Court Opinion

ID: 9424380
Source: CourtListenerOpinion
Date Created: 2023-08-02 23:11:28.661148+00
Date Added: 2024-06-11T17:22:49.585935
License: Public Domain

Mr. Justice White,
with whom Mr. Justice Brennan, Mr. Justice Stewart, and Mr. Justice Marshall join,
dissenting.
Respondent Arguelles is á seaman who signed onto the SS U. S. Pecos, a merchant ship owned by petitioner, on August 3, 1965, for six months’ employment at a stated monthly wage. The employment relationship was *367governed by the collective-bargaining agreement between petitioner and the National Maritime Union, AFL-CIO, of which respondent is a member.
On February 3, 1966, the day after respondent’s shipping papers expired by their terms, the Pecos anchored off Cape St. Jacques, South Vietnam, awaiting authorization to proceed to Saigon harbor. Respondent concedes that congestion in the harbor was the cause of the extended wait offshore.1 During this time, Saigon port officials refused to grant pratique, or quarantine clearance, to crew members. Nonetheless, respondent demanded discharge or shore leave, both of which were refused.2 On February 13, the Pecos was authorized to, and .did, proceed to the harbor and tie up at a designated location. Unloading of cargo began February 16, and the following day respondent and other crew members were discharged and given a voucher for their wages at the American Consulate in Saigon.3 The voucher called for payment in American currency at petitioner’s headquarters in Galveston, Texas. On February 18, respondent departed Saigon by air for Galveston, where he was paid in cash on February 22.
*368While in Galveston, respondent notified the union’s local office that he was dissatisfied with the company’s refusal to honor certain wage, penalty, and miscellaneous claims.4 The respondent was advised to contáct his union representative with details, but instead of doing so, he brought this suit in the District Court under its admiralty and maritime jurisdiction, 28 U. S. C. § 1333. Respondent sought recovery on three claims which survive here: (a) overtime for work allegedly performed prior to February 3, 1966; (b) overtime for wrongful restriction to the ship for 11 days between arrival at Cape St. Jacques on February '3 and tying up in the port of Saigon on February 13 despite requests for shore leave;5 (c) a statutory penalty of $254.95 under 46 U. S. C. § 596,6 based on two days’ pay for each day be*369tween February 3 and February 22, when respondent was paid at Galveston. Petitioner answered by alleging the failure of respondent to exhaust the grievance and arbitration procedures of the collective-bargaining agreement.7 Petitioner contends that (a) the master did not *370authorize any overtime work before February 3; (b) the restriction to ship between February 3 and February 13 was due to the failure of Saigon port officials to lift quarantine restrictions, and (c) because respondent was paid promptly by voucher at the American Consulate oh the day of discharge, no penalty obtains.
The collective-bargaining agreement provides in relevant part that (a) no overtime work shall be performed without the authorization of the master (Art. IV, § 2); (b) with exceptions not relevant here, no overtime will be paid-for .restriction to ship when such restriction is *371due to the regulation of government authorities (Art. Ill, § 2), and (c) a ship shall not be deemed to have arrived in port while it is awaiting quarantine clearance '(Art. •Ill, § 1 (c)).
The merits of respondent’s nonstatutory claims depend entirely on interpretation and application of the bargaining agreement. Specifically, the threshold questions involved are (a) whether the respondent performed overtime work with the authorization of the master; (b) whether the crew was confined to ship because of the actions of government officials and if so whether respondent . can base his claim on the alleged failure of the master to show the required documents to the crew, and (c) whether the ship had arrived “in port” on February 3, so that respondent was entitled to discharge and payment, or, in the alternative, whether the fact that respondent’s shipping articles expired by their terms on February 2 entitled him to discharge against petitioner’s claim that where the cargo is still aboard in such cases the articles are automatically extended; An additional question is whether respondent was “paid” on February 17 or February 22, since the penalty accrues only until the date of payment.
Most importantly, for purposes of this case, it is clear that the question of whether respondent was entitléd to the statutory penalty depends entirely on a resolution of these questions. If it develops that .petitioner has paid respondent all wages due him in a timely manner, the statutory penalty claim also disappears.
