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PHILADELPHIA LITHOGRAPHERS INTL. UNION

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA


December 19, 1972

Philadelphia Lithographers & Photoengravers' International Union, Local 7-P, Plaintiff
v.
Parade Publications, Inc., Defendant

Higginbotham, D. J.

The opinion of the court was delivered by: HIGGINBOTHAM

HIGGINBOTHAM, D. J.:

The question presented in these motions for summary judgment is whether the defendant parent corporation, which is a signatory to a collective bargaining agreement with the plaintiff union, can be compelled to arbitrate plaintiff's claim that the union is entitled to be recognized as the representative for the employees of defendant's subsidiary, where said subsidiary maintains a separate corporate identity and has already recognized, pursuant to its own labor-management policies, a different exclusive bargaining representative for its employees. For reasons which hereinafter appear, defendant's motion for summary judgment is hereby granted and defendant cannot be compelled to submit to arbitration the status of its subsidiary's employees.

 Jurisdiction of this court is predicated on Section 301(a) of the Labor Management Relations Act of 1947, as amended, 29 U.S.C. § 185(a). *fn1"

 The facts can be briefly summarized as follows: *fn2" The plaintiff Philadelphia Lithographers and Photoengravers' International Union, Local 7-P is a union representing employees in the photoengraving industry, including 32 of the approximately 158 employees of defendant Parade Publications, Inc. *fn3" Parade, a corporation with offices located at 511 North Broad Street, in Philadelphia, is engaged in the rotogravure photoengraving industry, publishing a Sunday newspaper supplement entitled "Parade", pursuant to contract with various newspapers.

 Over a number of years, Local 7-P and the photoengraving-unit employees at Parade have conducted joint collective bargaining negotiations with the photoengraving-unit employees at the Triangle Publications, Inc. plant at 440 North Broad Street, which is located directly across the street from Parade's plant. Any agreements reached between Local 7-P, on the one hand, and Parade and Triangle on the other, have been ratified by a joint vote of the photoengraving-unit employees at those two Philadelphia plants.

 The Gravure Division of Triangle had entered into a collective bargaining agreement with Local 7-P, which was in full force and effect from August 15, 1969 to February 29, 1972. On February 19, 1970, Local 7-P and Parade, in recognition of the foregoing agreement between Triangle and plaintiff, executed an agreement adopting the same terms and provisions for Parade's photoengraving-unit employees as negotiated for the Gravure Division of Triangle, except that certain features of the pension plan for Parade were different.

 Among the provisions contained in the collective bargaining agreement negotiated by plaintiff and Triangle (and similarly agreed to by Parade) were clauses relating to union recognition, *fn4" jurisdiction, *fn5" new machines or processes, *fn6" and arbitration. *fn7"

 Diversified Printing Corporation a wholly-owned subsidiary of Parade, owns and operates a commercial printing plant in Atglen, Pennsylvania. At all relevant times, Diversified and Parade, in the operation of their respective plants at Atglen and Philadelphia, have made no joint purchases of materials or equipment; have transferred no employees between their plants; have maintained separate sales organizations; have conducted separate labor relations programs; and have entered into no joint ventures with third parties. None of the employees at Diversified had been previously employed by Parade. Further, the construction and establishment of Diversified has not caused any reduction of the work printed by Parade, nor has Parade reduced the number of its employees.

 The approximately 158 employees at Atglen are represented by the International Brotherhood of Pulp, Sulphite and Papermill Workers, Local Union 185, pursuant to a collective bargaining agreement with Diversified entered into on December 7, 1970. The agreement is for three years, remaining in effect until November 6, 1973, and from year to year thereafter unless terminated by 60-day notice of either party.

 The Parade plant prints only Parade Magazine, except for occasional printing of advertising flyers for customers of newspapers which use the Parade Magazine supplement. Parade prints in Philadelphia approximately 33 percent of its weekly publication and contracts out the remainder of its weekly printing requirements to various plants: 28 percent to Standard Gravure, Louisville, Kentucky; 22 percent to Diversified; and 17 percent to Gravure West, Los Angeles, California. At all times relevant hereto, Parade has dealt with Diversified in the same manner as it, Parade, has transacted with other third-party printers to whom it contracts out the printing of its magazines. Diversified's printing of Parade magazines is done at a profit to Diversified in accordance with a contract establishing a price schedule. Diversified additionally prints more copies of Family Weekly, a magazine in competition with Parade, than it does copies of Parade Magazine.

  It should be further noted that although Local 7-P was aware of the construction of the Atglen plant, plaintiff never suggested any relevance of this new facility to the collective bargaining agreement at the time when it was negotiated on February 19, 1970. Moreover, since the expiration on February 29, 1972 of the previous Parade-Local 7-P contract and the beginning of negotiations for a new contract between Parade and plaintiff, the union has concerned itself only with the working conditions of the photoengraving unit of employees at the Parade plant and has not inquired into the status of the employees at Atglen.

