ITT World Communications, Inc. v. Communications Workers

• Decision Date: 19 January 1970
• Docket Number: Docket 33674.,No. 189,189
• Citation: 422 F.2d 77
• Parties: ITT WORLD COMMUNICATIONS, INC., a Delaware corporation, Plaintiff-Appellant, v. COMMUNICATIONS WORKERS OF AMERICA, AFL-CIO, and Local No. 1174, Communications Workers of America AFL-CIO, and Local No. 1172, Communications Workers of America, AFL-CIO, Defendants-Appellees.
• Court: U.S. Court of Appeals — Second Circuit

422 F.2d 77 (1970)

ITT WORLD COMMUNICATIONS, INC., a Delaware corporation, Plaintiff-Appellant, v. COMMUNICATIONS WORKERS OF AMERICA, AFL-CIO, and Local No. 1174, Communications Workers of America AFL-CIO, and Local No. 1172, Communications Workers of America, AFL-CIO, Defendants-Appellees.

No. 189, Docket 33674.

United States Court of Appeals Second Circuit.

Argued October 29, 1969.

Decided January 19, 1970.

Alfred Giardino, New York City (Lorenz, Finn & Giardino, Charles M. Mattingly, Jr., New York City, Seyfarth, Shaw, Fairweather & Geraldson, Chicago, Ill., on the brief), for plaintiff-appellant.

H. Howard Ostrin, New York City (Cooper, Ostrin, DeVarco & Ackerman, Ronald J. Brooks, Philip D. Tobin, David Kreitzman, New York City, Kane & Koons, Charles V. Koons, Washington, D. C., on the brief), for defendants-appellees.

Before LUMBARD, Chief Judge, and MEDINA and FEINBERG, Circuit Judges.

FEINBERG, Circuit Judge:

This case poses the familiar problem of construing the arbitration provisions of a labor agreement. Simply stated, the issue is whether the parties agreed to arbitrate claims of contract violation brought by an employer as well as those brought by a union. The employer is ITT World Communications Inc.; the unions are Communications Workers of America, AFL-CIO and two of its locals, hereafter referred to as the "Union." ITT appeals from an order of the United States District Court for the Southern District of New York, Milton Pollack, J., which stayed ITT's damage action against the Union pending arbitration. For reasons indicated below, we affirm the order.

The facts giving rise to the dispute are relatively simple. ITT alleges that the Union violated the "no strike" provision of the collective bargaining agreement in November 1968. Shortly thereafter, ITT brought suit in the district court under section 301 of the Labor Management Relations Act of 1947, 29 U.S.C. § 185. The complaint alleged breach of contract and sought $250,000 in damages. The Union filed its answer denying the allegations. In March 1969, ITT moved for summary judgment; the Union thereupon moved under 9 U.S.C. § 3 for a stay of the action pending arbitration of the dispute. The motions came on before Judge Pollack, who held that the arbitration provisions of the agreement covered the dispute and that the Union, by filing an answer in the law suit, did not waive its right to compel arbitration.¹

Article VI of the contract, which is titled "Arbitration," provides in pertinent part as follows:

Section 1.

Any matters disputed or in disagreement, or the subject of any controversy between the parties relating to and involving the interpretation, construction, or application of the terms of this Agreement, which the parties cannot adjust satisfactorily under the Grievance Procedure, may be submitted to arbitration for final and binding determination.

Section 2.

(a) Notification of intent to proceed to arbitration must be made within thirty (30) calendar days after mailing to the Union, by registered mail, the Company\'s answer in Step 3 of the Grievance Procedure, otherwise the grievance shall be deemed to be settled. Section 3, Article V, to the contrary notwithstanding only the Union shall have the right to invoke arbitration of grievances processed in Article V.

(b) Within two (2) weeks (unless mutually extended) of notification, by either party to the other, of intent to proceed to arbitration, either party may request arbitration. Such arbitration shall be submitted to the Federal Mediation and Conciliation Service (FMCS) * * *. Emphasis added.

The provisions of Section 1 are couched in very broad terms which seem at first blush to make arbitrable ITT's claim that the Union violated the contract. There is unquestionably a basic dispute over whether the Union violated Article VII of the agreement, which contains the "no-strike" provision;² moreover, that dispute certainly involves the "interpretation, construction, or application" of Article VII. However, Section 1 of Article VI does also contain the phrase "which the parties cannot adjust satisfactorily under the Grievance Procedure." ITT claims that this language is crucial because it "interlinks" Article VI of the contract with Article V, which is set forth in the margin.³ Since Article V concededly only covers employee grievances, ITT argues that the provisions for arbitration in Article VI must also be so construed. The Union retorts that the phrase relied on by ITT is not a limiting one, but merely describes when a claim is ready for arbitration. The Union points out that since an employer's claim of contract violation obviously cannot be adjusted under the Article V procedure, such a claim fits the Article VI description of "matters disputed" which are ripe for arbitration. The Union finds further support for its position in Section 2(b) of Article VI, which explicitly recognizes that "notification * * * of intent to proceed to arbitration" may be sent "by either party to the other" and thereafter "either party may request arbitration."

