LOCAL 1416, INTERNATIONAL ASS'N OF MACHINISTS v. Jostens, Inc.

• Decision Date: 31 January 1966
• Docket Number: No. 1-65-Civ. 370.,1-65-Civ. 370.
• Citation: 250 F. Supp. 496
• Parties: In re Arbitration between LOCAL 1416, INTERNATIONAL ASSOCIATION OF MACHINISTS, AFL-CIO, Petitioner, and JOSTENS, INC., Respondent.
• Court: U.S. District Court — District of Minnesota

250 F. Supp. 496

In re Arbitration between LOCAL 1416, INTERNATIONAL ASSOCIATION OF MACHINISTS, AFL-CIO, Petitioner, and JOSTENS, INC., Respondent.

No. 1-65-Civ. 370.

United States District Court D. Minnesota, First Division.

January 31, 1966.

Willard L. Converse and Peterson, Bell & Converse, St. Paul, Minn., for petitioner.

Curtis L. Roy and Dorsey, Owen, Marquart, Windhorst & West, Minneapolis, Minn., for respondent.

LARSON, District Judge.

Petitioner Local 1416, International Association of Machinists, (Union) instituted this proceeding in a Minnesota district court pursuant to the Uniform Arbitration Act, Minnesota Statutes § 572.09 (Minnesota Act).¹ By virtue of a collective bargaining agreement effective from July 1, 1964, to June 30, 1966, Union is the bargaining agent for production and maintenance employees at respondent's plant in Owatonna, Minnesota. Respondent Jostens, Inc., is engaged in the manufacture of scholastic jewelry and awards, while Josten Engraving Company manufactures graduation announcements, greeting cards, and other graphic arts products. They are both parties to the contract, but the present dispute involves an employee engaged in the operations conducted by Jostens, Inc. In the State court action Union sought an Order compelling Jostens, Inc., (Company) to submit to arbitration a dispute arising out of an alleged violation of the contract. The claimed breach is the assignment of bargaining unit production work to a supervisory employee, Terrance Tuttle.

Company caused the suit to be removed to this Court, based on the jurisdiction established by Section 301(a) of the Labor Management Relations Act of 1947, 29 U.S.C.A. § 185 (Labor Act). Union then placed the action on the special term calendar and moved for an Order compelling arbitration, which was resisted by Company on the grounds that the motion procedure outlined in the Minnesota Act is inapplicable to actions under § 301 of the Labor Act. Company's position is that Rule 81, Fed.R.Civ.Proc., requires that Federal procedure govern all proceedings subsequent to removal. The first hearing on December 27, 1965, was continued, allowing Company time to answer the application and motion. In its answer Company alleges that the Tuttle dispute is not subject to the arbitration clause of the contract. By way of counterclaim Company seeks reformation of that clause to specifically exclude from its coverage matters relating to the job duties of foremen and supervisory employees. Alternatively, Company seeks a judgment declaratory of the parties' rights under the contract. A second hearing was held on January 14, 1966.

Procedural Issues—

Company maintains that Union's motion must be treated as one for summary judgment, to be tested by the standards of Rule 56 rather than by the standards of the Minnesota Act. Union argues that State law, where not inconsistent with Federal labor policy, may be assimilated or adopted by the Federal courts.

The starting point of the inquiry is the proposition, established in Textile Workers Union of America v. Lincoln Mills, 353 U.S. 448, 77 S.Ct. 912, 1 L.Ed. 2d 972 (1957), that Federal law governs in actions brought under § 301 of the Labor Act. In that case the Supreme Court held that § 301 is not merely jurisdictional, but that it authorizes, and requires, Federal courts to fashion a body of Federal law for the enforcement of collective bargaining agreements, including the specific performance of arbitration clauses. While the Lincoln Mills case is clear in its direction as to the substantive law governing the present case, it did not suggest the proper procedure by which issues relating to the enforcement of arbitration clauses may be raised. Several alternatives are possible. One is the United States Arbitration Act, Title 9, U.S.C. (Federal Act). Another is State statutory procedure, here the Minnesota Act. Of course, there is the ordinary civil action, or an action for declaratory judgment under 28 U.S.C. § 2201. In addition, there are the various motions authorized by the Federal Rules of Civil Procedure, including a Rule 56 motion for summary judgment.

