Earl Warren: You proceed, Mr. Goldberg.
Arthur J. Goldberg: When we recessed for lunch, I was dealing with the question of section 301. Now, I must say in all candor that the congressional history with respect to this subject is very, very confusing indeed.Congress was dealing in this area largely with the objections that had been made that unions cannot be sued. However, in formulating the legislation which probably in this instance is the most reliable guide it was not confined to suits against unions for damages which is the subject most discussed. It was as the statute itself plainly indicates, a statute governing suits by one against the other be irrespective of whether the plaintiff was union or defendant. And in fact, there are community reports in reporting this legislation which indicate that very clearly. And it would be hard to believe that Congress in enacting a statute of this type would confine itself to a -- a piece of legislation that would operate only on one side of the street. And I must conclude from --
Felix Frankfurter: But they didn't any legislation to operate on the other?
Arthur J. Goldberg: They operate on the other --
Felix Frankfurter: They did not need any legislation to operate on the other.
Arthur J. Goldberg: They need a legislation to bring the cases in the federal court.
Felix Frankfurter: So, I mean, they didn't need legislation to get at the corporation.
Arthur J. Goldberg: Correct. They could be sued. But, of course, they could not necessarily be sued in the federal court. Then it would depend upon other --
Felix Frankfurter: The fact that it had both here shed no light on what the subject matter is.
Arthur J. Goldberg: Except the language that the Congress used in their committee reports does shed some light that there was a mutuality of approach with respect to bringing both people into the federal court and subjecting them to the jurisdiction of the federal court.
Felix Frankfurter: That was the whole point of the legislation. That was the whole point that you could bring corporations in and you couldn't bring at least subject to great difficulty, you couldn't bring in unincorporated association. That's the whole point of it.
Arthur J. Goldberg: The -- the focus of the debate, I will agree, related to the suability of unions. But on the other hand, the reports made by the congressional committees and what we must assume -- and I think quite properly, is their instinct to fairness would be to subject them to sue in the same form. This is the conclusion that I must come to reading the reports of the committee relating to this particular subject.
Felix Frankfurter: But it doesn't shed the slightest light on suits for one.
Arthur J. Goldberg: It does not. It return -- it is in terms of suits but what does shed light on this particular subject is the whole framework of the labor relations policy of the United States, because it is often forgotten, and we lawyers, perhaps more than others, are guilty of this omission. Section 301 was part of the Labor Management Relations Act and is a provision of the Act designed to implement the basic philosophy of the statute. And the basic philosophy of the statute is that it contributes to industrial stability to have collective bargaining. And as the Labor Board has held and as the Courts have held, the ultimate outcome of constructive collective-bargaining is a labor contract, and it contributes to industrial fees to have labor contracts that are enforced it.
Felix Frankfurter: Let me ask you, Mr. Goldberg. If the Amalgamated Clothing Workers has today -- worked today as it did in the past when I knew something about it, loaned money to an employer -- that employer corporations --
Arthur J. Goldberg: Correct.
Felix Frankfurter: -- as the default on that contract. Could they sue on the 301 in the federal court?
Arthur J. Goldberg: Would they -- I believe they could.
Felix Frankfurter: They could, all right.
Arthur J. Goldberg: Yes, I believe they could under the --
Felix Frankfurter: I understand.
Arthur J. Goldberg: -- under the grant of jurisdiction --
Felix Frankfurter: And that's -- that's sort of to carry out the general philosophy as you call it. That's a big word to find jurisdiction in philosophy.
Arthur J. Goldberg: Well, it is to carry out the plain language of the Congress in this respect. I cannot --
Felix Frankfurter: Yes but then they will come as I hope you will before --
Arthur J. Goldberg: -- that --
Felix Frankfurter: -- you get through to the right of Congress to impose that jurisdiction --
Arthur J. Goldberg: I --
Felix Frankfurter: -- on the Court --
Arthur J. Goldberg: I -- I will --
Felix Frankfurter: -- on how the Amalgamated or through all of the matter the Textile Company, before they come down to that to help out employers?
Arthur J. Goldberg: They -- they're a little more impoverished so I don't know whether they can reach to that particular point.
Felix Frankfurter: Well, if you --
Arthur J. Goldberg: But --
Felix Frankfurter: -- could find my reference to the Amalgamated, if the Amalgamated helps out an employer in New York, who's short of money, makes an agreement and he defaults out his contract, you can go to the federal court just on that contract.
Arthur J. Goldberg: Under the language of 301, I think this is --
Felix Frankfurter: And that's all right. And that's common -- it's written in Article 3 which you will explain to us.
Arthur J. Goldberg: I will. Now, the -- the -- when you look at the legislative history of the statute, and as I have done it and this Court has done it in Westinghouse. What we find here is that there was a committee report in reference to the question of -- of the problems that confronted the Congress in relation to labor unions. And the obvious problem which Congress focused on was the question of the rules in the various States relating to the non-suability of unions. And that operated a great amount of the time of Congress in dealing with this subject. But nevertheless, when we dealt with the -- the language of the statute, the language of the statute relates to the question of making contracts between employers and collective bargaining agents enforcing it. I don't think Congress for a moment thought of the situation which Your Honor is familiar with, the Amalgamated situation.
Felix Frankfurter: Well that's nothing unique.
Arthur J. Goldberg: I -- I -- that is correct, just as they did not think of specific performance. They however, thought of the question of the enforceability of agreements between the employers and the employees. And to that they addressed themselves. Now, it is argued by almost all of the companies here that the decision in this case must be governed by the decision of the Court in Bernhardt versus Polygraphic Co., one of the recent pronouncements of the Court which -- which held that in with respect to an individual contract of discharge in a case in which no allegation was made that the industry involved affected commerce. That recourse would be made to state law as to the enforceability of agreements to arbitrate. Now, that case was a diversity case. And as I read that case, the sole focus of the decision is that in the diversity case the state rule on the subject so substantially affects the cause of action that under Guaranty Trust versus York, that should it be sent to state law.
Felix Frankfurter: Well, are you suggesting that the Court has also diversity that cuts down the scope of the jurisdiction given by 301?
Arthur J. Goldberg: Well, 301 was --
Felix Frankfurter: Is that what you're suggesting?
