Earl Warren: Number 43, Republic Steel Corporation, Petitioner, versus Charlie Maddox. Mr. Burr.
Samuel H. Burr: Mr. Chief Justice may it please the Court. This case comes here on petition for certiorari from the Supreme Court of Alabama. It presents one single but we feel a very important question of law involving industrial relations under the National Labor Relations Act. That question is simply this that the person asserting a claim for severance pay based solely on the provisions of a collective bargaining contract governed by the Labor Management Relations Act as amended have to exhaust the binding grievance arbitration procedure provided for in the contract before he can sue in a court of law an effort to enforce his claim. All of the Alabama courts below held that he was not required to exhaust these administrative or grievance and arbitration procedures. We feel that this holding was fairly erroneous and contrary to the controlling federal substantive law enunciated by this Court since the Lincoln Mills decision. At the outset I think it might be well for me to state that this is not a case like that in Humphrey versus Moore where the individual claimant might assert that he was unable to have a fair determination of his trial under the grievance and arbitration procedure because of some conflict -- conflicting interest on the part of his union or some connivance on the part of the union and the employer. The complaint contains no allegation that the respondent ever requested his union to even invoke the arbitration and grievance procedure in this case. It was -- it has been simply the respondent's position throughout this litigation that under the Alabama law that he was not required to resort to the grievance arbitration procedure before suing in Court. The facts are relatively undisputed and in -- and as a matter of fact, they've quoted by stipulation of facts which we entered into in order to avoid the necessity of a lengthy trial so that this matter could be presented as a question of law and decided properly for the courts of Alabama. First, I like to point out that the labor contract in this case was between the petitioner and the exclusive bargaining agent of the respondent and covered two mines located in Jefferson County, Alabama, Spaulding and Edwards mines. It was in the usual form and was very comprehensive in nature, covering every phase of the employment relationship. Petitioner was admittedly engaged in interstate commerce. In that contract was Section 14 which set out a severance or separation pay provision. This particular provision was of the conditional type. That is a person was entitled a separation pay only upon a determination that the man or a substantial portion of the man, a plant where he worked was closed down permanently within the meaning of that particular contract. He was not entitled to separation pay because of layoffs for economic reasons, automation or lack of hours or lack of business.
Speaker: Is there any common law right to severance pay?
Samuel H. Burr: No sir, none whatsoever. The severance pay provision is purely a creature of this contract that the -- but -- that the respondent is suing upon. That same contract --
Speaker: As if -- but the -- the right you -- you claim that this is being sued upon arises out of the --
Samuel H. Burr: Out of the contract.
Speaker: -- the collective bargaining agreement?
Samuel H. Burr: Yes sir. He -- there's no other possible basis for his claim for severance pay.
Speaker: Would this case be different if it was a case for a wrongful discharge?
Samuel H. Burr: I do not think so. I think in the case for wrongful discharge under the Labor Management Relations Act, the result would be the same. I don't think the Court needs to reach that issue in this particular case. In the same contract was Section --
Speaker: (Inaudible)
Samuel H. Burr: If the suit were by the union, I believe it would -- is necessary for the union, the employee and the company alike to exhaust the grievance and arbitration procedure where the parties have agreed to put such a procedure which leads to binding arbitration in the contract itself. I believe the union could bring a suit for a specific performance to make the employer handle the matter through the arbitration procedure.
Byron R. White: What this means then is that if a -- if the union sues and hasn't exhausted the administrative remedies under the contract, there's no suit at all? There's no remedy at all? I mean, that's the one and only.
Samuel H. Burr: Yes Sir.
Byron R. White: Or if it's gone through the procedure and has been decided in the procedure against it, it also (Inaudible)
Samuel H. Burr: No, I think the -- this -- it really -- it is out because the decision is binding.
Byron R. White: Yes.
Samuel H. Burr: I agree with that statement. I like to point out that the arbitration clause in this case is very broad. It's in more or less the standard phraseology, it provides for the three grievance steps followed by binding arbitration. There is -- there is even a provision that says in the interest of expeditious handling of a claim under this contract that the parties can agree on other types of procedure under the contract for the hearing of the grievance. The scope of the arbitration provision is very broad covering any differences arising between the company and the union as to the interpretation or application of our compliance with the provisions of this agreement or as to any question relating to wages, hours of work, other conditions of employment of any employee. A complaint of any employee -- any complaint of an employee is first attempted to be settled with his foreman, if it's not settled, then -- and that -- then it goes into the grievance steps. I might also point out that there's no provision whatsoever as was true in the Independent Petroleum Workers case now pending before this Court which attempted to withdraw any particular appeal from the arbitration coverage. That brings me to the facts of the layoff of this petition. On December 16th, 1953, the respondent was laid off from active work, an enforced reduction. At that time under the stipulation of facts, a dispute existed as to whether this layoff was due to a permanent closing of the mines or the portion of the mines where he worked. As I said, the respondent made no effort whatsoever to exhaust the administrative grievance or grievance procedure. Instead, he waited some two years and seven months after the time of his layoff and filed a suit in the Circuit Court of Jefferson County claiming severance pay. When the case came on for trial, this Court had decided the Lincoln Mills case. Other federal courts had intimated that this was a question of federal law that favored the enforceability of arbitration, provisions and labor contracts. So, we defended the case on the grounds that the respondent had failed to invoke or to exhaust the grievance remedies. In this connection I think it would be fair to point out that the respondent in his brief in this Court for the first time argues that the severance pay claim was not contemplated by the parties as being subject to the grievance procedure suggesting in support of this argument that the respondent could not have filed his claim within 30 days after the date of his layoff because of the absence of any foreman, a mine committeeman at the plant that he worked. We must go outside of the record to answer that. As a matter of actual fact, the mine committee was there. The contract continued into operation for months after the plaintiff's layoff until this particular union was succeeded by a successor union, a new contract was negotiated with