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BRENNAN v. D. J. MCNICHOL CO.

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA


October 13, 1977

ROBERT BRENNAN
v.
D. J. McNICHOL COMPANY

The opinion of the court was delivered by: BECHTLE

MEMORANDUM AND ORDER

 BECHTLE, J.

 Presently before the Court is the motion of defendant D. J. McNichol Company ("McNichol") for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure. The jurisdiction of this Court is based upon Section 301 of the Labor Management Relations Act of 1947, 29 U.S.C. § 185 (1970).

 Defendant McNichol is a contract carrier whose sole customer is the A & P Company. From March 31, 1971, to July 12, 1974, plaintiff Robert Brennan ("Brennan") regularly operated a truck owned by McNichol in Delaware County, Pennsylvania. On or about July 12, 1974, Brennan delivered various goods and supplies to an A & P Company store in Llanerch, Pennsylvania. During the delivery, the manager of the store notified the Haverford Township Police Department that he observed Brennan attempting to steal merchandise from the shipment. The police stopped Brennan while he was driving away from the store and found the missing goods in the cab of his truck. Following his arrest on a charge of theft by unlawful taking, *fn1" Brennan was discharged by McNichol from his position as a truck driver.

 In his complaint, Brennan avers that on the day of the arrest, July 12, 1974, McNichol was a member of Food Employers' Labor Relations, Inc. ("FELR"), a unit of corporations, partnerships and other individual employers formed for collective bargaining purposes. [ See complaint at P 9.] FELR member companies entered into a collective bargaining agreement with Food Drivers, Helpers and Warehouse Men, Local No. 500 ("Union"). McNichol, as a member company of FELR, and Brennan, as a member of the Union, *fn2" were bound by the terms and conditions of the collective bargaining agreement between FELR and the Union, entitled the Master Food Agreement ("MFA").

 In his complaint, Brennan states that he, the Union and McNichol orally agreed soon after the July 12, 1974, arrest to waive the grievance procedure outlined in Article 8. [ See complaint at P 13.] The essence of the alleged agreement was that the outcome of the pending criminal proceedings in the Delaware County Common Pleas Court would be dispositive of the matter of Brennan's reinstatement. Specifically, Brennan asserts that it was understood that a verdict of guilty in the Criminal Court "would operate to terminate the plaintiff's employment with the Defendant-company and no grievance would be instituted or pursued on plaintiff's behalf." [ See complaint at P 14.] Likewise, an acquittal of the criminal charges "would automatically cause Plaintiff to be reinstated to his position as a truck driver with all back pay, rights and privileges to July 12, 1974." [ See complaint at P 15.]

 All criminal charges were dismissed against Brennan on July 18, 1975, by a jury verdict of "Not Guilty." Shortly after his acquittal, Brennan applied to McNichol for reinstatement pursuant to the alleged oral agreement. When his application for reinstatement was denied by McNichol, Brennan requested his Union representative to initiate proceedings *fn3" under the "Grievance and Arbitration Procedure" of Article 8 of the MFA. *fn4" The FELR Joint Board decision of July 10, 1975, regarding Brennan's discharge was deadlocked. The unsettled matter was then submitted to a disinterested arbitrator who, on November 25, 1975, sustained the discharge and dismissed the Union's grievance.

 In support of its motion for summary judgment, McNichol argues that (1) the decision of the arbitrator is res judicata and bars prosecution of the instant lawsuit; (2) principles of labor law favoring arbitration require that plaintiff's suit be barred; and (3) any oral agreement made by McNichol to reinstate Brennan if he were acquitted is null and void by virtue of the "Extra Contract Agreement" clause in the collective bargaining agreement.

