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July 31, 1959

PITTSBURGH RAILWAYS COMPANY, a corporation, Plaintiff,

The opinion of the court was delivered by: MILLER

Section 301(a) of the Labor Management Relations Act, 29 U.S.C.A. § 185(a), confers jurisdiction on federal district courts of suits for violation of contracts between an employer and a labor organization representing employees in an industry affecting interstate commerce. The plaintiff employer brought this proceeding under Section 2201 of the Declaratory Judgments Act, 28 U.S.C.A. § 2201, to obtain a declaration of the rights of the parties under a collective bargaining agreement and for incidental relief. The plaintiff is an employer engaged in an industry affecting commerce. The court has jurisdiction. Textile Workers Union of America v. Lincoln Mills of Alabama, 353 U.S. 448, 77 S. Ct. 923, 1 L. Ed. 2d 972; New Bedford Defense Products Division v. Local No. 1113, D.C.D.Mass., 160 F.Supp. 103, affirmed 1 Cir., 258 F.2d 522. The defendant has filed a motion to dismiss on the ground that the complaint fails to state a claim upon which relief can be granted. Although the court has jurisdiction of this suit, it is not under compulsion to exercise that jurisdiction, and the motion is addressed to the court's discretion. Brillhart v. Excess Insurance Company of America, 316 U.S. 491, 494, 62 S. Ct. 1173, 86 L. Ed. 1620. Because the parties have presented matters outside of the pleadings which have been examined by the court, the motion is to be treated as one for summary judgment and disposed of as provided in Rule 56, F.R.Civ.P., 28 U.S.C.A., Rule 12(b), F.R.Civ.P.

There is substantial agreement on the following facts:

 In 1954, the parties entered into a collective bargaining agreement containing, in Section I, the following language:

 'Should any dispute arise between the parties concerning the interpretation or application of any section or sections in this agreement which cannot be adjusted, the matter shall be submitted to a board of arbitration for decision as provided for hereafter, and during such arbitration, the employes shall continue in the employ of the Company. The party demanding arbitration shall request the same in writing, stating the question or questions to be arbitrated and naming its arbitrator. Within six (6) days thereafter, excluding Sundays and holidays, the other party shall name its arbitrator. The two thus selected shall endeavor to reach an agreement and if they fail to do so within fifteen (15) days they shall select a third arbitrator, and the decision of the said board of arbitration shall be final and binding on both parties. If one party demands arbitration and the other fails or refuses to name its arbitrator within said six (6) days as herein provided, it shall forfeit its case and the demands of the party requesting the arbitration shall be deemed to have been granted. If the two arbitrators do not come to an agreement within fifteen (15) days and fail to agree upon a third arbitrator within six (6) days thereafter, the two parties shall then agree upon a method which will insure the selection of a third arbitrator. Each party shall bear the expense of the arbitrator of its own selection, and the expense of the third arbitrator and the joint expenses incidental to the arbitration shall be borne equally by the parties.'

 Section XXI of the agreement (entitled 'Illness Benefits') contained a provision for sick pay to hourly rated employees with a year or more of service. Sick leave under the provision was allowed for seven days a year after the first three days of illness and was cumulative for a maximum of sixty-five days. The section also provided:

 'If an employe becomes entitled to payments for sick leave, there shall be deducted therefrom payments made on account of the particular illness under (1) the Company's Group Accident and Sickness Plan, (2) the Company's so-called Welfare Plan, and (3) and Workmen's Compensation Act.' (Emphasis supplied.)

 The agreement contained provisions relating to the Group Accident and Sickness Plan under which premium costs were shared, by the Company and the employees, but no terms relating to the 'so-called Welfare Plan.' *fn1" Under the 1954 agreement, the Union demanded arbitration of a dispute relating to an employee named John Vaughn. The grievance stated:

 'Operator John Vaughn was injured in line of duty and did not receive his full regular compensation for the period during which he was injured. Mr. Vaughn claims full payment for the period of his injury, and the Union requests arbitration of this grievance in behalf of John Vaughn and all other employees similarly situated. This grievance is based on the entire contract, including but not limited to Section XXI, and past practices.'

 The Company refused to submit to arbitration on the ground that the Union was seeking payment to employees of monies on account of the defendant's 'so-called Welfare Plan' and that accordingly the dispute did not involve the interpretation or application of any section of the collective bargaining agreement. The Company asserted that the plan was one unilaterally established and administered by it. On the Company's refusal of arbitration, the Union applied successfully to the Court of Common Pleas of Allegheny County for a rule to show cause why it should not proceed to arbitration. The Court of Common Pleas in an opinion *fn2" by Judge Henry X. O'Brien held that the disputed matters 'are covered in sections of the collective bargaining agreement,' and stated that 'the contention of the defendant is plainly a legitimate argument to be presented to the arbitrators.' The rule was made absolute. The Company however elected not to name its arbitrator and, thus, under the contract the demands of the Union were deemed to have been granted.

 At a later date, claiming to be employees similarly situated to John Vaughn, employees Phillip Buszinski, E. R. Crawford, A. A. Bathory and D. W. Little brought suit in assumpsit against the Company in the Court of Common Pleas of Allegheny County, Pennsylvania, to recover the difference between their regular compensation and the amount they had received under the Workmen's Compensation Act during periods of unemployment resulting from injuries. Their suit was dismissed by the Court of Common Pleas in May 1958 *fn3" on the ground that the election of the Company not to appoint its arbitrator in the Vaughn dispute had not established any contractual duty by the Company to pay employees other than Vaughn and that the court's decision in the suit between the Union and the Company relating to the Vaughn grievance conferred no rights on any employee. The court said however that the Company was required to arbitrate the issue and that the Union (which was not a party to the suit) was not foreclosed from taking appropriate steps for procuring arbitration of the grievance of the plaintiffs. It dismissed the action without prejudice to the plaintiffs 'to proceed with their claims as outlined above.'

 On October 29, 1958, the Union designated its arbitrator and submitted to arbitration five disputes involving the similar claims for compensation of Buszinski, Crawford, Bathory, Little and Another employee, Stanley Bonczak. The disputed question was still whether those employees were entitled to the difference between their regular pay and the Workmen's Compensation payment received by them during time off from work because of injury.

 The Union claimed full regular compensation for Buszinski, Crawford, Bathory and Little 'as employes similarly situated to John Vaughn' and in the alternative, 'on the basis of the entire contract in effect at the time of their injuries, the contracts subsequent thereto, and the present contract, including in each case, but not limited to Section XXI, and past practices.' Compensation for Bonczak was claimed on the basis of 'the entire contract, including but not limited to, Section XXI, and past practices.'

 On November 6, 1958, the Company designated its arbitrator. At the same time it notified defendant that it considered the disputes not arbitrable and demanded that the question of arbitrability be submitted to arbitration as a preliminary issue. Its letter read as follows:

 'In response to your letter of October 29, 1958, we note that the claims of Buszinski, Crawford, Bathory and Little are predicated primarily on their alleged similarity to the grievance of John Vaughn, entitled Grievance No. 6, which our Company elected to forfeit. You know, or should know, that the Court of Common Pleas of Allegheny County, at No. 2076 October Term, 1957, in an Opinion by the Honorable Anne X. Alpern, held specifically that our election with respect to the Vaughn grievance conferred no rights upon Buszinski, Crawford, Bathory ...

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