substantially the same grievance and arbitration procedure in the same severance pay procedure. The trial court rejected our defense. On appeal to the Court of Appeals of Alabama and while the case was pending there, this Court decided the Steelworkers trilogy in June of 1960. We call these important cases to the attention of the Court of Appeals, our intermediate appellate court in Alabama. Nevertheless, that court took the position based on two prior Alabama Supreme Court cases primarily, TCI versus Sizemore and Woodward Iron Company versus Stringfellow that it was not necessary for the plaintiff to exhaust the administrative remedies. Neither of these cases considered the import of the Lincoln Mills' holding that a new field of federal law was being fashioned which governed this matter. Vaguely significant that the Sizemore case relied on by the Court of Appeals was based on the same common law rule developed in the commercial arbitration field that this Court deemed inconsistent with the congressional policy found in the Labor of Management Relations Act. When the case reached the Alabama Supreme Court that Court felt constrained to recognize the existence of the federal law, in my opinion. Nevertheless, it believed that under the federal law, it was still free to carve out from the general doctrine, favoring the enforceability of agreements to arbitrate in labor contracts. Certain facts of claims like the severance pay claim in this case where the individual claimant was no longer employed actively by the company and where he was not seeking reinstatement. This type of reasoning would cover the severance pay claims. We think it would cover wrongful discharge claims. It would cover claims for back pay brought by retired or resigned employees or terminated employees. We feel that in making this distinction, the Supreme Court of Alabama first reached over in the Railway Labor field to take the decisions of this Court in Moore versus Illinois and TWA versus Koppal and apply that to the industrial field under the Labor Management Relations Act and then misconstrued the holdings of this Court to reach that result. We feel the --
Arthur J. Goldberg: Mr. Burr.
Samuel H. Burr: Yes sir.
Arthur J. Goldberg: There's no (Inaudible) in this case that the plaintiff prior to getting them (Inaudible)
Samuel H. Burr: No sir.
Arthur J. Goldberg: (Inaudible) stipulation, there was no effort?
Samuel H. Burr: That is the stipulation that there was no effort made to attempt to get relief through the union either by him or his union.
Arthur J. Goldberg: But this case (Inaudible)
Samuel H. Burr: No sir, it's not akin to the situation in Humphrey versus Moore whatsoever. We feel that the true distinction and the touchstone for proper decision in this case is not the fortuitous status of the claimants employment relationship when he brings his suit, but is the determination of whether the contracting parties to the agreement upon which the claimant relies exclusively intended the subject matter of the claim to be within the scope of agreements and arbitration procedure. We respectfully submit that this Court has virtually decided this case in the Lincoln Mills line of decisions under the Labor Management Relations Act. First, it's certainly clear that there's now one uniform body of federal substantive law. This point has been so well established in Lucas Flour and Smith versus Evening News. In other decisions, it seems unnecessary to argue the point. But it is interesting to me that these very decisions point out and emphasize the necessity of a uniformity of decisions that you obtain by using the proper grievance and arbitration procedure. The Lucas Flour opinion for example points out the possibility that individual contract terms may have different meanings on a conflicting state and federal law. It points out the desirability of adjusting claims under the agreed upon procedure as a part of collective bargaining itself. Now, we can -- I believe anyone can readily visualize the disruptive results on the collective bargaining process. If for example, various claimants similarly situated in claiming severance pay under the same labor contract and perhaps in state -- in different jurisdictions because these contracts cover more than one state very often, are allowed to bring different suits before different courts, different juries. I think it's obvious that this would have a very disruptive and disadvantage -- disadvantageous effect on the collective bargaining contracts. It would certainly in our opinion discourage employers who are willing now to include severance pay and separation pay provision in their contract if the employers are going to be denied the right to have matters involving those provisions determined under the agreed upon -- by the agreed upon tribunal as a result of conflicting state law. The decisions under the one body of uniform federal law decided by this Court certainly favor the full enforceability of coll -- of arbitration provisions. This -- the basic foundation for this principle is found in Section 203 (d) of the Act itself which provides that the final adjustment by a method agreed upon by the parties is determined desirable under the Act. The Steelworkers trilogy has set out definitely that this is proper under the federal scheme of things and they say that you should not exclude as we read those decisions from the coverage of the arbitration provision, any matter involving the contract unless positive assurance can be found that the arbitration clause is not susceptible of an interpretation covering the asserted dispute. The broad scope of this doctrine has been enunciated further in the Drake case, in the Needham case, in John Wiley versus Livingston case whereas a matter of fact the Court mentioned that typically included in collective bargaining agreements or such matters as seniority status and severance pay, the very type of claim in this case. Here again, the unanimous opinion of this Court said that the matter was going by federal law, not conflicting state law. It emphasized again the central and primary role of the arbitration process. It mentioned that the agreement covered the entire employment relation and stated that an employer would have to arbitrate under an expired contract as I remember the case where the plant involved had been closed down after a consolidation of merger or merger of the employer involved by another company. We believe very strongly that all of the reasons set out in those cases favoring the arbitration, the full enforceability of the arbitration process fully apply to a severance pay claim, the desirability of uniform results, the ex -- the expertise available under the arbitration process, the statutory right of the union to participate properly in the adjustment of grievances, and a prompt and expeditious disposition of these claims. Incidentally, the contract itself provided for appropriate time limits for the filing of agreements and between the grievance steps. The severance pay claim by nature we believe is particularly suited to be held under the arbitration machinery. For instance, one of those items that is subject to good faith bargaining like any other condition of employment, it is solely a breach of contract. It's like any other monetary claim based on the contract. In essence, it is just a form of deferred payment paid to an employee in return for work performed under the contract. It is specifically set out in the contract and one clause at Section 14, the severance pay and Section 10 is the arbitration provision. Certainly, the party has intended that this matter be determined under the agreed upon tribunal.
