The opinion of the court was delivered by: WATSON
The plaintiff, a manufacturing corporation, brought this action under Section 301 of the Labor Management Relations Act 1947, 29 U.S.C.A. § 185, commonly called the Taft-Hartley Act, against the defendant labor unions for damages for breach of contract. The breach alleged was a strike of the plaintiff's employees called by the defendants in violation of a collective bargaining agreement between the parties. The agreement contained an arbitration clause and the defendants moved for a stay of the suit pending arbitration, pursuant to Section 3 of Title 9, United States Code, entitled 'Arbitration'.
The plaintiff filed an answer in opposition to the defendants' motion for stay pending arbitration. Briefs were duly filed by all parties to the litigation, and the matter is now before the Court for disposition.
The first question presented is whether Section 3 of Title 9 is applicable to a collective bargaining agreement between parties in the situation of those in this action. The answer to this question in turn depends upon the interpretation of the final clause of Section 1 of Title 9 which reads '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.' 'Contracts of employment' to which this clause refers include collective bargaining agreements, and the clause is a limitation upon the operation of all sections of Title 9.
The answer to the question accordingly turns upon whether the plaintiff's employees are to be regarded as a 'class of workers engaged in foreign or interstate commerce' within the meaning of the exclusionary clause.
The problem, therefore, is to ascertain the meaning which Congress intended to give to the phrase 'workers engaged in foreign or interstate commerce'. The question here was squarely presented and decided by the Circuit Court of Appeals for the Third Circuit in Tenney Engineering, Inc., v. United Electrical Radio & Machine Workers of America, (U.E.), Local 437, 3 Cir., 1953, 207 F.2d 450, 452, where that Court, speaking through Judge Maris, said:
'We think that the intent of the latter language was, under the rule of ejusdem generis, to include only those other classes of workers who are likewise engaged directly in commerce, that is, only those other classes of workers who are actually engaged in the movement of interstate or foreign commerce or in work so closely related thereto as to be in practical effect part of it. The draftsmen had in mind the two groups of transportation workers as to which special arbitration legislation already existed and they rounded out the exclusionary clause by excluding all other similar classes of workers.'
In this case the plaintiff's employees are engaged in the production of goods for subsequent sale in interstate commerce. Thus while their activities will undoubtedly affect interstate commerce they are not acting directly in the channels of commerce itself. They are, therefore, not a 'class of workers engaged in foreign or interstate commerce' within the meaning of Section 1 of Title 9.
The collective bargaining agreement here involved, not being excluded by Section 1, is within the purview of Section 3 of Title 9. The defendants are, therefore, entitled to a stay of proceedings under Section 3 of Title 9, United States Code, if the defendants are not in default in proceeding with such arbitration and if the collective bargaining agreement between the parties provides for arbitration of the issues raised by the complaint.
The next question is whether the defendants are in default in proceeding with arbitration. The complaint did not allege that defendants were in default in proceeding with the arbitration. Defendants, in support of their application for a stay, filed an affidavit of Joseph Crugnale, President of the defendant, Local 122, United Electrical, Radio and Machine Workers of America (U.E.)., stating that 'plaintiff has not agreed to submit the issues to arbitration as is required by Article XI of said contract', and the motion for stay alleged that the defendants are ready and willing to submit said alleged breach of contract and the issues arising therefrom to arbitration. These statements were not controverted.
Delay in moving for an arbitration order will not alone amount to a default within the proviso. Almacenes Fernandez, S.A., v. Golodetz, 2 Cir., 1945, 148 F.2d 625, 161 A.L.R. 1420. Consequently, the Court concludes that the defendants were not in default in proceeding with such arbitration.
The final question presented is whether the collective bargaining agreement between the parties provides for arbitration of the issues raised by the complaint. The contract sued on relates to wages, hours and conditions of employment and provides the terms under which the parties shall proceed during the two years covered by the agreement. Article XI of the contract is entitled 'Grievance and Arbitration Procedure' and consists of eight sections. Section A thereof provides that the company shall recognize stewards in the various departments for the purpose of settling grievances. Section B provides that the company will recognize a shop committee to consist of not more than five member employees whose functions will be to adjust grievances. Section D provides that a duly authorized representative of the Union, upon request by the Union, shall be admitted to the office of the company during working hours for the purpose of assisting in the adjustment of grievances. Section E, consisting of subsections numbered from (1) to (4), provides a step by step procedure for the settlement of claims, differences, disputes, or grievances:
'E. Grievance Steps. Any claim, difference, dispute, or grievance shall be taken up as follows:
'(1) Between the aggrieved employee with or without his steward and his immediate foreman.
'(3) The Shop Committee and the Personnel Director. If no satisfactory settlement is reached between them within 48 hours, the ...