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International Union of Electrical v. General Electric Co.

decided: December 27, 1968.


Moore, Friendly and Feinberg, Circuit Judges.

Author: Feinberg

FEINBERG, Circuit Judge:

This appeal is from a judgment of the United States District Court for the Southern District of New York, Edward Weinfeld, J., 278 F. Supp. 991 (1968), granting the motion of appellee International Union of Electrical, Radio and Machine Workers ("Union") to compel appellant General Electric Company ("Company") to submit certain grievances to arbitration. One of these grievances arose under the 1960-1963 National Agreement between the parties. The other six,*fn1 arising under their 1963-1966 National Agreement, present this court with the difficult task of applying unusually complex contractual language to a variety of factual situations within the framework of the broad federal principles of arbitrability enunciated in the Steelworkers trilogy. United Steelworkers v. American Mfg. Co., 363 U.S. 564, 4 L. Ed. 2d 1403, 80 S. Ct. 1343 (1960); United Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 574, 4 L. Ed. 2d 1409, 80 S. Ct. 1347 (1960); United Steelworkers v. Enterprise Wheel & Car Corp., 363 U.S. 593, 4 L. Ed. 2d 1424, 80 S. Ct. 1358 (1960). For reasons given below, we affirm the order requiring arbitration as to four of the grievances and reverse as to three, with the writer of this opinion differing from his brothers as to the disposition of one grievance (N.D. 8290).


It is well established that whether the parties to a bargaining contract have agreed to submit specific issues to arbitration is for the court to determine. Atkinson v. Sinclair Refining Co., 370 U.S. 238, 241, 8 L. Ed. 2d 462, 82 S. Ct. 1318 (1962); see John Wiley & Sons v. Livingston, 376 U.S. 543, 546-57, 11 L. Ed. 2d 898, 84 S. Ct. 909 (1964).*fn2 When the question is raised under an agreement containing a broad or "standard" arbitration clause, this is now not usually a difficult issue; the court's function is limited to determining whether there is any reasonable construction of the arbitration clause that would cover the grievance on its face and whether any other provision of the contract specifically excludes it. Under the Steelworkers doctrine:

Apart from matters that the parties specifically exclude, all of the questions on which the parties disagree must therefore come within the scope of the grievance and arbitration provisions of the collective agreement.

An order to arbitrate the particular grievance should not be denied unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute. Doubts should be resolved in favor of coverage.

Warrior & Gulf, 363 U.S. at 581, 582-83.

The contract in dispute in Warrior & Gulf called for arbitration of "differences . . . as to the meaning and application of the provisions of this Agreement," 363 U.S. at 576; in American Mfg. Co., its companion case, the arbitration provision covered: "Any disputes, misunderstandings, differences or grievances arising between the parties as to the meaning, interpretation and application of the provisions of this agreement." 363 U.S. at 565 n. 1.*fn3 Similarly sweeping, "standard" arbitration clauses have frequently been construed by the federal courts subsequent to the Steelworkers trilogy to require arbitration of any grievance not expressly excluded, without weighing the claim on merits. See, e.g., John Wiley & Sons v. Livingston, 376 U.S. 543, 11 L. Ed. 2d 898, 84 S. Ct. 909 (1964); Communications Workers of America v. Bell Telephone Laboratories, Inc., 349 F.2d 398 (3d Cir. 1965); General Warehousemen & Employees Union v. American Hardware Supply Co., 329 F.2d 789 (3d Cir.), cert. denied, 379 U.S. 829, 13 L. Ed. 2d 37, 85 S. Ct. 57 (1964); Procter & Gamble Independent Union v. Procter & Gamble Mfg. Co., 298 F.2d 644 (2d Cir. 1962).

