William H. Rehnquist: We'll hear next in No. 89-1166, International Union v. Ring Screw Works. Mr. Gold, you may proceed whenever you're ready. Let's have order in the Court and no talking in the courtroom except from counsel at the lectern.
Laurence E. Gold: Chief Justice, and may it please the Court: This case, like the preceding case, is one in which the International Union UAW is the petitioner, but thereafter the similarities cease rather than arising under title VII. This case arises under section 301 of... of the Labor Management Relations Act and as... the emptying out of the bar section shows... raises questions of somewhat less emotional... proportion. The parties here entered into a collective bargaining agreement for a 3-year term. The agreement which stretches some 35 printed pages in the joint appendix. Actually, there are two agreements, but they're--
William H. Rehnquist: There are literally 3,500 pages?
Laurence E. Gold: --35 pages. I apologize. [Laughter] 35 pages of provisions are enough 3,500 and our printing bill would have kept us out of this Court. Stretches some 35 pages and covers the normal... particulars of the relationship... the working relationship between the employer and his employees. The agreement contains a grievance procedure which specifies that... it is the method for treating disagreements as to the interpretation and application of the agreement. The grievance procedure provides for 4 steps of conciliation and discussion, provides that the parties may agree to arbitration for certain matters, provides that an agreement reached between the employer and... the union during the grievance procedure is binding and is silent on what the status of the situation is in the event that the parties do not come to an agreement about what the contract means. In addition, this agreement has an express no-strike clause. And the express no-strike clause contains an exception for a strike or a lockout over an unresolved grievance. The one thing that is absolutely plain is that the agreement is totally silent on whether there is an option where no resolution of the matter is reached in the last stage of the grievance procedure. One party or the other may sue under section 301 which provides for such suits for breach of the agreement and for enforcement of the agreement as properly construed and entered into.
Antonin Scalia: Mr. Gold, if suit is brought, do you consider the grievance, by reason of the bringing of the suit, to still be an unresolved grievance?
Laurence E. Gold: I... I regard it as being an unresolved grievance until the Court speaks and determines whether the grievance is properly grounded in the contract or whether the employer's action was consistent with the contract and does not constitute a breach of the contract.
Antonin Scalia: When does the no-strike clause allow a strike to occur?
Laurence E. Gold: The no-strike clause allows a strike to occur at the completion of the fourth step.
Antonin Scalia: Uh-huh.
Laurence E. Gold: So, it does--
Antonin Scalia: Where is the no-strike clause in--
Laurence E. Gold: --Look at the... page 34, the no-strike clause, which is section 7 on page 34 of the joint appendix, the buff-colored book says, until all negotiations, there shall be no strikes, et cetera.
William H. Rehnquist: --Where is that on the page, Mr. Gold?
Laurence E. Gold: It is at the bottom of the page, section 7, the union will not cause or permit its members to strike. Then you have the negatives and at the end it says until all negotiations have failed through the grievance procedure set forth herein. Neither will the company engage in any lockout until the same grievance procedure has been carried out. So as we would see those words, there could be a strike or a lockout at the end of the fourth stage whether or not there was a lawsuit.
Antonin Scalia: The purpose of the strike being to force the company to do what the law may permit it to do, what it may have a contractual right to do. They are currently litigating whether... whether the company has a contractual right to do that.
Laurence E. Gold: Correct.
Antonin Scalia: And you're saying there can be a strike to prevent the company from doing what the court will say or is being asked to say it has a contractual right to do. And it works the opposite where, you know--
Laurence E. Gold: That's right.
Antonin Scalia: --where... where there's a lockout. The employer is locking out the union, because the union is asserting a contractual right which a court is being asked to affirm. I... I find something inappropriate about--
Laurence E. Gold: To the extent that there is anything inappropriate... I mean your sense of inappropriate... this is not in the lawsuit. It is that the parties created both an option to strike and an option to sue at the same time rather than a system which guarantees that you will have only one or the other. The company's--
Byron R. White: --Well, what if this suit goes forward and the ruling is against the union? Can the union strike?
Laurence E. Gold: --I take it that the question there and the answer that we would suggest as well is the same as was assumed in Buffalo Forge in--
Byron R. White: Mr. Gold, you can give a yes or no answer.
Laurence E. Gold: --We think the strike... we think that a continuation of a strike or a lock-out after the judicial decision would be enjoinable.
Byron R. White: And so in effect you think the contract says, we don't have arbitrators, but we have agreed that the Court will stand on issues with arbitrators?
Laurence E. Gold: That's right. And--
Byron R. White: Well, that isn't what the contract says.
Laurence E. Gold: --Well, the contract says nothing on that.
