This case, together with two others also decided today, Newspaper Guild of Boston v. Boston Herald-Traveler Corp., 1 Cir.,
Plaintiff-appellant is an unincorporated labor organization representing employees of defendant Company at a plant in Ashland, Mass., which is, without dispute, in an industry affecting commerce, within the meaning of the Act. Article XII of the collective bargaining agreement in effect between the parties at the relevant dates established a conventional four-step procedure for adjustment of employеe grievances between the Union and the Company, by which negotiation was to continue at progressively higher levels if an agreement was not reached. Article XIII provided:
“1. Any matter involving the application or interpretation of any provisions of this Agreement which shall not include a matter involving establishing of wage rates, general increases or production standards may be submitted to arbitration by either the Union or the Company. * * *”
The Article required written notice of intention to submit an unresolved grievance to arbitration within 30 days after the decision rendered in step 4 of the grievance procedure, and it went on to describe certain procedural matters and restrictions on the scope of the arbitrator's authority. He was limited, in so far as relevant here, to “interpretation, application, or determining compliance with the provisions of this Agreement but he shall have no authority to add to, detract from, or in any way alter the provisions of this Agreement.”
Two griеvances filed by the Union in 1954 are the subject of its present suit. One involved a dispute over whether an employee named Boiardi was employed in a certain job classification carrying a higher rate of pay than he in fact was receiving; the other involved the propriety of the discharge of an employee named Armstrong for re-fusing to clean certain machines when he asserted that such work was in addition to his regular duties. After unsuccessfully prosecuting these matters through the procedure of Art. XII, the Union duly notified the Company in each case of its desire to arbitrate, but the Company refused to submit to arbitration either the merits of the two grievances or the disputed issue of whether they were arbitrable under the provisions of Art. XIII first quoted above. The Union then filed its complaint in the district court, alleging jurisdiction under § 301. It sought as to each of the grievance cases an order “that defendant be required specifically to perform its agreement to arbitrate” and damages. After the district court granted a motion to strike the claims for equitable relief, the amended complaint was again amended to eliminate the damage claims. This was done so that no question could be raised as to the appealability of the decision. Plaintiff’s appeal is properly here, under 28 U.S.C. § 1291, from the final order of April 27, 1955, which dismissed the complaint for want of jurisdiction, the district judge being of the view that he was forbidden by the Norris-LaGuardia Act, 47 Stat. 70, 29 U.S. C.A. § 101 et seq., from issuing the requested order to compel arbitration of the two disputes. See
I.
In any case where equitable relief in some form is sought in the context of a controversy involving labor relations, a federal court must inquire whether the Norris-LaGuardia Act has withdrawn the jurisdiction of the district court to grant the desired remedy. See W. L. Mead, Inc., v. International Brotherhood of Teamsters, 1 Cir., 1954,
In recognition of this situation,, it has sometimes been argued that a suit to remedy a breach of contract does not, involve or grow out of a “labor dispute.”' This argument cannot be accepted, in the face of the sweeping definitions of § 13,, which set the scope of the Norris-LaGuardia Act. 47 Stat. 73. Any controversy between an employer and a union “concerning terms or conditions of employment” is included, “and no less so.