Arthur J. Goldberg: Have he ever refused the (Inaudible) of this type in (Inaudible)
Samuel H. Burr: No sir.
Arthur J. Goldberg: Any occasion or argument (Inaudible) in connection with this shutdown or (Inaudible)
Samuel H. Burr: As a matter of fact some claims were submitted under the arbitrary -- under the grievance procedure after December 1953 and was submitted to arbitration.
Arthur J. Goldberg: Arising from this (Voice Overlap) --
Samuel H. Burr: Arising from this and previous instances also.
Byron R. White: (Inaudible)
Samuel H. Burr: I honestly don't know. I really don't know. We --
Byron R. White: (Inaudible)
Samuel H. Burr: We can only assume this Mr. Justice White. The grievance in this case was a grievance committeeman who had participated in a previous arbitration involving the same subject matter which related to a previous layoff of the underground portion of the mine and the arbitrator in that case Mr. (Inaudible) Washington determined that the employees involved were not entitled to severance pay because it was not a -- that the employment was not terminated within the meaning of the Section 14. And no, there's nothing in the record that intimates why the claimant in this case did not attempt to exhaust the administrative remedies.
Byron R. White: Or the union?
Samuel H. Burr: Or the union, yes sir. We feel certainly that the obligation to exhaust the administrative remedies applies to the employee as well as to the union and the employer. We feel in the interest of a fair policy under the uniform federal law arbitration must work both ways. It cannot be a one way street. If it is favored by public policy when one party demands it then at the same time, we believe that is -- that the same public policy favors it and that the employer in this case can defend on a basis that the grievance with machinery has not been followed. We believe actually the Court has recognized this by a footnote to the decision of Smith versus Evening News which it mentioned in upholding the concurrent jurisdictions to entertain a 301 type suit that in the case in Smith there was no grievance arbitration procedure on the contract which had to be exhausted before result could be had to the courts. And following the import of the Supreme Court cases from Lincoln Mills through the trilogy to Drake, the Second Circuit for example has held that former employees could not bring suit for wrongful discharge and a suit governed by the Labor Management Relations Act without seeking to obtain redressed through the grievance arbitration procedure. The same result has been followed, had been reached by the Fourth Circuit in Henderson versus Eastern Gas and Fuel Company cited in our brief. We believe those decisions to be proper. This brings me to my final thought of my argument which relates to the Railway Labor Act cases upon which we feel the Supreme Court of Alabama erroneously relied. First place, we believe an excellent argument could now be made at the holdings in Moore versus Illinois Central and TWA versus Koppal which were writs and cases where a federal jurisdiction was based on diversity of citizenship have now been perhaps overruled although it's not necessary to reach that point in this case at least we believe in the proper case, those cases will have to be reexamined. The result seems implicit in the recent decision of this Court in IAM versus Central Airlines, an action arising under the laws of the United States in which it was held that federal and not state law controls in connection with matters involving the enforcement and interpretation of collective bargaining contracts. It's interesting to know that the Court there cited the Lucas Flour case decided under the Labor Management Relations Act on the point that the subject matter manifestly call for uniformity. Certainly, the Moore doctrine should be examined -- it should be reexamined and certainly, we feel that the -- that a divergence of results bearing from state to state previously true at least under the Railway Labor Act is completely inconsistent with the policy of this Court established under the Labor Management Relations Act. Just for example, the Second Court -- the Second Circuit Court of Appeals in two cases has declined to follow the Moore doctrine in a wrongful discharge cases even under the Railway Labor Act, the Larsen case and the Satterfield cases cited in our brief. The first of which cited the National Labor Policy developed under the Labor Management Relations Act in recent years and the second relying on the later decision of this Court in Pennsylvania Railroad versus Day. In addition, they -- both in decision in Mississippi which involved the same law interpreted in Moore versus Illinois as refused to follow at this date, Moore versus -- the doctrine of Moore versus Illinois in view of the later decisions of this Court. On the other hand, just last Thursday, the Supreme Court of Wisconsin in McDonald versus the Chicago and Milwaukee Railroad did follow Moore versus Illinois but said that in -- that instance Moore versus Illinois should be limited specifically to the cause of action there presented a wrongful discharge case. And I think the theory there was it perhaps in a wrongful discharge case that the claimant may have other items of injury or other items of damage which he cannot find for redress or on the arbitration procedure. Certainly, this is not true here. Under the arbitration procedure, if the plaintiff is entitled to severance pay, it's spelled out exactly what he gets. There is no other thing like damages for lawsuit, seniority rights, insurance, or pension rights. Finally, in Pennsylvania Railroad versus Day the Court here has severely restricted the application of Moore versus Illinois to the unusual and specific situation of wrongful discharge. In the Slocum Enterprise cases the Court has justified the continued existence of the Moore doctrine on the basis of the special nature of a common law or statutory right for wrongful discharge. As I've said, feeling that perhaps in those cases, there might be a different type of remedy and a different type of damages not available under the administrative process. This is certainly not true in the instant case. Also, I think it's interesting to point out that in the instant case, the decision of the arbitrator is found and binding on all parties and I think the Moore versus Illinois Central doctrine may have been influenced by the beating of the Court that a decision of the National Railroad Adjustment Board was not binding and so far as the money award was concerned on the railroad. And so, they said it's not unfair to say that the employee can go to court. As a matter of fact, the Central Airline case which involved the question of a system board award which was found then binding is more analogous to the instant situation. In any event, we respectively submit that there's no need to expand this doctrine which is already severely limited in its own field to the Labor Management Relations Act field and particularly in view of the clear cases in -- favoring the full enforceability of arbitration provisions. The conclusion, I just like to point out that we feel that the Supreme Court of Alabama fell into error because it had a too narrow concept of the entire collective bargaining process. It did not consider the role of arbitration as an essential part of the entire collective bargaining process. We feel that the plaintiff here in this case has attempted to obtain the benefits of the contract while rejecting the burdens of the contract. And as Justice Brandeis said in one of the earliest cases involving the arbitration field where parties have agreed on arbitration, I think this was the Red Cross case that the substantive right of the parties to have that matter arbitrated, the disputes under that contract arbitrated is a perfect obligation. If the policy of the law governing the contract favors that right, we feel the intent of the parties should be followed.
