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Local Union 560 v. Anchor Motor Freight Inc.

decided: August 15, 1969.


Biggs, Freedman and Stahl, Circuit Judges.

Author: Freedman

FREEDMAN, Circuit Judge:

The question presented is whether a party to a labor arbitration who had sought and awaited an award after the time fixed for its rendition had run, may terminate the arbitrator's authority by notice before the award is rendered that he will not be bound by any award which may thereafter be handed down.

Plaintiff and defendant were parties to a multi-union, multi-employer collective bargaining agreement known as the Eastern Conference Area Truckaway, Driveaway, Yard and Shop Agreement. Disputes arose regarding the right of some of defendant's New Jersey drivers to receive premium pay for weekend deliveries which they were dispatched to make from a terminal in Flint, Michigan. The Union claimed that the Eastern States area contract applied, while the Company's position was that another contract, one for the Central States area, governed. Grievances were filed with the Company on April 14, 1965. They were processed internally as provided by the Agreement and when they were not settled to the satisfaction of the Union, they were presented to a panel of the Eastern Conference Automobile Transporters Joint Committee. The Joint Committee, after a hearing, declared itself deadlocked on March 17, 1966. Under the Agreement, this made the grievances subject to arbitration by an arbitrator selected from a list submitted to the Union and the Company by the Federal Mediation and Conciliation Service.*fn1 On March 25, 1966, the Union invoked this procedure by applying to the Federal Mediation and Conciliation Service for the designation of an arbitrator.

The Service designated an arbitrator on April 22, 1966, and in so doing wrote to him and the parties:

"Awards are to be made within 30 days after the close of the hearing, unless the time is extended by agreement of the parties confirmed in writing. The Arbitrator should advise this office in writing if the hearing is unduly delayed or if there is a delay in the rendition of the award."

After some difficulty in fixing a date convenient to the parties, a hearing was held on June 23, 1966, in which both parties participated. On its adjournment, it appeared that a second hearing would be required for further testimony, unless the parties would agree to present the evidence by affidavits. Almost four months later, on October 12, 1966, the parties agreed to forego oral testimony and submit affidavits. It was not until December 16, 1966, that the union filed its affidavit and February 13, 1967 that the Company advised the arbitrator that it would not file any counter affidavit. The parties then agreed, with the approval of the arbitrator, that the hearing should be deemed closed upon the filing of briefs, which were to be postmarked no later than March 15, 1967. The briefs were filed within the prescribed time.

The thirty-day period for the filing of the arbitrator's award expired on April 14, 1967, but no award was filed and no objection or even comment was expressed to the arbitrator at that time. More than three months later, on July 25, 1967, the Union's counsel wrote to the arbitrator referring to the fact that the briefs had been filed in March and stating that the Union had inquired when the decision would be forthcoming and desired to have the award made as soon as practicable. Receiving no response from the arbitrator, the Union's counsel wrote to him again on August 18, 1967, referring to the prior letter and saying: "I didn't hear from you and I decided to drop you this note as a reminder. I would appreciate hearing from you so that I will be in a position to keep my client advised."

The arbitrator replied on August 29, 1967 that he had returned that day from vacation, and went on to say: "Since the briefs were about eight months in coming in, I was not aware of any need for haste. However, I am just finishing up a decision and will start on yours this week and hope to have it finished by the end of next week." Two months later, on October 30, 1967, the Union's counsel again wrote to the arbitrator pointing to the delay, the urging of his client and its interest in having a decision as soon as possible. On November 8, 1967, having received no reply, the Union's counsel wrote to the Director of the Federal Mediation and Conciliation Service, enclosing copies of his correspondence, and pointing out that no award had yet been made, although the hearing had been held on June 23, 1966 and the briefs had been filed by March 15, 1967. The letter then stated:

"Under the circumstances, I must advise that I will object to any award postmarked after November 8, 1967 as not rendered in accordance with the Rules and Regulations of the Federal Mediation & Conciliation Service nor in accordance with any prior acquiescence of the Rules in order to allow the arbitrator sufficient time to render a decision. In short, I do not believe that I must wait indefinitely for an award. The courtesies given an arbitrator, as far as I am concerned, have been grossly abused.

"Under the circumstances, will you kindly forward to the parties a new panel so that the case can proceed to hearing and decision."

On November 24, 1967, the General Counsel of the Service replied that it did not have authority to submit another panel to the parties unless they jointly requested it and asked the Company to state its position on the request. On receiving this reply the Union's counsel requested the Company's agreement to a new arbitrator, or at least to the submission of a new panel by the Service. On December 6, 1967, the Company wrote to the Union and the Service maintaining that the case could not be reassigned without the consent of both parties and declaring the Company's belief that they should patiently await a decision by the arbitrator to whom they had submitted their dispute. Two days before, on December 4, 1967, the arbitrator had made his award and mailed copies to the parties.*fn2

The Union then instituted this action in the Chancery Division of the Supreme Court of New Jersey under § 301(a) of the Labor-Management Relations Act (29 U.S.C. § 185) to have the award vacated and the Company directed to join in the designation of a new arbitrator, on the ground that the arbitrator's power had automatically ended on the expiration of the thirty-day period and the award therefore was null and void, or in the alternative, that the Union had terminated the arbitrator's jurisdiction by its notice prior to the award that it would not be bound by it.

The Company removed the proceeding to the District Court for the District of New Jersey, which subsequently granted the Union's motion for summary judgment on the ground that there should be incorporated into the federal common law developed under § 301(a)*fn3 the common law rule in commercial arbitration under which the arbitrator's power to act would expire at the end of the thirty-day period. The district court viewed the Union's notice that it would reject the arbitrator's award as sufficient to render the award invalid, and found that it was not estopped from repudiating the award by its participation in the delays preceding the submission to the arbitrator. It therefore vacated the arbitrator's award as null and void and ordered the Company to perform specifically ...

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