Goodall-Sanford, Inc. v. United Textile Workers

• Decision Date: 25 April 1956
• Docket Number: No. 5029.,5029.
• Citation: 233 F.2d 104
• Parties: GOODALL-SANFORD, Inc., Defendant, Appellant, v. UNITED TEXTILE WORKERS OF AMERICA, AFL, LOCAL 1802 et al., Plaintiffs, Appellees.
• Court: U.S. Court of Appeals — First Circuit

233 F.2d 104 (1956)

GOODALL-SANFORD, Inc., Defendant, Appellant, v. UNITED TEXTILE WORKERS OF AMERICA, AFL, LOCAL 1802 et al., Plaintiffs, Appellees.

No. 5029.

United States Court of Appeals First Circuit.

Heard November 3, 1955.

Decided April 25, 1956.

William B. Mahoney, Portland, Me., with whom Daniel T. Drummond, Jr., Douglas M. Orr, and Drummond & Drummond, Portland, Me., were on the brief, for appellant.

Sidney W. Wernick, Portland, Me., with whom Berman, Berman & Wernick, Portland, Me., was on the brief, for appellees.

Before MAGRUDER, Chief Judge, and WOODBURY and HARTIGAN, Circuit Judges.

MAGRUDER, Chief Judge.

This case is the third one decided today on problems relating to the power of a federal district court to compel arbitration in accordance with a collective bargaining agreement. However, the instant case reached this court in a posture different from that of the other two; and it involves additional considerations not present in Local 205, United Electrical, etc., Workers v. General Electric Co., 1 Cir., 233 F.2d 85, or Newspaper Guild of Boston v. Boston Herald-Traveler Corp., 1 Cir., 233 F.2d 102.

Plaintiffs herein, a local labor organization and its parent national union, represented employees of defendant Company at plants in Sanford and Springvale, Maine, in an industry affecting commerce. The last collective bargaining agreement between the parties, as renewed in June, 1954, provided that it was to "continue in full force and effect" until July 15, 1955. The past tense is used advisedly, for defendant, because of continued heavy losses, commenced to terminate all operations at its Sanford and Springvale mills and inaugurated a program of liquidation during the second half of 1954. Production was limited to "running out" products in process, at the completion of which the several mills were shut down completely. By April, 1955, all production operations had ended and all of the real estate and buildings had been sold; the corporation was to go out of existence after liquidating completely.

On December 29, 1954, and February 18, 1955, certain groups of employees (totaling approximately 1400) were notified that their respective employment with the Company was being terminated as of those dates and that their names were being removed from the payroll records. Although the workers were already on lay-off status, those actions were significant with respect to various "fringe benefits" provided in the collective bargaining agreement, including group life, medical, and hospitalization insurance, pensions, and vacation pay. The Union protested each of these notifications, achieving a month's delay as to the first group of terminations, and subsequently it requested arbitration of the entire problem in accordance with the contract, which will be described in some detail later in this opinion. The Company declined to arbitrate, deeming the terminations not an arbitrable matter under the contract. On March 15, 1955, the Union filed its complaint in the present action, invoking § 301 of the Taft-Hartley Act, 61 Stat. 156, 29 U.S.C.A. § 185, as the basis for jurisdiction, and praying for an order to compel arbitration and for interlocutory injunctive relief. A restraining order and a preliminary injunction were granted, D.C., 129 F.Supp. 859, which forbade the termination, but on May 20, 1955, Judge Clifford dissolved the preliminary injunction. No questions touching upon the granting or dissolving of the injunction are presented on this appeal. In an opinion and order of June 1, 1955, D.C., 131 F.Supp. 767, the district court granted the Union's motion for summary judgment on its prayer for specific performance of the arbitration provision, and subsequently entered a decree which will be described later. The Company appeals from that decree.

I.

