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O'Leary v. Westinghouse Electric Corp.

decided: March 6, 1969.

THOMAS E. O'LEARY ET AL., APPELLEES
v.
WESTINGHOUSE ELECTRIC CORPORATION, APPELLANT



Kalodner, Forman and Stahl, Circuit Judges.

Author: Kalodner

KALODNER, Circuit Judge.

In the instant case the appellant Westinghouse Electric Corporation, between December 21 and December 28, 1966, sent notices to five of its employees that they would be laid off for lack of work on December 30, 1966, and paid them two weeks salary from the date of their respective notices.

The layoff notices were sent pursuant to the provisions of Section IX, Paragraph 8A(1), of the collective bargaining agreement between Westinghouse and the appellee Federation of Westinghouse Independent Salaried Unions, which reads as follows:

"A. Employees laid off because of lack of work shall receive the following advance notification:

"(1) Over one (1) year of service -- 2 weeks."

The five employees filed grievances claiming they were entitled to 1967 vacation pay on the grounds that had they worked the two-week period instead of being paid two weeks dismissal pay when they were laid off on December 30, 1966, they would have then worked during some part of 1967, and so would have been entitled to 1967 vacation pay under Section XIII of the bargaining contract.

During the grievance procedure which ensued the discharged employees added claims for holiday pay for January 1, 1967 (New Year's Day), under Section XII of the bargaining contract.

The grievances for both vacation and holiday pay were denied and Unions then proposed arbitration under Section XV-A of the bargaining contract, and sub-paragraphs 18, 20 and 21 of the Section.*fn1

Westinghouse refused Unions' request to arbitrate the issue as to whether under Paragraph 8A(1) of Section IX it was required to give a full two weeks notice in advance of a layoff occasioned by a lack of work, contending that the arbitration provisions of the bargaining contract did not encompass Paragraph 8A(1). It further opposed a unilateral request for arbitration of the grievance issues presented by the appellee Unions to the American Arbitration Association. The latter declined to proceed with arbitration on the ground that it could not do so in the light of Westinghouse's opposition.

The appellee Unions*fn2 then filed the instant action seeking a declaratory judgment that Westinghouse was required to pay the 1967 vacation and holiday claims. Unions did not, in its Complaint, ask for an order directing arbitration.

Westinghouse, in its Answer to the Complaint,*fn3 averred that "The claims for holiday and vacation pay are subject to demand arbitration and without the jurisdiction of the Court", and that while the two weeks notice provision relating to layoff for lack of work was not subject to "demand arbitration" under the collective bargaining agreement, it had prior to the institution of Unions' action "offered to arbitrate this dispute on the basis of mutual agreement, but the Union refused."

After service of interrogatories by Unions, and answer thereto, Unions filed a motion for summary judgment.

This motion*fn4 was denied by the District Court in an Order which, after declaring that "current federal labor law policy calls for arbitration and settlement of labor disputes by the means chosen by the parties to the maximum extent possible rather than by intrusion of judicial procedure ", nevertheless proceeded to rule that Westinghouse had violated the two weeks' notice provision of the collective bargaining agreement, and to direct arbitration solely as to the issue of whether Westinghouse "did . . . effectually relieve itself of ...


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