Hotel and Restaurant Employees and Bartenders Intern. Union, AFL-CIO v. Michelson's Food Services, Inc.

• Citation: 545 F.2d 1248
• Decision Date: 29 November 1976
• Docket Number: P,No. 74-2994,AFL-CI,74-2994
• Parties: 94 L.R.R.M. (BNA) 2014, 79 Lab.Cas. P 11,775 HOTEL AND RESTAURANT EMPLOYEES AND BARTENDERS INTERNATIONAL UNION,etitioner-Appellant, v. MICHELSON'S FOOD SERVICES, INC., a California Corporation, and Larry Manning, Respondents-Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)

Page 1248

545 F.2d 1248

94 L.R.R.M. (BNA) 2014, 79 Lab.Cas. P 11,775

HOTEL AND RESTAURANT EMPLOYEES AND BARTENDERS INTERNATIONAL UNION, AFL-CIO, Petitioner-Appellant, v. MICHELSON'S FOOD SERVICES, INC., a California Corporation and Larry Manning, Respondents-Appellees.

No. 74-2994.

United States Court of Appeals, Ninth Circuit.

Nov. 29, 1976.

Lester Ostroz (argued), Los Angeles, Cal., for petitioner-appellant.

Jeffrey C. Freedman (argued), of Nelson, Kirshman, Goldstein, Gentile & Rexon, Los Angeles, Cal., for respondents-appellees.

Before DUNIWAY and WALLACE, Circuit Judges, and RICHEY, ^* District judge.

DUNIWAY, Circuit Judge:

The Hotel and Restaurant Employees Union appeals from the district court's denial of its petition to enforce an interim arbitration award. We reverse and remand.

This case arises out of a grievance against Michelson's Food Services by Manning, one of its employees, who claims that Michelson's failed to pay him over $30,000 due him under a labor agreement for work performed during the period from January 1, 1965, to May 15, 1971. Manning first filed a written grievance with the Union, the exclusive bargaining representation of Michelson's employees, and on September 28, 1972, at Manning's request, the Union filed a written notice of that grievance with Michelson's.

At all relevant times there was a collective bargaining agreement in effect between the Union and Michelson's which governed the "wages, hours, and working conditions" of the employees represented by the Union. The agreement created a three-step dispute resolution procedure. It provided that first the employer is to be notified of any grievance and given an opportunity to rectify it. If the employee remains dissatisfied, representatives of the Union and Michelson's must seek to resolve the dispute. If that fails, either party, that is, the Union or Michelson's, can demand that the dispute be submitted to binding arbitration. The contract makes an arbitration award binding on the parties (Union and employer) "and upon any employees concerned."

Manning's grievance followed this procedure, and after the Union and management negotiators were unable to resolve the dispute, the Union demanded final and binding arbitration. The two parties chose Mr. Edgar A. Jones, Jr., as the arbitrator, and the hearing was convened on July 17, 1973. On that day Manning personally appeared at the hearing with his own counsel, and for the first time, through his counsel, accused the Union of conspiring with Michelson's to deny him and other similarly situated employees the compensation due them, and insisted that the Union could not fairly represent his interests. His counsel suggested that the Union be joined with Michelson's as defendant in the arbitration proceeding, that the arbitrator be empowered to award punitive as well as compensatory damages, against either or both, and that Manning be allowed to represent the entire class of similarly situated employees. Manning's attorney said that he thought that the entire matter was one that could be best handled in the courts, and that he intended to file a class action against both the Union and Michelson's if Manning's demands were not agreed to. Whether such a suit has been filed does not appear.

The Union then stated that it was willing to let Manning and his own counsel handle his case, but it said nothing about its willingness to submit itself to potential compensatory and punitive damages in the arbitration. Michelson's said that it would not agree to a class action inasmuch as it was prepared only to defend against Manning's individual grievance. Additionally, it was unwilling to submit to arbitration unless Manning agreed to be bound by the arbitrator's decision, something that Manning consistently refused to do. In light of this confusion, the arbitrator dismissed the witnesses and adjourned the hearing overnight so that the three parties could try to reach some procedural accord.

The next morning the hearing was reconvened, but the procedural dispute was unresolved. As a result, Mr. Jones requested that each of the three parties sign a submission agreement leaving to him the decision as to how the arbitration would proceed. When only the Union expressed willingness to sign such an agreement, the hearing adjourned with no resolution in sight.

