Signal-Stat Corporation v. LOCAL 475, ETC.

• Decision Date: 02 July 1956
• Docket Number: No. 34,Docket 24039.,34
• Citation: 235 F.2d 298
• Parties: SIGNAL-STAT CORPORATION, Plaintiff-Respondent, v. LOCAL 475, UNITED ELECTRICAL, RADIO AND MACHINE WORKERS OF AMERICA (UE), Defendant-Appellant.
• Court: U.S. Court of Appeals — Second Circuit

235 F.2d 298 (1956)

SIGNAL-STAT CORPORATION, Plaintiff-Respondent, v. LOCAL 475, UNITED ELECTRICAL, RADIO AND MACHINE WORKERS OF AMERICA (UE), Defendant-Appellant.

No. 34, Docket 24039.

United States Court of Appeals Second Circuit.

Argued May 9, 1956.

Decided July 2, 1956.

Mildred Roth, New York City, for defendant-appellant.

Zelby & Burstein, New York City, Herbert Burstein, New York City, of counsel, for plaintiff-respondent.

Before CLARK, Chief Judge, and FRANK and HINCKS, Circuit Judges.

The plaintiff, Signal-Stat Corp., is a corporation engaged in the manufacture of automotive electrical equipment. A dispute arose between the plaintiff and the defendant, Local 475, concerning the discharge of two employees. The plaintiff's employees went on strike until it was eventually agreed that all employees, except the two discharged by the company, would return to work and the dispute over the discharged employees would be settled by arbitration. The plaintiff then instituted this action against the defendant union for damages under Section 301 of the Labor Management Relations Act of 1947, 29 U.S.C.A. § 185, alleging that the union had called, ordered and enforced a strike and sitdown of production employees. This was alleged to be a violation of the no-strike clause in the collective bargaining agreement between Signal-Stat and the Union. There was no diversity of citizenship.

Without answering the complaint, the defendant Union moved for a stay of the action, claiming that, under the collective bargaining agreement, it was entitled to arbitration of the dispute. The pertinent parts of the agreement are as follows:

"17. Strikes and Lockouts

"During the term of this agreement there shall be no strikes, stoppages or lockouts for any cause or reason whatsoever, but work shall proceed and continue without interruption pending settlement through the grievance procedure and/or arbitration as hereinafter provided.

"18. Grievance Procedure

"All disputes, grievances or differences that may arise between the parties of this agreement shall promptly be filed in writing with the Employer or the Union as the case may be, and shall promptly be taken up for adjustment between the aggrieved employee and the Shop Committee on the one hand, and the Employer on the other. In the event that they are unable to agree, the matter shall then be taken up between a representative of the Union, the Shop Committee and the Employer for adjustment. If no satisfactory settlement is arrived at, within ten (10) days from the date of the filing said grievance, then the difference, dispute or grievance shall at the request of either party, be immediately submitted for arbitration. Failure to submit such issue within said ten (10) days shall be construed as a final determination of said grievance. The arbitrator shall be appointed by the New York State Board of Mediation at the request of either party, and the parties hereto agree to be bound by the award rendered by said arbitrator."

The district judge entered an order denying the motion for a stay. The Union appeals, asserting that it is entitled to a stay under Section 3 of the United States Arbitration Act, 9 U.S.C. § 3,¹ or under Section 301(a) of the Taft-Hartley Act.²

FRANK, Circuit Judge.

1. An initial question is whether the district court has jurisdiction over the plaintiff's action for damages under Section 301(a) of the Taft-Hartley Act, 29 U.S.C.A. § 185(a). This is not the type of action, involving the "uniquely personal right of an employee", which, according to Association of Westinghouse Salaried Employees v. Westinghouse Electric Corp., 348 U.S. 437, 75 S. Ct. 489, 501, 99 L.Ed. 510, was not intended by Congress to be brought under Section 301. The Court in Westinghouse did not, therefore, reach or decide the constitutional-jurisdictional question raised by Section 301. Hence, we adhere to our decision in Shirley-Herman Co. v. International Hod Carriers, Bldg. & Common Laborers Union, 2 Cir., 182 F.2d 806, where we held that Section 301 created a federal substantive right and federal jurisdiction to enforce it. See also, Rock Drilling, Blasting, etc., v. Mason & Hanger Co., 2 Cir., 217 F.2d 687, 691. Other courts, since Westinghouse, have reached a similar result. See Lincoln Mills of Alabama v. Textile Workers Union, 5 Cir., 230 F.2d 81, 87-88; Local 205, United Electrical, Radio and Machine Workers v. General Electric Company, 1 Cir., 233 F.2d 85.