Arthur J. Goldberg: No, 301 was not involved in that particular case. And no sustenance was drawn either from 301 or from the enactments of Congress relating to the --
Felix Frankfurter: When you say it wasn't involved, you mean, the Court didn't talk about it?
Arthur J. Goldberg: The Court didn't talk about it.
Felix Frankfurter: And if we -- but something gives court -- a court jurisdiction. It connects a saga though the lawyers don't talk about it.
Arthur J. Goldberg: Well, they're -- they --
Felix Frankfurter: I'm for various reasons for not talking about these.
Arthur J. Goldberg: That's correct. .But there they invoked jurisdiction under the Diversity Clause.
Felix Frankfurter: I put it to you again. Does the adversity because of diversity under which the Court has obvious jurisdiction, cuts down on the jurisdiction under 301?
Arthur J. Goldberg: Because of adversity no, it does not cut down the jurisdiction under 301 and we buttress our argument upon 301. But I want to point out that in the Bernhardt case that it was specifically pointed out that the -- that the United States Arbitration Act did not apply because of lack of allegations with respect to commerce within the meaning of the American Arbitration Act that I'm going to discuss at a subsequent point in the argument. That was expressly excluded by Mr. Justice Douglas who wrote the opinion in that case from the impact of the decision. What we had there was a straight contract of employment, no allegation of commerce; diversity of citizenship, the Court sent them to the law of Vermont in that particular case.
Felix Frankfurter: Well, that if the Amalgamated sues an employer and is able to establish diversity, New York Law would have it govern.
Arthur J. Goldberg: New York.
Felix Frankfurter: If Amalgamated sues the employer and says nothing about diversity but invokes 301, federal law would govern.
Arthur J. Goldberg: Federal law would govern assuming that it fits within the scope of 301 and assuming that the statute would be defined as going beyond the section which it can literally be defined of which says 301 (a) suits for violation of contracts between an employer and a labor organization representing the employees in an industry affecting commerce as defined in the Act maybe brought. Now the real question upon --
William O. Douglas: You take upon that really the position that -- of Justice Reed took it in his separate opinion in Westinghouse --
Arthur J. Goldberg: I go a little --
William O. Douglas: -- on that point.
Arthur J. Goldberg: -- yes, I go a little beyond that too, Your Honor. And this is a subject which I am not at the moment prepared to make but is certainly a subject to the clause that the suits that they may be talking about are labor relations disputes. The statute itself does not say it. The statute literally read only talks about suits between an employer, suits for violation of contracts between the employer and the labor organization representing employees in an industry affecting commerce as defined in this Act.
Felix Frankfurter: Are you're sure they're only asking the Court to hold that argument. That this doesn't -- this applies only to labor relation.
Arthur J. Goldberg: No, I don't think it can be asked in light of the reading of the statute, although, that might be an interpretation as part of a labor relations statute. Now, in -- in conjunction with the force and reach of Section 301, we have this obvious thing which I think focuses the problem with respect to the reach of Section 301. And that is this. It is obvious and without question in the light of the legislative history that Congress intended that irrespective of state law, that a union could be sued in damages in the federal courts under 301. And it is my position in this case --
Felix Frankfurter: But isn't that obvious?
Arthur J. Goldberg: Yes, I think that's quite obvious and I think --
Felix Frankfurter: Why do you say that?
Arthur J. Goldberg: Because of the entire legislative history --
Felix Frankfurter: I've read that rule.
Arthur J. Goldberg: -- relating --
Felix Frankfurter: I've read very painfully.
Arthur J. Goldberg: I read it, too.
Felix Frankfurter: It's not the most -- the most exciting reading in the world.
Arthur J. Goldberg: No, it is not but it is -- it is I think, Your Honor --
Felix Frankfurter: You mean, just at large that any suit for damages by a labor union against the employer comes within 301, is that what you're saying?
Arthur J. Goldberg: Yes.
Felix Frankfurter: Is that what you're saying?
Arthur J. Goldberg: I say that (Voice Overlap) -- for violation --
Felix Frankfurter: And where (Voice Overlap) --
Arthur J. Goldberg: No, I say suits -- I'm following the language of the statute. I say suits for a violation of contracts between an employer and a labor organization representing employees.
Felix Frankfurter: I go back to my Amalgamated case then. A contract made into the Amalgamated or a local in New York and they all -- suppose the local consists entirely of New Yorkers, the locals, having -- being itself the labor organization. And they've lent some money or they make an agreement with an employer, have nothing to do with employment, having to do with the financial relationship between the union and the employer. And you're now suggesting, as you have -- and you suggest a little while ago, that under that a suit can be brought by or against the union in the federal courts for damages and you can disregard local law and you look to the meaning of that contract not at the New York laws but some -- some law in the in the sky as Justice Holmes say.
Arthur J. Goldberg: I think -- I think Your Honor, that the statute literally read can lead to this conclusion. I think we are considering a labor relations statute and I would answer that by saying that independently of the result that you might reach in this case, there's no doubt that the intention of Congress was that it could reach a collective agreement. (Voice Overlap) --
Felix Frankfurter: Well, I adhere to that.
Arthur J. Goldberg: Yes.
Felix Frankfurter: The Westinghouse says that.
Arthur J. Goldberg: Yes.
Felix Frankfurter: There's the procedural aspects which are very important things and which were a source of very great difficulty that I suppose you know at least as well as I --
Arthur J. Goldberg: I do.
Felix Frankfurter: -- very great difficulty by reaching a -- an unincorporated organization. And therefore, they were means devised to get to deal with that procedural difficulty.
Arthur J. Goldberg: Yes.
Felix Frankfurter: But how you can say it's obvious that they can sue for damages, God knows on what ground, I don't know.
Arthur J. Goldberg: I -- may I repeat --
Felix Frankfurter: What is it? What is the -- what is the substantive basis on which --
Arthur J. Goldberg: (Voice Overlap)
Felix Frankfurter: -- the damages should be based in my Amalgamated contract --
Arthur J. Goldberg: Well --
Felix Frankfurter: -- if the contract made New York and yet you say you can go into the federal court and there apply federal law?
