Whitehouse v. Hoskins Mfg. Co.

• Decision Date: 31 March 1982
• Docket Number: Docket No. 55443
• Citation: 317 N.W.2d 320,113 Mich.App. 138
• Parties: Steven WHITEHOUSE, Plaintiff-Appellant, v. HOSKINS MANUFACTURING COMPANY, Defendant-Appellant.
• Court: Court of Appeal of Michigan — District of US

Page 320

317 N.W.2d 320

113 Mich.App. 138

Steven WHITEHOUSE, Plaintiff-Appellant, v. HOSKINS MANUFACTURING COMPANY, Defendant-Appellant.

Docket No. 55443.

Court of Appeals of Michigan.

Submitted Dec. 2, 1981.

Decided Feb. 3, 1982.

Rehearing Denied March 25, 1982.

Released for Publication March 31, 1982.

King, Root & Sieb, P.C., West Branch, for plaintiff-appellant.

Breskin & Gunsberg, P.C., Detroit, for defendant-appellant.

Before V. J. BRENNAN, P.J., and ALLEN and MEGARGLE, ^* JJ.

PER CURIAM.

Plaintiff appeals as of right from the trial court's order granting summary judgment to defendant, plaintiff's former employer, and dismissing plaintiff's complaint for breach of contract.

The complaint alleges that plaintiff gave up a secured position in the production unit of defendant's Mio plant in return for a managerial position on the condition that plaintiff could return to the production unit upon request. The complaint further alleges that plaintiff was discharged because he requested to return to the production unit. Defendant filed an answer denying most of plaintiff's allegations but admitting that the reason for plaintiff's discharge was his desire to return to the production unit. The trial court found that plaintiff's employment in the managerial position was not terminable at will, citing Ebling v. Masco Corp., 79 Mich.App. 531, 261 N.W.2d 74 (1977); Sventko v. The Kroger Co., 69 Mich.App. 644, 245 N.W.2d 151 (1976), and Rowe v. Noren Pattern & Foundry Co., 91 Mich.App. 254, 283 N.W.2d 713 (1979). Nonetheless, the trial court dismissed the action because plaintiff had failed to exhaust arbitration remedies set forth in the collective bargaining agreement governing the production unit to which plaintiff previously belonged. The question before this Court is whether the trial court erred reversibly in granting summary judgment on this basis. We reverse and remand for trial.

In support of its contention that the present dispute should have gone to arbitration, defendant cites this Court's test of arbitrability, as follows:

"The arbitrability of an issue requires a three-stage inquiry: (1) whether there exists an arbitration agreement in a contract between the parties, (2) whether the dispute is arguably covered by the contract and arbitration clause, and (3) whether the dispute is expressly exempt by the terms of the contract." Clinton Twp. v. Contrera, 92 Mich.App. 297, 304, 284 N.W.2d 787 (1979).

Defendant notes that the collective bargaining agreement between defendant and the union representing the production unit employees contained certain arbitration provisions. Defendant also notes that article 9, section G of the collective bargaining agreement contained a provision governing the seniority of employees who transfer out of the production unit to managerial position. According to defendant, since the parties' dispute concerns plaintiff's rights to return to the production unit from a managerial position, the dispute is at least "arguably covered by the contract and arbitration clause", within the meaning of Contrera, supra. Defendant contends that the contract's arbitration provisions were binding upon plaintiff despite the presence of plaintiff's individual, oral contract of employment because "the subject matter of (plaintiff's individual) contract has been covered by and superceded [sic] by the collective bargaining agreement".

We disagree. The trial court found the dispute surrounding plaintiff's discharge to be arbitrable without properly applying the test for arbitrability set forth in Contrera, supra. Application of that test reveals that the dispute was not arbitrable. The first stage of the inquiry under that test is "whether there exists an arbitration agreement in a contract between the parties". 92 Mich.App. 297, 304, 284 N.W.2d 787. Plaintiff has not alleged that there is an arbitration agreement in any contract between himself and defendant. He has alleged that when he left his job in the production unit to take a managerial position he was no longer a member of the production employees' bargaining unit and that the terms of his employment were controlled solely by his oral contract with defendant, not by the production employees' collective bargaining agreement. We do not believe plaintiff can be bound by arbitration provisions in a contract to which he is not a party and which are contained only in a contract covering a unit which plaintiff had left at the time of his discharge.

In referring to the question whether a dispute is "arguably covered" by an arbitration agreement, defendant erroneously refers to the second part of the arbitrability test of Clinton Twp. v. Contrera, supra. Before addressing the question whether any dispute is "arguably covered" by a contract's arbitration clause, defendant first must show that there is an arbitration agreement in a contract between the parties. Contrera, supra. As noted above, the parties agree that there were no arbitration provisions in plaintiff's individual contract of employment.

We note also that the arbitration provisions provide that they were applicable only to disputes which may arise between the employer and employee "concerning the application, interpretation or alleged violation of any of the provisions of this agreement". Therefore, by their terms, the arbitration provisions were not applicable to disputes between the company and an employee concerning the application or alleged violation of any other agreements (such as plaintiff's individual contract of employment).

We also find distinguishable all of the cases cited by defendant for the proposition that collective bargaining agreements supersede individual contracts of employment. J.I. Case Co. v. National Labor Relations Board, 321 U.S. 332, 64 S.Ct. 576, 88 L.Ed. 762 (1944); Local 174, Teamsters, Chauffeurs, Warehousemen & Helpers of America v. Lucas Flour Co., 369 U.S. 95, 82 S.Ct. 571, 7 L.Ed.2d 593 (1962), and Klepacky v....