 To prevail upon its motion for summary judgment, McNichol must conclusively demonstrate to the Court that there is no genuine issue as to any material fact and that it is entitled to a judgment in its favor as a matter of law. *fn5" Barron v. Honeywell, Inc., Micro Switch Div., 69 F.R.D. 390, 391 (E.D.Pa. 1975); see Saaybe v. Penn Central Trans. Co., 438 F. Supp. 65, Slip Op. at 4 (E.D.Pa., July 20, 1977). Inferences to be drawn from the underlying facts contained in the movant's materials "must be viewed in the light most favorable to the party opposing the motion." Adickes v. S. H. Kress and Co., 398 U.S. 144, 158-159, 26 L. Ed. 2d 142, 90 S. Ct. 1598 (1970), citing U.S. v. Diebold, Inc., 369 U.S. 654, 655, 8 L. Ed. 2d 176, 82 S. Ct. 993 (1962). This liberal construction by the Court provides the opposing party the benefit of all reasonable doubts and inferences in determining whether a genuine issue exists in fact which should be preserved for trial. Barron v. Honeywell, Inc., Micro Switch Div., supra, 69 F.R.D. at 391-392; Saaybe v. Penn Central Trans. Co., supra, Slip Op. at 4. Once the proponent of the motion demonstrates the absence of a genuine issue of material fact, the burden shifts to the opponent to present countervailing evidence, by affidavits *fn6" or otherwise, to show the existence of such issues. Adickes v. S. H. Kress and Co., supra, 398 U.S. at 160, n.22; Saaybe v. Penn Central Trans. Co., supra, Slip Op. at 4.

 Taking McNichol's last argument first, we find that the specific language of the collective bargaining agreement does not automatically render any oral agreement between the parties null and void. In addition to its emphatic denial of the existence of any oral agreement between the parties, McNichol argues that the MFA *fn7" bars enforcement, since the alleged oral modification: (1) conflicts with the "Arbitration and Grievance Procedure" of Article 8 [ see note 4 supra ]; and (2) cannot exist without the knowledge or agreement of the FELR. *fn8"

 In response, Brennan argues that, notwithstanding Articles 6 and 28 of the MFA, Article 8 allows the parties to formulate oral agreements to resolve grievances. Specifically, Brennan claims that the July, 1974, meeting and resultant oral agreement to await the outcome of Brennan's criminal trial was a "mutually satisfactory solution" within the meaning of Step 1 of the grievance procedure. [ See note 4 supra.] In support of his argument, Brennan submitted the affidavit of William O'Farrell, Business Agent and Vice-President of Teamsters Local No. 500, which states, in pertinent part:

 

It is routine for Union and Employers, including Defendant, to enter into oral agreements in cases involving grievances, suspension and discharge, and this agreement pertaining to Robert Brennan was not unusual. [Affidavit of William O'Farrell.]

 The affidavit further states that Local No. 500 did not notify the designated representative of FELR of its intention to pursue the subsequent steps of the grievance-arbitration procedure because of the terms of the oral agreement to abide by the decision of the Delaware County Criminal Court. [Affidavit of William O'Farrell.]

 By their language, Articles 6, 8 and 28 of the MFA are not mutually exclusive and independent portions of the contract. It is well settled that:

 

A contract is to be considered as a whole, and, if possible, all its provisions should be given effect; while a contract's provisions must be interpreted with reference to the whole the specific controls the general; and a contract should be construed so as to give effect to its general purpose. Capitol Bus Co. v. Blue Bird Coach Lines, Inc., 478 F.2d 556, 560 (3d Cir. 1973).

 In addition to these principles of general contract construction, a collective bargaining agreement must be construed in the context of "the industrial common law -- the practices of the industry and the shop -- [which] is equally a part of the collective bargaining agreement although not expressed in it." United Steelworkers of America v. Warrior and Gulf Navigation Company, 363 U.S. 574, 581-582, 4 L. Ed. 2d 1409, 80 S. Ct. 1347 (1960); Ludwig Honold Mfg. Co. v. Fletcher, 405 F.2d 1123, 1131 (3d Cir. 1969).

 Upon careful consideration of the pleadings, memoranda and affidavits, we find that Step 1 "efforts to reach a mutually satisfactory solution" of a grievance are harmonious with the restrictive "Extra Contract Agreement" clause. Article 8, section 3 provides the contractual basis upon which Brennan's oral agreement rests. The alleged existence of an oral agreement between the parties which would reinstate Brennan without further pursuit of the grievance-arbitration procedure is a genuine existence of material fact which precludes the granting of McNichol's motion for summary judgment.

