Posner v. Grunwald-Marx, Inc.

• Decision Date: 29 December 1960
• Docket Number: INC,GRUNWALD--MAR
• Citation: 10 Cal.Rptr. 54
• Court: California Court of Appeals Court of Appeals
• Parties: Jerome POSNER, Manager of Los Angeles Joint Board, Amalgamated Clothing Workers of America, Petitioner and Appellant, v., a California corporation, Defendant and Respondent. Civ. 24968.

Page 54

10 Cal.Rptr. 54

Jerome POSNER, Manager of Los Angeles Joint Board, Amalgamated Clothing Workers of America, Petitioner and Appellant, v. GRUNWALD--MARX, INC., a California corporation, Defendant and Respondent.

Civ. 24968.

District Court of Appeal, Second District, Division 1, California.

Dec. 29, 1960.

Hearing Granted Feb. 21, 1961.

Opinion vacated 14 Cal.Rptr. 297.

Wirin, Rissman, Okrand & Posner, Paul M. Posner, Los Angeles, for appellant.

Hill, Farrer & Burrill, Ray L. Johnson, Jr., Los Angeles, for respondent.

LILLIE, Justice.

Petitioner unsuccessfully sought an order below under a collective bargaining agreement directing arbitration (Code of Civil Procedure, § 1282). ¹ From a judgment dismissing the proceeding, petitioner has appealed; the record consists of a clerk's transcript and designated exhibits.

On October 1, 1953, petitioner-union and defendant-company entered into a written collective bargaining agreement covering wages, hours and working conditions; the company recognized the union as the exclusive bargaining agent for its employees. The agreement contained the customary no-strike no-lockout and arbitration provisions. The issue sought to be arbitrated relates to portions of paragraph 9 of the agreement concerning vacations and vacation pay: '(a) Vacation Period--It is mutually agreed that there shall be a vacation period of one week in each calendar year. The period for computation shall be the period ending with the last pay period in June in each year. The vacation period shall be the first week in July unless the Company and the Union shall mutually agree upon some other period. When the vacation period occurs during a week in which a paid holiday falls, employees now entitled to receive pay for such a holiday shall be paid for such holiday in addition to their vacation pay. (b) Eligibility and Pay--1. All employees who (1) have been on the payroll of the company for at least nine (9) months prior to the commencement of the vacation period, and (2) are on such payroll at the commencement of the vacation period are eligible for a paid vacation as hereinafter provided.' Another paragraph of the agreement, 11(a), provided for six paid holidays, including Decoration Day (May 30th), eligibility therefor being defined as follows: '* * * In order to be eligible for a paid holiday, employees must work the last working day before the holiday and the first working day following the holiday. If the employee did not work either of these days due to illness or lay-off, he shall be entitled to holiday pay. In case of illness the company may require proof of illness.'

On October 23, 1956, the agreement was renewed and extended by the parties through September 30, 1959; the only change from the earlier agreement provided for a second week's vacation pay for an employee who had worked over three years--formerly an employee had to work in excess of four years to secure such additional pay.

On or about May 29, 1957, defendant moved the company plants from Los Angeles County to Phoenix, Arizona; its employees were 'terminated.' The petition alleged (and the court found) that at the time of the move and termination there were on the company payroll approximately 175 employees who had been on said payroll at the commencement of the vacation except for the removal of the company's plants, and that by reason of said removal the company had failed and refused to pay the employees their vacation pay.

It was further alleged that a dispute had arisen between the parties on or about May 29, 1957, concerning employees who had worked during the week of May 29th, but who were unable to work that day (May 29th) and the day following Decoration Day because of the removal of the company plants; the company, it was alleged, refused and failed to pay holiday pay for Decoration Day, and arbitration of that additional issue was likewise sought.

The trial court denied the petition. Though it found as true all the material allegations of the petition, and various affirmative defenses (save the first) as untrue, the effect of its decision was to find as true the allegations of the first affirmative defense that the petition 'fails to state facts sufficient to constitute a cause of action in that it fails to allege that the company acted illegally, arbitrarily or in bad faith in discharging its employees before the employees were eligible for vacation pay.' ² In its conclusions of law, the trial court concluded that while there was an arbitration provision in the bargaining agreement and while the company had refused to arbitrate in accordance therewith, the company was not in default since 'The wording of the collective bargaining agreement is without ambiguity as to vacation pay and holiday pay'; implicit in such conclusion is the determination that there was no arbitrable issue. The judgment declared that the defendant was 'not in default in proceeding thereunder,' and ordered the proceeding dismissed.