Byron R. White: Well, that's what I say. It didn't provide that--
Laurence E. Gold: What if it... what we say in terms of... first of all there was no strike here, so we're not dealing with the question in this particular case of the interplay between the right to get a judicial determination on the meaning of the contract and whether the contract is more than a collection of words which have no purpose when the push comes to the shove and whether a union or an employer can go down both options at the same time. The company's position here is that this silence... the creation of this grievance procedure which ends at a certain point whether or not there is a resolution of the disagreement and the exception to the no-strike clause which permits the option of going on strike is sufficient to demonstrate that the parties negated judicial enforcement of a contract whether or not the union strikes.
Anthony M. Kennedy: --Well, what is your position as to whether or not a lawsuit in a strike could proceed concurrently? If there's no final judgment in the lawsuit, can you... can the union then pursue both avenues simultaneously?
Laurence E. Gold: Let me treat with the problem, as we see it, because it explains my answer. My answer is that we believe that under an agreement of this kind they can proceed.
Anthony M. Kennedy: Can?
Laurence E. Gold: Concur. And let me state why. First of all, as we've noted in our brief the leading lower court case here is a Seventh Circuit case, Associated General Contractors. As that case shows, you can have one party bringing the lawsuit and the other party using economic force... the defendant using economic force. As the Seventh Circuit held in that case, because of the Norris-LaGuardia Act you can enjoin the nonsuing party from using economic force. And against that background, well, we don't think that it's hard and fast. It seems to us it would be unsymmetrical, disproportionate, and unsound to say that the suing party could not use economic force. But you have not only the contract questions and the contract interpretation questions here but you also have the Norris-LaGuardia Act questions, which as the court noted in the Associated General Contractors case, because that case came up twice... first on a status quo injunction pending a determination by the court and a second time around. So the question of whether the use of force is a breach of this no-strike clause pending judicial determination and the question of whether it is enjoinable even if it is a breach of this no-strike clause seems to us to be separate from the question of how do you read the agreement. Do you read the agreement of permitting the parties to secure what the Seventh Circuit said was the salutary effects of the judicial determination of the meaning of the contract on the basis of the fact that they permitted this option of economic force?
Antonin Scalia: Mr. Gold, is this an unusual form of... of collective bargaining agreement provision--
Laurence E. Gold: It is a minority form of collective bargaining agreement, but it is, seems to me to be a variation of your risk question. I can't quantify--
Antonin Scalia: --It doesn't stick out like a sore thumb.
Laurence E. Gold: --It does not become... 10 percent... It's a relatively--
Antonin Scalia: Uh-huh.
Laurence E. Gold: --small group--
Antonin Scalia: Right.
Laurence E. Gold: --of contracts, but it is not sui generis. It's not--
Antonin Scalia: Right.
Laurence E. Gold: --extraordinary. The litigation shows that there are a fair number of subjects.
Antonin Scalia: Well, what is the more standard... what is the more common... how does the more common one read?
Laurence E. Gold: The more common form of agreement is, or most common form of agreement is one that provides for final and binding arbitration and the court has set all the rules on what that means.
Antonin Scalia: Explicitly eliminates--
Laurence E. Gold: Right.
Antonin Scalia: --judicial--
Laurence E. Gold: It both eliminates the right for self-help and judicial determination of the meaning of the agreement. But it doesn't... and we'll get back to this in talking about what the policies are here... the important thing is that it doesn't eliminate the peaceful on the merits determination of what the contract means. It provides an arbitral determination of what the contract means in the traditional sense of determining what a group words that constitute legally enforceable promises mean.
William H. Rehnquist: --Well, isn't there also a right of judicial review of the arbitrary--
Laurence E. Gold: Right, and in addition, it is fairer to save than rather than eliminating judicial enforcement. The Steelworkers Trilogy in such cases set a standard of review of judicial enforcement, but the judicial enforcement is the final step in the process that either party will not accept what the arbitrator has done. The arbitrator's award in that sense is not self--
Byron R. White: --But the grounds for a court to... not to accept the arbitral award are very narrow.
Laurence E. Gold: --Very narrow. Yes. Well, that's what I'm saying, but the process is one of enforcement of contracts in the way that any common law lawyer would understand the concept.
Byron R. White: Well, is this case... is it very significant because I would suppose that if the parties are... do you think the union would ever have agreed to a provision in this particular contract that economic weapons are the only way to resolve an unsettled agreement?
Laurence E. Gold: No, I think that the greatest reason for doubting the inference that the court of appeals drew is the one you just stated. I think that there was a great deal of concentration here on arbitration and striking, but I think the union certainly presumed that it was not giving away its right to go to court because it is extremely difficult given the disproportion to have 300 people lose their sustaining wages--
Byron R. White: Well, I suppose if you had thought that the union would have said yes if the employer said, and by the way you can't sue. You probably wouldn't have been here--
Laurence E. Gold: --Well, I... I think so and one of the... one of the important functions this determine... this Court's ruling will have is to give the ground rules against which the parties will negotiate.
