International Ass'n of Machinists v. Hayes Corporation, 18946

• Decision Date: 08 December 1961
• Docket Number: 18947.,No. 18946,18946
• Citation: 296 F.2d 238
• Parties: INTERNATIONAL ASSOCIATION OF MACHINISTS, AFL-CIO, and Its Local Lodge No. 2003, Appellant, v. HAYES CORPORATION, Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

296 F.2d 238 (1961)

INTERNATIONAL ASSOCIATION OF MACHINISTS, AFL-CIO, and Its Local Lodge No. 2003, Appellant, v. HAYES CORPORATION, Appellee.

Nos. 18946, 18947.

United States Court of Appeals Fifth Circuit.

December 8, 1961.

Thomas N. Crawford, Jr., Jerome A. Cooper, Plato Papps, Washington, D. C., Cooper, Mitch, Black & Crawford, Birmingham, Ala., for appellant.

J. Asa Rountree, Birmingham, Ala., for appellee.

Before RIVES, CAMERON and BROWN, Circuit Judges.

JOHN R. BROWN, Circuit Judge.

This case¹ presents the two-fold question of whether the grievance involved is arbitrable as determined by the Collective Bargaining Agreement, and whether the Union has sufficiently complied with the procedural requisites of the grievance machinery to obtain a judicial decree compelling arbitration. The District Court answered both in the negative. We disagree and reverse.

The facts in this case are relatively simple and undisputed. Only a brief summary is necessary for an understanding of the legal questions involved. In the trial court both parties sought a summary judgment. The Employer's motion was granted, and that of the Union overruled. This appeal is taken from those rulings.

The Employer, Hayes, was engaged in the maintenance and repair of military aircraft at the United States Military Reservation at Ft. Rucker, Alabama. The contract between the Government and the Employer covering this work provided that the Government could require dismissal of any employee deemed to be incompetent or whose retention would be contrary to the public interest.² Pursuant to this contract, the Government required that two employees be discharged because of "carelessness and/ or incompetence."³ The Employer made the discharges effective on November 27, 1959, after giving notice to the employees and the Union on November 25, 1959.

The Collective Bargaining Agreement between the Union and Employer included what is sometimes referred to as a standard form of arbitration clause. The basic provision was that either party could submit to arbitration a grievance involving the "interpretation or application" of the Collective Bargaining Agreement if it had not been settled by Steps 1, 2 or 3.⁴ A dispute over a discharge of an employee went automatically to Step 3.⁵ The decision in Step 3 was final unless arbitration was invoked by giving written notice within 20 days.⁶

Contemporaneously with the execution of the basic labor contract, a collateral agreement was entered into between the Union and Employer known as a Memorandum of Agreement. In substance it took cognizance of the Employer's contract with the Government and the likelihood that the Employer might be required by the Government to take action, discharge employees, make changes in the Bargaining Agreement, or the like.⁷

Asserting that the discharges breached the labor contract, the Union promptly submitted grievances to the Employer. The Employer stated then, and still contends, that the discharges were not subject to the grievance procedure as set out in the contract.⁸ However, although no written decision by the Director of Industrial Relations was rendered as contemplated by Article VII of the Collective Bargaining Agreement,⁹ the Employer rejected the Union's request for determination by the grievance machinery prescribed.

Suit to compel arbitration was filed by the Union on October 25, 1960. Formal written notice of its desire to arbitrate the grievances was not given until August 29, 1960. This was more than nine months after the Employer had stated its basic position that the grievances were not subject to the grievance procedure.

At the outset it is appropriate to emphasize that the guiding principles for the determination of this case have been authoritatively laid down by the Supreme Court in its recent trilogy of opinions, United Steelworkers of America v. American Manufacturing Co., 1960, 363 U.S. 564, 80 S.Ct. 1343, 4 L.Ed.2d 1403; United Steelworkers of America v. Warrior & Gulf Navigation Co., 1960, 363 U.S. 574, 80 S.Ct. 1347, 4 L.Ed.2d 1409; United Steelworkers of America v. Enterprise Wheel and Car Corp., 1960, 363 U.S. 593, 80 S.Ct. 1358, 4 L.Ed.2d 1424, and reiterated by this Court in Lodge No. 12, etc. v. Cameron Iron Works, Inc., 5 Cir., 1961, 292 F.2d 112.

