Court Opinion

ID: 9469722
Source: CourtListenerOpinion
Date Created: 2023-08-05 02:47:25.609612+00
Date Added: 2024-06-11T17:41:31.848814
License: Public Domain

NEWMAN, Circuit Judge,
concurring:
I fully agree with Chief Judge Feinberg that, under the broad arbitration clause of the contract between Sheepshead Nursing Home (SNH) and Local 144 (the Union), the arbitrator had authority to decide the contract issue whether the October 30, 1980, withdrawal of SNH from the multi-employer Association, allegedly without timely notice to the Union,1 was effective to render the contract null and void as to SNH. Though § 32 of the contract provides that the contract becomes null and void as to a nursing home that terminates its membership in the Association, there remains an issue of contract interpretation as to whether the parties intended the contract-terminating consequence of withdrawal to occur in the absence of proper notice to the Union.
However, I disagree with Chief Judge Feinberg’s further conclusion that the arbitrator, having authority to interpret the contract on the issue of termination, did so. He maintains that the arbitration award “could reasonably have been derived from the terms of the contract,” suggesting that the arbitrator “could” have concluded by *892analogy that § 32 requires at least the one-day notice required by § 33B. Had the arbitrator given no indication of his reasoning, I would certainly accord him the presumption that his award drew its essence from the contract and accept as plausible the interpretation of the contract that Chief Judge Feinberg suggests “could” have been made. See Kurt Orban Co. v. Angeles Metal Systems, 573 F.2d 739, 740 (2d Cir. 1978); Sobel v. Hertz, Warner & Co., 469 F.2d 1211, 1214-16 (2d Cir. 1972). But the arbitrator set forth his reasoning and made it unmistakably clear that in deciding whether the contract continued beyond the date of SNH’s withdrawal and extended for a period in which the challenged discharge of an employee occurred, the arbitrator was not relying on the terms of the contract but instead was relying on a provision of federal statutory law, § 8(d) of the National Labor Relations Act, 29 U.S.C. § 158(d) (1976). The arbitrator wrote:
That this Employer withdrew from the Association in and of itself did not terminate the collective bargaining agreement, so far as it is concerned, appears to be the conclusion to be drawn from the failure of the Employer to establish that it complied with the Labor-Management Relations Act, 29 USCA § 158(d).
He then sets forth the full text of § 8(d) and adds:
Consequently the attempt of this employer to terminate the labor agreement to which it was a party must be deemed futile.
In light of this explicit statement of reasoning,2 I think we must decide whether the arbitrator’s view of § 8(d) is correct. Before reaching the merits of that issue, two preliminary points are in order. First, when an arbitrator’s authority to determine a grievance turns directly on an interpretation of a federal statute, the statutory issue should be decided by the District Court that is asked to stay the arbitration. In this respect this case is complicated because at the time of SNH’s motion to stay, the Union had two grounds available to it in resisting that motion. It could have argued that the contract itself required notice to the Union to render effective an employer’s attempt to terminate the contract as to it by withdrawing from the Association. That contention could properly have been referred to the arbitrator. But the Union also had available the statutory argument based on § 8(d). That argument, standing independently of the contract, required determination by the District Court. Second, once the entire matter was sent to arbitration and the arbitrator elected to decide solely on statutory grounds that the contract had not expired as to SNH, I see no reason to vacate the award if the arbitrator’s view of federal law is correct. If § 8(d) does extend the contract as to SNH in the circumstances of this case, then, as will be seen, the arbitrator had authority to adjudicate the grievance concerning the wrongful discharge. I therefore find it necessary to reach the issue whether § 8(d) extends the contract as to SNH.3
