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F & M Schaefer Brewing Co. v. Local 49

decided: January 16, 1970.

F & M SCHAEFER BREWING COMPANY, PETITIONER-APPELLEE
v.
LOCAL 49, INTERNATIONAL UNION OF UNITED BREWERY, FLOUR, CEREAL, SOFT DRINK AND DISTILLERY WORKERS OF AMERICA, RESPONDENT-APPELLANT



Waterman, Hays and Feinberg, Circuit Judges. Hays, C. J. dissenting.

Author: Feinberg

FEINBERG, C. J.:

This is an appeal from an order of the United States District Court for the Southern District of New York, Harold R. Tyler, Jr., J., staying arbitration of a grievance brought by Local 49, International Union of United Brewery, Flour, Cereal, Soft Drink and Distillery Workers of America (the Union), under a collective bargaining agreement with the F & M Schaefer Brewing Co. (the Company). The litigation began in the state courts when the Company sought to enjoin an arbitration proceeding instituted by the Union. The Union removed the action to the federal court and filed answering papers which sought to compel arbitration. Both parties moved for summary judgment on the basis of affidavits and exhibits. Thereafter, Judge Tyler granted the Company's motion and stayed the arbitration; the Union's cross-motion was denied. On the Union's appeal, we hold that it was error to stay the arbitration.

The collective bargaining agreement, which runs from May 1, 1968 to April 30, 1971, covers drivers and helpers employed by the Company to distribute beer from the Company's depot in Syracuse, New York. The controversy that led to this litigation arose in April 1969. Prior to that time, deliveries of beer to the Company's customers in the Utica-Rome area of New York State had apparently been handled through a local distributor. In April, the Company began to use its own employees, which were represented by the Union, to make the deliveries formerly handled by the independent distributor. Shortly thereafter, the Union filed a grievance as follows:

Want to be paid a fair and just wage for traveling time on new route's (sic) started April 10, 1969 which take in the cities of Utica and Rome and surrounding territories.

According to the slim record before us, the Union then submitted to the New York State Board of Mediation for arbitration the questions of "proper method of compensation and constitution of the runs." In May, the Company brought its action to stay the arbitration.

The contract provides procedures for " Grievances and Arbitration" in Section 21, which provides in subsection (b):

Other grievances, disputes, or differences relating to the interpretation or application of this agreement shall be taken up in the first instance by the appropriate Union agent and the Employer's representatives.

If a mutually satisfactory adjustment is not arrived at by them within five (5) days, unless extended by mutual agreement, the matter shall be submitted for arbitration by an arbitrator designated by the New York State Board of Mediation, and the award of such arbitrator shall be final and binding on both sides.

The Company's position -- argued successfully before Judge Tyler -- is that the grievance does not relate to "the interpretation or application" of any section of the agreement and is therefore not arbitrable. The Union retorts that this is not so and refers to various sections of the contract upon which it relies.

The teaching of the cases is plain. We are instructed in United Steelworkers of America v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582-83, 4 L. Ed. 2d 1409, 80 S. Ct. 1347 (1960):

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.

Indeed, in United Steelworkers of America v. American Manufacturing Co., 363 U.S. 564, 568, 4 L. Ed. 2d 1403, 80 S. Ct. 1343 (1960), we are told:

The courts, therefore, have no business weighing the merits of the grievance, considering whether there is equity in a particular claim, or determining whether there is particular language in the written instrument which will support the claim. The agreement is to submit all grievances to arbitration, not merely those which the court will deem meritorious. The processing of even frivolous claims may ...


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