In American Manufacturing Co., it was stated that "The courts * * * have no business weighing the merits of the grievance, considering whether there is equity in a particular claim, or determining whether there is particular language in the written instrument which will support the claim. The agreement is to submit all grievances to arbitration, not merely those which the court will deem meritorious. The processing of even frivolous claims may have therapeutic values of which those who are not a part of the plant environment may be quite unaware."¹⁰ In Warrior & Gulf the Court said "Apart from matters that the parties specifically exclude, all of the questions on which the parties disagree must therefore come within the scope of the grievance and arbitration provisions of the collective agreement. The grievance procedure is, in other words, a part of the continuous collective bargaining process."¹¹ The Court continued "The Congress, however, has by § 301 of the Labor Management Relations Act, assigned the courts the duty of determining whether the reluctant party has breached his promise to arbitrate. For arbitration 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. Yet, to be consistent with congressional policy in favor of settlement of disputes by the parties through the machinery of arbitration, the judicial inquiry under § 301 must be strictly confined to the question whether the reluctant party did agree to arbitrate the grievance or did agree to give the arbitrator power to make the award he made. An order to arbitrate the particular grievance 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."¹¹ This Court in Cameron Iron Works phrased it this way. "The merits of the controversy may not be looked to by a court for the purpose of declaring that a correct legal interpretation of the contract would not support the construction sought. This may not be done directly, nor may it be done under the guise of determining that the matter is outside the agreement to arbitrate."¹²

Applying these principles, the answer to the first question seems clear that the grievance is subject to arbitration. When the Union submitted, and the Employer rejected, the grievance that such discharges were contrary to the contracts, there was a dispute as to the "interpretation or application" of the collective agreement. The contract provides that such a dispute may be submitted to the arbitration process.

According to American Manufacturing Co., supra, even a frivolous claim may go through the arbitration process. Courts are not to concern themselves with what an arbitrator might do. And yet arbitrability was determined by the trial court in these terms of a possible award by the arbitrator: "An arbitrator might order the company to reinstate an employee whom the Government had excluded from the work and barred from the reservation for security reasons." To compel arbitration in the first instance is not to approve carte blanche in advance any decision which might be reached. The arbitrator is not a free agent dispensing his own brand of industrial justice. And if the award is arbitrary, capricious or not adequately grounded in the basic collective bargaining contract, it will not be enforced by the courts.¹³

Concededly, arbitration of this grievance was not expressly excluded. Nor, since doubts must be resolved in favor of coverage, and "only the most forceful evidence of a purpose to exclude the claim from arbitration can prevail * * *,"¹⁴ do we find merit in the contention that the Memorandum of Agreement impliedly excluded this grievance from the arbitration procedure. On the contrary, we feel that if any implications arise from the Memorandum of Agreement, the implication is the other way; i. e., in favor of arbitration. Once we get away from the now impermissible notion that the court is to interpret the substantive provisions of the contract invoked, § IC (note 7, supra) of the Memorandum of Agreement is quite significant. It provides that the parties agree to try to settle problems relating to "work needs" of the army in a mutually beneficial manner without depriving "the employees of their rights or benefits contained in the collective bargaining agreement." This provision was expressly invoked by the Union in the initial written statement of grievance. Likewise, the requirement of notice in § II (note 7, supra) affords a permissible inference that some purpose was to be served by such notice. The Union suggests, for example that the contract (amplified by the Memorandum Agreement) would at least require that the Employer in its relation to military officials act in good faith in taking appropriate and available steps to assure that the pertinent facts were made known concerning the incompetency or security risk of the discharge and whether appeal, as permitted (see note 2, supra) had been adequately urged.

The answer to the second question — compliance with procedural requirements — has likewise been troublesome to the courts, and cases can be found going in both directions. See e. g., International Tel. and Tel. Corp. v. Local 400, etc., 3 Cir., 1960, 286 F.2d 329, and Brass & Copper Workers Federal Labor Union, etc. v. American Brass Co., 7 Cir., 1959, 272 F.2d 849. Our conclusion in this case is that arbitration must be compelled, even though the Union has not complied literally with the procedural requirements.

This is not a case where the...