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Carey v. General Electric Co.

March 11, 1963

JAMES B. CAREY, APPELLEE
v.
GENERAL ELECTRIC COMPANY, APPELLANT.



Author: Kaufman

Before FRIENDLY, KAUFMAN and MARSHALL, Circuit Judges.

KAUFMAN, C. J.: This case comes before us on cross appeals from the disposition by Judge PALMIERI, in the United States District Court for the Southern District of New York, of a petition to compel arbitration of twelve labor grievances. The International Union of Electrical, Radio and Machine Workers, AFL-CIO, through its president, James B. Carey, instituted this proceeding in the New York Supreme Court, and the defendant, General Electric Company, elected to remove the case to the District Court by invoking section 301(a) of the Labor-Management Relations Act, 29 U.S.C. § 185. See 28 U.S.C. §§ 1441, 1446. The grievances in question arise under the collective bargaining agreement between General Electric and the union, as well as certain local supplement agreements controlling in various plants throughout the country. Over the employer's objections that these grievances were without the jurisdiction of the arbitrator for several reasons - failure to comply with procedural conditions precedent, express exclusion from arbitration in the collective agreement, conflict with the exclusive jurisdiction of the National Labor Relations Board - Judge Palmieri, in a thorough opinion, ordered that the merits of all grievances except one be submitted for determination to the arbitrator. General Electric Company, hereafter referred to as the employer, asserts that Judge Palmieri erred in submitting any issues to arbitration; the union, in its cross appeal, asserts that he erred in withholding the one grievance from arbitration.

We modify and affirm the order of the District Court on the appeal of General Electric, and reverse the ruling of the court on the union's cross appeal.

I. We shall first dispose of those objections to arbitration which rest upon the assertion that the union or the grieving employee failed to take timely action as stipulated in the collective bargaining agreement. Article XIII of the collective agreement establishes a three-step grievance procedure for the peaceful resolution of individual grievances. It provides that a grieving employee, within a reasonable time after the occurrence or knowledge of the aggrieving condition, may complain of it to his foreman or other immediate supervisor. If unresolved, the grievance may be carried to the second stage, presentation by a local union official to a representative of local management. If no settlement is reached after step two, the grievance may be referred by union "headquarters," the National Officers, to management "headquarters," an Executive Officer of the company. The collective bargaining agreement further provides that the step-three submission to the company shall be made "not more than three months after the completion of discussions and the final decision of local Management at Step Two."

The relevant portions of the arbitration provisions, Article XV) stipulate that "any grievance which remains unsettled after having been fully processed pursuant to the provisions of Article XIII, and which involves * * * the interpretation or application of a provision of this Agreement * * * shall be submitted to arbitration upon written request of either the Union or the Company, provided such request is made within 30 days" after a step-three decision by the company officials. Article XV-2(a) continues, "Within 10 days following a written request for arbitration of a grievance, the Company or the Union may request the American Arbitration Association to submit a Panel of names from which an arbitrator may be chosen."

The employer contends that two grievances - National Docket Nos. 4910 and 4928, both involving an employee's assertion that he has rightful claim to a position presently occupied by a junior employee - have been rendered nonarbitrable because not presented by the employee "within a reasonable time after the occurrence or knowledge of the situation * * *". The employer alleges that four and two years, respectively, transpired between the occurrence of the events complained of and the presentation of the grievance. The union answers that the presentation was timely in each case, because the senior employee did not know of the aggrieving condition for the extended time period in question and because each filed his grievance immediately upon learning of it.

Two other grievances - National Docket Nos. 3970 and 3971, consolidated as one in the union's petition to compel arbitration - spring from the laying off of two individuals whom the company refused to recognize any longer as stewards after it placed two groups of employees under a single foreman. The company claims that these grievances have been rendered nonarbitrable by the union's failure to comply with step three of the grievance procedure, which as we have seen requires reference to company headquarters within three months after a step-two decision by local management. The union justifies its non-compliance with the three month provision on the ground that resolution of the identical substantive issue was then pending in another arbitration proceeding; this, claims the union, was sufficient to warrant abeyance of the grievance procedure here.