These questions are particularly within the competence of the contractually established grievance procedure of the collective-bargaining agreement. They are all questions of fact or interpretation of various provisions of the agreement. There is not the slightest indication or contention that the grievance machinery would be unable *372to determine these questions, or that it would be inferior to a federab court in so doing. It is clear from the face of the claims that a familiarity with the cústoms and practices of shipping would be distinctly helpful in assessing. the validity of the claims. This familiarity is, of course, one of the prime attributes of an arbitrator. As the Court said in United Steelworkers v. Warrior & Gulf Navigation Co., 363 U. S. 574, 582 (1960):
“The labor arbitrator is usually chosen because of the parties’ confidence in his knowledge of the common law of the shop and their trust in his personal judgment to bring to bear considerations which are not expressed in the contract as criteria for judgment. The parties expect that his judgment of a particular grievance will reflect not only what the contract says but, insofar as the collective bargaining agreement permits, such factors as the effect upon productivity of a particular result, its consequence to the morale of the shop, his judgment whether tensions will be heightened or diminished. For the parties’ objective in using the arbitration process is primarily to further their common goal of uninterrupted production under the agreement, to. make the agreement serve their specialized needs. The ablest judge cannot be expected to bring the same experience and competence to bear upon the determination of a grievance, because he cannot be similarly informed.”
In Textile Workers v. Lincoln Mills, 353 U. S. 448 (1957), it was held that federal courts have jurisdiction to specifically enforce the arbitration provisions of the collective-bargaining agreement. And it has been clear at least since Republic Steel Corp. v. Maddox, 379 U. S. 650 (1965), that, absent extraordinary circumstances not *373alleged here, contractual grievance procedures must be exhausted before suit can be brought.8
The collective agreement reveals that , the parties intended all disputes and grievances, not merely those based on the contract, to be resolved if possible through the contractual procedure. Article II provides a three-step on-board grievance procedure for “[a]ny employee who feels that he has been unjustly treated or been subjected to an unfair consideration.” If no satisfactory solution is reached on board,.the parties are directed to proceed “through the grievance machinery of this agreement at the port where shipping articles are closed or at a continental American port where the Company maintains an operating office and the Union -maintains an *374agent.” Provisions are made for any party to a “dispute or grievance” to seek expeditious determination from the arbitrator. Art. XII, § 3. The parties made no provision whatever for excepting statutory penalty claims from the grievance machinery. Prior decisions unmistakably limit the role of the courts to determining whether a dispute is arguably covered under the arbitration clause. “In the absence of any express provision excluding a particular grievance from arbitration, we think only the most forceful evidence of a purpose to exclude the claim from arbitration can prevail, particularly where, as here, the exclusion clause is vague and the arbitration clause quite broad.” United Steelworkers v. Warrior & Gulf Navigation Co., supra, at 584-585.
Nor until now has there been any. principle that requires contract rights to be resolved internally but. directs statutorily created remedies, to be presented to the court, at least where, as here, the availability of the statutory remedy rests on disputed issues that are cognizable under the arbitration clause. In fact, this Court and lower federal courts have endorsed the suitability of arbitration to resolve federally created .rights. In Wilko v. Swan, 346 U. S. 427 (1953), the Court expressed “hope for [arbitration’s] usefulness . . . in controversies based on statutes . . . Id., at 432. And courts of appeals both before and after passage of § 301 have required that Fair Labor Standards Act employees’ claims for liquidated damages under 29 U. S. C. § 216 (b) for failure to pay overtime wages be referred to contractual grievance procedures before being presented to the court. Donahue v. Susquehanna Collieries Co., 138 F. 2d 3 (CA3 1943); Evans v. Hudson Coal Co., 165 F. 2d 970 (CA3 1948); Beckley v. Teyssier, 332 F. 2d 495 (CA9 1964). Cf. Fallick v. Kehr, 369 F. 2d 899 (CA2 1966); Old Dutch Farms v. Local 584, I. B. T., 243 F. Supp. 246 (EDNY 1965); *375United States Steel Corp. v. Seafarers, 237 F. Supp. 529 (ED Pa. 1965). That the question of penalties or liquidated- damages should be referred in the first instance to applicable grievance procedures is especially proper where; as here, there are also underlying wage claims based on factual disputes, and whose resolution will determine whether, and to what extent, the penalty is due. Neither do I see any reason why the issue of the penalty would be unsuitable for arbitration even if the owner paid off all disputed underlying wage claims, leaving only the question of the statutory penalty. On the contrary, if respondent’s claims are not reached by his promise to arbitrate, or if the promise to. arbitrate is unenforceable, a master or owner could pay off wages in full, but grossly late, secure in the knowledge' that the obligation to pay the penalty would not be susceptible of the quick and informal arbitration process, but must await the attention of a federal district court which may be thousands of miles ■ away. Overreaching' and delay were precisely the evils that § 596 was designed to reach. Mavromatis v. United Greek Shipowners Corp., 179 F. 2d 310 (CA1 1950).
