In this proceeding the plaintiff moves to vacate, and the defendant to confirm, an award made by an arbitrator under a collective bargaining agreement between the plaintiff as employer and the defendant union on behalf of the employees. There was no dispute of fact. The sole issue was construction of the agreement -- whether plaintiff's employees are entitled to vacation pay as though they had been in the employ of the plaintiff for five years or more.
On or about August 1, 1950 the plaintiff purchased a hosiery mill, formerly owned by Haddon Hosiery Mills Corporation, and shortly thereafter entered into an agreement with Hosiery Workers Association of South Jersey, an independent union. The agreement expressly provided that for the purpose of vacation benefits, employees were to be given credit for the time they had been employed by the previous operator of the plant. Thus, two weeks' vacation would be given to employees who "have five years or more combined and continuous service credit with the Employer and Haddon Hosiery Mills Corp."
On September 30, 1952 the plaintiff entered into a contract with another union, the defendant, for a term of two years, automatically renewable for successive two year terms unless terminated upon 60 days' notice. This contract, however, omitted any provision for credit for employment by the previous operator of the plant. The pertinent section reads as follows:
"Each employee who is on the payroll of the Employer on June first of the year in which the vacation falls and who on that date has been on the payroll of the Employer continuously for a period of five years or more shall be eligible for two weeks' vacation with pay. * * *"
Certain employees claimed two weeks' vacation on the ground that they had been employed at the plant for more than five years. The plaintiff, however, refused to pay because the company had not been in existence and no employee had been on its payroll for five years, and the agreement did not provide for credit for previous employment at the plant.
The agreement provided for arbitration of disputes before a designated impartial chairman, and the matter was submitted to him. His jurisdiction is thus defined:
"Any and all matters of dispute, difference, disagreement or controversy of any kind or character, between the union and the employer, involving or relating to wages, rates, hours, conditions of work, and the relations between the parties, arising during the term of this agreement or any renewal thereof, including but not limited to the interpretation, construction or application of the terms of this agreement, shall be submitted to the impartial chairman for final and binding decision by him. It is understood and agreed, however, that the Impartial Chairman shall not have power to alter, modify or change this agreement or any of the terms or provisions thereof, and the Union and Employer agree to be bound by and abide by the decisions of the Impartial Chairman."
After hearings, the chairman made an award in favor of the employees. In a formal opinion he stated the issues and the arguments of the parties, and concluded: "I think we must read the contract provision as a whole in accordance with the well established legal rule of contract interpretation to determine what was the actual intent of the parties," that the pertinent section "read as a whole, indicates an intention to give two weeks of vacation or vacation pay during the term of this contract * * * that the employees and the employer intended that employees who had been employed in this plant for a total period of five years, including service with preceding operators of the plant, would get a second week of vacation."
On this motion the issues as I perceive them are: was the award justified under the contract, what is the effect of submission to arbitration and is the award sustainable?
That parties to a contract may agree that all controversies growing out of it shall be submitted to arbitration and that the law favors such procedure is well settled.
"A submission to arbitration is essentially a contract. * * * The authority of the arbitrators is derived from the mutual assent of the parties to the terms of submission; the parties are bound only to the extent, and in the manner, and under the circumstances ...