Anthony M. Kennedy: --The Evans contract in that respect is I guess somewhat better for the employer's position because at page 53 of the Appendix it says, unresolved grievance, except arbitration decisions, shall be handled as is set forth in the no-strike clause.
Laurence E. Gold: Yeah, and the question there is why are these two contracts which... which were entered into by the same parties at the same time different? What did that mean? The court of appeals points out that this case was litigated on the basis that the agreements were substantially the same. The employer has never relied on that as showing a studied determination to resolve the problem and it does have the phrase unresolved grievances. How you resolve grievances is as... in the final analysis is as silent... is a question which is as... totally unaddressed, in the Evans collective bargaining agreement as in the other collective bargaining agreement. Having taken these detours, let me state what we believe the right rule is. We believe the right rule is that collective bargaining agreements should not be construed to preclude judicial enforcement unless that is clearly and unmistakably the party's intent. We believe that that is the sound rule of law because of... of the language policies and purposes of section 301 which adds a provision making collective bargaining agreements enforceable in court. As this Court has explained those purposes and policies... most particularly in Lincoln Mills which we set out the basic holding of at pages 10 and 11 of our brief... as the Court said there, Congress point was that unions as well as employees should be bound to collective bargaining contracts. There was also a broader concern, a concern with a procedure for making such agreements enforceable in the courts by either party. Congress, having created this system in order to further industrial peace by making these labor contracts enforceable in the Federal courts, creating quite a constitutional ruckus in doing so, as Lincoln Mills indicates, it seems to us that a determination that the parties have contracted out of the usual processes of the law ought to be one that is clear and unmistakable. And we believe for the reasons we also spell out in the brief that section 203(d) which recognizes a preference for final adjustment by a method agreed upon by the parties does not cut back on section 201 at all, that looking at the totality of title II of the... of the Taft-Hartley Act the obvious purpose is to further peaceful methods of settlement of the whole point of both section 301 and 203(d) and title II more generally was to create a system in which there are periods of discord when the parties negotiate agreements and to encourage and further systems for the peaceful resolution of contract disputes after the negotiation is concluded. Congress did not prohibit the parties from saying that they were going to have a system in which the contract is not enforceable in any sense that one would understand the contract being enforceable, namely a contract being a set of promises which attempts to capture the future and where disagreements on meaning are settled by referring back to the meeting of the minds as reflected in the agreement at the time it was entered into--
Anthony M. Kennedy: And if there's no meeting of the minds as some general, Federal common law of the work place?
Laurence E. Gold: --To the extent that the parties provide for... arbitration. I--
Anthony M. Kennedy: Well, no, no.
Laurence E. Gold: --Do you mean as to what--
Anthony M. Kennedy: This is at... at the judicial review stage?
Laurence E. Gold: --But it... are you asking about the substance or about this question of whether the contract is enforceable? I'm sorry, Justice--
Anthony M. Kennedy: What... what is the substantive law to which the Congress... to which the Court looks in these cases where the contract isn't clear? I mean you're not just asking us in this case to determine that the grievance procedure was proper, but I take it whether or not there was just cause for the termination.
Laurence E. Gold: --Yes. Where the parties don't provide for arbitration it is well settled that the Court interprets the contract and Lincoln Mills says that the courts must fashion the law they apply, the contract law they apply from the policy of our national labor laws. Again, we set out the quote at page 9--
Anthony M. Kennedy: Well, of course, those... that was in the context of arbitration.
Laurence E. Gold: --But... it is--
Anthony M. Kennedy: And... and in others, fact has been with the good faith duty of representation. We have developed no real Federal common law of justice... just cause for discharge.
Laurence E. Gold: --Well, there would not be a Federal common law in that regard. Certainly the Court would look to the evolving arbitral law on what just cause means, what that provision means. But it is perfectly well settled in Sinclair and other cases that the parties don't have to provide for arbitration, that 301 makes these contracts enforceable, and that the contract law, which after all is a relatively passive law... the basic rule is that you apply the contract as the parties intended it. All we're saying here is that on the critical question of enforceability and justiciability there ought to be a presumption that 301 means what it says and that the contract is enforceable in the traditional sense and that only if the parties expressly negate that, in essence, contract out of the system which Congress has put in place and shown a preference for, should the determination be made that no lawsuit can be brought. There--
William H. Rehnquist: Your position, Mr. Gold, would certainly bring a lot more cases into... labor contractors into Federal court.
Laurence E. Gold: --It would bring cases of this kind into Federal court. But I... I think it is inherent that these cases will be in the Federal courts. After all... unless the Court says that no matter what the true intent was, if you don't expressly provide for judicial enforcement where there's no arbitration, then you're going to decide on a case-by-case basis what this clause means or what that clause means. But the fact of the matter is that there will be cases of this kind in Federal court and that--
Byron R. White: And in the State court.
Laurence E. Gold: --and in the State courts and that--
Byron R. White: 301 cases can go in the State court?