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because the dispute is one that may be resolved or determined on its merits by reference to the terms of a collective bargaining agreement.” W. L. Mead, Inc., v. International Brotherhood of Teamsters, supra,
Nevertheless, it is our conclusion that jurisdiction to compel arbitration is not withdrawn by the Norris-LaGuardia Act. Although the present controversy is a “labor dispute” within the scope of the Aсt as defined in § 13, the relief sought is not the “temporary or permanent injunction” against whose issuance the formidable barriers of § 7 are raised. Of course, the label used to describe the judicial command is not controlling. We would not rest by saying that an order to arbitrate is a “decree for specific performance” in contradistinction to a “mandatory injunction,” for each term has been attached so frequently to this type of relief that neither can be rejected out of hand as an inappropriate characterization of it. But see 2 Pomeroy, Equitable Remedies § 2057 (2d ed. 1919). For reasons to be developed below, we believe that the “injunction” at which § 7 was aimed is the traditional “labor injunction,” typically an order which prohibits or restricts unilateral coercive conduct of either party to a labor dispute. E. g., Alcoa S. S. Co., Inc., v. McMahon, D.C.S.D.N.Y. 1948,
It should be noted in passing that the Supreme Court has recently reaffirmed its ruling that an order
denying
a stay of an action for damages in favor of arbitration is “refusal of an ‘injunction’ under” 28 U.S.C. § 1292. Baltimore Contractors, Inc. v. Bodinger, 1955,
It is significant, while still at the verbal level, that within the Norris-LaGuardia Act itself a distinction is made in the breadth of the bars imposed on equitable relief. The sections that might be relevant here all deny jurisdiction to issue an “injunction”, §§ 4, 5, 7, 9, 10, or “injunctive relief”, § 8. In contrast is § 3, where the so-called “yellow dog contract” is declared to be not enforceable in the federal courts by “the granting of legal or equitable relief”. Congress might have more broadly withdrawn all “equitable relief” in § 7, and its use instead of the phrase “temporary or permanent injunction”, in view of the clear desire for stringency in this Act, suggests that a narrower intent was deliberate.
More significant is the fact that the Norris-LaGuardia Act has been interpreted as not even withdrawing all “injunctive relief.” Virginian Ry. Co. v. System Federation No. 40, 1937,
Basically, it is the language and background of the Norris-LaGuardia Act itself which point to the conclusion that the restrictions of § 7 do not have to be met as a prerequisite to jurisdiction to grant an order compelling arbitration. Section 7 requires certain preliminary allegations and findings: a threat of unlawful acts leading to substantial injury to property, greater injury to complainant in denying relief than to defendants in granting it, and the inability of the public officials charged with protection of property to furnish adequate protection. Procedural requirements include notice to said public officials and an undertaking for reimbursеment by complainant and a surety. These provisions were obviously aimed to limit injunctions to cases involving violent or destructive acts. See also § 9. The enumerated requisites, which draw a logical line in relation to union conduct in strikes and picketing (and perhaps to some employer activities), are not at all compatible with the situation where one party merely demands that the other be compelled to arbitrate a grievance in accordance with a contract provision for arbitration, in which latter situation the required findings seldom, if ever, could be made either affirmatively or negatively. They just do not sensibly apply. We do not believe Congress intended § 7 in any case to be a snare and a delusion, holding out the possibility of jurisdiction but demanding for its exercise sworn allegations of inapposite facts.
Congress had no hostility to arbitration as such, as is demonstrated by § 8 of the Norris-LaGuardia Act, which denies injunctive relief to any complainant “who has failed to makе every reasonable effort to settle such dispute * * with the aid of any available governmental machinery of mediation or voluntary arbitration.” See Brotherhood of R. R. Trainmen v. Toledo, P. & W. R. R., 1944,
Many of the cases dealing with demands for equitable enforcement of collective bargaining agreements have simplified the problem of the Norris-LaGuardia Act by use of what was deemed to be the appropriate label—“injunction,” to deny relief, or “specific performance,” to grant it—and they have tended not to distinguish between different types of equitable remedies in this regard. Therefore, we have not been persuaded by such cases denying relief as Associated Telephone Co. v. Communication Workers, supra; International Longshoremen’s and Warehousemen’s Union v. Libby, McNeill & Libby, D.C.D, Hawaii 1953,
Other cases, correct on their own facts, have often been cited, erroneously we think, as authority for denying equitable relief in all circumstances. E.g., Alcoa S.S. Co., Inc., v. McMahon, supra (§ 4 activity, as in the Mead case); Amazon Cotton Mill Co. v. Textile Workers Union, 4 Cir., 1948,
Thus we do not consider that our answer to the Norris-LaGuardia problem was either foreclosed or required by prior authority. It is supported directly by a few cases, one of which, although citing opinions on which we do not rely, aptly summed up the analysis made above: “The general structure, detailed provisions, declared purposes, and legislative history of that statute [Norris-LaGuardia Act] show it has no application to cases where a mandatory injunction is sought to enforce a contract obligation to submit a controversy to arbitration under an agreement voluntarily made.” Textile Wоrkers Union of America v. American Thread Co., D.C.D.Mass.1953,
One final objection to our ruling should be discussed. It has been argued in these cases that no arbitration order could be given against a union under the Norris-LaGuardia Act, and therefore that the concept of mutuality of remedy requires that the same order against the employer be denied. The reply is two-fold. Our ruling herein, that an order to compel arbitration is neither barred specifically by § 4 nor subject to the requirements of § 7, means that such an order could be granted against either party to a labor dispute without violating the Act. The same is true of an order to stay a lawsuit in favor of arbitration. If the union’s breach of an arbitration promise should take the form of a strike, however, our prior holding in the Mead case applies, so that the order to arbitrate could not be accompanied by an injunction against the strike. Continuation of the strike theoretically is not a barrier to an arbitration, although practically it may be, in some cases, either because the employer deems it unfair to arbitrate in the face of a strike or because an arbitrator will not sit in those circumstances. See Cox, “Grievance Arbitration in the Federal Courts,” 67 Harv.L.Rev. 591, 603-606 (1954). But the employer is not without remedies for such a continuing breach, even though the Norris-LaGuardia Act precludes the swift, effective injunctive remedy. See Brotherhood of R. R. Trainmen v. Toledo, P. & W. R. R., supra, 321 U.S. at pages 62-63,
II.