Arthur J. Goldberg: Substantive basis, Your Honor, when we get into a case such as this perhaps ought to be better met in the case itself. I say the statute -- I want to repeat what I said. Perhaps I did not articulate it as clearly as I should. I said there is no doubt in my mind that 301 related to a collective-bargaining agreement. I don't think in Your Honor's mind there's any doubt about that. Now whether -- perhaps this is a second thought as I ponder the significance of your question, whether it reaches any other contract behind the collective -- beyond the collective bargaining contract, I don't know. The statute literally reads that way. It says any suit. It is however, part of a labor relations statute and could be appropriately construed to be confined to a collective agreement.
Felix Frankfurter: And yet in the Polygraphic case we had a clear case of a labor agreement.
Arthur J. Goldberg: The contracts of employment.
Felix Frankfurter: A contract had been --
Arthur J. Goldberg: Not a -- not a labor agreement.
Felix Frankfurter: (Voice Overlap) --
William O. Douglas: There's no collective-bargaining agreement there though.
Arthur J. Goldberg: No. No collective bargaining agreement. Now, maybe I -- maybe I reached too far, Mr. Justice Frankfurter.
Felix Frankfurter: What you mean is the (Inaudible) we have a contract.
Arthur J. Goldberg: Contracts of employment.
Felix Frankfurter: Yes.
Arthur J. Goldberg: I would like to talk about that under the arbitration. But I am saying now, perhaps I spoke too broadly before. And I am in thinking of a literal language of statute, I say now that there is no doubt in my mind that it reaches a collective agreement. And that was what Congress was dealing with. And when I read the legislative history which is quoted in the brief and which time will not me -- permit me to go over, I -- I read it to vest in the federal court's jurisdiction over collective agreements and suits brought by an employer or brought by a union.
Felix Frankfurter: You still have for me, at least, to reach a profoundly serious question of what the basis of your -- what -- how Congress can give such a generalized jurisdiction when it doesn't also furnish a code of substantive law authorized by some grant of the first article of the Constitution.
Arthur J. Goldberg: Yes. And I -- I say that it provides enough substantive law in this area --
Felix Frankfurter: What do you mean by enough? How can I tell when -- when enough is enough? What do you mean enough?
Arthur J. Goldberg: Because a -- because the Court --
Felix Frankfurter: Where do I get it from?
Arthur J. Goldberg: Because a Court unfortunately must shape doctrine from the policy declarations of the Congress and there have been a number of policy declarations in the enactments of Congress as well as the legislative history to warrant the creation of the body of federal law from that material which will govern this particular situation.
Felix Frankfurter: So that all over the United States, we'll have construction of these collective agreements first by District Courts then by Courts of Appeals and ultimately, to have this Court sit here and devise a labor code.
Arthur J. Goldberg: No. No, I don't think that will be required because as I pointed out earlier, not only for information but for the impact upon the federal courts, 90% of our contracts today contain provisions for arbitration.
Felix Frankfurter: But we're not -- not talking about the arbitration provision. We're talking about 301.
Arthur J. Goldberg: I'm talking about 301. Then if you invoke the jurisdiction under 301 to enforce the obligation of an employer to arbitrate the arbitrator and not the Courts, will be vested with the responsibility of deciding that particular aspect.
Felix Frankfurter: But they still have to decide these multifarious contracts according to party of the contract.
Arthur J. Goldberg: No, the -- No, Your Honor. The arbitrator --
Felix Frankfurter: (Voice Overlap) --
Arthur J. Goldberg: -- the arbitrator will decide that.
Felix Frankfurter: Yes, but is there any review of the arbiter -- arbitral award? Certainly --
Arthur J. Goldberg: There are -- there are reviews between very narrow limits.
Felix Frankfurter: I know but --
Arthur J. Goldberg: The --
Felix Frankfurter: -- those are the narrow limits that are vital both to the unions and to employers.
Arthur J. Goldberg: But no, no, I would not say that. We might --
Felix Frankfurter: Well, what do you mean wouldn't say that?
Arthur J. Goldberg: No, it might --
Felix Frankfurter: (Inaudible)
Arthur J. Goldberg: There are some --
Felix Frankfurter: (Inaudible)
Arthur J. Goldberg: Yes. There are some cases of that category but in my own experience from which I'm limited to talk, I have represented some very large unions in addition to this one and in some of them through a whole structure of arbitration, not one case has landed in any court.
Felix Frankfurter: There are not a few cases in the New York Court of Appeals.
Arthur J. Goldberg: There are some cases.
Felix Frankfurter: There are not a few cases in -- in Wisconsin.
Arthur J. Goldberg: There are some cases.
Felix Frankfurter: (Voice Overlap) --
Arthur J. Goldberg: But the -- what you -- what you envisage, and that is the federal courts operating in the realm of a whole area of adjudication. I do not envisage because of the experience that we have had under arbitration clause.
Felix Frankfurter: Whatever may be the scope, you say it's to be drawn out of the general philosophy which I ought to draw from the Wagner Act and the Taft-Hartley Act. Is that right?
Arthur J. Goldberg: I think the general -- I think the general -- whatever cases are envisaged are envisaged in light of the declaration by the Congress, not only in the -- in the Labor Management Relations Act, but dating back to the Norris-LaGuardia Act and other Acts vindicating a federal policy to encourage voluntary arbitration.
Felix Frankfurter: They give me very little light on problems of seniority; on layoffs and all the multitudinous questions about in which again you know so much more than I do that really makes the bite in particular, awards.
Arthur J. Goldberg: But -- but, Your Honor, what I am saying is that the procedure we invoke here will not bring that into the courts, whereas, a contrary procedure would bring it into the courts. The procedure we are invoking is a procedure directed at securing relief to arbitrate, not relief to bring into the federal court, the adjudication of these claims.
Felix Frankfurter: I put a deal, the litigation doesn't stop there because the scope of the arbitral tribunal, the area within which it operates, the scope of review of all questions in which the various state courts differ, naturally, and we'll have to divide the separate court and the courts are all over.
Arthur J. Goldberg: And I -- and Your Honor, and I must put it to you that on the basis of experience, not hypothesis, this is not the case.
Felix Frankfurter: But you may have had the very (Inaudible) in a few minutes to represent.
Arthur J. Goldberg: No. No, I have not represented only one. My point is that in the overwhelming thousands upon thousands of grievance arbitrations are heard every year and the experience proves that if you have an arbitration process to operate and the courts support that process, those cases will be decided by the arbitrator and they will not be decided by the courts except in a very limited range.
Felix Frankfurter: To what extent to the arbitral arrangements operate because they're in the agreement? Overwhelmingly, wouldn't they?