Laurence E. Gold: --Yeah, and that Congress made the determination. In other words, it was a long time ago and a lot of things have changed, but it was a fighting issue in 1947 as to whether these contracts ought to be judicially enforceable or whether there ought to be a system where there were simply guidelines which the parties in essence could tear up anytime they wished to do so if they felt strongly enough. And let me add in that regard that in no sense does a strike system constitute a method of enforcing a contract. It is a method of creating a new contract. The parties can do that as I say, but I don't see how it can be fitted into Congress' determination to have contracts enforceable through the usual processes of the law.
Harry A. Blackmun: Mr. Gold, I suppose your case or the case, really comes down to a battle of presumptions, doesn't it?
Laurence E. Gold: Yes, absolutely.
Harry A. Blackmun: You... you take the position that there is access to judicial relief unless the contract expressly provides otherwise. Your opponents say just the reverse, that there's no access to judicial relief unless the contract says there is.
Laurence E. Gold: Right. And we believe--
Harry A. Blackmun: And there we are.
Laurence E. Gold: --Yes, and we believe that the lessons of 301 in particular is that our presumption is the one grounded in Federal law.
Byron R. White: Well, the... I suppose if there weren't a no-strike clause and no provision for either grievances or arbitration, it would be perfectly clear that you sue in 301.
Laurence E. Gold: Absolutely.
Byron R. White: Not because of some presumption, because that's what the law says.
Laurence E. Gold: Well, but the law continues to--
Byron R. White: And the--
Laurence E. Gold: --to say that.
Byron R. White: --Well, of course it does.
Laurence E. Gold: In--
Byron R. White: You think, you think this case is just like the one I just posed?
Laurence E. Gold: --Absolutely.
William H. Rehnquist: Thank you, Mr. Gold. Mr. Page, we will hear now from you.
Terence V. Page: Mr. Chief Justice, and may it please the Court: The issue presented in this case is whether once there is in existence a collective bargaining agreement in a dispute resolution process within that agreement and that a grievance is filed and those grievances run the route of the dispute resolution process in the agreement, should the court presume that the end result is final or not final? I agree it is a battle of presumptions. With respect to the number of contracts in which this language might be found, I can say to the Court that the Bureau of National Affairs contains a database of approximately 400... I should say approximately 400 collective bargaining agreements. 36 percent of those agreements call for resolution by some method other than arbitration.
William H. Rehnquist: What... what is the reason that an employer or a union would prefer this kind of a contract to a contract for binding arbitration?
Terence V. Page: I would say to the Court the only comprehensive article on the issue, that of Professor Feller, who was the successful counsel who argued before this Court the Trilogy in the Vaca case, who was general counsel to the United Steelworkers, and he said that the reason the parties--
Byron R. White: Well, he didn't quite prevail in Vaca.
Terence V. Page: --To some extent. But... but the reason the parties would do this is because they consider this issue so important that they do not want third-party intervention. They treat it on the same level as they do the formation of the contract in the first place, that... that it's so important to them that they want to decide it themselves. Now, the rule I would suggest--
Antonin Scalia: Excuse me, that... that brings into question if... if everything in the contract is not enforceable in court and all you've agreed to is to go to arbitration if you agree to go to arbitration, and if you don't agree to arbitration either side is free not to comply with the contract, the union to strike and the employer to lock out. How can you call this a contract?
Terence V. Page: --Your Honor--
Antonin Scalia: It seems to me it's an illusory contract if it is... if it is utterly nonbinding in the court. Now, maybe under 301 illusory contracts are okay, but I'm reluctant to interpret the provision to, you know, to envision something that is unnoted to common law. You're telling me this agreement says nothing except we agree that if one party wants to go to arbitration, we'll go to arbitration. But if the other one doesn't want to, we've agreed to nothing. That's what the agreement says.
Terence V. Page: --Your Honor, I submit that the agreement does call... call for the resolution of the grievance and that that should be binding. And it calls for it in this manner. There's a four-step conciliation process, if you will, about where the parties meet and discuss it. If it isn't resolved at that juncture, the union has an option to present to its membership the option to strike vote which was presented in this case. Now, if the union--
Antonin Scalia: We have agreed then to try to agree.
Terence V. Page: --That's right.
Antonin Scalia: But if we can't agree, we've agreed to nothing.
Terence V. Page: No, Your Honor--
Antonin Scalia: I think that's a classic illusory contract.