*893Section 8(d) defines the obligation to bargain collectively, breach of which is an unfair labor practice, §§ 8(a)(5), 8(b)(3). When a collective-bargaining contract is in effect, § 8(d) specifies that the duty to bargain means that a party to the contract shall not terminate or modify the contract without complying with the four subsections of § 8(d). Subsection 8(d)(1) requires notice to the other party of proposed termination or modification sixty days prior to the proposed termination or modification. Subsection 8(d)(3) requires notice to federal and state mediation officials thirty days after the (d)(1) notice. Subsection 8(d)(4), pertinent to this case, requires that the terminating party “continues in full force and effect, without resorting to strike or lock-out, all the terms and conditions of the existing contract for a period of sixty days after such notice is given [the (d)(1) notice] or until the expiration date of such contract, whichever occurs later.”
As we observed in Procter & Gamble Independent Union of Port Ivory, N.Y. v. Procter & Gamble. Manufacturing Co., 312 F.2d 181, 188 (2d Cir. 1962), cert. denied, 374 U.S. 830, 83 S.Ct. 1872, 10 L.Ed.2d 1053 (1963), the purpose of § 8(d) is to provide a waiting period during which there can be no strike or lockout. SNH contends that the statute is concerned only with the temporary prohibition of a strike or lockout and has no application to this case since no strike or lockout occurred. Both the terms of the statute and common sense refute that contention. During the time period to which it applies, § 8(d)(4) obliges the party seeking termination to continue “in full force and effect ... all the terms and conditions of the existing contract.” Moreover, in prohibiting a strike or lockout during that time period, the statute cannot sensibly be read to be inapplicable whenever the parties heed its command and refrain from a strike or lockout. While the employees remain at work, their rights and obligations and those of their employer must be governed by some standards; Congress obviously would not have required employees to remain at work without enforceable rights to receive wages and other benefits. The pertinent authority, as § 8(d)(4) explicitly provides, is the existing contract.
In Procter & Gamble we were asked to rule that a contract remained in effect beyond its expiration date simply because the employer had failed to provide conciliation officials the thirty-day notice required by § 8(d)(3). The employer had given the union the notice required by § 8(d)(1), and the dispute arose long after the sixty-day extension period following the (d)(1) notice, which is provided by § 8(d)(4). Nevertheless the union sought to invoke (d)(4) as a remedy for lack of the notice required by (d)(3). Judge Hays rejected that argument, noting that “the requirement of paragraph (3) that federal and state agencies be notified is entirely independent of paragraph (4) .” 312 F.2d at 188. The message of Procter & Gamble is that (d)(4) stands on its own. That decision, however, does not govern this case, where timely (d)(1) notice was not given, thus triggering (d)(4)’s explicit provision for contract extension in the absence of such notice.
It is arguable that the contract-extending command of § 8(d)(4) creates only the basis for an unfair labor practice within the jurisdiction of the National Labor Relations Board in the event that the party attempting termination fails to continue the contract, and does not of its own force continue the contract and render it enforceable in suits in the district courts under § 301 of the Act, 29 U.S.C. § 185. Dictum in Procter & Gamble can be read as subscribing to that view.4 This contention arises at the *894interface between the traditional doctrines that unfair labor practices are not contract violations, cognizable as such by district courts under § 301, C-B Buick, Inc. v. NLRB, 506 F.2d 1086, 1094 (3d Cir. 1974), and contract actions are not shielded from district court scrutiny under § 301 simply because they are also unfair labor practices, cognizable as such by the Board, Smith v. Evening News Ass’n, 371 U.S. 195, 83 S.Ct. 267, 9 L.Ed.2d 246 (1962). If in this case the Union had sued SNH, claiming that the employer had breached the contract by failing to give a (d)(1) notice or by failing to continue the contract as required by (d)(4), it would seem clear that such allegations of conduct arguably constituting unfair labor practices in violation of the employer’s duty to bargain could not be transformed as such into contract violations cognizable in a district court. But by bringing this suit to enforce a contractual duty to arbitrate, the Union has not seized upon an unfair labor practice of the employer and characterized it as a breach of contract. Instead, the Union has relied upon § 8(d)(4) as a Congressional command that, in the absence of timely (d)(1) notice, the contract continues “in full force and effect” and has then looked to its rights under the contract. It is difficult to imagine that Congress intended otherwise. By requiring the parties to continue the contract on pain of committing an unfair labor practice, Congress must have expected the parties to be able to enforce all of their rights under the contract. That is all that the Union seeks to do in this suit.