Arthur J. Goldberg: I would say overwhelmingly.
Felix Frankfurter: Therefore this -- the -- these were rendered, the dangers that you indicated, if this is not taken over by the federal courts, it can't be so horrendous because the arbitral arrangement between responsible unions and responsible employers will show a respect for the arbitration.
Arthur J. Goldberg: So -- so did the criminal laws of the country. But that has never been a basis for declining to exercise criminal jurisdiction against the offender.
Felix Frankfurter: But it has been a basis from the beginning of this Court's history, not quite, that before we have a penal power to prosecute, there must be a specific statute which designates on substantive offense.
Arthur J. Goldberg: And I think --
Felix Frankfurter: Whenever Congress designates a statute with substantive power within the Commerce Board, that's an end of the matter.
Arthur J. Goldberg: And I think that's what --
Felix Frankfurter: And what we're debating here is, what we're arguing here is and which I've had (Inaudible) enlightened yet is that the -- the source when -- the source when the Congress got the power to say whenever you've got a union and an employer you'd be going go to a federal court.
Arthur J. Goldberg: The source in my opinion is the National Labor Relations Act, Norris-LaGuardia Act, the Federal Mediation Act, all of which have expressed the policy of the United States in industries affecting commerce to encourage collective-bargaining and after all arbitration is part and parcel of collective-bargaining and to -- to -- and that in my opinion provides the support for this particularly in light of the manifest desire of the Congress, as expressed, is to carry out their policy in the amendments they made in 1947. I would like to -- I think that I -- I and perhaps I want to say one word about that and then go on to some other points. And that is this. Had Congress spelled out, which is what I think you would and I would like, that Congress spelled out the -- that's the -- all of the variations of this -- in minutiae. I don't think any of us would have been troubled because the Congress clause is the basis upon which Congress could act. If they acted to create a National Labor Relations Act to prevent obstructions in commerce, which Act contemplates contracts and encourages the -- the institution in contracts of arbitration, voluntary arbitration proceedings, then I say that that provides the basis -- federal basis for acting in this effort.
Felix Frankfurter: Mr. Goldberg, let me recall to you for you know -- must know it well that there was an endeavor to write into the Taft-Hartley Act a provision that any breach, any violation of a provision of any collective agreement shall be deemed to be an unfair labor practice.
Arthur J. Goldberg: That's correct.
Felix Frankfurter: And Congress explicitly refused to make that unfair labor practice.
Arthur J. Goldberg: And the reason they -- and the reason, Mr. Justice Frankfurter --
Felix Frankfurter: I don't think that if you'd have that, then you would have a clear basis.
Arthur J. Goldberg: The reason they refused to do that was that in the same law they had a provision for resort to courts to do the -- precisely the same thing and the -- the Congressional history which we quote in our brief extensively said they made a choice to permit the courts to do it and not the Labor Board. And regardless of the merits of that, that seems quite clear in the Congressional Record. I would like to turn, if I may, to the question of -- pass very briefly over it because I think this Court has expressed itself several times on the subject and -- and that's the question of the – the -- well, before I do that, I want to say just a sentence because the limitations of time on a collateral question that's been raised and that is do we mean in 301 that only equitable -- that only damage suit liability can be granted? I say, no. The statute doesn't say no. We find while they focus on damage suits, we find no expression in the statute on that and it is hard to believe that equity relief was not contemplated by the statute. I want to turn now to the question of the Norris-LaGuardia Act. Despite differences on all of the other questions that we have a numbering. All of the circuits that have dealt with the problem have held that the Norris-LaGuardia Act does not follow equitable relief to convey an employer to comply with the terms on the collective-bargaining agreement. I would refer, Your Honors, to the discussion of Judge Magruder, Chief Judge Magruder, on that subject in the General Electric case and to the decisions of this Court in several cases where relief has been granted notwithstanding, the provisions of the Norris-LaGuardia Act. I already gave a short-hand statement of why the Norris-LaGuardia Act does not apply. It does not apply because it was never the purpose or intention of the Norris-LaGuardia Act to deal with a situation of this type. Norris-LaGuardia Act in section 4 deals with certain type of activities such as peaceful picketing, strikes, et cetera. Section 7 of the Norris-LaGuardia Act lays down certain procedural requirements. The procedural requirements are just in apposite to a case of this character. As Justice Jackson said in the case similar, it says to hold the Norris-LaGuardia Act apply to this particular situation would be to drive the knife inward. There are other problems, the United States Arbitration Act, Mr. Chief Justice, but my colleague, Mr. Feller, will be in a position to discuss that in the Goodall case when he argues it. I thank you very much for this opportunity.
Earl Warren: Mr. Constangy.
Frank A. Constangy: If the Court please. Briefly, there are two or three practical issues as to the present posture of this situation that I would like to mention to the Court so that there would be a complete understanding of where we are as of this moment. The -- this, as counsel stated in his opening argument is beyond the record, but actually what happened in this instance was that the contract expired in July 3rd, 1954, by mutual notices of the parties. There was no contract in existence thereafter between these parties until sometime in January or February 1956. In the meantime, there had occurred a strike which began in August of 1955 and ran until January of 1956. At the time the strike were settled and a new contract was written, I think it is sufficient to say that there were material changes in the workload clause. There was an express provision that grievances arising under the previous contracts would not be eligible for arbitration under the new contract and with the reservation that the 10 matters involved in this matter which were then pending in the Circuit Court of Appeals would not be arbitrated unless the Circuit Court ordered them arbitrated. Of even more recent vintage in the last few weeks, the company has literally ceased to operate. It has sold its plant. It has no employees at all and is not actually in business.
Speaker: (Inaudible)
Frank A. Constangy: Well, in good many aspects it seems to be so. The corporation has not been dissolved, but the -- insofar as an operating employer, it no longer exists. It has no employees there. It has no machinery and no point.
Felix Frankfurter: Well, is this an existing order to pursue Justice Harlan's question? Is the -- are they merely shut down for the time or --
Frank A. Constangy: No, sir. They have -- they have completely gone out of business insofar as this plant is concerned and so --
Felix Frankfurter: Is anybody taking it over? Was there --
Frank A. Constangy: No, they've sold the machinery and they've independently sold the building to a group of citizens who will lease it for other purposes. And we have had no employees for several weeks.
