George Rattray & Co., Application of
| Decision Date | 15 November 1960 |
| Docket Number | R,AFL-CI |
| Citation | 209 N.Y.S.2d 869,29 Misc.2d 734 |
| Parties | Application of GEORGE RATTRAY & COMPANY, Inc., Petitioner, for an order staying any proposed arbitration between Petitioner and James Trenz, as President, and George Borden, as Treasurer, of International Union of Electrical, Radio and Machine Workers, Local 463,espondents. |
| Court | New York Supreme Court |
Zelby & Burstein, New York City, for petitioner; Herbert Burstein, Arthur Liberstein, New York City, of counsel.
Abramson & Lewis, New York City, for respondents.
By this motion petitioner seeks a stay pursuant to Civil Practice Act, § 1458 of respondent union's demand for arbitration of nine stated questions. Prior to July 1957 George Rattray & Company, Inc. was an independent company engaged in the manufacture of potentiometers. On that date all of the outstanding stock of the company was purchased by Hardwick, Hindle, Inc. The employees and the Union were advised of the changed relationship. The pre-existing collective bargaining agreement with respondent union had been extended for two years in June 1957, and the business activities of Rattray were carried on as before, except that on September 30, 1957, all of the assets of George Rattray & Company, Inc. were distributed to Hardwick. The Rattray corporation continued in existence, but wages were paid by check of 'George Rattray & Co., Division of Hardwick, Hindle, Inc.' When the collective bargaining agreement expired a new contract, dated July 1, 1959, was made. That contract was negotiated by Hardwick's personnel manager, but as concluded is between 'George Rattray & Company, Inc., its successors and assigns' rather than 'George Rattray & Co., Division of Hardwick, Hindle, Inc.' On June 27, 1960, Hardwick, Hindle, Inc. entered into a contract for the sale to Instruments for Industry, Inc. of all of the assets of its George Rattray & Company Division, including machinery, unfilled orders, patents, and the use of the name George Rattray & Co., Inc. It was agreed that petitioner's name would be changed and it was further covenanted that 'for a period of three (3) years following closing, Seller will not, directly or indirectly, either as owner, investor, stockholder, joint venturer or participant, engage in the business of manufacturing, assembling, distributing or selling of precision potentiometers, or any component part thereof, in the United States of America, Canada or Mexico.' On July 1, 1960, the employees were notified that as of 4:30 P.M. that date George Rattray & Co., Inc. was terminating operations and each was paid through July 1, 1960 and in addition was paid for accrued vacation. The issues on which the Union demanded arbitration were: (1) discharge of employees without just cause in violation of Article XV of the agreement; (2) failure to give notice of intention to move the plant as required by Article I; (3) failure to provide employment rights at the new or relocated plant in violation of Article I; (4) failure to make proper holiday payments as required by Article VIII; (5) lock out in violation of Article XXIX; (6) failure to require the purchaser to assume the collective bargaining agreement; (7) failure to make proper payments to Pension Fund; (8) failure to make proper payments to Welfare Fund; and (9) failure to pay dues to the Union. Issues 7, 8 and 9 have been adjusted by the parties and are no longer in question.
Article XXII of the agreement establishes procedure with respect to 'any dispute, difference or grievance except as otherwise provided herein [which] shall arise under this agreement' and Article XXIII provides for submission to arbitration of 'disputes, differences and grievances * * * which have not been satisfactorily settled after following the grievance procedure hereinabove set forth * * *' Article XXIII further provides:
'The parties agree that the grievance and arbitration procedure set forth in Article XXII and XXIII of this agreement shall be the sole and exclusive method of settling disputes between them concerning the interpretation or application of any provision of this agreement.'
It is clear, therefore, that for a dispute to be arbitrable under the agreement it must arise under the agreement and concern the interpretation or application of a provision of the agreement. The arbitration provisions under consideration in this case are not sufficiently broad to encompass issues merely related to or connected with the collective bargaining agreement. See Matter of Lipman (Haeuser Shellac Co.), 289 N.Y. 76, 80, 43 N.E.2d 817, 819, 142 A.L.R. 1088; Matter of Teschner (Livingston), 285 App.Div. 435, 137 N.Y.S.2d 901, affirmed 309 N.Y. 972, 132 N.E.2d 333; Matter of General Warehousemen's Union (Glidden Company), 10 Misc.2d 700, 172 N.Y.S.2d 678. Since the agreement commits interpretation to the arbitrators, however, it is they, not the court, who, with respect to any dispute properly within their cognizance, determine questions of both law and fact. Matter of Carey (Westinghouse Electric), 6 A.D.2d 582, 180 N.Y.S.2d 203, affirmed 6 N.Y.2d 934, 190 N.Y.S.2d 1003; Matter of Spectrum Fabrics Corp. (Main Street Fashions), 285 App.Div. 710, 714, 139 N.Y.S.2d 612, 617, affirmed 309 N.Y. 709, 128 N.E.2d 416; Matter of Leonard Electric Co. (Local 419), 12 Misc.2d 304, 173 N.Y.S.2d 531.
