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Independent Oil Workers at Paulsboro v. MOBIL Oil Corp.

decided: April 12, 1971.


Ganey and Adams, Circuit Judges, and Weis, District Judge.

Author: Weis

WEIS, D. J.:

It is now firmly established that the policy of Federal Labor Law is to favor arbitration*fn1 of disputes between labor and management, but since neither Congress nor the Supreme Court has gone so far as to require this procedure in all cases, the sine qua non is a contract between the parties which binds them to this extra -judicial method of resolving disputes.*fn2

Our inquiry in this case narrows to the single issue of whether the agreement between the parties requires mandatory arbitration, as the Company contends, or whether the procedure is merely optional as the Union insists. Both parties do agree that the resolution of this question is one for the courts.

The basic contract between the parties in this case was dated April 30, 1960. It was amended on a number of occasions thereafter, and the present dispute concerns provisions dated January 31, 1967 and March 28, 1969, which plaintiff contends obligate the defendant to pay a designated class of employees certain general wage increases. By agreement of the parties, the issues relating to the 1967 amendment were referred to an arbitrator who submitted a finding in due course. The Union now, however, seeks a declaratory judgment against the Company with respect to the 1969 amendment although it deals generally with the same type of wage adjustment.

The District Court ordered a stay pending submission of the matters to an arbitrator because it felt that the collective bargaining agreement*fn3 was not clear and that doubts should be resolved in favor of arbitration.

Article XVII 1. provides that disputes as to the interpretation of or alleged violation of the agreement are to be processed through a grievance procedure, ultimately culminating in arbitration. However, paragraph 3 of that Article reads, "Nothing in this agreement shall prevent either Company or Union . . . from applying, during the term of this agreement to a court of competent jurisdiction for the relief to which such party may be entitled . . . including but not limited to application for a specific performance of a valid and subsisting labor agreement or any terms and conditions thereof, injunction against present or prospective violation of such agreement, damages as may be proved improperly allowed, etc. and without prejudice in any way to each and every present and future right of the other party under applicable law, rules and regulations in this agreement."

The last clause of paragraph 3 is unintelligible and may be treated as surplusage. It neither adds to nor detracts meaning from the remainder of the paragraph and we therefore disregard it in our interpretation.

Taking the words of paragraph 3 at their plain and ordinary meaning,*fn4 we find that the effect is to make arbitration optional. While Article XVII paragraphs 1 and 2 standing alone might appear to make arbitration compulsory, the qualification of paragraph 3 that "nothing in the agreement shall prevent" application to a court of competent jurisdiction takes away the mandatory aspect of the contractual grievance procedures.

While we are bound by and in agreement with the holding of the Steelworkers Trilogy (footnote 1) that arbitration is to be encouraged and that "doubts should be resolved in favor of coverage" in interpreting collective bargaining agreements, nevertheless we cannot disregard another statement in one of those cases holding, " . . . arbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit."*fn5 In the later Atkinson case, the Court said, "Under our decisions, whether or not the Company was bound to arbitrate, as well as what issues it must arbitrate, is a matter to be determined by the court on the basis of the contract entered into by the parties . . . ."*fn6

In commenting on the Steelworkers Trilogy, this Court in Boeing Company v. International United Automobile Aerospace & Agricultural Implement Workers of America, U.A.W., said:*fn7

"Despite this liberal rule of construction, a reluctant party may not be compelled to submit a controversy to arbitration unless under a fair construction of the agreement he is bound to do so. Absent a contractual obligation to the contrary, a reluctant party is free to pursue any available legal remedy to redress its grievances."

And as Judge Ganey wrote in Halstead & Mitchell Company v. United Steelworkers of America.*fn8

"While we are not insensitive to the progressive relationship fostered by the courts between Labor and Management, we must, nevertheless, accede to the agreement reached by the parties usually after long hours of debate and a procedure ...

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