Earl Warren: Number 276, General Electric Company versus Local 205, United Electrical, Radio and Machine Workers of America. Mr. Farr.
Warren F. Farr: May it please the Court. The basic issue in this case is the same as in the other two cases. Namely, may a federal court compel performance of an agreement to arbitrate future disputes in a labor contract? And the answer to that question seems to me must turn on whether the 1925 United States Arbitration Act requires such a result. Because as the court below held, as the Fifth Circuit held in the Lincoln Mills case, as the Seventh Circuit held in the Galland-Henning case, as every other Circuit Courts that I know of which has faced this question has held, unless you find the right to compel arbitration in the United States Arbitration Act, you can't find it in Section 301. Mr. Feller has demonstrated the difficulty, the confusion that inevitably arise from trying to rest and find in 301 the power to compel arbitration of a labor dispute. So, I think they must first consider the United States Arbitration Act. First, I might point out briefly the facts in this case.
Felix Frankfurter: Did I understand you to say that -- that all those who sustained the enforceability of the arbitration provision have rested it under the Arbitration Act?
Warren F. Farr: As far as I know, every Circuit Court which has enforced it has done so by virtue of the Arbitration Act, like the First Circuit and the Fifth Circuit rejected 301 as itself being the source of power to do so. The present case like the other two cases rose on a complaint under 301 of the Labor Management Relations Act, and the -- the union sought to compel specific enforcement of two grievances. Those grievances are set out in the amended complaint at page 44 and 45 of the record. The grievances were two. One, that an employee named Boiardi was not being paid the rate of pay which he was entitled to under his job classification. And secondly, that an employee named Armstrong had been improperly discharged and not for cuase. Arbitration was demanded. The company refused the arbitration on the ground that the issues were not arbitrable under the collective-bargaining agreement. The union brought suit seeking specific performance and damages on a motion to strike the claim for specific performance. The District Court held that it lacked power to enforce arbitration because of the provisions of the Norris-LaGuardia Act. After that decision the complainant, the union, then amended its complaint to strikeout the claim for damages so that its cause of action would ask only specific performance. It did so that it might have an immediate appeal. The Court of Appeals reversed, holding first that the Norris-LaGuardia Act was not at bar. Then it said, but it isn't enough to say that the Norris-LaGuardia Act is not at bar. We must find some affirmative basis on which compulsion of arbitration can be rested. Now, they said we can't find it in the common law because it was long settled common law that enforcement of executory agreements to arbitrate would not be compelled in the federal courts or in a state court. They turned then to section 301 and they say no, we can't find in 301 such a power. But we do find a statute which authorizes it and that is the United States Arbitration Act. And they held that this contract was a contract evidencing a transaction involving commerce within the meaning of section 2 of the Act. They held that it was not excluded from the operation of the Act by virtue of the exception contained in section 1 of the Act, which excludes contracts of employment of seamen, railroad workers, or other workers engaged in commerce. And then they said this being covered by the Act is not excluded from it. We have the power -- or the District Court has the power under section 4 of the Act to compel arbitration. Section 4 providing that a court of the United States which has jurisdiction of the controversy between the parties apart from the agreement to arbitrate may compel specific performance. So in the -- you might have heard that in the Court of Appeals and after argument the union made a motion to amend its complaint to set up as a basis of jurisdiction diversity of citizenship. The Court of Appeals denied that motion. And whether the denial was correct or otherwise, I think it's not at this time before this Court. Now, we turn then to the United States Arbitration Act to determine whether this case is within it. The United States Arbitration Act was proposed in 1922, 1923 shortly after New York had enacted its Arbitration Act. We've traced the history of that Act on pages 13 to 22 of our brief. Shown there it was sponsored by commercial interest. It was -- it was -- the proponents were commercial trade association. But there's not a word in the committee reports or in the argument on the House floor and the Senate floor showing this was anything other than the Commercial Arbitration Bill. But that's not all, because Congress didn't merely not consider, the applicability of the Act to labor. It specifically did consider it and specifically rejected it. Mr. Feller pointed out that (Inaudible) found that the provision with respect to compelling arbitration was objectionable. That it would -- it -- it met -- it was the same -- it met the objection that labor had always had up to that time through compulsion on arbitration. So, the provision excluding contracts of employment was written into the Bill. The -- that exclusion was put in reflecting at that time the general hostility and fear of labor to the equity courts. We have to consider this was 1923. At that time labor unions were bothered about the equity powers of the federal court. But then the yellow dog contract, the extension of the Sherman Act, the other matters which this Court referred to in its opinion of yesterday with respect to the enactment of the Norris-LaGuardia Act. Labor was afraid and it would not have met -- it would not have satisfied labor had this agreement of the statute applied to their agreement. Now, it is said, the Court of Appeals said this does -- covers only individual contracts of hire with contracts of employment means only individual hiring. I might say that the Court of Appeals, First Circuit with the exception of the Court of Appeals for the Sixth Circuit is the only court that should've taken that position. Now, what is this contract, if it is not a contract of employment? To be sure, a collective-bargaining agreement does in hierarchy? It's not the hierarchy. But what is a man's contract of employment? It's not merely the fact of being hired. It's the terms on which he's hired. It's his compensation. How long