Before MEDINA, SMITH and KAUFMAN, Circuit Judges.
KAUFMAN, C.J.: The plaintiff, Black-Clawson Company, Inc., (hereafter referred to as Black-Clawson or the employer) is engaged in the manufacture of machinery for the paper-making industry in various states. In July 1959, Black-Clawson entered into a collective bargaining agreement with the International Association of Machinists, Lodge 355, District 137 (hereafter referred to as the Union), which served as the exclusive bargaining representative for certain production and maintenance employees in the plaintiff's Watertown, New York plant. One member of the unit represented by the Union was Theodore A. Best who, along with the Union, was joined as a defendant in the court below in a suit for a declaratory judgment brought by Black-Clawson. Best was an employee of the company from June 4, 1951 until May 8, 1961, when his employment was terminated by a written notice informing him that the cause for discharge was his failure to return to work at the end of a protracted period of sick leave. The collective bargaining agreement between Black-Clawson and the Union established a four-step grievance procedure, terminating in arbitration, for resolution of employee grievances.Best, purporting to have complied with the preliminary steps of the grievance procedure, demanded that the employer go to arbitration in order to remedy what Best contended was a wrongful discharge in violation of the collective agreement.
Black-Clawson, invoking section 301 of the Labor-Management Relations Act, 29 U.S.C. § 185, and the Federal Declaratory Judgment Act, 28 U.S.C. § 2201, commenced an action in the United States District Court for the Northern District of New York for a declaration that this dispute was not arbitrable under the terms of the collective bargaining agreement, joining the Union and Best as co-defendants.The defendants, in separate answers, requested a dismissal of the complaint as well as affirmative declaratory relief and an order compelling the plaintiff to submit to arbitration. On cross-motions for summary judgment, the District Judge held that the defendants were to be restrained from taking any action, based upon the agreement, to compel the arbitration of Best's grievance. He held that no such right was conferred upon an individual employee by the contract or by the applicable rules of law; he also held that neither Best nor the Union had complied with the four-step procedure set down in the agreement, which barred them from compelling the employer to arbitrate. From this judgment, only Best appeals.
We affirm the judgment of the District Court.
As a preliminary matter, we hold that an action for declaratory judgment may be brought under the terms of section 301(a) of the Labor-Management Relations Act*fn1 as implemented by the Federal Declaratory Judgment Act.*fn2 Some courts have held that the language of section 301(a), "suits for violations of contracts," does not countenance an action by a party to a collective bargaining agreement who asserts that he has in fact adhered to the terms of the agreement and who fails to allege its "violation" by the opposing party. See Mengel Co. v. Nashville Paper Products & Specialty Workers Union, 221 F.2d 644 (6th Cir. 1955) (with Circuit Judge, now Justice, Stewart dissenting); Hall v. Sperry Gyroscope Co. Division of Sperry Rand Corp ., 183 F. Supp. 891 (S.D.N.Y. 1960); Wamsutta Mills v. Pollock, 180 F. Supp. 826 (S.D.N.Y. 1959). By far the great majority of courts, however, read section 301(a) more expansively and permit suits for a declaration of rights in circumstances such as those in the case before us. See Fried v. Glenn Elec. Heater Corp ., 198 F. Supp. 248, 254-55 (D.N.J. 1961); Local 28, Int'l Bhd. of Elec. Workers v. Maryland Chapter, Nat'l Elec. Contractors Ass'n, 194 F. Supp. 491, 493 (D. Md. 1961); Weyerhaeuser Co. v. International Bhd. of Pulp Workers, 190 F. Supp. 196 (D. Me. 1960); Employing Plasterer's Ass'n v. Operative Plasterers Ass'n, 172 F. Supp. 337, 340 (N. D. Ill. 1959); Prudential Ins. Co. v. Insurance Agents' Union, 169 F. Supp. 534 (S.D.N.Y. 1959); Armstrong-Norwalk Rubber Corp. v. Local 283, United Rubber Workers, 167 F. Supp. 817, 818 (D. Conn. 1958), appeal dismissed, 269 F.2d 618 (2d Cir. 1959); Studio Carpenters Local Union No. 946 v. Loew's Inc ., 84 F. Supp. 675 (S. D. Cal. 1949).*fn3
We find nothing in the history of section 301(a) which indicates an intention to restrict that section to suits for damages or specific enforcement. In fact, the one item of relevant material in the legislative history points quite clearly to the opposite conclusion and supports the result we reach today. In a discussion on the floor of the House concerning the effect of section 302 of the House bill, predecessor to the present section 301, Congressman Hartley, the sponsor of the act, adopted this construction:
"* * * Section 302 * * * contemplates not only the ordinary lawsuits for damages but also such other remedial proceedings, both legal and equitable, as might be appropriate in the circumstances; in other words, proceedings could, for example, be brought by the employers, the labor organizations, or interested individual employees under the Declaratory Judgments Act in order to secure declarations from the Court of legal rights under the contract." 93 Cong. Rec. 3656-57 (1947).
