Tejidos de Coamo, Inc. v. International Ladies' Garmet Workers' Union
| Decision Date | 05 November 1993 |
| Docket Number | No. 93-1762,93-1762 |
| Citation | 22 F.3d 8 |
| Parties | 146 L.R.R.M. (BNA) 2141, 127 Lab.Cas. P 11,078 TEJIDOS DE COAMO, INC., etc., Plaintiff, Appellee, v. INTERNATIONAL LADIES' GARMENT WORKERS' UNION, et al., Defendants, Appellants. . Heard |
| Court | U.S. Court of Appeals — First Circuit |
Ira Jay Katz with whom Rosa Garcia Badillo, Nicolas Delgado, Reinaldo Perez-Ramirez, and Jose E. Carreras-Rovira were on brief, for appellants.
Vicente J. Antonetti, Howard Pravda, Goldman, Antonetti, Cordova & Axtmayer, R. Carl Cannon, Frank B. Shuster and Constangy, Brooks & Smith were on brief, for appellee.
Before TORRUELLA, Circuit Judge, COFFIN, Senior Circuit Judge, and BOUDIN, Circuit Judge.
On January 12, 1993, Tejidos de Coamo, Inc. ("the Company") filed this suit in district court against the International Ladies' Garment Workers' Union and one of its locals (collectively, "the Unions"). The complaint, premised on section 301 of the Taft-Hartley Act, 29 U.S.C. Sec. 185, sought a declaration that no contract existed between the Company and the Unions; and the Company also requested a stay of pending arbitration proceedings. The district court granted a stay pendente lite, and the Unions appealed. We vacate the stay and remand for further proceedings.
Well before the current law suit, the Company and the Unions were parties to a collective bargaining agreement covering the Company's knit, cut, and sew employees at Barranquitas, Puerto Rico. That contract expired on February 29, 1992. Thereafter, on April 17, 1992, the parties entered into a "summary of agreement" looking toward a new contract. It is enough for present purposes to say that the Company believes that no effective contract was adopted at that time or thereafter; the Unions, by contrast, take the view that (based on past practice and the summary of agreement) a new contract did go into effect on or after April 17, 1992, retroactive to February 1, 1992, and is currently in force.
On November 5, 1992, the Unions requested arbitration, before arbitrator David Helfeld, of a dispute concerning access for union representatives to the Company's Barranquitas mill. The Company agreed; its explanation for agreeing is that the contract that expired on February 29, 1992, had provided for arbitration of disputes arising under that agreement and that the access dispute dated back to the period before the contract expired. The arbitrator scheduled a hearing for December 7, 1992.
On or about November 30, 1992, the Unions learned that some of the Company's employees desired to decertify the Unions as the representative of the Barranquitas workers and were preparing to petition the National Labor Relations Board for a new election. In early December 1992 there was a strike and certain employees were disciplined by the Company for what it said was strike and picket-line misconduct. The Unions then sought arbitration before arbitrator Helfeld of these disciplinary disputes. The Company objected that there was no contract and thus no basis for arbitration of new disputes arising after February 29, 1992.
The arbitrator held a hearing on December 30, 1992, and advised the parties that he would determine whether he had authority to proceed. The Company then filed the present lawsuit on January 12, 1993; the complaint sought, as already noted, a judicial declaration that no contract existed after February 29, 1992, a determination that would strip the arbitrator of power at least as to disputes arising after that date. The Company also sought a judicial stay of the arbitration while the contract issue was being determined by the court.
On January 20, 1993, a magistrate judge denied a stay of the arbitration proceedings. On January 27, 1993, the arbitrator issued a decision finding that a contract currently existed between the Company and the Unions. He proposed to schedule additional hearings on the merits of the disputes. The Company appealed the magistrate judge's decision and also asked the district court to stay further arbitration proceedings pending the court's decision as to whether the arbitrator had authority to proceed.
On June 21, 1993, the district court issued a stay pendente lite of arbitration as to grievances alleged to have arisen after February 29, 1992. The Unions then filed the present appeal to this court. So far as we have been advised, the district court has not yet determined the merits of the dispute and we are concerned only with the Unions' claim that interim relief--reflected in the stay of arbitration--was improperly granted.