Of seven grievances,*fn1 the employer contends that the union failed timely to request a panel from the American Arbitration Association within ten days from the date of a written request for arbitration. The union seeks to justify the untimely request by the fact, inter alia, that the Association will automatically and without request submit a list of potential panel members for the arbitral tribunal. The union also asserts that the ten-day limitation was merely permissive and was not a mandatory condition precedent to arbitration, and that the provision has been effectively ignored for many years.

Judge PALMIERI, noting the split of authority on whether compliance with purported conditions precedent was to be determined by the court or by the arbitrator, held that questions of "procedural arbitrability" requiring some special expertise or familiarity with plant conditions and practices would be determined by the arbitrator, but reserved for the courts "questions that do not call for this special competence, as, for example, where the contract provides in specific rather than general terms the procedural requirements and the consequences of non-compliance." He accordingly submitted to arbitration the questions whether an employee had presented his grievance "within a reasonable time" after occurrence or knowledge thereof, and whether the union's delinquency in invoking step three of the grievance procedure was excused by the pendency of arbitration proceedings. He reserved for himself the question whether the union's failure to request an arbitration panel was rendered immaterial by the automatic furnishing of such a list by the American Arbitration Association. He answered the question in the affirmative, and finding no procedural impediment to arbitration of the seven grievances involved, ordered that they be submitted to arbitration.

At the time of Judge PALMIERI'S decision, this Court had been silent on the question of procedural arbitrability. Our silence on this difficult problem in labor law has since been broken by the clear and positive language of Livingston v. John Wiley & Sons, Inc ., - F.2d - (2d Cir. Jan. 11, 1963). Holding that the question of compliance with conditions precedent was a matter solely for the arbitrator to decide, Judge Medina, speaking for a unanimous court, noted that

"It is of the essence of arbitration that it be speedy and that the source of friction between the parties be promptly eliminated * * *. The numerous cases involving a great variety of procedural niceties * * * make it abundantly clear that, were we to decide that procedural questions under an arbitration clause of a collective bargaining agreement are for the court, we would open the door wide to all sorts of technical obstructionism."

The Court continued:

"It is for this reason that we cannot agree to the distinction propounded by Judge PALMIERI in his very excellent discussion in Carey v. General Electric Co . * * * between matters of procedural compliance requiring the expertise of the arbitrator for decision and those which the courts are capable of deciding on their own. If the court must first decide whether a particular procedural problem calls for the special abilities and knowledge of an arbitrator, there will be inevitable delay. Such a practice, if followed, would develop a whole new body of decisional law, with the usual distinctions and refinements. Moreover, we have serious doubts that the suggested distinction between different types of procedural questions arising out of the arbitration clauses in collective bargaining agreements can be placed upon any tenable and rational basis. In any event, it is clear that the practical consequences of attempts by the courts to apply such a distinction would be delay and prejudice to the speedy and effective arbitration which we believe the national policy calls for."

We need add little to what has already been said in the Livingston case. The difficulties involved in the dichotomy suggested by Judge PALMIERI are clearly evident in the very case before us. Even were we to assume that contract conditions precedent could, on their face, be divided into those whose terminology is open-ended, warranting the arbitrator's special competence for interpretation, and those well-defined provisions meet for judicial interpretation, we would often have to go further, and characterize the union's reasons for non-compliance. Thus, it was determined below that the three-month provision involved in National Docket Nos. 3970 and 3971 was specific, but that the union's defense of pending proceedings "requires a consideration of factors more appropriate for the arbitrator." If the court must characterize not only the contract provision asserted to be a condition precedent but also each of the union's justifications or excuses for untimeliness, the arbitral wheels would very soon grind to a halt.

As noted in Livingston, the underlying premise behind Judge PALMIERI'S scheme of characterization is also subject to question; for what is a "specific" contract term? If, as an illustration, an employee must take certain action "within five days," does this not raise the question whether the parties to the collective bargaining agreement intended that the measuring rod be working days rather than calendar days; or, whether the period was intended to be tolled for certain occurrences, such as a strike; or, whether the five-day restriction was illusory under any circumstances, because customarily ignored in the plant?

We therefore affirm that portion of Judge PALMIERI'S order which submitted to arbitration the "procedural" aspects of Docket Nos. 4910, 4928, 3970, 3971, reverse that portion of his order holding that the union was excused from making a timely request for a panel of arbitrators, and ...


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