LOCAL 453, INTERNAT'L U. OF E., R. & MW v. Otis Elevator Co.

• Decision Date: 27 February 1963
• Docket Number: Docket 27767.,No. 227,227
• Citation: 314 F.2d 25
• Parties: LOCAL 453, INTERNATIONAL UNION OF ELECTRICAL, RADIO & MACHINE WORKERS, AFL-CIO, an unincorporated Labor Organization, Appellant, v. OTIS ELEVATOR COMPANY, a corporation, Appellee.
• Court: U.S. Court of Appeals — Second Circuit

314 F.2d 25 (1963)

LOCAL 453, INTERNATIONAL UNION OF ELECTRICAL, RADIO & MACHINE WORKERS, AFL-CIO, an unincorporated Labor Organization, Appellant, v. OTIS ELEVATOR COMPANY, a corporation, Appellee.

No. 227, Docket 27767.

United States Court of Appeals Second Circuit.

Argued January 24, 1963.

Decided February 27, 1963.

Irving Abramson, New York City, (Abramson & Lewis, New York City, on the brief); Donald Grody, New York City, of counsel), for appellant.

Louis Newman, New York City (Guggenheimer & Untermyer, New York City, on the brief), for appellee.

Before FRIENDLY, KAUFMAN and MARSHALL, Circuit Judges.

MARSHALL, Circuit Judge.

This is an appeal by the plaintiff below, Local 453, International Union of Electrical Workers, from an order entered by the United States District Court for the Southern District of New York, Cashin, J., granting summary judgment in favor of the defendant, Otis Elevator Company. The effect of the order was to vacate, set aside, and deny enforcement to an arbitration award which had directed Otis to reinstate an employee whom it had discharged for violating a company rule prohibiting gambling. The facts underlying the controversy are not in dispute.

Joseph Calise, an employee of Otis who was represented by Local 453, was convicted on December 1, 1960, in the County Court of Westchester County on two counts of knowingly possessing policy slips in the Otis plant in Yonkers on December 28, and 29, 1959, in violation of New York Penal Law, § 974, which makes such conduct a misdemeanor. He was fined a total of $250. There was testimony at the trial that four other Otis employees were "working for" Calise in handling policy slips within the plant, but apparently none of the four was prosecuted by the public authorities or disciplined by Otis.

During the eleven months that elapsed between the date of Calise's arrest and the date of his conviction, Otis took no disciplinary action against him and he remained on the job without evidence of further transgression. However, on December 5, 1960, four days after Calise's conviction was entered, he was discharged for violating the company's rule against gambling on its premises during working hours. The union challenged the discharge and after the exhaustion of grievance procedures under the collective bargaining agreement the parties submitted the dispute to arbitration.

The applicable provisions of the collective bargaining agreement gave the employer "the right to discharge any employee for just cause" and the union "the right to challenge the propriety of the discharge of any employee" as a grievance. The agreement further provided that when an issue was submitted to arbitration, the decision of the arbitrator "shall be final and binding upon the parties." In submitting the present controversy to arbitration, the parties stipulated that the question for decision was, "Has Joseph Calise been discharged for just cause, and if not what shall the remedy be?"

The arbitrator concluded that under all of the circumstances Calise had not been discharged for just cause. He ordered Otis to reinstate Calise to his former position on July 3, 1961, but without back pay or accrual of seniority or other benefits flowing from the collective agreement for the seven-month period of disciplinary layoff, although his prior-accrued seniority and pension rights were to be preserved and not to be affected by the layoff.

The arbitrator made plain that Calise had been guilty of serious misconduct and that his award was in no way to be taken as condoning "such illegal activities as policy numbers gambling." Substantial disciplinary action sufficient to serve as a deterrent would have been permissible, he said, but "outright and final discharge is a disciplinary action with effects too harsh upon the grieving employee." He based his decision upon the facts that Calise had already been punished once for his offense by the public authorities, that he had undergone a seven-month layoff without pay or unemployment compensation, that he had 24 years of unbroken seniority and satisfactory service at the company, that he had "heavy family obligations involving four young innocent children and a wife," that as a result of discharge he would lose considerable pension rights "built up after decades of service," and that the company had not disciplined the four other men who "were guilty also of violating the same rule against gambling in the plant."

The union subsequently brought suit in the United States District Court for the Southern District of New York to confirm the arbitration award and to compel Otis to comply with it, asserting jurisdiction under Section 301 of the Labor Management Relations Act, 29 U.S.C.A. § 185. By an order to show cause, the union moved for a preliminary injunction to compel compliance pending final disposition of the action. The motion was denied by the District Court, MacMahon, J., in an opinion reported at 201 F.Supp. 213 (S.D.N.Y.1962), on the ground that the arbitrator's award was "void and unenforceable" because violative of an "overriding public policy." The court said that the award "indulges crime, cripples an employer's power to support the law, and impairs his right to prevent exposure to criminal liability." Id. at 218.

The union then moved for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure. The District Court, Cashin, J., in an opinion reported at 206 F.Supp. 853 (S.D.N.Y. 1962), denied the motion. At the same time, since there was no genuine issue of fact, it exercised its right to grant summary judgment to the defendant, vacating and setting aside the arbitration award, without the filing of a formal cross-motion. See Local 33, International Hod Carriers, etc., Union of America v. Mason Tenders District Council, 291 F.2d 496 (2 Cir., 1961); United States v. Cless, 150 F.Supp. 687 (M.D.Pa.1957), affirmed, 254 F.2d 590 (3 Cir., 1958); 6 Moore, Federal Practice ¶ 56.12, pp. 2088-89 (2d ed. 1953).

In entering summary judgment for the defendant, Judge Cashin said that he agreed with "Judge MacMahon's determination that the arbitrator had the power to settle the dispute involved. I also agree that this court is foreclosed by the arbitrator's decision from considering the question of whether or not the commission of a crime by an employee upon the premises of the employer is just cause for discharge as a matter of law." 206 F.Supp. at 854. But he nevertheless felt bound to deny enforcement to the arbitrator's award.

"However, as Judge MacMahon found, the misconduct involved here is not just an infraction of a company rule. It is a misdemeanor under § 974, McK. Consol. Laws, c. 40, of the N. Y. Penal Law. This same statute also provides that a `person who * * * is the owner * * * of any place * * * where policy playing or the sale of what are commonly called "lottery policies" is carried on with his knowledge or after notification that the premises are so used, permits such use to be continued, or who aids, assists, or abets in any manner, * * * is a common gambler, and guilty of a misdemeanor.\' Thus, the responsibility for the observance of this law rests upon the owner of the premises and exposes him to criminal prosecution.

"In the instant case, Calise was not just gambling himself, but he was carrying on organized professional gambling and had four other employees working for him. Under these circumstances I cannot compel the defendant to comply with the arbitration award." Id. at 855.

It is from the decision of Judge Cashin that the union has taken this appeal.

The decision of Judge Cashin expressly adopted the conclusions of Judge MacMahon that the grievance that arose between Local 453 and Otis over the discharge of Calise was an...