On this appeal, the first question presented is whether we have jurisdiction to review the stay of arbitration granted by the district court as either a final order or an appealable interlocutory injunction. The Company has raised this issue by motion to dismiss the appeal. Clearly, the district court's stay is not a final disposition of the case. But we agree with the Unions that it is an appealable interlocutory injunction.
The governing statute, 28 U.S.C. Sec. 1292(a)(1), provides for immediate appeals of interlocutory orders of district courts "granting ... [or] refusing ... injunctions." An order staying an arbitration proceedings is in substance, and often in form, a directive to the parties to cease the arbitration. It is thus injunctive in character, A. & E. Plastik Pak Co. v. Monsanto Co., 396 F.2d 710, 713 (9th Cir.1968), and one might think that there could be little doubt that such an order was immediately appealable.
The doubts, such as they are, stem from two facts. First, several circuits, including this one, have held that an order refusing to stay an arbitration proceeding is not immediately appealable under 28 U.S.C. Sec. 1292(a)(1). 1 Second, in a series of decisions beginning with one by Judge Friendly in the Lummus case, 2 the Second Circuit has gone further and held that an order staying an arbitration proceedings also is not immediately appealable under 28 U.S.C. Sec. 1292. The Company argues that the Second Circuit's approach is supported by considerations of symmetry and policy.
The Second Circuit appears to stand alone. At least six other circuits treat an order staying arbitration as an injunction that is immediately appealable. 3 Our own decision in Societe Generale v. Raytheon European Management and Systems Co., 643 F.2d 863 (1st Cir.1981), tenuously distinguished by the Company, leans in the direction of the majority rule. A 1988 amendment to the Federal Arbitration Act, now 9 U.S.C. Sec. 16(a)(2)--although perhaps formally inapplicable to this case--expresses a congressional policy in favor of immediate appeal of "an interlocutory order granting ... an injunction against an arbitration that is subject to this title." 4
Judge Friendly's views are never lightly to be disregarded. However, his main concern in Lummus was with "the baneful effect" of permitting appeals from "order[s] refusing a stay of arbitration." 297 F.2d at 86. As he explained, immediate appeals from such orders would compromise the speedy, informal disposition at which arbitration agreements aim. Id. Judge Friendly then concluded that, as a matter of symmetry, "if an order refusing a stay" is deemed not to be an injunction, then "an order granting such a stay" also cannot be so classified. Id.
Courts since Lummus have been willing to entertain just such a distinction between orders granting stays of arbitration and orders denying them. Perhaps the best way to explain this outcome is to say that both orders constitute injunctions but that the policy favoring arbitration precludes an immediate appeal where the district court has refused a stay. New England Power Co., supra, 456 F.2d at 186. After all, treating procedure as a special concern of the courts, judges have not hesitated to embroider the Judicial Code with other judge-made rules on appealability. E.g., Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949).
Accordingly we believe that an order declining to stay an arbitration is an injunction but for policy reasons is not immediately reviewable by appeal, although of course fundamental objections to the arbitration are preserved for later judicial review if an award is made. By contrast, an order staying arbitration is an injunction that is immediately appealable under 28 U.S.C. Sec. 1292(a)(1), even where section 16 of the Federal Arbitration Act does not apply to the particular order. We thus have jurisdiction to review the district court's stay order in this case, and turn now to the question whether the district court had authority to grant such a stay.
The Unions claim that the stay granted by the district court was an injunction issued in violation of the stringent requirements of section 7 of the Norris-LaGuardia Act, 29 U.S.C. Sec. 107. In the alternative, the Union says that the stay was unjustified even under the less stringent equitable standards that govern ordinary injunctions. For reasons already indicated we agree that the stay comprised an injunction. The next, and more difficult, question is whether section 7 supplies the yardstick.
Section 7 is one of a set of interlocking provisions of the Norris-LaGuardia Act designed to curb the use of federal court injunctions in cases "involving or growing out of a labor dispute." 5 Under section 7, no injunction may be issued in such a case except after an evidentiary hearing, specified findings by the court, and certain other steps including a bond. The required findings include findings that absent an injunction "substantial and irreparable injury to complainant's property will follow" and that public officers "are unable or unwilling to furnish adequate protection." Id.
The threshold question, where section 7 is invoked, is whether the case derives from a "labor dispute," a critical phrase that provides the outer boundary for much of the...
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