Gangemi v. General Elec. Co.

• Decision Date: 29 March 1976
• Docket Number: No. 571,D,571
• Citation: 532 F.2d 861
• Parties: 91 L.R.R.M. (BNA) 3081, 78 Lab.Cas. P 11,351 In the Matter of the Arbitration between Thomas C. GANGEMI, as President of the Syracuse Draftsmen's Association, Appellee, and GENERAL ELECTRIC COMPANY, Appellant. ocket 75-7555.
• Court: U.S. Court of Appeals — Second Circuit

Page 861

532 F.2d 861

91 L.R.R.M. (BNA) 3081, 78 Lab.Cas. P 11,351

In the Matter of the Arbitration between Thomas C. GANGEMI,

as President of the Syracuse Draftsmen's

Association, Appellee,

and

GENERAL ELECTRIC COMPANY, Appellant.

No. 571, Docket 75-7555.

United States Court of Appeals, Second Circuit.

Argued Dec. 10, 1975.

Decided March 29, 1976.

Jules L. Smith, Syracuse, N. Y. (Charles E. Blitman, Blitman & King, Syracuse, N. Y., of counsel), for appellee.

Francis D. Price, Syracuse, N. Y. (Lawrence L. Tully, Bond, Schoeneck & King, Syracuse, N. Y., of counsel), for appellant.

Before OAKES, VAN GRAAFEILAND, and MESKILL, Circuit Judges.

MESKILL, Circuit Judge:

This is an appeal by the General Electric Company ("Company") from an order of the United States District Court for the Northern District of New York, the Honorable James T. Foley, Chief Judge, which order compelled the Company to arbitrate a labor dispute arising under its collective bargaining agreement with the Syracuse Draftsmen's Association ("Union").

The dispute arose on November 1, 1974 when the Company issued 32 lack of work notices and 33 displacement notices, effective November 15, 1974, to employee members of the Union. Generally, the collective bargaining agreement then in effect between the Company and the Union provided that if certain specified conditions were met those employees who had received displacement notices had the right to "bump" or displace employees with less seniority. Shortly after issuance of the notices, the Union commenced an action in the New York State Supreme Court to obtain a temporary restraining order preventing the Company from effecting the layoffs signalled by the notices. The Union contended that the notices violated the contract because the junior workers displaced by those senior workers who had decided to exercise their "bumping" options would not be afforded the two week notice of layoff required by the contract. It further alleged that the Company was attempting to protect the jobs of seven junior employees under the guise that those employees had unique "qualifications to perform the available work." The Union contended that these seven junior employees performed jobs that required no skills or qualifications beyond those used by ordinary draftsmen.

The New York court granted the order to show cause containing the temporary restraining order but, on November 15, 1974, vacated the temporary restraining order on the Company's motion. On November 25, 1974, the Company removed the action from the state court to the district court, asserting jurisdiction in federal court under Section 301(a) of the Labor Management Relations Act of 1947, 29 U.S.C. § 185(a). Thereafter, on December 16, 1974, the Company moved to dismiss the action on the ground, inter alia, that the Union had failed to exhaust its contractual remedies by not proceeding through the contract's grievance procedures and by not attempting to submit the dispute to arbitration. The Union opposed the motion and further sought a preliminary injunction against the layoff, claiming, by the affidavit of appellant Thomas C. Gangemi, its president, that it had no adequate remedy at law and that exhausting its contractual remedies would have been meaningless since "pursuant to Article IV of the parties' collective bargaining agreement any grievance excluding a disciplinary penalty may not proceed to arbitration unless both parties mutually agree in writing." ¹ The bargaining agreement's arbitration provisions, contained in Article IV of that agreement, are set forth in their entirety in the margin. ² The district court, on February 4, 1975, denied the Union's request for a preliminary injunction, concluding that the Union had failed to meet its burden of showing a "likelihood of success, irreparable harm, or a balance of equities in its favor." The court also granted the Company's "motion to dismiss the complaint for (the Union's) failure to exhaust contractual remedies" but went beyond the Company's position, indicating quite clearly in its memorandum opinion that it felt that the collective bargaining agreement's arbitration provision required mandatory arbitration of all contractual disputes. ³

Having met with no success in the courts, the Union returned to and apparently completed the contract grievance procedures, again meeting with no success. Consequently, the Union, framing the issues in broad terms, requested that the parties voluntarily proceed to arbitration. The Company responded by offering voluntarily to arbitrate, but only with respect to more narrowly drawn issues concerning whether or not specific individual senior employees possessed the qualifications to perform the jobs held by the seven junior employees whose jobs the Company was attempting to protect.

