Court Opinion

ID: 9530629
Source: CourtListenerOpinion
Date Created: 2023-08-07 04:01:49.731201+00
Date Added: 2024-06-11T13:28:11.980800
License: Public Domain

McCOMB, J.
I dissent. I would affirm the judgment for the reasons expressed by Mr. Justice Fourt in the opinion prepared by him for the District Court of Appeal, and concurred in by Presiding Justice Wood and Justice Lillie (O’Malley v. Wilshire Oil Co., (Cal.App.) 25 Cal.Rptr. 748), which is as follows:
Petitioner appeals “from the judgment . . . denying Petitioner’s Petition for Order Directing Arbitration.” The petition was brought in the name of “.. . EMMETT O ’MALLEY individually and in a representative capacity for and on behalf of OIL, CHEMICAL AND ATOMIC WORKS INTERNATIONAL UNION LOCAL 1-128, AFL-CIO, an unincorporated association; its officers and members, for an Order Directing Wilshire Oil Company, a corporation, to Proceed to Arbitration.”
A résumé of some of the facts is as follows: in April 1959 Wilshire Oil Company (hereinafter referred to as the “Company”) and the Oil, Chemical and Atomic Workers International Union, Local 1-128, AFL-CIO (hereinafter referred to as the “Union”) entered into a written collective bargaining agreement under which the Company recognized the Union as the exclusive bargaining agent of the employees of the Company in the divisions therein enumerated. This agreement was negotiated through the process of collective bargaining and superseded and cancelled prior agreements similarly negotiated between the Company and the Union, with reference to said employees, respectively, dating back to April 29, 1948, when the Union was certified by the National Labor *497Relations Board as the duly authorized bargaining agent for the employees of the Company.
During the year 1950 the Union served written notice upon the Company of its desire to modify and amend the collective bargaining agreement then in effect between the Company and the Union and served its proposed written amendments to said agreement upon the Company. One of the proposed amendments provided in effect that no work as listed in the schedules attached to the agreement (transportation work was then embraced in said schedules) would be let to any contractor' or subcontractor unless agreed upon by the Employer and the Union’s committee. The Company rejected this proposal but finally agreed to the insertion of a provision, article 15, placing certain restrictions upon the Company’s contracting-out of upkeep and repair work.1
On December 27, 1960, the Union submitted a grievance which in substance protested the contracting out by the Company of some of its transportation work.2
The collective bargaining agreement between the Company and the Union, which was in effect at the time that the grievance was presented, contained a provision for the processing *498and arbitration of disputes aud grievances relating to the application and interpretation of said agreement, subject to the following condition, to wit:
“ARTICLE 22
“GRIEVANCES
“Right of Grievance
“1
JL. • ••••••••••«
“Procedure for Handling Grievances
“2.............
“(a)...........
“(b)...........
“(c) Arbitration
“. . . Under no circumstances may an arbitration decision in any manner nullify, amend, modify, extend, reduce or otherwise change any of the terms or conditions of this Agreement or any amendments hereto, or establish or change wage rates or classifications....
11 General
“3.............”
Since the contract between the Company and the Union in force in December 1960 was to be opened by the Union for the negotiating of amendments, the parties agreed that said grievance be held in abeyance pending the conclusion of such negotiations. The Union sought to obtain an amendment of article 15. The proposed amendment sought to enlarge the restrictions placed upon the Company relative to contract work is as follows:
“1. Except for office janitorial services or in ease of an emergency the Company shall not employ or otherwise engage contract labor to perform any work ....’’ (Emphasis added.)
Throughout all of the 1961 negotiations between the Company and the Union, which consumed a period of approximately six months, the Company resisted the proposed change in the contract relating to contract work. Ultimately the parties entered into a new Agreement which contained the same contract work clause as is contained in the Articles of Agreement dated 1959. (See footnote 1.)
At that point the Union elected to prosecute further its grievance under the former contract and demanded that said grievance be submitted to arbitration. The Company refused *499to submit this grievance to arbitration and the Union filed a petition in the superior court to compel the Company to arbitrate this dispute.
On November 14, 1961, the findings of fact and conclusions of law were filed.3 The judgment after hearing on motion was filed November 27, 1961, and entered December 4, 1961. It provides in pertinent part that “the motion be denied and that said petition he dismissed.” This appeal followed.
*500There is no dispute of the fact that the Company is an industry affecting interstate commerce within the meaning of section 301 of the Labor Management Relations Act of 1947 as amended, 29 U.S.C.A. section 141 et seq. The state court in the interpretation and application of the applicable agreement on arbitration between the Company and the Union must apply federal substantive law governing collective bargaining agreements. (Charles Dowd Box Co. v. Courtney, 368 U.S. 502 [82 S.Ct. 519, 7 L.Ed.2d 483, 49 L.R.R.M. 2619]; Local 174, Teamsters, etc. of America v. Lucas Flour Co., 369 U.S. 95 [82 S.Ct. 571, 7 L.Ed.2d 593, 49 L.R.R.M. 2117]; Textile Workers Union v. Lincoln Mills, 353 U.S. 448 [77 S.Ct. 912, 1 L.Ed.2d 972] ; McCarroll v. Los Angeles County Dist. Council of Carpenters, 49 Cal.2d 45 [315 P.2d 322].)
