Court Opinion

ID: 9469723
Source: CourtListenerOpinion
Date Created: 2023-08-05 02:47:25.613888+00
Date Added: 2024-06-11T17:41:31.852400
License: Public Domain

LUMBARD, Circuit Judge,
dissenting:
I would reverse the judgment of the district court and vacate the award of the arbitrator; Sheepshead Nursing Home was under no obligation to arbitrate Bennett’s discharge. The agreement, which included an arbitration provision, became null and void as to Sheepshead Nursing Home on October 31,1981. The arbitration provision could have no after-life to require arbitra*896tion of a discharge which occurred thereafter on January 7, 1982.
Sheepshead Nursing Home was a member of the Greater New York Health Care Facilities Association, Inc., a multi-employer group, which, on April 1, 1978 signed a contract with Local 144, for three years ending March 31, 1981. The contract is an elaborate, carefully drawn 39-page agreement; Section 32 of which allowed any member of the Association to withdraw and free itself of any contractual obligation in these words:
32. INDEPENDENT CONTRACTS
If the membership in the Association of any nursing home consenting hereto is terminated for any reason whatsoever, this agreement shall become null and void to such Employer.
Neither in Section 32 or elsewhere is there any requirement that an employer give any notice of withdrawal. The only notice requirement (Section 33) is that the Association give 24-hour notice to the Local if it chooses to terminate the contract as to all employers after March 31, 1981.
On October 10, 1980 Sheepshead sent a letter to Peter Ottley, president of Local 144, advising the union that it was withdrawing from the Association effective October 31, 1981 and that by its terms the contract would then be null and void as to Sheepshead. It concluded: “We hereby recognize our obligations toward your labor organization and seek a discussion for the purpose of executing a new collective bargaining agreement.” By letter of November 3, 1980 Sheepshead repeated its willingness to bargain; to which the union made no response.
On January 7, 1981, sixty-nine days after its withdrawal from the Association, Sheepshead discharged Trevor Bennett, an employee and union shop steward. Although section 8(H) of the contract required the union to file its grievance within 15 days of the discharge, the union did not demand arbitration until February 12,1981.
Sheepshead, contending that there was no longer any obligation to arbitrate such a dispute, moved in the New York Supreme Court, on March 2,1981, to stay arbitration. The union moved the case to the district court where, on June 9,1981, Judge Cannella denied a stay. He read the Supreme Court’s decision in Nolde Brothers, Inc. v. Local 358, 430 U.S. 243, 97 S.Ct. 1067, 51 L.Ed.2d 300 (1977) as holding that all post-contract grievances are arbitrable so long as the request for arbitration is filed within a reasonable time — -a sweeping rule of law which goes beyond anything suggested in the three opinions we filed today. After filing a notice of appeal from Judge Cannella’s ruling, Sheepshead withdrew its appeal without prejudice because of the rule in this circuit that the denial of a stay of arbitration is not appealable. Greater Continental Corp. v. Schechter, 422 F.2d 1100 (2d Cir. 1970).
When arbitration commenced, Sheepshead argued to the arbitrator that he lacked jurisdiction to hear the case. The arbitrator, however, ruled that he did have jurisdiction because the employer had failed to give notice of termination as required by § 8(d) of the National Labor Relations Act, 29 U.S.C. § 158(d) (1976), and that accordingly the contract continued in effect.1
On this appeal, the dispositive question is whether the district court should have stayed arbitration. Under the terms of the contract, the employer could withdraw from the Association. When it did so, the contract became null and void as to the withdrawing employer. On its face, the contract required no notice of withdrawal and no one in this case — not Judge Cannella, not the arbitrator, and neither of my colleagues — has held that the contract does require any specific period of notice. Indeed, no one in this case has held that the contract under its own provisions continued to bind Sheepshead once Sheepshead’s withdrawal rendered the contract null and void as to it. If null and void mean anything, it *897means that nothing under the contract survived, including the § 8 grievance procedures of the contract.
I would hold that the duty to arbitrate survives termination of a contract only as to rights vesting or grievances which had occurred before the contract was terminated. The Supreme Court in Nolde Bros., in holding that the employer’s duty to arbitrate survived termination of the contract, relied heavily on the fact that the union there sought to arbitrate vested rights. Our decisions go no further. Both McAllister Bros., Inc. v. A & S Transportation Co., 621 F.2d 519 (2d Cir. 1980) and Rochdale Village, Inc. v. Public Service Employees Union, 605 F.2d 1290 (2d Cir. 1979) ordered arbitration of matters which concerned rights and events pre-dating termination of the respective contracts.
My colleagues are of the view that somehow the arbitration provision of the contract survives though the rest be null and void. Viewed realistically, their opinions are testimony to the fact that, in this circuit, once a district judge sends a case to arbitration, the court of appeals will do almost anything to uphold the arbitrator’s award — thus making not only the arbitrator’s award, but the district judge’s decision, effectively unreviewable.2
Chief Judge Feinberg would hold that the duty to arbitrate continues indefinitely after termination so long as a “colorable claim” can be made that the termination was not successful. I find no authority for the “colorable claim” standard. We do not enforce other contracts merely because litigants make a “colorable claim” that the contracts are in force, and the Chief Judge gives no reason why we should enforce arbitration agreements upon such a slim reed. As matters now stand in this circuit, Local 144 could wait an unlimited period of time to bring its “colorable claim” that the contract was not terminated, and it could still force arbitration. See International Union of Op. Engineers v. Flair Builders, Inc., 406 U.S. 487, 491-92, 92 S.Ct. 1710, 1712-1713, 32 L.Ed.2d 248 (1972).
