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MATTER OF GEN. WAREHOUSEMEN'S UNION

Supreme Court, Special Term, Queens County.
Feb 10, 1958
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Factual and Procedural Background

The General Warehousemen's Union, Local 852 (the "Union") served Glidden Company, Durkee Famous Foods Division ("Glidden") with a notice to arbitrate six disputes before the New York State Board of Mediation. Glidden petitioned the court under section 1458 of the Civil Practice Act to stay arbitration on the grounds that the disputes were not arbitrable under the collective bargaining agreement ("CBA") between the parties. The parties had executed a CBA effective December 1, 1955, through November 30, 1957, recognizing the Union as the exclusive bargaining representative for certain employees at Glidden’s Elmhurst plant. In 1957, Glidden decided to discontinue operations at the Elmhurst plant for economic reasons, notifying employees and the Union accordingly and terminating all covered employees by the agreement's expiration date. The Union sought arbitration on issues relating to alleged breaches of welfare, pension, and insurance plans, the discontinuance of the plant without offering continued employment with full seniority, and alleged discrimination based on union affiliation.

Legal Issues Presented

  1. Whether the disputes raised by the Union arise out of and involve the interpretation and application of the specific terms of the collective bargaining agreement, making them arbitrable under the arbitration clause.
  2. Whether the arbitration clause delegates the question of arbitrability itself to the arbitrator or to the court.
  3. Whether the alleged unfair labor practices, including discrimination based on union status and interference with collective bargaining, fall within the jurisdiction of arbitration or are exclusively within the National Labor Relations Board's authority.

Arguments of the Parties

Glidden's Arguments

  • The disputes do not arise out of or involve the interpretation or application of specific terms of the collective bargaining agreement as required by the arbitration clause.
  • The arbitration clause is limited and does not encompass a broad "any and all controversies" language, thus the question of arbitrability is for the court, not the arbitrator, to decide.
  • The discontinuance of the Elmhurst plant and termination of employees was a good faith business decision not governed by any specific contractual provision requiring continued employment or severance pay.
  • The allegations of unfair labor practices are matters within the exclusive jurisdiction of the National Labor Relations Board and not subject to arbitration or state court action.

Union's Arguments

  • The Union contends that the question of arbitrability itself should be decided by the arbitrator, relying on a broad arbitration clause similar to that in Matter of Teschner.
  • The Union claims that the welfare, pension, and group insurance plans create property rights for employees that were breached by the plant discontinuance without offering continued employment with full seniority.
  • The Union asserts that the discontinuance was designed to evade contractual obligations and that employees were discriminated against based on union affiliation.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Matter of Teschner (Livingston), 285 App. Div. 435, affd. 309 N.Y. 972 Broad arbitration clause including "any and all controversies in connection with the contract" delegates arbitrability to the arbitrator. Distinguished from the present case where the arbitration clause lacks such broad language; therefore, the court holds that arbitrability is for the court to decide.
Matter of Lipman (Haeuser Shellac Co.), 289 N.Y. 76 Explains that arbitration clauses including "any and all controversies in connection with the contract" broadly delegate jurisdiction to arbitrators over contract-related disputes. Used to contrast with the narrower arbitration clause in the present case, supporting the court’s conclusion that arbitrability is not delegated.
Matter of International Assn. of Machinists (Cutler-Hammer, Inc.), 271 App. Div. 917, affd. 297 N.Y. 519 Court’s jurisdiction to determine existence of genuine disputes under arbitration clauses. Supports the court’s authority to decide arbitrability and existence of disputes before compelling arbitration.
Matter of Miller Art Co. (Firestone), 4 A.D.2d 1032 Similar principle on court’s role in determining existence of arbitrable disputes. Reinforces the court’s decision to decide arbitrability in this case.
Matter of Lehman v. Ostrovsky, 264 N.Y. 130 No duty to arbitrate unless there is clear contractual agreement to do so. Supports the principle that arbitration jurisdiction depends on clear contractual language.
Matter of Kelly, 240 N.Y. 74 Arbitration contract must cover the precise matter in dispute to confer jurisdiction on arbitrator. Applied to emphasize the court’s role in ensuring the dispute falls within the arbitration clause.
Matter of Essenson (Upper Queens Med. Group), 307 N.Y. 68 Burden on party seeking arbitration to establish a bona fide dispute within the arbitration clause. Used to conclude the Union failed to meet its burden to show an arbitrable dispute.
Matter of Marchant v. Mead-Morrison Mfg. Co., 252 N.Y. 284 Intention to arbitrate must be determined by contract construction principles; no duty to arbitrate absent clear agreement. Supports the court’s strict construction of arbitration clauses and refusal to compel arbitration without clear intent.
Weber v. Anheuser-Busch, 348 U.S. 468 National Labor Relations Board has exclusive jurisdiction over certain unfair labor practices. Supports the court’s holding that unfair labor practice claims are not arbitrable or subject to state court jurisdiction.
Garner v. Teamsters Union, 346 U.S. 485 Confirms exclusive jurisdiction of NLRB over unfair labor practices. Reinforces exclusion of unfair labor practice disputes from arbitration.
National Labor Relations Bd. v. International Union, 194 F.2d 698 State courts cannot entertain claims properly within NLRB exclusive jurisdiction. Supports dismissal of arbitration demands on unfair labor practice claims.
Matter of Stowe (Aircooled Motors), 204 Misc. 228 Unfair labor practice claims lie outside arbitration and state court jurisdiction. Used to support court’s refusal to arbitrate unfair labor practice allegations.
Matter of United Steelworkers (Lennox Furnace Co.), 206 Misc. 193, appeal dismissed 1 A.D.2d 932 Same principle regarding exclusive NLRB jurisdiction over unfair labor practices. Further supports court’s conclusion on jurisdictional limits.
Matter of Dumont Labs. (Baker), 154 N.Y.S.2d 394 Confirms that unfair labor practices are not subject to arbitration or state court action. Reinforces court’s ruling on non-arbitrability of unfair labor practice claims.

