US Bulk Carriers, Inc. v. Arguelles/Concurrence Harlan

by John Marshall Harlan II

United States Supreme Court

400 U.S. 351

US Bulk Carriers, Inc.  v.  Arguelles

 Argued: Nov. 12, 1970. --- Decided: Jan 13, 1971

Mr. Justice HARLAN, concurring.

I join in the opinion and judgment of the Court, but deem it advisable to add some thoughts of my own.

* I do not think that the mere provision by federal statute of a judicial forum for enforcement of the wage claims of a subclass of workers forecloses application of the arbitration principles of Textile Workers Union of America v. Lincoln Mills of Alabama, 353 U.S. 448, 77 S.Ct. 912, 1 L.Ed.2d 972 (1957), and Republic Steel Corp. v. Maddox, 379 U.S. 650, 85 S.Ct. 614, 13 L.Ed.2d 580 (1965); nor do I understand the Court's opinion today to so hold. In Smith v. Evening News Ass'n, 371 U.S. 195, 83 S.Ct. 267, 9 L.Ed.2d 246 (1962), we held that a suit in the state courts by an individual employee charging employer discrimination in violation of the collective-bargaining agreement was not foreclosed by the availability of an unfair labor practice proceeding before the National Labor Relations Board based on the same conduct. There we explicitly noted the absence of a geievance arbitration provision in the contract which had to be exhausted before recourse could be had to the courts. Id., at 196 n. 1, 83 S.Ct., at 268. Later, in Republic Steel Corp. v. Maddox, supra, at 652, 85 S.Ct., at 616, we cited this portion of Smith as support for the broadly stated proposition that '(a)s a general rule in cases to which federal law applies, federal labor policy requires that individual employees wishing to assert contract grievances must attempt use of the contract grievance procedure agreed upon by employer and union as the mode of redress.' (Emphasis omitted.) Maddox held that an employee was compelled to exhaust contractual grievance machinery as a prelude to commencing a § 301 suit on the contract in the state court. Finally, in Carey v. Westinghouse Electric Corp., 375 U.S. 261, 84 S.Ct. 401, 11 L.Ed.2d 320 (1964), we held that a union could compel an employer to arbitrate a contractual grievance arising out of events which also might support proceedings before the NLRB for either an unfair labor practice under § 8(a)(5) of the National Labor Relations Act, as amended, or a petition clarifying the union's representation certificate under § 9(c)(1). See also Old Dutch Farms, Inc. v. Milk Drivers and Dairy Emp. Local Union No. 584, Intern. Broth. of Teamsters, etc., 243 F.Supp. 246 (E.D.N.Y.1965); United States Steel Corp. v. Seafarers' Intern. Union of North America, etc., 237 F.Supp. 529 (ED Pa. 1965). See generally Vaca v. Sipes, 386 U.S. 171, 183-184, 87 S.Ct. 903, 913-914, 17 L.Ed.2d 842 (1967).

Smith, Carey, and Maddox together evince the fundamental role arbitration plays in implementing national labor relations policy. They also evince the crucial role of the federal judiciary in forging the proper relationships among available arbitral, administrative, and judicial forums for vindicating contractual and statutory rights of employers, unions, and employees. In light of these cases, I cannot infer, from the mere provision by Congress of a federal judicial forum for enforcement of the wage claims of a subclass of workers' wages, that this Court is foreclosed from requiring arbitration under the collective-bargaining contract.

But in forging this relationship among potentially competing forums for the effectuation of contractual and statutory rights of individuals and organizations, we have always proceeded with close attention to the policies underpinning both the duty to arbitrate and the provision by Congress of rights and remedies in alternative forums. This Court has always recognized that the choice of forums inevitably affects the scope of the substantive right to be vindicated before the chosen forum. In particular, where arbitration is concerned, the Court has been acutely sensitive to these differences. Thus, in Wilko v. Swan, 346 U.S. 427, 74 S.Ct. 182, 98 L.Ed. 168 (1953), the Court faced a conflict between congressional policy favoring arbitration, as manifested in § 3 of the United States Arbitration Act, 9 U.S.C. § 3, and congressional policy favoring protection of securities purchasers from fraud, as manifested in § 12(2) of the Securities Act of 1933, 48 Stat. 84, 15 U.S.C. § 77l(2). The Court carefully analyzed the impact which remission to arbitration would have on the scope of the substantive federal right involved in that case and concluded that conflicting congressional goals would best be served by construing the nonwaiver provisions of the Securities Act ^[1] as applying to the choice of a judicial forum as well as the substance of the Act's protection. See Wilko v. Swan, supra, at 434-439, 74 S.Ct. at 186-189. Central to the process of reconciliation in that case was the recognition that the effectiveness of any proarbitration policy is dependent, in the first instance, on a limited scope of judicial review of the arbitrator's determination.

