United Steelworkers of America v. American Manufacturing Company/Opinion of the Court

United States Supreme Court

363 U.S. 564

UNITED STEELWORKERS OF AMERICA, Petitioner,  v.  AMERICAN MANUFACTURING CO.

 Argued: April 27, 1960. --- Decided: June 20, 1960

This suit was brought by petitioner union in the District Court to compel arbitration of a 'grievance' that petitioner, acting for one Sparks, a union member, had filed with the respondent, Sparks' employer. The employer defended on the ground (1) that Sparks is estopped from making his claim because he had a few days previously settled a workmen's compensation claim against the company on the basis that he was permanently partially disabled, (2) that Sparks is not physically able to do the work, and (3) that this type of dispute is not arbitrable under the collective bargaining agreement in question.

The agreement provided that during its term there would be 'no strike,' unless the employer refused to abide by a decision of the arbitrator. The agreement sets out a detailed grievance procedure with a provision for arbitration (regarded as the standard form) of all disputes between the parties 'as to the meaning, interpretation and application of the provisions of this agreement.' ^[1]

The agreement reserves to the management power to suspend or discharge any employee 'for cause.' ^[2] It also contains a provision that the employer will employ and promote employees on the principle of seniority 'where ability and efficiency are equal.' ^[3] Sparks left his work due to an injury and while off work brought an action for compensation benefits. The case was settled, Sparks' physician expressing the opinion that the injury had made him 25% 'permanently partially disabled.' That was on September 9. Two weeks later the union filed a grievance which charged that Sparks was entitled to return to his job by virtue of the seniority provision of the collective bargaining agreement. Respondent refused to arbitrate and this action was brought. The District Court held that Sparks, having accepted the settlement on the basis of permanent partial disability, was estopped to claim any seniority or employment rights and granted the motion for summary judgment. The Court of Appeals affirmed, 264 F.2d 624, for different reasons. After reviewing the evidence it held that the grievance is 'a frivolous, patently baseless one, not subject to arbitration under the collective bargaining agreement.' Id., at page 628. The case is here on a writ of certiorari, 361 U.S. 881, 80 S.Ct. 152, 4 L.Ed.2d 118.

Section 203(d) of the Labor Management Relations Act, 1947, 61 Stat. 154, 29 U.S.C. § 173(d), 29 U.S.C.A. § 173(d), states, 'Final adjustment by a method agreed upon by the parties is hereby declared to be the desirable method for settlement of grievance disputes arising over the application or interpretation of an existing collective-bargaining agreement. * * *' That policy can be effectuated only if the means chosen by the parties for settlement of their differences under a collective bargaining agreement is given full play.

A state decision that held to the contrary announced a principle that could only have a crippling effect on grievance arbitration. The case was International Ass'n of Machinists v. Cutler-Hammer, Inc., 271 App.Div. 917, 67 N.Y.S.2d 317, affirmed 297 N.Y., 519, 74 N.E.2d 464. It held that 'If the meaning of the provision of the contract sought to be arbitrated is beyond dispute, there cannot be anything to arbitrate and the contract cannot be said to provide for arbitration.' 271 App.Div. at page 918, 67 N.Y.S.2d at page 318. The lower courts in the instant case had a like preoccupation with ordinary contract law. The collective agreement requires arbitration of claims that courts might be unwilling to entertain. In the context of the plant or industry the grievance may assume proportions of which judges are ignorant. Yet, the agreement is to submit all grievances to arbitration, not merely those that a court may deem to be meritorious. There is no exception in the 'no strike' clause and none therefore should be read into the grievance clause, since one is the quid pro quo for the other. ^[4] The question is not whether in the mind of the court there is equity in the claim. Arbitration is a stabilizing influence only as it serves as a vehicle for handling any and all disputes that arise under the agreement.

The collective agreement calls for the submission of grievances in the categories which it describes, irrespective of whether a court may deem them to be meritorious. In our role of developing a meaningful body of law to govern the interpretation and enforcement of collective bargaining agreements, we think special heed should be given to the context in which collective bargaining agreements are negotiated and the purpose which they are intended to serve. See Lewis v. Benedict Coal Corp., 361 U.S. 459, 468, 80 S.Ct. 489, 495, 4 L.Ed.2d 442. The function of the court is very limited when the parties have agreed to submit all questions of contract interpretation to the arbitrator. It is confined to ascertaining whether the party seeking arbitration is making a claim which on its face is governed by the contract. Whether the moving party is right or wrong is a question of contract interpretation for the arbitrator. In these circumstances the moving party should not be deprived of the arbitrator's judgment, when it was his judgment and all that it connotes that was bargained for.

The courts, therefore, have no business weighing the merits of the grievance, ^[5] considering whether there is equity in a particular claim, or determining whether there is particular language in the written instrument which will support the claim. The agreement is to submit all grievances to arbitration, not merely those which the court will deem meritorious. The processing of even frivolous claims may have therapeutic values of which those who are not a part of the plant environment may be quite unaware. ^[6]

The union claimed in this case that the company had violated a specific provision of the contract. The company took the position that it had not violated that clause. There was, therefore, a dispute between the parties as to 'the meaning, interpretation and application' of the collective bargaining agreement. Arbitration should have been ordered. When the judiciary undertakes to determine the merits of a grievance under the guise of interpreting the grievance procedure of collective bargaining agreements, it usurps a function which under that regime is entrusted to the arbitration tribunal.

Reversed.

Notes

1. The relevant arbitration provisions read as follows:
2. 'The Management of the works, the direction of the working force, plant layout and routine of work, including the right to hire, suspend, transfer, discharge or otherwise discipline any employee for cause, such cause being: infraction of company rules, inefficiency, insubordination, contagious disease harmful to others, and any other ground or reason that would tend to reduce or impair the efficiency of plant operation; and to lay off employees because of lack of work, is reserved to the Company, provided it does not conflict with this agreement. * * *'
3. This provision provides in relevant part:
4. Cf. Structural Steel & Ornamental Iron Ass'n. v. Shopmens Local Union, D.C., 172 F.Supp. 354, where the employer sued for breach of the 'no strike' agreement.
5. See New Bedford Defense Products Division v. Local No. 1113, 1 Cir., 258 F.2d 522, 526.
6. Cox, Current Problems in the Law of Grievance Arbitration, 30 Rocky Mt.L.Rev. 247, 261 (1958) writes:

'The typical arbitration clause is written in words which cover, without limitation, all disputes concerning the interpretation or application of a collective bargaining agreement. Its words do not restrict its scope to meritorious disputes or two-sided disputes, still less are they limited to disputes which a judge will consider two-sided. Frivolous cases are often taken, and are expected to be taken, to arbitration. What one man considers frivolous another may find meritorious, and it is common knowledge in industrial relations circles that grievance arbitration often serves as a safety valve for troublesome complaints. Under these circumstances it seems proper to read the typical arbitration clause as a promise to arbitrate every claim, meritorious or frivolous, which the complainant bases upon the contract. The objection that equity will not order a party to do a useless act is outweighed by the cathartic value of arbitrating even a frivolous grievance and by the dangers of excessive judicial intervention.'