 In view of the aforementioned facts plaintiff's complaint alleges that: the Atglen plant is an expansion of Parade's facilities; that the employees at Diversified perform the same work as employees at Parade's Philadelphia plant; that the collective bargaining agreement between Local 7-P and Parade includes those employees at Diversified; and, finally, at a minimum, Parade should be compelled to submit plaintiff's claim for union recognition of Diversified's employees to arbitration in accordance with the arbitration clause of their collective bargaining agreement. Parade has steadfastly refused to arbitrate these particular contentions.

 Since 1957 when the United States Supreme Court decided Textile Workers v. Lincoln Mills, 353 U.S. 448, 455, 77 S. Ct. 912, 917, 1 L. Ed. 2d 972 (1957), federal courts have been obligated by § 301(a) of the Labor Management Relations Act of 1947 to enforce the arbitration provisions of collective bargaining agreements. The Court there recognized the agreement of the employer to arbitrate particular grievances as being the quid pro quo for the correlative agreement of the union not to strike over the same grievances.

 In subsequent cases, the federal courts have been additionally assigned the responsibility for initially determining whether the parties have contractually agreed to arbitrate the contested grievances and if the arbitration clause on its face governs those disputes. United Steelworkers of America v. American Mfg. Co., 363 U.S. 564, 567-568, 80 S. Ct. 1343, 1346, 4 L. Ed. 2d 1403 (1960). It is not the court's role to make an independent examination of the merits of the dispute. Id. Moreover, before the court can deny an order to arbitrate it must have "positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute," resolving any doubts in favor of coverage. United Steelworkers of America v. Warrior and Gulf Navigation Co., 363 U.S. 574, 581-583, 80 S. Ct. 1347, 1353, 4 L. Ed. 2d 1409 (1960). Accord, e.g., United Steelworkers of America v. Enterprise Wheel and Car Corp., 363 U.S. 593, 80 S. Ct. 1358, 4 L. Ed. 2d 1424 (1960); Atkinson v. Sinclair Refining Co., 370 U.S. 238, 241, 82 S. Ct. 1318, 1320-1321, 8 L. Ed. 2d 462 (1962); *fn8" John Wiley & Sons, Inc. v. Livingston, 376 U.S. 543, 546-547, 84 S. Ct. 909, 912-913, 11 L. Ed. 2d 898 (1964); Boys Markets, Inc. v. Retail Clerks Union, Local 770, 398 U.S. 235, 253-254, 90 S. Ct. 1583, 1594, 26 L. Ed. 2d 199 (1970); Avco Corp. v. Local Union #787 of the International Union, U.A., A. & A. Imp. Wkrs., 459 F.2d 968, 973 (3rd Cir. 1972).

 The precise question raised in this litigation has been previously decided by the Third Circuit adversely to the plaintiff union. Local 464, American Bakery and C. Wkrs. I.U. v. Hershey Chocolate Corp., 266 F. Supp. 276 (M.D. Pa. 1967), 310 F. Supp. 1182 (M.D. Pa. 1970), aff'd. per cur. 433 F.2d 926 (3rd Cir. 1970).

 In Hershey, supra, the Court concluded that the parent corporation, Hershey, which was a party to a collective bargaining agreement with Local 464, did not have to arbitrate the union's claim for recognition of the employees of Hershey's subsidiary, Reese Candy Company, even though the union contended that the subsidiary's operations had been "increasingly integrated" with the operations of Hershey. The arbitration clause in Hershey, as in the instant case, was drawn in very broad terms. In the former, "any matters which an employee may desire to discuss and adjust with the Employer" could be arbitrated, as opposed to the language provided in the instant clause: "All questions of difference concerning an interpretation of this Agreement and all questions arising between the Employer and his employee . . . which cannot be amicably adjusted in conciliation, shall be submitted to an Arbitration Committee. . . ."

 In construing the language of the arbitration clause in Hershey, supra, the Court stated:

 

"* * * It is perfectly obvious that the phrase 'any matters' is subject to the good faith limitation that the 'matters' in question be related to the employer-employee relationship as that relationship is set forth in the aforementioned bargaining agreement since (1) the clause only refers to the employee and the employer and (2) the conjunctive is used to join 'discuss' and 'adjust', thus implying that the matter must be within the employer's power to correct. Here, the plaintiff seeks to include within the ambit of the agreement another corporation and another set of employees and have this other corporation and other employees, who, incidentally, within the past year voted not to be represented by this very Union, covered by the Hershey contract. By no stretch of imagination could this be found to contain something that a Hershey employee may in good faith ask the employer to 'discuss and adjust'. It is completely outside of the employer-employee relationship which paragraph 9 was designed to protect." 266 F. Supp. at 277.