Byron R. White: Mr. Burr, the suggestion really isn't that this is an exhaustion of remedies although this -- I mean, this is really -- what you're really saying this is an exclusive remedy.
Samuel H. Burr: Yes sir, it's correct.
Byron R. White: The exclusive remedy. Alright, there's some allegations that an individual employee could make in a situation like this would --
Samuel H. Burr: I believe so. I think perhaps that if he alleged that it was impossible because of a (Inaudible) part of a -- the union and the company and because of some conflict of interest on the part of the union which would keep him from having a proper determination of his claim under the arbitration procedure that that might --
Byron R. White: What about just mere negligence on the part of the union? They just let the time go by. The grievance procedure isn't available for -- except within a certain time.
Samuel H. Burr: Well, I think these remedies should be to the union in that case, I think. It's perhaps a situation where he's not had a fair representation and perhaps the statutory duty of the union to (Voice Overlap) --
Byron R. White: Well, on the other hand, the employers who signed the contract and deliberately decided that this fellow had no rights under the contract.
Samuel H. Burr: I don't follow that Mr. Justice White.
Byron R. White: Well, you didn't give him severance pay.
Samuel H. Burr: No sir because we didn't think he was entitled (Voice Overlap) --
Byron R. White: That's right, I mean you can't suggest the employer didn't -- wasn't aware of the fellow -- the facts that the fellow had been discharged or that there might be a claim under the contract.
Samuel H. Burr: That's correct. The employee had been laid off. We felt the layoff did not -- was not under such circumstances to entitle the -- entitle him to a severance pay claim because the plant had not been permanently discontinued on the portion of the mine where he was working on. We build the issue on the merits and so far as that question is concerned is one which the arbitrator should be found.
Byron R. White: Did you say that this issue, this -- it's the same kind of issue had been determined in connection with other employees at the same mine --
Samuel H. Burr: Yes sir, we had.
Byron R. White: -- by the arbitrators, is that a public --
Samuel H. Burr: Yes sir.
Byron R. White: -- decision or not?
Samuel H. Burr: No sir, it is not, he did some black copies of it I think. That in fact there were two --
Byron R. White: But they were the employees of the same bargaining unit with this one?
Samuel H. Burr: That's correct, yes sir.
William J. Brennan, Jr.: What was the case about that the Court cited Woodward Iron Company versus Stringfellow and then the Drake case.
Samuel H. Burr: The Woodward Iron Company versus Stringfellow case was as I recalled a wrongful discharge case brought and was decided on the basis of the Stringfellow case in the Supreme Court of Alabama held that it was not necessary for the person who allegedly had been wrongfully discharged to exhaust the administrative remedies.
Hugo L. Black: That was a wrongful discharge.
Samuel H. Burr: Yes sir. Thank you.
Earl Warren: Mr. Jones.
Richard L. Jones: Mr. Chief Justice, may it please the Court. Let me use the question asked by Justice White as the springboard for what I have to say and let me say it parenthetically this first talk. We represent Charlie Maddox. I'll make that clear for this reason. We do -- we're not here representing the union, in fact the union has appeared here, amicus curiae with the petition and I said kiddingly to my associate as we drove up that if this --
Arthur J. Goldberg: (Inaudible) I can't see that here.
Richard L. Jones: It -- yes, its here, verified in the brief.
Arthur J. Goldberg: I know, but (Inaudible)
Richard L. Jones: No sir.
Arthur J. Goldberg: You mean the analogy is (Inaudible)
Richard L. Jones: No sir. I'm -- I'm glad you made that clear. I didn't mean to infer that. The union, the AFL-CIO states their position in this amicus curiae but it's not the same union, this was milk workers. In this particular case, I --
Arthur J. Goldberg: Well, I've had a little (Inaudible)
Richard L. Jones: Right.