he has to work. What are his rights? That's what anyone would normally think of as meaning -- as being a contract of employment and it's well accepted, perfectly well accepted that the provisions of the collective-bargaining agreement are read into the contract of hire of every single employee under it. This Court said so in the cases. As a matter of fact, this Court itself in the Sand case, 306 United States, which it quoted in the Senate report on 301 which Mr. Feller read you this morning. This Court said that the legislative history of the Act, referring to the National Labor Relations Act, those hardly indicate that the purpose of the statute was to compel employers to bargain collectively with their employees to the end that employment contracts binding on both parties should be made. This Court in 1939 was satisfied that that was an appropriate characterization. And we submit that, of course, it is. Now, it won't do to say that all Mr. (Inaudible) was bothered about was the individual hiring. He specifically adverted to what would happen if a union made a contract. And in the very analysis of the bill referred to in the -- the same as union convention, in his analysis of the bill he points out and I refer to the extracts from his analysis printed at page 46 of the respondent's brief in this case. He said, “What about those who seek to protect themselves through mutual aid?” Some organizations are very strong and a union may enter a contract. If they show into an -- into an agreement containing an arbitration clause there can be little doubt that the organization will be bound, but would such action bind the members?" And he concludes that it would. And indeed that was argued this morning and as I think I must fully agree with him. And as the courts have consistently held the provisions in a collective-bargaining agreement with respect to grievance procedure and arbitration are binding on the individual employee. What good would it have done -- have done therefore? Would Mr. Feller's set purpose have been accomplished if all that was excluded from the Act was an arbitration clause in the rare end where there was an individual contract of hire, but it was not excluded when it was included in the terms of the collective-bargaining agreement. It seems to me perfectly plain, therefore, that to give any effect to that proviso it must apply to the arbitration clause whether in a collective-bargaining agreement or in the rare case of an individual contract it had such as in the Shipping Act. Now then, it maybe said that although the collective bargaining agreement is a contract of employment, it is not a contract of employment of a seaman, a worker engaged in commerce in this case. In our case, we have production and maintenance employees. And some courts have said that the only collective-bargaining agreements which are excluded -- arbitration clause which are excluded are those relating to transportation workers, persons engaged in commerce. That is to say, therefore, that what Congress intended to do was to provide for the nonarbitrability of collective-bargaining agreements with respect to workers engaged in commerce but to leave open and subject to arbitrability the collective-bargaining agreements of workers who are engaged in industries affecting commerce or producing goods for commerce. There is not the slightest suggestion in the legislative history or any place else or as to why that distinction should be done. So that we submit that clearly this agreement is a contract of employment and a contract of employment which is therefore excluded from the Arbitration Act. Now then, Congress, therefore, in the Arbitration Act made up its mind that it was not going to provide for the enforcement of labor contracts -- enforcement of arbitration in labor contracts. Commercial arbitration, yes, but for reasons of policy it decided against making specifically enforceable provisions in a labor contract, a contract relating to the employment of individuals. That was the position it took in 1925. It is said that it reversed that position, in 1947, in enacting the Taft-Hartley Act. And that it did so. Although it used no words to that effect and although we submit a fair reading of the legislative history shows that it had no such intention. Now, Congress knew how to provide for arbitration, how to provide for methods of compelling arbitration if it wanted to. The 1925 Arbitration Act shows that it knew how to do it if it wanted to. The amendments to the Railway Labor Act which this Court considered in its opinion of yesterday in the Brotherhood case showed that Congress knew how to do it when it wanted to. In that Act, for example, with respect to minor disputes it set up a procedure under which both parties had to go to arbitration. When it came to major disputes on the other hand, it was very careful to say that this shall remain voluntary and neither party is obligated to do so. It knew how to deal with an arbitration question if it wanted to. So, we come then to the provisions of the Labor Management Relations Act. And do they change the situation? Now, you certainly don't find anything in the language of the Act that suggests, in anyway, that Congress was now for the first time deciding as a matter of policy that arbitration under labor agreements should be enforced when it had decided in 1925 that they should not be enforced. What is the language? Suits for violation of contract between an employer and the labor organization may be brought in any District Court of the United States without regard to the amount in controversy or diversity of citizenship. Does that sound in anyway like a policy declaration that arbitration agreement should be enforceable and that the federal court should have the power to enforce it? It certainly does.Now, they sought to draw out -- to draw out of a few phrases in the Senate report a contrary -- a contrary policy to that Congress had adopted before. Mr. Feller said that the purpose -- the purpose of 301 was to create a substantive right to the enforcement, collective-bargaining agreement. And then that necessarily embraced a substantive right to the enforcement of arbitration clause. I think the fair reading of the majority report and the minority report shows clearly that there was no such intention on the part of Congress. What was Congress faced with in conjunction with section 301? It was faced with the -- as the reports say again and again, it was faced with the procedural difficulties of employers suing unions. There was no procedural difficulty to unions suing employers that's been sued time and time again. It was not faced with the lack of any substantive