This case is not disposed- of by holding that the Norris-LaGuardia Act does not negative the existence of jurisdiction, for the plaintiff cannot prevail in the end unless there is also an affirmative basis upon which to grant the remedy sought. In view of its disposition of the Norris-LaGuardia issue, the court below did not reach this question. Since it is purely a question of law, and was fully briefed and argued here, we proceed to resolve it in the first instance.
Preliminary to our task, however, is the choice of law problem: In this suit under § 301, do we loоk to federal or state sources to determine the availability of specific enforcement as remedy for breach of a promise to arbitrate? This is the problem largely left open by our second opinion in International Brotherhood of Teamsters, etc., v. W. L. Mead, Inc., 1 Cir.,
Of course, if § 301 created a “generally applicable and uniform federal substantive right”, as well as “a remedy * * * and * * * a forum in which to enforce it”, as the enactment was described in Shirley-Herman Co., Inc., v. International Hod Carriers, etc., Union, 2 Cir., 1950,
If, on the other hand, a federal court in a § 301 case may have to determine at least some substantive issues by reference to state law—which possibly is so—then the problém of choice of law governing the “forms and mode” of enforcing an arbitration agreement must necessarily be faced. Our answer in that event is in accord with the reasoning of Judge Wyzanski in Textile Workers Union of America v. American Thread Co., supra, 113 F.Supp. at pages 141-142, relying on “the traditional rule that the availability of specific performance is a matter not of right, but of remedy, and that like other matters of remedy it is governed by the law of the forum. Red Cross Line v. Atlantic Fruit Co.,
However, we must fit this conclusion into the analysis of arbitration enforcement recently made by the Supreme Court in Bernhardt v. Polygraphiс Co., 1956,
Prior to the Erie decision, it was well accepted that the means for enforcing an arbitration agreement properly fell in the category of remedy or procedure. Red Cross Line v. Atlantic Fruit Co., 1924,
This conclusion drawn from examination of the post-Erie cases is reenforced by recalling that the remedial powers of a federal
court in
a labor controversy are sharply restricted. The many limitations thrown up by provisions of Title 28, by the Norris-LaGuardia Act, and by § 301 itself must be complied with in any event, as the first section of this opinion illustrates. Cf. Guaranty Trust Co. of N. Y. v. York, supra, 326 U.S. at page-105,
*96 III.
This brings us tо the availability and appropriateness, as a federal equitable remedy in a § 301 case, of a decree for specific performance of an agreement to arbitrate. In this connection, we do not forget the historic hostility of the judges, both at common law and in equity, to agreements for the submission of disputes to arbitration, and their manifested unwillingness to give such agreements full effect. Thus, while a valid award was enforceable at law or in equity, failure to satisfy all of the numerous formal or procedural rules would render an award invalid. Specific performance of a submission to arbitration was granted if the submission had been made a rule of court or was limited to subsidiary issues in a lawsuit. But the specific enforcement of arbitration in general was barred by a pair of complementary rules that left nominal damages as the only remedy for breach of the promise to arbitrate : A submission was revocable by either party until the award was rendered; an agreement to submit future disputes to arbitration was invalid as an ouster of the jurisdiction of the courts. See Gregory and Orlikoff, supra at 235-238.
