Markel Electric Prod. v. United Electrical, R. & M. Wkrs.

Decision Date09 February 1953
Docket NumberDocket 22424.,No. 47,47
Citation202 F.2d 435
CourtU.S. Court of Appeals — Second Circuit

Edward D. Flaherty, Buffalo, N. Y., for plaintiff-appellee.

Basil R. Pollitt and David Scribner, New York City, Martin R. Bradley, Jr., Buffalo, N. Y., for defendants-appellants.

Before SWAN, Chief Judge, and CHASE and CLARK, Circuit Judges.

CHASE, Circuit Judge.

On April 1, 1950, the plaintiff-appellee, hereinafter referred to as the company, and the United Electrical, Radio and Machine Workers of America, U. E., acting for itself and in conjunction with its Local 326, executed a written collective bargaining agreement. The company recognized the union as the exclusive bargaining agency for all of its production and maintenance employees "with respect to rates of pay, wages, hours of employment and all other conditions of employment," and Articles II to VII inclusive set forth in detail the conditions of employment agreed upon.

Article XI provided that the agreement was to continue in effect for one year from its date and from year to year thereafter unless either party notified the other in writing, at least sixty days before any expiration date, of its desire to terminate, "in which event the agreement shall terminate on the expiration date of the year in which the notice is given." And it was further provided in Article XI that, "At least sixty (60) days prior to any expiration date, either party may notify the other in writing of its desire to amend the agreement. If the parties are unable to agree upon the proposed amendment or amendments on or before the expiration date of the contract, then the agreement shall remain in full force and effect until a further written notice is served by either party on the other terminating this agreement."

Article VIII was entitled "Grievances," and the first paragraph thereof provided: "Should differences arise between the Company and any employee covered by this agreement as to the meaning and application of the provisions of this agreement, or should any trouble of any kind arise in the plant, there shall be no suspension of work on account of such differences, but an earnest effort shall be made to settle such differences immediately in the following manner." The next three paragraphs set forth a three-step grievance procedure by which a dispute was to be referred first to the department foreman and the aggrieved employee and/or his department steward; if no settlement was reached, the matter was then to be referred to the general superintendent and the chief steward; and if still no settlement was reached, the matter was to be referred to the executives of the company and the Grievance Committee and the International Representative of the Union. Article VIII contained no further procedure to be applicable in the event of no settlement in the way therein provided.

Article IX was entitled "Arbitration" and provided in part that:

"72. In the event that the two parties to this agreement fail to make a satisfactory adjustment of any dispute or grievance and such dispute or grievance involves a question as to the meaning and application of the provisions of this agreement, such dispute or grievance may be submitted to arbitration upon written notice of the party filing the grievance. Such notice is to be served upon the other party within five (5) days after the meeting referred to in the third step of the grievance procedure outlined above. * * * The Board of Arbitration to whom any grievance shall be submitted in accordance with the provisions of this section shall, in so far as shall be necessary to the determination of such grievance, have authority to interpret and apply the provisions of this agreement, but shall not have the power to add to, to disregard, or to modify in any way, any of the terms and conditions of this agreement. * * *
"* * *
"74. There shall be no lockouts or strikes during the life of this agreement. All complaints or grievances shall be settled in accordance with the full procedure outlined in this agreement."

On January 4, 1951, while this agreement was still in effect, the business agent of the union wrote to the president of the company informing him of the union's desire to amend it and proposing a meeting for the purpose of negotiations on wages, hours and working conditions.

The record does not disclose what efforts were made by the parties to agree upon amendments but it does show that the union caused the appellee's employees to strike on August 15, 1951 with the result that the manufacture and sale of appellee's products were completely stopped. It must be taken for granted that the strike was called solely because of the failure of the parties to agree as to amendments proposed by the union.

On August 17, 1951, pursuant to the provisions of section 301(a) of the Labor Management Relations Act, as amended June 23, 1947, 29 U.S.C.A. § 185, the company brought this suit for damages against the union, claiming that the strike was a breach of the bargaining agreement. The union's answer and amended answer, dated September 14, 1951 and February 19, 1952 respectively, alleged (1) that the company, prior to the date of the alleged strike, had committed several material breaches of the bargaining agreement which constituted an election to terminate the agreement and (2) that this suit was barred because the company had not first referred the dispute to arbitration as required by the contract. The union moved for an order striking the action from the trial calendar and staying all proceedings until arbitration should be had. This motion was denied, and whether such denial was erroneous is the only issue now presented.

Such an order is appealable since it is the equivalent of the denial of an injunction. Enelow v. New York Life Ins. Co., 293 U.S. 379, 55 S.Ct. 310, 79 L.Ed. 440; Shanferoke Coal & Supply Corp. of Delaware v. Westchester Service Corp., 293 U.S. 449, 55 S.Ct. 313, 79 L.Ed. 583; International Union United Furniture Workers of America v. Colonial Hardwood Flooring Co., 4 Cir., 168 F.2d 33.

The District Court denied the motion for a stay pending arbitration on two grounds. First, it was of the opinion that collective bargaining agreements were not within the scope of section 3 of the U. S. Arbitration Act. See International Union v. Colonial Hardwood Floor Co., supra; Amalgamated Ass'n, etc., Local Division 1210 v. Pennsylvania Greyhound Lines, Inc., 3 Cir., 192 F.2d 310. Second, the calling of the strike was a material breach which terminated the contract, thereby relieving the company of any duty it otherwise would have had under the contract to submit to arbitration.

We need not decide whether either or both of the above were proper grounds for denying the motion, since we do not think that the dispute here involved is within the scope of the arbitration clause. The whole tenor of the contract was to lay a groundwork of agreement as to wages hours and conditions of employment and to provide a peaceful method for the settlement of grievances and disputes over the meaning and application of the agreement with respect to those matters. If efforts in accordance with the procedure of Article VIII proved to be ineffective, resort might be had to Article IX, which provided that an unsettled dispute or grievance was to be submitted to arbitration "* * * upon written notice of the party filing the grievance * * * to be served upon the other party within five (5) days after the meeting referred to in the third step of the grievance procedure outlined above." The quoted language shows clearly that arbitration was to be but a fourth step in the grievance procedure, and as such the subject matter to which it is applicable is no broader than that to which the first three steps applied. The dispute as to whether the union was jusified in calling the strike is one certainly not capable of resolution at a conference between an...

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