Standard Oil Development Co. Emp. Union v. Esso Research & Engineering Co.

• Decision Date: 14 November 1955
• Docket Number: No. A--709,A--709
• Citation: 38 N.J.Super. 106,118 A.2d 70
• Parties: STANDARD OIL DEVELOPMENT COMPANY EMPLOYEES UNION, a non-pecuniary corporation organized under the laws of the State of New Jersey, and Maurice A. O'Keefe, George T. Krevetske, Edward F. Kobly, Thomas J. Logue, Elwood Vick, William James, individually and jointly, Plaintiffs-Respondents, v. ESSO RESEARCH & ENGINEERING COMPANY, a corporation authorized to do business in the State of New Jersey, Defendant-Appellant. . Appellate Division
• Court: New Jersey Superior Court — Appellate Division

Page 106

38 N.J.Super. 106

118 A.2d 70

STANDARD OIL DEVELOPMENT COMPANY EMPLOYEES UNION, a

non-pecuniary corporation organized under the laws of the

State of New Jersey, and Maurice A. O'Keefe, George T.

Krevetske, Edward F. Kobly, Thomas J. Logue, Elwood Vick, William James, individually and jointly, Plaintiffs-Respondents, v. ESSO RESEARCH & ENGINEERING COMPANY, a corporation

authorized to do business in the State of New

Jersey, Defendant-Appellant.

No. A--709.

Superior Court of New Jersey.

Appellate Division.

Argued Oct. 17, 1955.

Decided Nov. 14, 1955.

Frederick E. Riethmuller, Jersey City, for respondents (Jacob Friedland, Jersey City, and John F. X. Landrigan, Bayonne, attorneys).

William L. Dill, Jr., Newark, for appellant (Stryker, Tams & Horner, Newark, attorneys).

Before Judges CLAPP, JAYNE and FRANCIS.

The opinion of the court was delivered by

FRANCIS, J.A.D.

The problem presented for determination on this appeal is whether the Law Division was correct in holding that an arbitral issue exists under the collective bargaining agreement entered into between the plaintiff Standard Oil Development Company Employees Union and defendant Esso Research & Engineering Company.

On July 1, 1946 the company (then known as Standard Oil Development Company) and the union entered into an agreement which recognized the union as the exclusive representative of certain of the employees and which undertook generally to regulate wages, hours and other conditions of employment.

The contract and its amendments to March 20, 1953 established certain job classifications. Among them were Senior Laboratory Assistant, and Senior Operator, Operator and Operator Helper within the Operator group. An affidavit of the company's Director of Labor Relations recites that the work of persons in these categories was connected with research and experiment in the development of products and processes. The operations 'required considerable technical knowledge, skill, ingenuity and versatility, and some of the persons in such classifications had demonstrated considerable ability along those lines.'

The affidavit further says that in December 1953 the company, being desirous of giving more recognition to such outstanding ability proposed to the union that the agreement be amended to create a Technician Group, composed of Technician II, Technician I and Senior Technician, into which would be placed Operator Helper, Operator, Senior Operator and those Senior Laboratory Assistants engaged in work similar to that performed by the Operator group. It further proposed that Senior Operators, Operators and Senior Laboratory Assistants who qualified, be considered 'on an individual basis for appointment, at a salary to be fixed on a merit basis, as Senior Technicians * * *.'

A concord was reached on the subject and a formal amendment of the 1946 agreement, to be retroactive to December 19, 1953, was executed on March 12, 1954.

A salary schedule was included for the new Technician classifications. Specific wage ranges for the Technician II and I groups were set out but the Senior Technician specification for salary was simply 'merit.'

Reference to certain other portions of the revised contract is necessary. Section 1 of Article III as amended, hereinafter called the 'Promotions Clause,' reads as follows:

'Section 1--Promotions.

'A. Promotions will be made on the basis of the ability of an employee to best meet all the requirements of the job classification. The determination of such ability shall be made by the Company. In its determination of ability, Consideration shall be given by the Company to experience as reflected by total credited service on the following basis:

'2) b) For promotion from one classification within the Technician Group a higher classification within such group, longest total credited service in the next lower classification in the division shall be determining, but if this is equal, longest total credited service with the Company shall be determining, but if this is equal, longest total credited service with Standard Oil Company (N.J.) and its affiliates and subsidiaries shall be determining. * * *.' (Emphasis added.)