right to enforce. Employers had been sued on collective-bargaining agreements long prior to the Taft-Hartley Act. And employers had sued unions. The minority report of the Senate and the House both referred to a case as one example of it in 265 F.397, where an employer sued a union for breach of a no-strike clause and recovered a 1920 case, a suit brought on the basis of diversity of citizenship. There's no doubt that there was a contract which was enforceable. The difficulty was purely procedural. Now, Congress -- how did Congress go about correcting that difficulty? But it did -- it could not, of course, make the State change their methods of procedure with respect to suing an unincorporated association. So, it said the remedy is to make a labor union an entity for purposes of suit in the federal court. And they did that. They -- and that's all they did. What they wanted to do was to bring the union up to the level of the employer with respect to suability so far as procedure went and not so far as substance went because they didn't have to create a substantive right. And as the committee reports point out, there is no doubt that under state law collective agreements are enforceable. They are state contracts and they're governed by state law. Indeed, if Congress had wanted to create a substantive federal right to enforcement of a collective-bargaining agreement in the very language of section 301 in Congress was such a result. If what Congress was doing was saying a collective-bargaining agreement is a valid and enforceable and binding contract, and the mind of the statute doesn't say that, that's just one phrase in the Senate majority report. If they have done that, why provide in section 301 without regard to the citizenship of the party? Because if you have created a federal substantive right, then you don't need diversity jurisdiction to get into the federal court, you come into the federal court on the basis that this is a cause of action arising under the laws of the United States. The very fact of what they chose to remove was the diversity requirement shows that they were not intending to create a substantive federal right.
Felix Frankfurter: If they were removing the diversity requirement, what do they leave in its place?
Warren F. Farr: They left nothing in its place, I submit. We think that it is -- we think that it is perfectly clear that certainly the minority reports indicate that they thought of it that it was clear but you have to apply state law. And I submit that that is what must be applied. That's all they intended to do. Now, do we say that under section 301 --
Felix Frankfurter: Are you -- are you saying Mr. Farr that without regard to diversity that Congress consciously said here we leave -- we open the door, if I may use that striking figure of speech, so that you may then apply state law and at the same time strike out diversity?
Warren F. Farr: That -- that's exactly what the minority said to the majority again and again.
William J. Brennan, Jr.: They were the ones -- they were the ones that were opposing it.
Warren F. Farr: They were opposing it but they were pointing out the problem. It was certainly brought to the attention of the majority that that was the case. And there's not a word, I submit, in the majority report that answered that it said it isn't so.
Felix Frankfurter: The fact that they were opposed may not -- it doesn't disprove their wisdom doe it?
Warren F. Farr: It -- as to their wisdom, it doesn't --
Felix Frankfurter: I mean doesn't prove that that's what -- that's what really the legislation does.
Warren F. Farr: All I'm saying is that Congress knew what it was doing when it did it because the minority said this is what you're going to have to face.
Harold Burton: Well, you usually find out what the -- the body does by what the majority say they're doing from what the opposition said.
Warren F. Farr: I -- I think that's correct. Now, I say that the majority doesn't say -- doesn't say we are creating a federal substantive right at all. The majority doesn't say that. It doesn't say so in the -- in the language of the section, and it doesn't say so in its report. All I'm saying is that when it doesn't say that it knew -- it knew what it was doing. Knew what it was doing. It wasn't just by inadvertence that it removed the diversity requirement and then thought somehow rather there was something to be applied.
William J. Brennan, Jr.: It doesn't strike you as a strange way to -- to establish suability getting to this long phraseology of 301?
Warren F. Farr: I don't -- I don't think that the phraseology is -- is very simple. It's very long and difficult. It says suits for violations of contract may be brought in the District Court without regard to diversity of citizenship. I think that on its face finally show. All we're doing is removing the diversity requirement in this kind of a case, just as you removed the diversity requirement in cases perhaps involving federal instrumentalities or federal corporations which -- which the United States don't have to stop. It's a purely procedural kind of section, it seems to me. And now, if Congress was trying to create a substantive right -- if it is trying to create a substantive right, what was it doing? Was it taking over from State the rights on the collective-bargaining agreements which the State had always had? Prior to section 301, I submit, there was no doubt that if -- that a collective-bargaining agreement was a state agreement. Of course, it was. If it was an agreement at all it arose under state law. Under the -- under the original National Labor Relations Act there were collective-bargaining agreements. The Court referred to it in fact in the Sand case. The purpose was to make them binding.If they were binding by virtue of what law were they binding them -- bound, binding by virtue of federal. The same thing is true with respect to the Railway Labor Act. This Court held in the Travel case in 345 United States, where a contract made by a union representing airline employees of a carrier subject to the Railway Labor Act. In that case an individual employee was discharged and brought suit. The question as to whether he had the right to bring suit before first exhausting his remedies under the collective bargaining agreement, the grievance and arbitration procedure was held by this Court to be a question of state law. Mr. Justice Burton said this is a Missouri contract to be governed by Missouri law unless we find it inconsistent with the provisions of the Railway Labor Act. There was nothing inconsistent and therefore this Court held you've got to exhaust your remedies because Missouri says you must.