Terence V. Page: --I don't concur with the Court that we agree to nothing, because if the union chooses to strike in support of the grievance, that pressures both parties to come back to the negotiating table and resolve it and that the fact that they choose that kind of method for compelling negotiation and indeed compelling resolution indicates the importance with which they attach to resolution of the... of the grievance in the first place. So I submit that the process... the grievance process is not just the first four conferences, if you will. It includes the strike lockout, because what happens is if it isn't resolved in the first four steps and it's thrown over into that article of a contract, what occurs then is that pressures both parties to sit down and resolve the grievance, because, indeed, the union doesn't want to stay on... stay on strike over agreements and indeed the employer doesn't want to stay inoperable because... so I think that that is... that that strike lockout step is a continuation of the grievance process which compels a resolution. And what happened in this case was that when the union membership declined to go on strike in support of that grievance that that ended consideration of the grievance and in effect constituted a denial which was arrived at at the prior step. So, I submit, Your Honor, that this... this process does compel--
John Paul Stevens: Of course, they made that decision assuming they had the right to sue. Isn't that right, because they did go ahead and sue? So you don't know; if they've been told they can't sue, maybe they would have kept... they would have struck.
Terence V. Page: --Well, Your Honor, again we come back to a presumption that's correct. They might have struck and, of course, it depends on what took place at that union hall meeting in terms of what they're told. But I should say to the Court that it's never been contended in this lawsuit by the petitioners that there was any kind of indication either expressly or impliedly by the employer of a willingness or an acquiescence that any issue should be resolved pursuant to a 301 lawsuit.
William H. Rehnquist: But ordinarily when an employer enters into an agreement that sets forth, you know, 35 pages and signed as a contract, don't both parties intend... well, unless they say otherwise there's going to be some sort of right of judicial enforcement?
Terence V. Page: There is... and I think the principle of Lincoln Mills here is very important... I think the critical starting point in case. In Lincoln Mills the court said that the substantive law of 301 was to be fashioned by the Federal courts consistent with the policy of our national labor laws and which brings in the question, what is the policy of our national labor laws? And I think this Court, through a number of opinions, has ratified that the policy is expressed in section 203(d) which states that final adjustment by a method chosen by the parties is declared to be the desirable method by which grievances are settled with respect to the interpretation and collective... and application of the collective bargaining agreement. So if the substantive law is to be developed and consistent with the policy and the policy is final adjustment by a method chosen by the parties and clearly that was the legislative history, this Court's interpretation, the statutory language itself, all speaks to the fact that that is the policy, final adjustment by a method agreed to by the parties.
William H. Rehnquist: So is your answer that when an employer and a union enter into a contract, they don't intend that it shall be or that anyone shall have a right of judicial enforcement?
Terence V. Page: Your Honor--
William H. Rehnquist: You can answer that yes or no and then explain your answer.
Terence V. Page: --There is a right of judicial enforcement, Your Honor. I should indicate that what this Court has done, you know, and I'll analogize... to use an analogy here, what this Court has done is said the parties agree upon the rules. Indeed, the concept of industrial self-government discussed in the Trilogy. The parties will agree on the rules of the game. They are best situated. They are the ones who are present in the plain environment. They determine the rules and what the Court has done consistently with respect to 301 is step back and say, we will umpire--
William H. Rehnquist: You can say that about lots of contracts, that it's just the contracting parties agreeing on the rules of the game, whether it's a construction contract or the way a particular sports league shall be run and that sort of thing. But when there is an agreement, ordinarily people assume that if you're not able to solve it by... to settle the dispute, one party can go to court.
Terence V. Page: --Yes, and I think the 301 law is, Your Honor, that if there is no grievance process, that the parties can go in court to enforce. But when there is a grievance process which we contend here is the first four steps plus then going into the strike out... strike lockout to compel the resolution, that when there is a process, the courts give finality to that process and sit as long as the rules, to wit the grievance procedure, is adhered to. The only time this Court has used 301 authority is it's developed the substantive law consistent with the policy, the final adjustment by the parties. The only time this Court has exerted its authority, that the Federal courts have exerted their authority to enforce contracts is to make the parties play the game pursuant to the rules by which they said they would play it in the agreement.
John Paul Stevens: But, Mr. Page, are you in effect arguing... I just want to be sure I understand... that the no-strike clause really shouldn't have been put where it is, but it should have been step 5 of the grievance procedure.
Terence V. Page: Yes, Your Honor, I think it--
John Paul Stevens: Well, then 1, 2, 3, 4, and 5 we don't agree will either go on strike or lock you out.
Terence V. Page: --Yes, Your Honor, and as--
John Paul Stevens: Because you certainly admit that if you had put in a provision that said at the end of the procedure, the parties can either resort to economic weapons or to litigation. There would be nothing unlawful about such an agreement.
Terence V. Page: --That's right.
John Paul Stevens: Yeah.
Terence V. Page: That's right.
John Paul Stevens: But what you're saying in effect the strike is part of the grievance procedure.
Terence V. Page: Yes, Your Honor, I think that's indicated particularly strongly in the Evans case where it indicates in the grievance procedure that unresolved grievances shall be resolved pursuant to article 16, I think paragraph 7. And so the grievance procedure specifically continues on over into that process. It does the same thing in the Groves contract. It just doesn't do it quite as explicitly.
John Paul Stevens: It doesn't do it explicitly at all.