These contending positions have brought forth further rebuttals and rejoinders in the briefs. For example, under its theory that arbitration applies only to employee grievances, ITT views its right to "request arbitration" as merely a protection against having an employee grievance hang unsettled over its head indefinitely like a "Sword of Damocles." The Union characterizes that danger as "fanciful." The Union emphasizes that Articles V and VI are separate, with distinct procedures and differing coverage; the latter includes employer claims, while the former does not.

Both parties also rely on past practice. Thus, ITT says that it has never sought to arbitrate an employer claim, that when it brought a similar damage action in 1965, the Union did not seek arbitration, and that a Union official warned members during the 1968 strike that the walkout "gives the company an opportunity to go into Federal Court." The Union rebuts with very recent actions of ITT which it says show ITT recognition of the arbitrability of employer claims.

Finally, both sides call our attention to analogous judicial decisions. ITT relies most heavily on G. T. Schjeldahl Co., Packaging Machinery Division v. Local 1680, IAM, 393 F.2d 502 (1st Cir. 1968), and Boeing Co. v. International Union, UAW, 370 F.2d 969 (3d Cir. 1967). The Union invokes the imposing language of the Steelworkers' Trilogy⁴ and cites numerous cases for the proposition that whether a union has violated a no-strike clause is an arbitrable dispute under the contract, e. g., Drake Bakeries Inc. v. Local 50, American Bakery Workers, 370 U.S. 254, 258, 82 S.Ct. 1346, 8 L.Ed.2d 474 (1962); Signal-Stat Corp. v. Local 475, United Electrical Workers, 235 F.2d 298, 301 (2d Cir. 1956), cert. denied, 354 U.S. 911, 77 S.Ct. 1293, 1 L.Ed.2d 1428 (1957); and Local No. 463, United Papermakers and Paperworkers, AFL-CIO v. Federal Paper Board Co., 239 F.Supp. 45 (D.Conn. 1965).

From these volleys back and forth it appears to us that the Union has somewhat the better of it. Judge Pollack noted that Section 2(a) of Article VI fixes one time limit (30 days) for the Union to exercise "its exclusive right to invoke arbitration of employee grievances" and Section 2(b), which does not mention employee grievances, fixes another period (two weeks) in which "either party" may act. We agree with the judge that this is significant and that if "the arbitration agreement was intended only to deal with employee oriented disputes, there would seem to be no need for time limits imposed on the employer within which to invoke arbitration." In other words, we are not persuaded by the "Sword of Damocles" argument although the court in Schjeldahl, supra, apparently was, to a modest extent.

As to the past practice relied on by ITT, the record indicates only one employer claim prior to the 1968 controversy and, even as to that, the law suit was withdrawn in less than a month. Considering the realities of collective bargaining, that period of time was too short to label the Union's failure to invoke arbitration a conclusive recognition that it could not; the one instance cited is too meager to be considered as authoritative past practice.⁵ The Union's past practice claim is that after settlement of the 1968 strike, ITT itself invoked Article VI arbitration to confirm its right to discharge two employees. ITT says this was an "employee-oriented" grievance and that its action was meant to bring matters to a head — the "Sword of Damocles" theory again. We also regard this incident as not determinative. In short, we view the past practice in this case as inconclusive, assuming it is entitled to any weight at all.

However, there is a much more important reason for affirming the judgment below. The unequivocal command of the Supreme Court in United Steelworkers of America v. Warrior & Gulf Navigation Co., supra, 363 U.S. at 582-583, 80 S.Ct. at 1353 (1960), was that:

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.

We certainly cannot say "with positive assurance" that Article VI "is not susceptible of an interpretation that covers" employer, as well as employee, claims of contract violation. In addition to what we have already noted, we point out that the parties elsewhere in the contract showed that they knew how to clearly exclude a subject from arbitration when they so desired.⁶ Had the parties wanted to do the same with claims of violation of the "no-strike" clause, they could easily have been equally specific. The importance of clear exclusionary language to negate a presumption of arbitrability of a dispute about a no-strike clause was emphasized by the Supreme Court in Drake Bakeries, supra, 370 U.S. at...