The question whether a dispute is within the arbitrators' cognizance is, however, to be determined under either § 1450 or § 1458 of the Civil Practice Act, for there is no 'failure to comply' within the meaning of those sections if there is no bona fide dispute. Matter of Terminal Auxiliar Maritima, S. A. (Winkler Credit Corporation), 6 N.Y.2d 294, 299, 189 N.Y.S.2d 655, 659. There is no bona fide dispute where 'no real ground of claim' is advanced on the facts, Matter of General Electric Co. (United Electrical etc., Workers), 300 N.Y. 262, 90 N.E .2d 181, 182; Alpert v. Admiration Knitwear Co., 304 N.Y. 1, 105 N.E .2d 561, or where under the 'only tenable construction' of the agreement no default has occurred, Matter of Sarle (Sperry Gyroscope), 4 A.D.2d 638, 168 N.Y.S.2d 228, 232, affirmed 4 N.Y.2 917, 174 N.Y.S.2d 665; Matter of Potoker (Brooklyn Eagle) 2 N.Y.2d 553, 559, 161 N.Y.S.2d 609, 612. The burden of showing such a dispute is upon the party demanding arbitration. Matter of Essenson (Upper Queens Medical Group), 307 N.Y. 68, 72, 120 N.E.2d 209, 210; Matter of General Warehousemen's Union, supra.
Both § 1450 and § 1458 require that 'evidentiary facts raising a substantial issue' be set forth in the moving papers; conclusory statements are, therefore, insufficient, Matter of Minkin (Halperin) 279 App.Div. 226, 231, 108 N.Y.S.2d 945, affirmed 304 N.Y . 617, 107 N.E.2d 94; Matter of Essenson, supra; Matter of New York Mirror (Potoker), 5 A.D.2d 423, 428, 171 N.Y.S.2d 748, 753. Whether the facts presented must rise to the dignity of a prima facie case (see Matter of Essenson, supra, 307 N.Y. at page 72, 120 N.E.2d at page 210 and the dissenting opinion of Mr. Justice Breitel in Matter of New York Mirror, supra, 5 A.D.2d at page 436, 171 N.Y.S.2d at page 761), or, the problem being one of issue finding, the standards applicable to motions for summary judgment (see, e. g.--Falk v. Goodman, 7 N.Y.2d 87, 195 N.Y.S.2d 645) are to be applied, need not now be determined. Even if the lesser standard be applied, the court concludes that except as to issue 4, the union has failed to set forth any facts showing an arbitrable dispute.
An agreement not to discharge employees without just cause does not preclude an employer from discontinuing business in good faith. Matter of Otis Elevator Company (Carney), 6 N.Y.2d 358, 189 N.Y.S.2d 874; Amelotte v. Jacob Dold Packing Co., 173 Mic. 477, 482, 17 N.Y.S.2d 929, 933, affirmed 260 App.Div. 984, 24 N.Y.S.2d 134; Matter of Curry, Inc. (Reddeck), 194 Misc. 527, 86 N.Y.S.2d 674; Local Lodge 2040, International Association of Machinists, AFL-CIO v . Servel, Inc., 7 Cir., 268 F.2d 692, 699, certiorari denied 361 U.S . 884, 80 S.Ct. 155, 4 L.Ed.2d 120; see Matter of Twentieth Century-Fox Film Corp. (Screen Publicists' Guild) 17 Misc.2d 233, 78 N.Y.S.2d 178; Matter of Berger (World Broadcasting System), 191 Misc . 1043, 78 N.Y.S.2d 528, affirmed 274 A.D. 788, 81 N.Y.S.2d 195. On parallel reasoning the good faith termination of an employer's business is not a violation of the lockout clause. See Matter of Kosoff ('Jones'), 276 App.Div. 621, 96 N.Y.S.2d 689, affirmed 303 N.Y. 663, 102 N.E.2d 584. Except for the argument that the sale to Instruments For Industry, Inc., was not an arms length transaction, nothing is presented to substantiate that petitioner has moved or relocated its plant. With respect to issues 1, 2, 3 and 5, therefore there can be no dispute except as to good faith. Where 'under the circumstances of the case enough has been shown * * * to create an arbitrable dispute' concerning good faith, that issue is for the arbitrators not the court, Matter of Otis Elevator Co., supra [6 N.Y.2d 358, 189 N.Y.S.2d 877]; Matter of Sarle, supra; Matter of Saks & Co. (Saks Fifth Ave.) 9 A.D.2d 325, 192 N.Y.S.2d 1002; Carey v. General Electric Co., 4 A.D.2d 462, 166 N.Y.S.2d 953. Respondent's problem in the present case is that, faced with the facts that there is no relationship between Hardwick or Rattray and Instruments For Industry, Inc., direct or indirect, other than that created by the sales contract between them and that that sales contract prohibits petitioner from engaging in the potentiometer business, no matter by what firm the instruments are manufactured, for a period of three years, respondent can do no more than state that the Union has had a prior experience with Instruments For Industry, Inc., involving the removal of its plant (Trenz, Affidavit, Par. 9), suggest that 'The Union will seek an examination before trial, in order to establish the true...
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