The gist of the federal law is that: (1) arbitration is a matter of contract; (2) courts may not examine the merits of the grievance but must limit their inquiry to whether the claim, on its face, is governed by the agreement; (3) doubt as to arbitrability is to be resolved in favor of arbitrability; and (4) unless excluded, disputes pertaining to the agreement are arbitrable. (See United Steelworkers of America v. American Mfg. Co., 363 U.S. 564 [80 S.Ct. 1343, 4 L.Ed.2d 1403]; United Steelworkers of America v. Warrior & Gulf Navigation Co., 363 U.S. 574 [80 S.Ct. 1347, 4 L.Ed.2d 1409].)
Appellant states the issue to be resolved on this appeal as follows: “Under applicable law may arbitration be denied in the absence of uncontrovertible proof that the contract specifically excludes the subject matter from the grievance and arbitration procedures of the collective bargaining agreement ? ’ ’
Respondent chooses to state the issue as follows: “Where, as in the ease at bar, the parties to a collective bargaining agreement have negotiated concerning demands made by the *501Union to amend said agreement so as to restrict the Company’s right to contract out all work, and have in fact amended the agreement so as to impose restrictions upon the Company’s right to contract out only certain defined types of work and have knowingly rejected amendments which would have extended such restrictions to other types of work, may the Company be compelled to submit to arbitration its contracting out of such latter types of work, under an arbitration agreement which expressly excludes from arbitration, proposals to amend, modify or extend any of the terms or conditions of the agreement. ’ ’
A more accurate statement of the issue to be resolved is as follows:
Where the parties (Company and Union) have expressly and specifically agreed with reference to the subject matter of the Company contracting out work; and by the express terms of said agreement the restriction on contracting-out of work is limited solely to “contract labor to perform upkeep and repair work normally performed by employees”; and where the grievance does not relate to “contract labor to perform upkeep and repair work normally performed by employees” but relates to the use of contract labor relative to transporting products; and where the arbitration clause (article 22) expressly provides that “Under no circumstances may an arbitration decision in any manner nullify, amend, modify, extend, reduce or otherwise change any of the terms or conditions of this Agreement,” did the trial court err in refusing to order the parties to submit the controversy to arbitration ?
As stated by the Supreme Court in United Steelworkers of America v. Warrior & Gulf Navigation Co., infra [sic], 363 U.S. 574, 582-585 [80 S.Ct. 1347, 4 L.Ed.2d 1409, at pages 1417-1419] :
“. . . An order to arbitrate the particular grievance should not be denied unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute. Doubts should be resolved in favor of coverage. <<
“. . . Contracting out work is the basis of many grievances; ■and that type of claim is grist in the mills of the arbitrators. A specific collective bargaining agreement may exclude contracting out from the grievance procedure. Or a written collateral agreement may make clear that contracting out was not *502a matter for arbitration. In such a case a grievance based solely on contracting out would not be arbitrable. ... 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....”
The case at bar differs radically from the factual situation in the Warrior ease. The agreement in the Warrior case did not contain a provision which mentioned contracting-out of work. Footnote 8 of the majority opinion (363 U.S. 584, 4 L.Ed.2d, p. 1418) provides as follows:
“8. See Celanese Corp. of America, 33 Lab Arb Rep 925, 941 (1959), where the arbiter in a grievance growing out of contracting out work said:
“ ‘In my research I have located 64 published decisions which have been concerned with this issue covering a wide range of factual situations but all of them with the common characteristic—i.e., the contracting-out of work involved occurred under an Agreement that contained no provision that specifically mentioned contracting-out of work.’ ” (Emphasis added.)
The parties in the case at bar did specifically mention contracting-out of work in their agreement. The fact that the parties did specifically deal with the problem of contracting-out of work and specifically restricted the Company with reference to contracting-out of work only insofar as “contract labor to perform upkeep and repair work normally performed by employees” constitutes forceful evidence of a purpose to exclude the claim [i.e., contracting-out of transportation work] from arbitration.” (See: Local No. 725, Intl. Union of Operating Engineers v. Standard Oil Co. of Ind. (D.C. N.Dak.1960) 186 F.Supp. 895.)
“Arbitration is the means of solving the unforeseeable” —here there was no question as to the matter being unforeseeable, the Company and the Union had each foreseen the problem and had made a provision in the contract to provide for what could not be contracted-out. Pursuant to the law which is in effect under the circumstances, this court does not undertake to make any determination of the merits of the grievance. It seems perfectly clear however that the arbitration clause in this ease is not susceptible to interpretation to have it cover the asserted dispute.
Schauer, J., concurred.