The dissent contends that the National Labor Relations Board has rejected a construction of § 8(d)(4) that gives effect to its explicit requirement that a contract is extended for sixty days when modification or termination is attempted in the absence of a timely (d)(1) notice. I have found no decision of the Board that has squarely faced the issue, i.e., that has had to consider whether a contract remained in effect for sixty days after a purported termination not preceded by a timely (d)(1) notice.5 What the Board has held in a line of cases is that when a contract is automatically renewable unless a contractually specified notice is given, the lack of the statutory notice specified in (d)(1) does not have the effect of triggering a full year of renewal. See Jet Line Products, Inc., 229 N.L.R.B. 322 (1977); General Maintenance Service Co., 182 N.L.R.B. 819, 822 n.9 (1970); International Harvester Co., 77 N.L.R.B. 242 (1948).
There remains for consideration the relevant time period during which (d)(4) extends the contract as to SNH when a timely (d)(1) notice has not been given. SNH contends that since § 8(d)(4) purports to extend the contract for sixty days after the (d)(1) notice or sixty days after the contract expiration date, whichever is later, a literal reading of the statute could keep the contract in existence for years after its expiration date until the employer finally got around to giving notice of termination. However, a literal application of the phrase “whichever is later” has long since been rejected by both the Supreme Court, NLRB v. Lion Oil Co., 352 U.S. 282, 77 S.Ct. 330, 1 L.Ed.2d 331 (1957), and the National Labor Relations Board, United Packinghouse Workers of America, 89 N.L.R.B. 310 (1950). Lion Oil and Packinghouse Workers both involved a proposed mid-term modification or termination prior to the contract’s expiration date. As long as a timely (d)(1) *895notice was given, the effect of (d)(4) was to keep the contract in force only during the sixty-day interval after the notice, and not until the original expiration date of the contract. In Packinghouse Workers the Board observed that the “later” language of (d)(4) refers to a case where the sixty-day notice is given “less than 60 days before the termination.” 89 N.L.R.B. at 316 (emphasis original). As an example, the Board posited a case where notice is given only thirty days before termination; in that event, the sixty-day period runs until thirty days beyond the expiration date, i.e., “later” than expiration.
Thus, the effect of (d)(4) is as follows: If (d)(1) notice is given during the term of a contract, the contract continues for sixty days after the notice; if a party attempts to terminate at the expiration date specified in the contract, it can avoid any extension by giving (d)(1) notice sixty days prior to that date; if the party attempting to terminate at the expiration date gives less than sixty days’ notice, the contract is extended beyond the expiration date only for the number of days that the notice is late; if the party attempting to terminate at or before the expiration date gives no (d)(1) notice at all, the logic of Lion Oil and Packinghouse Workers means that the contract is extended only sixty days beyond the original expiration date.6 SNH’s fear of a perpetual extension is a red herring.
With this understanding of § 8(d)(4), it is apparent that the arbitrator correctly relied upon the statute to find that the disputed discharge of an employee occurred at a time when the contract, with its broad arbitration clause, was still in effect. The earliest date when SNH contends it furnished the Union with any notice of proposed withdrawal from the Association was October 10, 1980.7 In this case, the sixty-day periods of §§ 8(d)(1) and (4) are augmented to ninety days because health care employees are involved. § 8(d)(A), 29 U.S.C. § 158(d)(A). The 90th day after October 10, 1980 was January 8, 1981, which is the earliest date when the contract could have terminated as to SNH. The disputed discharge for which arbitration was sought occurred on January 7, 1981. The grievance was therefore governed by a contract then in effect and was arbitrable pursuant to the contract; the demand for arbitration, though made after expiration of the contract, was made within a “reasonable time” after the contract’s expiration, Nolde Brothers, Inc. v. Local No. 358, Bakery & Confectionery Workers Union, AFL-CIO, 430 U.S. 243, 255 n. 8, 97 S.Ct. 1067, 1074 n. 8, 51 L.Ed.2d 300 (1977).8 For these reasons, I concur in affirming the judgment that confirmed the arbitrator’s award.

