Source: https://www.chanrobles.com/usa/us_supremecourt/363/574/case.php
Timestamp: 2020-05-26 13:04:37
Document Index: 466097078

Matched Legal Cases: ['§301', '§ 301', '§ 301', '§ 301', '§ 8', '§ 158', '§ 301', '§ 185']

STEELWORKERS V. WARRIOR & GULF CO., 363 U. S. 574 (1960)
US Supreme Court Decisions On-Line> Volume 363 > STEELWORKERS V. WARRIOR & GULF CO., 363 U. S. 574 (1960)
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Held: It erred in doing so, and the judgment is reversed. Pp. 363 U. S. 575-585.
(a) In a suit under §301(a), judicial inquiry must be strictly confined to the question whether the reluctant party did agree to arbitrate the grievance or to give the arbitrator power to make the award he made; 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; and doubts should be resolved in favor of coverage. Pp. 363 U. S. 582-583.
(b) In the absence of any express provision excluding a particular grievance from arbitration, only the most forceful evidence of a purpose to exclude the claim from arbitration can prevail, particularly where, as here, the exclusion clause is vague, and the arbitration clause quite broad. Pp. 363 U. S. 583-585.
(c) Since, in this case, the parties had agreed that any dispute "as to the meaning of this Agreement" would be determined by chanrobles.com-red
arbitration, it was for the arbitrator, not the courts, to decide whether the contracting out here involved violated the agreement. P. 363 U. S. 585.
"This practice becomes unreasonable, unjust and discriminatory in lieu [sic] of the fact that, at present,
Settlement of this grievance was not had, and respondent refused arbitration. This suit was then commenced by the union to compel it. [Footnote 1]
The District Court granted respondent's motion to dismiss the complaint. 168 F.Supp. 702. It held, after hearing evidence, much of which went to the merits of the grievance, that the agreement did not "confide in an arbitrator the right to review the defendant's business judgment in contracting out work." Id. at 705. It further held that
Ibid. The Court of Appeals affirmed by a divided vote, 269 F.2d 633, 635, the majority holding that the collective agreement had withdrawn from the grievance procedure "matters which are strictly a function of management," and that contracting out fell in that exception. The case is here on a writ of certiorari. 361 U.S. 912.
We held in Textile Workers v. Lincoln Mills, 353 U. S. 448, that a grievance arbitration provision in a collective agreement could be enforced by reason of § 301(a) of the Labor Management Relations Act [Footnote 2] and that the policy to be applied in enforcing this type of arbitration chanrobles.com-red
was that reflected in our national labor laws. Id. at 353 U. S. 456-457. The present federal policy is to promote industrial stabilization through the collective bargaining agreement. [Footnote 3] Id. at 353 U. S. 453-454. A major factor in achieving industrial peace is the inclusion of a provision for arbitration of grievances in the collective bargaining agreement. [Footnote 4]
Thus, the run of arbitration cases, illustrated by Wilko v. Swan, 346 U. S. 427, becomes irrelevant to our problem. There, the choice is between the adjudication of cases or controversies in courts with established procedures or even special statutory safeguards, on the one hand, and the settlement of them in the more informal arbitration tribunal, on the other. In the commercial case, arbitration is the substitute for litigation. Here, arbitration is the substitute for industrial strife. Since arbitration of labor disputes has quite different functions from arbitration under an ordinary commercial agreement, the hostility evinced by courts toward arbitration of commercial agreements has no place here. For arbitration of labor disputes under collective bargaining agreements is part and parcel of the collective bargaining process itself.
The collective bargaining agreement states the rights and duties of the parties. It is more than a contract; it is a generalized code to govern a myriad of cases which the draftsmen cannot wholly anticipate. See Shulman, Reason, Contract, and Law in Labor Relations, 68 Harv.L.Rev. chanrobles.com-red
999, 1004-1005. The collective agreement covers the whole employment relationship. [Footnote 5] It calls into being a new common law -- the common law of a particular industry or of a particular plant. As one observer has put it: [Footnote 6]
Shulman, supra, at 1005. Gaps may be left to be filled in by reference to the practices of the particular industry and of the various shops covered by the agreement. Many of the specific practices chanrobles.com-red
Shulman, supra, at 1016.