Terence V. Page: No, but article 16 in the Groves contract again says that... that the grievance procedure will fulfilled by both parties before the strike lockout method comes into play.
Antonin Scalia: Mr. Page, here... here the issue has been raised by the unions filing suit. But I assume your position would be the same if the issue were raised not by the unions filing suit, but by the unions striking. That is to say you would take the position that if you have a contract which provides for wages of $25 an hour and the union says we think that... we want $30 an hour, you would then go through the... even though it says 25, they say, well, 25 means 30... you would go through the grievance procedure. When you failed to agree, you say the union would be free to strike and you would not be able to enjoin that strike on the basis that it was in violation of the contract?
Terence V. Page: That's correct.
Antonin Scalia: So the contract is really worthless.
Terence V. Page: Well,--
Antonin Scalia: What's the use of having the contract?
Terence V. Page: --The contract isn't worthless, because the... the method does achieve a result to that issue. It doesn't leave the subject open--
Antonin Scalia: It's the same result that would exist without a contract. When you feel like striking for more money, you strike for more money.
Terence V. Page: --Well, yes but, I mean, does a union strike for that purpose when the contract clearly delineates what the wage rate is? If the policy of the legislation, of the Taft-Hartley legislation, is to be effectuated I submit and the courts have recognized 203(d) as the policy that the American Manufacturing... that the language in the American Manufacturing is particular helpful. The Court states in conjunction with 203(d) that that policy, a final adjustment by means chosen by the parties, can be effectuated only if the means chosen by the parties for settlement of their differences on their collective bargaining agreement is given full play.
William H. Rehnquist: What if the company refuses to go through the grievance steps that are outlined? Could the union bring an action in court to force it to?
Terence V. Page: Yes, because those... as this Court has developed the law of section 301 and what the Court has said that in the Vaca case that if the employer repudiates the agreement... in other words, doesn't play the rules it agreed to play by... if the union doesn't render unfair... renders unfair representation, in fact, doesn't live up to its duty to represent its employees, a 301 claim will lie despite finality. So that... in the third case where this Court has said a 301 lawsuit will lie is where the parties have indicated, expressly indicated a willingness that... that the parties could go to court to settle a dispute.
William H. Rehnquist: Of course, there's nothing in this contract that expressly says you will have the right to go to court to enforce the grievance procedure. So it must just be by implication that when you enter into that sort of agreement and it's breached, you have a right to go to court.
Terence V. Page: Your Honor, this Court has developed 301. This Court has said that this is what 301 means. You can go to court when there's repudiation, the employer doesn't live up to the rules that he agreed to live up by... live up to, when the union doesn't fairly represent the employees or when the parties expressly indicate a willingness to go to court.
William H. Rehnquist: Why can't you say here that when the employer discharges for cause, and it isn't a correct interpretation of cause, he's not playing by the rules that he agreed to live up to?
Terence V. Page: Because, Your Honor, between... because the contract has established a dispute resolution process and inherent... when the employer said... gave up his... his right to discharge at will and said, I'll only discharge for cause. Part of that commitment by him was that the dispute would be... if a dispute arose as to what constituted just cause, it would be resolved through the mechanism that's provided for in the collective bargaining agreement. And that's... and I think that's really the main point I want to make here is that this legislation, the Taft-Hartley legislation, if there was one... if there was a policy that... that was enunciated and clearly there was and the statutory language and what this Court has said about it in the legislative history, it was final adjustment by the method chosen by the parties. And I submit that the parties have chosen a method.
John Paul Stevens: But isn't it true that they're generally speaking there in terms of final adjustment by the methods set forth in the contract, rather than a strike? Isn't the basic policy of that to try to avoid industrial warfare by peaceful means when they're available?
Terence V. Page: No, Your Honor, what Lincoln Mills said and I think it's... I should say I think it's been repeated subsequently by this Court... what Lincoln Mills says is that industrial peace is achieved when the parties live up to the agreement that they bargained. And that's where industrial peace comes from.
John Paul Stevens: And to decide where they've lived up to the substantive terms of the agreement, it's more peaceful to go out on strike than it is to have a judge decide whether the contract was broken? Seems to me somewhat inconsistent with my recollection of the debates back in 1947.
Terence V. Page: The strike certainly I would concur that the perception of being resolved by an arbitrator is more peaceful than... than a strike. However, there... the preemptive policy of title VII and I think it's clearly expressed in 201 and 203(d)... the preemptive policy of Taft-Hartley is that the method... final adjustment by the method chosen by the parties is the desirable method to resolve differences.
John Paul Stevens: But the real point here is the parties did not choose a method of final... final adjustment. They... they opted for mediation and strikes which are not methods of final adjustment.
Terence V. Page: Your Honor--
John Paul Stevens: They're methods of arguing and negotiating and fighting it out by... without having a finality to any of it.