Article IV of the original contract provides:

'Sec. 1--Job Classifications.

'A. The Company has established job classifications for all jobs covered by this agreement. Such classifications are shown on Exhibit II. (Hereinafter referred to as the 'Job Classification Schedule.')

'B. Promotions from lower to higher classifications will be made by the Company as vacancies or openings occur and in accordance with provisions of Article III herein above.' (The 'Promotions Clause.')

The Job Classification Schedule was amended by the addition of a new subsection 3D entitled 'Technician Classifications.' It is located at the very end of the long amendatory agreement. This subsection set out in separate paragraphs a definition of the duties of Technician II, Technician I and Senior Technician, and the requirements for entering each classification. With respect to Senior Technician, the following appears:

'1. Definition of Duties.

'May be called upon to perform any type of experimental work involved in the efficient operation of the unit or group with which the employee is associated, including the operation of any type pilot plant unit, engine test stand, or other research equipment, and assisting Professional or other Laboratory personnel in carrying out the Laboratory work required for the accomplishment of technical problems. May supervise the work of Technician I or Technician II employees if the equipment requires two or more men per shift. Takes full responsibility for the operation of the above described equipment on the basis of only general instructions and a minimum of technical supervision.

'2. Requirements for entering classification.

'Appointment to this classification is Reserved for outstanding Technician I personnel who have received for at least one year the top salary of the classification. The appointment is made Strictly on the basis of merit and at the discretion of the Company, and is available to only those who have demonstrated conclusively by their performance over a period of years on a variety of equipment their possession of special skills and abilities as well as the mental flexibility and versatility necessary to carry out the top grade of experimental work required by the Company of men in their field.' (Emphasis added.)

It appears without contradiction that during the negotiations for the creation of the Technician Group the company, at the request of the union, furnished the names of the employees it intended to designate as Senior Technicians. The plaintiffs were not among those listed. On March 12, 1954, the day on which the amendatory document was signed formal grievances were filed by the plaintiffs asserting that they were 'by-passed for promotion into a higher classification * * * in violation of Section 1, Article III * * *,' the Promotions Clause of the collective bargaining compact.

The matter was processed through the various steps of the grievance procedure by the company. It explained in some detail to each of these plaintiffs why he had not been nominated for the top technician category. This was done despite its basic position that such appointments were controlled by the requirements therefor established by mutual consent in subsection D of section 3 of the Job Classification Schedule and subject to those requirements rested in the discretion of the company.

Upon the rejection of the grievances a demand for arbitration was made under Article VIII, Section A of the agreement, which stipulates:

'Disputes as to the interpretation of the terms and provisions of this Agreement or any question of fact, arising out of an alleged violation of the terms and provisions of this Agreement, if not settled through the procedure established in this Agreement, may be submitted to a Board of Arbitration.'

The company declined to go to arbitration asserting that no arbiral question existed since appointment to the Senior Technician Group rested in its discretion alone.

Thereupon the complaint herein was filed under N.J.S. 2A:24--3, N.J.S.A. to obtain an order compelling arbitration. The question sought to be arbitrated was specified thus:

'Has the defendant violated Article VIII (the Arbitration Clause, supra), Article III, section 1, as amended on March 12, 1954 (the Promotions Clause), and that part of said amendment which follows (d)--Technician Classification on page 16 of said amendment of the Labor Agreement referred to in the complaint (the Job Classification Schedule) by the defendant's failure to promote to Senior Technician the individual plaintiffs named in the complaint?' (Insertions ours)

The general nature of the interrogatory makes it very difficult to determine just what the union wishes to subject to arbitrage. However, it is important to note that no charge of bad faith in the making of the selections for promotion is made against the company.

The trial court declared that under section 3D of the Job Classification Schedule the discretion of the company with respect to the promotion of personnel to Senior Technician was limited to the determination of whether and when there would be such promotions and how many there should be; but once having decided to make them, it was obliged to do so on the basis of seniority as prescribed by subsection 2(b) of the Promotions Clause, if the candidates otherwise possessed the qualifications required. From the statements of the court, we deduce his actual holding to have been that an arbitrable question exists as to whether seniority of employees in the Technician I category is an element which must be considered by the company in deciding upon promotion to Senior Technician. More specifically, since the Promotions Clause which regulates advancements generally, prescribes that they shall be made according to...