Judge Newman, while concurring in the “colorable claim” standard, also adopts the arbitrator’s ruling that Sheepshead’s failure to give notice under § 8(d) of the National Labor Relations Act, 29 U.S.C. § 158(d) (1976), kept in effect the contract to arbitrate. In my view, § 8(d) has no application to this discharge case. Section 8(d) states that a labor contract continues “without strike or lockout” for 90 days after notice that a contract has been terminated. But § 8(d) regulates unfair labor practices, not contracts. Both the National Labor Relations Board, see United States Gypsum Co., 90 N.L.R.B. 964, 968 n. 11 (1950), and this court, see Procter & Gamble Independent Union v. Procter & Gamble Mfg. Co., 312 F.2d 181, 189 (2d Cir. 1962), cert. denied, 374 U.S. 830, 83 S.Ct. 1872, 10 L.Ed.2d 1053 (1963), have indicated that failure to give notice under § 8(d) does not extend contractual obligations. The Supreme Court, though it has not ruled on this precise question, has held that a union may strike during a contract notwithstanding § 8(d). NLRB v. Lion Oil Co., 352 U.S. 282, 77 S.Ct. 830, 1 L.Ed.2d 331 (1957). Lion Oil reasoned that § 8(d) neither creates a contractual duty to strike, nor creates a contractual duty to bargain. Those duties must be found in the contract; the statute does not put them there. Id. at 290-91, 77 S.Ct. at 334-335. Thus, it follows that § 8(d) creates no contractual duty to give notice of termination.
We have no authority to enforce violations of § 8(d). San Diego Building Trades Council v. Garmon, 359 U.S. 236, 79 S.Ct. 773, 3 L.Ed.2d 775 (1959). So long as a *898contract provides for termination without notice, an employer may terminate and the next day fire all its employees, so far as its contractual obligations are concerned. The employer may have violated § 8(d) but it is not liable for damages. If it cannot be forced to pay damages for breach of contract, how can it be required to go to arbitration under the contract? If Sheepshead could fire its employees after October 31, 1980, without liability under the contract, how can it be required thereafter to arbitrate a grievance which did not occur until after that date?
Our deference to arbitrators has gone beyond the bounds of common sense. I cannot understand the process of reasoning by which any court can leave to the unfettered discretion of an arbitrator the determination of whether there is any duty to arbitrate. I am even more mystified that a court could permit such unrestrained power to be exercised by the very person who will profit by deciding that an obligation to arbitrate survives, thus ensuring his own business. It is too much to expect even the most fair-minded arbitrator to be impartial when it comes to determining the extent of his own profit. We do not let judges make decisions which fix the extent of their fees, see Tumey v. Ohio, 273 U.S. 510, 47 S.Ct. 437, 71 L.Ed. 749 (1927). How, then, can we shut our eyes to the obvious self-interest of an arbitrator? See Paul R. Hays, Labor Arbitration, A Dissenting View 52 (1966).
It has become the fashion for courts to encourage and foster the use of arbitration as a more expeditious and inexpensive means of settling disputes, particularly as the pressure of mounting judicial caseloads is thereby reduced. No one can doubt that the public interest is generally served when parties to disputes agree upon such means for their resolution. But if a simple and clear agreement, such as we have here, is construed to impose an obligation without limit of time, contrary to what any sensible employer would suppose, prudent employers will resist agreeing to arbitration in any form. Nor does it promote the salutary cause of arbitration for a court to enforce an award by an arbitrator, no matter how wrongheaded — to “stand idly by and let [the] court system be used as the handmaiden” of arbitration. P. Hays, Labor Arbitration, supra, at 118.
I had thought that our refusal to hear an appeal from a denial of a stay of arbitration is based on the belief that meaningful view may later be obtained, if necessary, upon the proceeding to confirm the award. Greater Continental Corp., supra, 422 F.2d at 1102; see Note, Interlocutory Appeal of Orders Granting or Denying Stays of Arbitration, 80 Mich.L.Rev. 153, 165, 172 (1981) (orders denying stays of arbitration do not threaten irreparable harm and therefore do not warrant immediate appeal). But if arbitrators’ decisions are immune from review, as my colleagues’ opinions suggest, then we should reconsider Greater Continental Corp. and allow immediate appeal from denials of stays.3 This case indicates that if parties cannot challenge arbitrability before arbitration occurs, they will never get meaningful review.
I would reverse and vacate the arbitration award.

. Sheepshead also protested to the arbitrator that the Union failed to file its grievance within 15 days of the discharge, as required by § 8(H) of the contract. The arbitrator did not even mention this contractual limitation in his decision.

. Chief Judge Feinberg’s opinion shows the difficulty in obtaining review of the district judge’s decision to send the matter to arbitration. Part II of his opinion commences by questioning whether the arbitrator abused his discretion and concludes that Judge Cannella was correct in sending the matter to the arbitrator. The issue in this case — when does the duty to arbitrate terminate? — is dealt with only by an aside that the union must assert a “color-able claim” that the contract is still in force in order to compel arbitration. Neither the district court nor the arbitrator found the union had made such a “colorable claim” under the contract, as both imposed the duty to arbitrate on non-contractual legal theories — Nolde Bros. and § 8(d), both of which, in my opinion, have no application here.

. The Ninth Circuit allows appeals from denials of stays. See Power Replacements, Inc. v. Air Preheater Co., 426 F.2d 980, 982-83 (9th Cir. 1970).