Felix Frankfurter: Mr. Farr, in your -- in your investigation of the legislative history, did you encounter any proposal either a statement, formal document, testimony in hearing indicating that any representative of labor wanted -- proposed anything like this in order to be able to get after employers when they refuses to arbitrate?
Warren F. Farr: In the legislative history of the Taft-Hartley?
Felix Frankfurter: Yes.
Warren F. Farr: I can't say I have but I can say that my investigation of that has been as exhaustive as it should have been -- I have not read all the hearing by any manner or means.I find nothing in any of the report or of -- in the legislative considerations before the House and the Senate to (Voice Overlap) --
Felix Frankfurter: Probably you've read all the opinions of the lower court dealing with them not all of them. The Courts of Appeals (Voice Overlap) --
Warren F. Farr: I have read -- I have read many opinions --
Felix Frankfurter: Yes.
Warren F. Farr: -- of the lower courts dealing with it.
Felix Frankfurter: I assumed you've read all of the Courts of Appeals on this, maybe not the District Court.
Warren F. Farr: (Voice Overlap) --
Felix Frankfurter: Have you encountered any opinion which makes any reference to -- any suggestions secondhand that -- that labor wanted to have a strengthened position in enforcing arbitration agreement?
Warren F. Farr: I have -- I have not. As a matter of fact, I think Mr. Feller pointed out in his brief and suggested yesterday. Of course, we didn't want this. We don't like it. We would prefer the other rule with collective-bargaining agreements not be enforceable but it's too late to argue that now. And he says I think in his brief that that fairly reflect the position of -- of labor.
Felix Frankfurter: Well, they're entitled to the windfall if they have it.
Warren F. Farr: Certainly, they're entitled to a windfall if they have it. The question is did they get it? Now, so I said that if as it seems clear that all Congress was doing in section 301 was opening the doors in the federal courts regardless of diversity to the enforcement of collective agreements which were valid under state law. You don't find in that the creation of a substantive right, the right to compel arbitration which didn't exist up to that time in which Congress had specifically determined in 1925 shouldn't exist. You don't have that situation at all. Now, is it -- is it a bad thing that you don't have it? Is it essential that somehow or other collective -- by -- arbitration clause is in collective-bargaining agreement should be enforced? Must we try to dig out of language in the Taft-Hartley Act not applicable to the situation some means of doing it because the need is so urgent and the end is so desirable and justifiable? And I submit that we need not. Mr. Goldberg pointed out yesterday that in his long experience with labor arbitration it was the very, very rare case where you ever got to the point when you had to go to court. And other students of the problem have arrived with the same conclusion. Much consideration to the question of enforcement of arbitration under labor contract is recently being given because of the proposal of the Commission of the newly formed state laws or Uniform Arbitration Act. The committee of the -- Labor Committee of the American Bar Association in 1955 in a report signed by Professor Howard who's one of the commissioners by Professor (Inaudible) Howard, Charles Gregory and others, waived the arguments back and forth as to whether such legislation is necessary. Professor Howard wrote a long article in the January 1956 Missouri Law Review presiding Missouri's consideration of the necessity for such legislation. He refers and the Bar Association refers to the reports of the Governor of Pennsylvania's Committee which studied the problem. And the conclusion saying that the, first, that if the rare case that gets to arbitration at all, by and large most problems are worked out in the grievance procedure. But when you get to arbitration it maybe in 1% or 2% of the cases that you have a refusal to go to arbitration. And that refusal as exemplified in these cases isn't just the casual some of you know that the arbitration clause has been saying we don't want to enforce them. We don't want it to be enforced. The reason for it is the parties had a dispute as to whether the particular grievance is or is not covered by the arbitration clause. Employers don't and can't likely say, no we don't like arbitration clauses and we won't -- we won't abide by them when -- when the situation comes that we -- well, we're bothered by it, we'll just disregard it. And there's a built-in protection. Unions have given no-strike clauses. Mr. Feller says in return to some extent for arbitration clauses, the employer willfully and callously refuses to obey the arbitration clause that the union has clearly resolved from its no-strike clause. There's no -- no incentive for anyone to be arbitrated willful about it. But the occasions do arise when both parties have a difference of opinion as to whether or not an issue is arbitrable and then you may have a disagreement. And there's the -- the -- well there are no precise statistics on it, students of the problem said it's about in 1% or 2% of the cases that that occur. Now, is the need great? Because agreements to arbitrate on -- in labor contracts are not specifically enforceable, is that harmful? Well, the statistics cited by Judge Brown in his dissenting opinion in the Lincoln Mills case show that agreements -- the