Felix Frankfurter: You mean this isn't going to be running as the Textile Mill the way it was?
Frank A. Constangy: No, sir. And they're obvious --
Felix Frankfurter: (Inaudible) to mean exactly that it is not?
Frank A. Constangy: Obviously, it is not because it is being -- the premises are being subdivided into series of -- a series of small units for small manufacturing operations.
William J. Brennan, Jr.: Well, then what do you have to lose if you lose this case?
Frank A. Constangy: Well, we have involved, this counsel pointed out conceivably some back pay to some individuals for a work performed during a period of four to six weeks or eight weeks --
William O. Douglas: Right.
Frank A. Constangy: -- prior to the expiration of the contract and we think that's clearly under Westinghouse. It clearly is covered by the Westinghouse decision.
William O. Douglas: That means that all that would remain then?
Frank A. Constangy: Yes, sir. There can be no direction for us to change our workloads and we have not.
Speaker: They've considered that a law.
William O. Douglas: Do -- do you suggest that the case is moot, therefore?
Frank A. Constangy: It seems to me that the posture of the argument at this time – it's moot.
Earl Warren: Did you raise it in your --
Frank A. Constangy: No sir, this --
Earl Warren: (Voice Overlap) --
Frank A. Constangy: -- my contention is -- is something that's occurred since the briefs have actually been filed here.
Earl Warren: Well, wasn't it known to the Court of Appeals that --
Frank A. Constangy: Well at the time --
Earl Warren: -- the company is going out of business?
Frank A. Constangy: No, sir. The -- the company is going out of business in the matter of the last few weeks. It was an operating company but then this matter was before the Court of Appeals.
Earl Warren: Could it start off -- could it start again next week?
Frank A. Constangy: Not -- not in the present shape of its -- of its operation. No, sir. The machinery has literally had been sold and has been move out.
William J. Brennan, Jr.: (Inaudible)
Frank A. Constangy: That's right, sir.
William J. Brennan, Jr.: (Inaudible)
Frank A. Constangy: And in part, this same issue is involved in the Goodall-Sanford case because there at the time the matter was raised, as I understand it, the company contended that it was out of business. So, the plant was not operating.
Felix Frankfurter: Is there any suggestion that -- I'm not suggesting this, but is there anything, any basis to say that they went out of business in relation, because of or in connection with this suit?
Frank A. Constangy: No sir, because after this suit had been well on its way and while the matter was pending in the Circuit Court of Appeals, this company and this union made a new collective agreement and operated on it -- under it for approximately a year. And there is a collective agreement literally in effect at this time, although the company is out of business.
Felix Frankfurter: When you say in effect, do you mean that the (Voice Overlap) --
Frank A. Constangy: It does not --
Felix Frankfurter: On a period (Voice Overlap) --
Frank A. Constangy: -- the contract has not expired. It will not expire until next year under its terms. Although they -- there's no operation on this.
Felix Frankfurter: There are no employees and there are no --
Frank A. Constangy: No employees and no machinery.
Felix Frankfurter: No machinery on which to employ?
Frank A. Constangy: That's right. And the physical premises have been sold to other people. So, other than our corporate shell we have nothing left.
Stanley Reed: Is there any question involved about liability of this employer under that contract for wages to those employees, a question involved among these other cases?
Frank A. Constangy: Well, if Your Honor please, that is a question which remains the only live question in our case because it's obvious that if the Court ordered this to arbitrate workload grievances on the assignment of work, it would be a -- on an order to arbitrate something that was clearly moot. So that the only other question that would be alive would be the incidental question of whether or not these people are entitled to some additional pay for the period under which it would -- that they operated under this increased workloads.
Felix Frankfurter: May I -- may I ask you this. Whether the claims for wages turns on determinations of some of the other types of grievances to which Mr. Goldberg referred?
Frank A. Constangy: I --
Felix Frankfurter: In other words, it may give a $565 or $47 or whatever the amounts are, but do those amounts turn on questions other than the fellow didn't work or did work? Do they turn --
Frank A. Constangy: Yes, I think they would. I think they would.
Felix Frankfurter: (Voice Overlap) --
Frank A. Constangy: I think, if Your Honor please, the -- the question of back pay, well could not arise until and unless an arbitrator had found that we had imposed an excessive workload on a given individual. And that he might award back pay to compensate him in whole or in part for that excessive workload. I don't think the back pay as such arises until the other issues have been disposed then.
Earl Warren: Proceed, if you please.
Frank A. Constangy: The fundamental questions here was that at the time the -- at the time the grievances were brought by the union to the point of demanding arbitration, the contract which provided for arbitration had expired by the mutual notices of the party. There is no question and there is no question at any point in these proceedings that on the date that the demand for arbitration was made, there was no contract in effect providing for arbitration. There was no no-strike clause. There was no contract of any sort. The parties were operating. The company was operating its plant and the union presumably was permitting, suffering its people to continue employment on a day-to-day basis without a -- an expressed contractual provision, then. The action sounded in the District Court both as a suit for damages under title 28 and as a request for relief under 301, and as a request for a mandatory injunction and a prohibitory injunction to enforce arbitration. The District Court, after hearing the parties, found that there was no damage proven and it dismissed that point and continued, however, its jurisdiction under the remainder of the case by directing this company to proceed with the arbitration of grievances as provided under the terms of the expired contract. Now, to us that's extremely significant, if the Court please, because if you take the case in that posture and if you assume the inapplicability of the Norris-LaGuardia Act to this company as an employer, that we can't raise the Norris-LaGuardia Act against injunctive relief directed at us. We, likewise, could not invoke the -- under the terms of the Norris-LaGuardia Act, we could not invoke the powers of equity to enforce the no-strike clause, which the union argues is the consideration for our agreement to arbitrate. So that what the union was doing was coming into a court of equity and asking for equitable relief under a set of circumstances that the Court could not grant equity. The Court could have ordered us to arbitrate, but it could not have perpetuated the no-strike clause as to that arbitration under the terms of the Norris-LaGuardia Act. Apart that we contend that the Norris-LaGuardia Act prohibit us -- prohibited us from being ordered to comply also, but that's an ancillary point. The matter came to the Circuit Court of Appeals and at that point there was no dispute with the laws of Alabama and the Courts of Alabama have traditionally followed the common law rule that an executory agreement to arbitrate is not enforceable. Now, Alabama there's been some statement as to the law of Alabama. Actually, Alabama will enforce an award where the parties have mutually submitted to arbitration and have not revoked this submission before an award is granted. But Alabama does not enforce executory agreements to arbitrate. The Circuit Court, examining the matter, found that the matter was brought under, 301. But the 301, while it permitted the parties the opportunity to come into the Court, did not provide the relief sought by the courts or sought in the Court. And in so arriving in that conclusion, the Circuit Court took into very careful account this Court's decision in Westinghouse and particularly the opinion by Mr. Justice Frankfurter and the --
Felix Frankfurter: But that was not the opinion of the Court. That was not the opinion of the Court. My opinion (Voice Overlap) --
Frank A. Constangy: No. I say and particularly the opinion by you, sir. The -- the Court took into account those facts and they came up with their own version citing the opinion of the three judges which you wrote, sir, as proof of their determination that Congress in enacting 301 had not conferred substantive rights in terms of creating a body of federal common law for enforcement of contracts. And in so determining, the Court felt that it must then look to other federal statutes and if there were no other federal statutes to the state law to see if the remedy sought could be sustained. The Court looked at the Norris-LaGuardia Act and found rather summarily that it did not prohibit the action. It then looked at the Federal Arbitration Act, the United States Arbitration Act and it found -- as this Court found in the Polygraphic case, and I differ with counsel as to why we contend that the Polygraphic case is applicable that the exception in the introductory definitions of the Polygraphic case of the Arbitration Act applied to the whole Act. And to that point, we rely on to the Polygraphic case that the exemption of contracts, seamen and railroad men and other persons engaged in commerce -- I -- I don't have the exact language here -- applied with the whole Act that it wasn't something that applied to section 1 of the Act and not applicable to 2 and 3.