The arbitration provisions in the 1963-1966 Agreement here in issue, however, are considerably more detailed and limited than the typically general language of an ordinary arbitration clause. Rather than being an agreement in which "the parties have agreed to submit all questions of contract interpretation to the arbitrator," American Mfg. Co., 363 U.S. at 567-68, or in which "the exclusion clause is vague and the arbitration clause quite broad," Warrior & Gulf, 363 U.S. at 585, the 1963 contract attempts to delineate a more restricted area of arbitrability. Indeed, it is clear that the language of the 1960 Agreement*fn4 was extensively revised in the 1963 Agreement in a deliberate effort to limit the scope of arbitration established by the Steelworkers trilogy.*fn5

Article XV of the 1963 Agreement contains unusually lengthy and complicated provisions. Section 1, the bulk of which appeared in the 1960 Agreement, begins with a broad provision allowing, but not requiring,*fn6 arbitration of any grievance involving either "the interpretation or application of a provision" of the Agreement or a "disciplinary penalty." However, section 4(b), which is new, divides arbitrable questions into two categories: those subject to arbitration as a matter of right and those subject only to voluntary arbitration, i.e., by the written agreement of both parties as to a particular dispute. The first category is defined in section 6:

(a) Arbitration as a matter of right includes only requests to arbitrate which involve:

(i) Disciplinary action (including discharge) but with certain exceptions spelled out in this Article;

(ii) The claimed violation of a specific provision or provisions of the

National Agreement (with the limitations and exceptions set out in this Article); . . .*fn7

(b) A request for arbitration, in order to be subject to arbitration as a matter of right . . . must allege a direct violation of the express purpose of the contractual provision in question, rather than of an indirect or implied purpose. For example, a request which claims incorrect application of the method of computing overtime pay under the provisions of Section 2 of Article V would be arbitrable as a matter of right, whereas a request which questioned the right of the Company to require the performance of reasonable overtime work, on the claimed ground that Article V contains an implied limitation of that right, would be subject only to voluntary arbitration. A request that Article XI and the appropriate Local Seniority Supplement had been violated by the layoff of a senior employee in preference to a junior employee would be arbitrable as a matter of right but a request that subcontracting of work in the plant while bargaining unit employees are on layoff violated a claimed implied limitation of Article XI and the applicable Local Seniority Supplement would be subject only to voluntary arbitration.

Section 7 states:

All requests for arbitration which are not subject to arbitration as a matter of right under the provisions of Section 6 above, are subject only to voluntary arbitration. In particular, it is specifically agreed that arbitration requests shall be subject only to voluntary arbitration, by mutual agreement, if they

(c) Involve claims that an allegedly implied or assumed obligation of this National Agreement has been violated.

Finally, section 4(b) adds a number of further criteria:

(iii) This Agreement sets out expressly all the restrictions and obligations assumed by the respective parties, and no implied restrictions or obligations inhere in this Agreement or were assumed by the parties in entering into this Agreement.

(iv) In the consideration of whether a matter is subject to arbitration as a matter of right, a fundamental principle shall be that the Company retains all its rights to manage the business, including (but not limited to) the right to determine the methods and means by which its operations are to be carried on, to direct the work force and to conduct its operations in a safe and effective manner, subject only to the express limitations set forth in this National Agreement . . . and it is understood that the parties have not agreed to arbitrate demands which challenge action taken by the Company in the exercise of any such rights, except where such challenge is based upon a violation of any such express limitations (other than those set out in Section 7 below).

(v) No matter will be considered arbitrable unless it is found that the parties clearly agreed that the subject involved would be arbitrable in light of the principles of arbitrability set forth in this Article and no court or arbitrator shall or may proceed under any presumption that a request to arbitrate is arbitrable.

The immediate effect of reading these provisions is a nostalgic reminder that use of the "standard" arbitration clause, combined with the Steelworkers test, considerably eases the task of courts in deciding when to order arbitration. When an arbitration clause begins to resemble a trust indenture, one wonders what gain there is for either party in agreeing to arbitrate at all, other than the questionable joys of litigation. Nevertheless, we cannot avoid grappling with the contract the parties have given us. The Union's construction of all the quoted prose is simply that it has no effect whatsoever. The Union contends that despite any of these clauses all grievances involving disciplinary actions or the interpretation or application of the Agreement are still arbitrable as of right; that the language is not sufficiently clear and unambiguous either to exclude any subject matter from arbitration or to reverse the presumption of arbitrability; in short, that we are faced with exactly the sort of unrestricted arbitration clause to which the Steelworkers cases were directed. But the 1963 contract is obviously different from the agreements in those cases. Arbitration as of right is clearly limited to matters involving "disciplinary action" and "claimed violation of a specific provision" of the Agreement; an "implied or assumed obligation" is specifically excluded from arbitration as a matter of right; "violation of a specific provision" is further qualified as "a direct violation of the express purpose of the contractual provision"; examples are ...

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