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TEXTILE WORKERS, LOCAL 129 v. COLUMBIA MILLS

October 3, 1978

In the Matter of the Arbitration Between TEXTILE WORKERS OF AMERICA, AFL-CIO, LOCAL 129, Petitioner,
v.
The COLUMBIA MILLS, INCORPORATED, Respondent



The opinion of the court was delivered by: MUNSON

MEMORANDUM DECISION AND ORDER

This action was commenced by The Columbia Mills, Incorporated (the "Company") in New York State Supreme Court, Onondaga County, for the purpose of obtaining an Order staying arbitration between the Company and the Textile Workers of America, AFL-CIO, Local 129 (the "Union"). On May 10, 1978, New York State Supreme Court Justice Richard H. Donovan issued a temporary restraining order, and ordered that a hearing be held on May 23, 1978, on the Company's application for a stay. On May 22, 1978, the Union removed the action to this Court pursuant to 28 U.S.C. § 1441 since there was the requisite federal jurisdiction under § 301 of the Labor Management Relations Act of 1947, 29 U.S.C. § 185. The Union now moves for an Order compelling arbitration. *fn1"

 The Company, which is currently under a plan of liquidation, ceased operations at its Minetto, New York plant in late 1977, and laid off all the employees represented by the Union at such time. On October 25, 1977, Richard King, in his capacity as Union Shop Steward, presented the following grievance to the Company:

 
This is to grieve that the intent and purpose of Article XIII, of the Labor Agreement, is to provide continuous group life, hospitalization and medical insurance for retirees meeting the requirements of Article XIII, for the duration of their natural lives. The remedy for this Grievance is that coverage be continued for retirees as per Article XIII.

 The Company denied the grievance on October 28, 1977, on the ground that "no violation of the Labor contract has occurred."

 The parties' collective bargaining agreement provides, in relevant part, that "(s)hould a difference or grievance regarding the operation of this Agreement or its interpretation respecting conditions of employment arise between the employer and Union or an employee . . ." then certain procedures, ultimately resulting in binding arbitration, should be resorted to. At the time that Mr. King presented his grievance to the Company, the collective bargaining agreement was still in effect, but shortly thereafter, on December 15, 1977, the Company, acting under the terms of a memorandum of understanding between the parties, notified the Union of its intention to terminate the agreement, effective January 1, 1978.

 The duty to arbitrate is a matter of contract, and a party can be required to submit a dispute to arbitration only if he has agreed to arbitrate this dispute. Nolde Brothers, Inc. v. Local No. 358, Bakery & Confectionery Workers Union, AFL-CIO, 430 U.S. 243, 250, 97 S. Ct. 1067, 51 L. Ed. 2d 300 (1977); John Wiley & Sons, Inc. v. Livingston, 376 U.S. 543, 546-47, 84 S. Ct. 909, 11 L. Ed. 2d 898 (1964); Atkinson v. Sinclair Refining Co., 370 U.S. 238, 241, 82 S. Ct. 1318, 8 L. Ed. 2d 462 (1962); United Steelworkers of America v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582, 80 S. Ct. 1347, 4 L. Ed. 2d 1409 (1960). The determination as to whether the parties agreed to submit a particular dispute to arbitration is to be made by the courts, not the arbitrator, unless the parties' collective bargaining agreement clearly manifests a contrary intent. John Wiley & Sons, Inc. v. Livingston, supra, 376 U.S. at 546-47, 84 S. Ct. 909; Atkinson v. Sinclair Refining Co., supra, 370 U.S. at 241, 82 S. Ct. 1318; United Steelworkers of America v. Warrior & Gulf Navigation Co., supra, 363 U.S. at 583 n.7, 80 S. Ct. 1347.

 Nevertheless, these traditional contract notions must be considered in light of the well-established federal policy favoring the resolution of labor disputes by arbitration. In order to effectuate this policy, the Supreme Court has created a presumption favoring arbitrability:

 
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.

