O'Malley, Application of

• Decision Date: 12 March 1957
• Citation: 48 Cal.2d 107,308 P.2d 9
• Court: California Supreme Court
• Parties: , 32 Lab.Cas. P 70,552 In the Matter of the Application of E. P. O'MALLEY, Secretary, Local 128, Oil Workers International Union, CIO, for an Order Confirming Arbitrator's Award. E. P. O'MALLEY, Secretary, Local 128, Oil Workers International Union, CIO, Applicant and Respondent, v. PETROLEUM MAINTENANCE COMPANY, W. A. Thompson, Jr. and Louis B. Minter, Defendants and Appellants. L. A. 24302

Page 9

308 P.2d 9

48 Cal.2d 107, 32 Lab.Cas. P 70,552

In the Matter of the Application of E. P. O'MALLEY, Secretary, Local 128, Oil Workers International Union, CIO, for an Order Confirming Arbitrator's Award.

E. P. O'MALLEY, Secretary, Local 128, Oil Workers International Union, CIO, Applicant and Respondent, v. PETROLEUM MAINTENANCE COMPANY, W. A. Thompson, Jr. and Louis B. Minter, Defendants and Appellants.

L. A. 24302.

March 12, 1957.

Rehearing Denied April 10, 1957.

Madden & McCarry, Long Beach, for appellants.

Wirin, Rissman & Okrand, Fred Okrand, Los Angeles, for respondent.

CARTER, Justice.

This is an appeal by Petroleum Maintenance Company (hereinafter referred to as 'Company') from a judgment of the superior court confirming an arbitration award in favor of Oil Workers International Union, CIO, Local 128 (hereinafter referred to as 'Union').

On July 16, 1947, the Company entered into a collective bargaining agreement with the Union. On October 5, 1951, Company discharged one Frank J. Semmentt, a member of Local 128. On April 10, 1952, the Union filed a petition for an order directing arbitration of Semmett's discharge. On June 20, 1952, the trial court granted the petition and ordered the matter arbitrated. Company appealed from the order, but the District Court of Appela dismissed the appeal, Corbett v. Petroleum Maintenance Co., 119 Cal.App.2d 21, 258 P.2d 1077, on the ground that section 1293 of the Code of Civil Procedure was controlling and that section did not provide for an appeal from an order directing arbitration.

The Union's petition to the superior court was for either arbitration of the grievance of Semmett, or arbitration of the question whether the Semmett discharge was subject to arbitration. The superior court ordered only arbitration of the merits of the discharge.

Union and Company on January 22, 1954, entered into a submission agreement and pursuant thereto three arbitrators were selected. The submission agreement, signed by both Company and Union, provided that the parties agreed to submit to arbitration (1) whether the discharge of Semmett was arbitrable and (2) whether the discharge of Semmett was proper. Paragraph (4) of the submission agreement provides that 'In submitting this matter to arbitration neither party shall be deemed to have waived any rights given them by law.' Company at all times contended that the discharge of Semmett was not subject to arbitration.

The collective bargaining agreement does not specifically mention the discharge of any employee. The agreement provides for a union shop, deductions from wages for union dues, strikes and lockouts, hours of work, holidays, transportation, contract work as related to subcontracts let by Company, meals, safety, clothing allowance, classification of work, and grievance procedure. ¹ It also provides under the article entitled 'Seniority' for promotions, lay-offs, and re-hiring. Vacations, illness, accidents, insurance, overtime, and wages and leaves of absence, assignability of the agreement and notices under it are also provided for.

Article XI, entitled 'Grievance Procedure' provides: 'For the purpose of handling disputes arising over the performance of this Agreement, there will be committeemen elected by the Union members for the various departments or crafts. These committeemen will be recognized by the Company in the first step of adjusting such a complaint, which will be with the man involved, his foreman, and the committeemen for such group or any other committeemen.

'If they cannot settle the dispute, then it shall be reduced to writing and a committee of five (5) shall meet with a representative of the Company to try to settle the dispute. The committeemen shall have fifteen (15) days to investigate such complaint after they are aware of their occurrence. The Company shall have seven (7) days to reply to the Committee. If the reply does not meet with the committee's approval, they may ask the Union to discuss the dispute with a representative of the Company and try to reach settlement, if, in the opinion of Union officials, the dispute warrants such meeting. This meeting to be held within fifteen (15) days after Company's reply to committee. If an Agreement cannot be reached the Company and Union shall select a third party to sit with a Company official as a Board of Arbitration with a decision of any two to be binding on the Company and the Union. The expense of such a third party shall be borne equally by the company and the Union.'

