the instant case is patterned after that model plan and is in compliance with the Decree.
In Part B, § II, para. D, the Decree states that it modifies existing Bell system collective bargaining agreements only to the extent required by federal law, and provides for negotiation, by Bell system Companies and the collective bargaining representatives of their employees, of alternatives to its own provisions, so long as the alternatives also comply with federal law.
On July 12, 1973, as part of its original November 29, 1972 case, the Union submitted to arbitration the grievances of eleven employees. The latter claimed that the imposition of the UMTP had either delayed their promotion or denied it altogether.
In a letter dated August 3, 1973, the Company stated its position on the demand for arbitration. It disclaimed any violations of the Agreement and denied the authority of an arbitration board to review its UMTP. While it was willing to present that position to an arbitration board, it said that such a presentation was not a waiver of its objections to the board's authority and jurisdiction over the UMTP. It expressly reserved its right to take legal action in other appropriate forums.
Arbitrator Lewis Gill was selected as impartial chairman of the arbitration board. Arbitration hearings were conducted before him on October 3, 1973, December 10, 1973 and January 10, 1974. On July 22, 1974, Arbitrator Gill rendered an award requiring the Company to make certain changes in its UMTP,
and on September 16, 1974, he issued an opinion stating his reasons for the July 22 award.
In its complaint in No. 74-2565, the Union alleges that the Company has failed to comply with the arbitrator's award in six different respects.
In its complaint in No. 74-2584, the Company alleges that Items 1 through 5 in the award require violations of the Consent Decree, that Items 2 through 5 are based on a nonarbitrable provision of the Agreement, and that Item 1 is based on an impermissible addition to the Agreement by the arbitrator. In each of these five items, the Company argues, Arbitrator Gill exceeded his authority and jurisdiction.
A. The Law of Arbitrability
It is well settled that the arbitration of labor disputes is a federally favored policy. 29 U.S.C. § 173(d); Gateway Coal Company v. United Mine Workers, 414 U.S. 368, 94 S. Ct. 629, 636, 38 L. Ed. 2d 583 (1974); Controlled Sanitation Corp. v. District 128, International Association of Machinists, 524 F.2d 1324 (3d Cir., 1975) (Slip Opinion at 6). The threshold question of arbitrability, however, is a matter for judicial determination. International Union of Operating Engineers, Local 150 v. Flair Builders, Inc., 406 U.S. 487, 491, 92 S. Ct. 1710, 1713, 32 L. Ed. 2d 248 (1972); John Wiley & Sons, Inc. v. Livingston, 376 U.S. 543, 547, 84 S. Ct. 909, 913, 11 L. Ed. 2d 898 (1964); Atkinson v. Sinclair Refining Company, 370 U.S. 238, 241, 8 L. Ed. 2d 462, 82 S. Ct. 1318 (1962); see United Steelworkers of America v. Warrior and Gulf Navigation Company, 363 U.S. 574, 582, 4 L. Ed. 2d 1409, 80 S. Ct. 1347 (1960).
Since arbitration is a matter of contract, "a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit." Warrior and Gulf, supra at 582; see John Wiley & Sons, Inc., supra at 547. Thus, an employer and a union can agree to exclude certain issues or disputes from the arbitration procedures of their collective bargaining agreement. Atkinson, supra at 241-42; Warrior and Gulf, supra at 584-85. If there is doubt about whether the parties have agreed to submit a dispute to arbitration, those doubts should be resolved in favor of arbitration. Warrior and Gulf, supra at 583. If, however, "it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute," id. at 582-83, and if the collective bargaining agreement contains an "express provision excluding a particular grievance from arbitration," id. at 485, then the particular dispute or grievance is non-arbitrable. Should enforcement be sought for an arbitrator's award based upon a non-arbitrable provision of a collective bargaining agreement, enforcement must be denied. See Enterprise Wheel and Car Corp., supra at 597.
B. The New York Telephone Company Case
The Court of Appeals for the Second Circuit applied many of these principles in Communications Workers of America v. New York Telephone Company, 327 F.2d 94 (2d Cir. 1964), a case remarkably similar to the instant action. The district court had granted the defendant's motion for summary judgment and dismissed plaintiff union's action to compel the arbitration of temporary promotions. The Court of Appeals affirmed.
The collective bargaining agreement in the CWA case excluded disputes over promotions from arbitration, contained a general arbitration clause "regarding the true intent and meaning" of the agreement, and limited arbitration to matters specifically made subject to arbitration. It thus parallels the Agreement in the instant case. See §§ 22.04, 10.06 and 13.01 respectively. Plaintiff union in the CWA case also made the same argument that the Union makes in the instant case,
namely, that the exclusion from arbitration applied to individual promotion disputes alone and not to broader disputes over promotion policy generally. The Second Circuit rejected that argument, reasoning that the exclusionary clause of the contract, which prohibited arbitration of any dispute over the terms of the promotions article, would be meaningless if it did not also limit the scope of the general arbitration clause regarding the "true intent and meaning" of the agreement. 327 F.2d at 96-97.
The same rationale applies with equal force in the instant case. Section 22 of the Agreement does not make promotion disputes specifically subject to arbitration as required by § 13.01. Indeed, it specifically excludes them from arbitration.
