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AMERICAN STORES CO. v. JOHNSTON

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK


March 18, 1959

AMERICAN STORES COMPANY, Plaintiff,
v.
Richard L. JOHNSTON, Deputy Trustee of Retail Clerks' International Association, Local 1245; Fred A. Ammond, Vice President of Retail Clerks' International Association (AFL-CIO), as Trustee of Retail Clerks' International Association, Local 1245; Retail Clerks' International Association (AFL-CIO), an unincorporated association; and Local Union 1245 of Retail Clerks' International Association(AFL-CIO)

The opinion of the court was delivered by: BICKS

In an action by plaintiff-employer for a declaratory judgment pursuant to 28 U.S.C.A. ยง 2201 *fn1" the defendant-Union has moved for summary judgment upon the following undisputed facts: On December 1, 1946 the plaintiff (hereinafter referred to as the Company) instituted an Employee Retirement Plan which provided for both employer and employee contributions toward a retirement pension fund, the Company's obligation being to contribute approximately twice that of the employees. In addition the entire cost of retirement income for past services, over 3 million dollars, was also paid by the Company. On December 30, 1946, Peter F. Wendel, an employee, voluntarily joined the plan by executing a form entitled 'Acceptance and Payroll Deduction Authority' which authorized deductions from his earnings of amounts sufficient to cover his contributions under the group annuity contract. The plan provided that 'each member shall retire on his normal retirement date, to wit, the first day of the month following his sixty-fifth birthday.' Wendel reached his sixty-fifth birthday on March 12, 1958 and pursuant to the provision of the Plan retired as of April 1, 1958. He has since received the prescribed retirement benefits. Notwithstanding that the Company has pursued a consistent policy of retiring employees at age sixty-five and, in accordance with the Plan, had previously retired fifty-four employees belonging to defendant Local 1245, the Union nevertheless, on the occasion of Wendel's retirement, informed the Company that it considered the retirement an improper discharge contrary to the terms of the collective bargaining agreement then in force. *fn2" The Company refused to acquiesce in the Union's demand for arbitration contending that the retirement of an employee pursuant to the above mentioned plan was not within the scope of the arbitration clause contained in the agreement between the parties. *fn3"

The suit sub judice followed.

 The issues raised by the motion for summary judgment are (i) whether the retirement of an employee consistent with the Employee Retirement Plan constitutes an arbitrable dispute under the collective bargaining agreement between the parties and (ii) whether that issue, i.e. arbitrability, is to be determined by the Court as a matter of contract interpretation or by the arbitrators themselves. The problems will be treated in inverse order.

 The cases have almost uniformly held that, absent clear evidence of a contrary intent, the question of arbitrability vel non is to be judicially determined. Only where the parties have unequivocally expressed a desire that the arbitrators shall determine their own jurisdiction will that issue be withdrawn from the Courts. Lodge No. 12, District No. 37, International Association of Machinists v. Cameron Iron Works, Inc., 5 Cir., 1958, 257 F.2d 467, 470; Engineers Ass'n v. Sperry Gyroscope Co., 2 Cir., 1957, 251 F.2d 133, 137; Local No. 149, etc. v. General Electric Company, 1 Cir., 1957, 250 F.2d 922, 930; Local 205, etc. v. General Electric Company, 1 Cir., 1956, 233 F.2d 85, 101. The contract provisions here make no attempt to reserve to the arbitrators said determination so that the Court must consider whether the facts before it constitute an arbitrable dispute.

 We proceed then to determine whether a retirement pursuant to a voluntary retirement plan under the circumstances here presented constitutes an arbitrable dispute. The facts detailed above suffice to indicate that the Union's claim of arbitrability herein is patently baseless. It has shown no circumstances which would warrant a finding that a uniform, consistent, and non-discriminatory application of a voluntary employee retirement plan is tantamount to an unjust discharge or improper layoff within the meaning of the collective bargaining agreement. See General Electric Co. v. United Electrical Radio & Machine Workers, etc., Sup.1949, 196 Misc. 143, 91 N.Y.S.2d 724; American Federation of Grain Millers, Local No. 110, A.F. of L. v. Allied Mills, Inc., Sup.1949, 196 Misc. 517, 91 N.Y.S.2d 732; Grocery and Food Warehousemen, Local Union No. 635, etc. v. Kroger Co., Sup.1950, 364 Pa. 195, 70 A.2d 218. Cf. United States Steel Corp. v. Nichols, 6 Cir., 1956, 229 F.2d 396, 56 A.L.R.2d 980; United Protective Workers of America v. Ford Motor Co., 7 Cir., 1952, 194 F.2d 997; Bakery & Confectionary W.I.U., etc. v. National Biscuit Co., 3 Cir., 1949, 177 F.2d 684. Indeed, for over a period of twelve years during which fifty-four employees were retired and several new collective bargaining agreements negotiated, the Union never challenged the Company's retirement policy. *fn4"

 If uniform practice, long continued, can settle the construction of an instrument, most certainly it has done so in this case. It fairly appears that the parties did not consider the retirement plan a subject of their negotiations, nor did they view retirement thereunder as a discharge or layoff within the meaning of the contract which could give rise to an arbitrable dispute. This new construction which the Union seeks to place upon the collective bargaining agreement is unsupported and unwarranted. When it appears that a claim of arbitrability is frivolous or patently baseless it would be an abuse of the arbitration process and would defeat the contractual intent of the parties to compel arbitration. See Local 205, etc. v. General Electric Company, supra, 233 F.2d at page 101. The defendant's motion is, accordingly, denied.

 The determination of the defendant's motion necessarily disposes of the issues raised by the complaint. Judgment for the plaintiff will, and hereby is granted, pursuant to Rule 56 of the Federal Rules of Civil Procedure, 28 U.S.C.A., declaring that Wendel's retirement pursuant to the plaintiff's Employee's Retirement Plan is not a dispute subject to arbitration under the collective bargaining agreement in force between the parties on October 20, 1958, the date of filing of the complaint herein.

 So ordered.


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