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802 v. Pennsylvania Shipbuilding Co.

filed: December 28, 1987.


On Appeal from the United States District Court for the Eastern District of Pennsylvania, D.C. Civil No. 87-0407.

Sloviter and Cowen, Circuit Judges, and Debevoise, District Judge*fn*

Author: Sloviter


SLOVITER, Circuit Judge.

This case presents the unusual situation in which a union seeks to have an arbitrator fix the wage rates applicable to a line of work on which the parties have been unable to agree. Lodge 802 of the International Brotherhood of Boilermakers, Iron Shipbuilders, Blacksmiths, Forgers and Helpers, AFL-CIO ("Lodge 802" or "Union") brought this suit in district court seeking an order compelling the Pennsylvania Shipbuilding Company ("Company") to arbitrate the issues of pay and job classifications relative to the assignment of employees to load and unload manifested ships' cargo. Although we are mindful that "arbitration is the preferred method for resolving disputes between a union and an employer," E.M. Diagnostic Systems, Inc. v. Local 169, 812 F.2d 91, 94 (3d Cir. 1987), we agree with the district court that the collective bargaining agreement does not require arbitration of such an issue and therefore affirm the entry of summary judgment for the defendant.


The Company and Union signed a new collective bargaining agreement effective January 1, 1985 through January 6, 1989, which contains the following arbitration provisions:

1. (a) In the event any difference or dispute arise between the parties as to the meaning, application or interpretation of any of the terms or conditions of this Agreement that cannot be amicably settled, or should either party claim that the other has breached any of the terms or conditions of this Agreement, or should any grievance or dispute remain unsettled after exhausting the first three steps of the grievance procedure outlined in Article 27 hereof, then the dispute or question involved, except those specifically excluded in this agreement, shall be submitted for arbitration to an arbitrator to be mutually selected by the parties, as herein provided.

3. It is distinctly understood and agreed that the arbitrator shall not have power to alter or modify the terms and conditions of this Agreement.

App. at 51 (emphasis added).

Traditionally, the Company and its predecessor, Sun Shipbuilding Company, had been engaged primarily in shipbuilding and rebuilding. In early 1986, the Company sought to use Lodge 802 members to load and unload cargo being shipped between ports. The Union filed a grievance contending that the contract did not require its members to do such work. At the Union's request, the matter proceeded to arbitration. The arbitrator ruled that the Company may properly assign Local 802 members to load and unload cargo, but because this work involved "new duties and changes in working conditions", the arbitrator's award also stated that, "the Company shall negotiate in good faith, at the Union's request, concerning pay levels, job classifications, and other working conditions issues relevant to bargaining unit employees performing the on-loading and off-loading of manifested cargo." App. at 80.

The Union filed an action to compel negotiation and to compel arbitration thirty days thereafter if negotiations proved unsuccessful. The parties then met and bargained, but without reaching agreement. The Union requested, and the Company refused, arbitration of the dispute over pay rates and other conditions of employment. The Union then pressed its claim for arbitration in this action. The district court, having received a joint letter from counsel stating that trial was not necessary and that the case could be resolved through summary judgment, granted without further proceedings summary judgment for the Company on the basis of the stipulated factual record submitted to it. The Union appeals.


The Union relies on the general presumption in favor of arbitrability recognized by the Supreme Court in United Steelworkers of America v. Warrior & Gulf Navigation Co., 363 U.S. 574, 4 L. Ed. 2d 1409, 80 S. Ct. 1347 (1960). There the Court stated that, "doubts [on arbitrability of a grievance] should be resolved in favor of coverage." Id. at 583. Significantly, however, the Court in that same case also cautioned that, "arbitration is a matter of contract ...

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