And in Bernhardt v. Polygraphic Co., 350 U.S. 198, 76 S.Ct. 273, 100 L.Ed. 199 (1956), in holding that state law controlled on the question of reference to arbitration in a diversity suit brought in a federal court, the Court offered the following considerations on the impact which reference to arbitration has on the scope of the substantive right:

'The nature of the tribunal where suits are tried is an important part of the parcel of rights behind a cause of action. The change from a court of law to an arbitration panel may make a radical difference in ultimate result. * * * Arbitrators do not have the benefit of judicial instruction on the law; that need not give their reasons for their results; the record of their proceedings is not as complete as it is in a court trial; and judicial review of an award is more limited than judicial review of a trial-all as discussed in Wilko v. Swan * * *.' 350 U.S., at 203, 76 S.Ct., at 276, 100 L.Ed. 199.

Normally, the impact on the substantive right resulting from the decision to remit the individual to the arbitral forum is acceptable because the parties themselves have consented to that forum. Compare Atkinson v. Sinclair Refining Co., 370 U.S. 238, 82 S.Ct. 1318, 8 L.Ed.2d 462 (1962), with Drake Bakeries v. Local 50, American Bakery Workers, 370 U.S. 254, 82 S.Ct. 1346, 8 L.Ed.2d 474 (1962). And, with respect to the individual employee seeking to bypass the arbitral forum in a suit brought 'simply on the contract,' see Maddox, supra, 379 U.S., at 657, 85 S.Ct., at 618, the fact that his substantive rights derive solely from the contract, and that he owes those rights to the actions of his union representative in the collective-bargaining process, warrants the extension of the boundaries of collective consent to his individual remedial preferences. A suit simply on the contract to enforce contractual grievances is the normal labor arbitration situation, 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 attempted to implement the procedures and found them so.' Maddox, supra, 379 U.S., at 653, 85 S.Ct., at 616. In Maddox, we laid out in full the strong policy concerns which support exclusivity in the arbitral forum, supra, at 653-656, 85 S.Ct., at 616-617, 618, and then expressly noted the absence of countervailing positive reasons where the suit was simply on the contract, supra, at 657, 85 S.Ct., at 618. It is this state of affairs that supports the presumption of comprehensiveness underpinning this Court's § 301 labor arbitration doctrines. Maddox, supra, 379 U.S., at 657, 85 S.Ct., at 618.

Arguelles' suit, unlike Maddox's suit, is not 'simply on the contract'; he invokes the court's jurisdiction seeking, in addition to the overtime wages allegedly due him under the collective-bargaining agreement, a statutory claim for refusal or neglect to pay his wages according to the timetable prescribed in 46 U.S.C. § 596 'without sufficient cause.' In this circumstance, the presumption of comprehensiveness of the arbitral remedy is, in my view, rebutted.

But, of course, the policies underpinning Maddox are still relevant to the process of forging relationships among potentially competing forums in this case. Here, as in Maddox, the union's status as exclusive bargaining representative will most certainly be bolstered by requiring the employee to vindicate both his contractual and statutory rights in the arbitral forum. Supra, at 653, 85 S.Ct., at 616-617. And, even more importantly, here as in Maddox, the availability of an alternative forum for vindicating both statutory and contractual rights allegedly abridged in the same transaction cuts significantly into the desirability of the arbitral forum from the employer's negotiating viewpoint. Maddox, supra, at 656-657, 85 S.Ct., at 618. But, in the present context, it is crucial to recognize that these policy considerations underpinning arbitration argue, not merely for reference to the arbitrator as a matter of prior exhaustion of internal organizational remedies, but also for extremely limited judicial review of the arbitrator's decision. Indeed, this Court's decisions in the Steelworkers Trilogy make very clear that the scope of judicial review of the arbitrator's judgment where matters of contract rights are concerned is limited to a threshold determination of the arbitrability of the dispute. United Steelworkers of America v. American Mfg. Co., 363 U.S. 564, 80 S.Ct. 1343, 4 L.Ed.2d 1403 (1960); United Steelworkers of America v. Warrior & Gulf Navigation Co., 363 U.S. 574, 80 S.Ct. 1347, 4 L.Ed.2d 1409 (1960); United Steelworkers of America v. Enterprise Wheel & Car Corp., 363 U.S. 593, 80 S.Ct. 1358, 4 L.Ed.2d 1424 (1960). The extreme limitation of judicial review, and the expansive reading of consent, are both important to the task of effectuating national labor policy; both are legitimized, in my view, by the derivation of the individual's substantive legal right from the collective-bargaining agreement.