These rules were long embedded in the decisions of the federal, as well as state and English, courts. See Red Cross Line v. Atlantic Fruit Co., supra, 264 U.S. at pages 120-123,
Practical grounds suрport this conclusion. A glance at a typical arbitration statute shows that it lays down procedural specifications for use of the new power to compel arbitration. Topics covered may include requisites of a submission, selection of an arbitrator, procedure and subpoena power for the arbitrator, stay and specific enforcement authority in a court, grounds and procedure for confirming or vacating an award. A court decision could overrule the common law bars to specific enforcement, but could not substitute for them the comprehensive and consistent scheme that legislative action could afford, and which is necessary for effective yet safeguarded arbitration.
A number of courts have held that § 301 itself is a legislative authorization for decrees of specific performance of arbitration agreements. E. g., Textile Workers Union v. American Thread Co., supra; Wilson Bros. v. Textile Workers Union, supra; Local 207, Elec., etc., v. Landers, Frary & Clark, supra; Evening Star Newspaper Co. v. Columbia Typographical Union, D.C.D.C. 1954,
IY.
The federal statute that does contain an integrated system for compelling arbitration is the United States Arbitration Act, first passed in 1925, 43 Stat. 883 and then codified and enacted into positive law as Title 9 of the U.S.Code in 1947, 61 Stat. 669, with one subsequent technical amendment, 68 Stat. 1233.
The structure of the Act is as follows: Section 2, subject to definitions and an exclusion in § 1, provides that:
“A written provision in any maritime transaction or a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction, or the refusal to perform the whole or any part thereof, or an agreement in writing to submit to arbitration an existing controversy arising out of such a contract, transaction, or refusal, shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.”
If a suit is brought in a federal court, and the court “being satisfied that the issue involved in such suit or proceeding is referable to arbitration under such an agreement,” § 3 requires that it “shall on application of one of the parties stay the trial of the action until such arbitration has been had in accordance with the terms of the agreement,” providing the applicant is not in default in proceeding with the arbitration. And specific performance, the remedy sought in the instant case, is authorized in § 4 in these terms:
“A рarty aggrieved by the alleged failure, neglect, or refusal of another to arbitrate under a written agreement for arbitration may petition any United States district court which, save for such agreement, would have jurisdiction under Title 28, in a civil action or in admiralty of the subject matter of a suit arising out of the controversy between the parties, for an order directing that such arbitration proceed in the manner provided for in such agreement.”
That section goes on to detail the procedure for litigating defenses to such an order. Further details of procedure in court and before the arbitrator are given in §§ 6-8, 12-13. As already noted, § 5 provides a method for appointing an arbitrator, where necessary. Finally, §§ 9-11 state the effect of an award and detail the grounds for confirming, vacating, modifying, or correcting an award.
The heart of the Act is contained in §§ 2, 3, 4. Although each of them states its scope in different terms, it has now been authoritatively held that § 2 defines the scope of § 3, on a basis that implicitly reaches § 4, as well. Bernhardt v. Polygraphic Co., supra,
It is not usual terminology to refer to a labor contract as “evidencing a transaction involving commerce”, but the Bernhardt opinion suggests that under proper circumstances an individual contract of hire would meet the test of §
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2. For the Court ruled § 2 inapplicable to the situation of the particular employee involved in that case by saying,
“Nor does this contract evidence ‘a transaction involving commerce’ within the meaning of § 2 of the Act. There is no showing that petitioner while performing his duties under the employment contract was working ‘in’ commerce, was producing goods for commerce, or was engaging in activity that affected commerce, within the meaning of our decisions.”
If the employment cоntract there involved would have been subject to § 2 had such a showing been made, then a collective bargaining contract should
a fortiori
be held to be within the scope of § 2. Although it does not consummate the employment relationship, which may be the “transaction,” the collective agreement sets the terms and conditions under which not one but hundreds or thousands of workers are employed, and thus “involves” commerce to a greater degree than any single hiring transaction could. Cf. NLRB v. Jones & Laughlin Steel Corp., 1937,
Section 2, however, must be read in connection with § 1, which, after defining “maritime transactions” and “commerce” in familiar terms, concludes with these enigmatic words:
“but nothing herein contained shall apply to contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.”
