The opinion of the court was delivered by: KNOX
In this case involving the issuance of what has been aptly described as a "Boys Market" injunction by the Court of Appeals for this Circuit,
we have a problem arising out of a Collective Bargaining Agreement between the plaintiff and the defendant through its Youngstown Division dated March 29, 1972, and extending from December 12, 1971, to and including December 15, 1973.
The defendant on July 28, 1972, posted in certain of its stores a notice that they would be closed on August 5, 1972, at 6:00 p. m. Certain employees testified they had not seen this notice. The union on the same day sent a letter to the company demanding arbitration of certain issues. On Tuesday, August 2, 1972, in the afternoon the union filed this action against the employer seeking preliminary injunction and seeking to require the defendant to submit to arbitration. The court at once fixed August 4, 1972, for hearing and notice was duly given the defendant. On August 4, 1972, a hearing was held which lasted nearly all day. At the conclusion of the hearing, a Temporary Restraining Order was entered to expire in ten days on August 14, 1972, with reasons therefor attached as required by Rule 65(d). This order required the parties to take steps preparatory to arbitration, enjoined the defendant from terminating and/or permanently laying off any of its employees covered by the labor contract, to meet with the employees in an endeavor to reach a satisfactory solution as required under Section 3 of the letter incorporated in the contract at page 38 (The contract is in evidence being plaintiff's Exhibit 1) and to refrain, pending determination of arbitration, from entering into any contract for the sale of the stores which does not contain a clause binding successors and assigns in accordance with Article XXXI of the Agreement.
At the hearing on August 4, 1972, it developed that defendant had been negotiating with Fox Grocery Company for sale of 36 stores in its Youngstown Division. There had been no firm agreement, however, until August 3, 1972, the day before the hearing when a one-page letter was signed by the parties agreeing to close the transaction subject to certain conditions on Tuesday, August 8, 1972. (This letter, defendant's Exhibit 3, was not admitted into evidence.) This agreement, the purchaser testified, did not contain any clause making the Collective Bargaining Agreement binding upon the purchaser as required by Article XXXI. It further appeared that defendant had started to sell off its inventory in the stores involved and had continued to deplete the same after knowledge that the suit had been filed. It appeared that the company had notice of the suit no later than Wednesday, August 3, 1972, because on the evening of that day an officer of defendant appeared in Miami, Fla. to discuss the situation with certain union officials. No attempt, however, was made to arrive at "a mutually satisfactory conclusion" as to the rights of employees under Article XVIII, paragraph K as required by paragraph 3 of the letter on page 38.
At the time of issuance of the Temporary Restraining Order, hearing and argument on the application for preliminary injunction were assigned for Thursday, August 10, 1972. On this date additional testimony was taken which showed that there had been a meeting between the parties on Tuesday, August 8, but that nothing had been resolved. Also, at that time plaintiff verbally communicated to defendant a list of issues which it desired to have arbitrated but through some failure of communication the defendant apparently did not understand the issues as read by plaintiff's attorney although the differences seem to be largely differences in semantics.
Extensive arguments were had on the matter during the afternoon of August 10 and voluminous briefs were presented with reference to the issues. Since it was obvious that the court could not arrive at a conclusion and prepare a written opinion containing findings and conclusions as required by Rule 52(a) with respect to the preliminary injunction prior to the expiration of the Temporary Restraining Order at Noon on Monday, August 14, the court on August 11, issued an order extending the Temporary Restraining Order for these reasons until Noon, Monday, August 21. After review of all the evidence and the numerous arguments and authorities presented by the parties, the court has determined that in order to preserve the status quo pending resort to arbitration as required by the contract a preliminary injunction should be issued.
It appears there are 36 stores involved which have now been closed. This closing is preparatory to carrying out of the sale to Fox Grocery. It was testified that approximately 700 employees were employed in these stores in the area of Western Pennsylvania of whom 351 were full-time employees entitled to protection under Article XVIII, Section K of the contract. Many of these employees have been employed by this company for a long period of years and their job, rights and status as provided under the contract will certainly be seriously jeopardized if they are permanently laid off or discharged at this time prior to a decision by the arbitrator on the matters at issue. At the first hearing, it appeared that their pension rights would be seriously endangered since it was testified that because the pension plan was put in effect only 3 1/2 years ago there would be no vesting until January 1, 1973. One of the trustees of the pension plan testified at the second hearing that this was not true but he admitted he was only one of a group of trustees and that in any event legal opinions had been requested on this from counsel handling legal matters pertaining to the plan.
"JOB SECURITY AND SENIORITY. The Company and the Union mutually agree that it is their intent and purpose to maintain the status of the present full-time employees and to effectuate this policy the following shall be done:
A. In the event it becomes necessary to change the status of a full-time employee, either by layoff or reduction to part-time status, the Employer and the Union shall immediately explore the possibilities for maintaining the full-time status of the employee by relocation where full-time work is available elsewhere within the seniority area.
If, after exploration at the above level, the matter is not resolved, the Company and the Union shall explore the possibilities for maintaining the individual's full-time status by relocation in the master seniority area and their Division area."
(There then follows certain other provisions relative to scheduling, seniority and reduction in layoffs.) Article XXII B spells out at length the procedures for arbitration. Of particular importance are the first sentence and the last four sentences in general providing that any dispute shall be submitted to arbitration which shall be binding on all parties and providing for no work interruption pending the decision of the board of arbitration.
This is supplemented by Article XXI providing for no strikes, lockouts or stoppages pending arbitration.
I Arbitrability of Rights of Employees.
If we were dealing with the ordinary employer-employee relationship, we would of course have to recognize that the members of plaintiffs' union were engaged in employment at will and subject to discharge at any time without cause at the whim of the employer but here we have a Collective Bargaining Agreement which confers valued rights upon the employees and provides for arbitration of any disputes concerning the same.
This brings the case within the provisions of Section 301 of the Labor-Management Relations Act, 29 U.S.C. § 185.
The Supreme Court has many times held under this Act that the Federal Courts have the power to compel compliance with these agreements to arbitrate. Textile Workers Union of America v. Lincoln Mills of Alabama, 353 U.S. 448, 77 S. Ct. 912, 1 L. Ed. 2d 972 (1957).
In United Steelworkers of America v. American Mfg. Co., 363 U.S. 564, 80 S. Ct. 1343, 4 L. Ed. 2d 1403 (1960), the court said:
"The function of the court is very limited when the parties have agreed to submit all questions of contract interpretation to the arbitrator. It is confined to ascertaining whether the party seeking arbitration is making a claim which on its face is governed by the contract. Whether the moving party is right or wrong is a question of contract interpretation for the arbitrator. In these circumstances the moving party ...