percentage of labor contract which have agreements to arbitrate in them increased from 73% in 1944 to 91% in 1952. And during that period were -- were arbitration clauses enforceable? They certainly weren't enforceable in the federal court, not until 1950 that any federal court suggest that the Arbitration Act applied not until Judge Wyzanski's opinion in the American Thread case in 1953 were there are many cases if the -- any other cases which held that this kind of agreement could be enforced. They weren't -- were they enforceable in the state courts? In some States and a few States but in other States not. But without machinery for enforcement, what happened? Labor unions increasingly adopted. And they adopted them because -- an employer did because by -- by and large you don't need judicial compulsion. The same students of the problem who say -- who point out the lack of necessity for judicial compulsion, point out that labor and many others well-versed in the field feel that the intrusion of the judicial process itself may in the long run destroy the voluntary nature of arbitration and do more harm than good. The philosophy of the Taft-Hartley Act is that if you get people to sit down across the table and talk to each other, they can usually work out their grievance. Now, they do work out their grievance. You get to up -- if they don't work them out in arbitration -- in the grievance procedure, you get up to arbitration. Union may say we think this is arbitrable. The company says we don't think it's arbitrable. In most instances there is an accommodation of one party to the other. The union will say, well, maybe you're right in this case. We won't fret if you won't go to arbitration or the company says, well, in this case we -- while we don't think it's arbitrable, it's not going to set a great precedence then we'll go to arbitration. So, in most instances it's worked -- it's worked out. But to introduce into the picture the right of either party to go to court and what happened? I think what happened is illustrated by the fact that since the opinion in -- in American Thread in 1953, there's been a flood, a rush of cases involving arbitration agreement. There weren't any before obviously the parties were not dissatisfied with the situation before because more and more of them adopted the arbitration agreement in their labor contract. So that once you introduced the (Inaudible) then you've changed the situation. It encourages the union to push as far as it can. After all a union business agent owe some obligation to his fellow unionist. Everybody wants him to play, and head far and to go as far as you can. So, you carry it for the grievance procedure and then you take it to arbitration. And if, however, the company refuses arbitration then you can't go any further, all right, you go further. You then carry it to court whereas to have -- without that you'd have to stop and the company said no, similarly the company. Company takes the position that the grievance is not arbitrable. Usually you -- they can work it out with the union. But if they get to court that's going to decide the question, all right, let's go to court.
Felix Frankfurter: There are always the lawyers to stimulate the client company.
Warren F. Farr: Well, sometimes lawyers are -- are pushed by their clients. In one case I had recently involving this question of the arbitrability of enforcement of a labor -- provision to arbitrate in a labor contract. We tried the matter -- the matter was tried and that it was the case -- companions of this -- this case was in the First Circuit, the case of Boston Herald-Traveler. In that case after the decision of the Court of Appeals, the question came up before the District Court as to whether the matter was arbitrable or not. District court held that it was not arbitrable. The union appealed. The union lawyer was saying, “Well, look we -- we really don't think we're going to win on this.” And they didn't because the First Circuit affirmed Judge Sweeney. We don't really think they're going to win on this. But after all the union boys feel that you ought to go as far as you can and the representative has to satisfy their constituents. So, now, I don't say -- I'm surely not taking the position that as a matter of policy you shouldn't have judicial enforcement of arbitration agreements. I simply say that there are weighty considerations and that those who have -- who entered in the field feel that it's a debatable matter. Now, that --
William J. Brennan, Jr.: Well, is this an argument -- it's perhaps at least, in light of the certainties that have been argued here the last couple of days there may be policy considerations which ought to have the consideration of the Congress?
Warren F. Farr: That's exactly -- that is exactly the point just as the states are now considering whether or not they are to adopt a uniform Arbitration Act. As a matter of policy is it a good thing? And as I say the Missouri experience shows the Bar Association there considered the time -- time from 1949 to 1955 included. On the whole we don't think it's a good thing. So, we're going to oppose it.
Felix Frankfurter: Well, but the question is still more restrictive as I think to inquire Justice Brennan implied isn't the question with arbitration should be legally enforceable? There's the still further quality question which certainly was right in many aspects not incomparable to this. Well, it should be enforced to the federal court.
Warren F. Farr: Oh, yes.
Felix Frankfurter: It's a very different question again.