The Bernhardt case indicates clearly that this exclusion pertains to the entire Act.
The term in question admittedly is not a “word of art” with a fixed technical definition, but it seems more familiar today as an equivalent tо what once was called the “contract of hire,” referring to an individual transaction, rather than as a generic term that would also embrace union-negotiated collective agreements. The distinction between the two concepts (and a suggestion of the difficulty of definition) appears in a well-known quotation from Mr. Justice Jackson’s opinion for the Supreme Court in J. I. Case Co. v. NLRB, supra, 321 U.S. at pages 334-335,
“Contract in labor law is a term the implications of which must be determined from the connection in which it appears. Collective bargaining between employer and the representatives of a unit, usually a union, results in an accord as to terms which will govern hiring and work and pay in that unit. The result is not, however, a contract of employment except in rare cases; no one has a job by reason of it and no obligation to any individual ordinarily comes into existence from it alone. The negotiations between union and management result in what often has been called a trade agree *99 ment, rather than in a contract of employment.” [Italics added.]
Compare the language used in § 3 of the Norris-LaGuardia Act to define a “yellow dog contract,” which of course would not be a union contract: “Every undertaking * * * in any contract or agreement of hiring or employment between any [employer] * * * and any employee or prospective employee * 47 Stat. 70. But see Amalgamated Ass’n of St. Elec. Ry. and Motor Coach Emp., etc., v. Pennsylvania Greyhound Lines, Inc., 3 Cir., 1951,
If the words of § 1 do not have a “plain meaning,” the legislative history does not conclusively make them plainer. The committee reports and hearings in the Congress which passed the Act contain only one reference—an ambiguous one— to the meaning of the exclusion. See Joint Hearings before Subcommittees of Committees on Judiciary on S. 1005 and H.R. 646, 68th Cong., 1st Sess. 21 (1924); S.Rep. 536 and H.R.Rep. 646, 68th Cong., 1st Sess. (1924). The whole tenor of these documents, however, demonstrates that congressional attention was being directed at that time solely toward the field of commercial arbitration. The history of the arbitration bill before the previous Congress and in the American Bar Association committee which had drafted it shows that the exclusion was inserted to overcome an objection by the Seamen’s Union. But even this bit of history is ambiguous as to whether the objection was made with reference to union arbitration or individual arbitration of seamen’s wage disputes. Compare Tenney Engineering, Inc., v. United Elec., etc., Workers, 3 Cir., 1953,
Court decisions are divided on the breadth of the exclusion in § 1 of the U. S. Arbitration Act. Three circuits have held that it includes collective bargaining agreements. Amalgamated Ass’n of St. Elec. Ry. and Motor Coach Emp., etc., v. Pеnnsylvania Greyhound Lines, Inc., 3 Cir., 1951,
On the other hand, the Sixth Circuit, while denying a stay under § 3 on other grounds, has squarely ruled that the exclusion covers only a “contract for the hiring of individuals,” distinguishing its earlier cases apparently as being suits for wages upon contracts of hire incorporating the terms of a collective bargaining agreement. Hoover Motor Express Co., Inc., v. Teamsters, etc., Union, 6 Cir., 1954,
With the legislative history and judicial treatment in the condition just described, we feel free to consider the statutory provision as carrying its own full meaning in what it says. The term “contracts of employment” serves to define in part the scope of a statute which created a governing code for a newly important system of adjudicating controversies, and which has assumed permanent status by codification. It may well be that the attention of Congress was focused on the field of commercial arbitration in 1925, because the proposed legislation was being pressed by advocates of commercial arbitration. Nevertheless, in enacting the Arbitration Act, Congress chose not to use apt language to confine the application of the Act to the field of commercial arbitration. If it be assumed that only in the period subsequent to 1925 did arbitration under collеctive bargaining agreements emerge as a factor of major importance, the most that could be inferred from that would be that Congress did not specifically advert to arbitration under collective bargaining agreements. But such inference would not be enough to warrant an interpretation excluding collective bargaining agreements from the coverage of the Arbitration Act. It would be necessary to go further and to conclude that, had Congress in 1925 foreseen the developing importance of arbitration under collective bargaining agreements, it “would have so varied its comprehensive language as to exclude it from the operation of the act.” People of Puerto Rico v. Shell Co., 1937,
Some of those limitations have already been noted. Another which must be discussed is the. provision of § 4 which authorizes specific enforcement of an agreement to arbitrate by a district court “which,
save for such agreement,
would have jurisdiction * * * of the subject matter of a suit arising out of the controversy between the parties * * *.” [Italics added.] Association of Westinghouse Salaried Employees v. Westinghouse Electric Corp., 1955,
V.
