The opinion of the court was delivered by: MACMAHON
This is a motion by a union, pursuant to Rule 65, Federal Rules of Civil Procedure, 28 U.S.C.A., for a preliminary injunction to compel an employer to comply with an arbitration award reinstating an employee discharged for violation of a company rule prohibiting gambling. The employee had been convicted for the knowing possession of policy slips upon the employer's premises during working hours. The main action seeks permanent enforcement of the award together with damages. Jurisdiction is grounded on the Labor-Management Relations Act, 29 U.S.C.A. § 185, and the United States Arbitration Act, 9 U.S.C.A. § 9.
Injunctive relief before trial on the merits should be granted most sparingly. A strong showing of a reasonable probability of success in the main action and irreparable injury are indispensable prerequisites to the granting of such a drastic remedy. This is especially so where, as here, a preliminary injunction would not merely preserve the status quo pendente lite, but grant the party seeking it a substantial part of the ultimate relief obtainable after a successful trial. Securities and Exchange Commission v. Capital Gains Research Bureau, Inc., Docket No. 26942 (2 Cir., December 18, 1961); Speedry Products, Inc. v. Dri Mark Products, Inc., 271 F.2d 646, 648 (2 Cir. 1959). The court must, therefore, appraise the merits of this controversy to determine whether the union is entitled to the extraordinary equitable relief it seeks.
There is no dispute that a company rule prohibited gambling on the employer's premises under penalty of immediate discharge. Admittedly, the employee was discharged for violation of that rule following his indictment, prosecution, and conviction in the County Court of Westchester County for knowing possession of policy slips on the employer's premises during working hours. The union challenged 'the propriety' of the employee's discharge, and after exhaustion of grievance procedures under a collective bargaining agreement, the parties submitted the dispute to arbitration.
Following hearings, the arbitrator found that the employee had knowingly violated the plant rule against gambling and as a result had been convicted of a crime. Nevertheless, and despite the absence of evidence indicating any other reason for the discharge, the arbitrator concluded that the employee had been discharged without just cause. As he saw it, the employee's misconduct called for disciplinary action, but discharge was too harsh a penalty in view of the hardship inflicted on the employee's wife and four children, his seniority, good record, punishment by the authorities, and the lack of any disciplinary action against four other employees whom the arbitrator, but not the authorities, felt were guilty of the same offense. Accordingly, he directed the company to reinstate the employee without back pay from the date of discharge.
The union contends that the award should be enforced because the arbitrator acted within the scope of his power under his honest interpretation of the collective bargaining agreement. The employer argues, however, that the award is unenforceable because the arbitrator exceeded his power by making a compromise decision that the employee's conceded misconduct warranted suspension, but not discharge.
The threshold problem is whether the court has any business at all reviewing the merits of the arbitrator's decision, however bizarre or wrong it may be. Ordinarily, parties to an arbitration agreement will not be heard to complain about the result, if they have received what they bargained for. As a general rule, an arbitrator's decision is not open to judicial review, unless he has exceeded his power by deciding a matter not arbitrable under the contract or the submission. United Steelworkers of America v. American Mfg. Co., 363 U.S. 564, 80 S. Ct. 1363, 4 L. Ed. 2d 1432 (1960); United Steelworkers of America v. Warrior & Gulf Navigation Co., 363 U.S. 574, 80 S. Ct. 1347, 4 L. Ed. 2d 1409 (1960); United Steelworkers of America v. Enterprise Wheel & Car Corp., 363 U.S. 593, 80 S. Ct. 1358, 4 L. Ed. 2d 1424 (1960).
The initial question, therefore, is whether these parties did agree to arbitrate the dispute involved. United Steelworkers of America v. Warrior & Gulf Navigation Co., supra. Accordingly, we must look to the terms of the collective bargaining agreement, and the stipulated question submitted for arbitration, to ascertain exactly what rights these parties designed for themselves, and whether the arbitrator acted within the scope of the power delegated to him.
The applicable provisions of the collective bargaining agreement are set forth in the margin.
The agreement gives the employer 'the right to discharge any employee for just cause.' The union, however, has 'the right to challenge the propriety of the discharge' as a grievance. 'All differences, disputes or grievances between the parties that shall not have been settled' by the grievance procedure 'may be submitted to arbitration', and in such case, the decision of the arbitrator 'shall be final and binding upon the parties but the arbitrator shall not have the power to add to, subtract from, or modify the terms' of the agreement.
When exhaustion of the grievance procedure failed to settle this dispute, the parties stipulated that the question for the arbitrator to decide was: 'Has Joseph Calise been discharged for just cause, and if not what shall the remedy be?'
The agreement does not define what conduct constitutes 'just cause' for discharge. Nor does it lay down any criteria governing 'the propriety' of a discharge once the union lodges a grievance. Neither of the quoted terms has any definite meaning. Both are vague, general and flexible. They confer general rights, but neither the parties, nor the draftsmen, have troubled to tell us, or the arbitrator, exactly what those rights are, other than the right to differ about what constitutes 'just cause' for discharge.
That both parties intended to leave room for differences of views about the matter is clear from the very fact that they expressly left ultimate resolution of disputes about it to an arbitrator unfettered with rigid criteria. Undoubtedly, certainty of meaning was consciously rejected in recognition of a need for flexible standards to facilitate ad hoc solution of each dispute on its own facts to promote the paramount objective of industrial peace. Obviously when this dispute arose, both parties so construed the agreement, otherwise there was no point whatever in submitting anything to arbitration, for there was not the slightest question about the misconduct involved. Yet, they freely stipulated that the arbitrator should decide whether the employee had 'been discharged for just cause, and if not what shall the remedy be?' Words could hardly make clearer the arbitrator's power to decide the only real dispute, that is, whether the conceded misconduct was just cause for discharge, or whether milder disciplinary action was more appropriate.
Lest doubt remain as to who should have the last word on any differences that might conceivably arise as to what the parties intended by the general terms employed, the agreement expressly empowers the arbitrator to make a final and binding decision on 'All differences, disputes or grievances' between the parties. Surely such a plenary grant carries power to interpret the contract. It also brings into play the rule requiring that all doubt as to an arbitrator's power to settle a dispute should be resolved in favor of coverage. United Steelworkers of America v. Warrior & Gulf Navigation Co., supra, 363 U.S. at 582-583, 80 S. Ct. 1347.
The employer argues, however, relying on Textile Workers Union of America, etc. v. American Thread Co., 291 F.2d 894 (4 Cir. 1961), that when the union challenges a discharge for lack of just cause, the arbitrator's power is limited, under the terms of both the agreement and the submission, to deciding whether the employee was in fact discharged for just cause, or for some other reason. Otherwise, the employer urges, the right to discharge for just cause is no right at all, but an illusory opportunity to chance the outcome of arbitration. These arguments are plausible and, indeed, might have validity if the agreement had defined 'just cause' or provided that violation of a company rule would be sufficient, or if the stipulation had focused the issue on whether the alleged misconduct had in fact occurred, rather than on whether it constituted 'just cause' for discharge, or some other remedy.
The court must take the agreement and the stipulated submission as the parties made them. Both squarely put the question of what constitutes 'just cause' for discharge up to the arbitrator. We think it plain, therefore, that the collective bargaining agreement, read with the question ...