Speaker: As a matter of fact, that it's worthless.
Frank A. Constangy: Worthless, indeed. The Fifth Circuit undertook to align itself rather strongly with the Fourth Circuit on that point and to disagree rather vigorously with the Third Circuit's interpretations or its later interpretations on that point, pointing out that initially, the Third Circuit had reached the same conclusion. The Fifth Circuit then examining -- having examined the Taft-Hartley Act and the United States Arbitration Act, and having found no body of federal common law that should -- that granted the remedy, then felt that it could only apply the law of Alabama which prohibited the remedy and it dismissed the -- it reversed the District Court. It left open this question which we feel is significant and will -- will continue to be significant in this matter as to the effect of the expiration of the contract upon the demand for arbitration when the contract had expired before arbitration was demanded. Now, going back, if I may, just briefly to legislative history the legislative history of the Taft-Hartley Act indicates as to this point rather little that is specific except two things. In the House, when the bill was in the House, the House Committee bill in its version of what ultimately became 301, referred to any action or proceedings involving a violation of a collective-bargaining contract. And in the same section, the House Committee expressly provided that the provisions of the Norris-LaGuardia Act would be made inapplicable to an action of that sort. Now, there's an indication, it seems to us, that the House intended to give equitable remedies or give equitable jurisdiction to the federal courts and to remove the obstacles to it. The Senate on the other hand, dealt with the question primarily and decided to test statement on the floor which was quoted here by Mr. Justice Frankfurter in the -- in his opinion in -- in Westinghouse, expressed the intent of the Senate Committee of being concerned primarily with removing the jurisdictional obstacles to suits against the non-incorporated association for breach of contract. Now, I -- I am certainly in no position to attribute a desire on the part of Congress to take an action of one kind or another or the lack of multilateralism and congressional action. There's certainly obvious precedent for Congress passing even a one-sided statute to meet an evil that's apparent to Congress or to meet a purpose that it intends to meet. Now, be that as it may, the legislative history of Taft-Hartley certainly contains no basis of assuming that Congress intended for this Court or for itself to write a body of federal common law governing the interpretation of contracts which are all is under the state law. These contracts do not arise under the federal law. The National Labor Relations Act may have some impact upon the obligation to contract, but the terms of the contracts are matters of state law and they're governed by the laws of the States. And those States who have -- have seen fit to make them enforceable either by specific performance or to make the agreements the arbitrative, irrevocable have enacted statutes to that effect. And there are statutes to that effect. Case is cited by counsel in its reply brief on -- on the question of irrevocability of arbitration all arise under the New York Statute which expressly so provides. Alabama on the other hand, has not elected to do so. And we submit that Congress did not elect to write such a provision for Alabama, it -- to govern it in the interpretation of a type of contract arising under the law of that state. Now, as to the applicability of Norris-LaGuardia, I say their point lead to the Court that the Fifth Circuit, not only was not impressed with the argument, but dealt with it very summarily. And we do not argue as such that the Norris-LaGuardia Act prohibits the federal court from granting some relief under certain circumstances. But we do argue that the Norris-LaGuardia Act's prohibitions against granting equitable relief under the Taft-Hartley Act and because of the Taft-Hartley Act were expressly kept active by the Congress because whatever Congress wrote in injunctive or equitable relief in the Taft-Hartley, and provided for it, it also expressly provided for a non-applicability of the Norris-LaGuardia Act. And in this instance, it did not. And it may not be said in the light of the legislative history that the -- the application or the impact of Norris-LaGuardia was unknown or not considered by the Congress because the House expressly injected it in the House Bill. As to the United States Arbitration Act --
Felix Frankfurter: Before you get to that.
Frank A. Constangy: Yes, sir.
Felix Frankfurter: What do you say to Mr. Goldberg's suggestion that accepting your proposition that the Congress must have a substantive body of law in which the federal court can operate, I don't suppose anybody could say Congress says we hereby allow you to sue labor unions, and you can apply any law that comes out of the heads of judges if that will be all right. But he says he didn't like that. That you can draw the substantive code, indeed you must draw it from the recitals, public policy expressed in the introduction to the Wagner Act and Taft-Hartley Act. And that gives you -- that gives a body of law that federal courts can apply the way they'd apply, you can say that but I said the maritime law.
