LOCAL 344 LEATHER GOODS, ETC., UNION v. Singer Co.

• Decision Date: 15 October 1979
• Docket Number: No. 79 C 2208.,79 C 2208.
• Court: U.S. District Court — Northern District of Illinois
• Parties: LOCAL 344 LEATHER GOODS, PLASTICS & NOVELTY WORKERS' UNION AFL-CIO, Plaintiff, v. The SINGER COMPANY, Piecework Control Systems, Defendant.

478 F. Supp. 441

LOCAL 344 LEATHER GOODS, PLASTICS & NOVELTY WORKERS' UNION AFL-CIO, Plaintiff, v. The SINGER COMPANY, Piecework Control Systems, Defendant.

No. 79 C 2208.

United States District Court, N. D. Illinois, E. D

October 15, 1979.

William F. Lennon, Chicago, Ill., for plaintiff.

Ronald S. Sheldon, Lederer, Reich, Sheldon & Connelly, Chicago, Ill., for defendant.

MEMORANDUM OPINION AND ORDER

ASPEN, District Judge:

This suit has been brought by Local 344 Leather Goods, Plastics & Novelty Workers' Union AFL-CIO to compel arbitration under a collective bargaining agreement of a dispute between the union and the employer, the Singer Company.¹ In May, 1977, the parties entered into a collective bargaining agreement for a period of three years, to expire on April 27, 1980. In addition to setting forth the agreement of the parties as to wages, hours, and other conditions of employment, the contract included a nostrike provision, a procedure for processing grievances, and an arbitration clause.² The collective bargaining agreement also granted either party the right to reopen the Article governing wages for the third year of the agreement if the consumer price index in the Chicago area rose 15% from January, 1977 through December, 1978, or more than 9% in calendar year 1978.³

Pursuant to this reopener clause, the parties entered into negotiations concerning the appropriate wage increase for the third year of the agreement. On May 12, 1979, after reaching an impasse in the negotiations,⁴ the union requested that the dispute be resolved by a neutral arbitrator under the terms of the arbitration clause. On May 22, the employer indicated that it would not go to arbitration, as it believed that the dispute was not covered by the collective bargaining agreement. Shortly thereafter, the union filed this action.

The case is now before the Court on cross motions for summary judgment. The union argues that the terms of the arbitration clause are sufficiently broad to cover this dispute. The employer, on the other hand, puts forth several arguments in opposition to the request for arbitration. First, the employer argues that the arbitration clause only covers grievances over "rights" rather than "interests," with the present dispute falling into the latter category.⁵ Second, Singer asserts that even if the arbitration clause is construed as extending to "interest" arbitration, the reopener provision of the agreement excludes the issues of midterm revision of wages from arbitration. Finally, the employer asserts that if the court finds the dispute to be substantively arbitrable, it nonetheless should refuse to compel arbitration because of the union's alleged failure to comply with the procedural steps necessary to trigger arbitration. Since there are no genuine issues of fact in dispute, the case appropriately may be resolved under Rule 56 of the Federal Rules of Civil Procedure.⁶

SUBSTANTIVE ARBITRABILITY

Ever since the Steelworkers Trilogy,⁷ it has been recognized that national labor policy favors the use of arbitration as a means of resolving employer-employee disputes. Underlying this policy is the assumption that arbitration of labor problems provides the best hope for promoting industrial peace and avoiding the economic upheaval that results from strikes and employer lockouts.⁸ The Supreme Court has enunciated a number of rules of construction for collective bargaining agreements and arbitration clauses in an effort to facilitate this policy.

In suits to compel arbitration, a federal court has a very limited role. "It is confined to ascertaining whether the party seeking arbitration is making a claim which on its face is governed by the contract. Whether the moving party is right or wrong is a question of contract interpretation for the arbitrator." United Steelworkers of America v. American Manufacturing Company, 363 U.S. 564, 567-68, 80 S.Ct. 1343, 1346, 4 L.Ed.2d 1403 (1960). The Supreme Court recognized that arbitration agreements are consensual arrangements, and therefore cannot be foisted upon an unwilling party. Yet, the Court held a dispute should not be considered nonarbitrable "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 Company, 363 U.S. 574, 582-83, 80 S.Ct. 1347, 1353, 4 L.Ed.2d 1409 (1960). "In the absence of any express provision excluding a particular grievance from arbitration, we think only the most forceful evidence of a purpose to exclude the claim from arbitration can prevail . . ." Id. at 584-85, 80 S.Ct. at 1354. The Supreme Court also has given weight to the existence of no-strike clauses in determining whether to submit a matter to arbitration.