To embrace the argument advanced by the Union, and erroneously accepted by the arbitrator, would be to locate the arbitrator's authority in the "true intent and meaning" language of § 10.06, and thus render § 22.04 meaningless. There can be no doubt that an arbitrator's discretion is broad and entitled to judicial deference. But there comes a point where the cloak of his office will not suffice to conceal utter absurdities in his award, especially when those absurdities are bereft of logic, contractual intent and legal authority. Absurdities in contract construction are not favored by the courts. Enforcement of the arbitrator's award, in so far as it is based on Article 22 of the Agreement, must be denied.
C. Items 2 Through 5 of the Award
In his opinion, Arbitrator Gill discusses seven items where he directed the Company to take remedial action. With regards to items 2 through 5, he states (Opinion at 5-6):
Probably the most important are numbers 2, 3, 4 and 5, since those items deal with new policies under which some employees are totally and automatically eliminated from consideration for promotions or other vacancies, whereas before under the same conditions they were not. The provisions in the Award on these subjects (application rules, attendance, time in title, and job freeze) speak for themselves, in effect stating that the new policies in these areas are not required by the Decree and shall be set aside in favor of the previous policy of flexibility as to these factors. The rulings reflect my conclusion that it is violative of the contract provision on promotions (Article 22) for the Company to unilaterally disqualify employees from consideration under the standards set forth in that Article, and that since those changes are not required for compliance with the Decree, they should be discontinued.
Probably two comments are in order as to this conclusion. One is that the Company has a very respectable argument that even this general conclusion amounts to ruling on a "dispute between the Union and the Company involving the terms of this Article" (Article 22), which is not supposed to be "subject to arbitration." However, I am persuaded by the Union's contention that the "true meaning and intent" of that provision in Article 22 is simply to rule out arbitration of individual grievances claiming improper denial of promotions under that Article, not to render unilateral changes in the general policy immune for review . . . . "
Items 2, 3, 4 and 5 of the arbitrator's award are therefore clearly based on what the arbitrator found to be violations of Section 22 of the collective bargaining agreement. Claims under Section 22, however, are specifically excluded from the arbitrator's jurisdiction. In a word, such claims are non-arbitrable. Thus, because the arbitrator, in Items 2, 3, 4 and 5, made decisions that he lacked the jurisdiction and authority to make, I am compelled to set aside those specific items of the award.
I am well aware that "[a] mere ambiguity in the opinion accompanying an award, which permits the inference that the arbitrator may have exceeded his authority, is not a reason for refusing to enforce the award." Enterprise Wheel and Car Corp., supra at 598. There is, however, no ambiguity in arbitrator Gill's opinion as to Items 2, 3, 4, and 5. He stated flatly that the procedures challenged by the Union in those items were "violative of the contract provision on promotions (Article 22)." Exhibit C to the Union's complaint in No. 74-2565, at 6.
The Union relies primarily on Ludwig Honold Manufacturing Company v. Fletcher, 405 F.2d 1123 (3d Cir. 1969). The citation proved less than helpful in resolving the dispute over Items 2 through 5 of the award. Judge Aldisert, writing for the panel in Honold, specifically stated that the case did not involve the issue of arbitrability. 405 F.2d at 1125.
The Company argues that Part C. Items 2 through 5 of the arbitration award should be vacated because they conflict (1) with the Consent Decree approved by this Court in No. 73-149, and (2) with the Company's equal employment obligations under federal law. In view of my decision that Items 2 through 5 of the Award must be set aside because Arbitrator Gill exceeded his authority under the Agreement, I need not, and do not, reach either of these federal law grounds for vacating those items in the award.
D. Item 1 of the Award
In Item 1 of the award, Arbitrator Gill required the Company and the Union to "negotiate to set up appropriate procedures" that would give the Union's representatives "direct access to the Placement Bureau to discuss grievances regarding actions taken by that Bureau." Explaining this item, Arbitrator Gill said (Opinion at 7):
As to number 1, dealing with the newly created Placement Bureau, that involves the Company's obligation (expressly affirmed in a Letter Agreement of May 14, 1968) to "give the Union the reasons for the selection and the reasons why the unsuccessful applicant was not selected as the basis for discussing the grievance." I think it is a fair implementation of that understanding to arrange for the Union to have direct access to the Placement Bureau in grievances regarding actions taken by that Bureau.
The letter agreement referred to in the Opinion, however, is a summary of a "discussion regarding the meaning of Article 22, Promotions" between the Company and the Union. Agreement, "Letter Agreements," at 8. The letter agreement in question is thus an agreed interpretation of the terms of Article 22, and disputes over the meaning of that article have been specifically from arbitration. Agreement, § 22.04. Item 1 of the award therefore labors under the same deficiency that I have previously found to afflict Items 2 through 5; it is based on a non-arbitrable provision of the Agreement. When, as here, an arbitrator's award does not draw "its essence from the collective bargaining agreement. . . courts have no choice but to refuse enforcement of the award." Enterprise Wheel and Car Corp., supra at 597.
E. Item 6 of the Award
"6. Temporary demotions. The change from the previous practice of permitting employees to return automatically to their prior jobs on completion of the temporary demotion, is not required by the decree; the previous practice shall be restored."