In Section 4, the Federal Act contains the following:

"A party aggrieved by the alleged failure, neglect, or refusal of another to arbitrate under a written agreement for arbitration may petition any court of the United States which, save for such agreement, would have jurisdiction under the judicial code at law, in equity, or in admiralty of the subject matter of a suit arising out of the controversy between the parties, for an order directing that such arbitration proceed in the manner provided for in such agreement. * * *"

Section 6 of the Federal Act provides as follows:

"Any application to the court hereunder shall be made and heard in the manner provided by law for the making and hearing of motions, except as otherwise herein expressly provided."

If the Federal Act is applicable to collective bargaining contracts, the sections cited above would seem to authorize the type of petition and motion procedure used by Union. However, § 1 of the Federal Act excludes from its coverage "contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce." Conflicting interpretations have been given to this section, some courts concluding that it excludes collective bargaining contracts from the scope of the Act, while other courts have reached the opposite result.² The Fifth Circuit, in the Lincoln Mills case, decided that such contracts are not covered by the Federal Act. The majority of the Supreme Court did not explicitly review that portion of the Fifth Circuit's ruling, and in fact made no reference at all to the Federal Act. Mr. Justice Frankfurter, in dissent, suggested that by silence the majority implicitly ruled the Act inapplicable to collective bargaining contracts.³ The better result is that reached in the recent case of Pietro Scalzitti Co. v. International Union of Operating Engineers, Local No. 150, 351 F.2d 576 (7th Cir. 1965), which held the Federal Act was applicable in actions seeking the enforcement of arbitration clauses in collective bargaining contracts. Although the Federal Act was not specifically mentioned in Minnesota Joint Board, Amalgamated Clothing Workers of America v. United Garment Mfg. Co., 338 F.2d 195 (8th Cir. 1964), there the Eighth Circuit reversed the District Court's refusal to stay a union's action for damages against a company for alleged breach of a collective bargaining contract pending arbitration of the dispute. Section 3 of the Federal Act specifically authorizes such a stay. Moreover, it would seem that the summary motion procedure of the Federal Act serves to effectuate Federal policy, recognized in the Lincoln Mills case and subsequently reiterated,⁴ in favor of arbitration as an expeditious means of resolving labor disputes.

Even if the Federal Act is not applicable per se to this type of action,⁵ certainly it is part of that body of Federal law to which the courts may resort in implementing Federal policy in this area. The same is true of the Minnesota Act. Lincoln Mills teaches that "state law, if compatible with the purpose of § 301, may be resorted to in order to find the rule that will best effectuate the federal policy."⁶ While the Supreme Court was undoubtedly referring to principles of substantive law, there should be no impediment to the use of State procedure, in the absence of a contrary or inconsistent Federal statute or rule.

Company maintains that the present motion must be tested by Rule 56 which precludes summary disposition where genuine issues of material fact are in dispute. From a practical standpoint, it would seem to be immaterial whether the issues are presented by motion under the Federal Act or the Minnesota Act, or by motion for summary judgment or motion for judgment on the pleadings. Regardless of the manner in which the issue is raised, a single question is presented—did these parties agree to submit this particular dispute to arbitration. Where, as here, there is a written contractual provision, the question is to be determined primarily within the four corners of the instrument. In the present case, insofar as the motion for arbitration is concerned, the only dispute is what the contract language means, not what that language is. This is not a factual dispute, but a dispute as to interpretation, or legal effect. If, from the written language, it is impossible to ascertain the true intent of the parties, then perhaps resort may be had to other evidence, such as bargaining history.⁷ Here Company has presented some bargaining history and other factual background in connection with its counterclaim for reformation. Both the issue of arbitration and that of reformation can appropriately be determined on the present record.⁸

Reformation—

The arbitration provision in the bargaining contract between Company and Union states:

"All disputes arising as to the interpretation of, or adherence to the terms and provisions of this Agreement, or any grievances arising hereunder which are expressly made subject to the provisions of this Article, shall be settled in the following manner, at the request of either the Union, the involved employee or employees, or the Employers: * * *." (Article VI, Section 1)

Three steps are then outlined for the resolution of the dispute, and if none is successful, the last step is reference to an Arbitration Committee (Article VI, Section 1(d)), whose decision is final and binding (Article VI, Section 3). Company seeks to reform the arbitration clause to expressly exclude from its scope matters relating to the job duties of supervisory employees, alleging that such a provision was omitted through mutual mistake, at the time the agreement was entered into. On oral argument, counsel for Company conceded that no statements were made at the time of negotiating the contract with...