It would be unusual, but certainly permissible, for the parties to agree to a broad mandatory arbitration provision yet expressly negate any implied no-strike obligation. . . . Absent an explicit expression of such intention, however, the agreement to arbitrate and the duty not to strike should be construed as having coterminous application. Gateway Coal Company v. United Mine Workers of America, 414 U.S. 368, 382, 94 S.Ct. 629, 639, 38 L.Ed.2d 583 (1974).⁹

By requiring the court to compel arbitration unless it can say with "positive assurance" that such was not intended by the parties to the agreement, the Supreme Court has sought to ensure that federal courts will not take it upon themselves to deny arbitration because of their own view as to the merits of the dispute.¹⁰ The general linkage of arbitration clauses and no-strike provisions as quid pro quos for each other, moreover, has elevated arbitration over the strike as a means of dispute resolution. Thus, the Supreme Court decisions have created an atmosphere in which the arbitration "of . . . differences under a collective bargaining agreement is given full play." United Steelworkers of America v. American Manufacturing Company, 363 U.S. at 566, 80 S.Ct. at 1346.

All of these cases concerned the arbitration of disputes concerning "rights" accorded by the contract; none has involved "interest" arbitration. On this basis, Singer argues that the strong presumption in favor of compelling arbitration should not exist in this case. This argument depends on the premise that the differences between interest and rights arbitration are such that the underlying goals of the Steelworkers Trilogy would not be served by according interest arbitration a strong presumption.¹¹

Yet, labor strife can arise just as readily over interests as over rights; indeed, this case highlights that reality. In the absence of arbitration, the likelihood is that interest disputes will lead to strikes or other forms of economic warfare. Some commentators have questioned whether enforcement of interest arbitration clauses can be effective in preventing strikes.¹² Admittedly, interest arbitration is no more an iron-clad guarantee against strikes than is rights arbitration. Nonetheless, both types of arbitration provide the best chance of avoiding the strike and the lock-out. So long as the courts continue to accord a strong presumption to rights arbitration, there is no good policy reason why this presumption should not extend to interest arbitration as well.¹³ Thus, this Court finds that interest disputes are entitled to the same presumption of arbitrability accorded to rights disputes under the Steelworkers Trilogy.¹⁴

It is in light of this presumption in favor of arbitration that the present collective bargaining agreement must be viewed. Article XII of the contract, the arbitration clause, states that "any grievance involving the interpretation, construction or application of the explicit terms of this Agreement which shall not have been satisfactorily settled" may be taken to arbitration. Article X, which forbids strikes and lockouts, states that "no dispute or grievances can or should arise which cannot be settled and adjusted by fair and friendly negotiations or arbitration." These expansive provisions on their face reflect a general scheme in which negotiation and arbitration are emphasized, while strikes and other forms of economic warfare are to be avoided.¹⁵ Singer's arguments that this broad arbitration clause does not encompass the dispute in question are unpersuasive.¹⁶

It first argues that the mere existence of a reopener clause does not indicate that the matter of a midterm wage and increase was subject to arbitration. In support of this position, Singer, noting the infrequent use of interest arbitration, cites to several arbitration decisions in which arbitrators have refused to construe an arbitration clause as requiring interest arbitration in the absence of a specific mention thereof. The arbitral decisions, however, are not unanimous in this viewpoint.¹⁷ Moreover, to the extent that interest arbitration is used, it is most prevalent with respect to wage questions.¹⁸ Thus, in view of the general language of the contract favoring arbitration, it cannot be said with "positive certainty" that the parties would have agreed to interest arbitration only if specifically provided for in the collective bargaining agreement.

Singer also asserts that Article XIV, Paragraph 4, impliedly excludes this dispute from arbitration. That clause provides that if proposed amendments are not mutually agreed upon by the termination date of the Agreement, either party may terminate the agreement upon five days written notice. This provision, however, does not explicitly preclude arbitration on the issue of wage reopening. Indeed, Article IX, Paragraph 3, specifically precludes arbitration of disputes concerning the interpretation and application of Group Insurance and Retirement Benefit plans. This suggests that, if anything, the parties expressly excluded arbitration when such was their intent.¹⁹...