Machine Products Co. v. Prairie Local Lodge No. 1538 of Intern. Ass'n of Machinists, A.F.L.-C.I.O., 40465

• Decision Date: 15 April 1957
• Docket Number: No. 40465,40465
• Citation: 230 Miss. 809,94 So.2d 344
• Parties: MACHINE PRODUCTS COMPANY, Incorporated, et al. v. PRAIRIE LOCAL LODGE NO. 1538 OF INTERNATIONAL ASSOCIATION OF MACHINISTS, A.F.L.-C.I.O., et al.
• Court: Mississippi Supreme Court

Page 344

94 So.2d 344

230 Miss. 809

MACHINE PRODUCTS COMPANY, Incorporated, et al. v. PRAIRIE LOCAL LODGE NO. 1538 OF INTERNATIONAL ASSOCIATION OF

MACHINISTS, A.F.L.-C.I.O., et al.

No. 40465.

Supreme Court of Mississippi.

April 15, 1957.

Robert D. Patterson, Aberdeen, R. L. McKnight, Memphis, Tenn., for appellants.

Pyles & Tucker, Jackson, Brown & Brown, Starkville, Plato Papps, Washington, D. C., for appellees.

ETHRIDGE, Justice.

This case presents the question of whether a provision in a collective bargaining contract between a labor union and an employer to submit future disputes to arbitration can be enforced by ordering its specific performance.

Appellee, Prairie Local Lodge No. 1538 of the International Association of Machinists, A.F.L.-C.I.O., and some individual members of the union filed this suit in the Chancery Court of Monroe County against appellant, Machine Products Company, Inc., and three of its officers for the purpose of obtaining specific performance of an arbitration clause for future disputes in the collective bargaining agreement between the union and the company. After a hearing the chancery court issued a temporary mandatory injunction requiring the company to forthwith proceed with arbitration of the disputes, which were concerned primarily with seniority rights. Several days later defendants filed a demurrer to the bill of complaint and a motion to dissolve the temporary injunction. They were overruled, but the trial court permitted the defendants to take an interlocutory appeal with supersedeas from the decree of October 15, 1956, overruling the demurrer and the motion to dissolve.

1.

Appellees filed a motion to dismiss the appeal on the ground that the decree was interlocutory in nature and would not settle all the controlling principles involved in the cause, which is required by Code of 1942, Sec. 1148. As will appear subsequently, this appeal will settle the controlling principles and questions raised in the bill of complaint. Its purpose was to require appellant to arbitrate the disputes as to seniority. The interlocutory decree granted that request. Appellants contend that they cannot be forced under the executory arbitration agreement to arbitrate. In the absence of an appeal with supersedeas, arbitration awards might be rendered, and this issue would be decided before a hearing and decision of this case on the merits.

Moreover, the decree also partook of the nature of a final decree, since once arbitration was accomplished, all of the relief prayed for by appellees would have been granted. A preliminary mandatory injunction should not issue here. Its effect would be to end the case without a hearing on the merits. Griffith, Mississippi Chancery Practice (2d Ed.1950), Sec. 444; Board of Supervisors of Wilkinson County v. Ash, 1926, 142 Miss. 686, 107 So. 763; Blum v. Planters' Bank & Trust Co., 1929, 154 Miss. 800, 122 So. 784; 2 Am.Jur., Appeal and Error, Secs. 22, 23.

2.

The bill of complaint averred that the local union is affiliated with the International Association of Machinists, A.F.L.-C.I.O., and is an unincorporated association. As such, it is entitled to bring this suit. Varnado v. Whitney, 1933, 166 Miss. 663, 669-670, 147 So. 479. The individual complainants are members of the union, and brought this action for themselves and on behalf of other members and as representatives of the class. Defendant Machine Products Company, Inc., operates a Vehicle Storage Depot for the United States Air Force at Prairie, Monroe County, Mississippi. The other three defendants are officers of the company, which performs certain maintenance and other tasks with reference to the operation of the depot under contracts with the United States Air Force. On June 28, 1956, the union and the company executed a collective bargaining agreement, effective for a one-year period terminating on June 28, 1957. A copy of this agreement was attached as an exhibit to the bill.