After receiving some correspondence from each party, the arbitrator finally took it upon himself to resolve the procedural logjam. On August 9, 1973, he rendered the interim award that is the subject of this appeal. Therein, he decided: (1) that Manning be designated as a "party" to the arbitration, and that Manning would be bound by the decision; (2) to allow any Michelson's employees similarly situated with Manning to join in the proceeding against the Union and Michelson's upon giving due notice and agreeing to be bound; (3) that provision should be made for award of punitive damages, costs, and attorney's fees against either of the party defendants "should such be deemed appropriate by the arbitrator;" (4) to direct the Union to petition a court for enforcement of the interim award; and (5) that should the court find that Manning could not be made a "party" to the proceeding, then the entire dispute would not be arbitrable.

As directed by the arbitrator, the Union filed this action to enforce the award in California Superior Court, and Michelson's removed the case to the federal district court. Michelson's opposed the petition. Manning, in his answer to the petition, asked for enforcement of the award. Later, in a memorandum, he modified his position. He opposed the enforcement of the award because he was unable to decide whether the Union's representation was acceptable without seeing the Union's file, which the Union had declined to let him see. He offered to be bound by the arbitrator's award as against Michelson's, but declined to be bound as to his claim against the Union. He asked affirmance of the award "as it affects the claim of Manning against Michelson's and Union against Michelson's, but not as to his claim against the Union." The court denied the petition in its entirety on the ground that the interim award was outside the scope of the arbitrator's authority. Manning has made no appearance and has filed no brief in this appeal.

Essentially, what the interim award does is to set the framework for, and order, arbitration of two underlying disputes, one between Manning and Michelson's, and the other between Manning and the Union. As to Manning's claims of conspiracy to defraud and failure to adequately represent which he makes against the Union, the award exceeded the scope of the arbitrator's authority. There is no agreement between Manning and the Union to arbitrate such a dispute. The only possible source of such authority would be the arbitration clause in the collective bargaining agreement, and that clause does not provide any such authority.

We recognize that "(a)n order to arbitrate . . . should not be denied 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." United Steelworkers of America v. Warrior & Gulf Navigation Co., 1960, 363 U.S. 574, 582-83, 80 S.Ct. 1347, 1353, 4 L.Ed.2d 1409.

The dispute between Manning and the Union, however, is not within the scope of the collective bargaining agreement. The agreement is one between the Union as agent for employees and the employer not between the Union and the employees. There is not and cannot be a claim by Manning that the Union breached a duty created by the agreement. The duty of fair representation is created by the relationship of the Union to its members. Nedd v. United Mine Workers of America, 3 Cir. 1968, 400 F.2d 103, 105-06. "(A) party cannot be required to submit to arbitration any dispute that he has not agreed so to submit." United Steelworkers of America v. Warrior & Gulf Navigation Co., supra, 363 U.S. at 582, 80 S.Ct. at 1353.

On the other hand, under the National Labor Relations Act, the Union is the sole agent of the employees for collective bargaining with the employer. As such it can bind itself and its members by a collective bargaining agreement, to arbitration of disputes arising under the agreement. This is what happened here. As a result, both the Union and Michelson's are bound to arbitrate Manning's grievance. Moreover because the Union is Manning's agent in the making, the performance, and the enforcement of the agreement, Manning is bound by the agreement to arbitrate. Republic Steel Corp. v. Maddox, 1965, 379 U.S. 650, 652-53, 85 S.Ct. 614, 13 L.Ed.2d 580.

It follows that ordinarily Manning cannot take his claim against the employer to court if he has not given the Union a chance to take it to arbitration. Republic Steel Corp. v. Maddox, supra. Furthermore, after the Union has pressed his grievance to the extent that it believes proper, an employee's action in court grounded on a charge that the Union has not acted in good faith on his behalf, or that the Union has been in collusion with the employer, will fail if he does not prove his charge. Vaca v. Sipes, 1967,386 U.S. 171, 191-93, 87 S.Ct. 903, 17 L.Ed.2d 842. There, the Court held that the Union's good faith decision that the member's grievance lacked sufficient merit to take it to arbitration defeated the member's subsequent lawsuit against the Union, even though, in that suit, the Court concluded that the member's grievance did have merit. See also Humphrey v. Moore, 1964,375 U.S. 335, 84 S.Ct. 363, 11 L.Ed.2d 370.

Although the usual procedure in an arbitration under a collective bargaining agreement is to name the Union and the employer as parties, but not the employee whose grievance is involved, the employee may be made a party. Applying the principle announced in John Wiley & Sons v. Livingston, 1964, 376 U.S. 543, 557,...