Terence V. Page: --I would first say that strikes are recognized by this Court as legitimate means to resolve differences.
John Paul Stevens: Yes, but they're not legitimate means of getting final adjustment of a dispute. I mean maybe... I mean what the right answer is in the dispute--
Terence V. Page: In... in a footnote in the Trilogy, the Court recognized the existence of contracts where... where grievances... that aren't resolved at through the conciliatory steps--
John Paul Stevens: --Sure.
Terence V. Page: --can result in strike. And if that's the method that the parties chose and that's the policy that industrial peace is best achieved by--
John Paul Stevens: By going on strike.
Terence V. Page: --Yes. If that's what they feel... if that's what the parties feel works best for them, and I think that what the courts have... what the Court has done over the years is it's given deference to the collective bargaining agreement that the parties agree to. It recognizes that they're best situated to--
John Paul Stevens: Let me ask you just another question. Isn't... couldn't you solve this problem very simply by saying, adding a sentence saying... instead of just saying there should be no strikes in nor shall there be any litigation. Will you waive our right to sue?
Terence V. Page: --That's correct, Your Honor.
John Paul Stevens: Because you could do that in the future if you're unhappy... say we decide against you. I'm not saying... I don't know what the Court will do... but if the Court should decide against you, you could protect yourself in the future by negotiating.
Terence V. Page: Yes, Your Honor. And on the other side of the coin is the other party to the agreement could have said, we reserve the right to go court.
John Paul Stevens: Sure. Both... you could have done that expressly either way.
Terence V. Page: So we come down to what is the presumption when silence exists.
John Paul Stevens: Right.
Terence V. Page: And I submit that if the rule of this Court in Lincoln Mills that we're going to develop the law of 301 consistent with the policy of the statute, then the policy... the preemptive policy of the statute is that final adjustment by means chosen by the parties that, that to the... as this Court decides this case to the... if the substantive rule to be consistent with the policy of Taft-Hartley is that the presumption of finality should attach. I should indicate this Court has never gone so far as to allow a... for example, a grievance to run the gamut of the grievance procedure contained in the collective bargaining agreement and if dissatisfied with the result, then go to court for a second bite of the apple. This Court has always confined 301 to compelling the parties to living up to the dispute resolution process they agreed to.
Byron R. White: Well, you don't really think that, that the... a strike or a lockout is going to settle what the contract means? You just say it will be a trial of strengths.
Terence V. Page: But, Your Honor, well, it's--
Byron R. White: Right or wrong?
Terence V. Page: --I don't agree, Your Honor. I think--
Byron R. White: You think a strike or a lockout... whoever wins is going... that is going to decide what the contract meant?
Terence V. Page: --I think, Your Honor, that it--
Byron R. White: Does it or not?
Terence V. Page: --What it means, Your Honor, is that... is that the parties have... that a strike... that these parties, as they sit in the workplace and decide upon the common law of what works best for them, that they have decided that this method best resolves their--
Byron R. White: This method for settling... for doing what? For interpreting the contract?
Terence V. Page: --Yes.
Byron R. White: Or just trying who... finding out who's the strongest?
Terence V. Page: This method for interpreting the contract and the way the strike and the lockout plays into that is that perhaps these parties over the bargaining history realize that if they put that kind of element as their last step in the procedure, that neither party will ever get to it and will put pressure on the parties to resolve it at a lesser step. The court has never taken the position that strike... that a strike or lockout to resolve... to resolve a grievance is impermissible.
Harry A. Blackmun: Mr. Page, the court of appeals wasn't very enthusiastic about the result of breach, was it?
Terence V. Page: No, it wasn't, Your Honor. I mean there was... there was--
Harry A. Blackmun: It goes back to the Fortune case as precedent--
Terence V. Page: --Yes.
Harry A. Blackmun: --which was written by Judge George Edwards--
Terence V. Page: I believe--
Harry A. Blackmun: --who I would have assumed would be sensitive to union and employer problems.
Terence V. Page: --Given a his history in Detroit, that would be correct, Your Honor.
Harry A. Blackmun: But clearly the Sixth Circuit said that were we writing on a clean slate we would have decided otherwise.
Terence V. Page: We might have decided otherwise, I believe.
Harry A. Blackmun: Any explanation for that?
Terence V. Page: Well, there it's... no, except... I mean they certainly were indicating that perhaps a preference, a preference to write the other way. But I would say this, that if this Court is going to continue to give substantive law to 301 consistent with the policy of the legislation and the policy of the legislation is that the parties resolved the grievance themselves, that this Court should do what it has always done and that is say that we're going to stand on the sidelines, let you play the game according to the rules that you decided to play them by provided, of course, they don't violate public law and if either of you then deviate from the rules you agreed upon, we're going to compel you to live up to the rules as you agreed. We are not going to develop a new set of rules for you to play the game. And I think that... I think that the Court has never done the petitioner's request here. The Court has never said, run the gamut of your grievance procedure and if you don't like the result, then we're going to give you another bite of the apple in a 301 lawsuit. I think that what 301 has been will enforce the game as you have created it. We will not give you a second chance before a Federal district court jury to achieve what you couldn't achieve pursuant to your dispute resolution process that you agreed upon. The Court has consistently held that there is no right to arbitration with respect to the... while the Court has favored arbitration, it has explicitly said that we are not going to coerce or compel an employer to put arbitration in a collective bargaining agreement. The date and the method they choose is the method that we're going to respect.
