The opinion of the court was delivered by: GRIM
In the present case, an employer, the plaintiffs, discharged an employee, William Hosendorf, who was a member of defendant, a labor organization. Defendant contested the employer's right to discharge Hosendorf and, being unable to settle the problem otherwise, the parties referred the dispute to an arbitrator in accordance with an arbitration clause in the labor contract between the parties. The arbitrator made an award reinstating Hosendorf, although without back-pay.
The employer filed a motion in a Pennsylvania state court (Philadelphia Court of Common Pleas No. 3) to modify or vacate the arbitrator's award,
contending that "(a) the arbitrator did not decide the question submitted to him for determination * * * (b) [the] Arbitrator determined matters not properly before him, and attempted to cause a compromise between the parties which is unacceptable to the plaintiffs; and referred to portions of the agreement not before him * * * (c) [the] award is against the law, and is such that had it been the verdict of a jury, the court would have entered judgment for the plaintiff, notwithstanding the verdict, in that the plaintiffs established by a clear preponderance of the evidence and by the admissions of the arbitrator himself, that the discharge of William Hosendorf was justified by the facts of this case."
Defendant removed the case to this federal court, whereupon the employer plaintiff filed a motion in this court to remand the case to the Pennsylvania state court, contending that this court does not now have and would not have had jurisdiction of the case if it originally had been brought here. This motion presents the question now before the court.
Removal to this court is authorized for any "civil action of which the district courts have original jurisdiction founded on a claim or right arising under the * * * laws of the United States * * *."
28 U.S.C.A. § 1441(b).
Thus the question arises: Does, and at the time of removal did, this United States District Court have original jurisdiction over this action to "modify, correct or vacate" the arbitrator's award made in this case?
Defendant contends that this court has jurisdiction of the case under the provisions of § 301(a) of the Labor Management Relations Act of 1947, 29 U.S.C.A. § 185(a) (The Taft-Hartley Act), which provides:
"Suits for violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce as defined in this chapter * * * may be brought in any district court of the United States having jurisdiction of the parties, without respect to the amount in controversy or without regard to the citizenship of the parties."
Clearly, when parties to a labor contract insert therein an arbitration clause, it constitutes a violation of the contract for one of the parties to refuse to arbitrate or to abide by an arbitrator's award and under the above-quoted § 301(a), federal district courts have jurisdiction to enforce arbitration under such circumstances and to enforce an award. Textile Workers Union v. Lincoln Mills, 353 U.S. 448, 77 S. Ct. 912, 1 L. Ed. 2d 972 (1957); United Steelworkers v. Warrior & Gulf Nav. Co., 363 U.S. 574, 80 S. Ct. 1347, 4 L. Ed. 2d 1409 (1960).
Likewise, although the question has not been authoritatively determined, it appears clear that there is a "violation" of a labor contract within the meaning of § 301(a) when the arbitrator misuses or abuses
the powers conferred upon him. Although it could be argued that this misuse of power does not constitute a "violation" of the contract by one of the parties thereto, in my opinion it does constitute a "violation of * * * [a contract] between an employer and a labor organization" within the meaning of the statute.
It is true generally that when one sues on a contract, he does it because of an alleged violation by a party to the contract, even though the suit be by a third-party beneficiary of a contract. However, § 301(a) does not say that a suit under it must be because of a violation by one of the parties. It confers jurisdiction when there is a suit for a violation of a contract "between an employer and a labor organization." In the present case, it is averred in substance that the labor contract has been violated by the arbitrator's misuse of power in rendering an award not authorized by the labor contract. It is this type of situation which § 301(a) purports to cover and which, in my opinion, it does cover. "Arbitration of a nonarbitrable issue is just as much a violation of the collective bargaining agreement as is the refusal to arbitrate an arbitrable issue."
Central Packaging Co. v. United Packinghouse Workers, 195 F. Supp. 188, 191 (D.Kans.1961).
The fact that the remedy sought by the plaintiffs here for the alleged violation of the collective bargaining agreement is a modification or vacating of the arbitrator's award, does not compel a contrary conclusion.
While the Supreme Court has specifically authorized the bringing of an action under § 301(a) to compel arbitration under a clause in a labor contract or to enforce an arbitrator's award, it has never discussed nor specifically decided whether an action may be brought under this section to modify or vacate an award. In the case of United Steelworkers of America v. Enterprise Wheel & Car Corp., 363 U.S. 593, 80 S. Ct. 1358, 4 L. Ed. 2d 1424 (1960) the Supreme Court ordered an arbitrator's award to be enforced and the men reinstated with back-pay. However, the arbitrator had not made clear how much back-pay was due. The Supreme Court, without any comment as to jurisdiction, ordered the District Court to send the case back to the arbitrator to modify his award to make clear how much back-pay was due. While the order to the arbitrator to modify his award admittedly involved ...