the 1974 letter from Thomas Magrann mentioned above.
On May 1, 1975, the Home Builders Association, on behalf of Gigliotti Corporation, entered into a collective bargaining agreement with the Laborers District Council of the Metropolitan Area of Philadelphia and Vicinity. On May 1, 1978, the Home Builders Association, on behalf of Gigliotti Corporation, entered into a collective bargaining agreement with the Metropolitan District Council of the United Brotherhood of Carpenters and Joiners of America. (Exhibit E to the stipulation).
The collective bargaining agreements between Gigliotti Corporation and the United Brotherhood of Carpenters and Joiners and the Laborers' District Council terminated in 1983. Since the termination of those agreements, Gigliotti Corporation has not entered into any collective bargaining agreements with any of the affiliated local unions of the BCTC. Furthermore, since the termination in 1983 of those agreements, Gigliotti Corporation has subcontracted work on occasion to subcontractors who are not signatory to collective bargaining agreements with affiliated local unions of the BCTC. On August 1, 1983, the BCTC made a demand for arbitration based on its 1969 agreement with Chris Gigliotti and Sons, Inc., contending that plaintiff should hire only members of unions affiliated with BCTC.
Under § 301 of the Labor Management Relations Act, 29 U.S.C. § 185(a), I have jurisdiction over this suit. Because the contract calls for arbitration, however, my role as a federal district judge is very limited. United Steelworkers v. American Manufacturing Company, 363 U.S. 564, 80 S. Ct. 1343, 4 L. Ed. 2d 1403 (1960). I must determine whether the dispute in question is arbitrable. Normally, my determination would be limited to "whether the party seeking arbitration is making a claim which on its face is governed by the contract." Id. at 568.
In this case, however, there is an additional question: whether the contract is enforceable against Gigliotti Corporation. If Gigliotti is not bound by the contract, then it cannot be compelled to arbitrate a dispute pursuant to the arbitration clause of the contract. John Wiley and Sons, Inc. v. Livingston, 376 U.S. 543, 11 L. Ed. 2d 898, 84 S. Ct. 909 (1964).
I. Arbitrability of the dispute
The arbitration clause in the agreement states that "all disputes, grievances or complaints involving the interpretation or application of this Agreement" shall be arbitrated. Assuming that Gigliotti Corporation is a party to the contract, this broad clause clearly covers the dispute in question, i.e., whether or not the plaintiff is bound to hire carpenters and laborers who are members of the unions affiliated with the BCTC.
II. Enforceability of the contract against plaintiff
Plaintiff asserts, however, five reasons why the 1969 contract with BCTC is unenforceable against Gigliotti Corporation. First, Gigliotti Corporation claims that it is not bound by the contract because plaintiff is not a signatory to the contract. Second, plaintiff argues that before the merger, BCTC, through the 1974 Magrann letter, terminated the contract with Chris Gigliotti and Son, Inc. pursuant to the termination clause. Thirdly, plaintiff asserts that the Magrann letter repudiated the contract as a matter of law. Fourth, plaintiff argues that the contract automatically terminated as a matter of law when Gigliotti Corporation executed collective bargaining agreements in 1975 and 1978 with its employees. And, finally, plaintiff asserts that the contract violates §§ 1 and 2 of the Sherman Act and is therefore unenforceable as contrary to public policy.
Because I find that plaintiff is bound by the contract as a successor to Chris Gigliotti and Son, Inc. and because the contract has not been terminated or repudiated as a matter of law, I refuse to grant plaintiff's requested declaratory and injunctive relief.
The fact that plaintiff is not signatory to the contract with BCTC is not necessarily conclusive. In John Wiley, supra, the Court held that a successor corporation was required to arbitrate under a contract entered into by its predecessor with the union. In Howard Johnson Co. v. Hotel Employees, 417 U.S. 249, 94 S. Ct. 2236, 41 L. Ed. 2d 46 (1974), the Court held that a corporation that merely purchased the assets of its predecessor was not bound by the collective bargaining agreement of its predecessor with the union. The answer to the question of successor liability for a contract with the union depends on the particular facts in each case. Id. at 262 n.9. The Howard Johnson Court distinguished Wiley because Wiley involved a merger "as a result of which the initial employing entity completely disappeared", id. at 257, whereas Howard Johnson's merely bought some of the assets from the initial employers and the original companies continued to exist as viable corporate entities. Id.
The Court in Howard Johnson set forth reasons for distinguishing between a merger and a purchase of assets. First, the merger in Wiley "was conducted 'against a background of state law that embodied the general rule that in merger situations the surviving corporation is liable for the obligations of the disappearing corporation'", Howard Johnson Co., supra, at 257, quoting NLRB v. Burns International Security Services, 406 U.S. 272, 286, 32 L. Ed. 2d 61, 92 S. Ct. 1571 (1972).
Furthermore, in a merger situation, the original contracting party disappears and there may be no means to enforce the obligation voluntarily undertaken by the disappearing corporation. In Howard Johnson the union had a realistic remedy against the corporations that sold some of their assets to Howard Johnson.
The present case falls squarely within the Wiley reasoning. First, there was a merger as a result of which Chris Gigliotti and Son, Inc. disappeared. Second, Pennsylvania state law in existence at the time of the merger held the surviving corporation of a merger responsible for all the liabilities and obligations of each of the corporations so merged or consolidated, 15 Pa. Cons. Stat. Ann. § 1907, Dawejko v. Jorgensen Steel Company, 290 Pa. Super. 15, 434 A.2d 106 (1981). Third, the merger agreement itself makes Gigliotti Corporation responsible for the contract obligations of its predecessor. That contract states:
The continuing corporation shall . . . be responsible for all debts, liabilities, obligations and duties of each constituent corporation, and all said rights, liens, debts, liabilities, obligations and duties shall henceforth attach to the continuing corporation and may be enforced against it to the same extent as if they had been incurred or contracted by it . . .