The opinion of the court was delivered by: GRIM
This is an action by an employer under Section 301(a) of the Labor-Management Relations Act of 1947, 29 U.S.C.A. § 185(a), for a declaratory judgment that under the terms of the collective bargaining agreement with defendant unions, it was not obligated to arbitrate a dispute arising out of the employer's decision to locate certain plastic production work at its plant in Wichita, Kansas, rather than at its plant in Morton, Pennsylvania.
Defendant Unions have filed a counterclaim seeking to compel the employer to arbitrate this dispute. The case is presently before the court on the defendant Unions' motion for summary judgment.
During the course of collective bargaining negotiations for a new labor contract in 1963, the Company and Unions entered into a collateral agreement pertaining to certain 'management prerogatives'. The agreement provided:
'In connection with the collective Bargaining Agreement * * * between the Company and the Union, it is agreed that under and included within the meaning of the 'Management Prerogatives' Article of that Agreement, the Company has the right to subcontract and designate the work to be performed by the Company and the places where it is to be performed, which right shall not be subject to arbitration.
'The Company will not subcontract any maintenance work now performed by members of the bargaining unit if such action would result in layoff of any maintenance employees who are qualified to do such work or if such action would prevent the recall from layoff of any maintenance employees who are qualified to do such work, unless the Company does not have the equipment to perform such work or unless conditions require its immediate performance. Any claim by the Union that the Company has violated the limitations upon its right to subcontract maintenance work contained in this paragraph shall be subject to the grievance and arbitration provisions of Article V-A and VI of the Agreement * * *.'
The Company denies that the collateral agreement on Management Prerogatives makes any distinction between the right of the Company to 'transfer' or 'subcontract' production work, both of which rights it is asserted are not subject to arbitration under the language of the agreement. The Company contends that the agreement calls for arbitration only of disputes over subcontracting of maintenance work. Since it is agreed that the dispute in this case arose over the decision to locate production work outside the bargaining jurisdiction of the defendant Unions, the Company contends that under the Agreement, the dispute is not arbitrable.
It is the responsibility of the court to determine whether a company is bound to arbitrate as well as what issues it must arbitrate, and the determination of this issue of 'arbitrability' must be made by the court on the basis of the collective bargaining agreement entered into by the parties. Atkinson v. Sinclair Refining Co., 370 U.S. 238, 241, 82 S. Ct. 1318, 8 L. Ed. 2d 462 (1962); John Wiley v. Sons, Inc. v. Livingston, 376 U.S. 543, 547, 84 S. Ct. 909, 11 L. Ed. 2d 898 (1964).
Likewise it is clear that the parties can in their collective bargaining agreement specifically exclude certain issues from arbitration. Atkinson v. Sinclair Refining Co., supra; United Steelworkers of America v. Warrior & Gulf Nav. Co., 363 U.S. 574, 584, 80 S. Ct. 1347, 4 L. Ed. 2d 1409 (1960); see concurring opinion of Mr. Justice Brennan in United Steelworkers of America v. American Mfg. Co., 363 U.S. 564, 80 S. Ct. 1343, 4 L. Ed. 2d 1403 (1960).
Article V-A of the collective bargaining agreement sets up a four-step process of meetings between union and company representatives at different levels of authority to resolve grievances that might arise. A grievance is defined in this Article as 'a difference between the Company and any Employee concerning working conditions, or the interpretation or application of any provision of this Agreement.'
Article VI of the Agreement entitled 'Arbitration' provides:
'Section 1. The only grievance which may be submitted to arbitration is a grievance involving the interpretation or application of the provision of this agreement which has been processed through Step 4 of the grievance procedure.
'Section 4. * * * The arbitrator * * * shall have no authority * * * to rule upon * * * management prerogatives.
'Section 7. The grievance procedure provided under Article V-A as supplemented by this Article shall be the exclusive remedy for the disposition of any claim, dispute or grievance of ...