The opinion of the court was delivered by: COOPER
This is an action instituted by plaintiff Humble Oil & Refining Company (Humble) to vacate
the November 18, 1966 labor arbitration award of a three member Board of Arbitration on the ground that the question submitted to and decided by the arbitrators in favor of defendant Local Union 866 of the International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America (Union) was not arbitrable. This Court has jurisdiction pursuant to 29 U.S.C. § 185 and 9 U.S.C. § 10.
After a two day trial conducted on March 12 and 16, 1970 before this Court sitting without a jury, we reserved decision. The following opinion constitutes our findings of fact and conclusions of law pursuant to Rule 52, F. R. Civ. P.
On January 22, 1965 a three month strike at Humble's Bayway Refinery, New Jersey was terminated; Humble and the Union thereupon entered into both a collective bargaining agreement (Contract) and a Special Agreement.
The Special Agreement was executed "to provide procedures for returning employees to work at the end of the strike that has been taking place at the Company's Bayway Refinery including provisions for handling a special early retirement and layoff program." Plaintiff's exhibit 1 in evidence, p. 1. The Special Agreement therefore concerned two interrelated problems facing the parties: I. handling of a reduction in the total number of employees in view of Humble's notice to the Union "that a surplus of no more than 325 employees exists in the bargaining unit . . ." and II. return of the remaining employees to work after the strike. Id.
With respect to Part I thereof, voluntary resignation or retirement was promoted in order to reduce the number of involuntary layoffs as much as possible. To effectuate this end, the Special Agreement established an early retirement and voluntary resignation program with a cut-off date for electing its benefits of January 22, 1965 (the effective date of the Contract). In the event that voluntary terminations were insufficient and involuntary layoffs became necessary, the Special Agreement provided a schedule of severance allowances (at the same rate offered to those who elected to voluntarily resign -- at least $7500 -- an amount considerably above that provided by the Contract).
By virtue of the three hundred twenty-five maximum reduction, the maximum number of employees who could be involuntarily laid off was directly dependent upon the number of voluntary retirements or resignations received and, further, upon an evaluation of the qualifications of those returning for the jobs available. Accordingly, the Special Agreement, while requiring notification of the possibility of layoff as soon as practicable, allowed Humble to delay final decision on involuntary layoffs until after the number could be accurately ascertained:
4. . . . It is recognized by the parties, however, that the number and names of employees to be laid off cannot be determined with accuracy until the number of employees who elect early retirement and voluntary terminations is known and until the determination is made, as provided below, of the number of employees who are qualifiable to fill the available jobs vacated by junior laid off employees.
7. The names of the individuals to be laid off shall be determined as soon as practical after the effective date of the collective bargaining agreement, and each individual to be laid off shall be so notified by the Company after the Company determines that the individual will be included in the laid off employees. Inasmuch as the final determination of the individuals to be laid off cannot be determined until after the completion of the evaluation period . . . (i. e. whether certain employees are qualifiable to replace junior employees cannot be determined until that time), the Company shall not be required to designate the individuals to be laid off under this special agreement until after that date, not more than seven weeks from January 25, 1965 -- March 15.
Plaintiff's exhibit 1, pp. 2, 7.
As to the order of layoff among the employees not electing to terminate, the Special Agreement left this to the Contract:
5. The designation of employees to be laid off shall be made in accordance with the collective bargaining agreement. Id. at 2.
With regard to recall rights for any employees thus laid off the Special Agreement merely stated:
. . . for the purpose of recall rights, all employees laid off pursuant to the provisions contained herein shall be considered as having been laid off on the same date, namely January 25, 1965. Id. at 4.
With respect to Part II of the Special Agreement and returning the remaining employees to work after the strike, the only portion of that agreement here relevant provided:
1. In recognition of the fact that it is not practical to resume normal operations immediately upon the effective date of the collective bargaining agreement, the Company and the Union have agreed that employees shall be returned to work as soon as practical after the effective date of the collective bargaining agreement and in accordance with seniority wherever practicable . . . . In no case shall any employee be recalled more than 14 days (February 8) from the effective date of this agreement (January 22). Id. at 5.
The Contract executed the same date as the Special Agreement provides that seniority governs the order of any layoff. Plaintiff's exhibit 3 in evidence, Article 34-2, p. 43. A "layoff" is defined as "the termination of an employee whose services are no longer required because of lack of work." Id., Article 34-1.
The Contract requires six months notice of layoff and provides a severance allowance. Id., Article 34-4, p. 44. In addition to severance allowances, employees have recall rights under the Contract:
An employee who is laid off for lack of work has preference for rehire, provided he is qualified, for a period of time equal to his Bayway Refinery service (at the time of his layoff) or one year, whichever is shorter . . . .
Before a permanent or temporary assignment is offered to a new hire, it shall be offered to qualified laid off employees having preference for rehire in the order of the longest Bayway Refinery service. To be qualified for rehire is to be qualified for the assignment for which the rehire is being made.
Finally, Articles 21 and 22 of the Contract provided for arbitration of grievances by a three member board consisting of one impartial chairman, as well as one member selected by the Union and one by Humble. Article 21-2 defines a grievance as a "claim by an employee or the Union ...