. I agree with Chief Judge Feinberg that we are entitled to accept the Union’s contention that no timely, unequivocal notice was given to it, in light of SNH’s silence in the face of repeated denials of notice by the Union, both at oral argument and in post-argument papers specifically directed to issues concerning the notice provisions of § 8(d) of the National Labor Relations Act. See footnote 7, infra, and accompanying text. I therefore need not reach the issue of whether it would be for the arbitrator or the District Judge to resolve a disputed issue of fact concerning the receipt of timely notice, in the event application of the statute turned on such a dispute.

. If the arbitrator had based his decision on the issue of contract termination on the contract itself, looking to the federal statute only for guidance or analogy as an aid to interpretation of the contract, I would agree that we could simply accept his interpretation of the contract, even if we thought his view of federal law was “mistaken,” Local 771, I. A. T. S. E. v. RKO General, Inc., WOR Division, 546 F.2d 1107, 1113 (2d Cir. 1977); Sobel v. Hertz, Warner & Co., 469 F.2d 1211, 1214 (2d Cir. 1972), or in “error,” Office of Supply, Government of the Republic of Korea v. New York Navigation Co., 469 F.2d 377, 379 (2d Cir. 1972). But, though the Union contends that the arbitrator did rely on the contract in resolving the termination issue, the arbitrator’s own words reveal that he relied exclusively on the federal statute, not as an aid in contract interpretation, but as a command of positive law.

. An alternative course would be to remand with directions to return the matter to the arbitrator for consideration of whether, as a matter of contract interpretation, SNH’s withdrawal from the Association was ineffective, for lack of notice to the Union, to render the contract null and void as to SNH. Since Chief Judge Feinberg is satisfied that such a determination has already been made and since I am satisfied that the same result was correctly reached by application of § 8(d), a majority of the panel concludes that the award should be confirmed, and a remand is therefore unnecessary.

. After holding that lack of (d)(3) notice did not continue the contract, since the contract-continuing language of (d)(4) is triggered only by lack of a (d)(1) notice, the opinion in Procter & Gamble also observes that “the provision does not suggest that failure to comply will constitute a breach of contract, or that the courts are authorized to take over the function of the Board by awarding specific performance of ‘the terms and conditions of the existing contract.’ Failure to comply is an unfair labor practice which the Board may redress by a proper order.” 312 F.2d at 188-89. If this language is still referring to' (d)(3), it simply reenforces the holding by observing that courts are not authorized to remedy a violation of (d)(3) by apply*894ing the contract-extending provision of (d)(4). If the language refers to (d)(4), then it does suggest that courts cannot consider contracts extended as (d)(4) in terms provides; such a suggestion is at best dictum since the giving of a timely (d)(1) notice in Procter & Gamble precluded any claim that a (d)(4) extension had occurred.

. I acknowledge that in United States Gypsum Co., 90 N.L.R.B. 964, 968 n.11 (1950), the Board stated that § 8(d) is “inapplicable” where no strike or lockout has occurred. That observation may be correct from the perspective of an agency determining whether an unfair labor practice has occurred but it is incorrect if it was intended to apply in the context of a case such as this where it is critical to determine whether a contract, with its authority for arbitration, continues in existence for a brief interval as specified in § 8(d)(4) after an attempted termination not preceded by a timely notice as required by § 8(d)(1).

. All of these results are those required only by § 8(d)(4); the contract itself may contain its own clauses covering extensions in the event of attempted mid-term or end-of-term modification or termination.

. The Union contends that it never received any notice. In a post-argument letter to this Court, SNH calls our attention to a Memorandum of Decision of Judge Constantino in a case between the same parties involving the arbitrability of another grievance. Sheepshead Nursing Home v. Ottley, CV-82-0815 (E.D.N.Y. Apr. 27, 1982). That opinion refers to letters of SNH annexed to its papers filed in the Eastern District litigation. Inspection of that file reveals a copy of a letter dated October 10, 1980, from SNH to the Union somewhat equivocally indicating an intention to terminate the contract because of SNH’s proposed withdrawal from the Association on October 30, 1980. Whether or not that notice complied with § 8(d)(1) and whether or not it was received by the Union, it is the earliest document referred to by SNH (however obliquely) that is claimed to be notice to the Union of contract termination.

. I agree with Chief Judge Feinberg that whether the demand for arbitration was timely under the contract was an issue for the arbitrator.