Court's Reasoning and Analysis

The court analyzed the arbitration clause in the collective bargaining agreement, noting it limits arbitration to disputes involving the interpretation and application of the specific terms of the agreement. Unlike broader clauses such as that in Matter of Teschner, the clause here lacks language encompassing "any and all controversies in connection with the contract," which would delegate arbitrability to the arbitrator. Therefore, the court held that the question of whether the disputes are arbitrable is for the court to decide.

The court found that the Union failed to identify any specific contractual provision requiring Glidden to continue operations at Elmhurst, to continue employment beyond the agreement's expiration, or to offer continued employment with full seniority or severance pay. The claims concerning welfare, pension, and insurance plans were based on the consequences of plant discontinuance rather than breaches of specific contract terms.

Additionally, the court determined that allegations of unfair labor practices, including discrimination based on union affiliation and interference with collective bargaining, fall under the exclusive jurisdiction of the National Labor Relations Board pursuant to the Labor Management Relations Act of 1947, and are therefore not subject to arbitration or state court jurisdiction.

Based on these analyses, the court concluded that no bona fide arbitrable disputes exist under the terms of the arbitration clause and that the motion to stay arbitration should be granted.

Holding and Implications

Glidden's motion to stay arbitration is granted.

The court’s decision directly prevents the Union from proceeding with arbitration on the six disputes under the collective bargaining agreement’s arbitration clause. The ruling clarifies that arbitration clauses limited to "specific terms" do not delegate questions of arbitrability to arbitrators absent broader language. It also affirms that unfair labor practice claims are exclusively within the jurisdiction of the National Labor Relations Board and not arbitrable or subject to state court proceedings. The decision does not establish new precedent beyond applying existing principles to the facts at hand.

Show all summary ...

DAVID KUSNETZ, J.

The Glidden Company, Durkee Famous Foods Division (hereinafter referred to as "Glidden"), upon which General Warehousemen's Union, Local 852, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, AFL-CIO (hereinafter referred to as the "Union"), served a notice to arbitrate six separate disputes therein set forth before the New York State Board of Mediation, has petitioned this court, pursuant to section 1458 of the Civil Practice Act, to stay such arbitration "upon the ground that the alleged disputes sought to be arbitrated are not arbitrable under the collective bargaining agreement between the parties to this proceeding."

The parties to this proceeding executed a collective bargaining agreement on March 13, 1956, effective from December 1, 1955, to November 30, 1957. Therein Glidden recognized the Union as the exclusive representative of all its hourly paid production, maintenance and service employees at the plant facilities in Elmhurst, Long Island, for the purposes of collective bargaining with respect to rates of pay, hours of employment, fringe benefits and other terms and conditions of employment (art. I). In article XXII the parties agreed that the aforesaid collective bargaining agreement "expresses the full and complete understanding and obligations of the parties on the subject of wages, method of payment, hours of employment, working conditions, and other conditions of employment including welfare, fringe and retirement benefits, and was freely arrived at through the processes of collective bargaining" and that said agreement "shall remain in full force and effect until November 30, 1957, and from year to year thereafter until either party hereto notifies the other party not less than sixty (60) days prior to the expiration of this Agreement or any extension hereof, that such party elects to terminate or modify this Agreement on its expiration date."