At the outset we must note a question as to whether the order and decree of the district court are appealable. The decree recites, as did the arbitration provision of the contract, that the decision of the arbitrator "shall be final and binding" on the parties. Thus it seems that the court did not intend to reserve jurisdiction to confirm the arbitrator's decision. Perhaps it could not have done so with respect to this contract calling for a "final and binding" award, since the Arbitration Act, 9 U.S.C. § 9, seems to authorize confirmation of an award by summary proceedings in the district court only when the contract includes an express stipulation for entry of judgment upon the award. See Hyman v. Pottberg's Ex'rs, 2 Cir., 1939, 101 F.2d 262, 266; Lehigh Structural Steel Co. v. Rust Engineering Co., 1932, 61 App.D.C. 224, 59 F.2d 1038; S.Rep.No. 536, 68th Cong., 1st Sess. 4 (1924). It must be recognized, however, that even without a reservation of jurisdiction to confirm the eventual award, a decree ordering parties to arbitrate obviously does not purport to adjudicate the merits of the controversy or finally terminate it. And where arbitration is sought through the related procedure for stay of a pending action pursuant to § 3 of the Arbitration Act, an appeal prior to the arbitration is only available, under 28 U.S.C. § 1292(1), whether the stay is granted or denied, if the pending action was "legal" rather than "equitable" in character. Baltimore Contractors, Inc. v. Bodinger, 1955, 348 U.S. 176, 75 S.Ct. 249, 99 L.Ed. 233. The appeal at that stage may be unavailable under the test of the Baltimore Contractors case even where a request for an affirmative order compelling the other party to arbitrate was joined with the request for a stay. Wilson Bros. v. Textile Workers Union, 2 Cir., 1955, 224 F.2d 176; Turkish State Railways Administration v. Vulcan Iron Works, 3 Cir., 1956, 230 F.2d 108; cf. Schoenamsgruber v. Hamburg American Line, 1935, 294 U.S. 454, 55 S.Ct. 475, 79 L.Ed. 989, (§ 8). Chief Judge Clark has suggested that where an order to compel arbitration is granted in an independent proceeding under § 4, the appeal likewise should be denied, not only to make availability of appeal more consistent with the practice under other sections of the Arbitration Act, but also because an appeal prior to the arbitration may be "disruptive and delaying." See Stathatos v. Arnold Bernstein S. S. Corp., 2 Cir., 1953, 202 F.2d 525, 527. There is much force to this view, although we doubt that a completely consistent pattern of appeal could be achieved in view of the variant situations illustrated by the cases already cited. At any rate, we are more persuaded by some of the older precedents, which viewed a § 4 proceeding as completed upon the granting of the only relief sought, an order of the court compelling arbitration, and thus held that order to be "final" in the sense of 28 U.S.C. § 1291. Krauss Bros. Lumber Co. v. Louis Bossert & Sons, Inc., 2 Cir., 1933, 62 F.2d 1004; Continental Grain Co. v. Dant & Russell, Inc., 9 Cir., 1941, 118 F.2d 967. This holding, which we adopt here, contributes consistency at least to the extent that appeal is equally available whether the court grants or denies an order to arbitrate, for dismissal of a § 4 petition on the merits is clearly a final judgment.

II.

The district court did not proceed under the Arbitration Act, 9 U.S.C. § 1 et seq., in this case, but found its authority to compel arbitration in § 301, relying upon some of the decisions discussed in our opinion today in Local 205, United Electrical, etc., v. General Electric Co., 1 Cir., 233 F.2d 85. For the reasons stated in the latter opinion, we do not accept this approach. But our holding in the General Electric case applies here; if the terms of the Arbitration Act are satisfied, the decision to compel arbitration was within the power of the district court.

It would be merely dilatory at this stage to remand this case for amendment of pleadings to allege compliance and defenses under the Arbitration Act. In the other two cases decided today, wherein the district court had denied an order to arbitrate, remand for a decision on the merits was necessary, and so affording an opportunity to amend was appropriate. Here the district court has ruled on the merits, and we may proceed to review that decision, after determining from the record that the case substantially complies with the requisites of the Arbitration Act.

The arbitration clause at issue comes within the scope of § 2 of that Act. Article VIII of the contract provides that

"any dispute which relates solely to the meaning and application of this Agreement or any individual grievance may be referred to arbitration by written notice by either party to the other. * * * Arbitration shall be in accordance with the following procedure: * * *

"2. The Arbitrator shall have no power to add to or to subtract from the terms of this Agreement. * * *"

The four-step grievance procedure that precedes arbitration in Art. VIII was not carried out here, although conferences somewhat equivalent to step 4 took place. At any rate, the Company may be taken to have waived compliance with that procedure by its failure to allege that ground in resisting arbitration in the court below. The proceedings in that court in substance were equivalent to the procedure of § 4 of the Act. There was no issue over "the making of the agreement for arbitration or the failure to comply therewith", other than the question of arbitrability of the dispute. This the court determined upon motion for summary judgment. Since there was no controverted issue of material fact and the question of arbitrability turned only upon interpretation of the written contract, summary judgment was an appropriate vehicle for the decision, not inconsistent with the provision of § 4 for trial to a jury or the court of controverted issues regarding the making or breach of the agreement to arbitrate. See also part IV of our opinion in the General Electric case.

The decree ordered the parties to agree upon a person to serve as arbitrator but provided for...