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BOOT & SHOE WORKERS UNION, LOCAL 149 v. FAITH SHOE

January 15, 1962

LOCAL 149, BOOT AND SHOE WORKERS UNION, AFL-CIO, Plaintiff,
v.
FAITH SHOE COMPANY, 25-43 Beekman Street, Wilkes-Barre, Penna., Defendant



The opinion of the court was delivered by: SHERIDAN

Local 149, Boot and Shoe Workers Union, AFL-CIO, plaintiff, filed a complaint to enforce an arbitration award of $ 116,600.00, plus interest and costs, against Faith Shoe Company, Wilkes-Barre, Pennsylvania, defendant. Jurisdiction is based on § 301 of the Labor Management Relations Act of 1947, as amended, Title 29 U.S.C.A. § 185. Defendant has moved to dismiss the complaint.

The complaint alleges that a collective bargaining agreement between plaintiff and defendant provided for final and binding arbitration of all claims, controversies, differences, disputes or grievances of any nature or character; for arbitration by an arbitrator appointed by the American Arbitration Association; and for arbitration in accordance with the rules of that association, which provide that arbitration may proceed in the absence of any party, who, after due notice, fails to be present or fails to obtain an adjournment.

 The complaint also sets forth the following. A dispute arose between plaintiff and defendant concerning the removal of work from defendant's Wilkes-Barre plant to its plant in Oil City, Pennsylvania. Plaintiff made demand upon defendant to arbitrate the dispute. An arbitration hearing was set tentatively for June 5 and 6, 1961, at 10:30 o'clock A.M. At the request of defendant's counsel the hearing was continued to July 11, 1961, at 10:30 o'clock A.M. On May 17, 1961, formal notice of the place, date and hour of the hearing was served on the defendant as well as on defendant's counsel.

 At the appointed day and hour the arbitrator and the Union representatives were present for the hearing, but representatives for the defendant did not appear. A representative of the American Arbitration Association advised defendant's counsel by telephone that the plaintiff and the arbitrator were waiting to start the hearing. Defendant's counsel replied that the company had decided not to appear or participate in the hearing, and that the company would not have an observer at the hearing. Defendant's counsel was advised that the hearing would proceed without representation by the defendant. The arbitrator proceeded to hold the hearing.

 On the day following the hearing a representative of the American Arbitration Association advised both defendant and defendant's counsel that the hearing had been conducted, and that the arbitrator would continue the closing of the hearing until July 25, 1961, so that the defendant could submit statements on its position. The defendant submitted no statements. The hearing was closed, and the plaintiff was awarded compensatory damages of $ 116,600.00.

 Exhibits to the complaint include copies of the following: the collective bargaining agreement, the demand for arbitration, the rules of the American Arbitration Association, the opinion of the arbitrator, the award of the arbitrator, and correspondence between defendant's counsel and the American Arbitration Association.

 Defendant assigns eight reasons to dismiss the complaint. The substance of these can be condensed to the following: (a) the complaint fails to state a claim on which relief can be granted; (b) the court lacks jurisdiction over the subject matter; (c) the conditions precedent to arbitration were not complied with; (d) the grievance was not arbitrable; (e) the arbitrator was without authority to arbitrate or render an award.

  In support of its contention that the complaint fails to state a claim on which relief can be granted, the defendant cites Foodhandler's Local 425, Etc. v. Pluss Poultry, Inc., 8 Cir., 1958, 260 F.2d 835 and Industrial Trades Union of America, Etc. v. Dunn Worsted Mills, D.R.I.1955, 131 F.Supp. 945, which held that ex parte arbitration awards were void and unenforceable. The defendant's contention appears to be that an ex parte arbitration award is void, and that an action to enforce such an award fails to state a claim on which relief can be granted. We disagree for the following reasons.

 First, in the cases relied on by the defendant the collective bargaining agreements included arbitration provisions different than the arbitration provisions in the instant case. In those cases the arbitration clauses provided no means by which an arbitration hearing could proceed in the absence of one of the parties to the agreement. In this case the collective bargaining agreement, which incorporated the rules of the American Arbitration Association, provides for selection of an arbitrator and for arbitration without the participation of one of the parties.

 Second, an ex parte arbitration award, under the circumstances alleged in the complaint, is not void. A party may expressly authorize an arbitrator to receive evidence even though that party is not present at the arbitration hearing. Standard Magnesium Corporation v. Fuchs, 10 Cir. 1957, 251 F.2d 455; Kentucky River Mills v. Jackson, 6 Cir. 1953, 206 F.2d 111, 47 A.L.R.2d 1331; A/S Ganger Rolf v. Zeeland Transportation, Ltd., S.D.N.Y. 1961, 191 F.Supp. 359. The rules of the American Arbitration Association provide that the arbitrator may receive evidence from one party to the dispute, in the absence of the other party, if the absent party after due notice fails to be present or fails to obtain an adjournment. Rule 27 provides:

 '27. Arbitration in the Absence of a Party -- Unless the law provides to the contrary, the arbitration may proceed in the absence of any party, who, after due notice, fails to be present or fails to obtain an adjournment. An award shall not be made solely on the default of a party. The Arbitrator shall require the other party to submit such evidence as he may require for the making of an award.'

 The complaint alleges that due notice of the hearing had been given the defendant, and that formal notice had been duly forwarded to the defendant and its counsel. Moreover, on the day of the hearing defendant's counsel was notified again of the hearing, and on advice that the defendant would not appear or be represented at the hearing, defendant's counsel was advised that the hearing would proceed without representation by the defendant. There is no indication that an adjournment was requested or that objections were made. The defendant, having been notified of the time and place of the hearing, waived its right to be present and to be heard. Seldner Corp. v. W. R. Grace & Co., D.Md.1938, 22 F.Supp. 388.

 Industrial Trades Union of America, Etc. v. Dunn Worsted Mills, supra, cited by the defendant, also held that the law of the state in which the collective bargaining agreement was made governs the substantive rights of the parties. However, in Textile Workers Union of America v. Lincoln Mills of Alabama, 1957, 353 U.S. 448, 77 S. Ct. 912, 1 L. Ed. 2d 972, the Supreme Court held that in suits under Title 29 U.S.C.A. § 185, the substantive law to be applied is federal law which the courts must fashion from the policy of our national labor laws. Pennsylvania law, however, is not contrary to the principles above set forth. See Curran v. City of Philadelphia, 1919, 264 Pa. 111, at page 119, 107 A. 636; Powell v. Sonntag, 1946, 159 Pa.Super. 354, at page 361, 48 A.2d 62.


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