Frank A. Constangy: If Your -- if Your Honor please, for example, and this may not directly answer the question at first, but for example, certainly the declaration of public policy in the Taft-Hartley Act and the Labor Acts did not express a congressional intent to repeal the common law rule against enforcing executory agreements to arbitrate. Yet here we are -- are confronted with an argument asking us to embody that into a -- an implied federal code of substantive law. Our answer to it is simply this. That Congress is not without the means or the knowledge or the capacity to impose a code of federal substantive law if it sees fit. But it was perfectly obvious from the history of the whole Labor Relations Program beginning with the United States Arbitration Act that the policy of Congress was against imposing such a code except in the limited fields that it specified. The labor opposition to compulsory arbitration is that whether it has been changed by their position in this matter is a matter of economic and American history and certainly something that Congress was well aware of.
Felix Frankfurter: But I'm not reaching what you're about to enter upon and this discussion of the Arbitration Act. But that -- but that grabs upon jurisdiction of -- that gives you enough of a substantive hold gives the federal court enough of a substantive hold to carry out adjudication. I'm still talking about 301 in and of itself having incorporated into it by a reference one of the context of the rest of the statute material. And that 301 means we give the federal courts this effective way of getting hold of an unincorporated association and for the governing law, you look to the rights of the Taft-Hartley Act or whatever this is a procedural device.
Frank A. Constangy: We -- I'm not --
Felix Frankfurter: (Voice Overlap) -- procedural means of effectuating the substantive law into which difficulty we find. I think that's a fair statement of Mr. Goldberg.
Frank A. Constangy: If Your Honor pleases, I do not believe that Congress did that or would have done it or could have done it or intended to do it. As a matter of fact, when counsel was talking, I happened to have with me a short excerpt from a discussion by Senator Murray on the floor of the Senate in which he was expressing some opposition to the provisions of 301. And in his dissertation he pointed out that 301 provided that the federal courts would be burdened with interpreting state law on the applicability of contracts. So that it's perfectly obvious that if -- even the opponents of the bill, construed that provision to simply mean that the procedure to use the federal court was there but that the law that applied was the existing law of the States.
Felix Frankfurter: I suggest that with all due respect to Senator Murray's regard, it's he but Senator Taft regarding the Taft-Hartley Act.
Frank A. Constangy: Well, he was writing a minority report, sir.
Felix Frankfurter: Yes, but that isn't what determines what the statute means, does it?
Frank A. Constangy: No, I -- I'm -- I'm not contending that, but it -- it seems to me that contemporaneous understanding of what these -- these people were talking about who obviously imposing something that Senator Murray opposed would be a strong indication of whether or not there was any misapprehension on anyone's part in Congress. But it seems to me that you -- you cannot assume that Congress would do as important and as far-reaching a thing as this. And let -- let the record, the committee reports in the legislation be completely void of any statement on that.
Felix Frankfurter: But I think you underestimate the resource of this in Congress.
Frank A. Constangy: Well, I -- I submit sir that at some point someone would have made the point of what was intended when it was -- if it was intended to go that far. Now, on the United States Arbitration Act, if I may proceed to that there again, one must not only read in to a statute what is not there but must read into the legislative history a complete reversal of what the legislative history says the purpose of the statute was to make it applicable to this or the situation. It seems to me that if there's a clear legislative history, it's the legislative history of the United States Arbitration Act that it did not intend to make it applicable to agreements involving industrial disputes of any kind. Now, the argument that in 1925, they were talking about contract to arbitration rather than grievance arbitration and that sort of thing is all very well. But to come to the conclusion that the United States Arbitration Act provides the federal remedy here in the face of its language and its history, requires that this Court not only look at the legislative history but reverse it and to come up with a conclusion exactly contrary to what Congress said. Now, it can't be argued, it seems to me, that the American Federation of Labor, even in 1925, did not know the difference between a collective agreement and an individual contract. And that it did not know the difference between agreements covering seamen as the reference is made to the president of Seamen's Union and collective agreements which weren't in existence at that time when there were collective-bargaining agreements in effect in 1925 in a number of industries. And yet the American Federation of Labor specifically opposed the bill and insisted upon the inclusion of language exempting industrial disputes from its terms. And Congress went along. Congress agreed. The Secretary of Commerce recommended the change. And the bill was changed accordingly and enacted that way. And the only decision of any court prior to its reenactment in the judicial court, the Galland case expressly held that that was the -- the intent of Congress and so ruled and Congress reenacted it. Now, to say that the United States Arbitration Act may now be stretched beyond its intent, its language, and its congressional purpose, to at this stage in contradiction to its legislative history cover -- provide the -- the substantive basis for a judicial code or a federal labor code that Congress didn't see fit to write seems to me to -- to request this Court to simply legislate. There just isn't any basis of interpretation or anything else it can be sustained, we submit in the face of that legislative history. Our final point is one that I mentioned at the outset. And that is the point of whether or not a federal court may require an employer to submit to final and binding arbitration matters governing the operation of his business which the petitioners concede are a sort of mutuality for the agreement not to strike when the no-strike clause is no longer effective. Now, in effect, the District Court extended the life of this contract through the date of arbitration. If he extended it only insofar as this company is concerned, it did not extend it insofar as the union is concerned. It couldn't. And while the Circuit Court did not reach the question, we think it is -- it is extremely significant because it's an indication of the fallacy, if you -- if the Court please, of this alleged distinction between grievance and contract arbitration. The line is so interwoven and the area is so commingling that except in the rather obvious case of conceivably a discharge in reinstatement, the grievance process as an extension, as some of the experts call it of the collective-bargaining process, is in and of itself a writing of contracts and a writing and implementing and an expansion of contract. So that I think that the -- the purported distinction that counsel seeks to draw between contract and grievance arbitration is not a substantial difference because the areas intermingle and in various places the area is gray rather than black and white. Now, if the Court please, we submit that the decision of the Fifth Circuit or the majority of the Fifth Circuit is a correct decision. That 301 did not, by its language or by the intent of Congress, vest in the federal courts the right to impose a federal rule requiring the arbitration of an -- of the enforcement of an executory agreement to arbitrate in the face of state law which expressed therein clearly prohibits the enforcement of such agreement.
Earl Warren: Mr. Goldberg, would you -- would you mind stating in a very few moments your position as to the suggestion of mootness?
Arthur J. Goldberg: First of all, I have meant earlier to tell the Court that the first time I learned about the plant closing down was at lunch today. I wasn't aware of that. And I made a note of it but I didn't reach it. I don't think the case is moot because of several considerations. First of all, this workload arbitration must be arbitrated in order to determine what remains and that is the liability for any compensation that any man is entitled to whose grievance was denied by the employer during that period.