The case will therefore be remanded for further proceedings under the Arbitration Act. Since our decision makes clear for the first time in this circuit that that Act is applicable, the district court should now permit the parties to amend their pleadings so as to allege, respectively, compliance with the requisites of the Act and defenses afforded by it.
We have not passed upon the question of the arbitrability of the two grievances at issue here, although counsel for defendant informed us that the Company denies that they are arbitrable under the contract. Arbitrability is a question which the district court must pass on in the first instance. By way of guidance, it may be appropriate to note here a brief comment on some general principles. The scope of an arbitration pledge is solely for the рarties to set, and thus the determination of whether a particular dispute is arbitrable is a problem of contract interpretation. See, e. g., International Union United Furniture Workers, etc., v. Colonial Hardwood Flooring Co., Inc., 4 Cir., 1948,
VI.
Plaintiff has submitted a motion to this court, under 28 U.S.C. § 1653, to amend its complaint so as to allege di
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versity of citizenship between all the members of the Union and defendant, no doubt as a hedge against a ruling that relief could not be granted under the law applicable to a federal question case. In view of our decision, this motion may have become moot, but it must in any event be denied, for it cannot accomplish the result intended. Rule 17(b) Fed. Rules Civ.Proc., 28 U.S.C.; Donahue v. Kenney, 1951,
- The judgment of the District Court is vacated, and the case is remanded to that court for further proceedings not inconsistent with this opinion.
Notes
. “Sec. 7. No court of the United States shall have jurisdiction to issue a temporary or permanent injunction in any case involving or growing out of a labor dispute, as herein defined, except after hearing the testimony of witnesses in open court (with opportunity for cross-examination) in support of the allegations of a complaint made under oath, and testimony in opposition thereto, if offered, and except after findings of fact by the court, to the effect—
“(a) That unlawful acts have been threatened and will be committed unless restrained or have been committed and will be continued unless restrained, but no injunction or temporary restraining order shall be issued on account of any threat or unlawful act excepting against the person or persons, association, or organization making the threat or committing the unlawful act or actually authorizing or ratifying the same after actual knowledge thereof;
“(b) That substantial and irreparable injury to complainant’s property will follow;
“(c) That as to each item of relief granted greater injury will be inflicted upon complainant by the denial of relief than will be inflicted upon defendants by the granting of relief;
“(d) That complainant has no adequate remedy at law; and
“(e) That the public officers charged with the duty to protect complainant’s property are unable or unwilling to furnish adequate protection.
“Such hearing shall be held after due and personal notice thereof has been given, in such manner as the court shall direct, to all known persons against whom relief is sought, and also to the chief of those public officials of the county and city within which the unlawful acts have been threatened or committed charged with the duty to protect complainant’s property: Provided, however, That if a complainant shall also allege that, unless a temporary restraining order shall be issued without noticе, a substantial and irreparable injury to complainant’s property will be unavoidable, such a temporary restraining order may be issued upon testimony under oath, sufficient, if sustained, to justify the court in issuing a temporary injunction upon a hearing after notice. Such a temporary restraining order shall be effective for no longer than five days and shall become void at the expiration of said five days. No temporary restraining order or temporary injunction shall be issued except on condition that complainant shall first file an undertaking with adequate security in an amount to be fixed by the court sufficient to recompense those enjoined for any loss, expense, or damage caused by the improvident or erroneous issuance of such order or injunction, including all reasonable costs (together with a reasonable attorney’s fee) and expense of defense against the order or against the granting of any injunctive relief sought in the same proceeding and subsequently denied by the court. * * * ” 47 Stat 71-72.