Warren F. Farr: I -- I agree. The State can adopt one view. Congress may conclude that that's enough. Congress may conclude that it's not enough. That in addition to state enforcement the federal court thought to get into the field. But you have first that question. Should there be or shouldn't be and I say that's the quality of the question. And then you have a second question once you've done that. What -- what should be the procedure? Under what should be the safeguard if you decide that these clauses should be enforced? Now, the Arbitration Act is laid down. They set a number of standards or provisions for subpoena, provisions as to methods of review, confirmation and so on. Are those provisions desirable in a labor arbitration? Maybe they are, maybe they aren't. Those who oppose the Uniform Arbitration Act is applied to labor arbitration there have made objections to certain of the provisions, thinking somewhat to strengthen that they aren't enough. What are you going to do if you decide to enforce agreements to arbitrate in a labor contract when the contract provides that you'll arbitrate the terms of a future contract or you'll arbitrate the terms in which the contract will be renewed? Should that or should that not be subject to arbitration? Judge Wyzanski held recently in the Potter Press case in Massachusetts in 143 Federal Supplement that it shouldn't be and the Court of Appeals for the First Circuit which in this case held that agreement to arbitrate are enforceable said, "Well, not that kind of an agreement because that's not a judicial kind of a dispute." Now, there's a line to be drawn. And I submit that you get a lot of questions of policy which have to be considered -- appropriately should be considered. And in the mean time if the Court is not enforcing them, who's apparently no one's been heard up to now because the use of arbitration (Inaudible). Moreover -- moreover the employees have their right. A fellow would have you believe that you have either arbitration or a strike because you don't have either arbitration or a strike. The union has two rights. It has the right to strike and the right to go to law. Whereas as in the Westinghouse case it decided to go to law. The employees have the right to go to law if they aren't paid, if their seniority provisions are -- are being disregarded. If they aren't getting the pension that they're entitled. In all those instances you have recourse to the Court. Now, one -- one further (Inaudible) In this particular case here --
William J. Brennan, Jr.: Well, may I ask Mr. Farr, that may be so on the issues in your case. Was that quite the case in the Lincoln Mills and the issues involved there?
Warren F. Farr: I think it is in the present posture of the Lincoln Mills case. The Lincoln Mills case is moot, it seems to me, unless you have -- unless the effect of the arbitration is going to have something to do with the (Voice Overlap) --
William J. Brennan, Jr.: Well, that's -- that's because it's gone out of business. (Voice Overlap) --
Warren F. Farr: That -- that's true.
William J. Brennan, Jr.: If that -- if that fact has not been introduced, would it be -- correct the case?
Warren F. Farr: There may be. I won't say, of course, that there may not be some disputes under a contract -- labor contract, which are not the stuff from which judicial disputes are ordinarily made, which the Court deny. Usually they are. Now, of course, the questions of discharge that's the thing the courts deal with every day. There are questions of the rate of pay, the courts deal with that all the time. It may be that to determine a rate of pay, a court would have to -- have to first determine methods of whether the workload has properly been established on that. The courts often have to determine difficult questions before they get to the simple question as to whether a man is who is not entitled to pay or not.
William J. Brennan, Jr.: Well, how about the application of the seniority clause --
Warren F. Farr: Well --
William J. Brennan, Jr.: -- as relates to assignments, say, to a night shift as against the day shift?
Warren F. Farr: If you get -- if a man who claims that he shouldn't have been -- he shouldn't have that -- when you say it makes no difference to his pay?
William J. Brennan, Jr.: No, I think not.
Warren F. Farr: Assuming it makes no difference to his pay, I don't know but what he would have a -- a right to a determination of a court. Assuming that he's not compelled to go through grievance and arbitration provision, he can't arbitrate if the arbitration here was not enforceable. Why doesn't he have an individual right to a determination by the Court by way of declaratory judgment for example as to whether he can or cannot do it. I don't say that in -- in such instances in every case that kind of thing will be completely satisfactory. All I'm saying is that in the bulk of the cases it isn't essential and if ultimately Congress should decide that it is one kind control, provide it in the meantime, nobody is being very much heard. Now, one further -- though I -- I -- I'm saying that so far as the United States Arbitration Act is concerned, this contract can't be enforced under it. That you can't find in section 301 the means of enforcing it and therefore it's not important. There's one further basis that I haven't discussed on which we submit that the Court of Appeals is wrong in holding that this contract is enforceable under the United States arbitration, and that is section 4 of that Act. Section 4 of the Act provides the machinery under which the Court can specifically enforce the agreement to arbitrate if the agreement is covered by the Act. We say this agreement isn't, but assuming we're wrong. We'll still say it can't be enforced. That section provides that the District Court -- the District Court which saved for such agreement would have jurisdiction under title 28 in a civil action of the subject matter of a suit arising out of the controversy between the parties may order arbitration. And what that means is this. We've got to look to the District -- the District Court, put aside based on the agreement to arbitrate. Put aside the agreement to arbitrate, look what the controversy is between the parties and then see whether a District Court would have jurisdiction of that controversy under title 28 or as section 4 formally read under the judicial code at law or in equity. Now, what's the dispute here? The dispute here is whether Mr. Boiardi was improperly paid and Mr. Armstrong was improperly fired. Did the District Court have jurisdiction under title 28 of the -- that controversy between the parties? We submit it did not. It did not on the basis of diversity of citizenship because there's no diversity. It did not on the basis of the case being one arising under the laws of the United States because what's sought to be enforced here are the provisions of a collective-bargaining agreement, and the cases I think make it perfectly plain that simply because you have a collective-bargaining agreement you don't have a case arising under the laws of the United States. The agreement may have been made apart from 301, apart from the construction of 301 and adopted and is followed. The agreement may have been made by virtue of -- because with a bargaining representative is authorized under the National Labor Relations Act. That doesn't make the case of one arising under the laws of the United States, because to arise under the laws of the United States, the controversy must be one which involve the construction of validity of the laws of the United States. And this involves simply the construction of a contract provision. So, we say the Federal District Court here had no jurisdiction under title 28. Now, the Court of Appeals completely ignores the requirement that it be under title 28 and says well, it's enough -- it's enough notwithstanding, the provisions of section 4. It's enough if the Court has jurisdiction under Section 301. Did the Court have jurisdiction under Section 301, save for the agreement to arbitrate? Did it have jurisdiction of the controversy between the parties apart the agreement to arbitrate? The controversy between the parties was Mr. Boiardi's pay and Mr. Armstrong's discharge. Perfectly obvious, had Mr. Armstrong or Mr. Boiardi sued, had the union sued for them. Under Westinghouse, the Court had no jurisdiction under section 301 because the controversy was one involving the uniquely personal right of two employees.
