbitration between Stroudsburg Fur Dressing Corporation and Plaintiff unions.

Res judicata does not bar the claim in Count I of the counterclaim, which alleges the labor organizations breached their agreement with Defendant Stroudsburg Fur Dressing Corporation, as this specific issue was not resolved by the arbitration proceedings. The submission framed the issues in terms of illegal lock-out and whether the Defendant Stroudsburg Fur Dressing Corporation had been in breach of the collective bargaining agreements. However, the arbitrator was not specifically requested to determine if the union had breached the agreements. Therefore, while the Defendant corporation did present evidence concerning the allegations now raised in Count I of the counterclaim at the arbitration proceeding in defense, this mere presentation of evidence at the informal arbitration proceeding is not sufficient to bar the counterclaim under the doctrine of res judicata.

The res judicata doctrine is generally more strictly applied where the first proceeding is arbitration rather than a court proceeding. As noted in United Electrical Radio and Machine Workers v. Honeywell Inc., 522 F.2d 1221, 1228 (7th Cir. 1975), "notions of res judicata are less suited to the informal process of industrial arbitration than to the litigation process, and, to the extent that res judicata has been used in arbitration, a strict factual identity has been required." In this circuit it has been held that res judicata does not bar subsequent arbitration when the issues disposed of in the first arbitration were not identical. Avco Corporation v. Local Union No. 787, UAW, 459 F.2d 968, 973 (3d Cir. 1972); See also, Acmat Corporation v. International Union of Operating Engineers, 442 F.Supp. 772, 783-85 (D.Conn.1977); Brennan v. D. J. McNichol Co., 439 F.Supp. 499, 503 (E.D.Pa.1977); International Chemical Workers Union, Local No. 189 v. Purex Corporation, 427 F.Supp. 338, 339 (D.Neb.1977). Therefore, since the issues at the arbitration proceeding are not identical to the issues presented by Count I of the counterclaim, it will not be held to be barred by the doctrine of res judicata.

The second question presented involves the motion to reconsider the prior order of June 29, 1978 in which we held that the Defendants were not required to arbitrate their claim that Plaintiffs breached the collective bargaining agreements between the parties. In that memorandum we noted the ambiguity of the arbitration clauses contained in the agreements between the parties and determined that the intent of the parties was only to arbitrate during the life of the agreement. Also, it was stated that Plaintiffs lost their right to insist on arbitration of the counterclaim by instituting suit on issues that concern the relationship between the parties. On our reexamination of the agreements, arguments of the parties, and the case law, the prior decision with respect to the questions of duration and waiver will now be altered.

All of the four collective bargaining agreements between the parties contained an identical broad arbitration clause which reads: "The Impartial Chairman shall have jurisdiction to hear and determine all questions that may arise between the parties concerning the construction, applicability and intent of any provisions of this agreement and shall have jurisdiction of all disputes that may arise out of any matter by reason of the relationship created by this agreement."¹ Clearly, the allegations in Count I of the counterclaim of sabotage and disruption of business operations concern disputes that arose by reason of the relationship created by the various agreements. Therefore the allegations in Count I of the counterclaim that the union breached the agreements seems to fall well within the arbitration clauses as agreed to by the parties.

Each of the four agreements contains language that limits the adjustment of dispute provisions to the duration or life of the particular agreement. In our former reading of these provisions we determined that this language showed an intention on the part of the parties to only arbitrate disputes arguably within the arbitration clause during the life of the agreement. Now, after reexamining these provisions, however, we believe that the real intention of the parties was to arbitrate all disputes that arose during the life of the agreements. The allegations contained in Count I of the counterclaim did arise while...