Union contends that the discharge of Semmett was arbitrable in that the collective bargaining agreement impliedly provides only for discharge upon a proper showing of cause for such discharge. Company, on the other hand, contends that nothing in the agreement relates to the discharge of any employee. Union also argues that Company by its conduct in taking the first two steps under the grievance procedure up until the opint of arbitration arcognized that discharge was a proper subject for arbitration under the collective bargaining agreement and is now estopped to claim that the arbitration procedure does not apply. It is also argued by Union that Company, having submitted the arbitrability of the discharge to the arbitration committee, when the court order did not require such arbitration, has waived its right to object to the arbitrability of the question.

The three arbitrators concurred in holding that the dispute was not arbitrable under the collective bargaining agreement and that they would have declined jurisdiction had it not been for the order of the court requiring arbitration on the merits. A majority of the arbitrators then concluded that Semmett had been improperly discharged and ordered his reinstatement with full seniority rights as of the date of his discharge and 'made whole for all wages which he would have earned from July 8, 1952, less any wages received from any other source and any unemployment compansation.'

We are of the opinion that Company is bound by the terms of the submission to arbitration agreement. It is the rule that 'The powers of an arbitrator are limited and circumscribed by the agreement or stipulation of submission. Bierlein v. Johnson, 73 Cal.App.2d 728, 733, 166 P.2d 644.' Pacific Fire Rating Bureau v. Bookbinders', etc., Union, 115 Cal.App.2d 111, 114, 251 P.2d 694, 696. See, also, Stenzor v. Leon, 130 Cal.App.2d 729, 732, 279 P.2d 802; Flores v. Barman, 130 Cal.App.2d 282, 286, 279 P.2d 81; Crofoot v. Blair Holdings Corp., 119 Cal.App.2d 156, 186, 187, 260 P.2d 156; 30 Cal.Jur.2d, § 133, p. 84, In the case at bar, although the trial court merely ordered arbitration of the merits of Semmett's discharge, Company agreed, in the submission agreement to the arbitration of the two questions: Whether Semmett's discharge was arbitrable and to the arbitration of the discharge of Semmett. This it was not bound to do since the arbitrability of the question could have been considered after the judgment confirming the arbitrator's award on the merits of the controversy. Sjoberg v. Hastorf, 33 Cal.2d 116, 118, 119, 199 P.2d 668. With respect to Company's argument that it had specifically provided that it was not to be deemed 'to have waived any rights given them by law' it appears that Company may not agree to arbitrate a question and then, if the decision goes against it, litigate the question in another proceeding. In Crofoot v. Blair Holdings Corp., 119 Cal.App.2d 156, 186, 187, 260 P.2d 156, 172, the court had much the same problem under consideration. It was there held: 'The whole spirit of the agreement is that these parties, when the agreement was executed, wanted to settle the many court actions then pending between them, carefully selected a competent and impartial arbitrator, and were then content, as long as the arbitrator acted within the limitations of the arbitration statute, to accept his determination as final, both as to law and facts. Now that such determinations have not turned out as this appellant hoped, he is attempting to secure a complete reconsideration of many legal (and some factual) determinations in this court. Under his agreement and the provisions of the law, except where permitted to do so by statute, this he cannot do.' It was then said that 'If the arbitrator in fact areated causes of action not within the arbitration agreement, and then decided these unsubmitted issues, that would require a vacation of the award as being in excess of the arbitrator's powers within the meaning of section 1288 of the Code of Civil Procedure.' As we have heretofore pointed out the arbitrators in the case at bar decided the issues submitted to them by the parties.

It is of course well settled that arbitrators do not exceed their powers merely because they assign an erroneous reason for their decision. Southside Theatres v. Moving Picture Projectionists, Local, 131 Cal.App.2d 798, 803, 281 P.2d 31; McKay v. Coca Cola Bottling Co., 110 Cal.App.2d 672, 243 P.2d 35; Crofoot v. Blair Holdings Corp., 119 Cal.App.2d 156, 189, 260 P.2d 156. In Southside Theatres v. Moving Picture Projectionists, Local, supra, 131 Cal.App.2d at pages 802, 803, 281 P.2d at page 34 the court said: 'Any controversy under a collective bargaining contract which requires first a determination that the contract does or does not define the rights or duties of the...