Byron R. White: What is the... what is the contract in the... provide for grievances and there was no strike clause and I suppose you would say that then you could sue under 301?
Terence V. Page: Yes, Your Honor, that's... I believe that's Smith v.--
Byron R. White: Even though they could also strike.
Terence V. Page: --Yes, they could also strike.
Byron R. White: So you can't say that just because they can strike there's no contract?
Terence V. Page: No, Your Honor. But I can say that they have agreed upon the method by which they're going to resolve it.
Byron R. White: All right.
Terence V. Page: And that's the policy that they should live up to.
Antonin Scalia: Suppose all they mean, Mr. Page, by the provision that after conclusion of the grievance procedure they may strike or resort to lockout... perhaps all they mean is it will not be... it will not be an unfair labor practice for them to do it even if they're striking for an issue that is really covered by the contract. I mean normally if... if you strike... you know, the contract says $15 and you say it means 18. If you strike, that would be an unfair labor practice if it's already covered. Maybe this provision just means you're free to strike and you won't be liable. However, the other side can go to court to see if it can be legally resolved. Isn't that a conceivable interpretation of it?
Terence V. Page: Your Honor, I think the parties are committed to the process they agreed on and that's the one they have to live by. I don't think either of them can go to court unless they fail to live up... live up to the rules that they agreed on.
Antonin Scalia: But I can give that provision meaning without leading to these... what seems to me extraordinary results that you end up agreeing on nothing to all.
Terence V. Page: Well, Your Honor--
Antonin Scalia: Just agreeing to your promise to negotiate.
Terence V. Page: --Well, I think that's... if they don't... the alternative to promising to negotiate is to call for arbitration and, again, the courts, while favoring arbitration... I think the Carbon Fuel case said it best is... while arbitration might color the interpretation of a contract, it will never result in the court imposing it on the parties.
John Paul Stevens: Well, they could have agreed to something less here. Instead of a four-step mediation proceeding, I suppose they could have agreed that before discipline is imposed on the employee you'll give notice to the shop steward and he'll have 48 hours in which to talk to the informant of the particular plant and once that's done, you can go ahead and strike. That would be the method agreed upon under your view, wouldn't it? It doesn't have to be four-step agreements.
Terence V. Page: No, Your Honor.
John Paul Stevens: It could be a very simple notice provision.
Terence V. Page: It could be a shorter step. But what Lincoln Mills said is, we best effectuate the policy by adhering to the means chosen by the parties. I suppose the ultimate issue here is whether the parties agreed that the court would be available or it wouldn't be available. The issue really is what did you agree upon. You've got this conflicting battle of presumption. We did not agree in terms of whether to go to court or not clearly, Your Honor. So what... so then--
John Paul Stevens: We didn't expressly agree, but maybe implicit... you know, it's a question of which way you run the presumption.
Terence V. Page: --Well, yeah, the one contract indicates that unresolved grievances will be processed through article 16. But the point... the rule we asked for is that the presumption is finality, because that is consistent with the policy of the legislation and this Court has never gone beyond saying which can go to in three instances, repudiation by the employer and for representation by the union or if the parties indicate a willingness... express a willingness to go to court. This Court, as its developed the substantive law of 301 has always said, we are going to use it to make you agree to the process that was arrived at through the collective bargaining process, your industrial self-government. It's given deference to that contract and because the legislation clearly expresses its policy of final adjustment by a means chosen by the parties, that this Court has never taken 301 beyond enforcing the methods chosen by the parties. And I ask the Court not to do it in this case. Thank you.
William H. Rehnquist: Thank you, Mr. Page. Mr. Gold, do you have rebuttal?
Laurence E. Gold: Just two very brief points if I could. First of all, I want to emphasize as Justice Stevens just indicated that this is a question of interpretation. The whole argument on the other side is, and I quote, "the parties are committed to the process they agreed on. " The problem is that it isn't plain what the parties agreed on and against that background, we're suggesting what we believe is the better interpretive rule. Secondly, the policies of the Labor Management Relations Act are far more complex than simply that the parties can do whatever they want. That was an argument that the unions made in 1947 and it might have been a better world if we prevailed, but we did not. And Congress provided that one of the policies was stability during the term of collective bargaining agreements. Thank you very much.
William H. Rehnquist: Thank you, Mr. Gold. The case is submitted.