Apparently unsatisfied with the Company's proposal to arbitrate only with respect to the limited issues, the Union sought to compel arbitration of the more broadly framed dispute by initiating the present action in the district court on June 5, 1975. Jurisdiction in the district court was asserted under Section 301 of the Labor Management Relations Act of 1947, 29 U.S.C. § 185, and the United States Arbitration Act, 9 U.S.C. § 4. In this action the Union, armed with the reasoning contained in the district court's opinion in the initial action, reversed field and maintained that the collective bargaining agreement provided for compulsory binding arbitration of the dispute. The Company moved to dismiss the action on the ground that the agreement provided for only voluntary arbitration of any dispute between the parties that did not involve a disciplinary penalty. In support of its motion the Company introduced evidence of the parties' past collective bargaining history and even cited the Union's stance in the prior action in an attempt to demonstrate to the court that it had always been the parties' intent and common understanding that the agreement did not provide for mandatory arbitration of any disputes other than those which involved disciplinary penalties.

On September 5, 1975, the district court issued its order denying the Company's motion to dismiss the action and granting the Union's petition to compel arbitration of the dispute. It noted that in its earlier opinion it had analyzed the arbitration clause of the agreement in an attempt to "expedite the resolution of this case without the necessity of subsequent litigation." The court incorporated its earlier opinion by reference, which opinion stated that the court felt that the word "may" in the arbitration clause of the contract must be interpreted as a mandatory rather than a permissive verb and that the Union's earlier contention that the contract required "prior written mutual agreement" of the parties before arbitration was available was "too simplistic to escape the contractual obligation of arbitration." In the opinion in the present case, the district court further elaborated and stated that the "prior written mutual agreement" provision of the contract could be read "as an articulation of the principle that an individual grievant cannot force the parties, i. e., G.E. and the Union to arbitrate a dispute which neither wants to arbitrate." (emphasis in original). Alternatively, the court felt that the requirement "could be read to mean that compulsory arbitration can only be had after Initially, since the district court erroneously concluded that the interpretation of the contract and presumably the question of arbitrability of the dispute was itself "penultimately for the arbitrator," we find it necessary to repeat the well established principle of federal law that unless a collective bargaining agreement clearly manifests a contrary intent, it is for the courts, not the arbitrator, to decide whether the parties to that agreement have agreed to submit specific disputes to arbitration. Operating Engineers v. Flair Builders, Inc., 406 U.S. 487, 491, 92 S.Ct. 1710, 1712, 32 L.Ed.2d 248, 252 (1972); Atkinson v. Sinclair Refining Co., 370 U.S. 238, 241, 82 S.Ct. 1318, 1320, 8 L.Ed.2d 462, 465 (1962); John Wiley & Sons v. Livingston, 376 U.S. 543, 546-47, 84 S.Ct. 909, 912, 11 L.Ed.2d 898, 902, 903 (1962); United Steelworkers v. Warrior & Gulf Co., 363 U.S. 574, 80 S.Ct. 1347, 4 L.Ed.2d 1409 (1960). That requirement is, of course, based upon the fact that "(n)o obligation to arbitrate a labor dispute arises solely by operation of law. The law compels a party to submit his grievance to arbitration only if he has contracted to do so." Gateway Coal Co. v. Mine Workers, 414 U.S. 368, 374, 94 S.Ct. 629, 635, 38 L.Ed.2d 583, 590 (1974). "(A)rbitration 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." Atkinson v. Sinclair Refining Co., supra, 370 U.S. at 241, 82 S.Ct. at 1321, 8 L.Ed.2d at 466.

exhaustion of grievance procedures and the obligation that the parties come to some basic agreement on the issues, etc., in writing." In any event, the district court held that the provision's "true meaning . . . is penultimately for the arbitrator and only thereafter for a federal court." We disagree.

(2) Superimposed upon these traditional contract notions, however, is the clear national policy favoring resolution of labor disputes in private, extra-judicial fora. ⁴ In keeping with this national policy the Supreme Court expressed its now well settled preference for arbitration of labor disputes in United Steelworkers v. Warrior & Gulf Co., supra, 363 U.S. at 582-83, 80 S.Ct. at 1353, 4 L.Ed.2d at 1417, by presuming that a broad arbitration clause applies "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." Stated another way, the courts have held that where an agreement contains a broad arbitration...