 United Steelworkers of America v. Warrior & Gulf Navigation Co., supra, 363 U.S. at 582-83, 80 S. Ct. at 1353 (footnote omitted). See also Nolde Brothers, Inc. v. Local No. 358, Bakery & Confectionery Workers Union, AFL-CIO, supra, 430 U.S. at 255, 97 S. Ct. 1067; Gateway Coal Co. v. United Mine Workers of America, 414 U.S. 368, 377-80, 94 S. Ct. 629, 38 L. Ed. 2d 583 (1974); John Wiley & Sons, Inc. v. Livingston, supra, 376 U.S. at 549-50, 84 S. Ct. 909; ITT World Communications, Inc. v. Communications Workers of America, AFL-CIO, 422 F.2d 77, 81 (2d Cir. 1970); International Longshoremen's Association, AFL-CIO v. New York Shipping Association, 403 F.2d 807, 809 (2d Cir. 1968).

 The Company advances various arguments in support of its request for a stay of arbitration. First, the Company argues that the grievance, filed by Mr. King, fails to cite a single instance in which the Company breached its obligations under Article XIII of the collective bargaining agreement. Hence, the Company argues that there is no duty to arbitrate until there is some action or inaction on its part which arguably constitutes a violation of Article XIII. On the other hand, the Union alleges that the Company has affirmatively stated that it will eliminate the benefits in question sometime during the calendar year 1978. The Union contends that it should be permitted to go to arbitration now, and not be forced to proceed, sometime subsequent to the completion of the plan of liquidation, with a grievance against a potentially non-existent employer.

 The Court is of the opinion that if the Company has, in fact, indicated its intention to eliminate the benefits under Article XIII at some particular time in the future, then there is a difference or grievance regarding the operation of the agreement or its interpretation which is ripe for submission to arbitration at this time. The Court believes that it is unnecessary for the parties to wait until benefits have actually been terminated. See United Rubber, Cork, Linoleum & Plastic Workers of America, AFL-CIO, Local 102 v. Lee Rubber & Tire Corporation, 269 F. Supp. 708, 716 (D.N.J.1967), Aff'd, 394 F.2d 362 (3d Cir.), Cert. denied, 393 U.S. 835, 89 S. Ct. 108, 21 L. Ed. 2d 105 (1968). If the Company has definite plans to eliminate the benefits, there does exist a concrete dispute between the parties, and, therefore, the arbitrator will not be asked to rule on a hypothetical question.

 However, the Court is unable to determine, on the basis of the present record, whether or not the Company has advised the Union of plans to discontinue benefits under Article XIII. While the Union makes such allegations in the Petition which it filed in this Court, the Company, in its Answer, states that it lacks information sufficient to form a belief as to these allegations. For purposes of pleading, the Company's statement has the effect of a denial. Rule 8(b), Fed.R.Civ.P.; 5 C. Wright & A. Miller, Federal Practice and Procedure § 1262 (1969). The present record does not contain an adequate basis for the Court to determine the validity of the Union's allegations. Therefore, if there is no other reason why Mr. King's grievance would not be arbitrable under the parties' agreement, a hearing will have to be held to determine whether the Company has actually stated its intention to terminate the benefits under Article XIII at some particular time in the future.

 Secondly, the Company argues that the purported grievance is not subject to arbitration under the parties' collective bargaining agreement, because a "grievance or dispute as to wages" is specifically excluded from the scope of arbitration. *fn2" In the present case, the contract has a broad arbitration clause, and in such circumstances, the language excluding certain disputes from arbitration must be "clear and unambiguous" or "unmistakably clear" in order to remove these disputes from the arbitral forum. Gangemi v. General Electric Co., 532 F.2d 861, 865 (2d Cir. 1976); International Union of Electrical, Radio & Machine Workers, AFL-CIO v. General Electric Co., 407 F.2d 253, 256 (2d Cir. 1968), Cert. denied, 395 U.S. 904, 89 S. Ct. 1742, 23 L. Ed. 2d 217 (1969); International Association of Machinists & Aerospace Workers, AFL-CIO v. General Electric Co., 406 F.2d 1046, 1048 (2d Cir. 1969). The Court does not believe that the exclusion in this case is clear and unambiguous or unmistakably clear. While the term "wages" might be construed broadly to include all forms ...


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