decided: April 1, 1981; As Amended April 6, May 8, 1981.
ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
Before Gibbons, Van Dusen and Weis, Circuit Judges.
Wilkes-Barre Publishing Company, (the Employer) a Pennsylvania corporation which publishes a daily newspaper, the Times-Leader, appeals from an order dismissing its three count complaint for declaratory and injunctive relief and compensatory and punitive damages. The defendants are the Newspaper Guild of Wilkes-Barre, Local 120 (the Local Guild), the Newspaper Guild (the International Guild), three newspaper trades local unions, and one newspaper trade international union, the Wilkes-Barre Council of Newspaper Unions, Inc. (the Council), a Pennsylvania corporation which publishes a daily newspaper, the Citizens' Voice, and eight individual residents of Pennsylvania each of whom is an official in one of the unions. The first count is brought pursuant to section 301 of the Labor Management Relations Act of 1947, 29 U.S.C. § 185, for the alleged breach of a collective bargaining agreement between the Employer and the Local Guild. The second count charges that the International Guild breached the collective bargaining agreement or, alternatively, together with the newspaper trade unions, the eight individual defendants and the Council tortiously induced a breach of the Employer-Local Guild contract in violation of section 301. The third count is a pendent claim under Pennsylvania law for tortious interference with the Employer-Local Guild contractual relationship. The trial court, 504 F. Supp. 54 (D.C.), dismissed the section 301 breach of contract claim against the Local Guild for failure to exhaust arbitration remedies, and against the International Guild for failure to state a claim upon which relief could be granted. It dismissed all the tortious interference claims for want of subject matter jurisdiction. We hold that the court should not have dismissed the suit against the Local Guild, but should have stayed it pending arbitration. We reverse the dismissal of the remaining claims and remand for further proceedings.
The Allegations of the Pleadings
Since 1938 the Employer has had a collective bargaining relationship with the Local Guild as representative of the editorial, advertising, circulation, business and maintenance employees. The most recent collective bargaining agreement, executed on January 18, 1978, contains a "Duration and Renewal" clause, Article XXV providing:
1. This agreement shall commence on the 3rd day of October 1976, and expire on the 30th day of September, 1978, and shall inure to the benefit of and be binding upon the successors and assigns of the Publisher.
2. At any time within sixty (60) days prior to the termination of this agreement, the Publisher or the (Local) Guild may initiate negotiations for a new agreement to take effect at the expiration of the present agreement. The terms and conditions of this agreement shall remain in effect during such negotiations. (emphasis supplied).
The collective bargaining agreement also contains Article XVII, providing:
Employees of the Publisher shall be free to engage in any activities outside of working hours provided such activities do not consist of service performed for publications in direct competition with the Publisher, and provided further that, without permission, no employee shall exploit his connections with the Publisher in the course of such activities. (emphasis supplied).
Finally, the collective bargaining agreement contains in Article XV(3) an arbitration clause providing:
Any matter arising from the application of this agreement (except renewal of this agreement) which cannot be settled by the grievance committee shall be referred to a standing committee composed of not more than three (3) representatives of the (Local) Guild and not more than three (3) representatives of the Publisher in an effort to adjust such dispute. Any such matter not satisfactorily settled within thirty (30) days of its first consideration may be submitted to final and binding arbitration by either party
On August 29, 1978, within sixty days of the September 30 expiration date of the contract, the Employer and the Local Guild commenced negotiations for a new agreement. Negotiations continued through October 5. During those negotiations, on September 28, the Employer's bargaining representatives delivered to the Local Guild bargaining representatives a letter stating the Employer's position that by virtue of Article XXV the collective bargaining agreement continued in effect after September 30. Simultaneous negotiations were also taking place, with the assistance of the Federal Mediation and Conciliation Service, with the newspaper trade union locals representing production employees. The complaint does not allege that the production employees' collective bargaining agreements had a clause similar to Article XXV, but does allege that the Employer's position as to the automatic extension of the Local Guild contract was called to the attention of their representatives.
On October 6 the Local Guild and the production trades locals voted to strike. Prior to that time, and indeed prior to September 30, individual defendants John J. Wallace of the Local Guild, Robert Ladd of the Typographical Local, James Kaporch of the Pressmen's Local, and Robert Booth of the Stereotypers' Local caused the incorporation of the Council as a nonprofit corporation for the purpose of publishing a newspaper throughout the pendency of the labor dispute with the employer. For several weeks prior to the October 6 work stoppage, pre-incorporation organizational activities were undertaken for production and distribution of the Citizens' Voice, and at a rally held on October 6 the publishing plans were announced. Publication and distribution began on October 9, utilizing editorial, advertising, circulation and building maintenance personnel represented by the Local Guild and on strike against the Employer. The production personnel are also striking employees of the Employer. Distribution of the Citizens' Voice is to present and former Times-Leader subscribers, and advertising in it is solicited from Times-Leader advertisers.
On October 11, 1978 the Employer filed with the National Labor Relations Board a charge that by encouraging its employees to participate in the Citizens' Voice venture the Local Guild has committed the unfair labor practice of refusing to bargain in good faith in violation of section 8(b)(3) of the National Labor Relations Act. 29 U.S.C. § 158(b)(3). It later filed similar charges against the production trades locals.*fn1 The National Labor Relations Board has found the existence of reasonable cause to believe the alleged unfair labor practice has occurred.*fn2
The Employer alleges that by virtue of Article XXV its collective bargaining agreement with the Local Guild, including the prohibition in Article XVII against competitive employment, continued in force after September 30, 1978. By working for the Citizens' Voice, the Employer contends, the Guild members violated their contract. And by inducing Guild members to breach the terms of an extant collective bargaining agreement ...