Arthur J. Goldberg: (Inaudible)
Richard L. Jones: Right. I said, kidding unless rubs on the way up that if this was a 301 case, it wouldn't have to fall, we never heard of 301 when we filed this lawsuit sitting there in our office trying to -- obtained delayed birth certificates and released garnishment. We just hadn't gotten into the labor field very much but we are available to people who walk in our door, house and that's what happened in this case. We represent this individual. We brought him to some seduction, suit on contract. He said in the contract that if they'd laid him off, they'd pay him severance pay. They laid him off and didn't pay him severance pay. Two years have gone by. He lost his seniority rights and couldn't get rehired. He sued on the contract for his money -- for his money. There's an anomaly involved here. You got a lot of -- you've got a lot of cases coming up here from Alabama. But let me say this, this is different. This is not one of those cases where you go appeal some impelling reasons to set them straight by something in my opinion. I think here for once, it would be terribly ironic but if you decide they were wrong because this is the -- before reaching this is that progressive type of decision as opposed to those that you have reviewed so many times and rightly so. Here you have the State of Alabama say in this Court, the Supreme Court of Alabama saying that here is a public policy which we will enforce as a matter of state law that leaves the courthouse door open to this man to go in and sue for a severance pay. Now, that's a pretty good decision, not a pretty good law. And let's boil this thing down to its essentials or saying what is the issue here? What are we talking about? The -- in further answer to Justice White's question, the people who brought this action, who brought this grievance holding up for a 30-day limit was waived not -- I don't know. I don't know about those folks. But I do know this, at the instant, if you would ask him the further question, how did they come out? Nonetheless though, I'm not trying to get beyond the record. Let's talk about the inevitable situation as preempted. Let's talk about the inherency of the dangers involved. He's got a right for reemployment under this contract within two years. Does he want severance paid? Does he want his $694 or does he want to work? He's never done anything in his life but go in this mine and work at the mine. And that was in 30 days, he had burdened with the decision of deciding whether he wants to get $694 or whether he wants to wait out another job. Now that's some decisions to put on immediately. Statute of limitations in Alabama with contract six years, why? Why such a long period? I remember six years as opposed to 30 days under this, because the very breach of the contract is in a nebulous area. Has it been breached? When he got back there that next morning, there one -- there was no sign written up over that mine door that says this mine is permanently closed by decision of -- by the decision of the Republic State. He didn't find that. In fact, they told him what? And defended on it and defended on both the arbitrator many months later. They hadn't told it yet. Now what are his rights? He can't win for losing. He hadn't got a foreman. The mine closed, no foreman, no fellow employees, 30 days now to make his complaint. If that complaint made within 30 days is not satisfied, then he goes to the first step of grievance with fellow employees. What fellow employees? The mine is closed. Does any wonder that there might be some slim area of liberality even in the Alabama courts that respect this whole situation?
Arthur J. Goldberg: Mr. Jones, this is (Inaudible)
Richard L. Jones: Yes sir. Yes sir, this is an option which he must take. That's important too because this becomes an election which waives right of emp -- for reemployment.
Arthur J. Goldberg: Where is it?
Richard L. Jones: I beg your pardon?
Arthur J. Goldberg: Where is that in the contract?
Richard L. Jones: If I'm not mistaken, we included it in our --
Arthur J. Goldberg: In my part of the decision is (Inaudible) you referred to the two-year revision but there's another revision up there (Inaudible)
Richard L. Jones: I may -- I may be in error.
Arthur J. Goldberg: (Inaudible)
Richard L. Jones: I may be in error with respect to the two years. I believe though and I cannot point to it immediately that on the other provisions of seniority, that we do have a two-year provision. I may about -- I may be confusing this with the --
Arthur J. Goldberg: Oh yes, the laid off (Inaudible)
Richard L. Jones: Right.
Arthur J. Goldberg: But of course the theory here (Inaudible) this type of determination (Inaudible)
Richard L. Jones: Right.
Arthur J. Goldberg: I mean, they are and I thought they're definitely not (Inaudible)
Richard L. Jones: They received letters --
Arthur J. Goldberg: (Inaudible) by the severance.
Richard L. Jones: They received letters --
Arthur J. Goldberg: That isn't wrong, is it?
Richard L. Jones: They received letters telling them that they had appeared at time but I remember its being two years in which they could -- will remain on the employment roles and could go in according to the seniority to other jobs and other parts of the mines or plains.
Arthur J. Goldberg: Well, the company must treated this as a lay off?
Richard L. Jones: I'm not sure about that. If I said they were, I might be mistaken about that. But at any -- but it -- at any rate, the time in which he has to wait out even a six months period seems to me to be an important right under the contract. What is the benefit of $694 as compared to continuing employment and if he waited that out, then doesn't he risk losing both because having waited beyond the 30 days, he wouldn't have that available to them make his complaint and make a grievance for severance pay.
Arthur J. Goldberg: My argument was there or not (Inaudible)
Richard L. Jones: Right.
Arthur J. Goldberg: -- was that following this (Inaudible)
Richard L. Jones: Now --
Arthur J. Goldberg: (Inaudible) contain an action, I mean, (Inaudible)
Richard L. Jones: Yes sir.
Arthur J. Goldberg: There wasn't --
Richard L. Jones: Yes sir.
Arthur J. Goldberg: (Inaudible)
Richard L. Jones: But the importance of the complete severance is this that once he has elected to take severance pay, once he's made his claim for severance pay, then he has completely severe it. And I'm not using -- I'm not trying to play all the words, I'm not trying to use the word severance as relating to severance pay but I mean he has broken off. He has discontinued by his option all employment-employee relationships. That was --
Arthur J. Goldberg: I read the context that there was one difficulty because the context having (Inaudible) employment relationship even though there has (Inaudible)
Richard L. Jones: But not for severance pay purposes.
Hugo L. Black: So all you -- the mere fact that (Inaudible)
Richard L. Jones: As I read it.
Hugo L. Black: Well --
Richard L. Jones: In other words, he had no employment rights upon exercising his options to take this severance pay.
Arthur J. Goldberg: I just thought it would be a quasi (Inaudible)
Richard L. Jones: Alright sir.
Arthur J. Goldberg: But I maybe wrong. And I --
Richard L. Jones: Well, --
Arthur J. Goldberg: (Inaudible) into taking the severance pay and if he fails the others would go except for the great (Inaudible)
Richard L. Jones: Well, the very letter which they got made that clear, that if you take -- in those cases where they say that we have closed and they agreed its close, they get a letter, they sign and send back. It says upon the acceptance of it, its severance. Now we've just interpreted that way in light of the company's policy of paying severance pay which not very often but once in a while.
Hugo L. Black: I find several references here in the record of this being a test case, what does that mean?
Richard L. Jones: I don't know sir. All I know is that this case is important to our client because it involves $694. Now, I'm not trying to be precious with --
Hugo L. Black: What about the basic issue of whether the -- does your right to recover depend on whether the mine was permanently closed?
Richard L. Jones: Yes sir.
Hugo L. Black: Has that ever been litigated?