On May 16, 1957, all of Glidden's employees at its Elmhurst plant were given notice that the operation thereof would be discontinued within several months. On September 16, 1957, Glidden notified the Union, pursuant to article XXII of the collective bargaining agreement of its intention to terminate it on its expiration date, November 30, 1957. This notice, according to Glidden, was given as the result of the resolution of its board of directors on April 19, 1957, to discontinue the operation of its plant at Elmhurst in the Fall of 1957, in order to effect economic savings to be achieved by the consolidation of the discontinued operations in the plants located at Bethlehem, Pennsylvania; Louisville, Kentucky; Chicago, Illinois and Berkeley, California.

Representatives of Glidden and the Union met on October 30, 1957, at which time they were informed that the operations at Elmhurst would be partially discontinued on November 1, 1957, pursuant to the notice given in May of that year and, therefore, the employment of a substantial portion of the workers covered by the collective bargaining agreement would be terminated on that date and that some of the employees would be continued in employment after November 1, 1957, to assist in moving stock and materials to the new plant in Pennsylvania and in the maintenance of the Elmhurst plant until such stock and materials were removed. The employment of all employees covered by the collective bargaining agreement was terminated on or before November 30, 1957, the expiration date thereof.

The first three issues set forth in the Union's notice of intention to arbitrate may be summarized as follows: Whether the collective bargaining agreement between the parties provides for (1) a welfare plan, (2) a pension plan and (3) a group insurance plan which create property rights for the employees which were breached by the discontinuance of Glidden's plant at Elmhurst, without first offering to each employee continued employment with full seniority. The remaining three issues sought to be arbitrated are (4) whether the discontinuance of the Glidden plant at Elmhurst without offering to each employee continued employment with full seniority was a breach of the collective bargaining agreement; (5) whether such discontinuance was designed to avoid, evade, disrupt and breach Glidden's contractual obligations to the Union and to its employees and to prevent collective bargaining in violation of law; and (6) whether the employees covered by the collective bargaining agreement were discriminated against, solely by reason of their Union status and affiliation and were denied equal treatment with employees in other categories by being barred from continued employment with full seniority or denied severance pay as an alternative.

Section 2 of article XX of the collective bargaining agreement sets forth a five-step procedure for the settlement of disputes terminating with the following arbitration clause: "Any question, grievance or dispute arising out of and involving the interpretation and application of the specific terms of this Agreement * * * shall, at the request of either party, be referred to the New York State Mediation Board for arbitration." (Emphasis supplied.) Art. XX, § 2, subd. [e].)

It is the position of Glidden that none of the alleged disputes tendered by the Union for arbitration arises out of and involve "the interpretation and application of the specific terms" of the collective bargaining agreement with respect to which the parties thereto signified therein their willingness to resort to arbitration (art. XX, § 2, subd. [e]). The Union contends, however, that the very question of arbitrability of the tendered disputes is referable to the arbitrator for decision under what they term to be a "sweeping" arbitration clause similar to that involved in Matter of Teschner ( Livingston) ( 285 App. Div. 435, affd. 309 N.Y. 972).

In Teschner, however, the arbitration provision used not only the phrase "any and all controversies arising out of the contract," but also "any and all controversies in connection with the contract." In the case at bar the arbitration provision does not contain the phrase "any and all controversies in connection with the contract." It is this additional phrase considered in Teschner which rendered the arbitration provision therein broader than that contained in the instant collective bargaining agreement. The difference between Teschner and the case at bar is high-lighted by a reference to the arbitration clause which was contained in Matter of Lipman ( Haeuser Shellac Co.) ( 289 N.Y. 76). There the court stated at page 80: "Where, however, as here, the language of the provision providing for arbitration uses not only the phrase `any and all controversies arising out of the contract' but also `any and all controversies in connection with the contract,' this language would appear sufficiently broad to express the intention of the parties to include within the exclusive jurisdiction of the arbitrators as a general rule all acts by the parties giving rise to issues in relation to the contract, except the making thereof."

