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International Association of Machinists and Aerospace Workers v. General Electric Co.


decided: January 27, 1969.


Kaufman, Anderson and Feinberg, Circuit Judges.

Author: Feinberg

FEINBERG, Circuit Judge.

We have here another case involving whether a dispute between parties to a collective bargaining agreement is arbitrable. General Electric Company ("Company") appeals from a decision of the United States District Court for the Northern District of New York, William H. Timbers, J.,*fn1 ordering arbitration of a grievance brought by petitioners International Association of Machinists and Aerospace Workers, AFL-CIO, and Auburn Electronics Local 967, International Association of Machinists and Aerospace Workers, AFL-CIO ("Union"). 282 F. Supp. 413 (N.D.N.Y. 1968). For reasons set forth below, we affirm.

The facts are undisputed and relatively simple. On June 26, 1967, the Company announced that production at its plant in Auburn, New York, would be suspended for July 3, and that most employees should not report to work. On June 29, the Union filed a grievance, claiming a contract violation. After exhausting the grievance procedures, the Union in January 1968, invoking section 301 of the Labor Management Relations Act of 1947, 29 U.S.C. § 185, filed a petition in the district court to compel arbitration under section 4 of the United States Arbitration Act, 9 U.S.C. § 4. The primary basis of the Union's grievance is that the Company violated Article IV, section 3, of the 1966-1969 labor agreement; that section requires the Company, before changing the "hours of work or working schedule of a substantial number of employees" to discuss the change with the Union and give one week's notice thereof. The Company's original response on the merits was that only a "temporary layoff" was involved; Article XII, section 1, of the contract appears to suggest that no notice is necessary as to such a layoff. There are other peripheral arguments;*fn2 the issue before us is not whether the Company breached the agreement, but whether the dispute is arbitrable.

As to that, the Company claims that the district court erroneously interpreted Article XVI of the agreement, which deals with arbitration. The relevant portions of that Article require arbitration of an unsettled grievance, at the request of either party,

provided it involves,

(a) the interpretation or application of any of the following provisions of this Agreement, except as otherwise specified:

Article IV, Working Hours, except as to issues involving the Company's right to schedule shutdowns.*fn3

According to the Company, the parties have thus excluded from arbitration all issues involving shutdowns; since a shutdown is involved here, that should end the case. The Union, however, argues that (1) the Company's action was not a shutdown because concededly the entire plant was not closed on July 3, and (2) even if there was a shutdown, the Company's violation of Article IV is nonetheless arbitrable. According to the Union, the effect of the exclusionary language of Article XVI quoted above is to make nonarbitrable only the Company's right to shut down if it decides that exigencies demand it. On this theory, the Company's decision to shut down the plant cannot be questioned in arbitration, but the consequences of the Company's action can be; e.g., did it violate other sections of the contract?

To resolve the issue of arbitrability, there is no need to rehearse the applicable law here at length; we have done so in the recent past. See, e.g., IUE v. General Electric Co., 407 F.2d 253 (2d Cir. 1968); ILA v. New York Shipping Ass'n, 403 F.2d 807 (2d Cir. 1968). It is enough to say that the authoritietration of labor disputes, that doubts as to arbitrability should be "resolved in favor of coverage," that language excluding certain disputes from arbitration must be "clear and unambiguous" or "unmistakably clear," and that arbitration should be ordered "unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute." This is an imposing litany for the Company to overcome. While the arbitration clause in the 1966-1969 agreement is not identical with the broad provisions contained in the now-familiar trilogy,*fn4 the language is spacious enough. Moreover, the exclusionary clause exhibits what counsel for the Union at oral argument called "calculated ambiguity" on at least two issues: (1) What does "shutdown" mean; e.g., is it partial or total, and if the former, how much of a "shutdown" is required to qualify as such; and (2) even if a "shutdown" is involved, does the exclusion from arbitration of the Company's "right to schedule shutdowns" also render nonarbitrable an alleged breach of other sections of the agreement caused by the Company's shutdown? We are by no means sure of the answers to these questions, and we certainly cannot say with the required "positive assurance" that the arbitration clause is not "susceptible" of the Union's construction. Accordingly, we think that under the controlling authorities the district court correctly ordered arbitration.