 McNichol next argues that the decision of the arbitrator is res judicata and bars prosecution of the instant lawsuit. The thrust of McNichol's argument is that a contractual provision stating that a decision of an arbitrator is "final and binding" *fn9" should bar reconsideration of the dispute fully decided on the merits.

 There has been no evidence presented to the Court that Arbitrator Horlacher was informed of any alleged oral agreement between the parties. Indeed, McNichol vigorously argues that Brennan's conspicuous failure to advance the terms of the alleged oral agreement during any stage of the grievance-arbitration procedure should preclude Brennan from further litigation in this Court.

 In both the Step 3 FELR Joint Board decision and the Step 4 arbitration, the issue primarily focused on whether McNichol had just cause to discharge Brennan. Ancillary arguments regarding "proven theft," burdens of proof, and the use of circumstantial evidence were directed to the issue of Brennan's guilt or innocence of the charge of theft. In essence, the character of the Grievance and Arbitration Procedure beyond the alleged Step 1 oral agreement was analogous to the earlier criminal proceedings. The existence of a post-arrest oral agreement between the parties has no relevance to the issue of whether McNichol had just cause to discharge Brennan on July 12, 1974. *fn10" Arbitration of the issues of Brennan's guilt and McNichol's just cause for discharge does not destroy the rights Brennan preserved under the conditional promise of reinstatement. An argument of res judicata of the issue of Brennan's guilt is not appropriate in an equity suit for specific performance of an oral contract which would have operated independent of, and prior to, arbitration.

 McNichol's final argument is that the principles of labor law favoring arbitration require that Brennan's suit be barred. Federal policy favoring arbitration of labor disputes, Gateway Coal Co. v. United Mine Workers of America, 414 U.S. 368, 377, 38 L. Ed. 2d 583, 94 S. Ct. 629 (1974), is based upon Section 203(d) of the Labor Management Relations Act of 1947, 29 U.S.C. § 173(d) (1970):

 

Final adjustment by a method agreed upon by the parties is declared to be the desirable method for settlement of grievance disputes arising over the application or interpretation of an existing collective bargaining agreement.

 In United Mine Workers of America, District No. 2 v. Barnes and Tucker Co., 561 F.2d 1093, Slip Op. at 2, 5 (3d Cir., August 22, 1977), the Third Circuit discussed the issue of judicial enforcement of general assurances made by an employer as a part of grievance settlements. Judge Rosenn stated therein:

 

It is not arbitration per se that federal policy favors, but rather final adjustment of differences by a means selected by the parties. If the parties agree that a procedure other than arbitration shall provide a conclusive resolution of their differences, federal labor policy encourages that procedure no less than arbitration. A determination made pursuant to that chosen procedure is no less enforceable in a federal court than is an arbitration award. United Mine Workers of America, District No. 2 v. Barnes and Tucker, supra, at 1096.

 Under the terms and conditions of the MFA, the "Grievance and Arbitration Procedure" of Article 8, supra note 4, constitutes the means selected by the parties for the final adjustment of differences. Brennan avers that the alleged Step 1 oral agreement would have provided a conclusive resolution of the issue of reinstatement but for McNichol's breach. If the alleged contract had not been breached, there would have been no need for arbitration since that Step 1 agreement would have been "no less enforceable in a federal court than is an arbitration award." United Mine Workers of America, District No. 2 v. Barnes and Tucker, supra, at 1096.

 Brennan has demonstrated the existence of a genuine issue of material fact; namely, whether or not the parties made a Step 1 oral agreement that hinged Brennan's reinstatement on the outcome of the criminal trial. *fn11" Since this material issue must be preserved for the finder of fact at trial, Briach v. Pennsylvania Railroad Co., 462 F.2d 266, 268 (3d Cir. 1972), we will, accordingly, deny defendant McNichol's motion for summary judgment.

 An appropriate Order will be entered.


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