Lukens Steel Co. v. United Steelworkers of America (AFL-CIO), AFL-CIO

• Decision Date: 25 March 1993
• Docket Number: AFL-CIO,A,No. 1165,92-1539,Nos. 92-1518,1165,s. 92-1518
• Citation: 989 F.2d 668
• Parties: 142 L.R.R.M. (BNA) 2870, 124 Lab.Cas. P 10,606 LUKENS STEEL COMPANY, Appellee/Cross-Appellant, v. UNITED STEELWORKERS OF AMERICA (); United Steelworkers of America (), Local Union; Edward E. McDaniel, United Steelworkers of America (); United Steelworkers of America (), Local Union, Appellants/Cross-Appellees.
• Court: U.S. Court of Appeals — Third Circuit

Page 668

989 F.2d 668

142 L.R.R.M. (BNA) 2870, 124 Lab.Cas. P 10,606

LUKENS STEEL COMPANY, Appellee/Cross-Appellant, v. UNITED STEELWORKERS OF AMERICA (AFL-CIO); United

Steelworkers of America (AFL-CIO), Local Union No.

1165; Edward E. McDaniel,

United Steelworkers of America (AFL-CIO); United

Steelworkers of America (AFL-CIO), Local Union No.

1165, Appellants/Cross-Appellees.

Nos. 92-1518, 92-1539.

United States Court of Appeals, Third Circuit.

Argued Oct. 23, 1992.

Decided March 25, 1993.

Rudolph L. Milasich, Jr. (argued), United Steelworkers of America, Pittsburgh, PA, for appellants/cross-appellees.

Raymond A. Kresge (argued), Pepper, Hamilton & Scheetz, Philadelphia, PA, for appellee/cross-appellant.

Before: COWEN, NYGAARD and SEITZ, Circuit Judges.

OPINION OF THE COURT

SEITZ, Circuit Judge.

This case involves the arbitrability of a dispute between Lukens Steel Company ("Lukens") and Local 1165 of the United Steelworkers of America ("Union") concerning the post-strike return to work of bargaining unit employees. The district court had jurisdiction over the action seeking a declaratory judgment as to arbitrability under Section 301 of the Labor Management Relations Act, 29 U.S.C. § 185 (1988). We have jurisdiction over the appeal and cross-appeal under 28 U.S.C. § 1291 (1988).

I. BACKGROUND

Lukens and the Union were parties to a collective bargaining agreement covering the period from August 20, 1988 through September 30, 1991 ("1988 Agreement"). When the 1988 Agreement expired, the bargaining unit employees went on strike. On January 5, 1992, the parties completed negotiation of a proposal to settle the strike. The terms of the proposed settlement were set forth in a Memorandum of Understanding. On January 13, 1992, the bargaining unit employees ratified this proposed settlement and it became the 1992 Agreement.

Thereafter, a dispute arose over the timing of the recall of employees. On January 23, 1992, Grievance No. 19515-9 ("Grievance") was filed alleging that Lukens "violated the current labor agreement, the week of 1/12/92, on all turns, when [it] failed to recall all seniority employees, and worked replacement and salary employees, when union members [were] available." The Union asked that Lukens be directed to "cease and desist in this practice [and] pay all wages and benefits, and all monetary losses...."

The 1992 Agreement contains a procedure for processing grievances which culminates in final and binding arbitration. The parties were unable to settle the Grievance during the lower steps of the grievance procedure and the Union then invoked this arbitration provision and selected Arbitrator Edward E. McDaniel ("McDaniel") to hear and decide the Grievance. ¹

In mid-March, the Union informed Lukens that the Grievance was scheduled to be heard on March 31, 1992. On March 27, 1992, Lukens filed this action seeking a judicial determination that the subject matter of the dispute was not arbitrable. Then, the day before the scheduled hearing, Lukens hand-delivered copies of a letter to McDaniel's home and office informing him of the pending action in the district court and saying that the arbitration hearing should not be held until after the district court determined whether the Grievance was arbitrable. The following day, before the hearing began, Lukens advised McDaniel both orally and in writing of its position that the arbitration should not proceed. Lukens declined a request by McDaniel that it participate in the hearing and then left the site where the hearing was to be held. McDaniel proceeded to conduct the hearing. After the Union presented its evidence, McDaniel closed the record without post-hearing briefs, but did not announce his decision.

Following the hearing, Lukens sought assurances from McDaniel that he would not issue his decision before the district court resolved the issue of arbitrability. When McDaniel declined to provide such assurances, Lukens amended its complaint to add him as a defendant in this action.

On April 13, 1992, the district court issued a temporary restraining order ("TRO") enjoining the arbitration proceeding and prohibiting McDaniel from issuing his award. The Union moved to vacate the TRO on the grounds that the Norris-LaGuardia Act, 29 U.S.C. §§ 101-115 (1988), deprived the district court of jurisdiction to issue such an injunction. The district court denied this motion as well as the Union's later motion for reconsideration.

