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Yale and Towne Manufacturing Co. v. International Association of Machinists

February 14, 1962


Author: Staley

Before GOODRICH, STALEY and GANEY, Circuit Judges.

STALEY, C. J.: The narrow question on this appeal is whether an employer can bring an action for damages in a district court against a union for the alleged breach of a no-strike clause, or must the claim first be submitted to arbitration where the collective bargaining agreement contains an arbitration provision.

The Yale & Towne Manufacturing Company brought an action under § 301(a) of the Labor Management Relations Act of 1947, 29 U.S.C.A. § 185(a), against Local Lodge 1717, International Association of Machinists ("union"), and its affiliate organizations, seeking damages for the alleged breach of a no-strike clause. The union filed a motion to stay the action pending arbitration of the company's claim for damages. From a denial of that motion, the union appealed.*fn1

The union contends that under the collective bargaining agreement the parties intended to arbitrate the breach of any provision of the agreement, including the no-strike clause, and points to the arbitration provision whereby

"It is understood and agreed that either party may invoke the grievance procedure in the consideration of any difference between the Company and an employee or group of employees involving the interpretation or application of the provisions of this Agreement. Any such difference shall constitute a grievance and may be taken up in the manner hereinafter set forth. Questions involving general negotiations shall not be subject to grievance procedure."*fn2

In International Telephone and Telegraph Corporation v. Local 400, Professional, Technical and Salaried Div., International Union of Electrical Workers, 286 F.2d 329, 330-331 (C.A. 3, 1960), we said that

"* * * the judicial function is narrowly circumscribed in cases such as this where the parties have agreed to submit to arbitration disputes arising under their collective bargaining agreement. That function is confined to ascertaining whether the party seeking arbitration is making a claim which on its face is one governed by the agreement. A court cannot pass on the merits of the claim. That is the arbitrator's function. Not only is the law clear, but its application to the controlling facts here is facilitated by the guidance contained in United Steelworkers of America v. Warrior & Gulf Navigation Co., (1960), 363 U.S. 574, 584-585, where Justice Douglas said: 'In the absence of any express provisions excluding a particular grievance from arbitration, we think only the most forceful evidence of a purpose to exclude the claim from arbitration can prevail, particularly where, as here, the exclusion clause is vague and the arbitration clause quite broad'."

What we said there was based on three decisions handed down by the Supreme Court in 1960,*fn3 and is in accord with other recent decisions of this court.*fn4 The company contends, however, that this proposition is not applicable here for two reasons. First, none of the cases involved breach of a no-strike clause, and secondly, the agreement to arbitrate is the quid pro quo for the union's promise not to strike, and the union cannot, therefore, after going out on strike, insist that the company's claim be submitted to arbitration.

There is divided authority among the courts that have considered the latter contention. Decisions of the United States Court of Appeals for the Second Circuit and several district court decisions support the union's position.*fn5 Other decisions have held that the dispute is not arbitrable.*fn6 We think, however, that the 1960 decisions of the Supreme Court make it clear that the alleged strike gave rise to a "difference" between the company and the union which on its face is governed by the collective bargaining agreement.

The arbitrability of a difference depends on the particular provisions of the agreement. It is a matter of contract and what the parties intended. The arbitration provision involved here is a broad one, requiring that all differences between the company and the union be arbitrated provided only that they involve an interpretation and application of the agreement. The arbitration machinery is not limited to any particular dispute or disputes, nor is there any limitation imposed on the power of the arbitrator to make an appropriate award. The company has not called our attention to any provision in the agreement specifically excluding the difference from arbitration. The exclusion clause is vague and general, providing only that "questions involving general negotiations shall not be subject to grievance procedure." A claim for damages arising out of an alleged breach of a no-strike clause is not such a question, and certainly the clause does not constitute forceful evidence of an intention not to arbitrate the difference.

The union filed an answer in the district court wherein it asserted that the strike was not authorized. The only obligation imposed on the union where a strike occurs in violation of the agreement was to immediately issue instructions to the employees to return to work. The union is not under an absolute duty to prevent a strike, and the mere fact that one takes place does not necessarily make it liable to the company. It may be that the union did notify the employees in a manner contemplated by or at least one that satisfies the requirements of the agreement, or, on the other hand, factors may exist that excused it from discharging even that limited responsibility. It has also been pointed out that it may be necessary to determine whether the company, in light of the record, deliberately provoked the alleged strike. These are questions which, under the circumstances, involve the merits of the controversy, and may best be answered by examining the total employer-employee relationship as manifested through the collective bargaining agreement. In this relationship we may also find an answer to the company's contention that the strike constituted a material breach of the agreement, thereby excusing it from proceeding to arbitrate. That is made clear by what the Court said in United Steelworkers of America v. Warrior & Gulf Navigation Co., 363 U.S. at 579:

"The collective agreement covers the whole employment relationship. It calls into being a new common law - the common law of a particular industry or of a particular plant."

As the union points out in its brief, the question here is not merely to determine whether a strike took place. Resolution of that question may well raise collateral problems involving past practices and recognized responsibilities of the parties insofar as a work stoppage is concerned. That, in turn, may require an examination of the bargaining history and grievance settlements, which admittedly we cannot do. Association of Westinghouse Salaried Employees v. Westinghouse Electric Corp., 283 F.2d 93 (C.A. 3, 1960). There is also the further fact that the strike involved an alleged refusal by the company to rerank certain jobs held by union members. In this regard, we would be called on to examine certain provisions of the agreement and the incentive rate system as well as the over-all practice and understanding of the parties in settling disputes concerning so-called "tight" or "loose" rates.

The result reached here is supported by two decisions of this court. In International Molders Union v. Susequehanna Casting Co., supra, we held arbitrable the discharge of thirty employees because of their alleged breach of a no-strike clause. The company brought an action for damages because of an alleged breach of a no-strike clause in Tenney Engineering, Inc. v. United Electrical Workers of America, 207 F.2d 450 (C.A. 3, 1953). After holding that the United States Arbitration Act, 9 U.S.C. § 1 et seq., was applicable under the circumstances, we remanded in order to permit the district court to determine if the breach ...

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