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UNITED INS. CO. OF AMERICA v. INSURANCE WORKERS IN

August 13, 1970

United Insurance Company of America, Plaintiff
v.
Insurance Workers International Union, AFL-CIO et al., Defendants


Lord, J.


The opinion of the court was delivered by: LORD

LORD, J.:

Plaintiff seeks a declaratory judgment pursuant to 28 U.S.C. § 2201 et seq. that certain grievances filed by the defendant union are not subject to arbitration. With the agreement of the parties we reserved decision on the defendants' motion under F.R. Civ. P. 12(b)(6), and entertained plaintiff's motion for summary judgment, which is basically a cross-motion for judgment on the pleadings since the parties' stipulation of facts consists of the complaint with some minor additions and deletions. We excluded all evidence of contract bargaining history, Insurance Workers Int'l Union v. Home Life Ins. Co. of America, 255 F. Supp. 926, 927 (E.D. Pa. 1966), and agreed to decide the case on the basis of these cross-motions and supporting briefs.

 1. Plaintiff, United Insurance Company of America (hereinafter referred to as "United") is a corporation organized under the laws of the State of Illinois, having its principal place of business in Chicago, Illinois.

 2. Defendant, Insurance Workers International Union, AFL-CIO (hereinafter referred to as "Union") is an unincorporated labor organization representing certain debit agents employed by United.

 3. Defendant, Nicholas M. Rongione is Vice President of the Union, having an office located at 1311 Spruce Street, Philadelphia, Pennsylvania, and a residence located at 1816 Benson Street, Philadelphia, Pennsylvania.

 4. United is engaged in the sale of insurance policies which move in interstate commerce and it is engaged in an industry affecting commerce within the meaning of Section 301 of the Labor Management Relations Act. 29 U.S.C.A. § 185. The members of the Union are residents of the states of Maryland, Delaware, Ohio, Pennsylvania and Washington, D.C.

 5. Effective January 1, 1969, Union and United entered into a collective bargaining agreement covering debit agents employed at United's Baltimore location (hereinafter referred to as the "Baltimore Labor Agreement"). Exhibit A.

 6. Effective September 26, 1969, Union and United entered into a collective bargaining agreement covering debit agents employed by United at its Pittsburgh, Pennsylvania; Wilmington, Delaware; Dayton, Ohio; Harrisburg, Pennsylvania; and Washington, D.C. locations (hereinafter referred to as the "Labor Agreement"). Exhibit B.

 7. Since February 19, 1970, the Union has filed six separate, but identically worded, grievances (hereinafter referred to as the "grievances"). Exhibits D through I. The grievances all claim that United has violated the Labor Agreement and the Baltimore Labor Agreement by eliminating certain policies and substituting new policies for them.

 
"The Company has eliminated the portfolio policies which had existed for many years, including prior to and throughout the time of the negotiation of the agreement, and has substituted an entirely new portfolio. The practical effect of this is to reduce the debit agents' earnings as though the compensation rates in the agreement had been correspondingly reduced. This is so because the new policies are not competitive. Their rates are much higher while their benefits are much lower than their competitors. The Company has made it practically impossible for the debit agents to sell and make a living in the debit business. All this was done without any prior notice or consultation with the Union. This Company conduct has violated the letter and intent of the agreement, including but not limited to recognition, compensation, lockout, management rights and general provisions. It has seriously impaired the fundamental terms of the agreement and the terms and conditions of employment and the relationship between the Company and the Union and the debit agents."

 9. The Union has submitted all six grievances to the American Arbitration Association, 1819 "H" Street, N.W., Washington, D.C., for the appointment of an arbitrator.

 Plaintiff accurately states the issue before us:

 
"Where a collective bargaining agreement grants to management 'exclusive right' to engage in certain specifically enumerated activities, but does not also recite that the exercise of these rights shall be nonarbitrable, must the company arbitrate a grievance which is based solely on one of these enumerated activities and which specifically requests the ...

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