Felix Frankfurter: I could look up, but you can tell me quickly. Did Judge Magruder consider the Gully case in connection with the point you're now making?
Warren F. Farr: Judge Magruder did not mention the Gully case in this case. He did refer to the Gully case in his opinion in the second Mead case, where he sustained the constitutionality of section 301 (a). I may say with (Voice Overlap) --
Felix Frankfurter: That's a different problem.
Warren F. Farr: That's a different problem. I may say with respect to section 4 and I think it ought to be said in fairness to the Court of Appeals. This question was not argued before them nor indeed was there much given to the Court of Appeals by way of legislative history which we've included in our brief. Mr. Rosenberg has in his and Mr. Feller has in his. And it wasn't for this reason. The District Court -- the decision turned in the Norris-LaGuardia Act. When we got to the Court of Appeals, the union did suggest that maybe in addition to 301 you could get rights under the United States Arbitration Act. At that time all the cases, practically all the cases that held the United States Arbitration Act didn't apply. The union didn't push the point very hard. We didn't consider it very strong and nobody paid much attention to it. But the Court of Appeals having apparently been persuaded by our argument that 301 didn't give any such right have then turned to the Arbitration Act and for the first time had to spend some time working out the Arbitration Act. So, this section 4 point wasn't argued before them and far as I know it's never been argued before any other Court of Appeals which is considered today. So we say, therefore that you can't arbitrate -- force arbitration under the Arbitration Act (1) because this collective-bargaining agreement is excluded from the Act by virtue of the provisions of section 1.(2) --
Felix Frankfurter: (Inaudible) if you forgive me. And I don't put it that the Arbitration Act came on -- came into law, came on the statute books in 1925.
Warren F. Farr: Yes, sir.
Felix Frankfurter: In 1925, there was no title 28.
Warren F. Farr: That's correct and the -- and --
Felix Frankfurter: And therefore, title 28 -- therefore, the Arbitration Act is now written, part of U.S.C 9, they then restricted this -- this one -- knows no more than I do which is next to nothing. In order to reach section 4, it must satisfy a right arising as you argue under title 28.
Warren F. Farr: Well --
Felix Frankfurter: Is that right?
Warren F. Farr: Well, what --
Felix Frankfurter: That's you're argument?
Warren F. Farr: Not -- what -- in 1925 it said --
Felix Frankfurter: And there was no 301 in 1925.
Warren F. Farr: No, and that's right. In 1925, what section 4 said that having jurisdiction under the judicial code at law or in equity or admiralty under the judicial code. And the judicial code, of course, embraced the diversity cases -- cases arising in the laws of the United States and that's all. And that's all that Congress contemplated.
Felix Frankfurter: Now, that's title 28, still contains (Voice Overlap) --
Warren F. Farr: And that's all that title 28 still contains.
William O. Douglas: I don't follow your argument because this section 1 of the Arbitration Act comes from the same authority as 28 U.S.Code.
Warren F. Farr: Section 1?
William O. Douglas: Yes.
Warren F. Farr: Well, my point is this --
William O. Douglas: A transaction that's involving commerce?
Warren F. Farr: Yes.
William O. Douglas: I don't get -- I don't follow you.
Warren F. Farr: This section 4 point? Section 4 says, put aside the agreement to arbitrate and see if the District Court has jurisdiction of the controversy under the judicial code or under title 28. You've got to look at the basic controversy. Now, obviously, if for example, you have a commercial arbitration. The seller agrees to sell some potatoes and the buyer says they're bad potatoes. And the seller wants to enforce an arbitration clause in the sales agreement. Where did he go to enforce it? Section 4 tells you where he goes. He goes to the Court which, had there been no arbitration clause, would have had jurisdiction over this controversy. What's this controversy? This controversy is whether there's a breach of the sales agreement or not.