It is the opinion of this court, therefore, that the question of arbitrability of the tendered issues has not been made referable to the arbitrator for decision by the arbitration clause presented in the case at bar, and that it is for the court to determine, and not the arbitrator, whether the collective bargaining agreement contains a provision for arbitration of the alleged disputes here tendered by the Union. In the exercise of that jurisdiction the court must determine whether such disputes in fact exist. ( Matter of International Assn. of Machinists [ Cutler-Hammer, Inc.], 271 App. Div. 917, affd. 297 N.Y. 519; Matter of Miller Art Co. [ Firestone], 4 A.D.2d 1032.)

No one is under duty to resort to arbitration unless by clear language he has so agreed. ( Matter of Lehman v. Ostrovsky, 264 N.Y. 130, 132.) "A provision in a written contract to settle by arbitration a controversy thereafter arising between the parties to the contract is now enforcible. The contract, however, must be to arbitrate the precise matter as to which arbitration is sought. Upon this depends both the jurisdiction of the arbitrator and the power of the court." ( Matter of Kelly, 240 N.Y. 74, 78.)

In the case at bar the Union has not been able to point to any specific term or provision in the collective bargaining agreement in question or by reference to the welfare, pension and group insurance plans which are part of this record, requiring Glidden to continue operations at Elmhurst or to continue the employment of any employee for any period of time, certainly not beyond the expiration date of the agreement, or to offer to each employee employment with full seniority after the discontinuance of such operations, or as an alternative severance pay, or in any way dealing with alleged property rights for employees whose employment has been terminated by Glidden's discontinuance in good faith of its operations at Elmhurst. Under these circumstances it cannot be said that the Union has met its burden of establishing that a bona fide dispute or real ground of claim exists for arbitration within the meaning of the arbitration clause set forth in the collective bargaining agreement. ( Matter of Essenson [ Upper Queens Med. Group], 307 N.Y. 68, 72.) As was stated by Chief Judge CARDOZO in Matter of Marchant v. Mead-Morrison Mfg. Co. ( 252 N.Y. 284, 299): "The question is one of intention, to be ascertained by the same tests that are applied to contracts generally. Courts are not at liberty to shirk the process of construction under the empire of a belief that arbitration is beneficient any more than they may shirk it if their belief happens to be the contrary. No one is under a duty to resort to these conventional tribunals, however helpful their processes, except to the extent that he has signified his willingness."

It may be noted that the Union does not claim that any specific term set forth in either the welfare or pension plans contained in the collective bargaining agreement has not been complied with by Glidden; nor that Glidden has failed to comply with the group life insurance plan which was set up without any provision therefor in the collective bargaining agreement. The basis of the Union's claim is that because of the discontinuance of the operations at Elmhurst and the termination of employment thereat, the employees covered by the collective bargaining agreement can no longer qualify for or become entitled to benefits under those plans in the future. However, no provision was made in the collective bargaining agreement relating to the continuance or discontinuance of operations at Elmhurst; for the continuance of employment of the employees covered by the said agreement for any period of time other than the expiration date thereof; or requiring the company to offer to each employee continued employment with full seniority in the event of discontinuance. It cannot, therefore, be said that the disputes the Union claims to have with Glidden are referable to arbitration under a clause which requires arbitration only with respect to "specific terms" of a collective bargaining agreement.

Moreover, so far as "dispute" No. 5 tendered by the Union poses the issue that Glidden's termination of operations at Elmhurst was to prevent collective bargaining between it and the Union in violation of law and "dispute" No. 6 presents the issue that the employees covered by the collective bargaining agreement have been discriminated against solely by reason of their Union status and affiliation, these are unfair labor practices under the Labor Management Relations Act of 1947 (U.S. Code, tit. 29, § 158). Over disputes involving such practices it has been held that the National Labor Relations Board has exclusive jurisdiction. ( Weber v. Anheuser-Busch, 348 U.S. 468; Garner v. Teamsters Union, 346 U.S. 485.) Matters of that nature cannot be the subject of arbitration or State court action. ( National Labor Relations Bd. v. International Union, 194 F.2d 698; Matter of Stowe [ Aircooled Motors], 204 Misc. 228, 230; Matter of United Steelworkers [ Lennox Furnace Co.], 206 Misc. 193, 197-198, appeal dismissed 1 A.D.2d 932; Matter of Dumont Labs., [ Baker], 154 N.Y.S.2d 394, 395.)

It follows from all of the foregoing that Glidden's motion to stay arbitration must be granted, whatever other remedies the Union may have with respect to the alleged disputes.

Submit order.