Article 15 provides in pertinent part as follows;
‘‘ Contract Work
‘ ‘ General
“1. Except for office janitorial services or in case of an emergency the Company shall not employ or otherwise engage contract labor to perform up-keep and repair work normally performed by employees covered by this Agreement until all laid off employees who still retain their rehiring rights . . . have been offered reemployment with the Company. . . .

“Preference to Wilshire Employees

‘ ‘ 2. When it is necessary for the Company to employ contract labor to supplement its work force for upkeep and repair work, preference shall be given to Wilshire employees for the jobs paying the higher wage rates provided such employees are qualified.

“Contractors’ Wage Bates

“3...............

“New Construction or Additions

1 ‘ 4. This Article shall not apply to work in connection with the construction of new facilities or additions to existing facilities.” (Emphasis added.)

The “Complaint or Grievance Report” submitted to the Company provides in pertinent part as follows:
“On December 20, 1960, the Adjustment Committee became aware that the Company was using contractors to do work normally covered by the Agreement while employees of the Company in the Truck Driver classification were laid off. The Adjustment Committee contends that the Company is in violation of the current Articles of Agreement between the . . . Company . . . and . . . Union, Article 15, and any other Article or Articles that may be found to be violated in the process of settling this complaint.
“We therefore contend that the Company will have to pay their employee or employees in the Truck Driver classification who were on the *498laid-off status and who would be doing this work if it were not for a contractor, all lost monies due them since their layoff, and reinstate them with full continuity of seniority. ’ ’

The findings of fact and conclusions of law provide as follows:
“FINDINGS OF FACT
“1. That at all times mentioned herein Respondent has been engaged in an industry affecting interstate commerce and has employed in said industry employees for whom the Oil, Chemical and Atomic Workers International Union Local 1-128, AFL-CIO has been certified by the National Labor Relations Board as the duly authorized bargaining agent.
“2. That the dispute which forms the basis for the grievance referred to herein grew out of the contracting out by Respondent of a portion of its transportation and trucking requirements during the term of the Articles of Agreement dated April 10, 1959.
“3. That contracting out of transportation work is and has been for many years a policy of Respondent.
‘ ‘ 4. That the only article contained in said Articles of Agreement dated April 10, 1959, which purports in any way to impose restrictions upon the contracting out of work by Dependent is an article numbered Article 15, entitled Contract Work,’ the scope of which article is and was intended to be limited to the contracting out of upkeep and repair work.
‘5. The said Article 15 of said Articles of Agreement dated April 10, 1959, does not and was not intended by the parties to extend to or impose any restrictions upon the contracting out of transportation work by Respondent.
“6. That during the collective bargaining negotiations carried on between the Petitioner and Respondent in the year 1960, Petitioner sought unsuccessfully to extend the scope of the restrictions to be contained in said Article 15 to include among other things the contracting out of transportation work.
“7. That during the collective bargaining negotiations carried on between Petitioner and Respondent in 1961, which ultimately were concluded by the adoption of new Articles of Agreement dated September 6, 1961, superseding the Articles of Agreement of April 10, 1959, Petitioner again sought unsuccessfully to extend the scope of the restrictions of Article 15 to include among other things contracting out of transportation work.
“8. That Article 22 of said Articles of Agreement dated April 10, 1959, which sets forth the procedure for processing grievances and the terms and conditions under which the parties have agreed to submit unresolved grievances to arbitration specifically provides that under no circumstances may an arbitration decision in any manner nullify, amend, modify, extend, reduce or otherwise change any of the terms or conditions of said Agreement.
“CONCLUSIONS OF LAW
“1. That the substantive rights of the parties are controlled by the Federal substantive law under Section 301 of the Labor-Management Relations Act.
“2. That interpreting t^ie Articles of Agreement of April 10, 1959, *500in accordance with the intentions of the parties as therein expressed and in the light of all of the facts and circumstances surrounding the negotiations for and execution of prior and subsequent agreements, no agreement can be found between Respondent and Petitioner which requires the arbitration of grievances arising out of or based upon the contracting out of transportation work.
”3. An order compelling Respondent to proceed with the arbitration of the grievance dated December 27, 1960, would have the effect of modifying or extending the terms and conditions of said Articles of Agreement dated April 10, 1960 [sic], which is specifically prohibited by the terms of said Articles of Agreement.”