Richard L. Jones: Not in this case, not in this case. But now it's been over 10 years and that's getting pretty permanent.
Hugo L. Black: I understand --
Richard L. Jones: I mean --
Hugo L. Black: -- but it seems that that was not litigated and --
Richard L. Jones: No sir.
Hugo L. Black: -- but they stipulated --
Richard L. Jones: They stipulated too.
Hugo L. Black: -- and agree on something to get this case tried.
Richard L. Jones: Yes sir.
Hugo L. Black: And that's the way it's tried.
Richard L. Jones: Yes sir.
Hugo L. Black: They never litigated the basic issues?
Richard L. Jones: No sir, no sir. As a matter of fact, we did try one (Voice Overlap) --
Hugo L. Black: How many other cases hardly involved like this?
Richard L. Jones: Four or five. How many -- eight in all, he says. I think there's one up a little bit that -- here's what we're involved with and let's take the issue this way because I think until we see it in this light, we -- it's easy to miss what we're dealing with. I want to put it this way so as to not appear on the negative on the defensive in this case. I -- we do not come here in any defensive situation. We feel that we don't. Here's what we're talking about. All claims was the word on that, does all claims based on the collective bargaining agreement come within that orbit to be governed by federal substantive law, all of them. Or to put another way this federal substantive law govern all claims arising out of the labor management contract. I think that's a blunt -- simple way to put the question. Now if they do not, then this one surely must follow without that orbit. And let's take a look at what we mean by orbit and perhaps to illustrate some other fact situation might help. A question was asked a moment ago by Justice White with respect to personal injuries or negligence. Now, you may remember that in some states even where workers' compensation covers accidental injury, if you've got an injury without an accident, long exposure situations that you can't have an action either negligence or for breach of contract. Suppose for a moment that an employee sued on a health and safety provisions of a union contract for personal injury. Is that the type that would be arbitrable on the 301? Or -- I'll point it out this way, take a note --
William J. Brennan, Jr.: Mr. Jones, I heard that the (Inaudible) along your argument that --
Richard L. Jones: Alright sir.
William J. Brennan, Jr.: -- its one corner though, in your colloquy with Justice Goldberg, were you suggesting this that somehow for the reasons that you've been outlining, this administrative remedy either was a useless one whether for -- or other reasons that any event in the circumstances because it was an unfair kind of procedure you had to resort to it too quickly or you had to make elections which gave you a Hobson's choice that on that account this was not the kind of a procedure to which you had to resort even if ordinarily under the principles of our cases as a matter of federal law, you would have to (Voice Overlap) --
Richard L. Jones: No sir.
William J. Brennan, Jr.: Is that right?
Richard L. Jones: I'm glad you asked that.
William J. Brennan, Jr.: Alright.
Richard L. Jones: No sir. What we're saying is this, this is merely illustrative of why this suit does not come within 301. There may be many other reasons, not that we're trying to go about this particular one, there are a number of them. Why the policy of arbitration in the first place?
William J. Brennan, Jr.: Well, are you asking us now to reconsider all the line of cases to get in the --
Richard L. Jones: Oh, no sir. We did -- we'd come here in a terribly defensive situation it seemed to me. We do not. Here's what we say (Voice Overlap) --
William J. Brennan, Jr.: How do you bring yourself outside of -- on the surface (Inaudible)
Richard L. Jones: Well, let me (Voice Overlap) -- those are not --
William J. Brennan, Jr.: (Voice Overlap)
Richard L. Jones: -- not to bring ourselves outside at all.
William J. Brennan, Jr.: Yes.
Richard L. Jones: It is the exception of the general rule that applies federal substantive law in the first place. That is the exemption, not the general rule. You see, go back to Erie Railroad and pick up and come (Inaudible). How do we get federal substantive law in the first place? By a public policy that cry out in this whole labor management relationship. These disruptive factors in labor management that brought about Taft-Hartley or where in you say -- or Taft-Hartley was just brought about but in that atmosphere it was -- it -- that it was which pronounced an arbitration policy. A section says there that it -- were effectively given to that agreement to arbitrate. Now, this is -- it is from this that the Court has said it is from the implication of this Federal Act that we're going to create this body of federal substantive law to apply to those situations dealt with specifically by Taft-Hartley. Smith versus Evening News, we do not consider that all claims by individuals are outside the orbit of 301. But it also didn't say that we do consider that they all are within the orbit of 301.
Byron R. White: Let's assume that the union here had asked the employer to arbitrate this claim of your client and the company said this isn't an argument for the reasons at all. Do you think the company could have gotten away with that?
Richard L. Jones: Yes sir, on our theory I think they could. I thought about that.
Byron R. White: (Inaudible) -- the company couldn't get away with that, neither can you.
Richard L. Jones: I thought about then, I think to be consistent we've got to say that if it fall -- so we're saying that here we're dealing with a situation not within the purview.
William J. Brennan, Jr.: Well, why couldn't the company get away with that?
Richard L. Jones: Because it -- I think was good for (Inaudible) --
William J. Brennan, Jr.: I asked why. What are your reasons for suggesting it (Voice Overlap) --
Richard L. Jones: Because the (Inaudible) -- the vulnerable nature of the arbitration provision under state law. In other words, if there is provision that speaks out against public policy in a contract and is void then I think either side would have to have the same right to void it. I think they say it void --
William J. Brennan, Jr.: And you (Voice Overlap)
Richard L. Jones: -- but I think in the -- in the technical (Inaudible)
William J. Brennan, Jr.: (Inaudible)
Richard L. Jones: I beg your pardon?
William J. Brennan, Jr.: You invoke state law for this?
Richard L. Jones: Well, here's what we're saying. That that's what has happened in the railroad cases and you have allowed state law to govern. The Second Circuit said that just not long ago that he mentioned not because of any federal substantive law, because they said New York State would require and arbitrate it. That's what the --
William J. Brennan, Jr.: Concurrently expressly accommodate state law when it wants to.