2. The order of the district court is appealable. Shanferoke Coal & Supply Corp. v. Westchester Service Corp., 293 U.S. 449, 55 S.Ct. 313, 79 L.Ed. 583. The fact that, here, the action "at law" for damages is to enforce a statutory rather than a common law right is immaterial. Wilko v. Swan, 2 Cir., 201 F.2d 439, 441, reversed on other grounds 346 U.S. 427, 74 S.Ct. 182, 98 L.Ed. 168; Markel Electric Products, Inc., v. United Electric, Radio & Machine Workers, 2 Cir., 202 F.2d 435, 437; Cf. Baltimore Contractors, Inc., v. Bodinger, 348 U.S. 176, 179-180, 75 S.Ct. 249, 99 L.Ed. 233.

3. We think the broad arbitration clause in the collective bargaining agreement here involved covers a dispute relating to an alleged breach of the no-strike clause. Under the agreement, "All disputes, grievances or differences" are arbitrable. We can hardly imagine more broadly inclusive language. This phraseology distinguishes the instant case from Markel Electric Products, Inc., v. United Electric, Radio & Machine Workers, supra. To the extent that the other cases cited by plaintiff require a contrary result, we think them erroneous.³ We think their interpretations of similar arbitration clauses are unduly restrictive and achieve, by indirection, the same result as the old, and now generally rejected, judicial aversion to enforcing arbitration agreements. Cf. Kulukundis Shipping Co. v. Amtorg Trading Corp., 2 Cir., 126 F.2d 978, 983-985. Other cases, with which we agree, support our decision that the instant arbitration agreement covers a dispute arising from an alleged breach of the no-strike clause. See, e. g., Lewittes & Sons v. United Furniture Workers of America, CIO, D.C.S.D.N.Y., 95 F.Supp. 851, 853-854; Pennsylvania Greyhound Lines v. Amalgamated Ass'n, etc., D.C., 98 F. Supp. 789, 791, reversed on other grounds, 3 Cir., 193 F.2d 327; Hudson Wholesale Grocery Co. v. Allied Trades Council, N.J.Ch., 3 N.J.Super. 327, 65 A.2d 557, 559.

The plaintiff itself apparently construed the grievance-arbitration provision to include this dispute, since it instituted a grievance pursuant to the provisions of Paragraph 18 of the agreement with respect to "the matter of the quitting of employment by the members of the union, with the knowledge, consent and direction of the union."

4. There remains the question whether the Union is entitled to a stay of the action pending arbitration under Section 3 of the United States Arbitration Act or under Section 301 of the Taft-Hartley Act. Since we decide that Section 3 of the Arbitration Act is applicable to this agreement and authorizes a stay of the proceedings, we do not reach, and need not decide, whether the arbitration agreement is enforceable under Section 301 of the Taft-Hartley Act, as some courts have held.⁴

The Supreme Court, in strong dictum, has recently stated that Section 3 of the Arbitration Act is limited by Sections 1 and 2; Bernhardt v. Polygraphic Co., 350 U.S. 198, 201-202, 76 S.Ct. 273. We think the collective bargaining agreement in this case is a "contract evidencing a transaction involving commerce" within the meaning of Section 2 of the Act.⁵ We also think that the last clause in Section 1 of the Act, which excludes certain contracts from the Act, is not applicable to this agreement. That clause provides that "nothing herein contained shall apply to contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce."

The Supreme Court has not yet interpreted the exclusionary clause in Section 1, and the decisions of the lower federal courts are in irreconcilable conflict. The decisions of the various circuits are discussed and reviewed in Lincoln Mills of Alabama v. Textile Workers Union, 5 Cir., 230 F.2d 81, 85-86 and in Local 205, United Electrical, Radio and Machine Workers v. General Electric Company, 1 Cir., 233 F.2d 85. We will not repeat their labor here. Suffice it to say that the Fourth, Fifth and perhaps the Tenth Circuits would hold that the instant agreement comes within the exclusionary clause in Section 1 and, hence, that the Arbitration Act is inapplicable. The First, Third and Sixth Circuits would hold that the agreement does not come within the exclusionary language of Section 1, and that therefore Section 3 of the Act, authorizing a stay of the action, is applicable. Those cases which so hold do so either on the ground that a collective bargaining agreement is not a "contract of employment," within the meaning of that language in Section 1,⁶ or — as the Third Circuit has held in Tenney Engineering, Inc., v. United Electric, Radio & Machine Workers, 207 F.2d 450, 452-453 — because, even assuming a collective bargaining agreement is a "contract of employment" — the exclusionary clause in Section 1 applies only to "workers engaged in * * * interstate commerce", i. e., only those actually in the transportation industries.

The legislative history of the exclusionary clause in Section 1 is, at best, vague and inconclusive. The language apparently was inserted at the request of the Seamen's Union, which felt that disputes involving the contracts of seamen came within the admiralty jurisdiction and should not be subject to arbitration. It is likely that the Union was concerned, at least in part, with its own collective bargaining agreements. Thus, to hold that such agreements are not "contracts of employment", and hence not within the exclusionary language in Section 1, would tend to defeat what little...