Felix Frankfurter: May I -- may I ask on that point, since that's merely a question for money wages -- for wages, is that right?
Arthur J. Goldberg: That -- well, that -- yes. That is -- that is back then.
Felix Frankfurter: Yes. (Voice Overlap) --
Arthur J. Goldberg: That is correct.
Felix Frankfurter: Now, insofar as that is concerned and starting with the decision with what was the decision in Westinghouse that 301 isn't available for back pay, what do you do with that?
Arthur J. Goldberg: Westinghouse did not involve and in the contract in Westinghouse did not contain an -- an arbitration provision. It contained a -- a grievance machinery and then there have to be recourse either to strike or to bring in suit to enforce individual rights under the contract.
Felix Frankfurter: I understand that. But the -- the decision, if I understand, and those who decided, who made the Court decide, said that 301 was not available for suit by a union on behalf of back pay for its employees. Now, does it make a difference whether the back pay as in that case was whether they took a holiday on their own or not? Would that make any difference on the jurisdictional point?
Arthur J. Goldberg: I think it makes -- I think it makes a substantial difference because --
Felix Frankfurter: I'm not talking in the industrial area.
Arthur J. Goldberg: Yes.
Felix Frankfurter: I understand that.
Arthur J. Goldberg: The method -- no, there's a legal difference. The method agreed upon by the parties to adjudicate that dispute was not to go to Court. The method agreed upon between the parties to adjudicate that dispute was to go to an arbitrator. In Westinghouse, that was not so. And so, the -- as was said in the --
Felix Frankfurter: No, but to go to an arbitrator for money and there, cannot be sued directly for money, is that right?
Arthur J. Goldberg: That's correct.
Felix Frankfurter: So --
Arthur J. Goldberg: But there -- but it has very important implications as was pointed out in the Polygraphic case as to how you adjudicate this arbitration itself running through the union. Now, there's another point. If we cannot arbitrate this dispute and since the union is the only way, the one who may arbitrate it and bring it up to this channel, there is a great doubt about the right of an individual to pursue his remedy as an individual because there have been cases that have decided that where an arbitration is the method provided in the agreement, it must be followed.
Felix Frankfurter: But that doesn't -- if you hadn't had the 301, you couldn't rely on 301?
Arthur J. Goldberg: That's correct.
Felix Frankfurter: Therefore, the fact that there isn't a federal statute, to make enforceable some provision under a contract, doesn't by itself prove that jurisdiction had entertained the suit.
Arthur J. Goldberg: No, but I think that the fact --
Felix Frankfurter: That's -- that's the trouble that I have in this suit.
Arthur J. Goldberg: I think the effect of the federal statute is to create --
Felix Frankfurter: Yes.
Arthur J. Goldberg: -- that jurisdiction for the reasons that I stated.
Felix Frankfurter: Yes, I -- I -- I'm not now opening that discussion again.
Arthur J. Goldberg: Yes.
Felix Frankfurter: But I'm just saying I --
Arthur J. Goldberg: I think --
Felix Frankfurter: -- but for me is find difference between the decision of this Court in holding that 301, if a union must sue for its own rights and can't do for wages, back pay for its men, if that is to be differentiated, there is jurisdiction if the union passed it on arbitrary, determine what back pay should be given to the men.
Arthur J. Goldberg: Yes.
Felix Frankfurter: To make sure both --
Arthur J. Goldberg: But there's another important consideration, Mr. Chief Justice, that I would like to advance, and that is this Court has sustained orders by the Board where an employer has discontinued requiring action to, notwithstanding, a determination and that is because that this has a prospective operation, we don't know. We have heard, of course, from counsel. I have known in my own experience that notwithstanding, shutdowns by plants and even sales of machinery, they operate in the future. We've had those problems with orders of the Board, Labor Board, which have been specifically enforced notwithstanding, the shutdown in the plant. It has never been regarded that that is -- presents a moot controversy. And so here, we are not advised and we ought not to be subjected to the whim of the employer to decide what the prospect of operation of this grievance will be.
Felix Frankfurter: Mr. Goldberg, I -- I will appreciate, I think, that on the fact and we have a situation here whereby, putting aside the facts, whereby this is still a live controversy in the sense that when you say a shutdown, that it already implies temporariness, transient. I do not think we've ever had a case in which this Court has enforced an order of a -- on subject intellectually, palpable memory in which this Court has enforced an order of the Board where the employer, (a) didn't merely transfer to another who takes it with the owners or (b) has shut down but the business goes on. I don't think we've ever had a case where the thing goes out of business without any implication of temporariness. And this Court had passed on it merely in order to rule for future purposes in other situations the validity of an order of the Board.
Arthur J. Goldberg: Now, I don't want to be categoric anymore than Your Honors. The recollection is probably as good as mine. But as I recall the doctrine of law under the National Labor Relations Act, those types of orders have been enforced, specifically enforced, notwithstanding, a shutdown of a plant.
Felix Frankfurter: Shutdown is not implying a temporary --
Arthur J. Goldberg: Sir, I -- I at this point I'm not distinguishing between plants.
Felix Frankfurter: Well, but I think it's important.
Arthur J. Goldberg: And I -- I think we would want to call your attention to some of those situations. As I said, I was not aware in the briefs presented that this problem was here until we arrived today.
Felix Frankfurter: With the Chief Justice's permission, would you mind dealing with it in a memorandum -- I'm --
Arthur J. Goldberg: All right, sir.
Felix Frankfurter: -- because the facts may make us --
Arthur J. Goldberg: Yes.
Felix Frankfurter: -- totally shed a totally different light on this.
Arthur J. Goldberg: If the Chief Justice will give me permission to do that, I would be glad to do it.
William J. Brennan, Jr.: Well, are you in a position to know, Mr. Goldberg, of the facts there?
Arthur J. Goldberg: I am not, not at the moment. I -- I certainly can ascertain the facts.
William J. Brennan, Jr.: Do I -- do I understand you're going to give us your version of the facts as well as --
Arthur J. Goldberg: I would be glad to -- I would be glad to do that.
Felix Frankfurter: Its a question of mootness always relate with new questions being on the record.
Arthur J. Goldberg: Yes, I would be glad to do that.