Richard L. Jones: Well, it can take from a state law those things that are consistent with the federal policy and merge it into federal substantive law, yes. Now that's my second point and I should get to it because --
William J. Brennan, Jr.: If the -- it also -- when it wants the state -- if it wants the state law to apply exclusively regarding from what the federal law says, it said so.
Richard L. Jones: Well --
William J. Brennan, Jr.: Section 14.
Richard L. Jones: Suppose somebody came to this Court by some procedure, I haven't thought this through, know how to get here but so supposing was here, saying that we made contracts up in Chicago and deal with the various states. I guess you have to have a Congressional Act involved first that unified the law. Well, a good one interstate commerce and a truck, trucks going into various states. This Court had just said we will not create a body of federal substantive law that says the rules to the road in Mississippi and Alabama are going to be the same because interstate commerce is involved, just having said that. And you -- and when you started off at the Westinghouse case, keep this in mind now. When you started off the Westinghouse case there were some serious question upon -- about the presently constituted courts as to the constitutionality of this thing about arbitration. But you resolved it in favor of the constitutionality. But you watched it, you looked at it and workout and said, "We've got watch it this close". And because if we get beyond what Congress was intending to do in Taft-Hartley we're going beyond the constitutionality, in other words interpreted to favor the constitutionality as opposed to the unconstitutionality of that. Then you came along later and said that -- and overruled Westinghouse in the Smith versus Evening News.
Byron R. White: So how would you define those, that class or category of cases which you (Voice Overlap) --
Richard L. Jones: Where there is no disruptive element involved in labor management, where there could not possibly be any question.
William J. Brennan, Jr.: You mean because the plant shutdown? Is that it?
Richard L. Jones: Well, because he's no longer employed.
Byron R. White: Well that (Voice Overlap) --
Richard L. Jones: He's not dealing -- he's not even -- he's not even bound up in the relationship --
Byron R. White: Well if you're (Inaudible)
Richard L. Jones: See, once a man takes severance pay, what could be more complete with his severance of employment than the very act of taking it? And it cannot affect any other employee at all, couldn't possibly do it, even more so than a wrongful discharge.
Byron R. White: So if a -- if the employer just came around because I'm terminating you and he says, “Well, you don't have any right to terminate me but I'll be terminated" -- I mean, if he takes severance pay then -- anytime that determination is what you're saying.
Richard L. Jones: That's right.
Byron R. White: Anytime they could terminate him.
Richard L. Jones: That's right. That's what the -- that's what's the railroad cases has gone of or completed. Now the railroad case as they say sets up some different policy about this. I mean you permit from the suing state court and that state court governing the railroad cases, but we don't want to do it here because there are some different congressional policy. Well how can that possibly be? The labor -- the Railroad Labor Act even established the very board for the arbitration. What could be more in keeping with the federal and -- federally announced public policy to arbitrate than to establish the board from the arbitrated being?
Byron R. White: So you're not -- you don't rely at all on any intermediate position that the bargaining unit was here dissolved and --
Richard L. Jones: That's right.
Byron R. White: -- consequently the -- that the arbitration procedure, the administrative -- so-called administrative remedy is nonexistent, it just isn't available. There's no foreman, no employees, the grievance procedure is --
Richard L. Jones: That's --
Byron R. White: You can't expect the union to watch out for me now, the union has gone to at this particular place. You're not picking that position, that isn't what you rely on?
Richard L. Jones: No sir. I say that that is a part of his situation and this -- and those are the peculiar facts of the case before you.
Byron R. White: But that isn't the reason?
Richard L. Jones: No sir. I say that the federal act was not intent and could not I believe the constitutionally be construed to have been intended, to have included every possible claim that a person would have under this union contract. Now the union brief here which is very expertly done incidentally takes a little bit different position in the company. They have showed the evolutionary process of this and say you hadn't cross the river yet, but you're right there ready to ford it. You -- you're there so now take the one most broad leap in going across. That's the position of the union. The (Inaudible) you've already done this and already said -- the authority said, you've already said -- don't need to be said -- cite our case against us. But --
Arthur J. Goldberg: Mr. Jones, are you saying that the (Inaudible)
Richard L. Jones: Yes, they miscalculated by the full amount.
Arthur J. Goldberg: Do you think you could say that?
Richard L. Jones: Sir?
Arthur J. Goldberg: Could you assume (Inaudible) after that?
Richard L. Jones: Yes sir, we did, I mean -- or perhaps you post the exact criteria, I might have --
Arthur J. Goldberg: (Inaudible)
Richard L. Jones: Oh, excuse me. Excuse me. I missed that.
Arthur J. Goldberg: I'm talking about -- supposed that the (Inaudible)
Richard L. Jones: Oh no, oh no.
Arthur J. Goldberg: (Inaudible) no longer an employee.
Richard L. Jones: No sir, no sir. That their case probably answers that, although I think that the dissent was very brilliantly done in that case. But the Day case does -- that does not stand in the way of my proposition. But it does say that if it would have that disruptive effect on presently employed employees, then we will also say that comes within the orbit of the arbitrable claims as opposed to lawsuits. Now, here's the final point I want to make, both sides here that is the company and the AFL-CIO in the amicus brief. They are -- they -- I could say they contend, that would be a bad choice of words. They assume that the federal law if applied in this case is already established and has already been announced and therefore the Supreme Court of Alabama decision will be overruled. Now, I'll take this strong issue with that. I think that's not so at all because to say that that's true is to say this, that you're going to create and have -- already began that process of creating two completely line of cases they will reach completely different results, one in the railroad cases on the one hand and the other, the 301 of the LMRA on the other. I don't think you've done that at all. In fact, the more recent cases have drawn in parallel and taken language from one and applied in the other.