Article XV deals with 'grievance and arbitration procedure.' It requires the following of a stated procedure to settle any grievances between the company and union. The first three steps consist of conferences between the employee and union representative and his immediate supervisor, the department head, and the industrial relations director. 'If the grievance is not satisfactorily adjusted in step 3, either party may refer the grievance to arbitration,' within ten days following the step 3 grievance decision. The arbitration clause then provides that the parties shall by mutual agreement select an arbitrator, but, if they fail to agree upon one within five days after a written request, either party may request the Federal Mediation and Conciliation Service to submit a list of five persons from which the union and company shall select one. Article XV further states:

'C. Arbitration shall be limited to the settlement of specific claims arising out of the interpretation or application of the specific terms of this Agreement.

'D. The Arbitrator shall have no power to change any of the terms of this Agreement or to make any additions thereto, nor to establish or change any job classifications or wage rates, nor to rule on any dispute involving the amount of work an employee shall perform.

'E. The decision of the arbitrator shall be final and binding on the Company and the Union.'

Article XX of the collective bargaining agreement deals with 'seniority', and also contains a limited exception to the arbitration procedure.

The bill of complaint charged that defendants violated Article XX of this contract by failing to promote, transfer, lay off, and recall union employees back to work in accordance with Article XX, and by failing to prepare proper seniority lists. The company refused, it was alleged, to correct and redress the many grievances and its breaches of contract by arbitration, as provided in Article XV. Defendants refused to join complainants in the prescribed method of selecting an arbitrator and to submit the grievances to arbitration. Attached as exhibits were three letters between the parties in which the company refused to submit the grievances to arbitration, on the ground that the disputes with reference to seniority were not subject to arbitration because of a stipulation agreement dated June 27, 1956. The bill therefore prayed that the court would order defendants to submit the grievances to an arbitrator to hear and determine them pursuant to Article XV of the collective bargaining agreement, and that on final hearing it would issue a permanent injunction to that effect.

The bill was filed on September 14, 1956. A hearing was held by the chancery court on September 26. D. D. Addington, chairman of the shop committee of the union, testified for complainants that the collective bargaining agreement with the company was entered into on June 28. The local union has less than 300 members, and about 80 are involved in the disputes and grievances. The parties went through the third step in the grievance procedure, but the disputes were not settled. The company refused to refer them to arbitration.

On cross-examination, the company introduced in evidence a 'stipulation' agreement between the company and union dated June 27, one day before the collective bargaining agreement was approved and executed. The stipulation provides that the union will terminate its strike at 11:59 P.M. June 27, and that the union and company will enter into a contract containing terms upon which they had already agreed, as soon as the contract was approved by the membership of the local union. It then states: 'The Company will return all employees to work who were on the active payroll on 25 June 1956 as soon as possible, but no later than 6 July 1956, and the employee must return by this date. It is recognized by the Union that the Company entered into certain employment agreements on 26 and 27 June 1956, and nothing in this Agreement or in the new contract shall void such Agreements.' Apparently this stipulation is the source of the disagreement between the parties, the company taking the position that the quoted provision recognized employment agreements made by the company with nonunion members on June 26 and 27, when there was no contract in effect, and the union contending that it was superseded by the collective bargaining agreement of June 28. It is not necessary for us to consider or decide that issue on this interlocutory appeal.

William E. Sewell is a representative of the International Association of Machinists with general supervisory jurisdiction over the local union. He testified that the contract of June 28 was complete in itself, the grievances were not adjusted, and the company refused to submit the matters to arbitration.

After the hearing on application for a temporary injunction, the learned chancellor recognized that an injunction 'would partake of a final judicial process', but was of the opinion that the bill was sufficient on its face to warrant issuance of it, and that, since an arbitration clause in a collective bargaining agreement is in the public interest, it should be enforceable. He did not pass on whether the disputes come within the stipulation or whether it was superseded, reserving decision on that until a final hearing. He thought that the common-law rule, to the effect that an agreement to arbitrate future disputes is revocable before an award is made, should not apply to arbitration agreements in collective bargaining contracts.

So his order of October 10 directed defendants to forthwith proceed to the selection of an arbitrator, to select an arbitrator within five days, and to forthwith proceed to arbitration of the disputes and grievances, upon complainants posting a $5,000 surety bond. Complainants did this, and the writ of injunction was served on defendants on October 15. Defendants filed an answer contending that the grievances were not proper subjects of...