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Chas. S. Winner Inc. v. Teamsters Local Union No. 115

UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT


December 4, 1985

CHAS. S. WINNER, INC., A CORPORATION
v.
TEAMSTERS LOCAL UNION NO. 115, AN UNINCORPORATED ASSOCIATION, TEAMSTERS LOCAL UNION NO. 115, APPELLANT

ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY - CAMDEN (D.C. Civil No. 84-3196)

Author: Gibbons

Before GIBBONS, SLOVITER and STAPELTON, Circuit Judges

Opinion OF THE COURT

GIBBONS, Circuit Judge:

A union, Teamsters Local No. 115, appeals from a district court's summary judgment order holding that an employer, Chas. S. Winner, Inc., need not arbitrate a grievance filed by the union and enjoining the union from further attempting to arbitrate the grievance. We affirm.

I.

The employer operates an automobile sales agency in Cherry Hill, New Jersey that employees approximately thirty-two salesmen. Since March of 1978 the Organization of Vehicular Counselors (OVSC), an independent union, has represented those salesmen in collective bargaining. The OVSC and the employer executed a collective bargaining agreement for the period September 1, 1983 through February 28, 1985. Section 4 of that agreement contains an undertaking to arbitrate "all disputes arising out of the interpretation or application of any provision of this Agreement," Section 7 provides that the agreement "shall be binding upon the Company and the Organization and their successors and assigns."

On May 11, 1984 the membership of OVSC, after having received appropriate notice, voted in a secret ballot election of affiliate with Local 115. Three days later John Morris, the Secretary/Treasurer and Business Manager of Local 115, wrote to the employer requesting a meeting. On May 29, 1984 the employer's attorney responded, advising Local 115 that the employer would not recognize it as a successor of the OVSC. Local 115 designated an employee as the union representative, and that employee filed a grievance with the employer protesting its refusal to recognize Local 115 as OVSC's successor. The grievance relied upon the quoted "successors and assigns" language in section 7 of the agreement. When the employer refused to grieve, Local 115 unilaterally arbitration proceedings with the American Arbitration Association.

When the Association commenced processing Local 115's demand for arbitration, the employer filed suit in the district court. It sought a declaratory judgment that Local 115 was not a party to its agreement with the OVSC as well as an injunction prohibiting Local 115 from taking any steps to compel arbitration of the disputed grievance. Local 115 counterclaim for an order compelling arbitration. n.1 [FOOTNOTE OMITTED] The employer moved for summary judgment. The district court first held that it was for it, and not an arbitrator, to decided whether Local 115 was a party to the collective bargaining agreement -- and was thus entitled to attempt to enforce the agreement's arbitration clause. Then, after finding that no disputed issues of material fact existed, the court, applying the standards of successorship announced in Howard Johnson Co. v. Detroit Local Joint Executive Board, 417 U.S. 249, 41 L. Ed. 2d 46, 94 S. Ct. 2236 (1974); Sun Oil Co. v. NLRB, 576 F.2d 553 (3d Cir. 1978); NLRB v. Bernard Gloekler North East Co., 540 F.2d 197 (3d Cir. 1978); NLRB v. Bernard Gloekler North East Co., 540 F.2d 197 (3d Cir. 1976); and American Bridge Division, United States Steel Corp. v. NLRB, 457 F.2d 660 (3d Cir. 1972), held that Local 115 was not a successor to the OVSC and thus not a party to the collective bargaining agreement. This appeal followed.

II.

Local 115 contends that the district court committed legal error when it took upon itself the responsibility of deciding whether the union was a party to the collective bargaining agreement. It argues that, because the decision concerned whether Local 115 was a successor or assignee within the meaning of the agreement signed by the employer and the OVSC and because that agreement bound those two parties to arbitrate "all disputes arising out of the interpretation or application of this agreement," the district court should have referred the decision to an arbitrator. In further support of its contention, Local 115 invokes the frequently heard dictum that arbitration is the preferred method of settling labor disputes.

The district court rejected Local 115's analysis. It reasoned that the question whether a party is bound by a collective bargaining agreement is antecedent to the question of arbitrability and therefore must be decided by a court.

III.

Our analysis starts with the fundamental premise that arbitration is a contract remedy. Thus, for a labor relations issue to be arbitrable, it first must be one that is susceptible to contractual resolution. The specific issue central to this appeal is whether an employer and labor organization can contractually designate a procedure for resolving successorship disputes.

Labor relations issues that run afoul of the substantive provisions of the National Labor Relations Act (NLRA), 29 U.S.C. §§ 151-169 (1982), cannot be resolved by contract. Several of the Act's provisions are relevant to this case. First, there is section 9, which provides that "representatives designated or selected for the purposes of collective bargaining by the majority of the employees in a unit appropriate for such purposes, shall be the exclusive representatives of all the employees in such unit for the purposes of collective bargaining." Id § 159(a). That same section delegates to the National Labor Relations Board the authority to supervise employee selection of a bargaining representative as well as the power to designate appropriate bargaining units. See id § 159(b), (c). In addition, provisions of section 8 define as unfair labor practices employer interference with employee free choice of bargaining representative and employer assistance to favored labor organizations. See id. § 158(a)(1), (2).

The thrust of these provisions is clear: the selection of a collective bargaining representative is left to the employees in an appropriate unit, with the Board exercising oversight of such selection. Yet Local 115 contends that the district court should have referred the issue of whether it was a successor or assignee of the OVSC -- in other words, whether Local 115 was the employee's collective bargaining representative -- to an arbitrator. We reject this contention. Union successorship is not a contract issue*fn2 and thus can never be decided by an arbitrator.*fn3

In light of the above discussion, it is also evident that the district court erred when it decided that Local 115 was not a party to the agreement signed by the OVSC and the employer, for the status of Local 115 is no more a decision for a district court than it is for an arbitrator. That dispute is one for the Board to resolve.*fn4 West Point-Pepperell, Inc. v. Textile Workers Union of America, 559 F.2d 304, 307 (5th Cir. 1977).

IV.

The judgment appealed from will be affirmed insofar as it declares that the employer is not bound to arbitrate the successorship issue, but vacated insofar as it declares that Local 115 is not a successor with which the employer must bargain collectively. No costs.


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