Byron R. White: Don't you think Central Airlines have anything to do with that question or no?
Richard L. Jones: I think it does. I think there -- I think that --
Byron R. White: What does it have to do with them?
Richard L. Jones: Well, I think it's talking about the same public policy about -- I think he's talking about the public policy of arbitration. But in that case whether that had arisen under railroad labor or LMRA, I think your results would have been the same. That's what I think it has to do with. I don't see two distinct lines of cases grow or growing out of this.
Byron R. White: Not on the -- you mean not on the applicability of federal law?
Richard L. Jones: That's right.
Byron R. White: I thought that's what you said in the -- with the -- was different between the two lines of cases.
Richard L. Jones: Because I don't think there's going to be any difference. I think your decision is going to be the same because I think the public policy announced in the Railroad Labor Act is the same policy announced under LMRA. I don't see any difference. So that I think that the line of cases which you've already established the right of an employee who has gotten completely away from, and not part of the machinery of management labor relationship.
Byron R. White: So the two cases could be -- two lines of cases -- there shouldn't be two lines of cases --
Richard L. Jones: And I don't think there are.
Byron R. White: We would create one if we decided to get through here.
Richard L. Jones: That's right. Yes sir. You would create a completely new one, not have -- not already created and not bear within these other case. Where you have enforced arbitration is where you would have been dealing specifically and directly with that disruptive element in management labor, that's where you said you got to arbitrate because of -- Taft-Hartley says so, if the parties agreed to. Only one confusing case in this whole line that I see, this has been very intriguing but interesting to take these cases, we're not dealing with them as I don't and follow the consistency and the line of reasoning that has brought us up to this point, most intriguing. Only one case bothered me some, and I think perhaps just because I don't understand something in the record. Justice Black dissents in Lucas Flour and says if there was no agreement to arbitrate and yet the majority goes off on the assumption that there was. That one is – that throws me a little bit on that one feature. Outside of that, it is the -- their thinking has been clear, it has responded to this public outcry of a public policy to keep down confusion and conflict to this disruptive effect and management labor. And you've done that under the policy announced by LMRA. By the same token you said if that's not involved and it doesn't come within the scope and the orbit and field of operation of Taft-Hartley, just like it didn't come within the wrongful discharge, didn't come within railroad labor. Then we leave him either one or two ways. And here, remember that -- I don't mean that I'm disinterested or made in that sense, but I don't stand in the position of the company who has to deal with this tomorrow and the next day and so forth or the position of the union who must do it, I stand here with this one --
Byron R. White: But if the --
Richard L. Jones: -- one thought.
Byron R. White: What about the wrongful discharge case, I supposed you would say that is an arbritable matter. The union says this fellow shouldn't been discharged and -- that reasons for it. The fellow has been discharged (Inaudible)
Richard L. Jones: Only if he accepts -- only if he accepts and that's the distinction on one of the cases that he mentions. Only if he accepts his discharge as filed, so as he is not suing for reemployment rights. So, you said that -- that's the difference in Moore and Slocum. Slocum wanted his job back and his backpay.
Byron R. White: If he wants severance pay and the company says he isn't entitled to it, he can go to court?
Richard L. Jones: He can go to court. And can do so under two theory -- one of two theories, either ones are (Inaudible). That Taft-Hartley just doesn't reach this and there is no federal body of substantive law which applies. Or yes Taft-Hartkey does but just as we've done in the railroad cases, we state what that public policy is and it's the same as Alabama State. In other words, to say that federal substantive law applies, it's not to say that Charlie Maddox loses his lawsuit because in the railroad case, as you've already said, that we'll announce a public policy. And that part of the policy is that if -- that the doors of the courthouse are open and he don't have the right to sue and go into court and make use of that guarantee of the constitution to be useful.
Byron R. White: What about the correlative policies not only of a case but of uniformity?
Richard L. Jones: Well, I think the Court certainly had that --
Byron R. White: To get payment at the same time (Inaudible)
Richard L. Jones: Yes sir.
Byron R. White: -- adjudicated under state law and the federal law was --
Richard L. Jones: I think --
Byron R. White: -- possibly different at all.
Richard L. Jones: I think the Court had to deal with that in another set of facts but the same basic question in Erie Railraod where the old case that Justice Holmes had dissented in --
Byron R. White: This happens to deal with a -- this happens to deal with the collective bargaining agreement.
Richard L. Jones: Yes sir.
Byron R. White: And you have to rely on the collective bargaining agreement as (Inaudible) your right to severance pay.
Richard L. Jones: That's right, that's right.
Byron R. White: Your source is in that collective contract.
Richard L. Jones: That is true.
Byron R. White: That isn't part of that issue here --
Richard L. Jones: That's right.
Byron R. White: -- even in one collective contract.
Richard L. Jones: That's right.
Byron R. White: In several courts, the -- they adjudicate it as I -- on the different standards --
Richard L. Jones: But --
Byron R. White: (Inaudible)
Richard L. Jones: But we would look back and say what within the labor contract was Taft-Hartley dealing with? What were they talking about? What was the concern of Congress over those matters that had nothing to do with the disruptive effect and the peace within the industry?
William J. Brennan, Jr.: Well, on that ground you say it's no (Inaudible) This situation presents no question of federal law or federal standards at all.
Byron R. White: That's right. And if it does, if it does, it would still be a policy consistent without announcing the railroad cases which would permit him to sue.
Byron R. White: And therefore, you have to say that this is not an arbitrable matter, the union has got no business in it at all. That (Voice Overlap) --
Richard L. Jones: If he wants it that way, and I've got a selfish interest involved in that because I won't -- my right to sit and (Inaudible) walk in my door for me to represent him if he so chooses to do so. Thank you.