'The question of the existence of an agreement to arbitrate and of the scope of the arbitration permissible under that agreement are issues which, in the first instance, the code refers to judicial action.' Wetsel v. Garibaldi, 159 Cal.App.2d 4, 7, 323 P.2d 524, 527. "When one of the parties (as here) is resisting such an order (to arbitrate), the court must make two principal determinations * * *. First was a valid agreement to arbitrate ever made by the parties and is it still operative? Secondly, does the dispute that now exists fall within the terms of that agreement, reasonably interpreted?' (Citation).' Local 659, I.A.T.S.E. v. Color Corp. of Amer.,47 Cal.2d 189, 195, 302 P.2d 294, 297. Citing United Steel Workers of America v. American Manufacturing Co., 363 U.S. 564, 80 S.Ct. 1343, 4 L.Ed.2d 1403, appellant suggests that we reject, as the cited case assertedly does, the 'Cutler-Hammer Doctrine' (Internat. Assoc. of Machinists etc., v. Cutler-Hammer, Inc., 271 App.Div. 917, 67 N.Y.S.2d 317); however, it is held in this state that "the mere assertion by a party of a meaning of a provision which is clearly contrary to the plain meaning of the words cannot make an arbitrable issue' (Internat. Assoc. of Machinists etc., v. Cutler-Hammer, Inc., supra, 67 N.Y.S.2d 318).' Pari-Mutuel Employee's Guild, etc. v. L. A. Turf Club, 169 Cal.App.2d 571, 579, 337 P.2d 575, 580. To the same effect is Griggs v. Transocean Air Lines, 176 Cal.App.2d 843, 849, 1 Cal.Rptr. 803. Pursuant to the plain mandate of Section 1282, Code of Civil Procedure, the trial properly made the required 'threshold determination of arbitrability' (McCarroll v. Los Angeles County Dist. Council of Carpenters, 49 Cal.2d 45, 65, 315 P.2d 322, 333); we are of the opinion that it correctly concluded that there was no arbitrable issue as to vacation pay.

Appellant challenges the determination below that the 'wording of the collective bargaining agreement is without ambiguity as to vacation pay and holiday pay.' Vacation clauses usually specify certain conditions which an employee must meet in order to qualify for a paid vacation. (Annotation 30 A.L.R.2d pp. 353 et seq.) They include (1) length of service, (2) employment at a specific date or period, and (3) the time of taking the vacation. In some cases only (1), supra, is present (Div. Labor L. Enf., etc. v. Ryan Aero. Co., 106 Cal.App.2d Supp. 833, 236 P.2d 236, 30 A.L.R.2d 347); in others, both (1) and (2), supra, exist (Division of Labor L. Enf. v. Standard Coil Products Co., 136 Cal.App.2d Supp. 919, 288 P.2d 637); while in Wamsutta Mills, Inc., 34 Lab.Arb. 158, cited by appellant, condition (3) above is found. In this state the courts have adopted the condition precedent (as opposed to the vested right) test where required to do so by the plain language of the contract concerning vacation pay. Division of Labor L. Enf. v. Anaconda Copper Min. Co., 138 Cal.App.2d 92, 97, 291 P.2d 169; Division of Labor L. Enf. v. Standard Coil etc. Co., supra, 136 Cal.App.2d Supp. 923, 288 P.2d 637, 640. In Standard Coil, supra, the portion of the collective bargaining agreement relating to 'Vacations and Holidays' provided that the employee must be in the active employ of the company at the start of the vacation period which was later defined to be between June 1st and September 15th. Said the Court: 'There is no doubt or ambiguity about the meaning of these provisions. While it is true that 'Courts are disinclined to construe the stipulations of a contract as conditions precedent, unless compelled by the language of the contract plainly expressed' Div. of Labor L. Enf. v. Ryan Aero. Co., 1951, 106 Cal.App.2d Supp. 833, 835, 236 P.2d 236, 30 A.L.R.2d 347, yet in this case we are so compelled. To be entitled to a vacation in any year an employee must be 'in the active employ of the company' on June 1 of that year. No such conditions existed in the contract construed in Div. of Labor L. Enf. v. Ryan Aero. Co., supra, on which plaintiff relies in support of its construction of the contract, and the rule of that case does not apply here (emphasis added).' Appellant has attempted to distinguish Standard Coil, arguing that the bargaining agreement was assertedly silent on the length of employment, and thus there was no forfeiture of accrued and earned vacation pay; however, the basis of the decision is found in the statement that 'an individual who accepts employment or continues his employment, after it (the agreement) becomes effective, does so on the and conditions thereby fixed (emphasis added).' 136 Cal.App.2d Supp. at page 922, 288 P.2d at page 639. Nor do we think that certain language in City of Long Beach v. Allen, 143 Cal.App.2d 41, 44, 300 P.2d 360 (relied on by appellant) compels a contrary view, since that case involved substantial performance under a contract of employment with certain pension rights--pension provisions are liberally construed to effectuate their beneficent purposes. In ...