We do not doubt that if the codefendants here had desired to press Best's grievance to arbitration they could have brought an action under section 301(a) to compel the company to do so, in the event Black-Clawson had refused to go to arbitration. See Textile Workers Union v. Lincoln Mills, 353 U.S. 448 (1957); United Steelworkers v. Warrior & Gulf Navigation Co ., 363 U.S. 574 (1960); cf. Smith v. Evening News Ass'n, 31 U.S.L. Week 4041 (U.S. Dec. 10, 1962).But, as it would in such an action, the instant proceeding turns upon a construction of the collective bargaining agreement and a determination whether the employer's obligation to arbitrate Best's grievance was called into play by the terms of the agreement and by the Union's and Best's conduct thereunder. The issues of fact and of law to be determined by the court are the same, whether the complaint alleges a violation of the contract and requests arbitration or whether it alleges compliance with the contract and requests protection by declaratory judgment against improper demands for arbitration.
Here, the Union and Best purported to take all steps necessary to precipitate the duty to arbitrate; in short, there was an "actual controversy" within the meaning of the Declaratory Judgment Act. To hold that the controversy cannot be resolved in an action brought by any of the parties empowered to do so under section 301(a) would comport neither with the streamlined procedural policy embodied in the declaratory judgment proceeding nor with the strong concern embodied in section 301 for the enforcement of collective bargaining agreements and the peaceful resolution of contract disputes between labor and management.Cf. Textile Workers Union v. Lincoln Mills, supra .
The heart of the controversy presented on appeal is the interpretation of those sections of the collective bargaining agreement between Black-Clawson and the Union which deal with the resolution of grievances. Article XX entitled "Grievance Procedures," defines a grievance as "any dispute between the Company and the Union, or between the Company and any employee," and goes on to establish a four-step procedure for the solution of such disputes. Step one provides that the "grievance shall be taken up orally by the aggrieved employee and a member of the Union Committee if he so desires with the Department Foreman within three (3) days after the grievance becomes known by the aggrieved employee or by the Shop Committee." Within two working days, the foreman must give his answer to the grievance, and if no settlement is reached, the grievance is to be reduced to written form, upon which the foreman will record his answer. Step two is in the hands of the Shop Committee which, within two days, may present the written grievance to the Plant Superintendent, who must meet with the Committee and give his written answer within four working days. If no settlement of the grievance is achieved at this stage, mounting to step three is again in the hands of the Shop Committee, which may, within four days, request a meeting with the Director of Personnel, whose answer must be forthcoming before ten days pass. Step four of the grievance procedure is described as follows:
In the event the grievance or dispute is not settled in a manner satisfactory to the grieving party then the grieving party may submit such grievance or dispute to arbitration. Whomever requests arbitration shall serve notice to the other party and submit letter of notification of intent to arbitrate to the Federal Mediation and Conciliation Service within fifteen (15) days after receiving the written answer from the Director of Personnel or his designee.
After Best's employment was terminated on May 8, 1961, both he and the Union purported to comply with the first three steps of the grievance procedure. Judge Brennan, in the court below, held that they had in fact failed to comply with the letter of the collective bargaining agreement. In any event, on July 5, 1961, Best mailed a letter to Black-Clawson's Director of Personnel, invoking step four of the grievance procedure and requesting arbitration. The employer indicated on several occasions that it did not consider the matter to be arbitrable.
Best contends that not only is the issue arbitrable but the terms of the contract are such as to permit him personally to request arbitration and to compel it by an action in a court of law. We disagree, and hold that the terms of Article XX of the collective bargaining agreement give no standing to Best, as an individual employee, to compel arbitration.
It matters not that "grievance" is defined in one sense as a "dispute * * * between the Company and any employee"; that is merely a definition in the contract and does not in any way govern the proper procedure for settling the grievance. It is clear that the rights of the individual employee with regard to the grievance procedure are limited to step one, confrontation with the Department Foreman. From that point on, the right to progress from one step to the next is vested in the Union and ultimately in the employer as well. Best contends that step four permits the "grieving party" to invoke arbitration, and that this clearly refers to the individual employee. But by doing no more than placing this phrase in its context, we are drawn ineluctably to the conclusion that "party" in step four means what it means throughout the entire collective bargaining agreement - either Black-Clawson or the Union. Step four itself requires that notice of intention to submit to arbitration be given "to the other party." "Each party" must bear its respective expenses during arbitration. Article XX also provides that "either party to this agreement shall be permitted to call employee witnesses" in administering the grievance procedure. The words "either party" recur too frequently in Article XX to permit of any construction other than that we here ...