A hearing on Lukens' motion for a preliminary injunction was held on April 22, 1992. At the hearing, over the Union's objection, Lukens presented testimony as to the parties' bargaining history. Lukens asserted that the bargaining history revealed that the dispute was not arbitrable. Ultimately, on April 23, 1992, the district court rendered a final judgment and decree in which the court concluded that the dispute was arbitrable. Nevertheless, the district court decided that Lukens' challenge to arbitrability was a good faith assertion of its rights under AT & T Technologies, Inc. v. Communications Workers of America, 475 U.S. 643, 106 S.Ct. 1415, 89 L.Ed.2d 648 (1986). Therefore, to ensure "fairness," the district court: (1) "deemed" the arbitration before McDaniel "not effectual"; (2) ordered that a new arbitration be held; and (3) prohibited McDaniel from serving as arbitrator in this new arbitration.

The Union moved the district court for reconsideration and Lukens moved for relief from the judgment. The district court denied both motions. The Union then filed a timely appeal to this Court from the final order and the denial of its motion for reconsideration. Lukens filed a timely cross-appeal from the final order and the denial of its motion for relief. The Union then moved the district court for an order suspending the judgment pending this appeal. The district court denied that motion. Subsequently, the Union moved this Court to stay those portions of the final order which deemed the arbitration before McDaniel ineffectual and which prohibited him from serving as arbitrator in the new arbitration. Our court denied that motion.

II. DISCUSSION

A. Arbitrability of the Grievance

The district court determined that the Grievance was arbitrable. Whether or not a dispute is arbitrable depends upon "the intent of the parties regarding arbitration." John F. Harkins Co. v. Waldinger Corp., 796 F.2d 657, 660 (3d Cir.1986), cert. denied, 479 U.S. 1059, 107 S.Ct. 939, 93 L.Ed.2d 989 (1987). "The proper standard of review has to be whether the district court's findings--interpretation of the contract, that is, the intent of the parties as to the meaning of the contract's language--are clearly erroneous." Id.; see Painewebber, Inc. v. Hartmann, 921 F.2d 507, 510 (3d Cir.1990). Thus, we address the issue of arbitrability under a clearly erroneous standard of review.

The Supreme Court has established certain principles for determining the arbitrability of a dispute involving a collective bargaining agreement. See AT & T Technologies, Inc. v. Communication Workers of Am., 475 U.S. 643, 648, 106 S.Ct. 1415, 1418, 89 L.Ed.2d 648 (1986). First, "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." Id. (quoting United Steelworkers of Am. v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582, 80 S.Ct. 1347, 1353, 4 L.Ed.2d 1409 (1960)). Second, "in deciding whether the parties have agreed to submit a particular grievance to arbitration, a court is not to rule on the potential merits of the underlying claims." Id. 475 U.S. at 649, 106 S.Ct. at 1418-19. Third, "where the contract contains an arbitration clause, there is a presumption of arbitrability in the sense that, '[a]n 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.' " Id. at 650, 106 S.Ct. at 1419 (quoting United Steelworkers of Am. v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582-83, 80 S.Ct. 1347, 1353, 4 L.Ed.2d 1409 (1960)). Guided by these principles, we turn to the arbitrability of the Grievance.

As noted, the issue in this appeal is the arbitrability of a grievance concerning the method of recall of bargaining unit employees upon the conclusion of a strike. It is undisputed that the determination as to the arbitrability of this dispute was for the district court rather than an arbitrator. It is also agreed that, during all pertinent times, the following arbitration provision governed disputes between the parties:

Should any differences arise between the Company and the Union as to the meaning and application of, or compliance with, the provisions of this Agreement, there shall be no suspension of work on account of such differences, but such differences shall be settled promptly in accordance with the provisions of this Agreement and in the manner hereinafter set forth. ²

On its face, the Grievance alleges violations of two articles in the collective bargaining agreement--Article 1 (Recognition) and Article 11 (Continuous Service and Seniority). In support of its position that the Grievance is arbitrable, the Union also relies upon Exhibit 41 to the Memorandum of Understanding which states: "The Company will discuss with the Union with respect to methods by which the hourly employees will return to work following the strike in accordance with the labor agreement." ³

In view of the parties' arbitration provision, the presumption in favor of arbitrability applies. See AT & T, 475 U.S. at 650, 106 S.Ct. at 1419. To rebut this presumption, Lukens must either: (1) establish the existence of "an[ ] express provision excluding [the] grievance from arbitration"; or (2) provide "the most forceful evidence of a purpose to exclude the claim from arbitration." Id. (quoting ...