The Court tries to avoid this problem by holding that grievance procedures are available to the seaman to pursue if he chooses. The effect of this is to hold contractual remedies enforceable by the employee but not by the employer. This is not only a curious application of § 301 and contract principles but an unwise departure from past cases. In Republic Steel Corp. v. Maddox, supra, the Court foresaw th^t under such circumstances the employer, “to limit the modes of redress that could be used against him,” woüld simply insist in future bargaining that suits for overtime pay9 be eliminated from *376the grievance procedure. The Court was entirely correct in surmising that “[t]he union would hardly favor the elimination, for it is in the union’s interest to afford comprehensive protection to those it represents, to participate in interpretations of the contract, and to have an arbitrator rather than a court decide such questions ... 379 U. S., at 656.
Nothing in the words of the statute warrants dispensing with contractual procedures. Section 596 provides that the penalty “shall be recoverable as wages in any claim made before the court.” (Emphasis added.) The statute on its face makes the penalty a wage claim; it would in no way be in derogation of the statute to require this claim to be presented like any other wage claim. Under the principles of Republic Steel Corp. v. Maddox, supra, this means that the internal remedies must first be exhausted.
Even assuming, without conceding, that § 596 provides a direct route to federal courts on penalty claims, § 301 should at least require that the contractual bases for the penalty claim be settled by contractual methods before penalty claims may be adjudicated by the courts.' The penalty statute is a direct descendant of 1 Stat. 133, passed in 1790. Section 596 has existed unchanged since 1915. Section 301, on the other hand, was enacted in 1947 - as a farreaching measure designed to secure the enforcement of arbitration agreements in the federal coúrts in the belief that “industrial peace can be best obtained only m that way.” Textile Workers v. Lincoln Mills, supra, at 455. Section 301 did away with common-law rules against enforcing executory promises to arbitrate, and there should be no reluctance to. accommodate § 596 and the policy of § 301 by withholding judicial relief until contractual remedies are exhausted.
It should also be recalled that even though a dispute also involves an unfair labor practice or a representation *377or jurisdictional dispute it. is nevertheless not removed from the arbitral process. Smith v. Evening News Assn., 371 U. S. 195 (1962); Carey v. Westinghouse Corp., 375 U. S. 261 (1964).10 Both the National Labor Relations Board and this Court havé shown a high regard for the informed opinion of the arbitrator in such cases. International Harvester Co., 138 N. L. R. B. 923, 925-926 (1962); Carey v. Westinghouse Corp., supra, at 272.
Moreover, prior tó the passage of § 301, nonmaritime employees, like seamen, could , go to court to resolve disputes' over the meaning of the collective-bargaining agreement. Given the basis for federal jurisdiction, they could go to federal court. In this respect they were no different from seamen. When § 301 provided for the enforcement of arbitration agreements and, as interpreted in Maddox, for exhaustion of internal remedies, there is not the slightest indication that Congress intended that seamen should be. treated any differently from their nonmaritime counterparts.
Finally, it is pertinent to recall the words of the District Court in the instant case in granting summary judgment to the petitioner:
“The policy established by the cases referred to, that matters of this sort should be left to procedures set up between the union and the employer, is, in the opinion of the Court, a most important policy lest this Court be inundated with small claims of the type which has been presented to the Court today.” App. 55a.
*378In short,, the Court today makes an unnecessary and ill-advised detour around the body of arbitration law developed by Congress and this Court. Its reasons for doing so, in my opinion, comport with neither the language of the statute nor considerations of sound labor and maritime policy. .