The Company argues that the district court erred by failing to decide whether a shutdown had occurred. As to this, Judge Timbers said:

Aside from the belatedness of the company's asserted claim that its July 3 action constituted a shutdown, it is doubtful that it was a shutdown within the meaning of the agreement; the company's answer of August 6 referred to "a one day temporary lack of work in most areas of the Plant "; most salaried employees worked; and some production departments were in full production. Even if the company's July 3 action could be construed as a shutdown, it also constituted a change in hours of work or working schedule with respect to which the exclusion clause does not relieve the company of the requirements of notification and discussion.

The Court has not overlooked the advisability of ordering a further hearing to take oral testimony . . . Such course in the instant case is believed to be neither necessary nor appropriate. The arbitration clause clearly covers the asserted dispute . . . .

It is true that the court technically made no explicit finding on whether there was a shutdown. But it clearly displayed its lack of enthusiasm for the Company's broad interpretation of the word and indicated its belief that what had occurred did not amount to a shutdown. This was made more emphatic by its later conclusion that "The arbitration clause clearly covers the asserted dispute." Finally, it flatly ruled that even if a shutdown had occurred, the Union's grievance was still arbitrable, a conclusion with which, as indicated, we agree. Under these circumstances, no error was committed.

Finally, the Company seeks reversal because the Union commenced its action by petition under section 4 of the United States Arbitration Act instead of by complaint under section 301 of the Labor Management Relations Act, and because the Union thereafter used the summary procedures of the Arbitration Act. The Company concedes that the procedure used would be appropriate under our holding in Signal-Stat Corp. v. Local 475, United Electrical Workers, 235 F.2d 298 (2d Cir. 1956), cert. denied, 354 U.S. 911, 77 S. Ct. 1293, 1 L. Ed. 2d 1428 (1957), that the Arbitration Act ordinarily does apply to suits upon collective bargaining agreements, at least when the employees involved are not "actually in the transportation industries."*fn5 However, the Company claims that we must overrule Signal-Stat because of the later decisions of the Supreme Court in Textile Workers v. Lincoln Mills, 353 U.S. 448, 1 L. Ed. 2d 972, 77 S. Ct. 912 (1957), and General Electric Co. v. Local 205, United Electrical Workers, 353 U.S. 547, 1 L. Ed. 2d 1028, 77 S. Ct. 921 (1957).

We do not agree that those decisions require reversal of Signal-Stat, since the majority opinion in each is silent on the basic issue here involved.*fn6 We note that the Courts of Appeals for the Third and Seventh Circuits agree with this view; after Lincoln Mills, they have each cited Signal-Stat with approval in finding the United States Arbitration Act applicable to actions based on section 301 of the Labor Management Relations Act. See Newark Stereotypers' Union v. Newark Morning Ledger Co., 397 F.2d 594, 596 n. 2 (3d Cir. 1968); Pietro Scalzitti Co. v. IUOE Local 150, 351 F.2d 576, 579-80 (7th Cir. 1965); cf. Rhine v. Union Carbide Corp., 343 F.2d 12, 16 (6th Cir. 1965); Local 149, Technical Engineers v. General Electric Co., 250 F.2d 922, 927-29 (1st Cir. 1957), cert. denied, 356 U.S. 938, 2 L. Ed. 2d 813, 78 S. Ct. 780 (1958). Contra, Lodge No. 506, IAM v. General Electric Co., 211 F. Supp. 654 (N.D.N.Y. 1959). In this court, Signal-Stat has not been squarely overruled or, as to the issue raised here, even explicitly reconsidered; in fact, we have recognized without discussion the application of the Arbitration Act in labor cases,*fn7 although once or twice we have apparently assumed the contrary for purposes of discussion.*fn8

It is now clear that section 301 of the Labor Management Relations Act itself authorizes enforcement of a promise to arbitrate contained in a collective bargaining agreement. Therefore, we are not impressed by the Company's argument that we should reverse because the proceeding was improperly commenced. The Union's petition invoked section 301, and we cannot believe that the district court should have dismissed the action under that section because the document first served upon the Company was labeled "petition" rather than "complaint." The argument, then, is reduced to whether use of the summary procedures of the Arbitration Act requires reversal and, presumably, a rerun of the dispute in the district court. However, as Judge Timbers emphasized,*fn9 the Company has neither shown nor alleged any prejudice other than its inability to delay the arbitration by insisting on the time periods applicable to plenary actions.*fn10 Under those circumstances, we decline the invitation to reconsider the holding of Signal-Stat that the Arbitration Act is applicable here. It is therefore unnecessary to decide whether, as the Union urges, the procedures of that act should, in any event, be applied as guiding analogy in formulating federal law.*fn11

The order of the district court is affirmed.



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