 It might plausibly be argued that the instant arbitration clause should be given a broader construction than the one in Hershey, since the latter's coverage was restricted to consideration of employer-employee disputes, whereas the former clause permitted examination into differences in interpretation of the collective bargaining agreement. That line of argument, however, was also rejected in Hershey:

 

"The issue which the Union wants to arbitrate does not involve the employer-employee relationship at defendant's Hershey plant, nor does it involve an interpretation or application of the collective bargaining agreement between the Union and Hershey, it seeks to encompass the relationship between Hershey and Reese. See also two recent California cases, Retail Clerks Union Local 428 v. L. Bloom Sons Company, Inc., 173 Cal. App. 2d 701, 344 P. 2d 51; and Retail Clerks Local 770 v. Thriftiman, Inc., 59 Cal. 2d 421, 380 P. 2d 652, 30 Cal. Rptr. 12 (1963). Both of these cases are similar to the instant case and in both the Court held that the proper forum for determination of the issue was the Court and not an arbitration." 266 F. Supp. at 278.

 In following the Hershey decision, I am confining my analysis in the case at bar to the contractual language of the collective bargaining agreement and have not scrutinized the merits of the dispute. While it is permissible for the court to consider the past practice and bargaining history of the parties to a collective bargaining agreement when the contract is ambiguous and equivocal and the Court seeks to clarify the parties' contractual intent, thus thereby ascertaining whether there was specific consensus relative to the arbitrability of the disputed grievances, the Court in the second Hershey decision concluded that, wholly apart from the merits and examination of collateral evidence, the contract on its face precluded arbitration of issues affecting the employees of the parent's subsidiary. 310 F. Supp. at 1185-1189.

 Numerous cases have been brought to the Court's attention by the defendant which discuss the merits of this case, but which are only tangentially related to the issue before me, namely, the applicability of arbitration. There are two cases cited by the plaintiff which, however, deserves more extensive comment, the first being John Wiley & Sons, Inc. v. Livingston, supra.

 In Wiley, the Supreme Court held that in a merger situation, the surviving corporation, Wiley, could be compelled to arbitrate with the union about the employee conditions of employees formally associated with Interscience, Wiley's predecessor. The significance of the decision is that Wiley was not a signatory to the collective bargaining agreement between the union and Interscience. Although the Supreme Court did require arbitration there, it recognized there would be instances where a similar holding would be inapplicable. Compare Wiley, supra, 376 U.S. at 551, 84 S. Ct. at 915, with a non-arbitration case involving a non-signatory to a collective bargaining agreement, National Labor Relations Board v. Burns International Security Services, Inc., 406 U.S. 272, 92 S. Ct. 1571, 1581, 32 L. Ed. 2d 61 (1972).

 Since Wiley was discussed in one of the lower court decisions pertaining to Hershey, supra, 266 F. Supp. at 278, the Court of Appeals for the Third Circuit was obviously aware of Wiley and its implications, hence evidently concluding that a reasonable distinction can be drawn between merger and parent-subsidiary arrangements. 433 F.2d at 927. Furthermore, it should have been equally apparent to the Court of Appeals that Hershey was a signatory and party to the collective bargaining agreement with the union (as is true in the instant case), and therefore the contractual hurdle (Wiley was not a party to the collective bargaining agreement) and concomitant limitations present in Wiley, were absent in Hershey.

 The second case meriting further remarks is Parade Publications, Inc. v. Philadelphia Mailers U. No. 14, 459 F.2d 369 (3rd Cir. 1972). Parade Publications involves the same employer and same subsidiary, but a different union with a different collective bargaining agreement. The issue raised in that case was whether under the circumstances therein alleged the District Court Judge, applying the standards of Boys Market, supra, could enjoin the union from striking over the employer's failure to arbitrate. In remanding the case, the Court of Appeals held that before the union can be enjoined, the Court was required to determine the cause of the strike and whether the underlying issue was arbitrable.

 The counsel of record for Parade in Parade Publications, supra, also represent Parade in the instant case. During argument before the District Court Judge, Mr. Harold Kohn, one of the attorneys for Parade, stated that Parade was prepared to go to arbitration over the issue of whether the pressmen and mailers at Parade were entitled to preferential employment at Diversified. 459 F.2d at 371. The Court of Appeals, nonetheless, concluded:

 

"* * * Parade in this case did not affirmatively allege that the strike was over an arbitrable issue. When asked at the hearing whether Parade conceded that the situation at Diversified presented an arbitrable issue under the collective bargaining agreements, Parade's counsel refused to commit himself and suggested that an arbitrator might properly determine that question in the future." Id. at 373.

  Even if there had been a concession by Parade's counsel in the other case, no such statement or representation has been made here, and all the parties are not identical. My decision here, therefore, is not necessarily dispositive of the issue in Parade Publications.9

 In reliance upon Hershey, supra, defendant's motion for summary judgment is hereby granted.

 Order

 And Now, this 19th day of December, 1972, upon consideration of the parties' respective motions for summary judgment and the accompanying papers and documents in support thereof, it is herein ORDERED that defendant's motion for summary judgment is hereby Granted and plaintiff's request for arbitration is Denied.


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