The labor arbitrator's source of law is not confined to the express provisions of the contract, as the industrial chanrobles.com-red
The Congress, however, has, by § 301 of the Labor Management Relations Act, assigned the courts the duty of determining whether the reluctant party has breached his promise to arbitrate. For 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. Yet, to be consistent with congressional policy in favor of settlement of disputes by the parties through the machinery of arbitration, the judicial inquiry under § 301 must be strictly confined to the question whether the reluctant party did agree to arbitrate the grievance or did agree to give the arbitrator power to make the award he made. 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 chanrobles.com-red
that covers the asserted dispute. Doubts should be resolved in favor of coverage. [Footnote 7]
Collective bargaining agreements regulate or restrict the exercise of management functions; they do not oust management from the performance of them. Management hires and fires, pays and promotes, supervises and plans. All these are part of its function, and, absent a collective bargaining agreement, it may be exercised freely except as limited by public law and by the willingness of employees to work under the particular, unilaterally imposed conditions. A collective bargaining agreement may treat only with certain specific practices, leaving the rest to management but subject to the possibility of work stoppages. When, however, an absolute no-strike clause is included in the agreement, then, in a very real sense, everything that management does is subject to the agreement, for either management is prohibited or limited in the action it takes or, if not, it is protected from interference by strikes. This comprehensive reach of the collective bargaining agreement does not mean, chanrobles.com-red
Accordingly, "strictly a function of management" must be interpreted as referring only to that over which the contract gives management complete control and unfettered discretion. Respondent claims that the contracting out of work falls within this category. Contracting out work is the basis of many grievances; and that type of claim is grist in the mills of the arbitrators. [Footnote 8] A specific collective bargaining agreement may exclude contracting out from the grievance procedure. Or a written collateral agreement may make clear that contracting out was not a matter for arbitration. In such a case, a grievance based solely on contracting out would not be arbitrable. Here, however, there is no such provision. Nor is there any showing that the parties designed the phrase "strictly a function of management" to encompass any and all forms of contracting out. In the absence of any chanrobles.com-red
(For opinion of MR. JUSTICE BRENNAN, joined by MR. JUSTICE FRANKFURTER and MR. JUSTICE HARLAN, see ante, p. 363 U. S. 569.)
See Textile Workers v. Lincoln Mills, 353 U. S. 448.
In § 8(d) of the National Labor Relations Act, as amended by the 1947 Act, 29 U.S.C. § 158(d), Congress indeed provided that where there was a collective agreement for a fixed term, the duty to bargain did not require either party "to discuss or agree to any modification of the terms and conditions contained in" the contract. And see National Labor Relations Board v. Sands Mfg. Co., 306 U. S. 332.
Complete effectuation of the federal policy is achieved when the agreement contains both an arbitration provision for all unresolved grievances and an absolute prohibition of strikes, the arbitration agreement being the "quid pro quo" for the agreement not to strike. Textile Workers v. Lincoln Mills, 353 U. S. 448, 353 U. S. 455.
It is clear that, under both the agreement in this case and that involved in American Manufacturing Co., ante, p. 363 U. S. 564, the question of arbitrability is for the courts to decide. Cf. Cox, Reflections Upon Labor Arbitration, 72 Harv.L.Rev. 1482, 1508-1509. Where the assertion by the claimant is that the parties excluded from court determination not merely the decision of the merits of the grievance, but also the question of its arbitrability, vesting power to make both decisions in the arbitrator, the claimant must bear the burden of a clear demonstration of that purpose.
"In my research, I have located 64 published decisions which have been concerned with this issue covering a wide range of factual situations, but all of them with the common characteristic -- i.e., the contracting-out of work involved occurred under an Agreement that contained no provision that specifically mentioned contracting-out of work."