Where, however, the § 301 dispute implicates federal statutory rights, it is incumbent upon this Court to fashion the relationships among forums according to an analysis of the policies underpinning both § 301 and the federal statute the employee invokes, rather than simply transposing ipso facto the Court's labor arbitration jurisprudence. Thus, in the analogous situation where the disputed transaction implicates both contractual rights and rights enforceable in NLRB proceedings, we do not simply assume that because the dispute involves a contract grievance, and the contract contains a typically broad arbitration provision, remission to arbitration on the presumption of consent combined with virtually no judicial review-follows automatically. Rather, the Court takes account of the views of the NLRB, as the agency charged with enforcement of the substantive statutory right in question, on the difficult issue whether the interests of national labor policy, as manifested both in § 301 and the unfair labor practice provision, will best be served by remission to arbitration. See, e.g., Carey v. Westinghouse Electric Corp., 375 U.S., at 271-272, 84 S.Ct., at 408-409; Smith v. Evening News Ass'n, 371 U.S., at 197-198, 83 S.Ct., at 268-269.

Here Seaman Arguelles seeks to vindicate a federal statutory right to prompt payment of wages due him. His original complaint stated a cause of action under 46 U.S.C. § 596, which provides as follows:

'The master of 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 a 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 before the court * * *.'

These provisions of Title 46 derive from § 6 of the Act of July 20, 1790; see 1 Stat. 133. Also derived from § 6 of the original Act is 46 U.S.C. § 597, providing for part payment of wages earned during interim stops in port for the discharge of cargo. ^[2] Sections 596 and 597 go beyond the mere provision of a federal judicial forum for vindication of a worker's wage claims; they represent a congressional policy to secure to the individual seaman the prompt payment of his wages ^[3] as part of a broader protective and remedial scheme intended for the benefit of seamen. See Isbrandtsen Co. v. Johnson, 343 U.S. 779, 784-786, 72 S.Ct. 1011, 1015-1016, 96 L.Ed. 1294 (1952). This legislation, though antedating the emergence of modern collective-bargaining institutions, must be taken to represent a continuing congressional policy to protect seamen as individual laborers.

In the instant case, remission to arbitration under the usual assumption concerning the scope of judicial review would mean that a denial of the grievance without any explanation on the arbitrator's part would have to stand. Given the assumption concerning scope of judicial review, the seaman's statutory right to double wages in the event of failure, 'without sufficient cause' to pay promptly within the meaning of § 596 is, as a practical matter, subject to the unreviewable discretion of the arbitrator.

But the usual assumption concerning judicial review need not necessarily obtain in situations of this sort, any more than the usual assumptions concerning the boundaries of the individual's consent to the actions of his bargaining representative in agreeing to the broad arbitration provision need necessarily obtain. Two possibilities suggest themselves: the arbitrator's award might be reviewable to some unspecified extent, to ascertain whether the rights under §§ 596 and 597 have been adequately protected, or the claim may, in some fashion, be split, either by declining jurisdiction at the outset over the contract portion of the litigation, or by utilizing the various devices of abstention. Cf., e.g., United States Steel Corp. v. Seafarers' Intern. Union of North America, etc., 273 F.Supp. 529 (ED Pa.1965). As an abstract proposition, both options have the undesirable consequence of cutting substantially into the very exclusivity of the contractual forum which we said in Maddox is important to effectuation of the national labor policy favoring arbitration. See Maddox, supra, 379 U.S., at 653, 85 S.Ct., at 616 617. And the difficulties of analyzing the respective boundaries of the contractual right and the statutory right forbode ill for the efficient resolution of disputes implicating both the contract right and the federal statutory right. But the matter is not one to be decided abstractly; it may well be that certain types of federal statutory benefits will lend themselves to arbitration or splitting without an unacceptable sacrifice in competing policy interests.

However, this is not such a statute, because the very essence of the legislative policy at stake here is ensuring promptness in the payment of wages. I think it obvious that the least desirable of all solutions would be to create a necessity for suits in both forums. In this circumstance, I think conflicting congressional policies are best reconciled by construing 46 U.S.C. § 596 and § 301 of the Labor-Management Relations Act as securing to the seaman an option to choose between arbitral and judicial forums where he states a claim under both the contract and 46 U.S.C. § 596.

Mr. Justice WHITE, with whom Mr. Justice BRENNAN, Mr. Justice STEWART, and Mr. Justice MARSHALL join, dissenting.

Notes

1. Section 14 of the Securities Act of 1933, 15 U.S.C. § 77n, provides:
2. Arguelles attempted to amend his complaint prior to the summary judgment hearing to state a complaint under 46 U.S.C. § 597 as well as § 596. The court refused the proffered amendment pending its ruling on the summary judgment motion. Brief for Respondent 7 n. 4.
3. In Collie v. Fergusson, 281 U.S. 52, 55, 50 S.Ct. 189, 191, 74 L.Ed. 696 (1930), in discussing what constitutes sufficient cause for delay in payment under § 596, the Court noted that 'the evident purpose of the section (is) to secure prompt payment of seamen's wages * * * and thus to protect them from the harsh consequences of arbitrary and unscrupulous action of their employers, to which, as a class, they are peculiarly exposed.'