Old Dutch Farms, Inc. v. Milk Drivers & Dairy Emp. Union, 246

• Court: United States Courts of Appeals. United States Court of Appeals (2nd Circuit)
• Writing for the Court: WATERMAN, MOORE and FRIENDLY, Circuit
• Citation: 359 F.2d 598
• Parties: OLD DUTCH FARMS, INC., Appellant, v. MILK DRIVERS AND DAIRY EMPLOYEES LOCAL UNION NO. 584, INTERNATIONAL BROTHERHOOD OF TEAMSTERS, CHAUFFEURS, WAREHOUSEMEN AND HELPERS OF AMERICA, Appellee.
• Docket Number: Docket 30076.,No. 246,246
• Decision Date: 31 March 1966

359 F.2d 598 (1966)

OLD DUTCH FARMS, INC., Appellant,
v.
MILK DRIVERS AND DAIRY EMPLOYEES LOCAL UNION NO. 584, INTERNATIONAL BROTHERHOOD OF TEAMSTERS, CHAUFFEURS, WAREHOUSEMEN AND HELPERS OF AMERICA, Appellee.

No. 246, Docket 30076.

United States Court of Appeals Second Circuit.

Argued February 24, 1966.

Decided March 31, 1966.

359 F.2d 599

Herbert L. Maltinsky, Marcus, Maltinsky & Marcus, Brooklyn, N. Y., for appellant.

Samuel J. Cohen, Cohen & Weiss, New York City, Bruce H. Simon, Robert S. Savelson, New York City, of counsel, for appellee.

Before WATERMAN, MOORE and FRIENDLY, Circuit Judges.

MOORE, Circuit Judge.

The appellee, Milk Drivers and Dairy Employees Local Union No. 584 (the union), is the collective bargaining representative for employees working in the New York metropolitan area milk industry. The union and the appellant, Old Dutch Farms, Inc. (the employer), were parties to an industry-wide collective bargaining agreement. In December 1962, a dispute arose between the employer and the union concerning whether the employer, by opening a milk "depot" in Brooklyn for the retail sale of milk and milk products, had violated Section 66A of the collective bargaining agreement.¹ This dispute was submitted to arbitration in the spring of 1963 pursuant to arbitration procedures provided for in the collective agreement. Subsequently, in May 1963, the union proceeded to induce employees of a neutral employer (a supplier of Old Dutch Farms, Inc.) to engage in work stoppages, and to threaten such employer, in an effort to cause such employer to

359 F.2d 600

cease doing business with Old Dutch Farms, Inc. Thereafter, Old Dutch Farms, Inc. filed a petition with the National Labor Relations Board (the NLRB) alleging that the union was engaged in unlawful secondary activity. On October 9, 1963, the NLRB held that the union had violated Section 8(b) (4) (i) & (ii) (B) of the Labor Management Relations Act (the LMRA), 29 U.S.C.A. § 158(b) (4) (i) & (ii) (B), 146 NLRB 509 (1964), and its decision was enforced by this court in January 1965. NLRB v. Milk Drivers & Dairy Employees Local Union No. 584, 341 F.2d 29 (2d Cir. 1965)

In March 1965 the employer commenced the present action in the United States District Court for the Eastern District of New York, pursuant to Section 303² to collect damages for business injuries sustained as a result of the union's allegedly unlawful activity. The union made a motion to stay all proceedings in the action pending arbitration of the damage claim on the ground that the disputes came within the purview of the general arbitration clause contained in the collective agreement. The arbitration clause provided that "any and all disputes and controversies arising under or in connection with the terms and provisions of this agreement, or in connection with or relating to the application or interpretation of any of the terms or provisions hereof, or in respect to anything not herein, expressly provided but germane to the subject matter of this agreement * * * shall be submitted for arbitration to an arbitrator * * *" The trial court granted the motion finding that the employer's statutory action presented a controversy which was "within the inclusive description of the arbitrable disputes," 243 F.Supp. 246, 247, set forth in the arbitration clause and concluded that "the dispute * * * arises out of the contract relation not only because it centered on the `depot' clause in the contract, but also because Section 17 contained a nostrike clause which forbade the Union to `call * * * any sympathetic strike of its members * * *'" 243 F.Supp. 246, 248. We reverse on the ground that the employer is not precluded by the arbitration clause in the parties' collective agreement from asserting in the district court a claim for tort damages based on the alleged unlawful secondary activity of the union and forced to rely upon arbitration for relief.

It is well established that whether an employer is required to arbitrate, as well as what issues he must arbitrate, "is a matter to be determined by the Court on the basis of the contract entered into by the parties." Atkinson v. Sinclair Refining Co., 370 U.S. 238, 241, 82 S.Ct. 1318, 1320, 8 L.Ed.2d 462 (1962). Moreover, an employer "cannot be required to submit to arbitration any dispute which he has not agreed so to submit." United Steelworkers of America v. Warrior & Gulf Nav. Co., 363 U.S. 574, 582, 80 S.Ct. 1347, 1353, 4 L.Ed.2d 1409 (1960); see John Wiley & Sons v. Livingston, 376 U.S. 543, 547, 84 S.Ct. 909, 11 L.Ed.2d 898 (1964). Thus, the principal issue raised by this appeal is whether the employer's tort damage claim constitutes an arbitrable issue within the meaning of the broad arbitration clause contained

359 F.2d 601

in the parties' collective bargaining agreement.³

This action arises under Section 303(a) and (b). It is in no way based on an alleged breach of contract and neither invokes nor needs to invoke the contract. The employer asserts that it was "injured in its business or property" and seeks damages solely for the injuries caused by the union's allegedly unlawful activity. Both the union and the district court maintain, however, that the employer's tort damage claim is an arbitrable dispute on the ground that it is connected with and "germane to the subject matter of" the collective agreement. Their theory is that the dispute is intimately related to Section 66A of the collective agreement since the business injury which forms the basis for the employer's Section 303 damage claim was caused by union activity which was originally provoked by an alleged breach of that section. They argue that since the union's secondary activity constituted a response to an alleged breach of contract by the employer, the damage claim is inextricably connected with the interpretation of the contract provision which it allegedly violated. But, this action bears no meaningful connection with the terms, conditions or subject matter of the parties' collective bargaining agreement. The fact that the union activity which forms the basis for this Section 303 damage suit was provoked by an alleged breach of contract by the employer is no reason to conclude that this suit arises under or is connected with the interpretation of the collective agreement within the meaning of the arbitration clause. This is so, not only because this suit rests solely on Section 303 and cannot be considered as a contract claim⁴ but, more significantly, because whether or not the employer violated Section 66A of the collective agreement has...