Until today, I have understood it to be the unquestioned law, as this Court has consistently held, that arbitrators are private judges chosen by the parties to decide chanrobles.com-red
particular matters specifically submitted; [Footnote 2/1] that the contract under which matters are submitted to arbitrators is at once the source and limit of their authority and power; [Footnote 2/2] and that their power to decide issues with finality, thus ousting the normal functions of the courts, must rest upon a clear, definitive agreement of the parties, as such powers can never be implied. United States v. Moorman, 338 U. S. 457, 338 U. S. 462; [Footnote 2/3] Mercantile Trust Co. v. Hensey, 205 U. S. 298, 205 U. S. 309. [Footnote 2/4] See also Fernandez & Hnos. v. Rickert Rice Mills, 119 F.2d 809, 815; [Footnote 2/5] Marchant v. Mead-Morrison Mfg. Co., 252 N.Y. 284, 299, 169 N.E. 386, 391; [Footnote 2/6] Continental Milling & Feed Co. chanrobles.com-red
v. Doughnut Corp., 186 Md. 669, 676, 48 A.2d 447, 450; [Footnote 2/7] Jacob v. Weisser, 207 Pa. 484, 489, 56 A. 1065, 1067. [Footnote 2/8] I believe that the Court today departs from the established principles announced in these decisions.
Being unable to persuade the employer to agree to cease contracting out work or to agree to arbitrate the "grievance," the union brought this action in the District Court, under § 301 of the Labor Management Relations Act, 29 U.S.C. § 185, for a decree compelling the employer to submit the "grievance" to arbitration. The District Court, holding that the contracting out of work was, and over a long course of dealings had been, interpreted and understood by the parties to be "strictly a function of management," and was therefore specifically excluded from arbitration by the terms of the contract, denied the relief prayed, 168 F.Supp. 702, 705. The Court of Appeals affirmed, 269 F.2d 633, and we granted certiorari. 361 U.S. 912. chanrobles.com-red
This is an entirely new and strange doctrine to me. I suggest, with deference, that it departs from both the contract of the parties and the controlling decisions of this Court. I find nothing in the contract that purports to confer upon arbitrators any such general breadth of private judicial power. The Court cites no legislative or judicial authority that creates for or gives to arbitrators such broad general powers. And I respectfully submit that today's decision cannot be squared with the statement of Judge, later Mr. Justice, Cardozo in Marchant that
"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. Our own favor or disfavor of the cause of arbitration is not to count as a factor in the appraisal of the thought of others."
(emphasis added), 252 N.Y. at 299, 169 N.E. at 391; nor with his statement chanrobles.com-red
in that case that "[t]he question is one of intention, to be ascertained by the same tests that are applied to contracts generally," id.; nor with this Court's statement in Moorman
"that the intention of the parties to submit their contractual disputes to final determination outside the courts should be made manifest by plain language"
(emphasis added), 338 U.S. at 338 U. S. 462; nor with this Court's statement in Hensey that "to make such [an arbitrator's] certificate conclusive requires plain language in the contract. It is not to be implied." (Emphasis added.) 205 U.S. at 205 U. S. 309.
"A party is never required to submit to arbitration any question which he has not agreed so to submit, and contracts providing for arbitration will be carefully construed in order not to force a party to submit to arbitration a question which he did not intend to be submitted."
(Emphasis added.) Fernandez & Hnos. v. Rickert Rice Mills, supra, 119 F.2d 815.
With respect, I submit that there is nothing in the contract here to indicate that the employer "signified [its] willingness" (Marchant, supra, at 299) to submit to arbitrators whether it must cease contracting out work. Certainly no such intention is "made manifest by plain language" (Moorman, supra, at 338 U. S. 462), as the law "requires," because such consent "is not to be implied." Hensey, supra, at 205 U. S. 309. To the contrary, the parties by their conduct over many years interpreted the contracting out of major repair work to be "strictly a function of management," and if, as the concurring opinion suggests, the words of the contract can "be understood only by reference to the background which gave rise to their inclusion," then the interpretation given by the parties over 19 years to the phrase "matters which are strictly a function of management" should logically have some significance here. By their contract, the parties agreed that "matters chanrobles.com-red
which are strictly a function of management shall not be subject to arbitration." The union, over the course of many years, repeatedly tried to induce the employer to agree to a covenant prohibiting the contracting out of work, but was never successful. The union again made such an effort in negotiating the very contract involved here, and, failing of success, signed the contract, knowing, of course, that it did not contain any such covenant, but that, to the contrary, it contained, just as had the former contracts, a covenant that "matters which are strictly a function of management shall not be subject to arbitration." Does not this show that, instead of signifying a willingness to submit to arbitration the matter of whether the employer might continue to contract out work, the parties fairly agreed to exclude at least that matter from arbitration? Surely it cannot be said that the parties agreed to such a submission by any "plain language." Moorman, supra, at 338 U. S. 462, and Hensey, supra, at 205 U. S. 309. Does not then the Court's opinion compel the employer "to submit to arbitration [a] question which [it] has not agreed so to submit"? Fernandez & Hnos., supra, 119 F.2d 815.