 Brief of Respondent in Opposition to Certiorari 1-2.

 Id., at 2. Article III, § 2, of the bargaining agreement provides overtime pay for restriction to ship except when shore leave is prevented by order of foreign governments. In such cases, the bargaining agreement requires the company to “produce a copy of the government restriction order when the crew is paid off.” Respondent now Seems to concede that the government’s failure to grant pratique prevented shore leave, but alleges that “the captain failed to conform to the procedures required to show the crew that pratique (clearance) was refused by the S. Vietnam Government [Art. Ill, § 2 of Agreement . . .].” Respondent seems to imply, though this is far from clear, that the alleged failure of the captain to exhibit the order restores respondent’s right to overtime wages.

 Petitioner asserts that “local currency restrictions” prevented payment in American currency in South Vietnam, and that use-of vouchers was a “customary and accepted” means of. payment in foreign ports.

 In addition to the three-claims listed below, respondent also sought recovery in the Federal District Court for the difference between coach air fare and first-class air fare to which he was entitled under the contract, $6.50 as his share of a limousine from Houston airport to Galveston, and $8.50 excess baggage charge. The air fare claim was settled directly with the airline, and respondent apparently abandoned the other two claims during the course of the proceedings.

 See n. 2, supra.

 “The master or owner of any vessel making coasting voyages shall pay to every seaman his wages within two days after the termination of the agreement under which he was shipped, or at the time such seaman is discharged, whichever first happens; and in case of vessels making foreign voyages, or from a port on the Atlantic to a port on the Pacific, or vice versa, within twenty-four hours after the cargo has been discharged, or within four days after the seaman has been discharged, whichever first happens; and in all cases the seaman shall be entitled to be paid at the time of his discharge on account of wages a sum equal to one-third part of the balance due him. Every master or owner who refuses or neglects to make payment in the manner hereinbefore mentioned without sufficient cause shall pay to the seaman á sum equal to two days’ pay for each and every day during which payment is delayed beyond the. respective periods, which sum shall be recoverable as-wages in any claim made *369before the court; but this'section shall not apply to masters or owners of any vessel the seamen of which are entitled to share in the profits of the cruise or voyage. This section shall not apply to fishing or whaling vessels or yachts.”

 “ARTICLE II
“GRIEVANCES
“Section 1. Department Spokesmen. The Unlicensed Personnel of each department' employed on board vessels operated by the Company shall have' the right to designate a spokesman by and from; that department. Any employee who feels that he has been unjustly treated or been subjected to an unfair consideration shall endeavor to have said grievance adjusted by his respective designated spokesman, in the following maimer:
“First — Presentation of the complaint to his immediate superior. “Second — Appeal to the head of the department in which the em-ployée involved shall be employed.
“Third — Appeal directly to the Master.
“Section 2. Grievance Machinery. If the complaint cannot be settled to the mutual satisfaction of the employee and department head or the Master, the decision of the Master shall be supreme at sea. and in foreign ports, and until the vessel arrives at the port where shipping articles áre closed. Such- complaint shall be settled through the grievance machinery of this agreement' at the port where shipping articles are closed or at a continental American port where the Company maintains an operating office and the Union maintains an agent.”'
“ARTICLE XII
“ARBITRATION
“Section 1. Settlement of Disputes Prior to Arbitration. In case a dispute arises over the interpretation .of any of the provisions of this agreement, whether the said dispute originates on board ship or ashore, the Union agrees to take the matter up with the Company and make every effort to adjust the said dispute. ‘ In the event that no amicable.and satisfactory adjustment can be made between the. Union and the Company and the question in dispute is deemed to *370be sufficiently important to either party, the Union or the Company may present the question disputed to the Disputes Board for arbitration as provided herein:
“Section 3. Notwithstanding any of the foregoing, should a dispute or grievance arise under this agreement which, in the opinion of the President of the American Merchant Marine Institute or his designee or the President of the National Maritime Union.or his designee, requires expeditious determination, such party may waive the grievance and arbitration provisions referred to above and request that the dispute or grievance be referred to arbitration as' follows:
“(a) The dispute or grievance shall be asserted by notice in writing to the other party and to Theodore W. Kheel, the arbitrator under this agreement. Such notice shall contain a summary of the dispute or grievance and the reasons for requesting, a waiver of the contract grievance procedure. Following the receipt of such request the arbitrator or his designee shall, upon the basis of the information submitted and any further information he may have requested from either party, determine whether the matter should be submitted to arbitration or referred back for processing under the regular grievance machinery. In the latter case, the arbitrator shall notify both parties of his decision and the grievance shall be processed as provided in Sections 1 and 2 of this Article. If the arbitrator or his designee should decide that the request to waive the regular grievance machinery should be granted, he shall so notify both parties and schedule the matter for prompt arbitration.”

 The language of the Court in that decision is pertinent here: “Congress has expressly approved contract grievance procedures as a preferred method for settling disputes and stabilizing the ‘common law’ of the plant. . . Union interest in prosecuting employee grievances is clear. Such activity complements the union’s status as exclusive bargaining representative by permitting it to participate actively in the continuing administration of the contract. In addition, conscientious handling of grievance claims will enhance the union’s prestige with employees. Employer interests, for their part, are served by limiting the choice of remedies available to aggrieved employees. And it cannot be said, in the normal situation, that contract grievance procedures are inadequate to protect the interests of an aggrieved employee until the employee has attémpted to implement the procedures and found them so.
“A contrary rule which would permit- an individual employee to completely sidestep available grievance procedures in favor of a lawsuit has little .to commend it. In addition to cutting across the interests already mentioned, it would deprive employer and union of the ability to establish a' uniform and exclusive method for orderly settlement of employee grievánces. If a grievance procedure cannot be made exclusive, it loses much of its desirability as a method of settlement. A rule creating such a situation ‘would inevitably exert a disruptive influence upon both the negotiation and administration of collective agreements.’ ” (Citations omitted.) 379 U. S:, at 653.

 Though Maddox involved a claim for severance rather than overtime pay, “ [grievances depending on severance claims are not critically unlike other types of grievances.” 379 U. S., at 656.

 In Carey v. Westinghouse Corp., supra, at 272, Smith v. Evening News, supra, was interpreted as approving "resort to a tribunal other- than the Board” even though the tribunal in Smith was a state court. There was no internal grievance machinery established in the collective agreement in Smith.