Felix Frankfurter: We'd have jurisdiction for some other remedy, damages or specific --
Warren F. Farr: Or -- or for any remedy.
Felix Frankfurter: For any remedy.
Warren F. Farr: For any remedy other than arbitration. That's right. Now then, the Court has got to have it. The Act then said the judicial code, not title 28. And what's the basis? Diversity of citizenship or it's a case arising under the laws of the United States. And we submit that the Court -- the District Court in this case didn't have it. But even if you adopt Judge Magruder's view and you say well, it's enough that this jurisdiction under 301, the basic controversy in this case is one over which the District Court had no jurisdiction under 301 because the basic controversy is whether Mr. Boiardi was being paid too little and Mr. Armstrong was improperly fired.
Felix Frankfurter: (Voice Overlap) --
Warren F. Farr: And if that isn't a unique -- with personal right under the Westinghouse (Voice Overlap) --
Felix Frankfurter: I'll put it to you that you're up against the Gully. I mean an adjudication on the point you're making on that analysis brings you right up to the Gully case the mere fact that ultimately you may reach a federal statute doesn't mean the case arises under it.
Warren F. Farr: Yes, I -- I think the Gully case entirely supports my position. It's simply because you have a question as to a -- a violation of the collective-bargaining agreement, you don't have a case arising under the laws of the United States. Because to arise under the laws of the United States, what has got to be involved is the construction or application of a statute which will determine the plaintiff's case one or the other. Now, there's no statute in the United States which will determine one way or the other whether Mr. Boiardi gets paid more or not. So, I submit the Court has no jurisdiction under section 4. Now, finally, the Norris-LaGuardia Mr. Goldberg told Your Honors yesterday that every Court of Appeals which had considered the application of the Norris-LaGuardia Act to a case like this was against it (Inaudible) against our position on it. And so on accounting of (Inaudible) we're entirely wrong. But every Court of Appeals which has considered the problem has I think done it in a very summary fashion. The Lincoln Mills case certainly did and the Seventh Circuit recently did and I don't believe with the exception of the court below, I don't believe anyone has ever really seriously considered the problem. Now, our point with respect to the Norris-LaGuardia Act is this. Here is a labor dispute. There's no doubt about that at all. Controversy involving services, conditions of employment and the Court of Appeals said the Norris-LaGuardia Act, as everybody admits, is still in existence notwithstanding, Taft-Hartley. Therefore, it applies. Now, what does the Norris-LaGuardia Act say? Section 7 of the Norris-LaGuardia Act says, "No court shall have jurisdiction to issue a temporary or permanent injunction in any case involving a growing out of a labor dispute except if certain conditions are met." Certain allegations made, certain findings made by the Court. Those allegations were not made here. Those findings weren't made and we say section 7 therefore is clearly barred. Now, in the first place, appellate argues to you that section 7 merely qualifies for section 4. Section 4 sets out a number of instances in which the Court under no circumstances can ever grant an injunction in the case involving a labor dispute. You can't enjoin anyone from striking. You can't enjoin them for becoming a member of another union. And he says that all section 7 does is to qualify the one or two instances in section 4 where an injunction may be granted if the means are unlawful or -- or there's coercion. I submit that section 7 is intended to go further than that. The purpose of the Norris-LaGuardia Act was to take the Court out of the business of dealing with labor disputes. Maybe Congress went too far. If you remember that at the time it was enacted labor and others were seriously concerned that the federal courts were getting too mixed up in the labor field. So that Congress decided to take them out entirely except -- except to have a case of unlawfulness or violence. Then they may come in. In every other instance they're out. Now, says the court below well that's -- if you've got to make the allegation from the finding of section 7 requirements then those findings would be totally in apposite here and therefore you don't have to make it, because they don't have any relation to the enforcement of an agreement to arbitrate. That assumes it seems to me that assumes that Congress intended that the Court should have jurisdiction in this kind of appeal. The fact that you can't come within the exception to a statute doesn't mean that the -- the exception is to be disregarded. And it seems to me that's exactly what the court below has done. It has sought to evade and get out of the plain words of section 7 of the Norris-LaGuardia Act and we submit that the Act was (Inaudible). We submit that the way -- what the court below has done is this. It twisted and turned its way in order to reach a result. It construed contracts of employment one way in section 1 of the Act and agreements evidencing a transaction in interstate commerce in another way. Using a rigid construction here and a broad construction there, reads out certain provisions of section 7 to reach a result. What's the result? In order to compel enforcement of arbitration provisions in labor agreement. Now, I submit that there is no such clear policy that any such tortuous course is required. That if there is to be such a policy, the policy for Congress to make, it can make it and when it has there, then there's no question but that the -- the Court can tolerate it. But that -- but that the Court should not make it and that it set off on an unchartered sea which Congress itself has said was not to be embarked upon in related matters.