Surely the question whether a particular subject or class of subjects is or is not made arbitrable by a contract is a judicial question, and if, as the concurring opinion suggests, "the court may conclude that [the contract] commits to arbitration any [subject or class of subjects]," it may likewise conclude that the contract does not commit such subject or class of subjects to arbitration, and, "[w]ith that finding, the court will have exhausted its function" no more nor less by denying arbitration than by ordering it. Here, the District Court found, and the Court of Appeals approved its finding, that, by the terms of the contract, as interpreted by the parties over 19 years, the contracting out of work was "strictly a function chanrobles.com-red
I agree with the Court that courts have no proper concern with the "merits" of claims which by contract the parties have agreed to submit to the exclusive jurisdiction of arbitrators. But the question is one of jurisdiction. Neither may entrench upon the jurisdiction of the other. The test is: did the parties in their contract "manifest by plain language" (Moorman, supra, at 338 U. S. 462) their willingness to submit the issue in controversy to arbitrators? If they did, then the arbitrators have exclusive jurisdiction of it, and the courts, absent fraud or the like must respect that exclusive jurisdiction and cannot interfere. But if they did not, then the courts must exercise their jurisdiction, when properly invoked, to protect the citizen against the attempted use by arbitrators of pretended powers actually never conferred. That question always is, and from its very nature must be, a judicial one. Such was the question presented to the District Court and the Court of Appeals here. They found the jurisdictional facts, properly applied the settled law to those facts, and correctly decided the case. I would therefore affirm the judgment.
"Arbitrators are judges chosen by the parties to decide the matters submitted to them." @ 58 U. S. 349.
"The agreement under which [the arbitrators] were selected was at once the source and limit of their authority, and the award, to be binding, must, in substance and form, conform to the submission."
(Emphasis added.) Continental Ins. Co. v. Garrett, 125 F.5d 9, 590 -- Opinion by Judge, later Mr. Justice, Lurton.
"It is true that the intention of parties to submit their contractual disputes to final determination outside the courts should be made manifest by plain language."
(Emphasis added.) United States Moorman, 338 U. S. 457, 338 U. S. 462.
"To make such [an arbitrator's] certificate conclusive requires plain language in the contract. It is not to be implied." (Emphasis added.) Mercantile Trust Co. v. Hensey, 205 U. S. 298, 205 U. S. 309.
( Emphasis added.) Fernandez & Hnos. v. Rickert Rice Mills, 119 F.2d 809, 815.
"The question is one of intention, to be ascertained by the same tests that are applied to contracts generally. . . . 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. Our own favor or disfavor of the cause of arbitration is not to count as a factor in the appraisal of the thought of others."
(Emphasis added.) Marchant v. Mead-Morrison Mfg. Co., 252 N.Y. 284, 299, 169 N.E. 386, 391.
In this case, the Court, after quoting Judge Cardozo's language in Marchant, supra, saying that "the question is one of intention," said:
"Sound policy demands that the terms of an arbitration agreement must not be strained to discover power to pass upon matters in dispute, but the terms must be clear and unmistakable to oust the jurisdiction of the court, for trial by jury cannot be taken away in any case merely by implication."
(Emphasis added.) Continental Milling & Feed Co. v. Doughnut Corp., 186 Md. 669, 676, 48 A.2d 447, 450.
"But, under any circumstances, before the decision of an arbitrator can be held final and conclusive, it must appear, as was said in Chandley Bros. v. Cambridge Springs, 200 Pa. 230, 49 Atl. 772, that power to pass upon the subject matter is clearly given to him."
"The terms of the agreement are not to be strained to discover it. They must be clear and unmistakable to oust the jurisdiction of the courts; for trial by jury cannot by taken away by implication, merely, in any case."
(Emphasis added.) Jacob v. Weisser, 207 Pa. 484, 489, 56 A. 1065, 1067.